• The NSW State Government cannot find the money for a proper Sydney metro. Baghdad authorities seem to be more visionary...
• 007, anti-imperialist: '(Daniel) Craig's Bond is an intimation of the sort of Britain that could have been, if Tony Blair had stood up to Bush...'
• Via Public Opinion, a thoughtful review of Tom Friedman's latest book on the coming 'green revolution'.
• And speaking of green revolutions, this looks like another bold move from Governor Schwarzenegger. Obama is also talking tough.

Will Clegg writes on how to regulate a financial system that Ken Henry described as 'so complex it defies understanding':

It would appear that 'emergent behaviours' (inherently unpredictable behaviour emerging from within very complex systems) are often the source of systemic volatility in financial markets. The mechanisms which translated an increased default rate in the sub-prime mortgage market into a systemic global liquidity and credit crisis, able to undermine international aggregate demand and the solvency of sovereign entities, were not predicted by people capable of (1) constructing a compelling analysis and (2) gaining adequate official attention for their views.

Similarly, the implications of any particular set of rules that might have prevented the sub-prime crisis cannot easily be estimated. The very complexity of our financial system, and the disaggregation of power within it, is one of the key reasons global leaders are emerging from the G20 meeting with such modest reform agendas. Will new rules produce public failures? What will their effects be on allocative efficiency? Will they generate new, disruptive incentives for regulatory arbitrage? Far easier, it would seem, for governments to defend the status quo and underpin an inherently volatile system with state guarantees. More...

I was interested to read today that four Australian judges have been shortlisted to sit on two of the UN's new administrative tribunals, set up to replace the utterly shambolic former system.

I once interned in the UN Panel of Counsel which represented UN staff in administrative disputes under the old regime. On my first day, I was asked to help with the annual office spring clean, which consisted of checking the names of the hundreds of open case files lining the room from floor to ceiling against the New York Times obituaries from the previous year. That day we made short work of at least part of the giant backlog as we stacked up the cases of deceased former UN staff. 

Strangely, UN personnel gave the impression of being slightly demoralised when we told them they would need to wait around 25 years to have their case resolved and that if they were really lucky they could expect a few thousand dollars in compensation for being shot, harassed, underpaid or the like. That's why the noble sounding resolutions establishing this new system of internal justice are good news for abused UN staff. 

But one of the biggest obstacles to justice in the past was the significant financial implications of compensating so many staff who had been so poorly managed/abused for so long. States, it seemed, were reluctant to cough up for UN managerial incompetence. I am curious to see how the new justice regime deals with the issue of compensation, and how states respond.

• The Interpreter is lucky to have one of the world's leading Burma experts guest blog for us occasionally. Today, Andrew Selth has an op-ed in The Age arguing that it is not realistic to try to remove the regime — we should put our energies toward helping the Burmese people.
• New Mandala is right to insist that the Government do more to help Harry Nicolaides, detained in Thailand over  book that sold ten copies.
• Five myths about the US election. Key points: the GOP is not dead, the Democrats do not have cart blanche, and the Palin pick was not the catastrophe you think it was.
• Before Mark Corcoran became a foreign correspondent with the ABC, he served in the Royal Australian Navy. Here he tells of his encounters with Vietnamese boat people as a sailor and a journalist.

I've never worked in finance, yet I found this oddly familiar (H/t Sullivan):

To this day, the willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grownups remains a mystery to me. I was 24 years old, with no experience of, or particular interest in, guessing which stocks and bonds would rise and which would fall. The essential function of Wall Street is to allocate capital—to decide who should get it and who should not. Believe me when I tell you that I hadn’t the first clue.

I’d never taken an accounting course, never run a business, never even had savings of my own to manage. I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later, and even though I wrote a book about the experience, the whole thing still strikes me as preposterous—which is one of the reasons the money was so easy to walk away from. I figured the situation was unsustainable. Sooner rather than later, someone was going to identify me, along with a lot of people more or less like me, as a fraud. More...

