Tuesday, September 20, 2011
Michael Moore Calls Out Mainstream Media on 'Rachel Maddow Show' (9/19/11)
Harvesting 'limitless' hydrogen from self-powered cells
Harvesting 'limitless' hydrogen from self-powered cells
By Mark Kinver Environment reporter, BBC News
An example of a microbial fuel cell has gone on display at London's Science Museum
US researchers say they have demonstrated how cells fuelled by bacteria can be "self-powered" and produce a limitless supply of hydrogen.
Until now, they explained, an external source of electricity was required in order to power the process.
However, the team added, the current cost of operating the new technology is too high to be used commercially.
Details of the findings have been published in the Proceedings of the National Academy of Sciences.
"There are bacteria that occur naturally in the environment that are able to release electrons outside of the cell, so they can actually produce electricity as they are breaking down organic matter," explained co-author Bruce Logan, from Pennsylvania State University, US.
"We use those microbes, particularly inside something called a microbial fuel cell (MFC), to generate electrical power.
"We can also use them in this device, where they need a little extra power to make hydrogen gas.
"What that means is that they produce this electrical current, which are electrons, they release protons in the water and these combine with electrons."
Prof Logan said that the technology to utilise this process to produce hydrogen was called microbial electrolysis cell (MEC).
"The breakthrough here is that we do not need to use an electrical power source anymore to provide a little energy into the system.
Hydrogen has long been hailed a transport fuel of the future but has yet to fulfil its potential "All we need to do is add some fresh water and some salt water and some membranes, and the electrical potential that is there can provide that power."
The MECs use something called "reverse electrodialysis" (RED), which refers to the energy gathered from the difference in salinity, or salt content, between saltwater and freshwater.
In their paper, Prof Logan and colleague Younggy Kim explained how an envisioned RED system would use alternating stacks of membranes that harvest this energy; the movement of charged atoms move from the saltwater to freshwater creates a small voltage that can be put to work.
"This is the crucial element of the latest research," Prof Logan told BBC News, explaining the process of their system, known as a microbial reverse-electrodialysis electrolysis cell (MREC).
"If you think about desalinating water, it takes energy. If you have a freshwater and saltwater interface, that can add energy. We realised that just a little bit of that energy could make this process go on its own."
Early days
He said that the technology was still in its infancy, which was one of the reasons why it was not being exploited commercially.
"Right now, it is such a new technology," he explained.
"In a way it is a little like solar power. We know we can convert solar energy into electricity but it has taken many years to lower the cost.
"This is a similar thing: it is a new technology and it could be used, but right now it is probably a little expensive. So the question is, can we bring down the cost?"
The next step, Prof Logan explained, was to develop larger-scale cells: "Then it will easier to evaluate the costs and investment needed to use the technology.
The authors acknowledged that hydrogen had "significant potential as an efficient energy carrier", but it had been dogged with high production costs and environmental concerns, because it is most often produced using fossil fuels.
Prof Logan observed: "We use hydrogen for many, many things. It is used in making [petrol], it is used in foods etc. Whether we use it in transportation... remains to be seen."
But, the authors wrote that their findings offered hope for the future: "This unique type of integrated system has significant potential to treat wastewater and simultaneously produce [hydrogen] gas without any consumption of electrical grid energy."
Prof Logan added that a working example of a microbial fuel cell was currently on display at London's Science Museum, as part of the Water Wars exhibition.
Sunday, September 18, 2011
BBC poll shows narrow support for Palestinian state
BBC poll shows narrow support for Palestinian state
Palestinian leaders go to the United Nations in New York this week to ask to become recognised as a state
A global BBC poll suggests more people support UN recognition of Palestine as an independent state than oppose it.
Across the 19 countries surveyed, 49% backed the proposal while 21% said their government should oppose it.
The Palestinians say they will ask for full membership at the UN this week but the US says it will veto the move.
International Middle East envoy Tony Blair told the BBC he wants to make sure the move does not undermine chances of a return to peace talks.
The Palestinians are seeking international recognition of their state based on 1967 borders - the West Bank, including East Jerusalem, and the Gaza Strip.
Israel and the US say a Palestinian state can only be achieved through direct negotiation.
The last round of peace talks between Israel and the Palestinians broke down a year ago.
A Palestinian delegation to the UN with a symbolic chair for Palestine Mr Blair, the envoy for the Quartet of Middle East mediators - the EU, UN, Russia and the US - said he was trying to reach agreement on a framework for a return to talks.
"My objective is to secure a basis on which we can renew negotiations," he told the BBC's UN correspondent, Barbara Plett.
He stressed he did not want to stop the Palestinians from going to the UN.
But, he added, "it's only if the two sides sit down together in negotiation that we're going to get what the Palestinians really need, which is a viable Palestinian state, and what the Israelis need, which is a state that guarantees Israel's security."
Varying supportThe poll, jointly conducted by the BBC and GlobeScan, saw majority support in four predominantly Muslim countries, with Chinese people also strongly endorsing the proposal.
Even in countries where opposition was strongest, more people polled supported the resolution than were against it.
