Pirates of the Mediterranean

September 30, 2006
Op-Ed Contributor
NY Times

By ROBERT HARRIS
Kintbury, England

IN the autumn of 68 B.C. the world’s only military superpower was dealt a profound psychological blow by a daring terrorist attack on its very heart. Rome’s port at Ostia was set on fire, the consular war fleet destroyed, and two prominent senators, together with their bodyguards and staff, kidnapped.

The incident, dramatic though it was, has not attracted much attention from modern historians. But history is mutable. An event that was merely a footnote five years ago has now, in our post-9/11 world, assumed a fresh and ominous significance. For in the panicky aftermath of the attack, the Roman people made decisions that set them on the path to the destruction of their Constitution, their democracy and their liberty. One cannot help wondering if history is repeating itself.
Consider the parallels. The perpetrators of this spectacular assault were not in the pay of any foreign power: no nation would have dared to attack Rome so provocatively. They were, rather, the disaffected of the earth: “The ruined men of all nations,” in the words of the great 19th-century German historian Theodor Mommsen, “a piratical state with a peculiar esprit de corps.”

Like Al Qaeda, these pirates were loosely organized, but able to spread a disproportionate amount of fear among citizens who had believed themselves immune from attack. To quote Mommsen again: “The Latin husbandman, the traveler on the Appian highway, the genteel bathing visitor at the terrestrial paradise of Baiae were no longer secure of their property or their life for a single moment.”

What was to be done? Over the preceding centuries, the Constitution of ancient Rome had developed an intricate series of checks and balances intended to prevent the concentration of power in the hands of a single individual. The consulship, elected annually, was jointly held by two men. Military commands were of limited duration and subject to regular renewal. Ordinary citizens were accustomed to a remarkable degree of liberty: the cry of “Civis Romanus sum” — “I am a Roman citizen” — was a guarantee of safety throughout the world.

But such was the panic that ensued after Ostia that the people were willing to compromise these rights. The greatest soldier in Rome, the 38-year-old Gnaeus Pompeius Magnus (better known to posterity as Pompey the Great) arranged for a lieutenant of his, the tribune Aulus Gabinius, to rise in the Roman Forum and propose an astonishing new law.

“Pompey was to be given not only the supreme naval command but what amounted in fact to an absolute authority and uncontrolled power over everyone,” the Greek historian Plutarch wrote. “There were not many places in the Roman world that were not included within these limits.”

Pompey eventually received almost the entire contents of the Roman Treasury — 144 million sesterces — to pay for his “war on terror,” which included building a fleet of 500 ships and raising an army of 120,000 infantry and 5,000 cavalry. Such an accumulation of power was unprecedented, and there was literally a riot in the Senate when the bill was debated.

Nevertheless, at a tumultuous mass meeting in the center of Rome, Pompey’s opponents were cowed into submission, the Lex Gabinia passed (illegally), and he was given his power. In the end, once he put to sea, it took less than three months to sweep the pirates from the entire Mediterranean. Even allowing for Pompey’s genius as a military strategist, the suspicion arises that if the pirates could be defeated so swiftly, they could hardly have been such a grievous threat in the first place.

But it was too late to raise such questions. By the oldest trick in the political book — the whipping up of a panic, in which any dissenting voice could be dismissed as “soft” or even “traitorous” — powers had been ceded by the people that would never be returned. Pompey stayed in the Middle East for six years, establishing puppet regimes throughout the region, and turning himself into the richest man in the empire.

Those of us who are not Americans can only look on in wonder at the similar ease with which the ancient rights and liberties of the individual are being surrendered in the United States in the wake of 9/11. The vote by the Senate on Thursday to suspend the right of habeas corpus for terrorism detainees, denying them their right to challenge their detention in court; the careful wording about torture, which forbids only the inducement of “serious” physical and mental suffering to obtain information; the admissibility of evidence obtained in the United States without a search warrant; the licensing of the president to declare a legal resident of the United States an enemy combatant — all this represents an historic shift in the balance of power between the citizen and the executive.

An intelligent, skeptical American would no doubt scoff at the thought that what has happened since 9/11 could presage the destruction of a centuries-old constitution; but then, I suppose, an intelligent, skeptical Roman in 68 B.C. might well have done the same.

In truth, however, the Lex Gabinia was the beginning of the end of the Roman republic. It set a precedent. Less than a decade later, Julius Caesar — the only man, according to Plutarch, who spoke out in favor of Pompey’s special command during the Senate debate — was awarded similar, extended military sovereignty in Gaul. Previously, the state, through the Senate, largely had direction of its armed forces; now the armed forces began to assume direction of the state.

It also brought a flood of money into an electoral system that had been designed for a simpler, non-imperial era. Caesar, like Pompey, with all the resources of Gaul at his disposal, became immensely wealthy, and used his treasure to fund his own political faction. Henceforth, the result of elections was determined largely by which candidate had the most money to bribe the electorate. In 49 B.C., the system collapsed completely, Caesar crossed the Rubicon — and the rest, as they say, is ancient history.

It may be that the Roman republic was doomed in any case. But the disproportionate reaction to the raid on Ostia unquestionably hastened the process, weakening the restraints on military adventurism and corrupting the political process. It was to be more than 1,800 years before anything remotely comparable to Rome’s democracy — imperfect though it was — rose again.

The Lex Gabinia was a classic illustration of the law of unintended consequences: it fatally subverted the institution it was supposed to protect. Let us hope that vote in the United States Senate does not have the same result.

Robert Harris is the author, most recently, of “Imperium: A Novel of Ancient Rome.”

In India, Water Crisis Means Foul Sludge

By SOMINI SENGUPTA
NY Times

NEW DELHI, Sept. 28 — The quest for water can drive a woman mad.

Ask Ritu Prasher. Every day, Mrs. Prasher, a homemaker in a middle-class neighborhood of this capital, rises at 6:30 a.m. and begins fretting about water.

It is a rare morning when water trickles through the pipes. More often, not a drop will come. So Mrs. Prasher will have to call a private water tanker, wait for it to show up, call again, wait some more and worry about whether enough buckets are filled in the bathroom in case no water arrives.

“Your whole day goes just planning how you’ll get water,” a weary Mrs. Prasher, 45, recounted one morning this summer, cellphone in hand and ready to press redial for the water tanker. “You become so edgy all the time.”

In the richest city in India, with the nation’s economy marching ahead at an enviable clip, middle-class people like Mrs. Prasher are reduced to foraging for water. Their predicament testifies to the government’s astonishing inability to deliver the most basic services to its citizens at a time when India asserts itself as a global power.

The crisis, decades in the making, has grown as fast as India in recent years. A soaring population, the warp-speed sprawl of cities, and a vast and thirsty farm belt have all put new strains on a feeble, ill-kept public water and sanitation network.



The combination has left water all too scarce in some places, contaminated in others and in cursed surfeit for millions who are flooded each year. Today the problems threaten India’s ability to fortify its sagging farms, sustain its economic growth and make its cities healthy and habitable. At stake is not only India’s economic ambition but its very image as the world’s largest democracy.

“If we become rich or poor as a nation, it’s because of water,” said Sunita Narain, director of the Center for Science and Environment in New Delhi.

Conflicts over water mirror the most vexing changes facing India: the competing demands of urban and rural areas, the stubborn divide between rich and poor, and the balance between the needs of a thriving economy and a fragile environment.

New Delhi’s water woes are typical of those of many Indian cities. Nationwide, the urban water distribution network is in such disrepair that no city can provide water from the public tap for more than a few hours a day.

An even bigger problem than demand is disposal. New Delhi can neither quench its thirst, nor adequately get rid of the ever bigger heaps of sewage that it produces. Some 45 percent of the population is not connected to the public sewerage system.

Those issues are amplified nationwide. More than 700 million Indians, or roughly two-thirds of the population, do not have adequate sanitation. Largely for lack of clean water, 2.1 million children under the age of 5 die each year, according to the United Nations.

The government says that 9 out of 10 Indians have access to the public water supply, but that may include sources that are going dry or are contaminated.

The World Bank, in rare agreement with Ms. Narain, warned in a report published last October that India stood on the edge of “an era of severe water scarcity.”

“Unless dramatic changes are made — and made soon — in the way in which government manages water,” the World Bank report concluded, “India will have neither the cash to maintain and build new infrastructure, nor the water required for the economy and for people.”

The window to address the crisis is closing. Climate change is expected only to exacerbate the problems by causing extreme bouts of weather — heat, deluge or drought.

A River of Waste

The fabled Yamuna River, on whose banks this city was born more than 2,000 years ago, is a case study in the water management crisis confronting India.

In Hindu mythology, the Yamuna is considered to be a river that fell from heaven to earth. Today, it is a foul portrait of crippled infrastructure — and yet, still worshiped. From the bridges that soar across the river, the faithful toss coins and sweets, lovingly wrapped in plastic. They scatter the ashes of their dead.

In New Delhi the Yamuna itself is clinically dead.

As the Yamuna enters the capital, still relatively clean from its 246-mile descent from atop the Himalayas, the city’s public water agency, the New Delhi Jal Board, extracts 229 million gallons every day from the river, its largest single source of drinking water.

As the Yamuna leaves the city, it becomes the principal drain for New Delhi’s waste. Residents pour 950 million gallons of sewage into the river each day.

Coursing through the capital, the river becomes a noxious black thread. Clumps of raw sewage float on top. Methane gas gurgles on the surface.

It is hardly safe for fish, let alone bathing or drinking. A government audit found last year that the level of fecal coliform, one measure of filth, in the Yamuna was 100,000 times the safe limit for bathing.

In 1992, a retired Indian Navy officer who once sailed regattas on the Yamuna took his government to the Supreme Court. The retired officer, Sureshwar D. Sinha, charged that the state had killed the Yamuna and violated his constitutional right, as a practicing Hindu, to perform ritual baths in the river.

Since then, the Supreme Court ordered the city’s water authority to treat all sewage flowing into the river and improve water quality. In 14 years, that command is still unmet.

New Delhi’s population, now 16 million, has expanded by roughly 41 percent in the last 15 years, officials estimate. As the number of people living — and defecating — in the city soars, on average more than half of the sewage they pour into the river goes untreated.

A government audit last year indicted the Jal Board for having spent $200 million and yielding “very little value.” The construction of more sewage treatment plants has done little to stanch the flow, in part because sewage lines are badly clogged and because power failures leave them inoperable for hours at a time.

“It has not improved at all because the quantity of sewage is constantly increasing,” said R. C. Trivedi, a director of the Central Pollution Control Board, which monitors the quality of the Yamuna River. “The gap is continually widening.”

Making matters worse, many New Delhi neighborhoods, like Janata Colony — Hindi for People’s Colony — are not even connected to sewage pipes. Open sewers hem the narrow lanes of the slum. Every alley carries their stench.

Some canals are so clogged with trash and sludge that they are no more than green-black ribbons of muck. It is a mosquitoes’ paradise. Malaria and dengue fever are regular visitors.

