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Robert A. Spira and Shirley J. Goldstein

2001 - Copyright Pending

Edited by William Noe


The Authentic Real Estate History

In the Beginning


Real Estate has been around for so long that earth denizens have begun taking it for granted. Real estate has become as ubiquitous as the land around us. For most of civilized history people could just camp anywhere they wanted and the land became theirs just for the taking, but that was during earlier times when there were not a lot of people around always sniffing out the choicest parcels.


The legendary Mongo the Magnificent was alleged to be the largest landholder in pre-historic times and astoundingly enough he carried a bludgeon that dwarfed the clubs of his neighbors. Mongo, in his episodic novel on real estate acquisition that appears in the Harvard Press, told of his secrets to land acquisition. Mongo was widely quoted as saying, "Find the best parcels and convince your neighbors to turn them over to you. This strategy works best when you are carrying a large club and are backed up by a gang of evil looking cave-thugs.


This was far cry from the strategy God used when he gave Adam and Eve an easement on some of his choicest property in the Garden of Eden, a neat resort village where the "first family" had a waterfront lot with a garden in back. This was a highly complex real estate transaction, which included both a personal services contract along with a morals clause. God honored his agreement and took care of all of their needs until the couple violated the morals clause in the chattel mortgage, which had a ban against eating certain foods, and this it turn automatically activated the eviction clause in an attached rider. Adam appealed the verdict but at the last instant a surprise, witness was brought in, "The Snake," who eloquently testified the Eve was a harlot, giving chapter and verse. Early landlords such as God were able to freely insert these onerous clauses into their contracts because they had made a very early claim on the world’s prime real estate, something they called "eminent domain." At this point in time, it was the ultimate sellers market.


During this time, someone remarked that everyone should be entitled to have a waterfront lot. Even at that time, these lots were in great demand and those that did not live on the water started praying to God. God gave some serious thought and considered the source, he/she could not find a reason not to oblige, and turned on His industrial rain spigot. Unfortunately, it turned out that God had a number of other serious matters to attend to in the universe at the time and forgot to turn the rain spigot off. he/she went into a high level conference that carried on for over a month nonstop and he/she having giving orders to his/her lieutenants that he/she was not to be disturbed under any circumstances became totally engrossed in the subject at hand. It soon became obvious that everyone in the world would not only get their wish to be on the waterfront; better than that, it became rapidly apparent that they would soon become part of the waterfront. When His meeting was over, forty long and wet days had passed and merely a used boat builder-dealer and his wife, Mr. and Mrs. Noah and some of their pets were around to enjoy the view.


Early Man

Historically, Fendl the Marinated tells us, that for tens of thousands of years, people lived primarily in uni-story caves that offered little luxury, but did provide them with some element of security against rampaging dinosaurs and saber toothed tigers. The trend of only building single story buildings continued unabated almost until the present, aided dramatically by an engineering miscalculation in the erection of the Tower of Babel. It seems that local zoning restrictions provided that "no building located within the town’s perimeter was allowed to touch the sky," not an illogical ordinance. A young architectural student who had been accidentally put in charge of the building design became confused when he began reading them. It seems that it was a windy day and he started reading the blueprints upside down and confused the sky with the earth. Having totally lost track of where the sky started and where it ended, construction continued at a frenzied pace until the town council had seen enough. The building had been constructed upside down and became a grisly monolith cluttering up the otherwise pristine landscape.


The town council yanked the young architects license for cause and reduce the building to rubble along with most of its inhabitants; strangely enough, the survivors of the episode were soon noted to be talking non-translatable gibberish and were soon ridden out of town. Not being able to speak Babeles, they were banished from the area to various and sundry parts of the planet, and this strange little experiment with multiple storied structures was mothballed for the next several millenniums for all of the wrong reasons. Fendl remarked on page 206 of his opus, The Divine History of Civilization; the fact that some local observers had noted that a large hand was seen hovering over the building just before it collapsed, but the Estonian historian, Gibberish retorted in his history of the times, that the day of the building collapse was also national holiday in Babel in which the fermented vine is highly revered by all of the citizens. He chalked the whole "hand thing" up to a religious experience gone badly by a bunch of marauding drunks.


As time went on, people tended to congregate around in the best neighborhoods, and city-states soon sprung up in these locals. These city-states had some characteristics that were almost always similar, their location was always near a water source, and agricultural produce was easily available nearby. The City-State was also located on transportation routes, the climate was usually temperate and the community provided an army made up of citizens to protect themselves from being overrun by others who were jealous of their favorable location.


Ancient Greece was divided into many of these city states, and everything would have been fine except that everyone once in a while one of the stronger neighbors impulsively made the determination that he coveted your property. This would soon lead to fighting in which deadly weapons were used and many people died. We believe that it was Ptolemy who said at that time, "location, location, and location." His words became legion and he achieved great fame. On the other hand, he was referring to the location of his outhouse, but everyone construed his meaning much differently.


As we pointed out earlier, the Cro-Magnon man traded property with his neighbors by carrying around a large club and asking his neighbors politely to move if he noticed that they were living in better conditions than he was. Should they not honor his courteous request to move, he had no compunctions about taking their heads off with his large weapon. These early cavemen caused the first land transfers to take place, and those historians around during that period noted that most of the contracts to abdicate land in favor of someone else were literally signed in blood.


Man from the very beginning has been really fussy about where he hung out, but the problem always was that the bigger guys were always making him move. On the other hand, if you did not know the territory, it could be very dangerous to move into a place before you have adequately scouted the kind of neighbors you would be getting. We can’t tell how many times has someone moved into a choice location and found out that their neighbors were cannibals. Instead of being able to enjoy their prime location, they suddenly became someone else’s lunch.


The Egyptians were always on the lookout for new territory, but they were not so much interested in the location as they were with the folks that were living there. When they Egyptians took over new property, everyone located on the conquered property usually received a free trip back to Ginza and a job working on a construction job building the latest pyramid. Overall, the job was not really all that bad, a lot of time in the sun and three squares a day. It was only that the foremen carried whips, and when the workers did not perform their tasks to their satisfaction, they could get really aggravated. It was noted historically that Twafiq the Cruel, second shift stone manager on the Cyclops project, was constantly needing replacement stone movers because of substantial attrition due to the sun. Because the second shift was at night, many scoffed at Twafiq’s baseless charges and indicated that he was only trying to hold up the Pharaoh in a job shop action.


Moving Along Smartly


In addition, many cultures took over new land to provide themselves with an endless source of available bodies for human sacrifice. Can you image, losing your home and being sacrificed to God on the same day. It would be enough to make a grown man cry. Too much of this kind of thing was going on, and during the Middle Ages, a new theory was tested. People were given land on the property of the king’s friends. These folks were called nobles, counts, dukes, and barons. They dressed in frilly outfits and promised their tenants protection from marauding hoards. In exchange, the people (or vassals, as some of them were called) were obligated to turn over most of their food production to the guy in the strange outfit, pay taxes, and defend the property and a whole host of other duties. Many of these folks determined that this kind of life was not really as advertised in the travel brochure and left for warmer climes where a number were either sacrificed or eaten for diner.