Palestinian UN Statehood Bid
- Palestinians currently have permanent observer entity status at the UN
- They are represented by the Palestine Liberation Organisation (PLO)
- Officials now want an upgrade so a state of Palestine has full member status at the UN
- They seek recognition on 1967 borders - in the West Bank, including East Jerusalem, and Gaza
- Enhanced observer member status could be an interim option
The United States and the Philippines both polled 36% against the resolution. But 45% of Americans and 56% of Filipinos backed recognition.
The lowest level of support was in India, with 32% in favour and 25% opposed, with many undecided.
Support was strongest in Egypt, where 90% were in favour and only 9% opposed.
In other Muslim countries, Turkey recorded 60% support, 19% opposition; Pakistan 52% for, 12 against; and Indonesia 51% for, 16% against.
Chinese were among the most enthusiastic supporters, with 56% in favour and just 9% opposed.
Public opinion in the three large European Union member states included in the poll was strikingly similar on the issue: France (54% support, 20% opposition), Germany (53% v 28%) and the UK (53% v 26%).
Overall, 30% opted for not giving a definite answer as they thought their country should abstain, or "it depends", or they did not offer a view.
But more than half of Russians and Chileans did not offer a definite opinion.
A total of 20,466 people in 19 countries were interviewed, either face-to-face or by telephone between 3 July and 29 August this year. The margin of error ranges from + or - 2.1% to 3.5%.
Source
Siemens to quit nuclear industry
Siemens to quit nuclear industry
Siemens will continue to work in the power industry but drop out of the nuclear sector
German industrial and engineering conglomerate Siemens is to withdraw entirely from the nuclear industry.
The move is a response to the Fukushima nuclear disaster in Japan in March, chief executive Peter Loescher said.
He told Spiegel magazine it was the firm's answer to "the clear positioning of German society and politics for a pullout from nuclear energy".
"The chapter for us is closed," he said, announcing that the firm will no longer build nuclear power stations.
A long-planned joint venture with Russian nuclear firm Rosatom will also be cancelled, although Mr Loescher said he would still seek to work with their partner "in other fields".
Siemens was responsible for building all 17 of Germany's existing nuclear power plants.
But more recently, the firm has limited itself to providing the non-nuclear parts of plants being built by other firms, including current projects in China and Finland.
The latest decision appears to imply a step back from building "conventional islands" - the non-nuclear plant in nuclear power stations - an area in which Siemens has remained active.
However, Mr Loescher also said Siemens would continue to make components, such as steam turbines, that are used in the conventional power industry, but can also be used in nuclear plants.
U-turnHe also gave his backing to the German government's planned switch to renewable energy sources, calling it a "project of the century" and claiming Berlin's target of reaching 35% renewable energy by 2020 was achievable.
The German chancellor, Angela Merkel, announced at the end of May that all of the country's 17 nuclear reactors would be shut down by 2022.
Before the Fukushima disaster, nuclear power accounted for 23% of electricity production in Germany.
The German government's decision marked a complete U-turn by the chancellor, who only in September 2010 had announced that the life of existing nuclear plants would be extended by an average of 12 years.
Siemen's move, announced on Sunday, is also a turnaround.
In 2009, the firm withdrew from an eight-year-old nuclear joint venture with French energy firm Areva, shortly before announcing its new deal with Rosatom.
"In view of global climate change and the increasing power demand worldwide, for us nuclear energy remains an essential part of a sustainable energy mix," Mr Loescher had said at the time.
A real Good Samaritan
A real Good Samaritan
One act of kindness that befell British writer Bernard Hare in 1982 changed him profoundly. Then a student living just north of London, he tells the story to inspire troubled young people to help deal with their disrupted lives.
The police called at my student hovel early evening, but I didn't answer as I thought they'd come to evict me. I hadn't paid my rent in months.
But then I got to thinking: my mum hadn't been too good and what if it was something about her?
We had no phone in the hovel and mobiles hadn't been invented yet, so I had to nip down the phone box.
I rang home to Leeds to find my mother was in hospital and not expected to survive the night. "Get home, son," my dad said.
I got to the railway station to find I'd missed the last train. A train was going as far as Peterborough, but I would miss the connecting Leeds train by twenty minutes.
“Start Quote
To this day, I won't hear a bad word said about British Rail”
I bought a ticket home and got on anyway. I was a struggling student and didn't have the money for a taxi the whole way, but I had a screwdriver in my pocket and my bunch of skeleton keys.
I was so desperate to get home that I planned to nick a car in Peterborough, hitch hike, steal some money, something, anything. I just knew from my dad's tone of voice that my mother was going to die that night and I intended to get home if it killed me.
"Tickets, please," I heard, as I stared blankly out of the window at the passing darkness. I fumbled for my ticket and gave it to the guard when he approached. He stamped it, but then just stood there looking at me. I'd been crying, had red eyes and must have looked a fright.
"You okay?" he asked.
"Course I'm okay," I said. "Why wouldn't I be? And what's it got to do with you in any case?"
"You look awful," he said. "Is there anything I can do?"
FIND OUT MORE
- The Good Conductor is on BBC Radio 4 at 20.45 GMT on Wednesday 29 December
"You could get lost and mind your own business," I said. "That'd be a big help." I wasn't in the mood for talking.
He was only a little bloke and he must have read the danger signals in my body language and tone of voice, but he sat down opposite me anyway and continued to engage me.
"If there's a problem, I'm here to help. That's what I'm paid for."