Chris Skinner adds some valuable context to my brief remarks about Treasury Secretary Ken Henry's observations on financial complexity:

Ken Henry identified three dimensions of the global financial system:

1. Complexity and its cost;
2. Risk and uncertainty; and
3. Regulation and governance.

All of these are applicable, in the same way, to any interconnected large scale system. His comments could apply just as well to the internet, the international criminal intelligence system or the command and control system of military forces. There are significant commonalities in these three dimensions, and that should be the source of insight to better manage the system. More...

If it wasn't creepy enough that Clancy predicted the use of passenger planes to destroy iconic American buildings in Debt of Honour (1994), how about this bit of news:

In an official lunch with foreign diplomats, Icelandic President Olafur Ragnar Grimsson shocked neighboring Nordic countries with inviting Russia to take use of the strategically important airbase. Foreign diplomats hardly believed what they heard when the Icelandic president said that his country needs “new friends” and that Russia should be invited to take use of the old U.S. airbase of Keflavik.

Clancy fans will recall that in the techno-thriller Red Storm Rising, Soviet forces invade Iceland and use Keflavik to stage air attacks against naval convoys crossing the Atlantic to supply NATO, which is battling it out against the Warsaw Pact in Europe.

In a nice modern twist on that Cold War tale, Russia did not have to use anything as crude as brute force to get this generous offer from Iceland. It just had to offer Iceland a loan.

Photo by Flickr user smperris, used under a Creative Commons license. H/t to NOSINT for the Iceland story.

• China wouldn't be increasing its troop presence on its North Korea border if it thought all was well in Pyongyang.
• Last week I argued that even if US automakers are developing greener cars, that's no reason to bail them out. Josh Marshall thinks they should be bailed out, for that very reason. But Matt Yglesias shoots Josh down.
• An Australian shipbuilder has won a major US Navy contract.
• George Packer interviews Austalian counterinsurgency expert David Kilcullen about the war in Afghanistan, which Kilcullen describes as winnable, just.
• Last week I asked why Steve Clemons had removed a post carrying the now-widespread rumour that Obama had approached Hillary Clinton to be his Secretary of State. Here's Clemons' explanation, and an interesting afterthought: '...this is EXACTLY what George W. Bush did to his most serious rival...He gave Powell Secretary of State and then began to box him up.'
• New Atlanticist looks like a pretty useful blog.

This is usually the time of the week I post a Friday Funny. But this clip isn't really 'funny'. It is fun and quirky, though, and it will make you think, so what else was I going to call it?

It also fits nicely with the green stimulus theme we've been debating this week. Have a good weekend.

(H/t Wilkinson.)

This weekend’s meeting of the G-20 leaders has been hailed as marking a new era for international governance. At long last, it seems, the time of the anachronistic G7 has passed, and the global architecture is being brought closer into line with the underlying realities of the world economy. 

Back in 2006, the year Australia hosted G-20 finance ministers in Melbourne, my colleague Malcolm Cook and I wrote a paper called Geeing up the G-20, which argued that the G-20 should replace the G7 as the steering committee for the world economy. So I view the elevation of the grouping as welcome news. Indeed, it has gone further than Malcolm and I hoped back then, when we thought the prospects for an L-20 (a G-20 leaders meeting) were poor. Which just goes to show the difference the worst international financial crisis since the 1930s can make...

What should we expect from this weekend’s gathering? After all the initial excitement about the possibility of forging a new Bretton Woods agreement, expectations seem to have receded somewhat in recent days. More...

• Five reasons why we shouldn't expect too much from the G20 summit. I guess a sixth would be George Bush's lame-ducktitude.
• The NY Times reports rather gleefully on a Sarah Palin-related hoax that revealed 'the shoddiness in the traditional news media and especially the blogosphere.' Fine, but the blogosphere is far more efficient at correcting mistakes than the traditional media.
• Superb photo essay of American troops in action in Afghanistan's Korengal Valley. (H/t Peace like a River.)
• Awful, awful, awful: Somali girl raped and stoned to death.
• Here are seven pages of questions you need to answer if you want to work in the Obama Administration.
• Putin tells Sarkozy he wants to 'hang Saakashvili by the balls'. And the conversation only gets better from there... (H/t Passport.)