Not long ago, a 2-year-old boy named Arman Mustakeem fell into one such canal and drowned. His parents said they found him floating in the open sewer in front of their home.

These canals empty into a wide storm drain. It, in turn, runs through the eastern edges of the city, raking in more sewage and cascades of trash, before it merges with effluent from two sewage treatment plants, and finally, enters the Yamuna.

Carrying the capital’s waste on its back, the Yamuna meanders south to cities like Mathura and Agra, home to the Taj Mahal. It is their principal source of drinking water, too. New Delhi’s downstream neighbors are forced to treat the water heavily, hiking up the cost.

With New Delhi slated to host the Commonwealth Games in 2010, the government proposes to remake this riverfront with a sports and recreation complex. In the meantime, the Yamuna, vital and befouled as it is, bears the weight of New Delhi’s ambitions.

At dawn each morning, men sink into the still, black waters to retrieve whatever can be bartered or sold: rings from a dead man’s finger, coins dropped by the faithful, the remnants of rubber sandals, plastic water bottles.

The dhobis, who launder clothes, line up on one stretch of riverbank, pounding saris and bedsheets on stone tablets. A man shovels sand from the river bottom: every bullock cart he fills for a cement maker will fetch him a coveted $5.50. Men and boys bathe.

“This river is worshiped,” said a bewildered Sunny Verma, 24. “Is this the right way of worshiping it?”

So shaken was Mr. Verma on his first visit to the Yamuna this year that he now works full time to shake up others. He joined an environmental group called We for Yamuna.

“If you want to worship the river, you should give it more respect,” he said. “You should treat it the right way. You should question the government. You should ask the state to actually do something for the river.”

Deluge and Drought

Mrs. Prasher has the misfortune of living in a neighborhood on New Delhi’s poorly served southern fringe.

As the city’s water supply runs through a 5,600-mile network of battered public pipes, 25 to 40 percent leaks out. By the time it reaches her, there is hardly enough.

On average, she gets no more than 13 gallons a month from the tap and a water bill from the water board that fluctuates from $6 to $20, at its whimsy, she complains, since there is never a meter reading anyway.

That means she has to look for other sources, scrimp and scavenge to meet her family’s water needs.

She buys an additional 265 gallons from private tankers, for roughly $20 a month. On top of that she pays $2.50 toward the worker who pipes water from a private tube-well she and other residents of her apartment block have installed in the courtyard.

Nearly a fourth of New Delhi households, according to the government commissioned Delhi Human Development Report, rely at least in some part on such wells. It is one of the principal reasons groundwater in New Delhi is drying up faster than virtually anywhere in the country: 78 percent of it is considered overexploited.

Still, the new posh apartment buildings sprouting across New Delhi and its suburbs sell themselves by ensuring a 24-hour water supply — usually by drilling wells deep underground. “Imagine never being thirsty for water,” boasts a newspaper advertisement for one new development.

Warning of “an unparalleled water crisis,” the study released in August found that 25 percent of New Delhi households had no access to piped water, and that 27 percent got water for less than three hours a day. Nearly two million households, the report also found, had no toilet.

The daily New Delhi hustle for water only adds to the strains on the public system.

A few years ago, for instance, to compensate for the low water pressure in the public pipeline, Mrs. Prasher and her neighbors began tapping directly into the public water main with so-called booster pumps, each one sucking out as much water as possible.

It was a me-first approach to a limited and unreliable public resource, and it proliferated across this me-first city, each booster pump further draining the water supply.

The situation for New Delhi, and all of India, is only expected to worsen. India now uses an estimated 829 billion cubic yards of water every year — that is more than guzzling an entire Lake Erie. But its water needs are growing by leaps. By 2050, official projections indicate, demand will more than double, and exceed the 1.4 trillion cubic yards that India has at its disposal.

Yet the most telling paradox of the city’s water crisis is that New Delhi is not entirely lacking in water. The problem is distribution, hampered by a feeble infrastructure and a lack of resources, concedes Arun Mathur, chief executive of the Jal Board.

The Jal Board estimates that consumers pay no more than 40 percent of the actual cost of water. Raising the rates is unrealistic for now, as Mr. Mathur well knows. “It would be easier to ask people to pay up more if we can make water abundantly available,” he said. A proposal to privatize water supply in some neighborhoods met with stiff opposition last year and was dropped.

So the city’s pipe network remains a punctured mess. That means, like most everything else in this country, some people have more than enough, and others too little.

The slums built higgledy-piggledy behind Mrs. Prasher’s neighborhood have no public pipes at all. The Jal Board sends tankers instead. The women here waste their days waiting for water, and its arrival sets off desperate wrestling in the streets.

Kamal Krishnan quit her job for the sake of securing her share. Five days a week, she would clean offices in the next neighborhood. Five nights a week, she would go home to find no water at home. The buckets would stand empty. Finally, her husband ordered her to quit. And wait.

“I want to work, but I can’t,” she said glumly. “I go mad waiting for water.”

Elsewhere, in the central city, where the nation’s top politicians have their official homes, the average daily water supply is three times what finally arrives even in Mrs. Prasher’s neighborhood.

Mrs. Prasher rations her water day to day as if New Delhi were a desert. She uses the leftover water from the dog bowl to water the plants. She recycles soapy water from the laundry to mop the balcony.

And even when she gets it, the quality is another question altogether.

Her well water has turned salty as it has receded over the years. The water from the private tanker is mucky-brown. Still, Mrs. Prasher says, she can hardly afford to reject it. “Beggars can’t be choosers,” she said. “It’s water.”

The Big Question Democrats Are Ducking

By David Ignatius
Wednesday, September 27, 2006

No matter how you slice it, the National Intelligence Estimate warning that the Iraq war has spawned more terrorism is big trouble for President Bush and his party in this election year. It goes to the heart of Bush's argument for invading Iraq, which was that it would make America safer.

Many Democrats act as if that's the end of the discussion: A mismanaged occupation has created a breeding ground for terrorists, so we should withdraw and let the Iraqis sort out the mess. Some extreme war critics are so angry at Bush they seem almost eager for America to lose, to prove a political point. Even among mainstream Democrats, the focus is "gotcha!" rather than "what next?" That is understandable, given the partisanship of Republican attacks, but it isn't right.

The issue raised by the National Intelligence Estimate is much grimmer than the domestic political game. Iraq has fostered a new generation of terrorists. The question is what to do about that threat. How can America prevent Iraq from becoming a safe haven where the newly hatched terrorists will plan Sept. 11-scale attacks that could kill thousands of Americans? How do we restabilize a Middle East that today is dangerously unbalanced because of America's blunders in Iraq?

This should be the Democrats' moment, if they can translate the national anger over Iraq into a coherent strategy for that country. But with a few notable exceptions, the Democrats are mostly ducking the hard question of what to do next. They act as if all those America-hating terrorists will evaporate back into the sands of Anbar province if the United States pulls out its troops. Alas, that is not the case. That is the problem with Iraq -- it is not an easy mistake to fix.

An example of the Democrats' fudge on Iraq was highlighted yesterday by Post columnist Dana Milbank in his description of retired Maj. Gen. John Batiste's appearance before the Senate Democratic Policy Committee. Senators cheered Batiste's evisceration of Defense Secretary Donald Rumsfeld but tuned out Batiste's call for more troops and more patience in Iraq, and his admonition: "We must mobilize our country for a protracted challenge."

Here's a reality check for the Democrats: There is not a single government in the Middle East, with the possible exceptions of Iran and Syria, that favors a rapid U.S. pullout from Iraq. Why? The consensus in the region is that a retreat now would have disastrous consequences for America and its allies. Yet withdrawal is the Iraq strategy you hear from most congressional Democrats, whether they call it "strategic redeployment" or something else.

I wish Democrats (and Republicans, for that matter) were asking this question: How do we prevent Iraq from becoming a failed state? Many critics of the war would argue that the worst has already happened -- Iraq has unraveled. Unfortunately, as bad as things are, they could get considerably worse. Following a rapid American pullout, Iraq could descend into a full-blown civil war, with Sunni-Shiite violence spreading throughout the region. In this chaos, oil supplies could be threatened, sending prices well above $100 a barrel. Turkey, Iran and Jordan would intervene to protect their interests. James Fallows titled his collection of prescient essays warning about the Iraq war "Blind Into Baghdad." We shouldn't compound the error by being "blind out of Baghdad," too.

The Democrat who has tried hardest to think through these problems is Sen. Joseph Biden. He argues that the current government of national unity isn't succeeding in holding Iraq together and that America should instead embrace a policy of "federalism plus" that will devolve power to the Shiite, Sunni and Kurdish regions. Iraqis are already voting for sectarian solutions, Biden argues, and America won't stabilize Iraq unless it aligns its policy with this reality. I disagree with some of the senator's conclusions, but he's asking the right question: How do we fix Iraq?

America needs to reckon with the message of the National Intelligence Estimate. Iraq has compounded Muslim rage and created a dangerous crisis for the United States. The Democrats understandably want to treat Iraq as George Bush's war and wash their hands of it. But the damage of Iraq can be mitigated only if it again becomes the nation's war -- with the whole country invested in finding a way out of the morass that doesn't leave us permanently in greater peril. If the Democrats could lead that kind of debate about security, they would become the nation's governing party. But what you hear from most Democrats these days is: Gotcha.

The writer co-hosts, with Newsweek's Fareed Zakaria, PostGlobal, an online discussion of international issues at http://www.washingtonpost.com. His e-mail address isdavidignatius@washpost.com.

Islamists Calm Somali Capital With Restraint

Islamists who seized Mogadishu, Somalia, have defied expectations by restoring order without harsh religious rules, even allowing soccer games.

September 24, 2006

By JEFFREY GETTLEMAN
NY Times

MOGADISHU, Somalia, Sept. 23 — As the sun begins to sink over this broken city, work crews swing their axes over their shoulders and head home.

Young couples take to the waterfront, mingling openly in the salty breeze. Thousands of children flock to soccer fields in the city center, with a backdrop of beautifully crumbled ruins from battles now over.

It is hard to imagine that this is Mogadishu, the same Mogadishu of “Black Hawk Down,” and clan against clan and 15 years of anarchy. But over the past three months, the Islamists in control here have defied international expectations — in many ways. Not only have they pacified one of the most dangerous cities in the world, they also seem to have moderated their message.

Instead of acting like the Taliban and ruthlessly imposing a harsh religious orthodoxy, as many feared, the Islamists seem to be trying to increase public support by softening their views, at least officially, delivering social services and pushing for democratic elections.

Islamic leaders are operating almost in campaign mode, organizing street cleanups, visiting hospitals, overseeing a mini building boom and recruiting elderly policemen to don faded uniforms they have not worn for years and return to work. Beyond that, they sent a letter this week to the United Nations Security Council pledging to support democratic rule.

Maybe this is just smooth talk. Or premature signs that could prove misleading. Hard-core elements still operate here, including militiamen who drive around with black scarves and black flags and shoot people for watching Hollywood movies. Young men like them were believed to have killed an Italian nun at a Mogadishu hospital last Sunday, apparently in retaliation for Pope Benedict XVI’s remarks on Islam.