I was a big bloke in my prime, so I thought for a second about physically sending him on his way, but somehow it didn't seem appropriate. He wasn't really doing much wrong. I was going through all the stages of grief at once: denial, anger, guilt, withdrawal, everything but acceptance. I was a bubbling cauldron of emotion and he had placed himself in my line of fire.
The only other thing I could think of to get rid of him was to tell him my story.
"Look, my mum's in hospital, dying, she won't survive the night, I'm going to miss the connection to Leeds at Peterborough, I'm not sure how I'm going to get home.
"It's tonight or never, I won't get another chance, I'm a bit upset, I don't really feel like talking, I'd be grateful if you'd leave me alone. Okay?"
"Okay," he said, finally getting up. "Sorry to hear that, son. I'll leave you alone then. Hope you make it home in time." Then he wandered off down the carriage back the way he came.
THE FIRST GOOD SAMARITAN
- Parable told by Christ in the Book of Luke
- A traveller is beaten and left for dead alongside a road
- Passers-by ignore him, but a Samaritan - who would have been regarded by Jews at the time as an enemy - stops to help
I continued to look out of the window at the dark. Ten minutes later, he was back at the side of my table. Oh no, I thought, here we go again. This time I really am going to rag him down the train.
He touched my arm. "Listen, when we get to Peterborough, shoot straight over to Platform One as quick as you like. The Leeds train'll be there."
I looked at him dumbfounded. It wasn't really registering. "Come again," I said, stupidly. "What do you mean? Is it late, or something?"
"No, it isn't late," he said, defensively, as if he really cared whether trains were late or not. "No, I've just radioed Peterborough. They're going to hold the train up for you. As soon as you get on, it goes.
"Everyone will be complaining about how late it is, but let's not worry about that on this occasion. You'll get home and that's the main thing. Good luck and God bless."
Then he was off down the train again. "Tickets, please. Any more tickets now?"
I suddenly realised what a top-class, fully-fledged doilem I was and chased him down the train. I wanted to give him all the money from my wallet, my driver's licence, my keys, but I knew he would be offended.
I caught him up and grabbed his arm. "Oh, er, I just wanted to…" I was suddenly speechless. "I, erm…"
Bernard was desperate to see his mother, Joyce
"It's okay," he said. "Not a problem." He had a warm smile on his face and true compassion in his eyes. He was a good man for its own sake and required nothing in return.
"I wish I had some way to thank you," I said. "I appreciate what you've done."
"Not a problem," he said again. "If you feel the need to thank me, the next time you see someone in trouble, you help them out. That will pay me back amply.
"Tell them to pay you back the same way and soon the world will be a better place."
I was at my mother's side when she died in the early hours of the morning. Even now, I can't think of her without remembering the Good Conductor on that late-night train to Peterborough and, to this day, I won't hear a bad word said about British Rail.
My meeting with the Good Conductor changed me from a selfish, potentially violent hedonist into a decent human being, but it took time.
"I've paid him back a thousand times since then," I tell the young people I work with, "and I'll keep on doing so till the day I die. You don't owe me nothing. Nothing at all."
"And if you think you do, I'd give you the same advice the Good Conductor gave me. Pass it down the line."
As Palestinians Push for Statehood, Israel Finds Itself Isolated
As Palestinians Push for Statehood, Israel Finds Itself Isolated
Angry neighbors Protesters attack Israel's embassy in Cairo, forcing diplomats to flee
There are links between nations, cordial relations, firm bonds, alliances and strategic partnerships. But what Turkey and Israel had in mind just four years ago was something akin to being joined at the hip. The plan was to snake an extraordinary "infrastructure corridor" from Ceyhan in Turkey's south to Haifa in Israel's north, a thick bundle of pipes carrying crude oil in one, electricity in another, natural gas in yet another and in the fourth, a steady flow of fresh, sweet water, all thrumming along the floor of the Mediterranean Sea. Not only would these pipes serve as ties that bind two nations, but they would also show the world that a Muslim country could tether itself to the Jewish state, to their mutual benefit.
Which makes the events of the past few weeks all the more worrisome for Israel. With dizzying speed, Turkey has gone from offering oil and gas to Israel to threatening to send gunboats to the Gaza Strip to protect activists seeking to break Israel's naval blockade of the Palestinian territory. Enraged by Israel's refusal to apologize for its killing of eight Turks (and one Turkish American) on board a blockade-busting ferry last year, Ankara has ejected Israel's ambassador, downgraded diplomatic relations and imposed military sanctions on its former ally. And that "infrastructure corridor"? It's now a mere pipe dream. (See Israel's thinkers discussing the country's challenges over the next 60 years.)
This conspicuous unfriending could hardly come at a worse time for Israel. As representatives of 193 nations gather in New York City for their annual U.N. conclave, Palestinian leaders are polishing a statehood proposal that would change the fundamental terms of the Middle East's core conflict, possibly putting them on the same legal footing as Israel.
With most of the world sympathetic to the Palestinians, waylaying their application for statehood will require Israel to deploy diplomatic skills of the highest order. But its preparations have not been going well. Prime Minister Benjamin Netanyahu warmed up for the big event by alienating the U.S. President, at once misquoting and lecturing Obama during Netanyahu's visit to Washington in May. Then there's the Arab Spring, which knocked over the Arab neighbor Israel relied on most, Egypt's Hosni Mubarak; last week, the Israeli embassy was attacked by protesters in Cairo while the riot police stood by. The spectacular collapse of the Turkey alliance makes three strikes. (See pictures of Israelis clashing with Palestinians.)
