America Died Today

John came into my office today -- right after I started to hear Mr. Tu's claim in arbitration. When he saw I was busy, he retreated quietly and closed the door.

Mr. Tu came to the U.S. from Vietnam 4 years ago, and now he runs a small coffee shop in Seattle. On the way home from work one day, he was rear-ended by a gal from the south side of the tracks. It was all her fault, and it didn't help that she had a petty criminal record three pages long.

Today was also the day we learned that the voice of America died. You know, the voice of a Horse With No Name, Sandman, Ventura Highway, and Lonely People. I love those songs; and I love John like a brother, and he was one of the lonely people today.

After I made my award I went in to John's office to talk about it; I gave Mr. Tu a modest award for his trouble. And John told me about SRB; he wanted to talk about it first thing this morning; it turns out that today was the anniversary of SRB's death in Vietnam, 41 years ago. SRB was from Great Falls, Montana and he was the first man to die under John's command. John's roots are deep in Montana, too.

Just made a Corporal and in country hardly long enough to be in charge of anyone, the CO made John a Squad Leader, in charge of 12-15 men whose job it was to patrol dense jungle trails and kill the bad guys when they found them. One day the usual point man complained about his job, and SRB said "fuck it, I'll take the point". And he headed up the trail and within a few minutes he ran into a booby trap that blew him to pieces.

A helicopter medivac'd SRB out of there, and the next day the Gunny told the men he died of his wounds. This was 41 years ago.

I said, "John, if you're up for a wee dram I'm game." I call it our Boston Legal.

He said, "I have a conference call with an expert witness at 4 and I'll be right over when I'm done."

Shortly later, he brought the Glen Morange and we finished it off, and we drank a toast to SRB.

He died today 41 years ago.

Guernica Revisited

Professor T.J. Clark completely missed the point in his lecture as the speaker at the University of Washington's Katz Distinguished Lecture in the Humanities on April 29. Professor Clark’s presentation entitled “Picasso’s Guernica Revisited” explored the evolution of Picasso’s painting Guernica.

Completed in a feverish 5 weeks following Generalissimo Francisco Franco’s bombardment of the city of Guernica in the Basque region of Spain in 1937, Guernica portrays one of the many acts of 20th Century’s state sponsored terrorism. Using the newest Luftwaffe bombers on loan from Hitler and help from Mussolini’s air force, too, Franco turned the city center into rubble and massacred all who happened to be there that sunny morning. And to avoid getting caught, Franco banned all journalists or other reporting, although reports trickled out, and Spain’s greatest 20th Century historian, Pablo Picasso, painted the report of the atrocity so that all would know it happened.

Professor Clark’s Picasso scholarship is well respected among academics in the art world and he walked the audience through the surviving photographs of Picasso at work on his masterpiece and the sketches that helped Picasso develop the work. Among other themes, Picasso’s work explores spatial relations between objects in a room, such as dancers in a cabaret or the objects that furnish our lives; and more profoundly, Picasso addresses the relation of the outside to the inside or the public to the private. In a growing surveillance society these were and continue to be important issues. Professor Clark introduced these themes early in his presentation and then wandered off into irrelevancy.

Guernica depicts what one might imagine the horror to have been, with dismembered animals, crushed humans, an anguished mother clutching her bombed child, and frightened citizens peering out the windows of their homes to see the carnage in the street. In one of Picasso’s early sketches, he drew a fist rising from the arm of a fallen victim and it rises from the rubble and chaos in the middle of the image. In a later sketch the arm and fist grow larger. And in the completed work, the fist is gone, and no remnant of it remains.

Professor Clark saw the fist as a homoerotic sexual metaphor, he invited the audience to snicker when the fist swelled larger in its manly act, and he was distracted also by what he saw as the sexuality of the women in the painting. By doing so, he missed a very important question about Picasso’s work. The painting is not an exploration of sexuality, it has nothing at all to do with sexuality; it is a political statement. Guernica was created to shed light on the atrocity of total war waged on a government’s own citizenry.