But the Islamist leaders say they are rogue elements who will be punished, and they have reopened some movie theaters and issued decrees emphasizing tolerance. Whether they live up to those promises seems to hinge on whether they can, or even want to, rein in the militant groups that helped propel them to power.

“The world was so quick to label us,” said Ibrahim Hassan Addou, the foreign minister for the Islamic administration in Mogadishu. “All we are asking is to be judged on our deeds.”

The United States continues to assert that the Islamists are sheltering Al Qaeda terrorists. The suicide attack against the United Nations-backed transitional government in Baidoa on Monday only reinforced that suspicion, though the Islamists deny any involvement.

But the darkest fears of a draconian Islam on Africa’s east coast have not come true, at least not yet. Boys are allowed to play soccer, and girls are allowed to go to school, despite rumors to the contrary. And businesses are not forced to close during prayer time, as has been widely reported outside of Mogadishu.

In fact, people were selling bread, biscuits and watermelon right in front of the Islamic forces’ headquarters during the noon prayer earlier this week. The teenage militia members standing guard regressed to the boys that they were, giggling over giant slices of watermelon and spitting seeds at each other, the juice running down their chins and dripping onto their guns.

“Nobody knows where we’re headed,” said Ahmed Mohammed Ali, chairman of a Mogadishu human rights organization. But, he added, the Islamists “pacified this place and brought the clans together.”

“Whatever you think about them,” he said, “you can’t overlook that.”

There is a famous story that says much about Somalia. It sounds like a fable, but according to several Somali businessmen, it is sad but true.

There were two close friends who owned a fishery north of Mogadishu. They were like brothers and vowed that if anything ever happened to either of them, the other would take care of his family. They were from the same clan but from different branches of it, the Saad and the Saleeban. One day the Saad man was caught in a cross-fire and killed accidentally by a Saleeban militia. Within hours, the Saad took their revenge and without consulting the dead man’s family shot to death his best friend.

“Anarchy is bad, man,” said Adam Daley, a Somali-American businessman living in Mogadishu. “Can you imagine New York City without any police? Or light?”

This is how Mogadishu, the capital of Somalia, was since 1991, when clan-based warlords brought down the central government. United States marines and United Nations peacekeepers tried to restore order, but the people rallied behind the warlords and helped drive the foreigners out.

The fighting razed the city’s famed Italian architecture and left a leadership vacuum. Gradually, clan elders set up small courts to resolve disputes, using Islamic law to guide them.

Before the war, that might have seemed strange. Somalia used to be a secular place, where women wore skirts and men drank beer.

But in the period of anarchy, the culture changed. After Western aid organizations pulled out, Arab charities rushed in, bringing Koranic schools and more religion.

Militant Islamic groups opened camps in Somalia’s deserts. According to terrorism analysts, American intelligence officers began hiring warlords to kidnap terrorism suspects and take them to bases outside Somalia. Often the suspects were innocent imams or businessmen who were soon set free.

By 2004, the Islamist groups teamed up with clan courts and businessmen to protect themselves from the warlords, calling their alliance the Union for Islamic Courts.

Last winter, the warlords announced that they, too, had formed an alliance, the Alliance for the Restoration of Peace and Counterterrorism. It was a well-known fact, buttressed by the annoying aerial drone that buzzed over Mogadishu at night, that they had American support.

That played straight into the hands of the Islamists, who quickly built an army called the Shabab, or youth, made up of young, devout fighters, to overthrow the warlords. The Shabab wore green skull caps and little beards. They did not smoke cigarettes or chew qat, the popular narcotic leaf that had spurred so much of Mogadishu’s madness.

People were impressed.

“Every day at noon women were driving to the front lines to bring these guys food,” recalled Ali Iman Sharmarke, one of the founders of the HornAfrik television and radio station.

The warlords were steadily pushed back and soon could not trust anyone, including phone operators, whom they suspected of tapping their calls.

“We had no communication or leadership,” said Col. Ali Warsame, whose warlord commander ended up fleeing Mogadishu on the back of a donkey and wearing a veil. By the first week of June, all the warlords had been defeated.

The courts’ first move was a thank you to their patrons. Within weeks, Mogadishu’s port and airport, which had been essentially closed for more than a decade, were open for business.

The courts then took many of the warlords’ militiamen to an old army base outside the city.

There, under a searing sun, 700 young men march in circles, chanting, “God is great!” and doing a funny elbow-swinging goose step.

“It’s Russian,” Col. Muhidin Haji, the camp commander, explained.

The courts are now focusing on civil administration, with committees on sanitation, reconstruction, education and justice. Investment money is already flowing back in. The streets around Mogadishu’s main market are clogged with trucks hauling logs and cement. To oversee all this, the Islamists have appointed university professors, including many educated abroad, to crucial posts.

The Islamists are meeting with leaders from the transitional government based in Baidoa, 150 miles inland, to discuss sharing power. Despite being recognized by the United Nations, the transitional government has very little support among Somalis.

Under a United Nations-backed framework, Somalia is supposed to have elections by 2009. The Islamists say the sooner the better. They know they are the most popular force in the country.

One morning this week, hundreds of men volunteered for an Islamist-organized cleanup. With the clap of his hands, the work leader sent them plunging into overgrown thickets to clear brush. “It’s an exchange,” said Abdul Aziz Issah, one of the workers. “They brought us peace, we give them work.”

There is so much of it to do. Huge swaths of the capital have been reduced to ruins, with an arch left here, half a crumbling wall left there. In many places, Mogadishu looks like an ancient city that has been deserted for centuries, just riddled with holes.

Lebanon’s Future: Bending Toward Hezbollah or Leaning to the West?

News Analysis

By CRAIG S. SMITH
NY Times

BEIRUT, Lebanon, Sept. 18 — The war with Israel is over and reconstruction has begun, but the battle for Lebanon’s political future continues apace. It is a struggle whose outcome could have profound ramifications for the Middle East.

The latest maneuver in that fight is Hezbollah’s vociferous call for a national unity government that would threaten the slim majority held by pro-Western parties, known as the March 14 movement after a huge demonstration on that date in 2005. [Hezbollah has scheduled what is expected to be a huge rally on Friday in Beirut.]

“The political map now is different,” said Ahmad Malli, a member of Hezbollah’s politburo, sitting beneath a white tent erected amid the rubble of southern Beirut’s bombed-out Dahiya district. “March 14 doesn’t represent the real majority in Lebanon anymore.”

The struggle is first and foremost about the shifting alliances of Lebanese domestic politics, and it is still too early to say which side will win. But the surge in popularity and power that Hezbollah has enjoyed since this summer’s war has alarmed those who are trying to pull Lebanon more securely into the American orbit, since they fear that political gains for Hezbollah translate into political gains for Iran.

Pro-Western Lebanese politicians have watched with dismay as Iranian influence has spread across the region, largely with the help, they say, of American foreign policy. Iran extended its reach into western Afghanistan and has secured a deep hold in Iraq.

It has cemented its standing among the Shiite population of Lebanon with Hezbollah’s perceived success in the recent war. It has even begun playing a larger role in the Israeli-Palestinian conflict, having publicly offered the fiscally squeezed Palestinian party, Hamas, financial support.

“There is an Iranian empire slowly but surely being erected,” said Walid Jumblat, a weary, aging Druze warlord cloistered in his ancestral castle deep in the mountains of the Shuf region.

Mr. Jumblat has emerged as Hezbollah’s most vocal opponent among the American-backed pro-democracy movement that holds a slim majority in Parliament today. But that majority is being challenged by Hassan Nasrallah, the young, charismatic Iranian-backed leader of Hezbollah, hiding somewhere in the devastated southern suburbs of Beirut. He has forged an alliance with Michel Aoun, a former general who controls the largest bloc of Maronite Christian seats in the Parliament.

“A government of national unity will introduce people like Michel Aoun, who is pro-Hezbollah, and maybe others, and we will lose the majority,” Mr. Jumblat said earlier this week in the richly decorated confines of his castle.

Even if the current government remains in power, its influence has suffered severely. Members of the March 14 group worry that without making peace with Hezbollah, they will not be able to get anything done. Hezbollah and other Shiite ministers paralyzed the government for seven weeks earlier this year with a boycott to protest the government’s call for an international tribunal to judge suspects in the assassination of the former prime minister, Rafik Hariri. Syria, a Hezbollah backer, is widely believed to have been involved.

Before the war, talks with all major political forces in Lebanon had begun to address the delicate and complex issue of disarming Hezbollah, the final obstacle in the government’s effort to recover full sovereignty over Lebanese territory since the withdrawal of Syrian forces a year earlier.

But the war interrupted all of that.

Sheik Nasrallah has emerged as a hero of defiance against American influence and Israeli might for many people across the Middle East.

Iran, too, won an added measure of respect for both its wartime support and its post-war aid. Portraits of the Iranian president, Mahmoud Ahmadinejad, hang in some villages of southern Lebanon, while highways across Lebanon have Hezbollah-paid billboards showing the destruction by Israeli bombs, emblazoned with the words, “Made in the U.S.A.”

Now, Hezbollah is trying to turn its perceived military successes into greater political power.

Mr. Malli, 51, a calm man in a gray suit over an open-necked blue-gray shirt, dismisses the worries about Iranian influence and casts Hezbollah’s maneuvers instead as an effort at national reconciliation in the face of an Israeli threat.

Hezbollah has successfully portrayed the war here as an inevitable, pre-planned attack that Israel launched at the first opportunity, rather than as an unexpected reprisal for its kidnapping raid.

In that context, it has depicted itself as Lebanon’s only effective defender. The group has made much of an incident in the southern town of Merj ’Uyun where the Israeli Army occupied a Lebanese Army barracks and detained the soldiers inside without resistance. Lebanese television aired a videotape of the Lebanese general in charge having tea with Israeli Army officers.

“If we follow that strategy, there will be no defense of Lebanon,” Mr. Malli said.

Now, rather than talk of disarming its militia, the group wants instead to discuss a national defense strategy in which the militia plays a part.

Left on the defensive over the war, the March 14 group has focused attention on pressing for an international tribunal to eventually try those suspected of roles in the February 2005 assassination of Mr. Hariri.

The pro-Western group hopes that such a tribunal would revive the anti-Syrian, anti-Iranian sentiment that dominated Lebanese politics before the war and help swing the country back toward the West.

“The tribunal, if it is formed according to our wishes, might give us a weapon,” Mr. Jumblat said.

But sending suspects to a tribunal requires legal maneuvers by the Lebanese government that it can only hope to manage if the March 14 group maintains its majority.

“This balance of power is quite fragile, with Iran on one side and Europe and the U.S. on the other,” Mr. Jumblat said, his conversation punctuated by heavy sighs and bitter chuckles. “Now our independence is at stake.”

Iran’s Leader Relishes 2nd Chance to Make Waves

By DAVID E. SANGER
NY Times

When President Bush and his advisers decided to allow President Mahmoud Ahmadinejad of Iran into the country to address the United Nations, their strategy was simple: containment.

