Wednesday, September 27, 2000
great essay comparing heaven and the enterprise (via nowhere-tropolis :)

The Star Trek Gene Roddenberry envisioned sounds like a secular paradise: no war, no hunger, and no greed. That last one, the one about greed, is the most disturbing. Roddenberry's vision suggests that people themselves can undergo great change by promoting progress in their environment. According to such a plan, people who are without suffering don't simply act better because they have no motivation to kill and exploit others. Instead, the promotion of humanity becomes an evolution on both a social and individual level. We are legitimately "better" people.

and another one on the construction of the force (via nowhere-tropolis :)

Reviewing The Phantom Menace, Bill Moyers linked the discovery of Anakin to the search for the Dalai Lama. Roger Ebert identified Qui-Gon Jinn as a John the Baptist figure.

btw, here's what my mom had to say about bill moyer's four part series on dying :

To: lopati@excite.com
Subject: looking forward to see you

of course yes.ask them the specific name of the cake.I myself don't know much about cake.that way we can get the correct one.have you had a chance to see the series    in your own term  dying by bill moyer in opb.it educate people the new medicine and reality facing all of us,it is nothing secret,the people just not openly talking  about it .this become so  complex,it involved doctors,laws,immediate family,social acceptance,religious believes,financial burden,decision making. I am doing fine, i am still taking easy right now and no agenda. any odd suggestion .     love mom.

Tuesday, September 26, 2000
three articles from sept. 25 barron's online on globalization/globalism : on world bank-IMF cooperation with NGOs, an editorial commentary on africa as an "investment opportunity" (whether it sees itself as such or not :) and the appropriation of power by the worlds' central bankers. we're ruled by fiat and we didn't even notice!

***
The World Bank's New Clients
Its ''civil society'' dealings raise concerns about political leanings
By James H. Smalhout

Demonstrators at the annual meetings of the World Bank and the International Monetary Fund in Prague this week should make a splash on the nightly news. But the demonstrators are, at best, no more than props in a much bigger story. The bank and the IMF, once pre-eminent among international financial institutions, have been busy remaking themselves in ways that would have been unthinkable when they opened their doors just after World War II.

The new focus at the bank and the IMF is part of a campaign to push nongovernmental organizations -- or NGOs, in the shorthand of multinational politics -- into much bigger roles on the global stage. Jessica Mathews, president of the Washington-based Carnegie Endowment for International Peace, observes that the World Bank and IMF "have been institutions of, by and for nation-states, but the world has changed." She perceives "a steady recognition at the bank and more lately at the IMF that they need to engage more with outside groups to succeed in making broad changes in governance in target countries."

Case in point: The International Finance Corp., a World Bank affiliate that invests in private business ventures in developing countries, has been making loans directly to well-known environmental groups. Conservation International is using part of its $1 million from the IFC to join forces with Starbucks in an effort to slow deforestation in Mexico's Chiapas region, a boon to subsistence farmers of shade-grown coffee. The World Wildlife Fund, meanwhile, borrowed $250,000 to buy equipment for an environmentally friendly sawmill in Papua New Guinea. IFC is the lender of record in both transactions, but it used funds from the $4.75 billion Global Environment Facility sponsored by the United Nations and other multilateral agencies.

These deals and several others with local nongovernmental organizations in places like Costa Rica, Guatemala and Bangladesh may not be large, but they serve to reinforce a clear change in culture.

The World Bank and the IMF were chartered at Bretton Woods to lend to governments. Then the IFC was set up in 1956 as a Wall Street-type dealmaker to champion private enterprise inside an institution that had become profoundly statist. That the IFC now has found a way to supply credit to not-for-profit organizations in what advocates of the trend call "civil society" brings it much more in tune with the "third way" philosophy now favored by government leaders in many industrialized countriesBill Clinton in the U.S., British Prime Minister Tony Blair, Chancellor Gerhard Schroeder of Germany, Wim Kok of the Netherlands and Goran Persson of Sweden. These people want civil-society groups ranging from trade unions and religious organizations to consumer cooperatives, human-rights activists and voluntary organizations of almost every kind to become the engine of economic development. Civil society, the argument goes, is strategically positioned between business and the state and is capable of holding them accountable.

This new focus was underscored by a recent announcement by the World Bank that every country-assistance strategy it approved last year involved nongovernmental organizations and civil society in some way. That's up from about 20% in 1990. The bank today makes a point of talking with a wide range of outside groups before making a loan. And borrowing governments often channel loan money to NGOs and other community-based groups. The bank, for its part, sometimes hires NGOs to help design and run projects. It also passed out $1.8 million in grants to NGOs last year for conferences, publications, networking and the like. About 300 NGOs have official credentials to participate in the Prague meetings.

All of this bears the imprint of World Bank President James Wolfensohn, who began a second five-year term in June. Wolfensohn has installed more than 70 NGO specialists in the bank's field offices around the world, with more supporting them back at headquarters in Washington. Wolfensohn also rolled out his highly personal blueprint, called the "Comprehensive Development Framework," at the beginning of last year to guide bank staffers in their dealings with borrowing countries. It calls for the bank and borrowing-country governments to consult a wide range of groups when setting up a project or program.

The bank has reaped a substantial public-relations payoff as a result, particularly in donor countries (the U.S., with a 17% stake, is the largest subscriber to the bank and IMF). But Prof. Richard Cooper of Harvard is concerned that the bank may be going too far. "I worry about the legitimacy of the NGOs," he says. "Some of them are transparent and responsibly run, but others are not. The right way for them to influence policy is through their own governments."