Shiro Armstong at East Asia Forum has misunderstood the point I tried to make yesterday about President Bush and the G20. I can see how he might, so let me try to state it more clearly.

I did not mean to argue that Bush was responsible for getting China into the G20. What I meant to say was that, by convening the G20 to address the financial crisis, Bush had potentially made an important move toward setting in place a concert of powers for the 21st century.

Shiro ends his post by saying that 'George W is not the one calling the shots anymore'. I think that's an exaggeration, but it still gets at the point I was clumsily trying to make. By choosing the G20 rather than the G7 or some other institution, Bush has acknowledged that China and other developing economies are going to be critical to resolving the current financial mess. And if the G20 performs well in this instance, we may just see it develop as an important institution for peacefully managing the new global order. 

If all that comes to pass (and that's a lot of 'ifs'), we might owe President Bush a debt of gratitude. That's all I meant.

According to WorldPublicOpinion.org, 74% of Americans believe it is the government's responsibity to ensure that people's basic food needs are met. That's in the home of free enterprise; in the twenty other countries surveyed, the figure is even higher.

I doubt this means Americans want the Department of Agriculture to create collective farms. In fact, most of the world has learnt that such basic needs are far better met by efficient open markets. And it's pretty clear that consumers around the world like the greater variety and higher nutrition offered by market-based food production.

So what's going on here? I reckon there's a clue in the survey question: 'Do you think the [country’s] government should be responsible for ensuring that its citizens can meet their basic need for food, OR do you think that is NOT the government’s responsibility?'

Perhaps that word 'basic' stuck in respondents' minds, and they took the question to mean, 'do you think governments should allow their people to starve?'

Lines of grey, muttering faces, masked with fear,

They leave their trenches, going over the top,

While time ticks blank and busy on their wrists,

And hope, with furtive eyes and grappling fists,

Flounders in mud. O Jesus, make it stop!

— Siegried Sassoon, as quoted in E. Hobsbawm, Age of Extremes.

•  Thanks to Rory for this link: 'Asia Matters for America provides a hub for American and Asian audiences to explore the importance and impact of Asia in the United States...'
• George Packer is right — the cover of the latest New Yorker is gorgeous.
• Nice piece of detective work from the BBC suggesting the latest North Korean photo of Kim Jong Il is fake. (H/t Passport.)
• Apparently, the very well connected Steve Clemons posted a rumour on his blog that Hillary Clinton would be Obama's Secretary of State. But the post has been removed. What's up, Steve?
• This blog on Iranian military issues looks pretty good. (H/t Peace like a River.)
• New Mandala urges discussion of Thailand's anachronistic lese majeste law. I know of country experts who agree, but they're worried such discussion will just see them banned from Thailand or, worse, suffer the same fate as Australian Harry Nicolaides.

• The latest issue of Inside Indonesia focuses on Indonesian Papua, and includes this handy collection of online Papua-related resources.
• I loved this quote: 'There is ample support in economic theory for your view – it is just a shame there is little support for it in practice.'
• Here's a bold claim that merits discussion: 'The ability to get along with as many people as possible will soon become a more accurate measure of influence than the ability to form coalitions that isolate one or another actors.' Discuss.
• World Nuclear News wants to make nuclear power plants more beautiful.
• Surely this is parody: 'Our failure to stand by the one person who continued to stand by us has not gone unnoticed by our enemies. It has shown to the world how disloyal we can be when our president needed loyalty...'

Oxford University researchers have compiled their top ten list of most irritating phrases. I suggest using this as a bingo card the next time you have to sit through a Kevin Rudd interview.

Have a good weekend, but check in with us tomorrow, as I'll be posting another interview with our man in Washington, Michael Fullilove. We'll talk about how we can bring new meaning to our lives now that the presidential election is over.

