April 29, 2007
Books
The Chosen Frozen

By PATRICIA COHEN
Sitka, Alaska

ASIDE from geography, Sitka, a boomerang-shaped island in the southeastern panhandle of Alaska, has very little in common with the imaginary city named Sitka conjured up by Michael Chabon in his latest book, “The Yiddish Policemen’s Union.”

In this fourth novel, which comes out Tuesday, Mr. Chabon takes a historical footnote, a pie-in-the-sky proposal to open up the Alaska Territory in 1940 to European Jews marked for extermination, and asks: What if? What if this proposal, which in real life was supported by the secretary of the interior, Harold Ickes, but killed in Congress, had actually passed? What if Jews had poured into a frigid island instead of the Middle Eastern desert, and the state of Israel had never been created? What if the small settlement of Sitka had grown into a teeming Jewish homeland, a land not of milk and honey but of salmon and lumber?

Mr. Chabon (pronounced SHAY-bon), tucking into a breakfast of eggs, wheat toast and reindeer sausage at Sitka’s Westmont Hotel, said he took the first, unwitting step down this road-not-taken a decade ago. That’s when Mr. Chabon, who won the Pulitzer Prize in 2001 for “The Amazing Adventures of Kavalier and Clay,” wrote a controversial essay about “Say It in Yiddish,” a 1958 phrase book for travelers that he found both poignant and funny. “Where would be the most fabulous kingdom you could have taken this phrase book to, if the Holocaust hadn’t happened?” he wondered. To him, the phrase book was predicated on the ultimate “Yiddishland,” a place “where you might need to say ‘Help, I need a tourniquet’ ” (which the phrase book thoughtfully provides).

After Mr. Chabon’s essay appeared, he was attacked for mocking the language and prematurely announcing its demise. He had not realized that its revered authors, Uriel and Beatrice Weinreich, wrote the book at the request of the publisher because Yiddish was spoken widely in Israel in the 1950s and in other Yiddish communities around the world. “I had a double reaction,” Mr. Chabon said. “I don’t like having my ignorance pointed out to me. I was embarrassed and shamed. I had the nice Jewish boy impulse that I disrespected my elders and caused pain and embarrassment. But I also felt a total sense of irritation and spite.”

In Yiddish the word is “tsalooches,” he explained. “Oh yeah? That offended you? Well, I’m going to write a goddamn novel, and you think that was offensive? Just wait.”

It wasn’t until 2003 that Mr. Chabon began to transform this momentary flight of fancy into “The Yiddish Policemen’s Union,” a detective story in the hard-boiled style of Raymond Chandler, where the dead body and the detective both make their appearance on the first page.

The following year he visited Alaska and chose Sitka (it “sounds kind of Yiddish”) as home for the three million European Jews — and their children and grandchildren — his imagination saved from the Holocaust.

THIS is his first trip back to the Russian-accented city since then, and while the herring boats in Sitka’s harbor announce the arrival of spring, large feathery flakes of snow have been falling. Mr. Chabon is wearing Ugg boots, which keep out the wet slush but are not that comfortable to walk around in. He stops at the corner of Monastery Street, a narrow road with boxy, pastel-colored houses, and announces, “This is where the Zamenhof Hotel is,” a rundown flophouse that can be found only in his novel.

Mr. Chabon, 43 grew up in Columbia, Md., a newly formed community with a utopian flavor and very few people and houses. “It only existed on paper,” he explained, “but we had this map, a project map of how it was going to be. And then it came into being as we lived there. So I got really into this early on, that you could imagine a place and it would come into being.”

With Sitka, he said, “I was just repeating what I had seen done in the town I grew up in.” The Sitka he created is far from utopian, though. On the eve of “Reversion” — when the territory is to be returned to Alaskans, and the Jews, suspended between hopelessness and oblivion, are to be kicked out — the book’s Sitka is a grim, choked place, desperate and despairing, more like Jake Gittes’s Chinatown than the “fabulous kingdom” of Yiddishland.