Other critics question the need for such wide-ranging consultations with civil society. "Most of the changes that borrowing countries need to make today are obvious," says economist Allan Meltzer of Carnegie Mellon University. Meltzer chaired a congressional advisory panel that submitted a report this spring on U.S. participation in most of the international financial institutions.

"Shifting power in the direction of the narrow special-interest groups that tend to dominate civil society will often stand in the way of growth," Meltzer contends. "Such groups serve their members best by grabbing more of the national product for themselves, primarily by lobbying to raise some price or some wage or for some special tax break for certain types of income. That hurts overall performance of the economy."

Such critics contrast the experience of postwar Britain, which became an economic laggard as powerful unions and venerable professional groups pressed their influence, with the history of postwar West Germany and Japan, which enjoyed economic miracles. The critics also note that many of the groups that the World Bank takes seriously viscerally oppose globalization and free markets. "Groups with valid, but narrow, interests can capture the attention of the bank so that it becomes disproportionately a conduit for their agendas," observes Jessica Mathews of the Carnegie Endowment. "The risk is that as the NGOs get stronger, the voice of a common interest gets muffled-especially in countries with weak governments. We even see this in U.S. foreign policy. Issues of broad public consequence get hijacked by passionate special interests, and it's a real problem."

JAMES H. SMALHOUT is a visiting fellow at the Hudson Institute.

***
and two by william pesek jr.

African Investment
It takes contrarians to find the opportunities in the sub-Saharan region
By William Pesek Jr.

Walking the streets of Lagos, Johannesburg or Dar es Salaam these days, one can't help but think of the "African renaissance." This seductively simple phrase has been used to describe a new dawn in sub-Saharan Africa, of a day when war, famine and corruption are replaced by democratic, market-oriented reforms and improving quality of life. Today, the African renaissance seems like a cruel joke.

Those who believed that growth rates above 6% would raise many of sub-Saharan Africa's 600 million inhabitants out of poverty have seen their vision eclipsed by political chaos in the Ivory Coast, violence in Uganda, war in Sierra Leone and currency instability in South Africa. Many countries are buckling under the weight of debt service and financial histories that investors won't soon forget. Rapid globalization is concentrating on other continents, leaving Africa even further behind. And AIDS is rapidly claiming many of Africa's people during their most productive years.

By many measures, Africa is moving more backward than forward. Income levels are lower today than in the late 'Sixties. On average, people are living on less than $1 a day. Output per capita in some countries has fallen by more than 50% over the past 30 years. And sub-Saharan Africa's share in global trade fell to less than 2% in the mid-'Nineties from 3% in the 'Fifties.

Contrarian opportunity

For all its problems, Africa remains among the world's fastest-growing regions. The continent also has an abundance of natural resources. Combined with a young population, that could lead to increased trade of manufactured goods for export. And there's no question that Africa's markets are deeply undervalued.

But Africa has a long way to go before it will show the promise that Southeast Asia and Latin America did in the 'Seventies. The reasons many investors stay away include political instability; overwhelming illiteracy; daunting health problems like AIDS and malaria; African skepticism about Westernstyle capitalism; dismal histories of economic mismanagement. Some investors who had given Africa the benefit of the doubt in the past have regretted those decisions. Their money, as well as funds extended by international lending institutions, tended to fund presidential palaces, private jets and Swiss bank accounts for crooked dictators rather than productive investments like infrastructure and education.

Africa is at best a contrarian investment, not for those with weak stomachs or an investment horizon shorter than five years. But it is an opportunity that some are recognizing: According to the Netherlands-based Forum on Debt and Development, African investment has been far more robust than previously thought. In the mid-'Nineties, it was the globe's fastest-growing recipient of investment. Callisto Madavo, vice president of the World Bank-Africa Region gives a hopeful note: "In the past five years growth rates in these countries have been picking up, and we are beginning to see greater participation and democratization."

Despite a rash of conflicts around the continent, 80% of Africans are now fighting poverty, not each other. Political systems known more for corruption and strong-arm tactics than for effective leadership are becoming more open and are adopting badly needed economic reforms. The press is growing more independent, intensifying the call for change, while the influence of grass-roots organizations is growing.

Even limited good news has been enough to prompt the international community to pay more attention to Africa, pledging increasing amounts of money to help the continent's poorest nations. President Clinton this year prodded Congress to pass the African Growth and Opportunity Act, a trade liberalization. Some major companies, such as Coca-Cola, SBC Communications, FedEx, Enron and Exxon Mobil, already are taking the plunge into Africa's huge and undiscovered market. Cisco Systems is putting money into South African universities to boost information-technology skills. It's a promising sign, because money from Corporate America has less to do with altruism than with profiting on the last frontier of capitalism.

"There's no other world region that has rapidly growing companies with good cash flow, single-digit P/Es and double-digit rates of growth," says Lawrence Fejokwo, chief investment officer at Chazon New Africa Investors. He thinks a well-constructed Africa portfolio should deliver annual returns of 30% to 40% or more.

Searching for investments

A survey by the International Chamber of Commerce and the United Nations Conference on Trade and Development finds that one-third of the world's largest companies plan to boost investments in Africa over the next three to five years. The UNCTAD survey rates South Africa as the most attractive investment destination, and companies also are drawn to Cote d'Ivoire, Ethiopia, Ghana, Mozambique, Tanzania and Uganda. They generally see opportunities in tourism and telecommunications. Other areas attracting interest are petroleum and related products, agriculture, mining, quarrying and pharmaceutical and chemical products.