I loved this story, found on Global Dashboard:

This morning, at the airport in Brussels, I was chatting with a retired Scottish aid worker. He told about his friend who got on a flight in Lagos to find it completely full…plus one. One person was standing in the aisle with no seat. The flight attendants went through and checked that everyone had a boarding pass, which they did. (Apparently someone had a forged pass; welcome to Lagos.) The staff then made an announcement that everyone was going to de-plane and that they were going to check everyone’s boarding pass carefully. 

As soon as the first person stepped off the plane, the staff slammed and locked the airplane door, despite the person’s cries and banging on the door. Problem solved.

That reminds me of a documentary I once saw about aviation in early 90s Russia, when the once-proud Soviet flag carrier Aeroflot was on its knees. A fault was found with a plane after passengers had already boarded, and the local ground crew insisted that the airline pay cash on the spot for the required spare part. So to raise the money, the cabin crew passed a hat around among the passengers!

• With prices dropping sharply, where have all the Peak Oil believers gone? (H/t Oil Drum.)
• John McCain's appearance on sketch comedy program Saturday Night Live was quite funny, but James Fallows argues it was also an admission of defeat.
• The Mark Thirlwell presentation I raved about last week is now available for viewing on Slow TV.
• If ship-based missile defence is going to be a real capability, it needs to demonstrate the ability to destroy multiple incoming missiles. On this evidence, they're not there yet.
• Gulp: a fire broke out in a US nuclear missile silo and burned undetected for five days.

The Interpreter turns one tomorrow. Thanks to our readers for their support, and to everyone who has contributed to The Interpreter's early success.

Given military issues and arms control have been prominent themes in our first year, I thought this video might be a good way to mark the occasion:

Lowy Institute Executive Director Allan Gyngell has an op-ed in the Financial Review today. My attention was drawn to one particular paragraph, questioning how the world can govern itself more effectively:

Despite the end of the Cold War, despite the rise of Asia, the world's central institutions remain stubbornly resistant to change. States that possess power are notoriously reluctant to give it up. So year by year, outmoded structures like the United Nations Security Council or the G7 group of industrial powers or the World Bank and the International Monetary Fund (in which the Benelux countries have a larger share of the votes than China) are being drained of their usefulness and their legitimacy.

My initial reaction was that, although it is certainly true that those who hold the upper hand in these institutions are reluctant to surrender it to China, what is China itself doing to grasp this influence? Is there much evidence that China even wants a leadership role? I see an answer of sorts in today's Australian:

EUROPE turned to Asia and the Middle East for help yesterday as the financial crisis threatened to overwhelm Hungary and other ailing European economies.After talks with other Western leaders, British Prime Minister Gordon Brown urged China and the oil-rich Gulf states to come up with hundreds of billions of dollars to aid countries struggling to survive.

Any help from Asia and the Middle East is likely to come at a high price. China, Japan and the Gulf states are demanding more say in the way the International Monetary Fund and the World Bank are run. Both organisations are dominated by the US and western Europe.

• The PM's office denies that Bush ever asked Rudd, 'What's the G20?'
• Also from The Australian, it looks like our Defence Minister is in the Robert Gates camp when it comes to focusing on the wars we're in rather than the wars we might get in. That will please my colleague Mark O'Neill.
• There is little evidence for the claim that poverty leads to civil war, according to VoxEU.
• The Asia Foundation has published its annual public opinion survey of Afghanistan.
• Iran has opened a naval base at the mouth of the Persian Gulf. (H/t Nosint.)

• Leading indicator?: Oil prices may have fallen by half, but that hasn't stopped an 'alarmingly fast paced and and widespread' drop in global airline traffic.
• Foreign investment in Thailand plummets as the political crisis continues.
• Stocking stuffers: it seems Usama bin Laden and Joe the Plumber are both working on books.
• Business Week's Eye on Asia blog says Asia's financial crisis has only just started.
• The usually sensible Thomas Barnett says 'only America can really play Leviathan. The rest of the world simply loses it during times of tumult.' Spare me.
•  It's the oldest and soundest financial truism around: in the long term, stocks always go up. Ummm...