The victim’s fist rises, not as a phallus, but as another, far more profound statement with another kind of sexual content that screams out “fuck you Franco”. You who turned the inside out by bombing open our homes, by dismembering our bodies and animals, by opening our guts to the public, by turning what was once rational and ordered into total chaos – your brutal oppression – must be resisted by all the strength we have left. The clenched fist is the symbol of the socialist workers’ resistance to the dehumanizing growth of capital, and it was raised again during the Paris riots of 1968, by Carlos Smith on the podium at the Mexico City Olympics, and the May Day marchers two days after Professor Clark’s lecture. It is the symbol of resistance.

But if my interpretation is correct, what then do we make of Picasso’s decision to obliterate the image of the raised fist from Guernica? Did Picasso not believe in the value of resistance? Did he conclude that resistance was futile or ill advised? Or was the destruction of the old order all that he wanted to show us?

Failure at Copenhagen?

The recently concluded climate change meeting in Copenhagen is portrayed by many, if not most, as a great failure at many scales, and one that interests me is the scale of public international law.

Some wonder why the global community was able to agree to ban the use of chemical and biological weapons in war and yet fail to agree on reductions to the emission of green house gases. Assuming for the moment that the science of man’s central contribution to the problem is solid – recall that humans were believed to be the center of the universe at other times in history and Galileo was tried and convicted of heresy for suggesting the truth was something else – the reference to the Geneva Convention is apt, but not for the reasons usually stated.

The problem is, I submit, that lay persons and maybe some experts expect too much of international agreements like the ones sought at Copenhagen. The New York Times reported that the agreement finally patched together in Copenhagen by President Obama and leaders from China, India, Brazil, South Africa set a commitment to limit global warming to 2 degrees Celsius, or 3.6 Fahrenheit. Am I the only one to believe that such arrogance rivals that of Galileo’s accusers?

The best example, I think, of the apparent futility of such agreements is the treaty signed in 1928 by which the states that exercised sovereign power over essentially the entire planet renounced war and pledged to resolve all future disputes peacefully. The full text of Articles I and II is set forth here:

ARTICLE I. The High Contracting Parties solemnly declare in the names of their respective peoples that they condemn recourse to war for the solution of international controversies, and renounce it, as an instrument of national policy in their relations with one another.

ARTICLE II. The High Contracting Parties agree that the settlement or solution of all disputes or conflicts of whatever nature or of whatever origin they may be, which may arise among them, shall never be sought except by pacific means.

http://www.yale.edu/lawweb/avalon/imt/kbpact.htm

Its promises were simply and unambiguously stated; it was ratified by the US Senate by a vote of 85-1, and I believe it is still the law today.

As it would happen, we know that the states of the world began to ignore its promises almost before the treaty’s ink was dry.

So, it seems to me that Copenhagen should not be seen as a failure but rather as proof that public international law is best created, not by top down agreements from world leaders who promise too much, but rather by the accretion of consistent state practice and an acknowledged sense of obligation. Those things must happen on a local scale before they can acquire global significance.

Vultures Have Rights, Too

There is near universal agreement among those who pay attention to such issues that the debt load of the world’s poorest developing countries is obstructing their efforts to climb out of a very deep hole of poverty. The premise of this view, which seems unassailable, is that the resources necessary to pay even the interest on the debt consumes the resources that otherwise would be available to finance development. The debt is owed to developed country governments, the international financial institutions and, to a lesser extent, private investors. It is sovereign debt and, as they have done throughout history, private investors have acquired some of the debt at bargain basement prices, speculating on a future in which the debts might be paid.

Developed countries and their financial institutions implemented measures to provide debt relief to the developing countries with the Heavily Indebted Poor Countries (HIPC) initiative, established in 1999, and the Multilateral Debt Relief Initiative (MDRI) that was adopted at Gleneagles in 2005. While the Jubilee Debt Campaign estimates the debt totals in excess of $2.9 trillion, the debt relief delivered or committed under these initiatives is in excess of $110 billion, according to HM Treasury’s July 2009 consultation, “Ensuring effective debt relief for poor countries.” While laudable, the relief so far is a paltry sum in the larger scheme of things.