According to UNCTAD, the rate of return of foreign direct investment in Africa was between 5% and 15% above the next-best region of the globe in every year from 1991 to 1998.

But even sub-Saharan nations deemed to have the greatest chance of offering global investors high returns -- including South Africa and Nigeria -- come with gaping caveats. South Africa, for example, is the continent's showpiece economy. Travelers landing in Johannesburg feel as if they've arrived in Miami. It's by far Africa's most prosperous and market-oriented spot, and policy makers have worked admirably to find the right mix between fiscal and monetary policies. But weakness in global commodity prices is hurting the economy, while the nation's massive income gap -- 5% of South Africans own 95% of all wealth and post-apartheid unemployment among blacks is 60% -- is troublesome. Crime is rampant and AIDS is spreading at lightning speed.

"We have millions of people that are destitute, and that is a tremendous challenge for South Africa's policy makers," says Fritz Steyn, director of economics at the University of Pretoria.

Nigeria's outlook, brighter now than in recent years, is even shakier. Speaking with legislators, economists and businesspeople in the Nigerian capital, Abuja, one hears invitations for investors to rush in. Indeed, the year-old, democratically elected administration has worked quickly to clean up its economy. But Nigeria has one of Africa's most notorious financial histories, a crushing debt load, rampant corruption and an economy based almost solely on volatile oil exports.

Abdullah Musa, a legislator who heads the government's commerce committee, told Barron's that the best hope for Nigeria is for rich nations and private investors to absolve the country of some $33 billion of foreign debt. But Nigeria is hardly destitute. It exported more than $12 billion of oil last year and, thanks to the recent jump in fuel prices, it's sitting on a few billion dollars worth of gains on its reserves. Until Nigeria takes responsibility for itself, it cannot expect very much from foreigners.

Ingredients for success

What will it take for Africa to join the developed world? Political stability and will, first and foremost. Equally important are the kinds of transparent and credible economic policies that reassure investors their money won't be squandered or lost amid market turmoil. Too often, resource-rich nations have failed to profit from precious commodities like oil, diamonds or gold because of corrupt or incompetent governments. The lure of quick riches prompted leaders to ignore more stable pursuits, like agriculture and textiles.

More effective education and health-care systems also are badly needed. In this way, Africa demands a new investment psychology. Traditionally, when venture capitalists or speculators get involved in a country or region, people are rarely part of the equation. Those looking for high returns want corporate restructuring, bottom-of-the-barrel wage and benefit costs, flexible, unregulated labor markets and a general focus on profits over employee satisfaction. But in Africa, the reverse is true: The continent doesn't have a prayer of delivering profits unless its population can thrive.

While many write off Africa as the continent of despair, other enterprising individuals and organizations recognize its huge but untapped potential. If Western investors are wise and brave, Africa might just become the biggest investment surprise of the decade.

Thomas G. Donlan, the Editor of this page, receives E-mail at tgdonlan@barrons.com

***
O Brave New World, Run by Central Bankers
By William Pesek Jr.

This November, millions of Americans will head to the polls to cast a ballot for President. They'll do so with the best of intentions, assuming their vote has the power to keep the nation on its current course or usher in sweeping changes. But they may be surprised to learn that whether Al Gore or George W. Bush moves into the oval office is largely irrelevant. The reason is that central banks are running the world nowadays.

The bond market is getting antsy about the outlook for fiscal policy. The fear is that neither Bush nor Gore is as committed to growing the budget surplus as President Bill Clinton has been. The Texas Governor wants to cut taxes, the Vice President wants to increase government spending. As if surging oil prices weren't enough to spook the fixed-income arena, investors now have to worry that politicians will toss some fiscal stimulus into an economy that's already booming along.

Thanks to concerns about fiscal policy and energy prices, bond rates already are having trouble edging lower. By the end of the week, however, Treasury Secretary Lawrence Summers soothed investors with an announcement that the Clinton Administration is becoming less averse to releasing oil from the nation's Strategic Petroleum Reserve. Also, the dive in stocks helped bonds. The 10-year Treasury note ended the week at 5.84%, unchanged from a week earlier.

On the fiscal policy front at least, the market may find a savior in Federal Reserve Chairman Alan Greenspan and his monetary-policy-making colleagues. Greenspan has been holding the nation's economic reins since the early 'Nineties, when elected officials turned to the task of moving the federal budget to surplus. With fiscal policy locked in place and the wonders of the New Economy confounding even America's brightest minds, elected officials have been all too happy to put Greenspan in the driver's seat. And judging from the lack of criticism from Capitol Hill and the healthy state of economy, there seems to be little movement away from this arrangement.

Virtually every campaign promise coming from the Democrats and Republicans this year relates to keeping the eight-year-old economic expansion alive. And while neither Gore nor Bush wants to admit it, the independent U.S. central bank will have the final say in whether their proposals have the intended effect. Gore can spend all the money he wants and Bush can go ahead and cut taxes, but if the Fed offsets the resulting economic stimulus with higher interest rates -- as analysts expect -- then the policy shifts are a wash.