In reality, the 4,710-square-mile island, much of it mountains and national forest, has a population of 8,947, of which no more than 35 adults are Jewish, according to Aryeh Levenson, whose home phone rings when you dial the listing for Sitka’s Jewish Community Center. But once Dr. Levenson, who works for the Indian Health Service and wears a colorful tapestry yarmulke, has alerted the tiny network, it almost seems as if we have stepped into Yiddishland. David Voluck, a Philadelphia boy who worked for the tribal bureau as a lawyer before becoming a Hasidic Jew, heard we were in town, so he called a Jewish friend, Davey Lubin, to take us out on his boat, a 28-foot aluminum cruiser built by another friend, also Jewish.

The boat is named Esther G., after the grandmother of Mr. Lubin’s wife, Lisa Busch. The couple met here and had the city’s first Jewish wedding. They flew in bagels from H&H in Manhattan. Ms. Busch is studying for her master’s in Northern studies, and as we head across the inner Sitka sound, warm inside the heated cabin, she says she just wrote a paper on Mr. Ickes’s resettlement plan.

“No one here had ever heard about it,” she tells Mr. Chabon.

Esther G. bounces along the sound. It is snowing again, tiny hard pellets that resemble a beanbag’s innards. The giant spruce that cover the island’s mountains are thoroughly dusted, as if someone shook out too much powdered sugar. They match Mr. Chabon’s hat, whose furry black earflaps are flecked with snow, and his few days of stubble, which shows some gray whiskers among the black. Mr. Lubin spots a few dozen brown-pointed snouts bobbing in and out of the water, sea lions, near a few glistening black seals on a rock. He is standing in the cabin doorway with a wide grin: “This is my homeland.”

Later in the afternoon, we head toward the airport. At the back of the terminal, past the mounted heads of moose, ram and bear, hangs a wooden sign with a long arrow that looks as if it came from a Motor Vehicle Bureau in the 1960s, except that it points the way to “PIE” instead of license renewals. Follow it and you can buy the Nugget Restaurant’s banana cream pie, famous throughout Alaska. In “Policemen’s Union,” the detective Meyer Landsman is sitting with a slice when he discovers a crucial clue. Disappointingly, the only kind left when we arrive is peanut, but Mr. Chabon orders it anyway, à la mode.

The Russian writer Isaac Babel is partly responsible for his writing a detective story, Mr. Chabon explains, after declaring the peanut pie pretty good. “There was some strange kinship between Babel writing in translation and hard-boiled detective fiction, a kinship to Chandler,” he says.

For “Policemen’s Union,” he adds, “I felt like I had to invent a whole new language, a dialect. The thing that took the longest for me was finding the right voice. The sentences are much shorter than usual for me.”

Mr. Chabon wrote a 600-page draft in the first person that he ended up trashing after a year. It had the same characters — Landsman; his ex-wife, Bina Gelbfish, also a policeman; and his cousin and partner, a half-Indian, half-Jew named Berko Shemets — but a completely different story. He feels as if “Policemen’s Union” is its sequel, he says.

For the book, Mr. Chabon dug into New York’s underworld slang, filling in at spots with his own linguistic creations. A latke is a beat cop and a sholem is a gun — a bit of wordplay, as “sholem” in Yiddish means peace, and “piece” is slang for gun in English. The powerful local mafia is made up of Hasidic Jews with payess, long curling sidelocks. Along with the rest of Alaska’s Jews, they are part of what Jews living in the rest of America call “the Frozen Chosen.”

Since Mr. Chabon envisioned a “story that would encompass many levels of society,” he needed a character who would have access to them all. “That’s why writers have been using detectives,” he says, mentioning Inspector Bucket in Dickens’s “Bleak House.” Such examples haven’t saved detective stories or narratives in general from contemporary disdain, he complains. “Telling stories well is a neglected and undervalued element of what is thought to be a ‘real’ writer’s job. There is a bias against any kind of narrative in which plot is foregrounded.”

To Mr. Chabon, the detective and the writer share a bond: “A detective suffers about a case. Writers tend to be recriminators; they go back over the same turf.”

Does he?

“Oh, definitely,” Mr. Chabon says. As he goes back and refines his characters, there is always “that sense of ‘Oh, I missed something here.’ ”

His detective, Meyer Landsman, is like many of Mr. Chabon’s protagonists, empty, disaffected men who have never quite come to terms with their (physically or spiritually) absent fathers. Landsman’s damaged father, salvaged from the death camps, is brilliant at chess. He played “like a man with a toothache, a hemorrhoid, and gas,” writes Mr. Chabon, and helped teach “his son to hate the game he himself loved.” Mr. Chabon learned chess from his own father, who separated from his wife and left their home when Michael was 11. “I was good at it, like Meyer,” he said. “I grew up hating it. I transferred a lot of my own feelings” about the game to the character.

