For U.S. Muslims, 'It Can't Get Worse than This'

Reprinted from National Journal

Based on what we know so far, the two suspects in the Boston Marathon bombings were likely self-motivated terrorists who were probably not part of a larger al Qaida plot, but may well have been inspired and perhaps prepared in part by ideology and training from the global jihadist network. Based on police reports and witness testimony, the older brother, 26-year-old Tamarlan Tsarnaev, appeared to be disaffected and angry, a “loser” in his uncle’s words. He may have decided that his life in America wasn’t working and wanted to go out with a literal bang, inducing his more Americanized and integrated younger brother, Dzhokar, 19, to come along.

For U.S. Muslims, the revelation of the identities of the Boston suspects is the worst possible news, says Hedieh Mirahmadi, a Muslim community organizer who works at the International Cultural Center in Gaithersburg, Md., an area where many Muslims live—including an uncle of the two suspects. “It can’t get worse than this. It’s really a tragic day for our community. And for Americans," Mirahmadi says. “The older brother seems to fit the usual profile of a socially alienated Muslim youth, and points to all the concerns we’ve had about the influence of radicalization, the markers we look for.  The younger brother, though, doesn’t. He was integrated. “

What’s scary now, she adds, is that many Americans will come to believe that even relatively “integrated” Muslims, like Dzhokar, are suspect for radicalization. “There’s an issue right now with young Muslims feeling a need for justice. That’ s not directed usually at America per se, but it’s distress at the condition of Muslims around the world.” In a statement delivered to the media on Friday, the two brothers’ uncle, Ruslan Tsarni, a native Chechen, called them “losers” who simply could not get “settled” and harbored “hatred to those are.” “I can’t imagine anything else to do with religion, with Islam. It’s a fraud. It’s fake. ... Somebody radicalized them, but it’s not my brother,  who spent his life bringing bread to their table. Fixing cars.”

Quietly, working with the Obama administration, Mirahmadi, president of the World Organization for Resource Development and Education, which seeks to enhance understanding between Muslim and non-Muslim communities, and other American Muslim community leaders have been trying to identify signs of radicalization in young American Muslims and working to stop it before it leads to destructive acts. But Mirahmadi and other critics say the Obama administration has sought to gloss over the issue of purely Islamist radicalization so as not to offend Muslims, labeling its programs “combating violent extremism” instead. But seeking to do that while studiously avoiding the role of Islamism avoids the main issue, they say.

Even if the two suspects were not part of a larger jihadist plot, the bombings should not be seen as an isolated act. The global jihadist movement has brought under its umbrella many young men originally from Chechnya, Kyrgyzstan and other Caucasus republics, as the Tsarnaev brothers appear to be. Some of these terrorists have been trained at the same school near Peshawar that trained the Taliban, called  Darul Uloom Haqqania. Harvard terrorism expert Jessica Stern says she met two Chechens being trained there in 2000, and it is also known that nationalist movements in these countries in the Caucasus have been largely “coopted by the jihadists.”

It remains unclear what may have motivated either Tamarlan or Dzhokar Tsarnaev. The older brother, Tamerlan, who died in a police shootout, appeared far more upset with his life in America.  "I don't have a single American friend," he reportedly said. "I don't understand them." He was also reportedly arrested for assaulting his girlfriend in 2009.

Angry, disaffiliated young men lash out in different ways in different cultures. Adam Lanza, the Newtown, Conn., murderer, may have acted in the way he did because he had absorbed the sick culture of mass shootings. It’s entirely possible that Tamarlan Tsarnaev lashed out in the way he did because he was just enough of a jihadi to want to follow that path, while not being part of a larger plot. His act may well have been the product of an increasing trend: lone, self-motivated jihadis who have their own private grievances but find an outlet in the radical Islamist ideology that has gone viral over the past ten years online—and who are sometimes empowered by jihadist and explosives training, whether paramilitary or online. The amateurish nature of the Boston plot -- the two men apparently didn't even have an escape plan -- points to a do-it-yourself plot.

In an interview in 2010, the former deputy assistant secretary of state in the Bureau of Near Eastern Affairs under George W. Bush, Scott Carpenter, said both the Bush and Obama administrations have fallen short in tackling the problem of radicalization. “There has to be a recognition that Islamist ideology plays an important role,” he said. “You can’t have an effective prescription without an accurate diagnosis. Part of the problem is because we haven’t figured out a way to talk about this in anything but a politically correct way, we don’t talk about it.”

Kim Jong Un: Driving the Family Business into the Ground

picture credit: popular-security.com

Reprinted from National Journal

The United States could, if it so chose, destroy Pyongyang in a split second, probably even without using nuclear weapons. Not only could the U.S. arsenal make “the rubble bounce,” in Winston Churchill’s tart phrase; it could, with a second strike, turn the rubble into much smaller pieces. You might, in the end, find a few strands of Kim Jong Un’s retro haircut.