The game's not over. Obama still plans to use the U.S. veto in the Security Council to deny Palestinians full membership. But they could take the matter to the General Assembly, where a vote would likely be lopsided, leaving Israel looking conspicuously isolated. Israelis approach the threats one at a time. The Netanyahu government is avoiding a diplomatic contre temps with Egypt, since the 1979 peace treaty between the two countries is crucial to Israel's defense. The U.N. is easier to criticize, and most Israelis feel it is generally biased toward the Palestinians. "We don't like the U.N.," says Daniel Reisner, a longtime peace negotiator and international-law specialist. "We don't trust it."
And Turkey? In a country where new homes are built with bomb shelters, diplomatic conflict is easily dismissed. "Turkey, Burkey," said Rabbi Ovadia Yosef, spiritual leader of the Shas party, a key member of Netanyahu's ruling coalition. "God Almighty couldn't care less about them. Who are they anyway?" (See TIME's special report "The Middle East in Revolt.")
Although Prime Minister Recep Tayyip Erdogan was once hailed as a vital ally, many Israelis now regard him as a neo-Ottoman, out to revive Turkish leadership of the Muslim world by beating up on the Jewish state. That's certainly how they perceived Erdogan's performance in Cairo, where he said in a Sept. 13 speech to the Arab League that Israel must "pay a price for its aggression and crimes" and that supporting Palestinian statehood was "not a choice but an obligation." Israel, he said, is "the West's spoiled child."
Across town, Palestinian leader Mahmoud Abbas was meeting with the European Union's Foreign Minister, working on a strategy to avoid the U.S. veto in the Security Council. The Europeans were urging Abbas to settle for the status of a "nonmember observer state," akin to that of the Vatican, which he could get from a vote in the General Assembly — thus avoiding the U.S. veto in the Security Council.
That would be no consolation to Israel, however, because it would very likely give Palestine access to the International Criminal Court. There, it could bring charges against Israel for building settlements on occupied territory and allegedly driving out Palestinians — it would argue that this amounts to a war crime. That changes things. Even if Abbas promises (as a condition of E.U. support) not to rush to the Hague, the mere fact that he could do so hands Palestinians new leverage in peace talks.
Not that the Palestinians are anywhere near ready for talks. For negotiations with Israel to have real meaning, Abbas' Fatah party must first reconcile with Hamas, uniting the West Bank and Gaza into one entity after new elections promised in May. But intra-Palestinian parleys have stalled: the two parties can't even agree on the time of day. Literally. In Gaza City, a university associated with Fatah keeps daylight time, while the Hamas school next door sets its clock with Egypt, an hour behind. "We are one people," wails Rewaa Fanouna, 21. "We ought to be united at least on the time!" (See pictures of life under Hamas in Gaza.)
Polls show that most Palestinians support the U.N. bid but don't necessarily understand what it might bring them. That's not surprising, given the muddy signals from their leaders on a legalistic matter. As late as Sept. 14, when this magazine printed, it was not clear whether Abbas would go the Security Council route or the General Assembly route. In any event, what Palestinians want most, after 44 years of Israeli occupation, is something the U.N. bid cannot deliver: immediate change on the ground.
Israel, meanwhile, seems unperturbed by the loss of so many friends. Netanyahu seemed willing to sour relations with the White House because he was confident it would play well back home: his selective quotation of Obama's call for a Palestinian state based on 1967 borders (leaving out the crucial qualifier "land swaps") was a hit with the Israeli public. (See pictures of Israel.)
Isolation carries a price, however. When Israel's embassy in Cairo was besieged Sept. 9 by a mob of Egyptians protesting their own transitional military rulers and Israel's killing of five Egyptian police officers after a terrorist attack the previous month, Netanyahu was unable to reach the top Egyptian general. In the end, he had to phone Obama to ask him to intervene.
That may have been the most positive exchange between the two in months. But it's not clear if Obama can head the Palestinians off at the pass in New York City. Averting a U.N. vote would depend on a credible promise of progress in peace talks, but Netanyahu has continued to sanction the steady expansion of the settlements on the West Bank. The White House has repeatedly asked him to freeze the construction of settlements on occupied land, and the Palestinians say they won't sit down to talks while the building continues. "From what we see, the construction is speeding even in settlements deeper in the West Bank," says Hagit Ofran of Peace Now, an Israeli group that monitors settlement construction. "So it doesn't seem, at least on the ground, the government is doing anything in favor of peace." Israel too has demands, among them Palestinian recognition of its status as a Jewish state. In this and other matters, Abbas is as unyielding as Netanyahu.
There's still time, of course. There's just the chance that two client states can be coaxed to accommodate their Washington sponsor. But it's September: the days are growing shorter.
Commentary
Talk about hypocrisy. America is not in favor of a two state solution. It is in favor of the status quo. Actions speak louder than words.
The status quo means more settlements, less peace, more deaths, and more terrorism around the world because of the lack of peace and the willingness to demonize the other side.