There would be no visits to other cities where he could denounce Washington or question Israel’s legitimacy. There would be no opportunities, beyond his speech to the General Assembly, to turn questions about his nuclear intentions into repeated diatribes about America’s nuclear arsenal.

It turned out that Mr. Ahmadinejad had a Plan B.

The scope of his determination to dominate not only the airwaves but the debate became evident yesterday evening, when he entered a hotel conference room on the East Side with a jaunty smile, a wave and an air of supreme confidence.

Over the objections of the administration and Jewish groups that boycotted the event, Mr. Ahmadinejad, the man who has become the defiant face of Iran, squared off with the nation’s foreign policy establishment, parrying questions for an hour and three-quarters with two dozen members of the Council on Foreign Relations, then ending the evening by asking whether they were simply shills for the Bush administration.

Never raising his voice and thanking each questioner with a tone that oozed polite hostility, he spent 40 minutes questioning the evidence that the Holocaust ever happened — “I think we should allow more impartial studies to be done on this,” he said after hearing an account of an 81-year-old member, the insurance mogul Maurice R. Greenberg, who saw the Dachau concentration camp as Germany fell — and he refused to even consider Washington’s proposal for Russia to provide Iran with nuclear reactor fuel, and take it back once it is used. (Without the capacity to enrich fuel on its own soil Iran would be unable to make fuel suitable for a nuclear weapon.)

He traced the history of 50 years of unfilled deals with the United States, Germany, France and others — skipping over the Iranian revolution and the hostage-taking that followed — and concluded, “How can we rely on these partners.” His solution? The United States should shut down its own fuel production and “within five years, we will sell you our own fuel, with a 50 percent discount!” He settled back into his seat with a broad smile that some in the group described as a smirk.

The decision by the council’s president, Richard N. Haass, to invite Mr. Ahmadinejad to the session touched off a rare outcry protest in an organization whose meetings are usually as staid as the portraits of long-forgotten diplomats on its walls.

Mr. Haass, who ran the policy planning branch of the State Department during Mr. Bush’s first term, first had to fend off senior administration officials who had argued that he should not give Mr. Ahmadinejad the legitimacy of a hearing — especially with the likes of Brent Scowcroft, who served as national security adviser under President Bush’s father, or Robert D. Blackwill, who directed Iraq policy at the White House under Condoleezza Rice.

“It’s fair to say that Dr. Rice thought this was a bad idea,” one senior State Department official said. “A really, really bad idea.”

So did leaders of several Jewish groups, whom Mr. Haass invited — and who promptly asked if the council would have invited Hitler in the 1930’s. “Some of us considered quitting to make it clear how offensive this is,” said Abraham H. Foxman, the national director of the Anti-Defamation League, who was one of the Jewish leaders whose attendance Mr. Haass sought.

But after a flurry of phone calls, including with Elie Wiesel, the writer and Holocaust survivor, they decided against a mass resignation — particularly after the council made the session a “meeting” rather than a dinner. (There were light hors d’oeuvres on the side; Mr. Ahmadinejad never touched them.)

“It is more offensive to break bread with the guy,” Mr. Foxman said. “I thought dinner was crossing the line.”

But the council pointed out that it had served as host for many world leaders equally skilled at repressing dissidents, developing suspected weapons programs, shutting down a free press and denouncing Israel.

“We’ve had Castro,” said Lisa Shields, the council’s communications director, ticking off the gallery of leaders Washington considered rogues. “We’ve had Arafat, and Mugabe. We’ve had Gerry Adams.”

The greeting yesterday evening was not exactly overwhelming. There were no introductory handshakes, no diplomatic niceties. All of the Americans who were invited to attend, including four journalists, were members of the council. Iran’s effort to bring in television cameras was deflected, apparently because the council feared that the session would be used for political purposes in Iran, where Mr. Ahmadinejad is presumably eager to show that even if President Bush refused to meet him, he got his message across.

In fact he did — meeting academics in the morning and religious leaders at midday, and speeding from the council meeting for another television interview. He did most of this without leaving the Intercontinental Hotel on 48th Street in Manhattan.

The council would not say how many of the invitees had refused to attend. But members said they knew of more than a half-dozen, from the publisher Mort Zuckerman to the former Secretary of State Madeleine K. Albright. It is unclear why some declined. A few claimed scheduling conflicts, rather than moral objections.

The handful who had a chance to quiz the Iranian president went out of their way, within the limits of diplomatic etiquette, to make clear to Mr. Ahmadinejad that they thought his characterizations of Israel and the Holocaust were repugnant and that his nuclear strategy was self-defeating. He gave no ground.

When Martin S. Indyk, a former American ambassador to Israel, told Mr. Ahmadinejad that Iran “did everything possible to destroy’’ efforts to bring peace between Israel and the Palestinians, the president said, “If you believe Iran is the reason for the failure, you are making a second mistake.’’ Why, he asked, should the Palestinians be asked to “pay for an event they had nothing to do with’’ in World War II, saying that they had nothing to do with the systematic killing of Jews — if those killings, he added, had happened at all.

“In World War II about 60 million people were killed,’’ he said at one point, when pressed again on his refusal to accept that the Holocaust happened. “Two million were military. Why is such prominence given to a small portion of those 60 million?’’

A few minutes later, he asked a question himself: “In the Council on Foreign Relations, is there any voice of support for the Palestinians?’’

Mr. Ahmadinejad’s habit of answering every question about Iranian policy with a question about American policy was clearly wearing on some of the members, but at the end they acknowledged that he was about as skillful an interlocutor as they had ever encountered. “He is a master of counterpunch, deception, circumlocution,’’ Mr. Scowcroft said, shaking his head. Mr. Blackwill emerged from the conversation wondering how the United States would ever be able to negotiate with this Iranian government.

“If this man represents the prevailing government opinion in Tehran, we are heading for a massive confrontation with Iran,” he said.

In fact, on the main issue speeding the two countries toward confrontation, Iran’s nuclear program, the president was unwilling to discuss specifics. He insisted that he was fully cooperating with the International Atomic Energy Agency, even though it had pages of questions his government refused to answer.

Instead, he steered the whole conversation toward Iran’s rights under the Nuclear Nonproliferation Treaty, ignoring an effort by Ashton B. Carter, a Harvard professor, to get him to answer whether the nuclear effort was worth the cost to Iranian society.

“The U.S. doesn’t speak for the whole world,’’ Mr. Ahmadinejad responded, noting that at a meeting of nonaligned nations in Cuba over the weekend “118 countries defended the right of Iran to enrich.’’

And as he left, it was with a jab to his hosts. “At the beginning of the session, you said you were an independent group,’’ he said. “But almost everything that I was asked came from a government position.’’ Then he smiled, thanked everyone and left the room with a light step.

Who Needs the IMF?

The organization is facing serious questions about its makeup, and its purpose.

By Kenneth Rogoff
Newsweek International

Sept. 25, 2006 issue - As the international Monetary Fund holds its big fall meetings in Singapore this week, it faces a financial world that has been turned on its head. Traditionally, the Fund has helped out bankrupt emerging-market governments using loan money collected mainly from Western nations. But now, the Fund is being asked, in effect, to play a much broader role in helping maintain financial stability in a world where the lenders and creditors are trading places. With the United States borrowing two thirds of global net savings and Euro-zone countries like Italy, Greece and Portugal struggling to control their government finances—while emerging markets sit on mounting foreign-exchange reserves—many worry that ground zero for the next big global financial crisis could be somewhere in the wealthy West. Given that Asia now accounts for almost 40 percent of global income, and an even larger share of its surpluses, it makes no sense that IMF voting rights and leadership posts are still dominated by the United States and Europe.

At immediate issue in Singapore is a relatively modest proposal by the Fund's managing director, Spaniard Rodrigo Rato, that would give slightly more voting power to China, South Korea, Turkey and Mexico. But this proposal is just a stalking horse for a larger reshuffling that would acknowledge the seismic shifts in global income that have taken place since the International Monetary Fund was founded after World War II. For an institution that pretends to reflect countries' relative economic influence, it is simply untenable to have China, with 15 percent of global income, own only 2.9 percent of the Fund's voting shares.

But attempts to reallocate power in global financial governance are meeting stiff resistance. True, the all-important United States stands firmly on the side of change, perhaps hoping that a more empowered Asia will feel obliged to take a less nationalistic approach to economic policy. Europe, however, is resisting fiercely, especially small, rich nations such as Belgium, the Netherlands, and the Nordic countries. They see their outsize role in the Fund—each controls more votes than China—as a key affirmation of their continuing relevance in a growing world. Curiously Asia, which ought to see the enhancement of its Fund voting shares as a milestone, is deeply ambivalent.

Many Asians, fueled by polemicists who seek to blame the Fund for the region's late 1990s financial crisis, remain deeply hostile to the IMF. Rather than seek deeper involvement in the organization, some Asian leaders are arguing for a regional alternative that would pool the trillions of dollars their economies have accumulated over the past ten years by running massive trade surpluses with the rest of the world.

Perhaps the biggest obstacle to reform are those who simply do not see the importance or urgency of revamping the IMF. Four years of rapid global growth have lulled many into thinking that the Fund is an anachronism, that nothing will ever go wrong. Sovereign debt markets, in particular, seem to have forgotten the spate of spectacular global debt crises that raced across the developing world only a short while ago. These include Mexico in 1994, South Korea, Indonesia and Thailand in 1997, Russia in 1998, and Brazil, Argentina and Turkey in the early 2000s. Each time, global financial stability stood on the brink, and each time the Fund helped orchestrate a global response, often pouring in billions of dollars in bridge loans out of its own resources.

Consider, for example, the Fund's risky and creative lending package to Brazil in August 2002, when markets were terrified that the impending election of leftist President Luiz Inácio Lula da Silva would induce Brazil to cast aside its newly stable macroeconomic policies. With market access suddenly freezing up and the country on the brink of default, the Fund stepped in with $30 billion. The Fund's loan arguably helped avert a meltdown that would have slammed global markets from Manila to Istanbul, and forestalled the benign period that emerging market economies have enjoyed the past few years.

Of course, not all of the Fund's programs have proved so successful. The most notable failure was Argentina in 2001, when the Fund was too slow to pull the plug even after it became obvious that the country was not willing to reform its finances in a way needed to avert default. In between these two diverse performances is the Asian crisis, where Fund intervention helped stave off default but not a deep recession. True, the root cause of the crisis was the Asian governments' attempts to rigidly peg their currencies to the dollar, even as they opened up their capital market to massive speculative flows. This was a recipe for catastrophe that I and a few other academic economists had been warning about for several years prior. The Fund, however, was too weak and inconsistent in its efforts to convince national authorities in Asia of the urgent need to adopt more sustainable policies.