It's this arrangement that could make the bond market's concerns about election-year spending a moot point, notes Kim Wallace, Washington-based analyst for Lehman Brothers, who thinks Greenspan will keep the market's best interests in mind. Behind that confidence is the belief that the Fed will be a natural check on the economics of the White House or Congress.

It's actually a global trend. In Europe, 11 nations have adopted a single currency and effectively forfeited economic sovereignty to the European Central Bank. These fiercely independent, unelected officials are steering economic activity in an area roughly the size of America's without a government looking over their shoulders. In this way the ECB holds the fortunes of most Europeans -- not to mention the politicians who entrusted them with this power -- in the palm of its hand. That's been the case recently, as the euro has weakened amid uncertainty not only about eurozone growth, but ECB policies too. We'll see if last week's concerted intervention turns the tide. But no matter what happens, the ECB will get the credit or blame.

In Japan, it's the central bank that economists around the world are watching, not elected officials. To end the nation's decade-long recession, the government has spent beyond its means, boosting Japan's debt-to-GDP ratio to levels typically seen in Third World nations. And now it's to the Bank of Japan that politicians -- and the international economics community -- look to keep the economy from falling into the adyss.

By any objective measure, the Fed, ECB and Bank of Japan dominate the global financial system, controlling upwards of 80% of growth in the developed world. "Governments have largely ceded to these three institutions the responsibility of controlling world inflation, and to do this they must necessarily influence the near-term path for GDP and unemployment," notes Goldman Sachs economist Gavyn Davies. "Rarely, if ever, can so much power have been wielded by such a small number of institutions sitting outside the direct democratic process."

Is having central bankers rule the world a good thing? One might expect the average citizen barely scraping by in Boston, Madrid, or Osaka to say "no," but there's been little backlash against this new economic world order. Save the occasional protest at International Monetary Fund and World Trade Organization meetings, one detects only scattered dissent. In the U.S., ironically, folks seem to have few qualms with Greenspan's tutelage, save the occasional gripe that the Fed shouldn't target the stock market.

After a few years of myriad economic meltdowns around the world and wild swings in the stock market, politicians and voters alike seem to find comfort in knowing a tested policy-maker is at the controls. Washington Post columnist David Ignatius argues that this may be the 21st century analogy to the old Cold War question: Whose finger do we want on the nuclear trigger? "Today, with the world at peace," he writes, "the Armageddons that people worry about are financial ones."

In the age of globalization and open trade, financial markets can be more powerful than armies. Consider that it wasn't military force that brought the Domino Theory to fruition in Southeast Asia, it was volatility in currency markets. It wasn't tanks and missiles that toppled the Soviet Union, but its economy. Today, it's not the Evil Empire that investors fear, but Russia's credit rating. So having the right finger on the button can mean everything nowadays.

Clearly, finding the right person to run a central bank has never been more important. As economist Paul Krugman sees it, one can only hope Greenspan's up to the challenge, since he's largely unaccountable. Greenspan, Krugman wrote in a recent New York Times column, "holds a position that must be filled with great discretion, because he has a degree of autonomy that is peculiar in a democratic polity. Neither Congress nor the President can tell Mr. Greenspan what to do: He is a power unto himself."

Which brings us back to the 2000 election cycle. While the bond market has held it together so far, some investors like William Gross of Pacific Investment Management, which runs one of the world's biggest bond portfolios -- are getting antsy about all the spending and tax cutting that's being promised in Washington. Higher bond yields would boost Uncle Sam's borrowing costs and slow the economy, notes David Hale of Zurich Financial Services.

The Fed may have little choice but to do the same. With growth in the 5% range, unemployment at 4.1%, and wages on the rise, it's hard to argue the U.S. needs fiscal stimulus. Even though the economy is cooling off, policy-makers still think the economic risks are skewed to the upside. "If fiscal policy were to become increasingly stimulative, then that could mean there will be more of a burden placed on monetary policy," San Francisco Fed President Robert Parry told Barron's in a recent interview.

It's not surprising, then, that the bond market wants continued gridlock. Fixed-income investors care less about the partisan outcome of the 2000 election and more about a stalemate between the executive and legislative branches. GOP control of both branches may boost bond yields because government debt probably won't be retired as quickly. And the stimulative effects of GOP tax cuts could induce the Fed to boost short-term rates to avoid economic overheating.

E-mail comments to editors@barrons.com

***
btw, here's what cathy freeman said after being asked what it felt like winning the 400m.

"It was just a relief. I was totally overwhelmed. I could feel the crowd all around me and all over me. I could feel everyone's emotion and happiness in every pore of my body. I had to sit down and feel normal and to get comfortable. It was all beyond words."

Monday, September 25, 2000
john kay on the practical application of systems theory

So solidarity is an economic as well as a military virtue. If you want a genuine smile on the face of the fast food server or the flight attendant, it has to come from a belief in the organisation and its values rather than obedience to the company training manual. And the effectiveness of the collectivised Japanese in achieving greater quality and reliability than the incentivised Americans making cars and CD players shows the value of commitment to the organisation and the product.

case study: subic bay, philippines from the sept. 20 wsj

***
Former U.S. Base, Is Hit
By Cronyism and Closings
By ROBERT FRANK
Staff Reporter of THE WALL STREET JOURNAL

SUBIC BAY, Philippines -- Kevin Hamdorf knew there was trouble in the neighborhood even before his watchdog was taken hostage.