Saturday, September 17, 2011
State-Run Shakedown
State-Run Shakedown
By Michael Schuman / Moscow
Economic twilight? The Kremlin promises change, but so far it's more talk than action
Photograph by Alexander Gronsky for TIME
Alex Shifrin thought he found a surefire way to profit from Moscow's new consumers with an old Russian tradition: soup. Russians can't get enough of the stuff, slurping down an incredible 32 billion bowls each year. But with the city's emerging middle class increasingly adopting Westernized, on-the-go lifestyles, soup fans have less time to boil it for themselves. Shifrin, an advertising executive, and three partners smelled an opportunity. Why not cook it for them? They pooled their personal savings and in April 2010 launched Soupchik, a chain of takeaway outlets serving up borscht, chicken noodle and other local favorites to upwardly mobile Muscovites.
The investors, however, learned that nothing in Russia is a sure thing, thanks to the unpredictable and predatory government. A steady stream of corrupt tax officials, police officers and other security agents began harassing them for payoffs. Within weeks of Soupchik's opening, two tax inspectors claimed the start-up was violating an obscure retailing regulation. Shifrin protested, and amid the negotiations, a tax administrator suggested that some $1,000 in cash would resolve the matter. (Shifrin refused to ante up, and the tax office eventually dropped its case.) (See pictures of Russia celebrating Victory Day.)
Matters got worse later in 2010 when eager bureaucrats declared war on shops like Soupchik after Moscow's mayor remarked that the numerous stalls dotting the city were unsightly. One day in October, an employee at a Soupchik kiosk phoned the head office in a panic: bulldozers were outside, poised to flatten the shop. A manager rushed over in a van to rescue the kitchen equipment before the kiosk was smashed into rubble. New regulations made accessing sidewalk space for more Soupchiks extremely difficult. The chaos forced the investors to overhaul their business model. Instead of stand-alone kiosks, they opened all but one of their six outlets inside modern shopping malls — an attempt to shield them from bureaucrats hungry for bribes, not borscht. Doing business in Russia is "a moving target. There are no real rights," Shifrin says. "If you could put your $100 million in any market, why would you put it here?"
That's a question more and more businesspeople are asking. Before the Great Recession, Russia was one of the world's premier emerging markets. Economic growth was stellar, at more than 7% a year from 2000 to 2007. Rising incomes created a lucrative market for consumer goods like cars and refrigerators. Foreign investors rushed in for a piece of the action. Goldman Sachs bunched Russia with Brazil, India and China as the BRICs, the four large developing economies the bank considered best positioned to dominate global growth for decades. After falling so low after the 1991 collapse of the Soviet Union, Russia was again asserting itself on the world stage, backed by both military might and economic progress. (See why young entrepreneurs are fleeing Russia.)
Not anymore. While the other BRICs have shrugged off the recession and soared to new heights of global influence, Russia has not regained its precrisis moxie. With the economy plagued by sluggish growth and anemic investment, the outlook has turned gloomy. Neil Shearing, senior emerging-markets economist at research firm Capital Economics in London, forecasts that Russia could average only 3% annual growth over the next 15 years — a pittance compared with the stratospheric rates notched by China and India. "The old growth model has broken down," he says.
That could have serious consequences for both Russia and the West. Prime Minister Vladimir Putin, the country's uncrowned czar, has linked his legitimacy to the economy's performance by offering the Russian people a grand bargain: submit to his increasingly autocratic rule and the state will compensate with economic goodies like higher incomes and hefty social-welfare spending. Now that the economy is faltering, Putin is under intensifying pressure from a discontented public to restore Russian democracy, potentially destabilizing Russian politics. He has already faced protests in Moscow against his rule amid the economic downturn. There's also a risk that leaders in Moscow will resort to nationalistic appeals to distract the public from problems at home, escalating tension with Russia's neighbors, the rest of Europe and the U.S. Putin even now has a testy relationship with Washington. After the recent debate over the U.S. debt ceiling, he accused Americans of "living like parasites" on the global economy. "A faltering economy is more likely to produce an aggressive and adventuresome [Russian] foreign policy," says Charles Kupchan, a senior fellow at the Council on Foreign Relations in Washington.
Watch TIME's video of a Russian roadtrip.
The Politics of Pillage
what's gone wrong? the problems are rooted in the structure of Russia's economic model. After a tumultuous decade in the wake of the Soviet demise, which featured an embarrassing 1998 government default, Putin took over in 2000 and re-established the state's dominance in the economy. He wrested control of large swaths of Russian industry from the handful of oligarchs who had taken advantage of the disintegration of the Soviet command economy to build massive business empires. Lubricated by oil revenue, Putin lavished spending on state welfare programs, sparking a consumer boom. Russia was even lauded by some economists for its model of state capitalism, which has at times appeared superior to the more laissez-faire systems of the West, particularly in the immediate aftermath of the financial crisis.