For the Panglossians, who seem to hold sway now in sovereign debt markets where interest spreads are at or near record lows, all this is ancient history. Many investors have come to believe that today's newly prudent governments, backed up by newly improved monetary policies, will indeed ensure the world of at least a couple decades of financial-crisis-free living. Perhaps they are right. Maybe the world will one day look back on the sovereign debt crises of the 1980s and 1990s as mere growing pains on the path to global financial nirvana. Perhaps even today's massive U.S. current-account deficit of more than $800 billion per year will prove a nonissue—just a reallocation of global assets, soon to be dwarfed by ever-expanding global capital markets.

If so, the rest of us may be losing sleep over prospective financial crises for nothing. But just in case, wouldn't it be a good idea to keep trying to improve the IMF, rather than to eviscerate it? Perhaps the biggest question facing the Fund today is how to assert greater influence over the big players like the United States and China, whose massive borrowing and lending activities pose risks no one can easily assess. Indeed, the Fund has already become quite outspoken in questioning China's rigid exchange-rate regime and budget deficits in the United States. But in Singapore, the finance ministers and central bankers who oversee the Fund must decide how far they are willing to go in assigning the Fund an enhanced role in surveillance of these economies, not to mention Europe's.

Speaking of Europe, one desperately needed reform is an immediate end to Europe's prerogative of choosing the Fund's leader. Although Europe's candidates have generally compared favorably with their counterparts at other international economic organizations, the practice is still a horrible anachronism. Even as the Fund board struggles over voting shares, it should immediately agree that the next managing director should be the best and most qualified candidate, regardless of nationality.

Will the Fund's leaders make any progress in Singapore on the institutions' governance and future direction? Let's hope so. In a world where global capital markets are now 10 times the size of the U.S. economy, we need a fully empowered multilateral financial institution, ready to mitigate the risk of future global financial crises, even if there is no way to completely avoid them.

Rogoff is professor of economics at Harvard University and a visiting scholar at the Brookings Institution. From 2001 to 2003, he served as the chief economist at the International Monetary Fund.

How to Avoid War

Nixon went to China. Now Bush must break out of the box on Iran

By Michael Hirsh
Newsweek

Sept. 20, 2006 - America is in the middle of a giant mess in the Muslim world, and there is one country—just one—that holds the key to solving the whole problem. There is only one country that has the ability, and the interests, to help us confront the out-of-control Shiite militia movement in Iraq, the terrifying Taliban resurgence in Afghanistan and the still-dangerous Hizbullah presence in Lebanon all at once. There is just one country that stands between the unsettling situation we're in now and the far greater horror of a nuclearized Islamic world in which Israel is permanently locked into an existential battle with both Arabs and Iranians, and Americans must live in fear forever. There is just one country that, if it were brought into the community of nations, could stop this downward spiral before it is too late—indeed reverse it.

That country is Iran. The only man who can bring Iran around is George W. Bush. And the only way he can achieve that is by wiping the table clean and proposing a grand bargain with Tehran that discards the silly, artificial constraints in the current U.S. approach. I mean this business of talking but not talking (let the Europeans do it) and artificially separating issues, as in: "We'll have one fellow talk to you about Iraq, but not about nukes; we'll have another fellow talk to you about nukes, but not about Iraq. And we won't talk about anything else."

There is ample precedent for the kind of bold, transformational step that I'm talking about. Good Republican cloth-coat precedent. Richard Nixon, who came of age as a commie-baiting ideologue, proved a great enough statesman in the end to transcend his ideology, to the shock of the entire world, when he realized that the United States and the Soviet Union were locked into hopeless, and dangerous, confrontation. "Red" China was as much anathema to Nixon then as clerical Iran is to Bush today. But Nixon realized that, in that era of American weakness and distractedness, only Beijing could give America the geostrategic advantage it needed to shatter the more dangerous Soviet stalemate. As early as October 1967, he began talking about China in much the same way worried internationalists now speak of Iran: "We simply cannot afford to leave China forever outside the family of nations, there to nurture its fantasies, cherish its hates and threaten its neighbors," Nixon wrote in Foreign Affairs. As Henry Kissinger later concluded in his magisterial book "Diplomacy": "Excluding a country of the magnitude of China from America's diplomatic options meant that America was operating internationally with one hand tied behind its back."

The United States currently has two hands tied internationally. We have an official policy of not engaging with the one country that could most make a difference in setting Lebanon, Iraq and Afghanistan on a better course. Similarly, we do not talk to another country that could also help resolve the first two problems: Syria. At the same time, we are utterly bogged down next door in Iraq, as Nixon was in Vietnam. In a moment of clarity, CENTCOM commander Gen. John Abizaid admitted Tuesday that more than 140,000 U.S. troops in Iraq would likely have to remain there at least until the spring of 2007. That means that for the remainder of Bush's presidency, our Army will be completely distracted, our deterrent undermined, our weakness apparent. In Afghanistan the newly confident Taliban are carving out a new Islamist safe haven that, years hence, could set the stage for another 9/11, perhaps a far more devastating one. Even more ominous is the fear that Iran, having successfully divided Russia and China from the West and more recently sown discord between Washington and Europe, will continue to move ahead stealthily to a bomb. A nuclear-armed Iran would turbocharge a Mideast arms race and put the region into permanent hair-trigger Armageddon alert on multiple levels: between Arabs and Persians, between Persians and Westerners, between Israelis and Persians and between Israelis and Arabs.

There is only one conceivable way, at this point, to stop an Iranian bomb. And that is to remove the rationale behind an Iranian bomb. Only Washington can achieve this, because after invading Iraq and threatening confrontation with Tehran, a hostile United States is now the main reason Iranian hard-liners are winning the day in that battened-down and isolated country. Why are the Europeans leading the talks when Tehran knows they represent no threat (or a minimal one of holding up the sale of some dual-use valves and pipes)? Despite the considerable skill of European Union Foreign Minister Javier Solana, these talks are likely to go nowhere.

And what of those crazy clerics in Iran? Won't they get the wrong idea if Bush turns diplomatic softie? We know, of course, that Mahmoud Ahmadinejad is a man of "dangerous" mindset, as Time magazine put it this week. And of course we must try to operate from a position of as much strength as we can muster, which means actively considering muscular last-resort options that could include "forced" inspections of Iran's nuclear sites, or heaven forbid, airstrikes.

But was not Mao Zedong a dangerous man, too? (In fact, he made Ahmadinejad look like a prankster by comparison.) And wasn't Beijing feeling quite confident at the time of the China opening, in 1972, after watching America get bogged down for 10 years next door in Vietnam? Like China, Iran is a country with a long view of its interests. And it is feeling more vulnerable than you might expect right now. The latest postmortems from Lebanon indicate that Hizbullah, Tehran's principal proxy army, was severely hurt by Israeli airstrikes. Iran, if it were encouraged, has considerable interest in containing the Taliban-Al Qaeda alliance, its bitter ideological enemy (thanks to the Shia-Sunni split) and in preventing the civil war in Iraq that is now mainly being fomented by Shiite death squads. And Ahmadinejad's scurrilous rhetoric aside, the Iranians do not especially want to antagonize Israel either (one reason why, for 10 years before the inexperienced Ahmadinejad came to power, it was officially sanctioned policy in Tehran to tone down its anti-Zionist diatribes).

Does Iran want the bomb? Almost certainly. But there is ample ground between there and here, many middle stages where Tehran could be persuaded to pause indefinitely if it decided that the threat from the West (read: Washington) had subsided enough to do so. Bush went to war in Iraq hoping to bring the Shiites over to America's side, tilting the balance of power in Islam away from both the Sunni autocrats and the Sunni radicals. Now we are in the peculiar situation of embracing one set of Shiites (led by Iraqi Prime Minister Nuri al-Maliki) and treating another as if they were lepers. It won't wash in the Muslim world. Nor in the real world. Bush doesn't need to "go" physically to Tehran of course, as Nixon did to China. But perhaps he and the Iranians could meet somewhere else—maybe Reykjavik?

As Kissinger wrote, Nixon was a Wilsonian by inclination like almost all U.S. presidents, Democrat and Republican—in other words, a believer in the concept that it is America's destiny to spread freedom around the globe (no, today's neocons didn't invent that; they only invented pre-emptive war, which is over with, as are they). But Nixon also knew that he had to operate with limited tools of leverage. As Kissinger wrote 10 years ago of that era, which increasingly resembles the one we're in now as Iraq looks more like Vietnam and our country remains split by bitter partisanship and burdened by debt: "The America of the late 1960s—stalemated in Indochina and torn by domestic conflict—required a more complex and nuanced definition of its international enterprise."

Bush once famously said that he doesn't "do nuance." No doubt he will resist taking this step to the last. He has a phobia about appearing weak, and he seems utterly locked into the view that strong leadership means never saying you're sorry or changing course. What his savvier advisers must make him understand—and there is no one who knows this better than Secretary of State Condoleezza Rice, a thorough pragmatist—is that he has no choice at this point.

Chávez Calls Bush ‘the Devil’ in U.N. Speech

By DAVID STOUT
NY Times, September 20, 2006

President Hugo Chávez of Venezuela bitterly and sarcastically assailed President Bush before the United Nations General Assembly today, portraying Mr. Bush as “the devil” who thinks he is “the owner of the world.”

“Yesterday, the devil came here,” Mr. Chávez said, alluding to Mr. Bush’s appearance before the General Assembly on Tuesday. “Right here. Right here. And it smells of sulfur still today, this table that I am now standing in front of.”

Then Mr. Chávez made the sign of the cross, brought his hands together as if in prayer and glanced toward the ceiling.

The moment may not become as famous as Nikita Khrushchev’s finger-wagging, shoe-thumping outbursts in the General Assembly in the cold-war era, but it still produced chuckles and some applause in the assembly hall.

In case anyone had missed the point, Mr. Chávez drove it home:

“Yesterday, ladies and gentlemen, from this rostrum, the president of the United States, the gentleman to whom I refer as the devil, came here, talking as if he owned the world. Truly. As the owner of the world.”

The Venezuelan leader also had sharp words for the United Nations, which he said is “antidemocratic” and “doesn’t work.”

Mr. Chávez, a left-wing populist who tried to seize power in a coup six years before winning election in 1998 on a tide of poverty-driven resentment, looked somewhat incongruous in a buttoned-up gray suit as he delivered an address that blended anti-Americanism with snippets of American life and culture.

“I think we could call a psychiatrist to analyze yesterday’s statement by the president of the United States,” Mr. Chávez went on. “As the spokesman of imperialism, he came to share his nostrums, to try to preserve the current pattern of domination, exploitation and pillage of the peoples of the world.

“An Alfred Hitchcock movie could use it as a scenario. I would even propose a title: ‘The Devil’s Recipe.’ ”

Mr. Bush spoke on Tuesday about Iran’s nuclear ambitions and how they might be curbed, and about his broader visions for the Middle East — visions that Mr. Chávez saw as insincere, ridiculous or both.

“Wherever he looks, he sees extremists,” said Mr. Chávez, who won office by defeating a businessman educated at Yale, Mr. Bush’s alma mater. “He looks at your color, and he says, ‘Oh, there’s an extremist.’ Evo Morales, the worthy president of Bolivia, looks like an extremist to him.”