Mr. Chabon, who lives in Berkeley, Calif., with his wife, the writer Ayelet Waldman, is more available to his two boys and two girls, 4 to 12, getting them ready for school, breaking from work when they return in the afternoons. As a teenager, he said, he thought a lot about what kind of father he would like to be — unusual musings for an adolescent.

Mr. Chabon’s novels are dominated by men, and this one is no different — although Bina is one of his most developed female characters. Writing fully rounded, complex women, he said, “is something I’ve been working on.”

WITH “Policemen’s Union,” Mr. Chabon was aiming not only for a classic detective story with a twisting, page-turning plot, but also for rich characters and detail, psychological depth and cosmic truth — or at least cosmic questions. The book’s mysteries are manifold. There is the mystery of a murder and a chess problem, the larger conspiracy it may be linked to, the fate of the Jews without a homeland, and then the ultimate mystery of existence itself.

“Is there a plan for us, is there destiny or fate?” Mr. Chabon says. “Are we chosen? Chosen for what? Is that a good thing or a bad thing?” Are things “bashert” (meant to be)?

Thinking about what the world would look like without the state of Israel was “one of the motivating impulses of writing the book,” he says. “How mad it seems that this tiny little scrap of land” should be at the center of global conflicts. “I have a very strong feeling of complete ambivalence about a world without Israel,” Mr. Chabon says. “I didn’t come in with a point to prove or an agenda.”

Whether because of that or despite it, Jews, Muslims and Christians will no doubt be able to find something in the book to hate or love.

That evening, Mr. Voluck and his wife, Esther, have invited most of Jewish Sitka to their small blue bungalow to meet Mr. Chabon and have a dinner of fish tacos. Kosher, of course. (Nearly everything is flown in from Seattle.)

Mr. Voluck’s impish laugh contrasts with his severe black suit and starched white shirt, buttoned to the collar. The fringes of his prayer shawl hang out the back, and a black velvet yarmulke is on his head. On the wall, he points out pictures of Joseph Isaack Schneersohn and his son-in-law Menachem Mendel Schneerson, whom many within the Chabad-Lubavitch sect believe was a messiah.

“I took his name,” Mr. Chabon says, referring to Mendel, a character in the book.

“I knew you did,” Mr. Voluck responds with a smile. “I’m on to you.”

Mr. Chabon explains that he also used the name of the Russian town that he thinks his grandmother came from, Verbov, for the Hasidic sect that runs Sitka.

Why not, says Mr. Voluck, they’re your family, “your mishpokhe.”

He points to a picture on the opposite wall of his own mishpokhe, his wife’s great-grandparents. Only two of 14 siblings made it out of Poland after the Holocaust. “We’re here on a thread,” he says, “so close to being lost.”

A galley of the book has been making the rounds, and Mr. Voluck is needling Mr. Chabon about some of the plot points. But the next morning, when we meet him at the Back Door, a coffee shop behind the bookstore, he makes a point of telling Mr. Chabon how authentic and moving he found a funeral scene in the novel. “It hit me right between the eyes,” he says, putting a forefinger above the bridge of his nose.

John Straley, a mystery author and the writer laureate of Alaska, is there, and they start talking about Babel and the language of the detective novel. “There is a lot of Eastern European street talk that’s made it into the language,” Mr. Straley says.

Those immigrants later “created this underworld cash culture,” Mr. Voluck responds.

“A moral netherworld,” Mr. Straley says. Mr. Chabon nods: “I just took that one more step.”

The bagels — which taste and look like muffins — are finished. “I’ve got to go to jail,” says Mr. Straley, who works as an investigator for the public defender’s office. Mr. Chabon has to catch his plane. He is already at work on other projects. Finishing a novel is always bittersweet, he says, as he realizes “I’m not coming back to these people anymore, that this is it.”

