Undermining Karzai

Recently, it was reported that Mohammad Asif Mohseni refused change for controversial Afghan legislation mandating that Shiite women must submit to sex from their husbands.

"It is not possible for all women to pay the same amount of money as men are paying. For all these expenses, can't we at least give the right to a husband to demand sex from his wife after four nights?" [Mohammad Asif Mohseni] said.

I've not seen a report that mentions his historical ties to Iran. Until 2005, he had previously been the leader of Harakat-e Islami-yi.

During the 1980s, the movement was part of the 'Tehran Eight', an alliance of Shiite mujahedin factions supported by Iran that fought against the PDPA government and Soviet troops.

This could be a calculated move to alienate Karzai from the West. From the standpoint of near-border security, Iran would gain from seeing all US presence driven from both Afghanistan.

Prisoner shell game

It was widely reported in January that President Obama signed an order to close Guantanamo by the end of the year.

Where will the prisoners go? It was reported in 2008 that a contract was awarded to build a prison complex in Afghanistan, due for completion before the end of the year.

For example, on Aug. 1, the Army Corps of Engineers announced that Prime Projects International, a firm based in Dubai, [UAE], had won a $50 million contract to design and build a prison complex at Bagram to hold 1,000 high- and low-risk detainees. The complex is not expected to be completed before October 2009.

In addition, the Pentagon plans to expand intelligence operations at Bagram, the main prison in Afghanistan.

According to NPR, the number of Guantanamo detainees peaked at 775, a figure well within the capacity of the new prison complex.

Stiglitz makes a modest proposal

Joseph Stiglitz' proposals got my attention. First, let the banks go bust, then step in:

Mr Stiglitz's radical proposal is a "Chapter 11" scheme for households to allow them to bring their debts under control without having to go into bankruptcy. "Families matter just as much as firms. The US government can borrow at 1% so why can't it lend directly to poor people for mortgages at 4%," he said.

TARP is a bust. Buying preferred shares from banks and expecting them to suddenly start lending again can't work. My reading of the situation is that the credit crunch isn't a dysfunction of the market, but a reflection of markets operating efficiently. Why would a bank rationally risk losing funds on the interbank lending market when there are other banks still yet to collapse? The uncertainty and reluctance to loan is a reflection of real risk. The market is functioning according to the rules of the system, but isn't functioning the way we want it to. Credit is not flowing through the network. Nor is it reasonable to expect that banks can be "bribed" into taking more risk, not after so many were burned by the sub-prime mortgage meltdown.

Stiglitz' proposal to bypass the banks and lend directly to mortgage holders effectively routes around "damage" in the network. It's a novel approach to getting credit where it's needed. If the banks can't do it, create a new mechanism that can.