Because common folk could not actually own land in Europe, the option of owning it somewhere else had great appeal, and continental governments played this angle to the hilt when their coffers were running down. We are reminded about the story of John Law, who grew up in Europe the early 17th Century. John was precocious as a youngster, showing early signs of being a mathematical genius by solving exceedingly complicated analytical problems that had been enigmas to even the most clever people of his day. He also possessed two other distinct disadvantages, he was extremely handsome and an inveterate gambler. However, as his successes substantially exceeded his failures in all of his many pursuits, his fame spread far and wide, and eventually he caught the eye of Louis XIV of France. Louis, as opposed to Law, was having a bad time of it. He really wanted all the better things in life, but not having enough money in his own treasury, thought to siphon some from his neighbor’s kingdom. Alas, this was a colossal mistake, it seems that he had not chosen his adversaries propitiously and he barely escaped with his life, and due to his blunder, went even further into debt. King Louis XIV did not earn the nickname "molasses brains" without good reason.


Louis was bummed out, so when Law, always on top of his game, came up with a startling pronouncement, "We’ll start a Royal Bank, and I’ll run it," Louis looked at Law as though the man had lost his wits and responded, "What good will that do, you babbling idiot? Nobody in the kingdom has a franc. You know that I have glommed on to everything that the people didn’t tack down. How can they possibly have anything left to deposit in your silly bank?"


Law was not unprepared with a retort, "Lou, you know all those stories about the New World, all that gold and condos by the beach in Miami?"


Louis indicated he was indeed familiar with those stories, but further indicated he had heard that opposed to precious metals and valuable land being in abundance, his intelligence had indicated that unfriendly savages and pestilence primarily inhabited the land. "Look at all those strange diseases the Spanish soldiers brought home," he countered.


Law was non-plused and continued; "We start a company and sell stock in it to the peasants. You know yourself that if we hire a top-notch public relations firm and give the deal the right amount of hype, we can make the commoners believe anything. We play down the bit about diseases and savages and tell them that the streets are made of gold and there are beachfront properties for all in the New World. Those chumps will fall for it and they will take what is left their money out of hiding. We grab all of the money that comes from the peasants, put it in the treasury and pay off all of your debt, and Louis, there may be even a little left for some of those bizarre little trinkets you really like, you know, the really weird stuff."


Louis thought for a moment and concluded, "John, I think that is a capital idea. We have nothing to lose, and if it works, I will be indebted to you really big time. Do you really think that there will be enough left over for the really weird stuff?"


Well, the idea worked! The money came in from unexpected places by the gobs and the government’s debts were soon paid off, and there was even enough left for Louis purchase a few of his bizarre little trinkets and to throw a party or two for his friends in the court. But wait!


The peasants, having lost all of their money in one of the dumbest real estate deals in history, now could not pay taxes. They were thrown out of work, and the country went into a depression far worse than when John Law had originally been given his assignment. Louis became disenchanted with his erstwhile friend, and the people harbored extremely grave ill feelings against the man.


John Law, a brilliant conceptualist who just had not thought his plan through to its inevitable conclusion determined that the time had come to leave town a quickly as possible, and he eventually died a pauper. The plan he devised became know as the "Mississippi Scheme", which along with England’s similar real estate fiasco, the "South Sea Bubble", almost drove Europe back into the dark ages.


The Mostly Wild West

Governments found that the best way to protect their land was to populate it. If their own people lived there, they would scream and yell if anyone else came to camp out. Under these circumstances, the more contemporary governments would call in their armies to evict the people that they called squatters. On the other hand, no one really wanted to live on some of these tracts. The United States Government, needing a hook in those days gave these folks forty acres and a mule if they would just stick around and till the soil for a couple of years. This program had mixed success and was followed by what was called the "Great Railroad Giveaway."


The government gave the railroads land in exchange for erecting cross continent railroads. When someone on the train thought the train stop particularly attractive, they would get off in order to buy land and start to farm. They soon found out that the railroads owned all of the land next to the tracks and were in the people gauging business. While many people were wiped out over the greed of the railroad leaders, the country thought the plan a complete success because transportation had been constructed to scan the breadth of the country. This served as a win–win situation for everyone but the potential farmer. History does not report the true fact that the early railroads were financed by the bank accounts of poor people that were taken for two rides on the same train. Naturally, there was more too it than that: story lines were created by public relations people which showed pictures of large golden nuggets that could be picked up off the ground all over the West.


Unkempt people called prospectors bought the story hook, line and sinker; but for the most part, none of them found anything that resembled gold, and all they got for their trouble was blisters and an early spot on "Boot Hill." When they realized that they had been swindled, they gravitated to towns that were located on the rail lines and drank, gambled and caroused most of the time. This added a lot of local color to these towns, and their chamber of commerce people were never bashful about boasting that they had residents such Wyatt Erap, Billy the Kid, Ringo Star, and Doc Holiday, for the most part, a group of prepubescent thugs. Easterners ate up the stories that were woven by the town’s public relations people, and many traveled to see these strange beings, causing them to ultimately settle in the neighborhood, at least for as long as they survived. This plan was a large public relations success.


In other areas of the United States, land was given away to the first people that could get to something they liked from a set place at a given point in time. The problem is that those that obeyed the rules got nothing, while a group strangely called the Sooners claimed most of Oklahoma by not following the rules and leaving the starting line one day early. Many of the people living in Oklahoma today are ancestors of those people who cheated everyone else. Many of these people are very rich because a lot of the land they took had a black gooey substance on it called oil. ()


Manifest Destiny

Obviously, this was a time of chaos where the strong dominated the earth. As Governments eventually learned to deal with their neighbors through negotiation instead of violence, things began to change dramatically. Force was replaced by conciliation, and men learned that talking at the conference table produced substantive results. The United States Government wanted to set an example for its citizens and show them that property could be obtained in non-violent ways. One example of acquisition by negotiation and settlement was with Spain in 1898. The Spanish American War, in which the United States was able to seize Puerto Rico, Guam the Phillipines and Cuba from Spain, was a prime example of how well negotiations can work when both sides are really serious about working matters out in a business like manner ().


Another example of accomplishing things by compromise would be the Mexican American War, in which the Mexicans negotiated away Texas in spite of many hard fought battles. America’s ability to gain the upper hand by smooth talk () was noticed by other countries that started to follow the US example, and it was not much later that World War I broke out.


Battle was a particularly unrealistic and bloody way of doing business, and in reality, a lot of the bloodshed need never have occurred. Back in 1066, a German invaded England by the name of William the First, Duke of Normandy. He immediately set the record straight when he announced that he owned every single acre of land in England. People could live on his land, but they could not own it and if they didn’t like it, he had a small dungeon that he indicated could accommodate a large part of the population. The people, faced with William’s indisputable logic and his large army of thugs and murderers, agreed that what he said was extremely logical and went along, causing the inauguration of common law.


William let some of his favorites use his land for a period, and these were usually those frilly characters that we talked about earlier. They in turn would rent their land to others from whom they collected onerous taxes. A lot of the money that was collected went directly to the noblemen, but William was very careful to see that he was kept inside the loop, insuring that he got his cut. Basically, this system was institutionalized when the Magna Carta was written in 1215. () This document was not composed in a vacuum and came into being when the common people realized that they were always drawing the short straw. They indicated that if there were not significant changes made in they way things were being handled, there would be serious consequences. The King’s pollsters noted that the crowd was becoming unruly and recommended that some changes be made to palliate what they considered a really bad hair day that the throngs were having. Eventually a deal was hammered out and Included in the new arrangement, was the fact that the tenants had to become knights to fight for their lord and give up a big percentage of their crops. This doesn’t sound like much of a victory.


Religious orders were given substantial land in exchange for successful prayers. Various orders that did not have much luck in bringing the King good fortune with their prayers soon vanished from the face of the earth. It remains one of the great-unsolved mysteries as to what actually happened to the Tominites, the Lorenterians, and the Hastonian Sects that were less than successful in helping the King. After all, it wasn’t always their fault. Sometimes the King asked for clerics to provide him a sunny day to go on a picnic with his lady-in-waiting on particular date in December in London. He really pushed the religious sects to get behind him on this one. A number of them were totally banished, when the worst blizzard in recorded history fell on England that day.