Nibbling at the margins of the task, some have argued that the private investors’ punts may pay off only because the governments, i.e. the taxpayers, have written off the debt they held, thereby releasing the hold on the resources needed to pay off the balance owed and now held by the private investors. Comparing them to “vultures” that prey on the carrion of dead animals, Members of Parliament and the U.S. Congress have proposed legislation to prevent the investors from profiting from the generosity of debt relief. Sally Keeble MP introduced a Restriction of Recovery Bill in the House of Commons in May 2009, and Congresswoman Maxine Waters introduced her Stop Vulture Funds bill in Congress in June. The UK legislation would set a cap on recovery of “non-cooperating” investors who won’t voluntarily take less than they are owed, unless the courts consider it just and equitable to order otherwise; while the more draconian US bill would bar the investor’s access to the federal courts altogether.

The fundamental problem is that there is no global mechanism for the resolution of sovereign bankruptcy. When a going concern like General Motors has liabilities greater than its assets and ability to pay, bankruptcy exists to re-organize or liquidate its debts and start over. Under most bankruptcy schemes, everybody “cooperates” whether they want to or not and receive less than they are owed or nothing at all, and often the wage earner comes out poorly in the end. But so far, a country like Zambia cannot file a bankruptcy to avoid paying a sovereign debt owed to a company registered in the British Virgin Islands whose only asset is the sovereign debt it purchased for a fraction of its face value.

The proposed medicine may be worse than the illness it is intended to remedy, and we might question whether the illness is life threatening in any event. According to HM Treasury’s consultation, only $4.3 billion in debt relief is expected from the private sector, and claims totaling $1.2 billion have been already litigated, with no new cases filed in 2007-2008. In relative terms, these are puny sums and the proposed remedies beggar thy neighbor.

Of greater concern yet, is the impact of these proposals on such bedrock principles as the rule of law, rights to property, access to justice and compensation for expropriation. To be sure, legislatively reducing the amount of a debt, outside of a bankruptcy in which the interests of all stakeholders is adjudicated, is the equivalent of expropriating the investor’s property and seemingly in violation of the European Convention on Human Rights’ protections for property rights and requirements of proportionality. In the US, we would call it a partial “taking” in violation of the Due Process Clause and other provisions of the Constitution. Barring access to courts is a denial of justice. These are complaints usually made about third world despots. We can do better.

Developing country debt is every bit as toxic as any traunch of ill advised securitized sub-prime residential mortgages in the developed world. While the world’s public and private bankers continue to work themselves out of the current conditions, now is a good time to enact comprehensive and meaningful cancellation of developing country debt. It should be done while respecting the rule of law.

We Are All Bozos on This Bus

Three recent events resurrected late night college memories of listening to the albums of “Firesign Theatre,” an off the wall comedy troupe.

First, a U.S. investor served notice of intent to file an international arbitration claim against Canada under NAFTA, the North American Free Trade Agreement, for the actions of Newfoundland and Labrador, an allegedly developed and democratic province. The investor alleges that the government seized its property after the company gave notice that it had to shut down one of its newsprint making plants due to the world wide collapse of the need for newsprint. Unhappy that the company’s shut down would result in hardship to the locals, the government acted within weeks of the announcement by enacting new laws simply taking the investor’s property without compensation and barring recourse to the courts.

Second, an international arbitration tribunal awarded Dutch farmers substantially their entire claim against Zimbabwe, which seized their farm lands and never paid any compensation. The tribunal was appointed pursuant to an investment treaty between Zimbabwe and The Netherlands. There, too, Zimbabwe sought to cloak its seizure with law by enacting Constitutional amendments permitting the seizures.

And then, Philip Stephens, writing in the April 24, 2009 edition of the Financial Times, notes that the Bush administration’s memos justifying “harsh” interrogation “remind us how legal bureaucratese can empty the law of any real meaning.”