Indeed, Mr. Morales, another leftist, does raise potential problems for United States interests in Latin America, though perhaps not as thorny as those posed by Mr. Chávez. Unlike Bolivia, Venezuela belongs to the Organization of the Petroleum Exporting Countries and is a major energy supplier to the United States, and Mr. Chávez has courted Fidel Castro and the leaders of Iran and Syria, all factors that make him a man Washington must watch.

Mr. Chávez’s remarks were translated from Spanish, and while subtleties can sometimes be lost in translation, his feelings about the United States seemed to come through clearly enough. The United States, he said, is “the gravest threat looking over our planet, placing at risk the very survival of the human species.”

“We appeal to the people of the United States to halt this threat, like a sword hanging over our heads,” Mr. Chávez said.

It was not clear if Mr. Chávez was exhorting Americans to rise up in revolution, or if his gibe was an indirect reference to previous American-aided upheavals in Central and South America.

Needless to say, the speech did not go down well with American officials. John R. Bolton, the United States ambassador to the United Nations, called the remarks “insulting.”

Tom Casey, a State Department spokesman in Washington, was a bit more diplomatic, saying, “I don’t think you’ll find it surprising that we disagree with the views that were expressed in President Chavez’s remarks.”

President Bush often notes that some of America’s one-time enemies, notably Japan and Germany, are now friends. But any rapprochement with the Caracas government would seem to be a long way off, to judge by Mr. Chávez’s closing remarks.

“It smells of sulfur here, but God is with us, and I embrace you all,” he said. “May God bless us all. Good day to you.”

A Hedge Fund’s Loss Rattles Nerves

By GRETCHEN MORGENSON and JENNY ANDERSON
Published: September 19, 2006 in NY Times

Enormous losses at one of the nation’s largest hedge funds resurrected worries yesterday that major bets by these secretive, unregulated investment partnerships could create widespread financial disruptions.

The hedge fund, Amaranth Advisors, based in Greenwich, Conn., made an estimated $1 billion on rising energy prices last year. Yesterday, the fund told its investors that it had lost more than $3 billion in the recent downturn in natural gas and that it was working with its lenders and selling its holdings “to protect our investors.”





Price of Natural Gas




Amaranth’s investors include pension funds, endowments and large financial firms like banks, insurance companies and brokerage firms. The Institutional Fund of Hedge Funds at Morgan Stanley was an investor in Amaranth; as of June 30, it had a stake valued at $124 million. The turnabout in the fortunes of the $9.25 billion fund reflects the decline in energy prices recently; natural gas prices fell 12 percent just last week.


Yet also last week, Charles H. Winkler, chief operating officer at Amaranth, had met with prospective investors at the Four Seasons restaurant in Manhattan and reported that his fund was up 25 percent for the year, according to a meeting participant. Days later, rumors began circulating that Amaranth was losing money in one of its natural gas bets, a trade that had generated enormous profits for the fund in recent years.

Late in the week, the fund’s traders began dumping large stakes in convertible bonds and high-yield corporate debt, securities that could be sold without disrupting the market.

Mr. Winkler did not return a phone call seeking comment.

The scale of Amaranth’s losses — and how quickly they appear to have mounted — was the talk of Wall Street yesterday, as was speculation on how much the bet was leveraged, or made on borrowed money. Still, there were no signs of ripples on the financial markets as a result.

Amaranth’s woes are largely the result of a decline in natural gas prices that began in December, well before the spring months of March or April, when they typically fall off. Amaranth’s biggest stake was a combination bet on the spread between natural gas futures prices for March 2007 and those for April 2007. Amaranth had often bet that the spread on that so-called shoulder month — when natural gas inventories stop being drawn down and begin to rise — would increase.

But instead the spread collapsed. In the last six weeks, for example, the spread between the two futures contracts ranged from $2.50 at the end of July to around 75 cents yesterday.

Traders briefed on Amaranth’s problems, including one person who examined the fund’s books yesterday, said that the losses might be considerably larger than the firm estimated. Over the weekend, according to one person briefed on the situation, Goldman Sachs examined the fund’s positions.

Amaranth is not the first hedge fund to experience problems in energy markets. MotherRock Energy Fund, a $400 million portfolio, shut down last month after losing money on its bets that natural gas prices would fall. Summer heat sent prices soaring and the fund lost 24.6 percent in June and 25.5 percent in July, according to one investor.

The natural gas market is exceptionally volatile, making it an ideal playground for hedge funds that thrive on wide price movements in securities. Natural gas prices are subject to more severe swings than oil, in part because gas cannot be stored easily.

Arthur Gelber, the founder of Gelber & Associates, an energy advisory and consulting firm based in Houston, said that as a result, the natural gas market was about five times more volatile than the stock market.

The greatest demand for natural gas occurs during very hot or very cold weather, Mr. Gelber said. During mild periods, like early autumn, an oversupply of natural gas can cause a significant decline in price. Hedge funds have added to this natural volatility, he said.

Amaranth was founded six years ago by Nicholas M. Maounis, a former portfolio manager who had specialized in debt securities at Paloma Partners, another large hedge fund. Amaranth employs a so-called multistrategy approach to investing that allows nimble portfolio managers to seize opportunities in whatever markets seem to be most promising at the time.

Now that Amaranth has owned up to huge losses in a single sector, “multistrategy’’ seems to have been a misnomer at the fund.

In his letter to investors, Mr. Maounis, 43, wrote: “In an effort to preserve investor capital, we have taken a number of steps, including aggressively reducing our natural gas exposure.”

Amaranth has additional offices in Houston, London, Singapore and Toronto and employs 115 traders, portfolio managers and analysts, according to its Web site. The firm deploys capital “in a highly disciplined, risk-controlled manner,” it noted.

Its energy portfolio has been overseen by Brian Hunter, a trader who joined the fund from Deutsche Bank in 2004 and conducts trades from his hometown of Calgary, Alberta. Mr. Hunter made enough money at Amaranth in 2005, an estimated $75 million to $100 million, to place him among the 30 most highly paid traders in Trader Monthly magazine.

Rocaton Investment Advisers, a consulting firm in Norwalk, Conn., whose clients have $235 billion in assets, recommended Amaranth to its customers. Yesterday, Robin Pellish, Rocaton’s chief executive, declined to comment on her firm’s relationship with the fund or to identify clients that it had advised to invest in it.

“We’re well aware of the situation with Amaranth and we are monitoring developments,” Ms. Pellish said.

Citing Amaranth’s woes, Stewart R. Massey, founding partner of Massey, Quick & Company, an investment advisory firm in Morristown, N.J., said, “I think it will cause investors to go back and take another hard look at the multistrategy funds they are invested in and do a deeper round of due diligence.” Mr. Massey said he did not have any exposure to Amaranth.

The problems at Aramanth will help fuel a debate over whether more oversight is needed over hedge funds, which have become increasingly powerful forces in the markets. There are nearly 9,000 hedge funds, managing more than $1.2 trillion in assets. In 1990, hedge funds managed just $38.9 billion, according to Hedge Fund Research.

Last week, in a speech in Hong Kong, the president of the Federal Reserve Bank of New York, Timothy F. Geithner, said greater attention needed to be paid to the margin requirements and risk controls in dealings with hedge funds.

The growth in hedge funds, Mr. Geithner noted, will eventually “force us to consider how to adapt the design and scope of the supervisory framework to achieve the protection against systemic risk that is so important to economic growth and stability.’’

In 2004, Amaranth protested a new rule proposed by the Securities and Exchange Commission that would have required certain hedge funds to register with federal regulators and undergo greater scrutiny.

“Contrary to media stereotypes of hedge fund managers, Amaranth does not ‘operate in the shadows’ outside of regulatory scrutiny,” its general counsel wrote. “We do not understand why the commission is proceeding so urgently with this rulemaking when the public policy problem to be addressed remains poorly defined and the proposed regulatory response is so burdensome.”

The rule, which was issued in late 2004, was struck down in June by the United States Court of Appeals for the District of Columbia. Last month, the S.E.C. declined to appeal the ruling.

People Who Share a Bed, and the Things They Say About It

By KATE MURPHY
Published: September 19, 2006 in NY Times

While researching rural life more than 20 years ago, Paul C. Rosenblatt took his 12-year-old son with him to interview farm families in the Midwest. Father and son stayed in a farmhouse and had to share a bed.

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“It was terrible,” said Dr. Rosenblatt, a professor of sociology at the University of Minnesota, Twin Cities, because his son thrashed and turned so much that “his feet were in my face all night.”

Tired and bedraggled the next day, he recalled thinking about how challenging it can be to adapt to sleeping with another person.

In more recent research — on grief — Dr. Rosenblatt interviewed couples whose children had died.

“They quite often would tell me that they dealt with their grief by holding each other and talking together in bed at night,” he said. “It seemed that I kept being reminded of how sharing a bed impacts our lives and sense of well-being.”

And yet, no one had really studied it, perhaps because sharing a bed is so mundane, Dr. Rosenblatt said. So he wrote “Two in a Bed: The Social System of Couple Bed Sharing,” published this summer by State University of New York Press.

“It’s not a self-help book,” he said, but an examination of some of the common and often humorous issues couples face when sharing a bed, including spooning, sheet-stealing and snoring.

“My hope is that the book will influence the world of sleep research so sleep is no longer viewed as an individual phenomenon,” Dr. Rosenblatt said.

There are thousands of studies on sleep and even more on marriage and relationships, but only a handful on couples sleeping together.

The National Sleep Foundation, a nonprofit group in Washington that supports education and research on sleep and sleep disorders, estimates that 61 percent of Americans share their bed with a significant other. And while the very presence of another person in bed increases the chance of sleep disruption, 62 percent of those polled in the foundation’s annual sleep study said they preferred to bed down with their partner.

In researching his book, Dr. Rosenblatt said even though many couples said they slept better alone, they still shared a bed. “When I asked why, they looked at me as if I’d asked them why they keep breathing,” he said.

For “Two in a Bed,” Dr. Rosenblatt interviewed 42 couples. Most of them were married heterosexual couples but some were unmarried hetero- or homosexual couples. Intimacy and comfort were the primary reasons couples gave for sleeping together.

“Some mentioned sex, but not a lot,” Dr. Rosenblatt said. Most reported that the bed is where they talked. “The bed is where they found privacy and were able to leave behind the distractions and separate interests that keep them apart during the day. There’s also something about late night that allowed them to open up and connect.”

Several interviewees reported that difficulty sleeping together or sleeping apart had led to the dissolution of previous marriages, and that sleeping together was essential to maintaining their relationships. Dr. Rosenblatt found that it might also save lives.

“It surprised me how many people thought they were alive today because they shared a bed,” Dr. Rosenblatt said.

For example, he said a woman’s seizure was noticed immediately by her husband with whom she spooned every night. Similar stories came from couples where one partner had a heart attack, stroke or went into diabetic shock.