These early laws evolved into much of what is practiced today, with changes occurring over the years. Today, people are made to believe that they themselves own their land, but all of us know that this is just propaganda put out by government public relations people. Just see how fast someone that "owns" land keeps it when he doesn’t pay his taxes or fight for the government in times of war. In addition, just as in the old days, the government can exercise a right of eminent domain, which allows it to take whatever property it wants from landholders, whenever it desires. Many reasons are given for taking land belonging to others; among those reasons are the construction of infrastructure developments, such as highways, and being arrested for drug dealing without having the necessary political clout.


While Europe stayed with a feudal type system well into the Twentieth Century, many people were beginning to feel that there were more opportunities available in the New World. Places like the United States, Sri Lanka, and Tasmania were common destinations of early settlers. Rumor had it that you could live wherever you wanted and the streets were lined with gold. They say that steamship owners who were charging an arm and a leg for transportation spread this rumor. They had justified this position by indicating that there was always an inherent danger of the ship falling off the end of the earth if it made a wrong turn. There wasn’t much truth to either statement, and when the newcomers arrived at Ellis Island for processing, they were soon sent to live in tenements on the lower east side of New York.


A tenement is defined as a multi-storied building located in a crowded neighborhood surrounded by unpleasant neighbors and having cardboard walls. The reason that these buildings were tall was the fact that so many inhabitants had heard these strange stories concerning gold in the streets that an immigration of massive proportions had transpired. In order to house the millions of people that were attracted by these strange stories, building were built larger and larger.


Slum Landlords

Having learned his lesson, man stayed away from violating city ordinances for a number of years. The first of the ghetto high-rises were made of wood and were hastily constructed. Instead of the City Council destroying these properties, for the most part they destroyed themselves. Fires were common in these buildings as many of the uneducated immigrants, not knowing what a stove was, cooked their dinners on the wooden floors over a campfire and chanted strange prayers. More often than not, the entire property would become engulfed with flames and the building and its inhabitants would become totally consumed by the flames. Some people at the zoning commission saw this as a form of pest control.


It seems that many of these émigrés had come with more baggage than had been anticipated. They had arrived with lice, roaches and rats, and as pesticides had not yet been invented, this was causing some serious problems. Not being in the business of throwing the baby out with the bath water, the New York City Fathers banned in-house campfires. This was said by many to be the start of modern zoning regulation and building codes.


Many of the newcomers soon expressed the desire to live in climates more in keeping with that of the country of their origin. Geneticists insist that that is why so many of the Irish immigrated to Idaho where they could grow potatoes just like their forefathers, the blacks gravitated to cotton farms in the southern part of the United States, which climatically had similarities to the continent of their origin, but did not offer many of the freedoms that they had previously enjoyed. The Nordics headed to Minnesota and became very successful at growing ice, which today is in substantial demand in the civilized world.



Logically, people seemed to want to find their own kind, and it was for this reason that the next major mass migration occurred along with a startling evolution in real estate. The blacks that were for some reason or other unhappy in the warm southern climes of the United States peculiarly began migrated to the colder northern parts of the United States. Just as all immigrants before them, they settled in the inner cities, usually in tenements next to the railroad tracks and the bad schools. Whites in the north, never having seen people of this strange hue before pulled up their stakes in fright and repositioned themselves in the suburbs, a term that means "far from the people of a different color that have just moved into the neighborhood."


It was the post World War II suburbs that spawned the Noble Prize winning design of the Levittown House. A ubiquitous dwelling that was indistinguishable from that of its neighbors. If it weren’t for street signs, everybody would have been entering the wrong residence. As it was, there were many problems with type of development, such as the time when the generator went down at city central and all the towns’ lights went out. Strange couplings occurred and nine months later, the town experienced literally geometric growth.


Modern Developments

Although this occurrence lent some excitement to an otherwise dreary existence, there was really no form of entertainment for suburbians. This gave rise to such outstanding achievements as the outdoor movie theater, the bar-bowling alley complex, and the strip shopping center. Each served a different personal need, the outdoor movies alternatively doubled as spawning centers for the prepubescent, the bowling alleys created a place to go on a man’s night off where he could hang out with the guys and drink himself into oblivion. The object of this sport was to knock down ten pins arranged in the shape of a pyramid in one role of a huge ball.


On the other hand, if the feat was not accomplished in one shot, another shot could be arranged, and almost all bowlers, as they were called, took advantage of that option. This caused an immediate medical problem in the suburbs: men walking around with one arm substantially longer than the other. Elected officials thought long and hard about banning the activity until it was pointed out by local zoologists that this form of malady could some day be beneficial if man returned to live in the tops of trees. While bowling alleys were a man's release, strip shopping center became a great outlet for the little woman. She could go over to the mall and see stores that carried the newest in sewing utensils, cooking pots and lawn care products. These would offer her a well-deserved respite from taking care of the children. This indeed had become heaven on earth.


This phase was short lived. When the children left home, the parents were no longer interested in being tied to the house. They no longer wanted to travel great distances to and from work and began to think up ways of moving back to the city. Eventually, a plan was worked out in which a public relations campaign would be launched which explained the wonders of suburbia to the Black population that dominated the cities and substantial money was expended to insure that they would take the bait. Sociologist Emma Fung explained the process as a form of reverse osmosis. Many people that did not know better subscribed to her radical theory. Soon the central cities were lily white again, and buildings were now made of steel, not wood, so that cooking once again returned to the apartment. In the meantime, because of the wooden structures and the fire ordinances that accompanied them, another innovation had occurred. The fast food carry out restaurant had come into being.


These places had some dramatic similarities no matter what type of food they served; they all hired non-English speaking Koreans riding bicycles to deliver their product. It did not matter whether you were going to have a pizza, chop suey, or sushi. They would all come by bicycle carried by an obsequious oriental that did not seem to either understand what you were saying or have change. This caused a number of racially motivated incidents, but having not cooked for so many years, the central city residents were now totally at the mercy of these aliens on two-wheelers. Both sides ultimately saw the benefit of keeping a lid on the problems and learned to live with each other.


Another innovation that made life in the central cities more bearable was the innovation of the mega-movie theater, a palace containing ten or more small rooms in which you could watch movies while eating the most horrible popcorn and sundries known to man. When the experience was finished, people would vow never to go back, but like lemmings, they would return to the same spot over and over again. In spite of the people’s apparent desire to wolf down inedible food while watching an over-hyped movie at jacked up prices, these emporiums of misery soon started going bankrupt in rapid succession. It seems that the industry had become so overbuilt that there had become enough of these showplaces so that there was an individual theater for every man woman and child in the United States. Fabled award winning economist Franchot Brickbase stated that building theaters had become basically a male thing. Everyone wanted to have the biggest theaters, and it became sexual and power thing to be top dog. In the meantime, many of these movie palaces have been replaced by Banana Republic Stores.


You Gotta Know the Territory


Change had become rapid and by 1976, the most knowledgeable President of the United States relative to real estate was elected to office. He had won a hard fought campaign for office on the slogan, "Anyone that can make a living in Georgia shucking peanuts must know his real estate." Voters believed that this statement was true and elected him to office. Surprisingly, he soon demonstrated to the populace that he had apparently did know something about nuts because of certain family ties and political associations, but his education was severely lacking when it came to matters that went any deeper than that. By this time, interest rates had gone through the roof and the entire real estate market in the United States came to a screeching stop. Real estate lenders had became concerned that everyone was going to turn their property into peanut farms, and with interest rates at all time highs, determined that the economics just did not make sense.