Now, however, state capitalism is strangling Russia. Government-owned companies, shielded from competition, are crowding out private enterprise. Over the past seven years, the government has gobbled up private players in the crucial energy sector, with Rosneft, the state-controlled oil giant, and Gazprom, the natural gas monopoly, becoming two of the largest energy companies in the world. The government owns about half of all shares in companies listed on the Moscow stock exchange, up from 30% eight years ago. As a result, says Arkady Dvorkovich, an economic adviser to the somewhat more reform-minded President, Dmitri Medvedev, the performance of the entire economy has suffered. "With state control, state companies enjoy a better position in the market," he says. "They don't have motivation to improve efficiency and the quality of goods and services, and this affects the whole market." The number of public-sector employees exploded under Putin, growing by nearly 80% to more than 868,000 in 2009, without much improvement in services. With more bureaucrats, there are more sticky fingers grabbing at entrepreneurs like Shifrin. In its 2010 corruption-perception index, Transparency International ranked Russia well below the other BRICs and behind even Zimbabwe, Haiti and Pakistan. "Russia has 140 million hardworking people and 1 million people who want to steal from them," says William Browder, CEO of Hermitage Capital Management, a London-based investment fund. (Read "The Race for Arctic Oil: Is Russia Ready to Share?")
Browder should know. The American-born financier has been at the center of one of several high-profile controversies that have exposed parts of the Russian bureaucracy as something akin to an organized-crime family. Once the largest foreign portfolio investor in Russia, he created a stir by confronting corporate managers over shady dealings. That led to his banishment from the country and a scam in which, Browder claims, government officials used his corporate documents to steal $230 million in tax revenue. One of his lawyers died suspiciously while in pretrial detention. (The Russian government is investigating the death, as well as a tax-evasion case against Browder.)
Billionaire Alexander Lebedev, who controls the National Reserve Bank and the country's most popular opposition newspaper, has publicly accused a cabal of police and secret-service agents of seeking to seize his assets through an intricate conspiracy, which he has linked to recent police raids at his offices, intimidation of his staff and alleged demands for multimillion-dollar bribes. Earlier this year, he wrote an open letter to Putin appealing for an investigation of these "werewolves in epaulets." Without curtailing corruption and strengthening the legal system, Lebedev says, Russia can't compete with China or India. "The political system here is an impediment to economic growth," he says. "You can hardly find an aspect of life that cannot be explained by the huge dominance of corruption at the highest echelons. It has come to the point that it couldn't get worse." (Read about the billionaire Alexander Lebedev who wants to change Russia.)
Actually, it could. The corrupt and intrusive state is scaring off what the Russian economy needs most: investment. Over the past six quarters, a net $65 billion of private capital flowed out of the country. Without that cash, Russia can't spur growth, rebuild decrepit infrastructure, upgrade its industrial base or create jobs for college graduates. In a March speech, Medvedev admitted that the investment climate "is very bad, very bad" and corruption had "a stranglehold" on the economy. "We cannot let this situation continue," he warned.
The Market Fights Back
that pledge has led to a rethink of Russia's economic model at the highest levels of policymaking. Those who admire state capitalism "don't know what they're saying," says Dvorkovich. "This way of doing things has exhausted all its potential, so we need to change policies." A flood of market reforms has rushed from the Kremlin, including proposals to eliminate regulations, reduce controls on foreign investment, shrink the bureaucracy and improve the transparency of state companies. In early August the government announced it would sell off majority stakes in a wide range of state-owned enterprises by 2017. "I want to state loud and clear here that we are not building state capitalism," Medvedev said in June.
See 10 things to do in Moscow.
Yet so far, Medvedev's bold talk has remained mostly talk. In part, the roadblock may be a resistant bureaucracy still not detached from its Soviet roots. "There is no respect for private property and economy in the minds of the majority of bureaucrats," Dvorkovich complains. The biggest obstacle might be Putin. Medvedev sits in the Kremlin, but Putin remains the ultimate arbiter in the economy, and there is little to suggest he has joined the small-government tea party. "He believes in the traditional Russian way — the state should be the biggest player in everything," says Maria Lipman, a political analyst at the Carnegie Endowment for International Peace in Moscow. The sort of liberalization propounded by Medvedev would threaten the sources of patronage and control that ensure Putin's position. In fact, by advocating market reform, Medvedev and his advisers are issuing a barely veiled critique of Putin. Dvorkovich talks of turning Russia into a "less paternalistic" society — a swipe at Putin's method of governing: "I think we have, potentially, people who are more inclined to freedom than state intervention into private life." And, Dvorkovich adds, their numbers are growing. Yet more paternalism is likely what Russia will get. With the next presidential election in March, Kremlin watchers are waiting to see if Putin will declare his candidacy for a third term.
Because of his popularity at home and the not-so-free-and-fair nature of Russian elections, he would almost surely win. Even if Putin remains in the background, some analysts believe Medvedev and his team haven't forged a political base sturdy enough to challenge Putin or his policies. That leaves Putin's critics convinced that only a major shake-up in Russian politics could fix the economy. Talk of market reform "is like a patient with terminal cancer putting on nice makeup," says Browder. "In order for Russia to change, they need a real change in most of the government leadership." (See pictures of Kremlin youth camp.)
Diversify or Die
with no sign of that happening, discontent is growing. In a closely watched August poll conducted by Moscow's Levada Center, a mere 22% of respondents believed their government could improve the country's prospects. A restless public is not the only factor increasing the pressure to reform. The poor investment climate has made the economy dangerously dependent on oil and more vulnerable to volatile prices. Putin's expanded state is so thirsty for oil revenue that it requires not just high prices but increasing prices to meet its spending commitments. If oil prices plunge to $70 or less per barrel, it could face a budget crisis. The only solution is diversification into new industries, but Russia has had minimal success. Even though it was famous during the Soviet era for its advanced technical talent, the country today has only a handful of technology firms with a global presence.