Still, he adds, “the world of the book still feels pretty close to me. When I was landing and the stewardess announced that we were arriving in Sitka, I had this ‘What? Oh yeah, it’s the real Sitka.’ For so long, the only Sitka is the Sitka I made up. I forgot for a minute there was this real Sitka.”

April 27, 2007
Ex-C.I.A. Chief, in Book, Assails Cheney on Iraq

By SCOTT SHANE and MARK MAZZETTI
WASHINGTON, April 26 — George J. Tenet, the former director of central intelligence, has lashed out against Vice President Dick Cheney and other Bush administration officials in a new book, saying they pushed the country to war in Iraq without ever conducting a “serious debate” about whether Saddam Hussein posed an imminent threat to the United States.

The 549-page book, “At the Center of the Storm,” is to be published by HarperCollins on Monday. By turns accusatory, defensive, and modestly self-critical, it is the first detailed account by a member of the president’s inner circle of the Sept. 11, 2001, terrorist attacks, the decision to invade Iraq and the failure to find the unconventional weapons that were a major justification for the war.

“There was never a serious debate that I know of within the administration about the imminence of the Iraqi threat,” Mr. Tenet writes in a devastating judgment that is likely to be debated for many years. Nor, he adds, “was there ever a significant discussion” about the possibility of containing Iraq without an invasion.

Mr. Tenet admits that he made his famous “slam dunk” remark about the evidence that Iraq had weapons of mass destruction. But he argues that the quote was taken out of context and that it had little impact on President Bush’s decision to go to war. He also makes clear his bitter view that the administration made him a scapegoat for the Iraq war.

A copy of the book was purchased at retail price in advance of publication by a reporter for The New York Times. Mr. Tenet described with sarcasm watching an episode of “Meet the Press” last September in which Mr. Cheney twice referred to Mr. Tenet’s “slam dunk” remark as the basis for the decision to go to war.

“I remember watching and thinking, ‘As if you needed me to say ‘slam dunk’ to convince you to go to war with Iraq,’ ” Mr. Tenet writes.

As violence in Iraq spiraled beginning in late 2003, Mr. Tenet writes, “rather than acknowledge responsibility, the administration’s message was: Don’t blame us. George Tenet and the C.I.A. got us into this mess.”

Mr. Tenet takes blame for the flawed 2002 National Intelligence Estimate about Iraq’s weapons programs, calling the episode “one of the lowest moments of my seven-year tenure.” He expresses regret that the document was not more nuanced, but says there was no doubt in his mind at the time that Saddam Hussein possessed unconventional weapons. “In retrospect, we got it wrong partly because the truth was so implausible,” he writes.

Despite such sweeping indictments, Mr. Bush, who in 2004 awarded Mr. Tenet a Presidential Medal of Freedom, is portrayed personally in a largely positive light, with particular praise for the his leadership after the 2001 attacks. “He was absolutely in charge, determined, and directed,” Mr. Tenet writes of the president, whom he describes as a blunt-spoken kindred spirit.

But Mr. Tenet largely endorses the view of administration critics that Mr. Cheney and a handful of Pentagon officials, including Paul D. Wolfowitz and Douglas J. Feith, were focused on Iraq as a threat in late 2001 and 2002 even as Mr. Tenet and the C.I.A. concentrated mostly on Al Qaeda.

Mr. Tenet describes helping to kill a planned speech by Mr. Cheney on the eve of the invasion because its claims of links between Al Qaeda and Iraq went “way beyond what the intelligence shows.”

“Mr. President, we cannot support the speech and it should not be given,” Mr. Tenet wrote that he told Mr. Bush. Mr. Cheney never delivered the remarks.

Mr. Tenet hints at some score-settling in the book. He describes in particular the extraordinary tension between him and Condoleezza Rice, then national security adviser, and her deputy, Stephen J. Hadley, in internal debate over how the president came to say erroneously in his 2003 State of the Union address that Iraq was seeking uranium in Africa.

He describes an episode in 2003, shortly after he issued a statement taking partial responsibility for that error. He said he was invited over for a Sunday afternoon, back-patio lemonade by Colin L. Powell, then secretary of state. Mr. Powell described what Mr. Tenet called “a lively debate” on Air Force One a few days before about whether the White House should continue to support Mr. Tenet as C.I.A. director.