We believe that Carter was basically a well-meaning person that surrounded himself with total incompetents who professed to know something about everything but wound up knowing everything about nothing, except how to line their pockets. Carter himself felt that prayer had a lot going for it, but when you can’t find your behind with both hands, mistakes are going to occur. You see, Jimmy Carter, never found out that Savings and Loan Associations ("S & Ls") loan money for up to 30 years, while they borrow from customers for less than 5 years. If short-term rates became higher than long-term rates for any protracted period of time, literally the entire industry would fail.


The rates did and the industry did. It was only the magic of accounting and a government bailout of immense proportions that preserved anything at all. The commercial banks, which were restricted from lending long term, were able to prevent collapse despite holding as many disastrous real estate loans as the S & Ls did, even while they were struggling with defaulting Latin American debt. With the entire S & L industry stultified, banks were able to step into the breach with high interest loans and provide a perceived safe harbor for investor’s funds that had fled their competitors.


The prime rate hit 21 percent in 1981, causing investors to withdraw their money from the S & Ls, which could not pay over 5.5 percent. The majority of the funds were deposited into money market funds and with commercial banks, where six month CD’s were yielding 15 percent. Because failures were occurring faster than they could be absorbed by the system, the FSLIC changed the adequacy rules, allowing some breathing room for the regulators, while staving off total panic among depositors. The failure of the press to totally grasp the gravity of these events was the economy’s ultimate salvation. Having bought time to grab a breath or two, S & Ls were shorn up, merged or liquidated, and calm returned, for a time, to the system.


Milkin’s Moment

The Fed had earlier felt that inflation was a major concern and had increased interest rates, but now believing that inflation had been brought under control, it turned the money spigot on again in earnest. The regulations governing the S & Ls borrowing policies were loosened, and they borrowed to the hilt. Historically, the S & Ls were a local enterprise, as opposed to a money center banking institution; they became overzealous lenders in an attempt to make back their losses of the previous 5 years; at least those thrifts that had survived. Loans were made everywhere and anywhere, in all areas allowed by the regulators, and frequently in areas that were not. Money was thrown at developers, and cities like Houston, Dallas, Denver and Phoenix became monuments to the vacancy god. The S & Ls had once again shot themselves in the foot.


The "Thrift Industry" debacle cost the US taxpayers almost $100 billion dollars before it was over.


We have listed a few of the S & Ls that failed, the cost to taxpayers and the disposition of the principals by 1993:


Lincoln $2.6 billion Charles Keating, serving a 10–year sentence


Vernon $1.0 billion Don Dixon, serving a 10-year sentence


CenTrust $1.6 billion Not determined, up to 10 years


Columbia $2.0 billion facing charges and $40 million in Damages

Silverado $1.0 billion Director Neil Bush agreed to pay $50 million to settle charges.


Within three years, the industry had literally collapsed twice, for two very different reasons: one the drought of funding and the other the riches of funding. Loopholes that had been opened to provide survival escape routes in bad times were left open and created the excesses of the good times. The Savings and Loans have easy access to people with bankrolls that could acquire the weaker businesses of the very early 80s. The institutions were then allowed to merge and acquire beyond the scope of their charters. Junk bond funding provided much of the fuel for the conflagration, which was ignited by inept management. How soon we forget!


These real estate lending institutions were at their wits’ end when a man arouse to lead them from fear and deprivation. His name was Michael Milken and he worked for the prestigious investment-banking house of Drexal Burnham, which preached the gospel of Junk. Milken was a deeply religious person who believed that separating people from their money was God’s work and he indeed was His messenger. Milken rose early and worked mightily at his chosen profession and in the end, succeeded in transferring vast sums of money from the Savings and Loans to his commission account at his brokerage firm. The cult at Drexal, who were originally Wall Street heathens, soon became money worshipers as well and joined Milken in his arduous task. Their successes became legendary, but with success sometimes comes a fork in the road. Milken and many of his followers soon found themselves in the penitentiary prosecuted primarily for their religious beliefs.


Eventually, Milken and his cult got back together, but the government feared that if Milken were left to his own devices, he would eventually have all the money in the world, and no one else would have anything. The real-estate market started to recover.


Out of tragedy comes renewal, and once again new trends started occurring as the market sprang back to life. One of the new innovations was the Hotel. We are told that the word is derived from the Chinese "Ho" meaning, place to stay, and the Danish word "tel," meaning to have sex. This odd contraction aptly described the industry in spite of the fact that few understood its derivation. Soon these pleasure palaces started rising on the choicest property available. For the first time in history, occupancy rates for real property were achieving breakthrough 340 percent occupancy rates and higher. This created a void and caused a demand for massive new influx of people to service the industry. As occupancy rates continued to climb, it was found that the turnover was so rapid, that it took a single maid an entire day just to change the sheets in one hotel room. Many that worked in the central cities thought that this was good.


Japan Attacks Again

Along with the evolution of the Hotel came the emergence of the Japanese, who were blessed with a government policy of keeping interest rates as close to zero as possible. These folks, who had made a series of mistakes during World War II, now tried to conquer the world by buying it, a much more civilized approach, but just as deadly. Unlimited money being available at below market interest rates and a strong currency allowed Japanese investors to buy up choice parcels that were literally unaffordable to American’s stuck with a higher rate structure. These Orientals were indefatigable in their quest to buy up the world and early on, they concentrated primarily on the purchase of golf courses, first class commercial properties and landmark hotels. After the Japanese had invested billions, their bubble burst and they were forced to retreat back to their own crowded shores with a fraction of what they had invested. This caused the natives in Japan to become fretful, and they went on an economic strike and refused to buy anything but necessities. This has caused bankruptcies and chaos in the Land of the Rising Sun and it continues to this very day. Many people in the southern part of the United States say that this confirmed their belief that God is indeed a white male.


Those beliefs aside, with the Japanese out of the way, the Americans started to buy back their land. There were two sources to look to for real estate acquisitions. The first source was Resolution Trust created by the United States Government to clean up the damage that Milken had left and was selling property at a bargain prices. The second was the property being left by the retreating Japanese who were also obligated to sell at whatever they could get because of the trouble at home.


A vehicle was needed so that the common people could participate in this windfall. The REIT sprung into being. No one is quite clear on what those initials stand for but senior Brookings Institute Fellow; Newton Nosebleed has indicated that the initials clearly stand for "Roger’s Excellent Independent Transmission Company. Nosebleed died of natural causes before he could explain what significance of naming REIT’s after Roger’s Company. The facts are that the REIT’s were organized to purchase bulk real estate for a fund comprised of numerous same minded individuals and that the Roger’s Transmission Company was voted by the Federal Trade Commission as one of the worst "bait and switch" operations in the United States. On the other hand, many people found numerous similarities, and the subject was dropped.


Games Of Chance

The Iron Curtain came down and the people in Europe found democracy. On the other hand, they had lived under a government that had provided for them for so long that most of the people were not capable of dealing with the new economics. It was not long before someone in Albania read something in a book about an American gentleman by the name of Ponzi who had been able to separate many people from their money, in the United States with what was called a pyramid scheme. Liking the sound of getting something for nothing, the criminal in waiting, read on.


Moreover, at that time, the Albanians, were probably further removed from world events than any other group of people with the possible exception of Tibetan Monks who abstain from communication as part of their vows. This time an entire country was wiped out by a pyramid scheme adopted to real estate and the populace determined that in the best interests of justice, the entire government should be boiled in oil. In typical Albanian fashion, kindly President Sali Berisha naturally proclaimed his innocence and placed blame squarely upon the Mafia.