• According to the People's Daily, there are now over 100,000 Chinese students in Australia.
• Hans Blix is hip: Not only did he get a starring role in Team America, now there's a band named after him. (H/t Total Wonker.)
• The Australian Government has started thinking about its next generation of submarines.
• Harvard University's Middle East blog debates Bush's regional legacy.
• The Washington Post reports on how blogs are keeping the world informed about the US election.

What motivates any bribe is the hope or even expectation that 'everyone has a price'. If the inducement is sufficiently large, it is argued, you can talk anyone into anything. Now I doubt this is true all the time, and it may be that, as Judah Grunstein argues at World Politics Review, Iran is simply too attached to its uranium enrichment program to ever give it up, no matter what is offered to them.

But although I agree with Judah that the West ought to be thinking about the type of inducements it is offering Iran, I do wonder if we've yet come close to meeting Iran's price. More...

There's such a wealth of comedy emerging from the US presidential election. Here's a Russian love letter to Sarah Palin:

And here's what John McCain's campaign commercials would look like in the hands of three different Hollywood directors:

Yesterday's Lowy Lunch was devoted to launching the latest Lowy Institute Paper, which is our flagship publication. Zealous Democrats examines how three different Islamist movements — the Muslim Brotherhood in Egypt, the Prosperous Justice Party in Indonesia and the Justice and Development Party in Turkey — have adapted to democratic politics and how electoral or democratic participation has shaped them.

You can listen to all three authors of Zealous Democrats give their lunch presentation here. Afterward, I spoke with one of the co-authors, Greg Fealy, about Zealous Democrats:

Terrific op-ed from Shadow Attorney-General George Brandis today on the tensions between former Prime Minister John Howard's conservatism and the liberal traditions of his party. We've talked before on this blog about the uneasy fit between liberalism as it relates domestic policy and its application to foreign policy. I have argued that, altough bilateralism and a strong commitment to the US alliance have come to be associated with the Liberal side of politics, there's no necessary link between those policy stances and liberalism as a political philosophy. Former Shadow Foreign Minister Andrew Robb disagreed with me (here's my response to Robb).

Similarly, although the Howard Goverment came to be known for its close association with the US, there seems to me no reason to regard this as a necessarily conservative stance. In fact, conservatives like Owen Harries have expressed their discomfort with this close association.

Brandis' essay is an extract from a soon-to-be released book called Liberals and Power — The Road Ahead. I look forward to reading the foreign policy section.

• A locally produced 50-part (!) TV series on the life of Bruce Lee is apparently a big success in China. Here's the trailer.
• You can now watch selected Lowy Institute presentations on Slow TV.
• I'd never heard of Arab Media & Society, but it has a nice website and the latest issue carries two promising articles on the Egyptian blogosphere and one on Facebook in Egypt. (H/t Abu Aardvark.)
• Slate has started a conversation between journalists, historians and director Oliver Stone about his George W Bush biopic.

• China releases plans for universal public health care, and announces major land reforms.
• The University of Sydney's US Studies Centre has a pretty cool election website.
• Thailand and Cambodia plan jaw-jaw instead of war-war over their border dispute.
• Photos of India's much-delayed aircraft carrier, an ex-Soviet ship being refurbished in Russia, have been hard to come by. But Here's a good collection. (H/t Information Dissemination.)
• Iran's navy, meanwhile, is taking a different approach: asymmetric warfare at sea. (Thanks to reader Tom for the link.)
• Via Flightstory, this photo was taken by Flickr user Points1 at Amsterdam's Schiphol airport.

Tobias Harris at Observing Japan is bracingly honest about America's North Korea policy:

Bowing to the reality of the situation in which the US has few alternatives to committing to negotiations, bilateral and multilateral, the Bush administration has made clear that bribery is now the essence of US North Korea policy. That's not necessarily a bad thing. Given that North Korea's price isn't particularly onerous and given that the alternatives (a war on the Korean Peninsula, unchecked nuclear proliferation, collapse of the DPRK before the US and North Korea's neighbors are prepared to respond) are all worse than bribery, this may be the best possible approach. (My emphasis.)