“In the end, the president said yes, and said so publicly,” Mr. Tenet wrote. “But Colin let me know that other officials, particularly the vice president, had quite another view.”

He writes that the controversy over who was to blame for the State of the Union error was the beginning of the end of his tenure. After the finger-pointing between the White House and the C.I.A., he wrote, “My relationship with the administration was forever changed.”

Mr. Tenet also says in the book that he had been “not at all sure I wanted to accept” the Medal of Freedom. He agreed after he saw that the citation “was all about the C.I.A.’s work against terrorism, not Iraq.”

He also expresses skepticism about whether the increase in troops in Iraq will prove successful. “It may have worked more than three years ago,” he wrote. “My fear is that sectarian violence in Iraq has taken on a life of its own and that U.S. forces are becoming more and more irrelevant to the management of that violence.”

Mr. Tenet says he decided to write the memoir in part because the infamous “slam dunk” episode had come to define his tenure at C.I.A.

He gives a detailed account of the episode, which occurred during an Oval Office meeting in December 2002 when the administration was preparing to make public its case for war against Iraq.

During the meeting, the deputy C.I.A. director, John McLaughlin, unveiled a draft of a proposed public presentation that left the group unimpressed. Mr. Tenet recalls that Mr. Bush suggested that they could “add punch” by bringing in lawyers trained to argue cases before a jury.

“I told the president that strengthening the public presentation was a ‘slam dunk,’ a phrase that was later taken completely out of context,” Mr. Tenet writes. “If I had simply said, ‘I’m sure we can do better,’ I wouldn’t be writing this chapter — or maybe even this book.”

Mr. Tenet has spoken rarely in public, and never so caustically, since stepping down in July 2004.

Asked about Mr. Tenet’s assertions, a White House spokesman, Gordon D. Johndroe, defended the prewar deliberations on Thursday. “The president made the decision to remove Saddam Hussein for a number of reasons, mainly the National Intelligence Estimate on Iraq and Saddam Hussein’s own actions, and only after a thorough and lengthy assessment of all available information as well as Congressional authorization,” the spokesman said.

The book recounts C.I.A. efforts to fight Al Qaeda in the years before the Sept. 11 attacks, and Mr. Tenet’s early warnings about Osama bin Laden. He contends that the urgent appeals of the C.I.A. on terrorism received a lukewarm reception at the Bush White House through most of 2001.

“The bureaucracy moved slowly,” and only after the Sept. 11 attacks was the C.I.A. given the counterterrorism powers it had requested earlier in the year.

Mr. Tenet confesses to “a black, black time” two months after the 2001 attacks when, sitting in front of his house in his favorite Adirondack chair, he “just lost it.”

“I thought about all the people who had died and what we had been through in the months since,” he writes. “What am I doing here? Why me?” Mr. Tenet gives a vigorous defense of the C.I.A.’s program to hold captured Qaeda members in secret overseas jails and to question them with harsh techniques, which he does not explicitly describe.

Mr. Tenet expresses puzzlement that, since 2001, Al Qaeda has not sent “suicide bombers to cause chaos in a half-dozen American shopping malls on any given day.”

“I do know one thing in my gut,” he writes. “Al Qaeda is here and waiting.”

David E. Sanger contributed reporting from Washington, and Julie Bosman from New York.

April 27, 2007
Op-Ed Columnist
China Needs an Einstein. So Do We.

By THOMAS L. FRIEDMAN
I’ve been thinking about China as I read Walter Isaacson’s new biography of Albert Einstein. China isn’t even mentioned in the book — “Einstein: His Life and Universe” — but Mr. Isaacson’s stimulating and provocative retelling of Einstein’s career plays into two very hot debates about China.

First, what does Einstein’s life tell us about the relationship between freedom and creativity? Or to put it bluntly: Can China become as innovative as America, can it dominate the 21st century, as many predict, when China censors Google and maintains tight political controls while establishing its market economy?

Second, how do we compete with China, no matter how free we are, when so many of China’s young people are studying math and science and so many of ours are dropping out? Or to put it more bluntly: If Einstein were alive today and learned science the boring way it is taught in so many U.S. schools, wouldn’t he have ended up at a Wall Street hedge fund rather than developing theories of relativity for a Nobel Prize?