When a senior government official asked for calm, an angry crowd almost killed him, and it was only the fact that the mob was able to beat up an entire squad of riot police that took their attention away long enough for the official to escape. Three hundred thousand people were fleeced, and in an effort to get even, they burned municipal buildings at random, blaming the government for their losses. Even Albania’s deputy prime minister got a rock in the head and crowbar in the back for his trouble as he attempted to assuage the crowd. A total of 118 people were associated with nourishing the scheme that hit one out of every 10 people in the country and one out of every three families. Undoubtedly the highest proportion of people in one country to be taken advantage of in a single transaction since Adam ate Eve’s apple.


The government, in actuality looked the other way had allowed any number of these schemes to flourish. The one that stands out, even among a collection of classic illegal transactions solely designed to separate the people from their money, was the largest and most successful and continues to operate under the original founder; Veja Alimucaj. Veja’s company, was not just your normal everyday Albanian fraud. According to Deloitte & Touche, the giant accounting company hired by the Albanian Government to look into the matter, found that they Veja’s company had hired 1,500 bodyguards, used mobile telephones to communicate with each other (unheard of in Albania), and had expensive limo’s waiting at the ready along with the always appropriate and much needed helicopter. Moreover, Veja was just an average Albanian citizen who spent his time, when not running the company, involved in smuggling weapons and laundering money. Talk about audacity, this man was able to convince the fleeced investors that the accounting firm of Deloitte Touche, was to blame for the people not getting their money back. The Albanian victims were so gullible that when Veja first told them this Alice in Wonderland story, many of them went on a hunger strike at the accountant’s headquarters. Ever since, senior Deloitte people were forced to travel with bodyguards, and several bombs have gone off in their premises.


Veja garnered investments from 92,000 Albanian Citizens by promising them heaven on earth. He would put their money into valuable real estate investments, which would operate on two levels. In the first instance, the people would be able to profit from the appreciation of the properties that were acquired, and then, when it came time to retire, they would live in absolute luxury in the estates constructed by the consortium. Instead of a dream, they now have a nightmare: a cumulative loss of almost $260 million and an assortment of chicken farms and seedy real estate. These assets are evaluated at some $33 million, but with losses amounting to almost $500,000 per month, even that kind of money wasn’t going to last long.


The Government believed that they were going to be tarred and feathered unless they did something quickly, and so they placed Veja under house arrest and ordered him to sell the Company’s remaining assets and return what was left to the people. Veja, not a great believer in Government, was unwilling to liquidate his assets and did what any other Albanian would do under the circumstances: he organized a national hunger strike. The people clamored to be allowed to go without food as a vote for Veja because he told them with time, he could return not only all of their money, but deliver on his original promises of El Dorado as well. He further indicated that the Government really did not want to see the people prosper and indicated that they were standing in his way in his efforts to make the wealthy.


The Government became paralyzed. Literally all of the investors believed Veja, and officials were afraid to arrest him. These delaying actions reduced the amount of money that could be returned at an ever-accelerating pace. Officials started to cringe because they became concerned that they themselves would become chopped liver when the people found out they were being had once again. In the meantime, Albania is helping its import/export balance because food imports have dropped to literally nothing now that there is no money to even purchase the basics.


How Now Dow Jones?

The stock market in the United States went wild and didn’t stop escalating for a decade. This made a lot of people super-rich that really didn’t deserve it. Crusades were organized to find the right way to separate these nouveaux riches from their money. REIT’s became the vehicle of choice for this purpose and prices of mediocre property soon zoomed into the stratosphere. The stock market stagnated and real estate started to collapse.


Rome had introduced many magnificent innovations. In all of their sizeable cities, they erected coliseums, which were huge buildings where shows would be put on for the populace where people and animals indulged in unnatural acts to delight cheering throngs. Many people said that Rome’s decadence would never be equaled again in the history of the world, but that did not turn out to be the case. The legend intrigued American Builders, and they came to believe that if the Roman debauchery could be recreated, the public would pay big money to witness these strange sights. Developments were carved out in central city areas to build these coliseums so that the American Spectators could enjoy what the Romans had seen almost 2000 years before. In spite of the fact that many of the taxpayers were against paying for these commercial enterprises, just as in Roman times, coliseums were erected in all of America’s largest cities.


New Age Gladiators

It was argued that there would be no lack of entertainment available for these buildings, and soon the WWF came into existence. In similar fashion to the Romans, these people would put on displays of both male and female gladiators engaging in arm breaking, eye gouging, and backbreaking tactics. Blood flowed freely and the people naturally demanded more. The Coliseums where this "new age" mortal combat occurred were always overbooked and the people were fulfilled.


Another traveling road show catering to the more bloodthirsty element in society is called the National Hockey League. The players’ objective in this sport, which is played on ice, is to maim as many people on the opposing team as quickly as possible so that goals can be scored without substantial opposition. The public has found that the WWF has been providing more mayhem than the NHL, its closest commercial competitor, and the NHL has suffered mightily at the box office.


For years, various states had allowed their citizens to gamble on horses and dogs running around a track. For some odd reason, this seemed to attract people, but more importantly, it also provided substantial tax revenue to the State. As the social infrastructure demanded more amenities, there was not enough money in the till to pay for everything. There were two choices, cut back and lose the next election or find other ways to fleece the taxpayers. Casino gambling was created to fill this gap. The problem was that this type of gambling was outlawed in almost every state in the union. The lawmakers came up with a solution, they could kill two birds with one stone, by putting gambling on Indian land, they could evade state laws against the practice, they could resurrect the downtrodden Indians and although they legally couldn’t collect taxes from the tribes, they could work out other arrangements. As soon as the legal obstacles had been cleared, a massive building campaign was started which effectively transferred money from the European settlers back into the hands of the Native Americans. Many thought that this was poetic justice, but people that lost substantially at the crap table did not share this concept.



Bubbles of the Real Estate Variety


Bubbles are public relations events that affect an entire people. Someone of respectability indicates that, let’s say, tulips are going to be in great demand and an entire country starts buying and hording tulips. The price rises to levels that become ridiculous and then, for some always-inexplicable reason, the bubble bursts, almost everyone winds up behind the eight ball, but they expectantly await the next bubble. A bubble is also dramatically more that a blip in the market, it is a situation that is more analogous to a stampede where the purchasing is done within a minimal time frame. Bubbles are expected to last forever when they start and some other guy is always going to be the loser when the collapse comes, not you. Bubbles happen because people with the same culture share comparable beliefs and often react to similar stimuli. Certainly an interesting psychological phenomenon, first pointed out by the famous Austrian shrink, Wilhelm Fraud.


The Mississippi Bubble

We are reminded about the story of John Law, who grew up in the early 17th century. John was precocious as a youngster, showing early signs of being a mathematical genius by solving exceedingly complicated analytical problems that had been enigmas to even the most clever people of his day. He also possessed two other distinct advantages, he was extremely handsome and an inveterate gambler. As his successes exceeded his failures in all of his many pursuits, his fame spread far and wide, and eventually he caught the eye of Louis XIV of France. Louis, as opposed to Law, was having a bad time of it. He wanted all the better things in life, but not having enough money in his own treasury, thought to take from his neighbor’s kingdom. Alas, he did not choose his adversaries well and although he escaped with his life, and he went much further into debt and his problems had multiplied.


Law, always on top of his game, came up with a pronouncement, "We’ll start a Royal Bank and I’ll run it", he told Louis. Louis retorted, "What good will that do? Nobody in the kingdom has a franc. I have glommed on to everything that the people didn’t tack down. How can they possibly have anything left to deposit in your silly bank?" Law was prepared, "Lou, you know all those stories about the New World, all that gold and stuff like that?" Louis indicated he was indeed familiar with those stories.