North Korea, for the foreseeable future, can do nothing to jeopardize America beyond threatening the 37,000 U.S. soldiers deployed in South Korea. That’s a serious threat—Seoul is only 30 miles from the demilitarized zone—but it’s all Pyongyang has ever been able to do. Which raises an important question: Just what does Kim Jong Un think he’s up to? The young, untested “supreme leader” is actually suggesting he might attack the U.S. mainland, declaring he’s at war with a U.S. ally, planning another missile test, threatening to restart plutonium production, and miniaturizing warheads just enough to make U.S. officials wonder whether he must be stopped. Even Kim’s only ally, China, is calling him delusional. "Pyongyang should drop its illusions that it can make the world stay silent over its desire for nuclear arms through its hard-line stance and deceptions,” the Global Times, which is published by the ruling Communist Party's People's Daily, wrote in an editorial.

With North Koreans, whose internal discussions are as little known as any closely held family firm’s, no one is ever sure what is going through their minds. But the best conjecture is that young Kim is simply trying his best to ply the bread-and-butter trade of the Kim family business: nuclear blackmail. It’s just that, like most third-generation heirs, he’s not very good at it.

A classic 1987 study of family firm succession by John Ward of the Kellogg School of Management at Northwestern University concluded that only 30 percent of family businesses survive the third generation, and only 3 percent survive beyond that—no matter what the culture or country. The reasons are usually the same: With each generation the heirs grow more spoiled, fail to make the transition, possess less competence, and squabble more with shareholders, professional management, and among themselves. The ravages of nepotism and an uncreative desire to preserve the status quo make such businesses weaker and weaker.

Kim seems to fit the pattern. He badly wants to emulate his grandpa—Kim Il Sung, whose birthday will be celebrated Monday in grand style—even adopting his haircut, but he doesn’t seem to have mastered the tradecraft he learned from his dad and granddad. Like them, he is seeking to use the combined threats of the North’s technology and its military’s proximity to Seoul and U.S. troops in order to extract food and fuel aid to his self-impoverished country. It’s not really a growth business, but it has kept the Kims fat and well stocked in movies, athletic shoes, and fine cognac, in kidnapped celebrities and in visiting clueless ones, like Dennis Rodman.

But by overdoing the threats Kim may be alienating those, including the Chinese communists, he needs most. In the past, Beijing has been inclined to supply measured support to the North (if only to avoid a mass of refugees when the regime collapses), but its patience is being tried as never before. Kim is even cutting off the meager economic progress zones that his father started. If he keeps it up, it's bound to end badly for him.

The family firm model occasionally applies to other countries’ politics as well, and to our own. The most noted example, perhaps, is George W. Bush, the erstwhile black sheep of the Bush dynasty who, as Maureen Dowd of The New York Times liked to write, ultimately “crashed the family station wagon into the globe.” Saudi Arabia has been somewhat more successful than the Kims, largely because the family concern controls some 20 percent of the world's oil reserves, and boasts a vast network of Saudi princes who operate in a manner more reminiscent of the Sopranos than a modern, relatively transparent government, according to a former senior CIA and FBI official with long experience in the country. 

The Kim family business is much more tenuous. Kim still has some things going for him. The North has always depended on one trump card: unlike, say, Iraq or even Iran, an attack by the U.S. or other outside power allied with the South would mean an almost certain human catastrophe. That is why even neoconservatives hesitate over recommending regime change in Pyongyang. According to my former Newsweek colleague John Barry, one reason that President Clinton decided to make a deal with Pyongyang in 1994—the first of several U.S. negotiations—is that his defense secretary, Bill Perry, had briefed the president shortly before on the likely costs of invasion. The estimate: 52,000 U.S. military and 490,000 South Korean soldiers killed or wounded, and untold numbers of civilian casualties, all in the first 90 days. Perry ultimately was the one who went to Pyongyang to negotiate.  

But everyone’s getting fed up with the Kims, and despite new fears of technological advances—the Defense Intelligence Agency assessed with "moderate confidence" that North Korea could put a nuclear weapon on a ballistic missile, though the reliability would be "low"—the West and Washington will always remain very far ahead of the Kim family. And let’s face it: Washington is constantly developing new means—cyber, among them—of fostering regime change. "North Korea will not be accepted as a nuclear power," Secretary of State John Kerry said at a news conference in Seoul on Friday. "The rhetoric that we are hearing is simply unacceptable."