Mr. Isaacson’s take on Einstein’s life is that it is a testimony to the unbreakable link between human freedom and creativity.

“The whole theme of the last century, and of Einstein’s life,” Mr. Isaacson said in an interview, “is about people who fled oppression in order to go places to think and express themselves. Einstein runs away from the rote learning and authoritarianism of Germany as a teenager in the 1890s and goes to Italy and Switzerland. And then he flees Hitler to come to America, where he resists both McCarthyism and Stalinism because he believes that the only way to have creativity and imagination is to nurture free thought — rebellious free thought.”

If you look at Einstein’s major theories — special relativity, general relativity and the quantum theory of light — “all three come from taking rebellious imaginative leaps that throw out old conventional wisdom,” Mr. Isaacson said. “Einstein thought that the freest society with the most rebellious thinking would be the most creative. If we are going to have any advantage over China, it is because we nurture rebellious, imaginative free thinkers, rather than try to control expression.”

My gut tells me that’s right, but my mind tells me not to ignore something Bill Gates said in China the other day: that putting PCs, education and the Internet in the hands of more and more Chinese is making China not only a huge software market, “but also a contributor to this market. Innovation here is really at a rapid pace.”

Will China hit a ceiling on innovation because of its political authoritarianism? That’s what we need to watch for.

In the meantime, we should heed another of Mr. Isaacson’s insights about Einstein: he found sheer beauty and creative joy in science and equations. If only we could convey that in the way we teach science and math, maybe we could nurture another Einstein — male or female — and not have to worry that so many engineers and scientists in our graduate schools are from China that the classes could be taught in Chinese.

“What Einstein was able to do was to think visually,” Mr. Isaacson explained. “When he looked at Maxwell’s equations as a 16-year-old boy, he visualized what it would be like to ride alongside a light wave and try to catch up. He realized those equations described something wondrous in reality.

“By being able to visualize and think imaginatively about science, he was able to see what more academic scientists failed to see, which is that as you try to catch up with a light beam, the waves travel just as fast, but time slows down for you. It was a leap that better-trained scientists could not make because they did not have the visual imagination.”

If we want our kids to learn science, we can’t treat science as this boring or intimidating thing. “We have to remind our kids ... that a math equation or a scientific formula is just a brush stroke the good Lord uses to paint one of the wonders of nature,” Mr. Isaacson said, “and we should look at it as being as beautiful as art or literature or music.”

My favorite Einstein quotation is that “imagination is more important than knowledge.” A society that restricts imagination is unlikely to produce many Einsteins — no matter how many educated people it has. But a society that does not stimulate imagination when it comes to science and math won’t either — no matter how much freedom it has.

So my sense, from reading Mr. Isaacson’s book, is that if Einstein were alive today, he would be telling both America and China that they have homework to do.

Copyright 2007 The New York Times Company

How to get a handle on the axis
Apr 12th 2007
From The Economist print edition

AP
Financial sanctions have a big place in a tool-box designed to thwart the proliferators of Pyongyang and Tehran
Get article background

THIS hasn't been the finest week for the effort to curb the nuclear ambitions of the two states which, along with Saddam Hussein's Iraq, were once consigned by George Bush to an “axis of evil”.

North Korea, which shocked the world with a nuclear-bomb test last October, looks like missing an April 14th deadline—agreed two months ago in six-party talks with America, China, South Korea, Japan and Russia—to shut down and seal its Yongbyon nuclear reactor, and the related facilities for extracting bomb-useable plutonium from its fuel rods.

Meanwhile, on April 9th, Iran's President Mahmoud Ahmadinejad (above), announced to much ballyhoo and the strains of a “nuclear symphony” that its technicians could enrich uranium (for reactor fuel, not bombs, he says) “on an industrial scale” at its underground plant at Natanz.

To hawkish critics of Mr Bush's readiness to negotiate with both North Korea and Iran (if only the latter would suspend its uranium and plutonium work as the UN Security Council has demanded) on nuclear matters, these setbacks are not unconnected. The two countries collude closely on increasingly far-flying missiles; some suspect them of doing joint nuclear work, too. The critics worry that an American concession to get North Korea back to the negotiating table two months ago—the unfreezing of $25m worth of North Korean funds held at a Macau-based bank, which America's Treasury Department had identified as coming partly from other illicit activities, such as counterfeiting—will incur a cost. It could make stripping Kim Jong Il of his nuclear weapons that much harder, and further embolden Iran. Yet the broader knock-on effects of America's latest moves over Macau-based Banco Delta Asia (BDA) are unclear, and it may turn out that they are not all bad.