As one of the pioneers of the Subic Bay Freeport Zone in the early 1990s, he had helped turn this former U.S. military base into an international business hub and a symbol of the New Philippines. Gone were the gunboats, blackouts and bar girls. In came Acer, FedEx, fiber-optic cables and business lunches at the Hollywood Steakhouse. By 1997, economic developers world-wide were trekking to Subic to study the Philippine miracle.

"So much for the miracle," sighs Mr. Hamdorf, hunched over a plate of cold French fries at the half-empty Hollywood Steakhouse. Mr. Hamdorf, a photographer from Australia, used to take pictures for Subic businesses and events. He hasn't had a corporate call in weeks. Acer Group, the Taiwanese computer giant, is cutting jobs and moving business to China, while France's Thomson SA just closed its phone factory. On Aim High Avenue, a circuit-board maker, a convenience store and a pencil plant have all moved out. The new Negritos Cyber Canteen does a brisk business in pork rice but doesn't have a computer.

A Hundred for One Dalmatian

Brownouts, smuggling and crime have returned, residents say. Mr. Hamdorf's house, just outside the Freeport Zone, was robbed twice, despite the presence of Nikko, his Dalmatian watchdog. After the dog was grabbed last month, it took $100 in ransom to get him back.

If there's a ground zero in the sudden crisis of confidence facing the Philippines, it is here in Subic Bay, 55 miles northwest of Manila. Once a symbol of all that could go right with Asian democracy and free markets, the commercial and residential development is now a lesson in cronyism, corruption and the clumsy leadership of Philippine President Joseph "Erap" Estrada.

A former actor in local B-movies, Mr. Estrada is known for his glistening pompadour, his Average Joe image and his vigor -- he takes pride in his many illegitimate children. Since he came to power, the Philippines has become the slowest-growing economy in Asia, after Japan. Its stock market has been among the world's worst performers this year, privatization has stalled, and foreign direct investment is down more than 40% this year from 1999. Islamic rebels and Communist bandits are back in action, along with the cronies of Ferdinand Marcos. The can-do optimism of former President Fidel Ramos has been replaced by daily Erap jokes, like:

How do you tell when Erap sends you a fax?

It has a stamp on it.

Not so long ago, the Philippines was being cheered as the comeback kid of Southeast Asia. While its neighbors collapsed in crisis in 1998, this country forged ahead with only minor damage. Its U.S.-built legal and accounting systems, free press and rapid reforms were proof, many said, that good institutions were more important to Asia's development than individual leadership. Progress will march on, said Gen. Jose Almonte, then national security adviser, in 1996, "even if a chimpanzee becomes president."

The picture began to darken after Mr. Estrada took office in 1998 and brought a different style to economic management. After intervening in a stock-manipulation probe on behalf of a business friend, Mr. Estrada called in to a late-night television talk show in March and told the country's top stock regulator, "May lightning strike you down!" A $1 billion tax case against Lucio Tan, the country's wealthiest man and Mr. Estrada's main campaign backer, was recently dropped because the government missed the filing deadline. This comes at a time when a tax-collection shortfall is widening the budget gap and threatening a bailout program with the International Monetary Fund that was set up before Asia's financial crisis.

"We thought our institutions were so strong that it no longer really mattered who was president," says Bernardo Villegas, dean of economics at the University of Asia and the Pacific in Manila. "Now we realize there's a limit to that."

Nowhere have the limits been tested more than at Subic Bay. On a recent afternoon, as a typhoon howls into the harbor, a group of local business leaders and workers march into a meeting hall to celebrate the second anniversary of the Subic Administration, which oversees the zone. The anniversary used to be in November. But President Estrada changed it to September, to honor the day he ousted the administration chairman, Richard Gordon, who was appointed by President Ramos.

In the summer of 1998, Philippine police, armed with riot gear and automatic rifles, surrounded the administration headquarters to remove Mr. Gordon, who was barricaded inside. A dynamic salesman and self-confessed autocrat, Mr. Gordon was largely responsible for Subic's $2.6 billion in investment and global success, and was slated to remain chairman until 2004. Mr. Estrada, angered that Mr. Gordon didn't support his presidential campaign, appointed his own chairman. Police clashed with more than 100 of Mr. Gordon's supporters and more than 20 people were injured during the three-month standoff before Mr. Gordon agreed to honor a court ruling and step down.

On the podium to celebrate his anniversary this month, Subic's new chairman, Felicito Payumo, sets the new tone. Mr. Gordon's anniversaries featured parades, floats, beer and evening feasts. Today Mr. Payumo -- a former congressman -- hands out boxed lunches to a small group of workers and gives a speech about Subic's new cargo crane and raises for government workers. Their salaries have more than doubled, although the Subic development is losing money for the first time.

Back in his office, Mr. Payumo stresses his achievements at Subic: more than 30 new projects, over 20,000 new jobs, more than $1 billion in exports in 1999 and rising tax collections. But local business executives refute the figures, pointing to the rash of closings and cutbacks, and add that Subic's marketing has all but vanished. Even Mr. Payumo admits some problems. Companies have stopped paying their bills, leaving him with more than $30 million in back rent. "The infrastructure needs a little work," he says, just as the electricity shuts down in his office.

Even the bats have grown surly. Every night the sky over Subic turns black with giant columns of fruit bats, which are forced to fly farther away for food because of increased logging in the base's extensive forested areas.

"It's a little eerie," says Mr. Payumo. "But a lot of things here are better. Have you seen our new logo?"