Law continued, "We start a company and sell stock in it to the peasants. They still have some money left in their mattresses. You know yourself, that if we hire a top-notch public relations firm and give the deal the right twist, we can make the commoners believe anything. We tell them that the streets are made of gold in the New World and those chumps will fall for it. We take all of the money that comes in from them, put it in the treasury and pay off all of your debt, and Louis, when we are finished, there may be even a little left for some of those funny little trinkets you really like." Louis though for a moment and concluded, "John, I think that is a capital idea: we have nothing to lose and if it works, I will owe you really big time."


Well, the idea worked. The money came in by the gobs and the government’s debts were paid, and there was even enough left for Louis buy his funny little trinkets and to throw a party or two for his friends in the court. But wait! Soon the people discovered that there were savages in the New World and that the property that they had acquired was not "ocean front" as they had been promised. The Bubble burst, and the money of the peasants went down the proverbial drain.


However, the peasants, having lost all of their money now were no longer in a position to pay taxes. They were thrown out of work, and the country went into a depression far worse than when John Law had originally been given his assignment. Louis became disenchanted with his erstwhile friend, while the people harbored grave ill feelings. John Law, a brilliant man who just hadn’t thought his plan through to its inevitable conclusion, was run out of town and died a pauper. The plan he devised became know as the "Mississippi Scheme", which along with England’s "South Sea Bubble", almost drove Europe back into the dark ages.



South Sea Bubble

John Law’s exploits in France were soon noted by the English who were well aware of his early success. An entity was created to deal in New World real estate called the South Sea Company. Just as in France, the Government was foursquare behind the scam. England was wallowing in war debt because of a number of military actions that they had entered into without receiving any economic benefit. The South Sea Company was given a charter covering both North and South American real estate and along with substantial trade rights. The fact that England had only conquered a miniscule part of the New World at this point did not dampen anyone’s enthusiasm for speculating on this glorious and unique opportunity. In other words, for the most part, the English Government was selling its people land that it didn’t even own. Between Spain and France, the New World had already been pretty well carved up. However, in spite of this, a vast majority of the Crown’s advisors had indicated that the people would never read the private placement memorandum that the Government was issuing and even if they did, there were no maps available yet showing who owned what in this new region and so no matter what occurred, no one would ever be the wiser.


On the other hand, many other none-governmental scams were cropping up all over and various private companies vied mightily with the government in an effort to prune money from the English investors. Great concepts, like the company that was charted to "carry on an undertaking of great advantage, but nobody is to know what it is," another project which absolutely guaranteed that it could turn mercury into precious metals and the most brilliant concept of them all, a company that was going to coin money by manufacturing square bullets, all competed for investors’ money. The English Government saw that its plans to pay off its war-debt were evaporating as the competing schemes multiplied, did what any other sensible government would do. It banned all of the other deals with the hopes that its own would prosper. The people, however, had had enough of promoters slinking off into the night after stealing their hard earned money. The bubbles all burst and logic returned to a poorer, but wiser English countryside. Believe it or not, the bubble, when it ended, had only lasted for a year.



The Florida Real Estate Bubble

Midwestern farmers started buying land in Florida by the bushel-full in the early 1920’s because of their desire to have a place to relax during the long winter months when the land would lay fallow. For some strange reason they were soon followed by the New York bankers who believed that these dirt farmers had stumbled on to something that was too good for them to have to themselves. Soon everyone in the country was clambering aboard, and because of the fact that the mortgage companies believed that the bubble would never end, they fueled the fire by providing very low interest loans, and soon even swampland was selling at astronomical prices.


As an example of how the craze had turned seemingly sensible people into raving maniacs, the land abutting the Ft. Lauderdale Waste Disposal facility, a spot where the stench was so horrific that you could not live within miles of the place, was broken down into home sites which, when taken as a whole at the then going price, were worth substantially more then the entire property encompassing the City of Tokyo, Japan. To give you some idea of how precarious the situation had become, fully a third of the entire population of Miami at that time was composed of real estate agents, and if this wasn’t enough of a warning, almost one-half of the gross domestic product of the State of Florida was devoted to filling in swampland and converting the resultant property to home sites. This situation was reversed some sixty years later when downtown Tokyo was worth substantially more that all the land that made up the State of California. That bubble suffered the same fate.


Bubbles are temporary balloons that seem to break when people wake up and smell the coffee. The Florida Bubble collapsed when a gigantic hurricane blew straight up the state like a laser beam and wiped out just about everything in its path. Most of the speculators had not been familiar with Florida’s proclivity for these types of storms and the boom abruptly ended.


The people in the United States did not dwell long on the disaster that had happened in Florida because a tremendous Bubble was developing in the securities markets. Many old-timers were sure that this one would last, and people trying to recoup their money from the Florida debacle were soon pouring money into the market and on heavy margin. Needless to say, these folks were hit with a double douse of disaster in 1929.




Japan’s Real Estate Bubble

Japan’s bubble was a little harder to break because it was basically something that the government had ingrained into the population’s thought process and the people were convinced that they were correct. It was simply that the Japanese were smarter and more industrious than others and that together, they could literally take over the world from an economic viewpoint. The concept was spread that the Japanese economic system was so powerful that along side of it, no other system could compete. To fuel the fire, the Japanese Government provided a facility to accommodate almost zero cost bank loans. Effectively, this Bubble differed from others in that it was not a scheme to collect more taxes; it was designed more as a grand plan to economically take over the world.


Japanese corporations and businessmen started accumulating, both commercial real estate, golf courses and art from all over the world, but with a particular concentration in the United States. With the Japanese government literally footing the bill and with the yen continuing to rise, the worse thing that could happen, the people believed, would be that they would be able to pay the banks back with cheaper dollars. Everyone in Japan was convinced that the joyride would never end. While it did last for a time, it soon became apparent that the Japanese were far from great business-people, they built up debts on their corporate books that literally could never be repaid. Banks were stuck with bad loans and the government simultaneously created infrastructure projects so badly conceived and so padded with graft that wasted the taxpayers’ money, with the result that the Japanese economy remains literally bankrupt to this very day.


The commercial real estate, the great art and the golf courses have now all been sold back to the Americans, and only now is Japan coming to gripes with the full price it had to pay for its horrendous economic policies. However, the worst is not over by a long shot, the companies that made these purchases are going bankrupt like a row of dominoes, as are the individuals that made similar purchases. No longer is Japan capable economically of bailing all of their citizens and corporations out of every stupid investment they make.



The Pacific Rim Bubble

The Japanese Bubble was exported all over the Pacific Rim by mindless bankers from Japan all wearing dark blue suits and thinking deep thoughts about world economic domination. Korea, Thailand, Malaysia, Singapore and Hong Kong received these men in dark suits with open arms, and Japan attempted to do in the 90s what they had failed at in the 40s, take over the known world. But this time, it was going to do it by owning mortgages on a good piece of the world’s assets. Free spending Japanese bankers, dealing with blank checks soon drove out their more conservative western counterparts, who had no reason to compete with the Japanese give away.


The problem with this distorted attempt at world economic domination was the fact that it was not orchestrated by the government; rather, it was a natural competition among the banks for domination of each country. People that had been struggling as rice farmers in Thailand only several years earlier were soon seen with two Mercedes Benz Automobiles in their million dollar condos in downtown Bangkok. The same was true all over the Pacific Rim as the Japanese caused the disaster to extend as far west as Russia and as far east as Brazil. The world was in crises, and it was purely the fact that the Japanese had people who had only left the dirt farms in their country a scant few years earlier believing they too could share in the American Dream.