The couples Dr. Rosenblatt interviewed described how they had had to adjust to sleeping with their partner. Many reported conflicts over bedroom temperature, where to locate the bed and how to make the bed. Watching television, reading and eating in bed were other contentious issues, as was sleeping in the nude. There were quarrels over the alarm clock and whether to allow children or pets into the bed.

“Each couple had to do a lot of problem solving to work out their systems for sleeping together,” Dr. Rosenblatt said. These systems, he said, usually became comforting routines of how couples prepared for bed, got into bed, behaved once in the bed, fell asleep and woke up.

The subjects he interviewed invariably had their own side of the bed, and responsibilities like putting out the cat or opening the windows before turning in. They usually had rituals like watching the television news before lights out or snuggling before falling to sleep. And they often had signals for when they wanted affection, wanted to talk or wanted to be left alone.

“How they arrived at these systems could be said to mirror their relationships,” said Dr. Rosenblatt. The most successful systems were those formed out of compromise and sensitivity to the other’s needs.

“The issues change over time,” Dr. Rosenblatt said.

Whereas a woman might have always been cold at night when she was younger, she might feel like a furnace from menopausal hot flashes as she grows older. Prostate problems might cause a man to get up more often in the night to use the bathroom. Illness and injury might prevent people from sleeping entwined with each other.

Not surprisingly, perhaps, those interviewed said dealing with a partner’s snoring and insomnia profoundly affected the couple’s sleep dynamic.

“These are all things that no one teaches you how to cope with,” said Neil B. Kavey, a psychiatrist and director of the Sleep Disorders Center at New York-Presbyterian/Columbia University Medical Center. “There’s no counseling in this regard, but there should be.”

Sleep centers are primarily concerned with treating disorders and don’t address the impact one partner has on the other. Whatever the cause of unrest, “sleep deprivation has consequences,” Dr. Kavey said. Those include impaired cognitive ability and irritability.

Though Dr. Rosenblatt has written five other books and scores of scholarly essays and papers, he said his book on couples’ sleep has gotten by far the most attention from the news media and fellow academics.

“I think it’s because it’s something most people have struggled with and can relate to,” Dr. Rosenblatt said. “And even though we may take sleeping with our partner for granted, it’s through these kinds of shared social systems that we build and nurture our relationships, and perhaps uncover the underlying meaning of our lives.”

Teaching Math, Singapore Style

NY times Editorial

Published: September 18, 2006

The countries that outperform the United States in math and science education have some things in common. They set national priorities for what public school children should learn and when. They also spend a lot of energy ensuring that every school has a high-quality curriculum that is harnessed to clearly articulated national goals. This country, by contrast, has a wildly uneven system of standards and tests that varies from place to place. We are also notoriously susceptible to educational fads.

One of the most infamous fads took root in the late 1980’s, when many schools moved away from traditional mathematics instruction, which required drills and problem solving. The new system, sometimes derided as “fuzzy math,’’ allowed children to wander through problems in a random way without ever learning basic multiplication or division. As a result, mastery of high-level math and science was unlikely. The new math curriculum was a mile wide and an inch deep, as the saying goes, touching on dozens of topics each year.

Many people trace this unfortunate development to a 1989 report by an influential group, the National Council of Teachers of Mathematics. School districts read its recommendations as a call to reject rote learning. Last week the council reversed itself, laying out new recommendations that will focus on a few basic skills at each grade level.

Under the new (old) plan, students will once again move through the basics — addition, subtraction, multiplication, division and so on — building the skills that are meant to prepare them for algebra by seventh grade. This new approach is being seen as an attempt to emulate countries like Singapore, which ranks at the top internationally in math.

All these references to Singapore are encouraging, given this country’s longstanding resistance to the idea of importing superior teaching strategies from abroad. But a few things need to happen before this approach can succeed.

First of all, the United States will need to abandon its destructive practice of having so many math and science courses taught by people who have not majored in the subjects — or even studied them seriously.

We also need to fix the current patchwork system of standards and measurement for academic achievement, and make sure that students everywhere have access to both high-quality teachers and high-quality math and science curriculums that aspire to clearly articulated goals.

Until we bite the bullet on those basic, critical reforms, we will continue to lose ground to the countries with which we must compete in the global information economy.

Fortune’s Fools: Why the Rich Go Broke

George Foreman, at his home in Houston, went from street fighter to boxing champion to product pitchman. Along the way he had a close call with bankruptcy after squandering $5 million.

September 17, 2006

By TIMOTHY L. O’BRIEN

GEORGE FOREMAN — bald, smiling and gigantic — is propped atop a stool in Gleason’s Gym, the venerable boxing haunt in Brooklyn, watching a videotape of his heavyweight championship bout in 1994 with Michael Moorer.

Mr. Foreman once devastated opponents with brutal, staccato punches short on artistry and long on force. He disposed of formidable pile drivers like Joe Frazier, traded blows with dangerous magicians like Muhammad Ali, and dropped the undefeated 26-year-old Mr. Moorer in the 10th round with a right to the jaw.

Mr. Foreman was 45 at the time of the Moorer fight, a roly-poly 250-pounder who had just reclaimed the heavyweight mantle that Mr. Ali had snatched from him 20 years earlier. By knocking out Mr. Moorer, Mr. Foreman became the oldest heavyweight champion in history and he hailed his victory at the time as one “for all my buddies in the nursing home and all the guys in the jail.”

As Mr. Foreman watches the tape of Mr. Moorer crumpling to the mat, part of a boxing retrospective that ESPN is shooting at Gleason’s, he beams. “Play that again,” he says to no one in particular, softly chuckling to himself. The knockout was the culmination of an unlikely return to the ring that Mr. Foreman staged in his later years, well after he had retired. He has often said that he ended his retirement to prove that nobody is too old for a comeback.

But Mr. Foreman confides in an interview that something else actually drove him back into boxing in the late 1980’s, and it had nothing to do with proving the meaninglessness of an AARP card. Having blown about $5 million, made mostly, he says, during his salad days as a young champion, he desperately needed the money he could earn by fighting again. A former street thug from Houston, accustomed to dispassionately cutting down the most ferocious of men, Mr. Foreman was on the verge of bankruptcy in the 1980’s — and it terrified him.

“It was frightening, the most horrible thing that can happen to a man, as far as I am concerned,” he says. “Scary. Frightening. Nervous. I had a family, people to take care of — my wife, my children, my mother. I haven’t gotten over that yet.”

Pondering his glimpse into the abyss a moment longer, Mr. Foreman’s eyes tighten: “It was that scary because you hear about people being homeless and I was only fractions, fractions from being homeless.”

UNLIKE many others with lush bankrolls who somehow manage to lose it all, Big George rebounded handsomely from his flirtation with bankruptcy. He earned multimillion-dollar purses boxing in the 1990’s and made tens of millions more by reinventing himself as a gentle entrepreneur, astutely peddling the best-selling hamburger grills that bear his name.

Even so, the trajectory of Mr. Foreman’s finances once had him headed into a gilded pantheon of big buckaroos who have squandered often-unimaginable sums of money, come perilously close to personal bankruptcy or completely lost their shirts. The ranks of well-heeled debtors include Thomas Jefferson, Buffalo Bill Cody, Mark Twain, Ulysses S. Grant, Debbie Reynolds, Michael Jackson, Dorothy Hamill, Robert Maxwell, Mike Tyson, Jack Abramoff and a long and pitiful cast of lottery winners.

Each of these grandees had distinct encounters with errant money management. Some of them were undone by rampant spending, others by injudicious deal-making, still others by various shades of greed, fraud or spectacularly poor investments. All of which gives rise to the same old set of questions: Why can’t those who are already wealthy restrain themselves from spending more than they have? Why do rich people, those who would seem to have all the financial padding one needs, wind up deeply in debt? Even worse, why do some of them end up broke?

Mr. Foreman, street-smart and now mindful of his wallet, has his own perceptive answers to those questions. For the man who came back from the brink, it’s all a matter of discipline and proper boundaries.

“A lot of people just don’t grow up,” he says. “I mean, 65-year-old men. They just don’t grow up. They don’t understand that money does not grow on a tree and that you’ve got to respect every dollar. Like Rip Van Winkle — the guy who slept — they party, party, party, then they wake up. ‘Oh my God!’ And they do something desperate trying to recapture what they had. And it doesn’t work like that. You must stay awake.”

David W. Latko, a money manager and radio host who recently published “Everybody Wants Your Money” (HarperCollins), a personal finance primer, reduces the mechanics of squandered wealth to handy categories. He says there are five basic ways people become rich: they inherit, marry, steal, win or earn their fortunes. Only those who earn fortunes, says Mr. Latko, tend to preserve their wealth. Inhabitants of the other four categories are more prone to be wastrels.

“The first thing you’ve got to look at, always, is where is the money coming from,” he says. “People who’ve made money themselves protect it. People who’ve inherited it spend it.”

Profiles of wealthy debtors may not be quite as tidy as Mr. Latko’s list suggests; self-made gazillionaires can wind up insolvent, too, particularly if they earn their money in celebrity circuses like Hollywood. But by and large, Mr. Latko’s list rings true and reinforces one of Mr. Foreman’s points: America’s rich, it would seem, sometimes do believe that money grows on trees.

In some of the darker scenes in Frank Capra’s 1946 cinematic parable about family, community and money, “It’s a Wonderful Life,” Uncle Billy, a kindly, pastoral fogy whose bank office is routinely visited by crows and squirrels, misplaces a hefty deposit that threatens to upend the Bailey family’s little savings-and-loan. Billy’s nephew, George Bailey, played by that symbol of middle-American rectitude, James Stewart, warns his uncle of the consequences of a bank collapse that also promises to force the Bailey family into debt.

“Where’s that money?” George screams at his uncle, growing more frantic by the second. “Do you realize what this means? It means bankruptcy and scandal and prison!” Later rescued from suicide and shame by a bumbling angel and generous townsfolk who kick in hatfuls of cash around the Bailey family’s Christmas tree, George gets smooches from his lovely wife and a new lease on life.

In our more modern financial era, fueled by credit card debt, home equity loans and myriad other forms of handy spending money, George Bailey’s predicament strikes us as, perhaps, quaint. When people like the former baseball commissioner Bowie Kuhn — who earned a handsome salary overseeing the national pastime before his law firm collapsed in bankruptcy in 1990 — decamp to manses in Florida to take advantage of state laws that prevent creditors attaching expensive homes, George Bailey’s fear of ostracism rings old-fashioned.

Over the last three decades, personal bankruptcy rates in America have soared. But in a nod to the notion that going belly-up still carries a whiff of disrepute, Congress tightened bankruptcy laws last year to circumvent what Senator Orrin G. Hatch, Republican of Utah, decried as “a way to avoid personal responsibility.”

It may be, however, that for most people, a bankruptcy filing simply marks an inability to stay afloat — not an attempt to dodge creditors — because most of those who lose their shirts typically are not rich.