Bribery of a more personal kind (ie. paying a purse to a foreign diplomat or statesman) has a long history in international diplomacy. As Hans Morgenthau wrote in his classic, Politics Among Nations, it also had some benefits: More...

• Colin Powell's endorsement of Obama is compelling, particularly his comments (from the 4.25 mark) on American Muslims. 
• Hope for capitalism yet: T-shirts for sale with a financial crisis theme.
• Retired General Jim Molan has thoughts on Australia's involvement in the Afghanistan war on Andrew Bolt's blog.
• Malcolm Fraser is convinced (a little too convinced, for my money) that the US is past it.
• You know those photos of depressed brokers used by the press to illustrate stories about the meltdown? Yep, there's a blog. (H/t Marginal Revolution, which also has meltdown jokes.)
• Some stunning photos of Chinese countryside, taken from a hot air balloon.

Thanks to reader Jim for alerting me to this funny (in a weird way) photo of John McCain at yesterday's debate. 

A Simpsons clip recently emerged on YouTube showing Homer trying (and failing) to vote for Obama. It's OK entertainment, but as a confirmed fan of the show, I must say I've always thought of Homer as a Republican.

Not the evangelist, social conservative type of Republican — that should be clear from how much he hates Flanders — but more of a libertarian Republican, or what PJ O'Rourke called a Republican Party Reptile. In fact, Homer could be a McCainiac, except that over the course of this campaign, McCain seems to have left behind that maverick streak to embrace his party base. So I guess that means we can add Homer to the people Michael Fullilove talked about in his post: right-wingers McCainiacs for Obama.

• Newsweek says Indonesia is booming and could be the next India.
• Another useful idiot's guide to the financial crisis.
• The UN gives its Timor staff some very UN-like advice on how to deal with crocodiles: monitor the situation.
• The 2008 Prosperity Index is out, and AUSTRALIA WINS! Be sure to print the report out, as the paper can be used to keep that campfire going after your house is repossessed. (H/t Drezner.)
• The Australian thinks the financial crisis might delay the Defence White Paper.

Nobel Laureate Paul Krugman speaking about the financial crisis on The World Today:

In retrospect, how could we have been so blind?

That's a common lament in life generally. But although we should examine scupulously how we can easily miss signs of an impending crisis, it is equally sobering to look at how quickly we incorporate previously unthinkable events and ideas into our worldview as if they were obvious and trivial. The idea that major Western governments could, en masse, effectively nationalise their banks would have seemed impossible a month ago, yet now it is the conventional wisdom on how to at least stem the financial bleeding.

What seems impossible in prospect looks inevitable in retrospect, but that retrospective sense of inevitability is actually a barrier to clear analytic thinking, because it inhibits us from imagining future Black Swan events. Faced with an uncertain future, there is a tendency to assume that it will look much like the present. But to remain open to future strategic shocks, one must remain alive to the idea that there is nothing inevitable about how the past unfolded.

• Via Peter Martin, one of Australia's better economics bloggers, here's a cartoon guide to how the financial crisis got started (contains strong language).
• Uh-oh: Singapore is in recession.
• The episode of CSI: Miami screened in Australia last night centered on one of our (so far) less successful military exports: Metal Storm.
• James Fallows argues the media pays way too much attention to the daily girations of the stock market.
• The London Times lists its top ten blogs for following the financial crisis.
• The EU officially adopts Beethoven's Ode to Joy as Europe's anthem.

• A China milestone: 8 October marked the day on which modern China had 'lived for more time under the reform and opening up era than under Mao’s era.'
• And just to drive home the point about Chinese modernisation, this week saw the launch of a new Chinese news magazine called Blog Weekly, which republishes blog posts in print form. The magazine offers payment for eyewitness blog accounts of major events.
• Canada is going to the polls, with the opposition Liberals proposing a pretty radical green tax agenda. It might be doomed, however.
• The US looks set to remove North Korea from its list of terrorist sponsors, a move that might keep nuclear negotiations alive.
• A map showing how many FTAs various countries have signed. Interesting to note that China and South East Asia are still pretty light on. (H/t Barnett)