Mr Kim was furious when America accused BDA in September 2005 of turning a blind eye to his laundering of ill-gotten gains (a charge it denies), and when he found his accounts there frozen. North Korean negotiators have been refusing to close down Yongbyon—the first step in a deal agreed in February to implement an earlier vow by North Korea to abandon its weapons programmes—until he gets his millions back. Inspectors from the International Atomic Energy Agency (IAEA), supposed to monitor the shutdown, have been cooling their heels for weeks.

The next stages of the February deal are supposed to see North Korea owning up to and eventually disabling all its nuclear-related facilities. But it is still not clear that Mr Kim intends ever to give up his bombs. His officials are said to have demanded privately that America instead recognise North Korea as a nuclear power, and treat it like India (which also built nuclear weapons to loud condemnation, but is now forging a deal with America to gain de facto recognition as a nuclear power).

For now Mr Kim, with his money tied up for months, is disinclined to press that demand. Much will depend on whether South Korea and China, which supply much food and other aid to North Korea, can calibrate their help in ways that keep Mr Kim on the right path. North Korea is also under mandatory UN economic sanctions as a consequence of last year's nuclear test and it remains to be seen if other countries will now keep up this pressure.

Yet for bankers and businessmen, whether their dealings are with North Korea or Iran, there is a moral of a different sort in the BDA story. Freeing up Mr Kim's funds at the bank, even with America's willing assistance, has proved far easier said than done. This was in part because China is nervous at allowing identifiably “laundered” funds to flow out through its banking system. It also still “deeply regrets” America's decision last month, when it agreed to see the Kim cash released, to designate BDA formally as a money-laundering concern; that obliges American banks and firms to cut all ties with it, and puts the bank's future further in doubt.

The move against BDA also deters others from doing business with Mr Kim. The hope, presumably, is that the bank's ongoing troubles will compound the deterrent effect. And it suggests that, although America does little trade with either North Korea or Iran, it still has ways of putting the squeeze on. North Korea was already fairly isolated; Iran is more deeply enmeshed in the world's trading and financial systems. That makes it a harder target for financial pressure, but not an impossible one.

Iran's announcement this week that it has mastered large-scale uranium enrichment has yet to be verified by international inspectors. But the claim alone was a raspberry aimed at last month's UN Security Council resolution, which will extend sanctions on individuals and companies involved in Iran's nuclear and missile programmes if it again fails to halt enrichment work before a 60-day deadline (a previous Security Council resolution had already been flouted).

The 3,000 centrifuge machines it now claims to have up and running at Natanz could eventually produce enough highly-enriched uranium (nuclear-power reactors require only low-enriched uranium) for about a bomb a year. Iran is thought still to be some way off being able to do all that—if bomb-making is indeed its aim. But its defiance heightens concern.

That may be Mr Ahmadinejad's intention: creating nuclear facts on the ground faster than diplomats from Europe, America, Russia and China can manage to step up international pressure against him. At the UN, the diplomacy has at times been tortuous. Outside the UN, however, things have been moving more speedily.

Taking their cue from the BDA saga, senior American Treasury and State Department officials have for months been criss-crossing the world to point out the growing risks of doing business with Iran. The message has started to sink in: several European banks have already announced they will no longer do business with Iran in dollars (and are said to be cutting exposure in other currencies too); scores of other banks and companies in Europe and Asia have cut new business there sharply.

More slowly than America would like, a number of European governments and Japan have also started to cut back export credits that finance trade. And since just under 25% of Iran's exports and over 40% of its imports are with the European Union alone, this can be expected to pinch.

Unlike America, EU countries until now have lacked the powers to bar companies and banks from doing business with Iran. But on April 19th new EU-wide regulations are to be published that will implement last December's first UN resolution, allowing sanctions to be imposed against named companies and individuals. Other restrictions are expected to follow. Iran is already finding it more costly to do business. It can count on only short-term credit. And it is having problems attracting investment for its oil and gas industries.