According to a study by the St. Louis Federal Reserve last fall, most bankruptcy filers are blue-collar, lower-middle-class high school graduates who are already overloaded with debt when they get sideswiped by unforeseen miseries like a job loss or overwhelming medical expenses. Rarely do the rich have to ponder the consequences of layoffs or insurmountable hospital bills, yet the social ledger is chock-full of examples of landed gentry who still dissipate their wealth and run the risk of ignominy.

Buffalo Bill hauled in the equivalent of about $30 million in today’s dollars overseeing his Wild West show at Chicago’s Columbian Exposition in 1893, according to Erik Larson’s book “The Devil in the White City.” A financial panic in 1907 ruined him and his show; when he died in 1917 there wasn’t enough money in his till to pay for his burial.

Mark Twain, who had a lifelong penchant for dodgy investments and gimmicky inventions, lost about $4 million in today’s dollars betting on a newfangled but unwanted typesetting machine in the 1890’s. He subsequently had to take to the lecture circuit to stave off bankruptcy.

Michael Jackson, who began churning out Top 10 songs and albums as the lead singer of the Jackson 5 before reaching puberty, found it necessary to pledge a stake in his lucrative songbook of Beatles hits to secure a $270 million bank loan to forestall a slide into bankruptcy.

Mike Tyson, like Mr. Jackson a gifted man-child, is entangled in his own financial woes despite once having the marquee power to draw $30 million purses for a single fight. When Mr. Tyson filed for bankruptcy in 2004, he listed debts of $27 million, including about $13 million in unpaid federal taxes and about $174,000 for a diamond-studded gold chain. He had maintained a monthly budget of about $400,000 before the filing.

Buffalo Bill, Michael Jackson, Mike Tyson, Wayne Newton, Burt Reynolds, Elton John and other public examples of spending run amok were, or are, all entertainers, and entertainers offer ready fodder for tsk-tsking — largely because gossip columns make it easy for the rest of us homely paupers to take quiet satisfaction in their plight. Entertainers, for the most part, are also peculiarly vulnerable when it comes to personal finance.

“You have people who are struggling for a long time and then overnight, boom, they hit it,” says Shelley Finkel, Mike Tyson’s manager. “If they don’t have someone watching out for them, and some emotional stability, it will be very hard for them to be grounded financially.”

MR. FINKEL, a genial, elfin 62-year-old New Yorker who began his own career promoting a A-list rock stars like Jimi Hendrix, said he had always advised musicians and athletes to protect their wealth by socking away a chunk of their earnings into annuities or pensions. Few of them have heeded that advice, he said, including Mr. Tyson, who Mr. Finkel believes earned and lost more than $400 million in his boxing career.

“It’s very hard to tell them ‘Don’t!’ because they love the instant gratification,” Mr. Finkel says. “I think the human in general is vulnerable and whatever their weakness is it’s going to get exploited, particularly around money.”

Mr. Foreman, unlike most entertainers and athletes, had homegrown financial antennae, and his budgetary acumen surfaced at a relatively early age. He slugged his way into prominence by winning a gold medal at the 1968 Olympics, and a year later, when he was 20, he turned pro. Schooled, he said, in the perils of errant spending by the financial predicament of the boxing legend Joe Louis, he decided to form the George Foreman Development Corporation in 1971.

“I had so much time alone,” he recalls. “Not many people thought I would be champ of the world. Didn’t have any friends at all. And what I would do is walk to the bookstore, and I’d buy books. And they were books on taxes, accrual taxes, estimated taxes, and you better make a corporation.”

Mr. Foreman says his homework persuaded him to put about 25 percent of what he earned at every bout into a pension and profit-sharing plan controlled by his corporation. “I had all this time dreaming of this, so that when money came upon me I was already prepared,” he says.

Despite how closely Mr. Foreman tended his nest egg, most of his assets remained exposed. He describes the way he invested his unencumbered cash, about $5 million, as a series of blunders: “Oil wells, gas wells, banks, flop, flop, flop.”

Entertainers aren’t the only rich people with holes in their pockets. Business people, seemingly prepared to have a better handle on their balance sheets than celebrities, have wound up as big debtors as well. William Randolph Hearst, of the publishing empire, the San Simeon estate and a 280-foot yacht, stood at the edge of insolvency in the late 30’s. John Z. DeLorean, Motor City dream weaver and inventor of a streamlined sports car that bore his name, filed for bankruptcy in 1999 after financial and legal problems.

Questioned in 1991 about the reasons rich people hit the skids, the multibillionaire investor Warren E. Buffett told an audience at Notre Dame that debt and alcohol were ever-present culprits in financial demise. “I’ve seen more people fail because of liquor and leverage — leverage being borrowed money,” he said, according to a transcript of his comments. “You really don’t need leverage in this world much. If you’re smart, you’re going to make a lot of money without borrowing.

“I’ve never borrowed a significant amount of money in my life. Never,” he added. “Never will. I’ve got no interest in it. The other reason is I never thought I would be way happier when I had 2X instead of X.”

Yet even the most well-to-do sometimes still rely on debt. Over the years, Lawrence J. Ellison, founder and chief executive of Oracle, has preferred to hold onto, rather than sell, his shares in the database provider, giving him a stake currently valued about $17.6 billion.

Oracle shares represent almost the entirety of Mr. Ellison’s fortune, and to finance one of the country’s splashiest spending sprees (454-foot megayacht, mansions, expensive hobbies and more) he has occasionally taken on sizable bank loans rather than sell his shares — all on the presumption that the value of his shares will remain lofty enough to allow him to pay back the loans.

A RAFT of e-mail messages and financial documents introduced in a lawsuit that disgruntled shareholders filed against Mr. Ellison and other Oracle executives in 2001, give witness to some of Mr. Ellison’s budgeting practices. (The suit was settled last November and the judge in the matter subsequently unsealed financial documents submitted as exhibits in the case). The documents, first reported by The San Francisco Chronicle earlier this year, also show how far Philip E. Simon, an adviser who described himself as Mr. Ellison’s “financial servant,” went in trying to persuade his boss to pay off about $1.2 billion in loans. (Neither Mr. Ellison nor Mr. Simon responded to interview requests for this article).

Mr. Ellison’s ledger around the end of 2000 included annual “lifestyle” spending of about $20 million, the purchase of a Japanese villa for $25 million, a proposed underwater archeology project earmarked for $12 million and his new yacht, budgeted at $194 million (news reports later said that the yacht’s final cost approached $300 million).

“I know you view me as a pessimist,” Mr. Simon wrote Mr. Ellison in an e-mail message in 2002, several months after banks began sounding alarms about Mr. Ellison’s debt. “Maybe you’re right, though I would disagree. Nonetheless, I think it’s imperative that we start to budget and plan. New purchases should be kept to a minimum. We need to establish and execute on a diversification plan to eliminate (yes, eliminate) all debt and build up a significant, conservatively structured, liquid investment portfolio.

“I know you don’t like to discuss this,” Mr. Simon added. “I know this e-mail may/will depress you. View this as a call to arms.”

Mr. Ellison paid down a portion of his debt by 2002, according to court filings, and his Oracle holdings are vast enough that it was unlikely that his financial well-being was ever in peril. But for lesser financial potentates, the psychological twists behind overspending and bad investing can be more debilitating.

“The rich are different from you and me: they are more egotistical,” says Theodore R. Aronson, managing principal of Aronson Johnson Ortiz, an investment firm in Philadelphia. “Psychologically, I think the rich, because of their egos, think they know everything. Well, they don’t, and many of them repeatedly make horrible investments — because they can.”

Financial success can breed its own peculiar set of vulnerabilities. “People who are very successful develop elevated sensibilities about their skills, and when things turn on them they won’t admit they’re wrong because their self-confidence has held them up so long,” says Arnold S. Wood, chief executive of Martingale Asset Management in Boston. “In the face of evidence, even subjective evidence, that suggests that something bad is about to happen to someone, a funny thing happens: They reject the evidence.

“These kinds of people just continue spending because they think the money will keep coming in because they’re so successful,” adds Mr. Wood, who says he is fascinated by the possible neurological and social underpinnings of financial delusion and decision-making. He believes that gender plays a strong role in financial ruin because, he says, women tend to be more risk averse than men when it comes to money. Some interesting research backs this up.

Brad M. Barber and Terrance Odean, two business professors at the University of California, Berkeley, noted in an analysis in 2001 of stock trading, “Boys Will Be Boys,” that psychological studies demonstrated that men tended to be more overconfident than women. Financial data supported the same point. “Models of investor overconfidence predict that men will trade more and perform worse than women,” the professors’ study concluded.

Dig a little deeper into this psychological terrain, and, alas, the financial deck may be stacked beginning in childhood, regardless of sex. Kathleen Gurney, a “financial psychologist” who advises wealthy people trapped in monetary crises, said that the social milieu in which people grew up, the early messages they received about money and their individual emotional makeup all conspired to define how well they handled money as an adult.

America’s consumer landscape, which prizes spending and encourages people to define themselves by what they own, only makes the financial balancing act trickier for adults, especially if they have fat wallets.

“Someone who goes broke, or someone who goes into debt, is really somebody who isn’t comfortable having their money,” Ms. Gurney says. “Yes, it appears as a lack of discipline. But the lack of discipline comes from an emotional place that causes them to be undisciplined. It’s not about the money. It’s about our emotional relationship to money.

“The people who are out there just running through money have failed because they haven’t come to terms with who they are and what they want the money to do for them,” she adds. “I see a lot of baby boomers beginning to panic because they haven’t figured this out.”

Mr. Foreman, who stared down financial collapse as an adult despite a troubled, impoverished childhood, said he knew real wealth when he saw it. “If you’re confident, you’re wealthy,” he says. “I’ve seen guys who work on a ship channel and they get to a certain point and they’re confident. You can look in their faces, they’re longshoremen, and they have this confidence about them.”

He says he can spot a longshoreman who has enough equity in his home and enough money in the bank to feel secure, and that some people, no matter how much money they have, never get there. “I’ve seen a lot of guys with millions and they don’t have any confidence,” he says. “So they’re not wealthy.”

IN the years after the Moorer fight, Mr. Foreman became much wealthier than he ever was during his boxing career. In 1999, he sold his name and his image to the manufacturer of George Foreman’s Lean Mean Fat-Reducing Grilling Machine for $137.5 million in cash and stock. He is now a proven pitchman on home shopping channels and the lecture circuit. He owns a fleet of cars, a watch collection, two homes and a ranch in Texas, and another home on the Caribbean island of St. Lucia — but he says he has no idea what his net worth is, and he says he does not want to know.

“When you start knowing, you’re scared,” he says. “I have lots of money, you know what I mean? But I haven’t found confidence like that longshoreman I told you about.” Nearly going bankrupt, he asserts, has permanently scarred him. “I will never feel secure again,” he says. “I’ve got to earn, earn, earn, earn.”

Respect every dollar, Mr. Foreman reiterated, respect every dollar.

“You can become complacent,” he says. “You can say, ‘I’m successful,’ which is the kiss of death. In America it’s hard to wake up hungry. It’s frightening. You can become complacent and wake up tomorrow totally homeless.”