Monumental Real Estate


Babylon and Its Gardens

Just as Americans visit the awesome Grand Canyon, Russians vow that the Hermitage is the place to go, Greeks are convinced that the Acropolis is their Gods’ gift to civilization and the Brits visit their pubs to take down an ale or two, the people in the ancient world thought that Babylon was really the greatest thing going. This was a city that had flourished for over two thousand years, and it was here that the mighty Tower of Babel was constructed along with the many negative consequences of an architectural error, but its negative results only caused even more tourists to want to visit the area. In addition, it was well located near the "Garden of Eden" which was the "old world’s" highest-ranking tourist attraction, along with the fact that the city had the most elegant hanging gardens in world history. Romans described Babylon as the "greatest city the sun ever beheld." Ultimately Babylon was turned into a wild-animal park for the use of the Roman’s whose appetite for carnivores for their special events was voracious. Monotheism was born within the walls of Babylon, as was Hammurabi, the zodiac of horoscopes, demonology and any number of other diametrically opposed visions. It was this diversity of thought that made the city great, and it was the tourists that paid the freight.


Many early historians of the time rate Babylon as undoubtedly the first true cosmopolitan center in the world, and certainly the gardens were the big draw. Philo of Byzantium the creator of the list known as the Seven Wonders of the Ancient World (he didn’t know it was ancient at that time, and we changed it to make the saying more in keeping with modern times) was an engineer and described the irrigation and construction of the gardens in intimate detail. He went on to point out that the gardens were self-watering and that trees and flowers abounded. Berossus, a contemporary historian and drinking buddy of Alexander the Great, describes the Gardens as follows: "At his (Nebuchadnezzar’s) palace, he had knolls of stone which he shaped like mountains and planted with all kinds of trees. Furthermore, he had a so-called pensile paradise planted because his wife, who came from Media, longed for such, which was the custom in her homeland."


Alexander the Great: was a young Macedonian who was into pillaging, rapping, stealing and all of that good stuff. After destroying Tyre, he continued down the Aegean coast until he came to Egypt, which turned their land over to him around 330 BCE. He was made Pharaoh of the country, founded Alexandria (which became one of the great shipping ports of the world) and with the same stroke secured the Greek mainland from any potential attack by the Persians. In one of the great land battles of all time, Alexander met Dairus of Persia at Guagamela (Iraq) and in a pitched battle defeated his adversary when Darius chose to run rather than fight. This battle, along with Dairus’ cowardly act, spelled the end of the great Persian Empire.


Now, Alexander turned his attention toward Babylon believing that it would make an impressive capital for his emerging empire. His generals who had reconnoitered the area were equally impressed with the city’s magnificence’s but indicated that there was no way to conquer the city. They said that it was entirely surrounded by great walls, huge archery towers, a well trained military and worse yet, the city was virtually self contained; there was no way to starve the population out. The city’s gardens were fed by fresh water springs that provided basis for all of the sustenance needed by the inhabitants.


The year was 331 BCE and Alexander was annoyed. It was his birthday and this was something that he really was set on. He pouted for a long period of time. Ultimately he came upon a really capital idea, in the dead of night, his warriors would climb up the vines that extended from the Babylonian gardens on the dark side of the city near the mountains. This area was typically not guarded as heavily as the town’s entrance because of the natural protection that the terrain afforded. The plan included borrowing some of Hannibal’s elephants that had proven adept at working in hilly areas and everything worked to perfection with the Babylonians never believing that their own agriculture would be the ultimate object of their demise. To say that they were taken completely by surprise would be conservative. This entire episode caused Alexander great joy and the large sign indicating that "it pays to advertise" thought up by early Babylonian public relations to draw in the tourists was burned in the town square at a victory bonfire.



The Third Water Tunnel

As we are aware, the world’s environment is being screwed up at an ever-escalating pace, but this is only ancillary to our main theme. When it becomes necessary, man has shown an ability to survive and pull his "fat out of the fire", so to speak. We want to talk about one of those little known fat pulling projects that has been going on in New York for a good number of years and won’t be finished for another two decades. It has an undistinguished name: "The Third Water Tunnel". It is scheduled for completion in 2020, and when it is completed and it will have cost at least $6 billion. It will be 60 miles long, at least twice as long as the next longest tunnel in the world and it is located 600 feet below New York City. Officials call the tunnel, the largest construction project in the Western hemisphere. New York’s Mayor Rudolph Giuliani called it "the grandest and maybe the most important capital construction project in the history of the city." Moreover, it will be the largest underground aqueduct in the world and the most expense public works project in our country’s history.


New York’s water supply system was 150 years old in 1954 when the city recognized the need for a new system to supply the city. Water was being lost to frayed seams in the pipe, and at any given moment, there could be a catastrophic underground rupture. The next 16 years were spent in evolving a sensible strategy that would allow for the transport of the water from upstate reservoirs, 66-miles away into the city of New York. Construction began in 1970, and when it is finally completed, the work will have been in continuous progress for half a century. The tunnel-boring machine has a 19-foot cutting edge that bites massive chunks of earth with every turn in its circumference. This cutting mouth, identical to the one used to carve out the "Chunnel," weighs 450 tons and penetrates through 50 feet of rock a day, double the amount that could be accomplished by blasting. When the tunnel-boring machine finally completes its job, New York will have the world’s premier facility. Its valve chambers are state of the art technology.


The Third Water Tunnel will be able to deliver 1.3 billion gallons of water daily to nine million New York City residents Surprisingly, the water tunnel will not be the longest water carrying structure built by man. That award will continue to be held by the Delaware Aqueduct, listed in The Guinness Book of World Records as the longest tunnel in the world, an unbelievable 85 miles long, a project that took 30 years to compete and it still provides over 50% of New York City’s water. The mains, to which this massive tunnel intersects, have over 6,000 miles of underground pipe that supply the water that New Yorkers use on a daily basis.


Marty Pottenger, an artist, carpenter, and contractor wrote about the Water Tunnel in a story that appeared in High Performance #75, spring of 1997. This represents a small vignette of what goes in high-tech construction projects:


"Once we were down in a tunnel, must’ve been up at highbridge and we couldn’t get this leak to stop. Water was coming in pretty good, underground stream; we get them all the time. We tried everything, stuffing it with oakum, caulk, and concrete. After a bit, whatever we put in would come right out with a rush of clean water right behind it. Finally we got some oatmeal, good old fashioned oatmeal and stuck that in there. Oatmeal swelled up and gave us just enough time to fill it in with a chemical grout. Water stopped and we finished, packed up and left. About a year later we had to come back to check on something. As we walked to where the leak had been, there was something growing all along the floor of the tunnel, two, three feet high. The chemical grout we had used was nitrogen based, so the nitrogen had fertilized the oatmeal and since there wasn’t any sun, this was 700 feet down, the oats came out albino. White Oats."


The first part of the system was completed in 1917 and goes by the label of City Tunnel No.1. It stretches 18 miles from its point of origin in Yonkers, a New York suburb. The second tunnel, aptly named Tunnel No. 2, went into service in 1938 and served the further outlying areas in the then, rapidly expanding New York City. This tunnel is 20-miles long and is connected to the five-mile long Richmond Tunnel. The Richmond Tunnel itself is another engineering marvel due to the fact that it was built under New York Harbor in anticipation of the explosion of population growth, which occurred several decades later. The storage tanks for this section of the tunnel were the world’s largest and each holds 50 million gallons of water.