Will this help deflect it from its nuclear path? American officials say they will be patient and let the diplomacy, inside and outside the Security Council, take effect. But, says one senior official, the tougher countries are prepared to be on Iran now, the less likely it is in future that anyone will be tempted to reach for other options “famously on the table”.

Great comments by Thomas Barnett about how pollution can and should be treated as a profit potential business opportunity as opposed to a government regulatory effort.

In other words its a 'bottom up' rather than a 'top down' approach.

======================================================
POLITICS & ECONOMICS: “Clean-Energy Firms Make Pitch to Asia: U.S. Trade Mission Aims to Capitalize on Growing Commitment in China, India,” by Jane Spencer, Wall Street Journal, 18 April 2007, p. A9.
India and China gear up to spend billions on renewable energy as that $10T gets spent on new infrastructure by 2030 (six in energy, four in water). Naturally, our clean-energy businesses want in, which is smart.
Accessing the build-out in Asia is re-learning how to sell to the bottom of the pyramid--pure and simple.
The usual hyperbole from a investment fund manager looking to profit: “Either we have a complete environmental collapse, or we have to quickly evolve the entire global economy to a much more energy-efficient, resource-efficient and environmentally conservative model.”
Hmmm.
I’ll take Option B, but can I stretch out the payments some?
Commerce is involved due to fears of IP loss, which makes good sense.
When we did the Cantor Fitzgerald-Naval War College “NewRuleSets.Project” economic security exercise on future environmental damage in Asia back in the summer of 2001, Cantor kept saying, this is going to be huge within a decade, and we want a big role in shaping the markets that make it happen--thus their new energy-trading business whose debut was trumpeted at the event. Can’t remember the name off the top of my head (probably blocking, cause the CEO who attended, Carlton Bartels [see bios as bottom], died on 9/11), but have a mug in my office (CO2e.com). The side biz was designed to anticipate, shape, and exploit future cap-and-trade regimes, which they believed would grow, bottom-up around the world (national and regional first) versus a global rule set like Kyoto being imposed from above.
So here’s the first bit that interests me:
The clean-energy mission is part of a wave of initiatives developed by the U.S. government that seek to harness the forces of the free market to address Asia’s environmental problems, creating business opportunities while dealing with global pollution problems. The projects are part of the Asia-Pacific Partnership on Clean Development and Climate--the U.S., China, India, Japan, Australia and South Korea--that was organized as an alternative to the Kyoto Protocol.
The signature program, Pollution Prevention and Energy Efficiency (P2E2) is rolled out later this year.
This is the second cool bit:
P2E2 aims to help companies in Hong Kong turn profits while cleaning up heavily polluting factories in China. It will ultimately be backed by $1 billion in funding from the Asian Development Bank and other sources that will grease the wheels by eliminating capital costs for the companies involved.
The basic idea is to match environmental-service companies based in Hong Kong with individual factories in China’s Pearl River Delta region, one of the most heavily industrialized--and most intensely polluting--places on the planet. The service companies will conduct environmental audits at the factories and then install new energy-efficient technology and machinery to cut both costs and pollution at the factories. In effect, the Chinese factories will outsource their clean-up to the Hong Kong environmental-service companies.

The trick is that neither party will face any upfront costs or capital investment. The Hong Kong companies will finance their work with loans from the Asian Development Bank and other sources. The factories get the technology free and later pay the environmental-service companies a cut of the cost savings generated by the new technology over a period of years. The Hong Kong companies then pay off the loans and pocket the remainder as profits.

That is sweet. It just needs to be marketized by private capital markets so it can be scaled up.
Brilliant quote to end:
“We can’t fund enough regulators or prosecutors to solve Asia’s environmental crisis,” says Stewart Ballard, chief commercial consul for the U.S. Commercial Service at the American Consulate General Hong Kong and Macau. “We need to start looking at the environment as business opportunity.”
Couldn’t have said it better.
Enterra’s doing similar stuff on the security angle first for a waterway stretch from Philly out to the mouth of the Delaware bay, another hugely concentrated chunk of intense industries (energy and chem.) Tons of conflicting rules to work. Perfect for us.
Eventually we’ll be working this stretch in China too--my prediction.