The common thread in these three unrelated events is the abuse of law by government, and I can now say with confidence that we are all bozos on this bus.

Cancel Developing Country Toxic Debt

The worst financial crisis since the 1930’s, if not ever, is shaking the world’s financial system to its core. Congress authorized the Treasury Department to spend $750 billion to support the U.S. banking system, and with the prior loans and efforts, the sum that we are warned has and will be spent is nearly $1 trillion. If published reports are accurate, the European governments are prepared to spend $2 trillion to support the European banking system. If only Carl Sagan was still here to tell us how many billions and billions that is.

The New York Times reported on October 15 that British Prime Minister Gordon Brown is calling for a “new Bretton Woods” by which he refers to the architecture of the current global financial system that was established at the conclusion of World War II. At Bretton Woods, a resort in the New Hampshire mountains, the Allied victors (meaning primarily the US and the UK) established the framework for the International Monetary Fund, whose goal was to provide international financial stability with fixed exchange rates and balance of payments assistance. In the 1950’s a development bank was formed ostensibly to assist the developing world, and it has grown into what we now know as the World Bank.

These international financial institutions were supposed to ensure stability and development, and it appears that they are no longer up to the task. The reason for the lack of stability may be as simple as the growth of technology. When they were established, money was stored in vaults and usually consisted of gold or silver, hence the Pound Sterling, and labor was involved in moving it around the world; today, money is stored in digital accounts kept on computer servers, and vast sums move from New York to London or Singapore and back with a click of the mouse. Financier George Soros demonstrated how the world had radically changed when he brought the Bank of England to its knees one night by selling British Pounds faster than the Bank could soak them up.

Or the explanation for how we got into this predicament may be as simple as the contemporary fact that the banks who loan money for things like residential mortgages sell them quickly to somebody else before payment comes due and the buyers, who may be in another part of the world, are lulled by the assurances of smooth talking brokers with the gold plated reputations of a Lehman Brothers or Goldman Sachs.

Whatever may be the explanation for how we got here, all the hullabaloo over the plight of our Western banks has pushed one other reality of the existing global financial system out of sight. According to the UK based NGO, Jubilee Debt Campaign http://www.jubileedebtcampaign.org.uk/, today developing countries’ debt stocks stand at a staggering $2.9 trillion and every day the poorest countries pay the rich world almost $100 million in debt repayments. In many of these countries millions of people live on less than $2 per day, poverty is everywhere, opportunities and choices are limited or non-existent, and we have yet to see the impact of this year’s doubling of the price of energy, which will only make matters worse.

It is true that economic growth in the developing world has lifted millions of people out of the most abject poverty, and some credit for that progress may be due to the international financial institutions’ efforts. But that success is not evenly distributed around the world and in some regions the problem is getting worse, not better.

The developed world’s Heavily Indebted Poor Counties (HIPC) Initiative was launched in 1996 and expanded in 1998, aiming to bring together the bilateral, multilateral and commercial creditors of some of the poorest countries, and to reduce their debts to a level deemed “sustainable”. In 2005, the G8 countries added the Multilateral Debt Relief Initiative. But, according to the Jubilee Debt Campaign, so far these efforts have delivered about $88 billion of irrevocable debt cancellation to 25 countries. In 10 years, a not so grand total of $88 billion in debt relief has been achieved on a debt that now totals $2.9 trillion.

Surely, if the governments of the developed world’s financial system can come up with $3 trillion in about three weeks time to take care of themselves, there can no longer be any excuse for not addressing the developing world’s $2.9 trillion problem, too. The developing country debt is every bit as toxic as any traunch of ill advised securitized residential mortgages in the developed world.

While the world’s public and private bankers are saving themselves and restructuring the global financial system with a new Bretton Woods, it would be a good time to enact comprehensive and meaningful cancellation of developing country debt.

