Short Subjects

Banking Committee kisses Dimon's ass

Is anybody surprised?  The JPM PAC hands out a load of money to members of the banking committee, and Congress really is not interested in banking reform or they'd have brought back Glass-Steagall instead of farting around with the Volcker Rule.


Egyptians notice it was a military coup all along

Hell, even the American press has noticed, at last.   To me, it seemed pretty obvious in February 2011.

When the Mubarak appointed Supreme Court voided the results of the Parliamentary elections and confirmed the right of Mubarak apparatchik Ahmed Shafik to run for the presidency, it became harder to ignore.  That same court gets to supervise counting the votes, so let's try to guess who's going to win.  (Was the US in on it all along?  Well, maybe.)


Obama and his Drones

The rest of the world has had a pretty good idea of the impact of Obama's greatly increased use of Predator Drones for quite a while — especially the people in their target areas — but the American press finally seems to be waking up to the fact that we've been killing a lot more civilians than the Pentagon reports.  I'm willing to bet that a large majority of the American people don't even know we've been using them in Yemen, and that an even larger majority can't find Yemen on a map.

Told you so!

I was planning to post about Fannie and Freddy today, but, instead, I'll take a few minutes to point out that my post of one week ago, in which I predicted a military coup in Egypt, was right on the mark.

Yes, I know, the media and the President and damned near everybody else is saying that the "democratic revolution" was a success. Well, I suppose it is possible that the Egyptian military will replace Mubarak's corrupt, authoritarian plutocracy with a corrupt, democratic plutocracy (like the United States), but it hasn't happened yet — all that's happened so far is a military coup.

Frankly, nobody really knows what the military elite will do in the coming months. What it has to accomplish, though, is not political, but economic reform. The wealth has to be spread at least a little bit further, so that the educated children of the middle class can find jobs that will enable them to live middle class lifestyles, and the members of the labor syndicates see some improvement in their standards of living.

Unfortunately, the Egyptian military has not shown a great deal of economic creativity, despite the fact that it is involved in a wide range of businesses and industries. It is sure to need help. Hopefully, the generals will know enough to hold the line against the army of free marketeers certain to descend on them momentarily. (If Obama really wants stability in Egypt, he'd better put Jeffrey Sachs on the no-fly list.)

So, good luck to the Egyptians. I now return to "no prediction" mode, and will emerge from it only if I perceive another chance to shoot fish in a barrel.

Coup time?

There is a straightforward way out of the mess in Egypt: a military coup.

A coup would work. Egyptians like and admire their military, and would probably stand behind it if it tossed out Mubarak and crew. The United States would be totally cool with a coup as well. Traditionally, we get on well with military leaders of developing countries, and our arms merchants would be happy because their lucrative contracts supplying the Egyptian armed forces would not be interrupted. (By the way, foreign aid from the U.S. pays more than 80% of the cost.)

The leaders of the coup, of course, would be portrayed in the western press as a "transitional" government. Democracy could wait a while — maybe another thirty or forty years — and the arms shipments to keep the military in power would continue. Israel could breathe easy, since Egypt would continue to be bought.

The chief responsibility of the coup leaders would be to put an end to Mubarak era patronage and corruption, and create a new system of patronage and corruption that would better serve angry middle class youth. The peasantry must continue to receive its subsidized wheat, and a few more NGOs could be invited to drill wells and provide schooling for little girls, but not much else need be done for the poor. As long as they're eating, they'll stay quiet.

Yes, there will be elections — typical Arab world elections to put in place very cooperative legislators with very limited powers. Some members of Parliament can even represent the Muslim Brotherhood, which already is planning its own cooption. There will be no reason to find a place for Mohammed El Baradei. He's been in the news lately mostly because the western press already knows who he is, but he has no real power base in Egypt.

I know I swore off making predictions a while back but, frankly, I don't see a real alternative to a coup. It's vaguely conceivable that new Vice President Omar Suleiman could run a caretaker government until September, when the next elections are scheduled, but there are significant problems with that scenario.

• While many seem to prefer Suleiman to Mubarak, he is part of the old regime.
• There is not enough time for any of the anti-Mubarak forces to organize viable parties and candidates in time for the next election, with the single exception of the Muslim Brotherhood.
• Neither Egypt not other potentially unstable Arab countries would be stabilized.
  

Given that the Egyptian military is the single most important component of the Egyptian economy, and that military leaders require stability to maintain profitability, it is hard to see how a military coup could be avoided, even if anybody (other than Mubarak's inner circle) actually wanted to avoid one.

So here comes the coup.