The Kremlin is attempting to change that through — not surprisingly — state action. Medvedev has endorsed a $6 billion program to create a state-run technology park outside Moscow called the Skolkovo Innovation Center. Companies that gain admittance will get tax breaks, express customs clearance and other perquisites. Some 120 firms have received the green light so far. Yet even the endeavor's senior managers fret that the program will be undermined by corruption. To shield the project from self-serving bureaucrats, applications are judged by panels of independent experts. Plans call for the park, on which construction is just beginning, to have special teams of police, health inspectors and other government agents to ensure that the usual suspects don't prey on the start-ups. Alexey Sitnikov, head of international development at the Skolkovo Foundation, the organization managing the project, hopes that a successful park will kindle the entrepreneurship the nation so badly needs. The goal "is not so much diversifying the economy but creating an entirely new economy," he says. (See pictures of lives of the Russian Rich.)
Is that possible? One factor that still binds Russia to China, India and Brazil is its tremendous untapped potential in the still strong consumer market. Car sales, for example, jumped 32% in August from a year earlier. It is telling that Alex Shifrin refuses to give up on Soupchik even after the trauma he has endured. "Russia is a lousy place to do business," he says, "but a great place to make money." Unfortunately, with the state in the way, not enough businesspeople are willing to find that out.
—with reporting by Simon Shuster / Moscow
US envoy links Haqqani militants to Pakistan government
US envoy links Haqqani militants to Pakistan government
The Haqqani network has been described as the glue that binds together militant groups
There is evidence linking the Haqqani militant network to Pakistan's government, the US ambassador to Pakistan has said in a radio interview.
"This is something that must stop," Cameron Munter told Radio Pakistan, when discussing Tuesday's militant assault on the Afghan capital, Kabul.
At least 25 died during a 20-hour-long attack blamed on the Haqqani group, who are believed to be based in Pakistan.
Pakistani authorities have consistently denied links with militant groups.
The Haqqani network, which is closely allied to the Taliban, has been blamed for several high-profile attacks against Western, Indian and government targets in Afghanistan.
It is often described by Pakistani officials as a predominantly Afghan group, but correspondents say its roots reach deep inside Pakistani territory, and speculation over its links to Pakistan's security establishment refuse to die down.
"The attack that took place in Kabul a few days ago that was the work of the Haqqani network, and the fact that, as we have said in the past, that there are problems, there is evidence linking the Haqqani network to the Pakistan government, this is something that must stop," Mr Munter said in the interview.
Although US officials have long harboured suspicions about the alleged links, they rarely make such public and direct statements.
Deteriorating relationsIn July the top officer in the US military, Adm Mike Mullen, said the Pakistani government "sanctioned" the killing of investigative journalist Saleem Shahzad. The Pakistani government called that statement "irresponsible".
Analysts say that US officials have long been frustrated at what they perceive to be Pakistani inaction against the Haqqani network, thought to based in Pakistan's tribal areas.
Last week, Washington said it could target the Haqqani network on Pakistani soil if the authorities there failed to take action against the militants.
Ties between the uneasy allies deteriorated sharply after the killing of al-Qaeda chief Osama Bin Laden on Pakistani soil by US commandos in May.
The network is thought have bases in Pakistan's volatile tribal regions US drone strikes targeting militants in the tribal areas and the controversy over the release of Raymond Davis, the CIA contractor who killed two Pakistani men in Lahore, had already strained ties.
Mr Munter acknowledged that relations had been "tough" and went on to say that it was time for the two countries to work together to defeat the militants.
"From our side we think that fighting them together is the best way to do it," he said.
Haqqani interviewBut Sirajuddin Haqqani, the son of the leader of the network, has told the Reuters news agency that the group no longer has sanctuaries on Pakistani soil because it felt secure inside Afghanistan.
"Gone are the days when we were hiding in the mountains along the Pakistan-Afghanistan border. Now we consider ourselves more secure in Afghanistan besides the Afghan people," he said.
He also said that the group would take part in peace talks with Kabul and the US if the Taliban endorsed such talks as well.
Previously the group has rejected such overtures, the agency reported.
But he declined to comment on Tuesday's attack on Kabul saying that he had been instructed by senior leaders not to say anything if Western interests were attacked.
"For some reasons, I would not like to claim that fighters of our group had carried out the recent attack on US embassy and Nato headquarters," he said.
Reuters said they spoke to Sirajuddin Haqqani by telephone from an undisclosed location.
Analysts say US concern about the capabilities of the Haqqani network is particularly acute as Nato begins withdrawing troops from Afghanistan.
Mayor Bloomberg predicts riots in the streets if economy doesn't create more jobs
Mayor Bloomberg predicts riots in the streets if economy doesn't create more jobs
By Erin Einhorn and Corky Siemaszko
DAILY NEWS STAFF WRITER
Mayor Bloomberg warned Friday there would be riots in the streets if Washington doesn't get serious about generating jobs.
"We have a lot of kids graduating college, can't find jobs," Bloomberg said on his weekly WOR radio show.
"That's what happened in Cairo. That's what happened in Madrid. You don't want those kinds of riots here."
