In thinking about how to respond to the Bali bombing, the biggest single danger is that of ‘fighting the last war’, that is, seeking to model our response on the (broadly correct) US response to S11. In that case, Al-Qaeda was operating, more or less openly, with the protection of the Taliban government in Afghanistan. Although there were plenty of disputes about the details, the basic policy of overthrowing the Taliban and destroying as much of Al-Qaeda as possible was agreed on by everybody outside the fringes of the left and far-right. And the maxim of ‘either with us or against us’ could be applied fairly straightforwardly, allowing most of the local warlords who’d accepted the Taliban to change sides, while offering no quarter to foreign Al-Qaeda operatives.
The situation in Indonesia is quite different. In fact, a closer parallel is that of the Oklahoma City bombing. While we don’t know precisely whether the bombing was the work of Al-Qaeda or of ‘domestic’ extremists, the situation of the terrorists is similar to that of Timothy McVeigh. McVeigh came out of the network of right-wing Christian militias, which in turn was (and is) embedded in a much larger group of people adhering to extreme fundamentalist Christian views and conspiratorial political theories. This group shades into the broader Christian right of people like Jerry Falwell, which in turn shades into mainstream American conservatism in which (moderate) Christianity is taken as the norm. Substitute ‘Islamic’ for ‘Christian’ and you have a pretty fair description of the situation in Indonesia. A simple ‘with us or against us’ approach is not likely to work here, any more than a decision by the US government to disarm the militias and arrest their members would have worked after Oklahoma City.
The problems are further complicated by the role of the various factions in the Indonesian army and police. Some have fomented religious discord, and particularly Islamic extremism from a variety of motives, while others have brutally suppressed Islamic opponents of past and present governments. Yet this is the group that is going to have to most of the work of chasing and catching the terrorists.
The basic problem is going to be one of ‘hearts and minds’. Unlike the Middle East, Indonesia already has a moderate, and basically pro-Western, Muslim majority, and a democratically elected, if imperfect and fragile, government. The problem is to keep their support while doing as much as possible to root out the extremists. This is not going to be achieved by the kind of military response some people seem to be contemplating.

I thought I’d give myself some time to think about the Bali bombing and its consequences before writing anything more than the brief note I posted yesterday. As of this morning not much has become clear except that the number of casualties is large and likely to get worse, that many of them are Australians, and that most of them are young.
As with nearly everybody else, my first thoughts are with the families of those who have been killed or injured, or are still missing. As far as I know, none of my family or friends is in Bali, but many have been at some time, and others were planning visits in the near future. I know from experience that words are not much use at times like this, but I’m very much saddened.
The same news bulletin that brought the first news of Bali also reported a car crash in New South Wales, with three teenagers dead and three more badly injured. Six kids died in another crash only a few weeks ago. And every day, many families experience private tragedies that don’t make the news. We should try to spare a thought for them as well.
It’s worth stopping to think about all this before being caught up again in the trivial events that inevitably dominate our days, and before we start rushing to judgement on the political or military implications of these dreadful crimes.

Between the horrific bombings in Bali and Finland, and the shootings in DC, not to mention all the places where this kind of thing never stops, the world is a pretty gloomy place at the moment, and Australia is obviously not immune. There’s no easy answer to any of this. As far as I can tell, the Helsinki bombing was the act of a lone psycho, the Bali bombing was presumably done by Islamic terrorists of some kind, and the DC shootings could be either, or both, or something else altogether. Effective gun control, a successful campaign against Al-Qaeda, a resolution of the Israel-Palestine dispute might have prevented some of these acts. But these are some of the toughest things I can think of to do, and even if they were all successful there would still be plenty of other sources of terror in the world.
Given that we have been living with this kind of thing, in one form or another, for a long time, and will have to do so for the foreseeable future, we should be careful about being panicked into doing anything stupid as an ’emergency measure’.

The Tax Pack. Yes, it’s that time of year again. Tax time for a social democrat is like election time for a democrat or jury duty for a citizen. You know it’s vitally necessary, and you’re glad to do your bit, but that doesn’t make it any more enjoyable.

I just decided to save my archives for posterity and observed yet again that Blogger had made a mess of them. Some aren’t linked at all and other links go to the wrong date. Still they’re all there and I’ve now got copies safely filed on my hard disk.

This brings me to a more general problem, the increasingly common practice of shifting material to archives a week or so after publication and breaking the initial link. I’m sure there are good reasons for this, but it’s really bad for blogging and, to my mind, violates the basic idea of the Web.