The only hope that Kim might have, family-firm research suggests, is that he convert the old family business into a new one. If the family abandons the old business and finds new entrepreneurial outlets, that increases survivability dramatically, says Judy Green, president of the Family Firm Institute. Kim seems like a “normal” enough guy, as Dennis Rodman described him. Kim's former classmates at the super-posh Liebefeld-Steinholzi school on the outskirts of Bern, Switzerland, told the British newspaper the Mirror in December 2011 that he went out for pizza, sang from Grease, and loved joking and basketball. "He hated to lose. Winning was very important," said former classmate Marco Imhof. And local education chief Ueli Studer remembered him as being “well-integrated, diligent, and ambitious.” But now Kim’s been asked to take over a dying enterprise, and he doesn’t seem to have figured out how to revive it.

North Korea is an invented more than a real country. After the World War II defeat of Japan, which had occupied Korea, the regime was created by Stalin in 1945 out of the northern half of the Korean Peninsula. As the Cold War developed, Moscow propped up Kim Il Sung as a strongman. The Americans, meanwhile, built their client state in the southern half. Both sides never gave up their claims to the whole peninsula even after the 1953 armistice, putting them on a permanent war footing. To consolidate power, Kim Il Sung created a cultlike ideology around himself, which his son and then grandson have continued. There is no political system to speak of; just the family business.

All the world can do now is hope that North Korea follows the usual pattern—and goes bankrupt.

Coming This Week: More Crank Medicine for an Ill Economy

Reprinted from National Journal

The American economy is like a chronically ill patient suffering from a mysterious wasting disease that physicians would call "idiopathic" (a fancy term that means they have no idea what’s causing it).

Vast teams of self-interested doctors are still huddled around the patient, prodding it and tut-tutting over the strange disease. But rather than taking a fresh look at the affliction, they are merely re-prescribing favorite standard cures that have already been proven not to work. President Obama’s recently departed chief physician, Timothy Geithner, left office in January congratulating himself over having saved the nation from another Great Depression, but without acknowledging his part in the slowest job recovery since World War II. The former Treasury secretary, of course, spent most of his energy and resources in an effort to resurrect (now) tightfisted Wall Street banks, the same ones that caused the disaster in the first place, prompting even his own Cabinet colleague, Attorney General Eric Holder, to admit recently that the banks are now too big to call to account.

Meanwhile, politically comfortable Republican congressmen, their salaries unsequestered, continue to insist on a nostrum that is the scientific equivalent of medieval bloodletting: more austerity. This GOP “cure” has been accompanied by another fine medieval technique: surgery performed with an ax, and without anesthesia--in other words automatic across-the-board cuts. Thank you, Dr. Faustus!

And, of course, Obama and the Republicans continue to argue over whose austerity medicine is better, vying over entitlement-cutting budgets that will almost certainly only prolong the disease. According to my colleague Ron Fournier, Obama will propose specific cuts to Social Security and Medicare in his annual budget next week.  

The latest job numbers, out Friday, were only a reminder of the chronic nature of the illness. According to the Bureau of Labor Statistics, the unemployment rate edged down to a still-high 7.6 percent, but only because many more people dropped out of the workforce, bringing the labor-participation rate to a new low since 1979: 63.3 percent. That means another 663,000 Americans have been added to the record 90 million who are no longer even looking for work.

And while the sequester cuts had little to do with this particular grim report, get ready for coming ones: among the big-government programs slated for sequester is the Unemployment Trust Fund, with about $2.39 billion to be cut. While regular unemployment benefits are exempt from sequestration, these payments intended for people who have been unemployed longer than 26 weeks are not. According to the Bipartisan Policy Center, most of these long-term unemployed will eventually see their benefits cut by a ruinous amount, more than 10 percent, for the remainder of fiscal 2013.

With the politicians off playing doctor—on TV, of course—the only real physicians administering to the U.S. and world economy these days are starting to run out of medicine. These would be the central bankers, who, as Neil Irwin writes in his timely and enlightening new book, The Alchemists, have acted “with a speed and on a scale that parliaments and presidents could never seem to muster.” But they cannot much affect the underlying chronic unemployment problem, which as Fed Chairman Ben Bernanke noted last summer, “will wreak structural damage on our economy that could last for many years.”

It already has. Some economists, such as Kenneth Rogoff of Harvard, who along with coauthor Carmen Reinhart tracked 800 years’ worth of economic recoveries in a landmark 2009 book, This Time Is Different: Eight Centuries of Financial Folly, say the economy’s doing about as well as could be expected, given the financial origin of the economic disease. The difference between current slow job recovery and previous postwar recessions, he says, is that the others—for example, in 1981 and 1990—weren’t caused by a major financial crisis, which almost always results in prolonged economic impact beyond normal recessions.   

