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Generational Dynamics Web Log for 4-Feb-2010
4-Feb-10 News - Europe plays chicken, Iran poised for bloodbath

Web Log - February, 2010

4-Feb-10 News - Europe plays chicken, Iran poised for bloodbath

Iran plays "cat and mouse" with nuclear politics.

Europe and Greece's public sector labor unions play chicken

Wednesday was report card day for Greece, and apparently the grade was "Pass."

Greece's Prime Minister George Papandreou has proferred a deficit reduction program, and the European Commission has recommended that the EU finance ministers endorse it, according to Bloomberg. Papandreou's plan raises taxes, raises the retirement age, and freezes public sector wages, breaking his campaign promises last year.

On one side, you have the public sector unions that have vowed to stop Papandreou's plan by having a major strike and street demonstrations planned for February 10. Greece has a history of settling political issues in the streets.

On the other side, you have the other EU countries, who are very distrustful of Greece, because of alleged lying in years past about deficit figures. They're expressing willingness to bail out Greece, but only if Greece makes further concessions, and only if Greece agrees to a continuing third party audit of their books.

Each side thinks that the other will be forced to back down, because it's thought that a default by Greece's government would spread to other countries, and might be the end of the euro currency.

This is "Europe's big game of chicken," according to Mohamed El-Erian, CEO of Pimco, the world's largest bond fund, in a Bloomberg interview on Wednesday. In another interview, El-Erian said that stock prices should slump in 2010, because investors are too optimistic about sovereign debt in Greece and other countries, including the US.

"Investors may well find that January’s global equity sell-off was just a precursor to a disappointing year for several asset classes," according to El-Erian. "The global financial crisis has undermined growth and job creation; it has clogged many of the pipes that allocate funds to productive uses; and it has rapidly taken public debt and the budget deficit to worrisome levels."

Iran is heading for a major confrontation on February 11

February 11 is the 31st anniversary of the start of Islamic Revolution of 1979, and it provides a fresh opportunity for Iran's "Green" opposition movement to protest against the hardline government. The NY Times reports that two opposition leaders, Mehdi Karroubi and Mir Hussein Moussavi, have both called for non-violent protests.

If the December protests are any guide, then the government's Basij militia will use teargas, beatings, arrests, and possibly gunfire in an attempt to stop the protests.

So, with protests planned for Greece on Wednesday, and in Iran on Thursday, next week ought to be interesting.

Iran plays "cat and mouse" on the nuclear issue

On Wednesday, Iran demonstrated an advanced ballistic missile program by sending a rocket into space carrying a mouse, a turtle and two worms. President Mahmoud Ahmadinejad claimed that the animals will return to earth unharmed.

This reminds everyone that if Iran can send animals into space, then they may be able to send nuclear weapons to London or New York.

So, on the same day, Ahmadinejad made a small concession on the nuclear issue, by agreeing to ship some of its uranium for processing abroad, in accordance with a deal discussed last year.

According to an analysis in Times Online, Ahmadinejad is playing a game of "cat and mouse," buying time by making a small concession in one area to hold off further Western sanctions.

Ahmadinejad is not making the same mistakes that Saddam Hussein made. In 1991, after Saddam had invaded Kuwait, the US-led coalition forces were lined up, ready to invade and take back Kuwait. All Saddam had to do was back down and offer to leave Kuwait, and the invasion wouldn't have taken place. But he was incredibly stubborn, so the invasion occurred. A similar stubborness occurred in 2003 with WMD inspectors.

Ahmadinejad learned that lesson. All he has to do is make a small, meaningless concession, and the West has to back off from whatever they've been threatening.

This difference between Saddam and Ahmadinejad even fits their generational archetypes. Saddam was of the same generational archetype as our Generation-X, so we'd expect him to be nihilistic. Ahmadinejad is in the same generational archetype as our Millennial Generation (Generation-Y), so we'd expect him to a realistic warrior. And both of them fit their profiles very well.

Additional Links

New research is beginning to show that when a home's value falls below 75% of the amount owed on the mortgage, owners start walking away and allowing the bank to foreclose, even if the owner has the money to keep on paying, according to the NY Times.

The Samsonadzes is the Georgian version of the American TV show, The Simpsons. According to the BBC, the show became controversial and popular when it started mocking Vladimir Putin.

(Comments: For reader comments, questions and discussion, see the 4-Feb-10 News - Europe plays chicken, Iran poised for bloodbath thread of the Generational Dynamics forum. Comments may be posted anonymously.) (4-Feb-2010) Permanent Link
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