Down the road, at the foot of a dense jungle where American soldiers once trained for Vietnam, Kenny Wang is fighting his own air war. The managing director for Acer Philippines, Mr. Wang oversees the biggest factory complex in Subic, employing 2,600 workers. The computer plants make more than one-third of Acer's personal computers and about one-third of its notebook devices, accounting for 70% of Subic's total exports. A recent decision by Mr. Estrada to help a businessman friend, however, has choked off Acer's business.

Last year, Mr. Estrada suspended an air-rights pact with Taiwan, citing accusations by Philippine Airlines that its Taiwanese rivals were poaching passengers with cheaper fares. The decision, which ended direct commercial flights between the two countries, largely benefited Mr. Tan, the majority owner of Philippine Airlines. The rest of the Philippines has suffered: Taiwanese tourists no longer flock to Philippine beaches, electronics parts can't make it to Philippine factories, and Philippine nurses and engineers have to take long and expensive routes to get to their contract jobs in Taipei. Both Philippine Airlines and the Estrada government say allegations of favoritism toward Mr. Tan are groundless.

Acer has been among the hardest hit. Most of the parts and motherboards for its personal computers come from Taiwan. Without direct flights, the components take twice as long to arrive, at twice the cost, making the plant uncompetitive. Mr. Wang has moved one PC-manufacturing line to China and two notebook lines to Taipei, cutting more than 1,000 jobs here. While some employees have been absorbed into the notebook division, Acer can't move ahead with its planned expansions. The factory has so much empty space that workers have started playing soccer on the testing floor.

"We want this solved immediately," says a frustrated Mr. Wang, who is eyeing China for expansion. "The environment here has become very political, and it's not good for business."

At happy hour at the Subic Bay Yacht Club, soft piano music drifts across the lounge. Giant picture windows offer a view of the harbor that America's Seventh Fleet once called home and where, today, a cluster of leisure boats bobs in the rain. The $80 million club was part of a grand plan to turn Subic into a tourist haven. Yet now, the bar is empty, there isn't a member in sight, and the guest-services manager is asleep.

"You know what the problem is?" says Jose Mari Vargas, the club's managing director, as he rattles around the empty Skipper's Grill. "Buzz. We need more buzz."

And less terrorism. While President Ramos made peace with Islamic separatists and rural bandits, Mr. Estrada has taken a tough military stand. Last weekend, he launched an all-out war against Muslim guerrillas on the island of Jolo in an effort to rescue 19 hostages, including one American and two French journalists. The military strikes are continuing, and it isn't clear whether the hostages are alive. The rebels had been gathering strength after collecting an estimated $15 million in ransom money paid by Libya, in what was widely seen as an effort to enhance relations with Europe.

The turmoil has battered tourism. Although Subic is flooded on weekends with visitors from Manila, the big-spending foreigners have stayed away. A casino at the nearby Legenda Hotel, once one of the most profitable in Asia, is quiet, and construction ended two years ago on a new hotel down the road.

When it opened three years ago, the yacht club expected 300,000 memberships; it has gotten about half that. The club is trying special "food days," offering cuisine from, say, Mexico, and playing up its policy that members don't need to own a boat. Corporate memberships used to cost more than $30,000; an advertisement in the Subic Chamber of Commerce newsletter offers one for $12,000.

Anna Lyn Dominguez stirs a pot of rice in her cramped, concrete home in Olongapo, the town just outside the gates of Subic. Ms. Dominguez, 27 years old, used to snap together phone circuits at a Thomson plant for $80 a week. The money supported her husband and two children, her parents and her sister. Earlier this year, Thomson moved its plant to China to become more competitive and Mrs. Dominguez lost her job.

"It's getting hard to buy food," she says. Unemployment in Olongapo, once among the lowest in the country, has soared to more than 22%. Small stores are closing and shop owners report a rapid rise in crime.

Political battles have made matters worse. Subic's new boss, Mr. Payumo, hails from Bataan, a poor province on Subic's southern border where he used to be a congressman. Olongapo remains the turf of Mr. Gordon, whose wife is mayor. After taking office, Mr. Payumo filled the Subic jobs center with workers from Bataan, replacing many from Olongapo. Subic companies are forced to hire first from the job center for available positions.

Stuart Allen, director of South Sea Resources, a treasure-hunting and diving company at Subic, wanted to hire a talented Web-site designer from Olongapo when he ran into trouble with Subic authorities. They required him to first consider a long list of candidates from the jobs center, including a Bataan bus driver. Although he eventually got permission to make the hire, the approval took weeks.

Mr. Payumo concedes that he is trying to boost employment for Bataan, but only "to correct the favoritism of Mr. Gordon toward Olongapo." Gazing out his office window, Mr. Payumo points to another corrective measure, a marble statue honoring the 12 Philippine senators who helped drive out the U.S. military. Mr. Gordon's monument was the Volunteer's Wall, listing the names of the more than 20,000 volunteers who helped protect and nurture the Subic development throughout the 1990s.

The new display, called "Inang Laya -- Mother Country," features a robed woman releasing a small bird and 12 handprints set in marble, representing the senators. Mr. Payumo calls it a "symbol of the Philippine spirit and persistence." Locals, however, have their own name: "The Outstretched Palms."