All of which points up the need for Geithner’s successor, Treasury Secretary Jacob Lew, to ensure that he deals aggressively with the chief pathology behind today’s chronic disease: Wall Street. Although it never became a 2012 campaign issue, financial regulation has lagged well behind schedule (no one even seemed to care, for example, when Mitt Romney failed to propose an alternative to Dodd-Frank, even though he had promised to do so). Wall Street’s lobbyists have managed to delay the “Volcker Rule” —the closest thing we have today to a Glass-Steagall law separating federally insured commercial banking from risky investment banking—by six months.

Treasury spokesmen say Lew is intent on implementing Dodd-Frank fully and ensuring the safety of the financial system. But others in the regulatory field, for example at the Federal Reserve, say they’ve heard nothing yet from him.

And so the suffering goes on. And we have no doctors to speak of...

Schapiro, Breuer Head Back to the Mother Ship

Graphic credit: www.fundmymutualfund.com

Reprinted from National Journal

As head of the Securities and Exchange Commission for the past four years, Mary Schapiro failed to win a major civil action against any Wall Street executive connected to what may be the worst financial fraud in history, the subprime-mortgage scam that led to the 2008 crash. As head of the Justice Department’s criminal division for the past four years, Lanny Breuer failed to accomplish the same with criminal action. And now both are headed back over to the other side: deep-pocketed firms that earn their keep largely from Wall Street. In Schapiro’s case, that’s Promontory Financial Group, which advises financial firms on regulation; in Breuer’s, it’s Covington & Burling, a major law firm that defends financial clients.

If this sounds like a dog-bites-man story, it is. Actually it’s more like, Wall Street bites everybody. But that too is pretty predictable these days. “It used to be called ‘selling out,’ ‘cashing in,’ or ‘influence peddling.’ Now it’s referred to politely as the ‘revolving door,’ ” said Dennis Kelleher, president of Better Markets, a Washington nonprofit that advocates for better regulation of financial markets. “But whatever it’s called, nothing is more corrosive to the American people’s trust in government than when former senior public officials turn their so-called public service into multimillion-dollar riches unimaginable to almost all Americans.”

Schapiro will no doubt be welcomed back to her tribal homeland with open arms. During her rather undistinguished tenure, SEC failed to gain any significant prosecutions related to the subprime disaster, though she did manage bolster SEC’s enforcement process and create a new tips database and a whistleblower office. At one point, SEC was even rebuked by U.S. District Court Judge Jed Rakoff, who refused to approve the agency’s $285 million settlement with Citigroup because, as in another case with Goldman Sachs, SEC failed to gain any admission of wrongdoing.

Schapiro told The Wall Street Journal this week that she would be doing no lobbying at Promontory and that "in my case, there's no revolving door.... I won't ever be going back to government.” She added that after spending "28 of the last 32 years as a regulator," now was the "right time ... to do something different."

But Promontory will feel more like familiar ground to her. The firm benefits from its senior employees’ supposed inside knowledge of the rules (and how to get around them), which Schapiro certainly has. Most recently, it got about $1 billion in fees for reviewing foreclosures, which  didn’t help any homeowners. Kelleher says it’s “irrelevant for someone working for Promontory Financial Group to say they aren’t going to lobby because, as the founder and CEO says, they don’t lobby anyway.” 

No one has ever accused Schapiro of dishonesty or corruption, but in her long career as a regulator, she was not renowned for coming down hard on dubious trading or banking practices. As head of the Commodity Futures Trading Commission in the mid-1990s, she failed to assert control over derivatives trading at a time when the practice was already beset with fraud and manipulation. (When a successor, Brooksley Born, came in, she called the unregulated derivatives market "the hippopotamus under the rug.")

Later, when Schapiro was running the Financial Industry Regulatory Authority, the industry's ostensible "self-regulator" (though it was widely seen as a joke in the industry), she also missed Bernie Madoff's Ponzi scheme and R. Allen Stanford's mini-Madoff scam, which later sent Stanford to prison for 110 years. According to Reuters, associates of Stanford's even served as advisers to FINRA, as was the case with Madoff's family. In all her jobs, Schapiro followed a pattern: She tended to aggressively investigate relatively minor violations while failing to see the hippopotamus-size frauds in the room.

Breuer's resignation was curiously timed, coming soon after a recent Frontline documentary depicted him as ineffectual against the main culprits of the crisis. In that piece appeared this exchange:

Breuer: “What we’ve had is a multipronged, multifaceted response. And it’s simply a fiction to say that where crimes were committed, we didn’t pursue the cases. And that’s why, where crimes were committed, you have more people in jail today for securities fraud, bank fraud, and the like than ever before.”

Frontline reporter: “But no Wall Street executives.”

Breuer: “No Wall Street executives.”

Yeah, it’s a dog-bites-man story. But that's a really, really big dog.