Haloscan is recording comments, but not updating the comment counter. A pity as there’s lots of good stuff in the comment threads – sometimes more than in the original post.

Tim Blair can’t be accused of Steynwalling (this useful term is due to the other Tim), at least on this occasion. After running a standard speeder’s rant about “revenue-raising” in Thursday’s Oz, he very graciously linked to the Letters page, where he was, IMHO, comprehensively demolished.

Anyone who is inclined to take Blair’s claims seriously (as usual with pro-speeding rants, he doesn’t provide any evidence or any real argument) might care to compare road death statistics for Australia (and particularly Victoria, his target on this occasion) with those of the US, where road safety laws are enforced much less vigorously. I’ll try and provide a link to these sometime soon.

Followers of the debate over competitive tendering and contracting in Australia will know that, while contracts do not always deliver economic benefits, they can be very effective in screening the operations of government from public scrutiny. The use of commercial confidentiality to prevent scruninty of dubious or corrupt financial dealings and failures in government services was perfected by the Burke Labor government in WA and the Kennett Liberal* government in Victoria.

Some of the worst abuses have occurred when state power is delegated to private enterprises, as in prisons and detention centres. The biggest dangers arise when governments hire mercenary forces to do jobs that could not be done by the regular army. As this piece from the NYT on
America’s For-Profit Secret Army shows, this is already happening, and seems certain to go further under the Bush doctrine. What mercenary forces lack in cost-effectiveness** they more than make up for in deniability.

There are a couple of interesting sidelights. Opponents of the International Criminal Court might want to ponder the fact that these mercenaries can commit war crimes with impunity. The article refers to the case, reported at the time but still not well-known of two employees of Dyncorp (one of the leading US mercenary companies) who ran a sex-slave operation in Bosnia. They weren’t subject to US military justice or to prosecution in US, just sacked and sent home. In principle they could have been prosecuted in Bosnia where the crimes were committed, but the minimal likelihood of this is the reason why the ICC was established in the first place. It’s not clear whether the bilateral treaties the US is trying to negotiate to avoid the ICC would protect future war criminals of this kind (the crimes in this case predate the ICC).

A final tidbit is that, although the mercenary forces in the former Yugoslavia were under effective US control, they were paid for by the Saudis.

* For non-Australian readers, Liberal =neoliberal/conservative. The Kennett government was neoliberal rather than conservative.

** History is replete with examples of mercenary forces being defeated by poorly armed and trained, but well-motivated, citizen armies. According to the NYT article, claims of cost savings in recent contracts have not been proved.

The award of the Nobel Peace Prize to Jimmy Carter has stirred predictable reactions.As usual, I’ll give my bald statement of views first, then follow up with a justification if I can muster time and energy. Carter was, with the exception of FDR and maybe Eisenhower, the best US President of the 20th century. To the extent that US foreign policy has any moral credibility today, it’s due to his actions in office and subsequently. He’s an excellent choice for the Prize.

The fact that Lucent is cutting 10000 more jobs and now looks unlikely to survive 2003 in one piece might seem like another boring business story. Motient, Scient, Viant and many faux-Latin bubble-era companies are already dead, or as good as, so the significance of one more casualty is not immediately obvious.
But Lucent is more than an over-indebted telecom gearmaker. At its core is, or was, the heart of American technological leadership for the second half of the 20th century, the fabled Bell Labs. Amazingly, this commercial research organisation earned at least six Nobel prizes, not to mention giving the world Unix and running its own highly-rated economics journal. After the breakup of AT&T and the spinoff of the absurdly-named Lucent, the labs survived but were pushed towards a short-term commercial focus. Now it seems doubtful that anything will survive.
Meanwhile, the symbol of American technological leadership for the first half of the 20th century, Ford Motor company, is also in trouble. Once again, the core problem is the triumph of financial engineering over physical engineering. Ford’s problems stem from its finance arm, which holds billions of dollars in dubious car loans.
Even General Electric, which is still highly profitable despite some recent disillusionment, is now basically a finance company. The great achievement of Jack Welch, until recently the archetypal ‘hero as CEO’ was to combine the cash-cow of GE finance with a PE ratio appropriate to GE’s history as a technological innovator. The gloss has come off, and the question of whether GE would be better off broken into pieces is already being asked.
Done right, financial engineering is a valuable tool for reducing risk, but even more boring than civil engineering. What we have seen for the last two decades is better described as financial alchemy. promising gold and delivering dross.