Write to Robert Frank at robert.frank@wsj.com

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btw, here's a great FEED daily by JJC! on the international reception of American Beauty :)

But let us return to Togo, where the armchair cultural anthropologist eagerly awaits the opinions of his West African viewers. What will they think of the movie's anguished quest for beauty in the humdrum American suburb, in a country where such a suburb looks like a paradise of unimaginable wealth? What will they make of the movie's daringly ambiguous attitude towards sexual relationships between middle-aged men and minors, in a country where rural high-school teachers sleep with their students routinely and openly? What will they make of the homophobic gay marine, in a country where sex between men implies no fixed sexual orientation; or of the bitterness of the corporate drone, in a country where simply having a paying job is a terrific privilege?

Friday, September 22, 2000
fun analogy awareness article reprinted without permission from aug. 22 wall street journal :)

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Tests Show: Skill at Seeing Parallels
Can Yield Multiple Career Choices
By CYNTHIA CROSSEN (james gleick's wife!)
Special to THE WALL STREET JOURNAL

Remember those questions on standardized tests called analogies? They went like this: RAIN is to DROP as SNOW is to (a) hail (b) blizzard (c) flake (d) ice.

The answer, (c) flake, is obvious: Rain comes in drops, snow comes in flakes. But try this more difficult example: OPTIMISM is to NOTARY as BLAST is to (a) wall (b) posse (c) antic (d) hose.

Sooner or later, almost every student in America will cross paths with these word puzzles. So-called classic analogies, which compare relationships between two pairs of words, remain a pillar of most achievement, aptitude and I.Q. tests, including the SATs. Many graduate schools require candidates for admission to submit a score for the Miller Analogies Test, which gives students 50 minutes to complete 100 analogies like this one: AURICLE is to VENTRICLE as VENTRICLE is to (a) jugular (b) carotid (c) coronary (d) aorta.

Yet beyond raising scores on standardized tests, what does the ability to solve analogies really gain a person in life? Aren't analogies as irrelevant to most adults as their 10th-grade biology texts?

Black Holes

As it turns out, analogies are more applicable to the real world than ever. Simple analogies, which compare several properties of two unlike things, may be the best way to help ordinary people understand such complex and invisible systems as the Internet and the human genome, not to mention killer viruses and black holes. Employers and educators in fields ranging from psychology to business agree that the ability to analogize well can distinguish the perspicacious from everyone else.

The late J.C.R. Licklider, a computer expert who played a major role in organizing the Internet, once said: "I had a kind of rule. Anybody who could do 85 or better on the Miller Analogies Test, hire him, because he's going to be very good at something." (The mean score on the Miller Analogies Test is about 43.)

"In areas that change too rapidly for bodies of known rules or laws to develop -- such as technology or business -- analogies end up being one of the most useful teaching tools," says Keith Holyoak, a professor of psychology at the University of California, Los Angeles.

Fun With Numbers

It's easier to conceptualize the Internet as a superhighway with on- and off-ramps than an exchange of bytes in the ether. The Internet music company Napster, under legal attack, analogizes its product to early videocassette recorders: Just because something can be used illegally doesn't mean it should be outlawed. Microsoft Corp., arguing in its recent antitrust action, claimed that forcing it to integrate competitors' browsers in its operating system would be like ordering Ford Motor Co. to install Chrysler engines in its cars.

Speaking of Microsoft, how can the average person grasp the magnitude of Bill Gates's personal wealth? According to one popular analogy, if Mr. Gates pays the same percentage of his net worth to take his spouse to a movie as the average person does, it would cost him almost $19 million. Analogies also help people grasp other unimaginably large numbers: In chemical concentrations, one part per billion is equivalent to one bogie in 3,500 golf tournaments; one part per quadrillion is like one human hair out of all the hairs on every head in the world, according to a nonprofit education group, Foundation for American Communications.

Zinging Opponents

"A beautiful analogy is accurate, rich and suggestive," says Paul Thagard, a philosophy professor at the University of Waterloo in Ontario, Canada. Dr. Thagard himself is studying "dynamic visual analogies" such as how a gymnast's cartwheel might be like the motion of a windmill.

In this campaign season, a clever analogy can zing an opponent without sounding excessively negative. Speaking on the day he was officially announced as Al Gore's running mate, Sen. Joseph Lieberman said the Republicans responded to the news "by saying that George Bush and I think alike. With all due respect, I think that's like saying the veterinarian and the taxidermist are in the same business, because either way you get your dog back."

Analogies -- of which similes and metaphors are two forms -- can be as simple as "a truck is like a car." But the best ones illuminate the similarities between two things that seem very different. Children can't analogize before the age of about five, but after that, the ability to analogize is almost universal. Advertisers have found that analogies allow them to compare their products with just about anything. An Internet company called Mail.com has been running an ad campaign in New York that features the slogan, "Plato: thinking; Melville: fishing; Mail.com: email," using the traditional notation of colons separating word pairs.

Thinking Like Humans

In recent years, analogies have become a popular subject of research in the field of artificial intelligence, where scientists try to program computers to think like humans. But sometimes they just help real humans grapple with a world that has become increasingly complex. At a U.S. Steel plant in Gary, Ind., Dean Larson uses analogies to teach his employees highly technical training material they are required to understand.

"If I want to talk about a chair, I can point to a chair," says Dr. Larson, the plant's department manager for safety and hygiene. "How do I point to a threshold limit value or adsorption?" His answer: A threshold limit value is like a posted speed limit for safe driving; adsorption is like rain that beads on the hood of a newly waxed car.