Mr. Murphy was on the bus

I think I saw Mr. Murphy today. I took the bus to Tacoma for the first time; I work in Seattle and usually drive when I have business in Tacoma, but today I tried something new. An old guy got on the bus and shuffled down the aisle to a seat right behind me, and shortly after he sat down I heard a drawn out dry cough come from deep within him. I've been fighting a cold and didn't want it to get any worse and thought of moving to another seat, but after the second or third time I didn't hear it anymore; maybe he went to sleep. He reminded me of the late Donald B. Murphy, who was the ancient founder of a drilling company I once represented in a case many years ago.

It was a landslide case that arose on a Thanksgiving weekend -- when the rain came down so hard and steady that the Mercer Island floating bridge on Lake Washington sunk. It takes a lot of water to sink a floating bridge. It rained like that all over Western Washington that weekend, three inches or more in a 24 hour period a couple days in a row; the weatherman called it a hundred year storm, which is supposed to mean that much rain comes not more than once every hundred years, but it seems that we get one of those storms about once every other year.

When it rains like this the hillsides start moving -- the rain lubricates the glacial till -- and slabs of earth slip from high ground to low in a kind of leveling flow. There were landslides all over Western Washington that weekend, including one on the Kennydale Hill that allegedly resulted in the death of an old gentleman who lived on the side of the hill.

Mr. Murphy's drilling company was hired to build a retaining wall at the base of the Kennydale Hill where a condominium development was going in, and shortly after they got the wall in, it began to rain. After several days of steady rain, the hillside began to move. Although it is a fact that the new retaining wall stopped that whole hillside from flowing right out onto Interstate 405 that weekend, the heirs of the old man on the hill sued Mr. Murphy's company, and everybody else who worked on the condo project, for wrongful death and other misdemeanors.

Mr. Murphy was long retired by the time all this happened, but I needed a company representative to attend the trial with me and he was chosen. He was a gruff and grizzled old man who survived lung cancer after they took out one of his lungs, but it hardly slowed him up. He came to court early and energized every day dressed in a clean pressed shirt, a regimental tie, and a blue blazer.

During jury selection, it turned out that one of our prospective jurors was an editor for the Seattle Post Intelligencer, and I thought he might know a bit about the rains that caused the hill to move. So in the guise of finding out if this guy could be a fair and impartial judge of the facts of our case, I had him tell us all about the rains that weekend, the flooding, the sinking of the bridge, and all the landslides that happened all over Western Washington. The Seattle PI, as it's known, is the more liberal of our two daily newspapers, and I guess Mr. Murphy had some kind of run in with them, and he wasn't too sure where I was going with all my chummy questions of this newspaper man. During our next break, Mr. Murphy shuffled up to me and said so everybody else could hear, "I don't know what you're doing, but you better get rid of that guy from the fucking PI."

He had a way of making his point understood. He also had a low wet cough that came from deep within his one remaining lung. It was a rumbling thing that took quite a bit of work from start to finish and the first time I heard it I wasn't sure if he was going to make it or expire right there in the courtroom. But he was a tough old guy and one more unpleasant bodily noise wasn't going to disturb him no matter what. He sat right behind me in the court room in the first row of seats, and this gurgling choking cough was not something you could miss. Trouble is, after the trial got started, it seemed to me that one of those coughs came up right about the time some damaging testimony came in, as if to put an exclamation point on something I wished had never been said.

Early on in the case, Mr. Murphy would stand right next to the door as the jury came and went, and he would nod or wink or give them some other sign of affection until one of them said something to the judge who told him to stop. About half way through the trial he attended a luncheon and came back with a gigantic gold medal hung on a red, white and blue ribbon around his neck. There was no missing him whenever he came into the courtroom and this time everybody stopped and watched him; he had a grin on his face from ear to ear as if he had just won an Olympic Gold medal. The jury loved this old man and I did, too.

So it was that I think I saw him again today on the bus to Tacoma even though he passed a few years ago. And tucked up under one arm I do believe he had a copy of the Seattle PI.