In Cairo, angry Egyptians took out their frustrations by toppling presidential strongman Hosni Mubarak - and more recently attacking the Israeli embassy.
As for Madrid, the most recent street protests were sparked by widespread unhappiness that the Spanish government was spending millions on the visit of Pope Benedict instead of dealing with widespread unemployment.
Bloomberg's unusually alarmist pronouncement came as President Obama has been pressuring reluctant Republicans to pass his proposed job creation plan.
"The damage to a generation that can't find jobs will go on for many, many years," the normally-measured mayor said.
Bloomberg gave Obama kudos for coming up with a jobs plan.
"At least he's got some ideas on the table, whether you like those or not," he said. "Now everybody's got to sit down and say we're actually gonna do something and you have to do something on both the revenue and the expense side."
And everybody's got to share in the pain.

The streets of Cairo erupted in violence this spring. (AP Photo)
"When you start picking and choosing which groups do and do not, that's when it becomes unfair in a lot of people's minds," the mayor said. "But we're all in this together."
Obama didn't create this economic mess, it developed "over long periods of time," Bloomberg said.
Obama's approval rating has sunk along with the economy, but the ratings of the Republicans who have stymied his attempts repair the damage are even worse, most polls show.
Already, House Speaker John Boehner, an Ohio Republican, has drawn a line on raising taxes on the rich to pay for Obama's proposed $447 billion jobs plan, which aims to help the middle class.
csiemaszko@nydailynews.com
Basu: Couple comes face to face with reality of 'Obamacare'
Basu: Couple comes face to face with reality of 'Obamacare'
Amy Ward and Ross Daniels, on vacation at the Taj Mahal in India during happier times. / SPECIAL TO THE REGISTER
After more than five weeks on a ventilator, Amy Ward is finally being weaned off it to breathe on her own. She no longer requires dialysis. But a near-fatal infection resulting from a freak accident has left her with a long road of rehab ahead.
In the time he’s spent at his wife’s bedside in a hospital critical care unit, her husband has been able to do a lot of thinking. Ross Daniels, on unpaid family medical leave from his IT job to tend to his wife, has had to face the real possibility that he would lose her, though she’s just 39. At one time, she was given only a 30 to 40 percent chance of surviving.
He has thought about the overwhelming odds against contracting the illness she did. A brief fall into the Boundary Waters when a kayak overturned in June would, months later, morph into a rare fungal infection in her lungs. Only one or two in 100,000 people are infected by the blastomycosis fungus, even where it’s prevalent.
Daniels has also thought about what would have happened if portions of the new federal health care law had not been in place. His wife’s insurance had a million dollar lifetime cap on benefits. Her current expenses have already exceeded that. One medication — a potent antifungal agent — costs $1,600 a dose. Without the protection against lifetime limits the new law provides, they would have had to declare bankruptcy.
That law, derisively dubbed “Obamacare” by the president’s opponents, has been portrayed as the essence of evil among Republican presidential candidates. At a tea party-sponsored debate this week, front-runners Rick Perry and Mitt Romney vowed to sign executive orders exempting states from enforcing it. Michele Bachmann bragged of working for its repeal in Congress.
Those attitudes confound Daniels, who says, “It is hard for us to believe that so many of the GOP candidates would have us go back to a time where an illness like this would have forced us, or any other family for that matter, into bankruptcy.” He’s also grateful for the law’s protection against insurance companies denying coverage for pre-existing conditions.
I asked Ryan Rhodes, the head of the Iowa Tea Party and a political consultant, for his thoughts on the West Des Moines couple’s situation. After saying a prayer for Ward, he said the real issue is high health-care costs, which the new law does not address. “Unfortunately, probably, had it not been for the way our system is functioning, it never would have gotten to that million dollar level,” he said of Ward’s bill. “Instead of actually looking at the costs and finding better care for the price, people are just getting blanket payments.”
Daniels thanks Rhodes for his prayers but says, “An insured patient in the United States without question has access to the highest technology medical equipment, the most advanced medications, and finest medical professionals in the world. My wife's care has required each of those to save her life.”
In fact, Daniels has rethought his earlier support of a single-payer system (which was dropped from the bill), wondering if under it drug companies would no longer have the incentive to produce cutting-edge medical treatments and technologies like the biomedicines that he says saved his wife.
The new law’s requirement that everyone have health insurance is being fought in court. So far different rulings have concluded differently, with three cases still awaiting appeals court decisions.
Daniels and Ward both have insurance, but if they didn’t, it would ultimately fall to taxpayers to pay for their care. Would the tea party want that?
No, says Rhodes: Churches could pitch in or uninsured people could go to a free Shriners Hospital. (Those provide orthopedic and burn care to children.) “I’ve been unemployed before and I don’t personally expect someone to take care of me,” he said.
But as Daniels observes, “A church would need to sell a heck of a lot of pies and brownies, and wash a lot of cars, to pay for a congregant's million-dollar-plus medical bill.”
Despite all the political mileage being gained from trash-talking health care reform, it’s highly doubtful the law will be dumped, regardless of who wins. That’s not to say it won’t need any tweaking.
But by the time the next president is sworn in, enough people will have experienced the protections and benefits it offers that no elected official would risk his or her standing by rescinding it. That’s the value of first-hand experience, painful as it may be. It brings you closer to the truth than all the political platitudes in the world.