Of course, analogies can also be bad -- so bad they're funny. High-school teachers routinely urge students to enliven their writing with metaphors and similes, but the idea is sometimes lost in the translation. These analogies came from a list of high-school duds published a few years ago by the Washington Post: "The whole scene had an eerie, surreal quality, like when you're on vacation in another city, and 'Jeopardy' comes on at 7 instead of 7:30." And: "The politician was gone but unnoticed, like the period after the Dr. on a Dr Pepper can."

And from a list of bad suspense-novel analogies posted on the Internet: "His face looked like an ice sculpture. Not one of those pretty ones in the middle of a cruise-ship buffet, but the kind they do in a contest with a chainsaw -- and it had been out in the heat too long."

Plato's Idea

The classic analogy was introduced to the Western world by Plato, who argued that "the idea of good makes knowledge possible, as the sun makes vision possible." (The word "analogy" comes from the Greek "ana logon," which means "according to a ratio.") In the Middle Ages, despotic rulers liked to analogize themselves to the sun. Today's politicians are slightly more subtle, but they often use what linguists call "hot" analogies -- comparisons designed to stir up emotion. During the buildup to the Persian Gulf War, for example, proponents of U.S. action likened Saddam Hussein to Adolf Hitler, while opponents worried about America getting into "another Vietnam."

All of this comes as no surprise to the publishers of the Miller Analogies Test, which was introduced in 1926 at the University of Minnesota and is still going strong. Currently, the test, which has been revised several times since its inception, is being rewritten to reflect recent changes in higher education. Earlier editions tested not only reasoning and vocabulary, but also scholarship in several fields. For example a 35-year-old test guide includes this analogy: KOLN is to WIEN as COLOGNE is to (a) Vienna (b) Prague (c) Warsaw (d) Hamburg.

"We want to make it a stronger measure of general verbal reasoning instead of relying on specific sorts of knowledge," says James Augustin, director of postsecondary assessment at Psychological Corp., the Harcourt General Inc. unit that publishes the Miller test. Test companies also like analogies because they are relatively inexpensive to devise and standardize. "We regularly create analogies tests for practice," says David Stuart, research director of Kaplan Inc., the test-preparation concern that is a unit of Washington Post Co. "We find they are easy, quick and cheap to write and correct."

A Skill of Geniuses

In his famous textbook, "Principles of Psychology," the 19th-century psychologist William James asserted that "the faculty for perceiving analogies is the best indication of genius." People who could analogize, he continued, were "the wits, the poets, the inventors, the scientific men, the practical geniuses."

Does this describe you? Check your answers on the three analogy problems in this story. For OPTIMISM is to NOTARY as BLAST is to (a) wall (b) posse (c) antic (d) hose, the correct answer is (c) antic. All four words contain the letter "t." For AURICLE is to VENTRICLE as VENTRICLE is to (a) jugular (b) carotid (c) coronary (d) aorta, the answer is (d) aorta. Blood flows from auricle to ventricle to aorta. And for KOLN is to WIEN as COLOGNE is to (a) Vienna (b) Prague (c) Warsaw (d) Hamburg, the answer is (a) Vienna. Koln and Wien are German for Cologne and Vienna.

Perhaps now you feel more like the man whose intelligence P.G. Wodehose once described as "somewhat lower than that of a backward clam -- a clam, let us say, which has been dropped on its head when a baby."

***
btw, here's a cool interview with ed lu, a mission specialist on sts-106 (ISS assembly). he begins all his responses with "well,...". so thoughtful. i wish he was my dad.

The success of your mission is critical to establishing this station as a permanent place where people from Earth can live. The fact that you're willing to fly there and do the work yourself would tell us that you believe it's something that's important to be done. Finally, tell me why you think it's important to establish this space station; what is it going to contribute to us in the future?

Well, I think it's an unbelievably important step because of the capability it offers us. Right now, if we want to go further in space than we're doing right now, if we want to eventually go to Mars or out of low Earth orbit permanently, we need to know a bunch of things, and a lot of the technology is not there yet. And if you think about how you would test this technology or develop it on the Earth, you can't really test things very well on Earth because you don't have the weightless conditions, or the vacuum, as it turns out. And for instance, what we do now is we send experiments up on a shuttle; you get a week or so of data, you bring it back down. That same experimenter, that same scientist or engineer, will think about the data, make some changes, he might get to fly his equipment again two years later…at which time he'll get another six or seven days worth of data. It's very difficult to make progress this way. If you think of how an engineer would develop something in his lab here on the ground -- he works on it every day, he's making changes every day. If you only let that scientist into his laboratory once every two years for a week period, progress is incredibly hard. So, what it allows you to do is to have an engineer or a scientist or an astronaut running an experiment, making changes and doing things real-time every day, all the time. That's how you're going to make progress, and I think that's how we're going to be able to develop some of the systems which we need to go out to other planets and to move outwards.

Thursday, September 21, 2000
i really like these passages on reading.

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We read, frequently if unknowingly, in quest of a mind more original than our own.

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Reading is perhaps cannibalism par excellence. Through reading, one dissects and consumes with the intent of making the object one's own. As Kilgour (1990: 9) writes, "Reading is therefore eating, an act of consumption. For homo sapiens, to think is to taste, as in the act of knowledge we imagine that we draw the outer world into our minds and possess it." Again, this is the way we relate to each other in consumer culture, coveting and being coveted, reading and being read.

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At the end it's as if a digital Byzantium has somehow crossed over into the real world.