The really important aspect of Tunnel No. 3 is the fact that when its construction is completed, the City will be able to shut down #’s 1 and 2, for much needed repairs. The valve chambers that control the flow of water will be located 250 feet underground, which makes maintenance and repair much more effortless. The largest of these chambers will be located in the facility at Van Cortland Park, which has a length of 620 feet, is 42.5 feet wide and 24 feet in diameter. In addition, the complex will have 34 steel-lined lateral tunnels, each measuring more than 100 feet.


Scott the Geologist had another story to tell Marty Pottenger:


"My job is to reach and understanding of the rock we’re going though. To build a picture of what has happened over the last several million years and apply that knowledge to the work of construction. Once we know where we’d like to have the tunnel go, we drill core borings, test borings. To get these we drive a truck along the route, and set a drill up which goes down six, seven, eight hundred feet and brings with it this piece of the puzzle. This is vital information for the contractors to know when they are making their bids. If you think about it, this is the only concrete, pardon the expression, information the General Contractor has to go on. They have to estimate how long it’s going to take them to tunnel out, how they are going to do that, and how much it is all going to cost, without even seeing anything besides this. After the work begins, we geologists inspect all the rock as soon as it’s revealed, looking for faults, cracks, loose shifting, settling, which could lead to a cave-in – trying to understand as much as we can what has happened over the last millions of years. The patterns in the rock are beautiful, like rivers, for the matter, now solid, was once liquid. The rock we’re going through now is from a time when the West coast of Africa, the Orkney Islands, and New York City were all a part of the same land mass. It’s very humbling. It’s good to be humbled in your job every once in a while."

"Water Tunnel No. 3 is by far the largest construction project in New York City’s history. When completed, it will extend 60 miles through Westchester County, The Bronx, Manhattan, Queens, and Brooklyn. The completion of city Tunnel No. 3 will allow New York City to:


    1. Increase delivery reliability to meet the growing demand in the eastern and southern areas of the City, which are the furthest from Tunnels No. 1 and 2;
    2. Reduce the demands on Tunnels No. 1 and 2 during peak flow periods;
    3. Permit New York City to drain, examine and rehabilitate Tunnels No. 1 and 2; and
    4. Provide alternative delivery in the event service is disrupted in either of the other two tunnels.



This tunnel’s construction was not without incident, as 24 people have died during the construction process. This was commemorated during an during an activation ceremony in which each of their names were read by the Mayor of New York City while a fellow Sandhog tolled a bell in their memory.


Tunnel No. 3 has already received the Grand Award, Water Resources given by the American Consulting Engineers Council in 1999, the Platinum Award, given by the New York Association of Consulting Engineers in 1999, and the Heavy Construction Project of the Year Award given by the New York Construction News in 1999.


There is a message here: first plan ahead for all possible contingencies. The planning on this project started 50 years ago. Your city is not going to prosper unless you can provide the amenities that are required to prevent disease and environmental problems. Lastly, have a city that is housed within a country that has both massive budget surpluses and can afford multi-billion dollar projects. In reality, that is not exactly what happened, for at the time the Third Tunnel construction was initiated, New York City could not pay its bills, and the Federal Government was a heck of a lot better off. In spite of this, the City determined that the project was not subject to discussion, if there was going to be a New York City in the 21st century, and hence, the completion of the Third Water Tunnel was not an option. This then is the message: sometimes there are options, and sometimes there are not, when people’s health is involved and you are rich, there aren't any options, at least in America.



The World’s Largest Building


What is the world’s largest building? No, it’s not the Pentagon and it’s not the Merchandise Mart, it’s Boeing’s massive plant outside of Seattle, Washington, where those jumbo jets are put together. It would seem to logically follow that the world’s largest plane would have to be built in the world’s largest building, and that indeed is the fact. Construction began on the building, actually located in Everett, Washington, in 1966 when the company announced that it was going to be making the Boeing 747 and various additions to the structure have been added over time. In addition, the building comes with all kinds of amazing statistics; it covers 98 acres, and has 472 million cubic feet of space. It is 11 stories high and comes equipped with a certification from Guinness Book of Records that it is indeed, the world’s largest building by volume.


Naturally, Boeing didn’t start out as grandiose as all of that. Their original headquarters were located in a "Building No. 15" known as the "Red Barn." It was purchased in 1910 by William Boeing, then 28-years old, to construct a yacht which he was having built for himself. In 1916, Boeing switched from seafaring interests to those more aerodynamically oriented. He had formed Pacific Aero Products Company, moved the company into the "Red Barn," and converted its boat building facilities to those more suitable to the construction of airplanes. In that same year, the facility turned out the B&W, its first stab at the burgeoning aerospace market. Within next several years, the company’s name was changed to Boeing Airplane Company and it soon started receiving military contracts from the United States Government for aircraft deemed necessary in the First World War.


For the next decade or so, things went slowly, there were no wars that required aircraft and the trains seemed adequate to transport the general population for the purpose of getting from here to there. However, as the winds of war once again swept over Europe, the Boeing designers, still housed in the Red Barn, came up with both the B-17 and B-29 bombers that were so important to our overall victory in the conflict. Boeing had become a mammoth company, thanks to wartime military procurement, and when the war had ended, they sold Building No. 105 to the Port of Seattle. It is now listed in the National Register and has been reinvented as a flight museum.


Disneyland and its parking facility could comfortably fit inside the structure that now houses the Boeing production facility. Seventy-four football fields could be accommodated under its roof, or in lieu of that almost a 1000 basketball courts could be snuggled in. Can you picture a facility in which 1,000 games of basketball were going on at the same time? It takes one million light bulbs to provide illumination for the building, which comes at a cost of almost $20 million a year. Incidentally, the lights are on twenty-four hours a day, so the mere job of changing those things when they burn out must take a full time staff. The production line and allied facilities require the labors of 24,000 people in three shifts and there are 5 cafeterias, 2 cafes, and 12 food plazas located inside the plant to insure that none of the workers go hungry. In addition, Boeing provides a medical facility, a full-blown fire department and a day care center.


In order to keep the production line in operation, there are 26 cranes sitting 90 feet above the plant floor, moving energetically all over the place on 31 miles of networked tracks. These cranes are of mammoth proportions and are capable of lifting between 34 and 40 tons each. In total, the gantries are capable of lifting 1.9 million pounds simultaneously. There are 45,000 lifts per month and 130 crane operators are required to handle the job. There are six hangar doors located in the facility, each of which is 87 feet tall and as long as a football field. While the assembly line is in continuous operation, trucks and railroad cars are relentlessly delivering vitally needed parts to allow seamless production. At least three million parts go into each plane. The building contains over 3,000 heating, ventilating, and air conditioning systems (HVAC), which require a full time staff of 30 technicians.


Because the planes are too large and fragile to be lifted by the cranes as they near completion, Boeing has made 100,000 square feet of floor space into an "air bearings" facility. Since the planes would be too heavy to safely tow on natural surfaces, the floor has a glass-like surface created by coating the 13-inch deep concrete floor with an epoxy finish. It is this slippery surface that makes the uncomplicated movement of these enormous planes possible. The building’s roof is divided into 143 sections, each measuring 40,000 square feet. There are 2½ miles of catwalks under the roof to provide access for maintenance personnel.


"Computerized maintenance management systems are also used on a grand scale at Boeing’s Everett plant. The facility implements 11,700 preventive maintenance procedures and processes 600 work orders per week. All must be stored and processed electronically. A major change is coming in this area as will, says Russell Deputy, systems administrator. "With the current system, which was installed in 1991, we have trouble collecting information from many different areas of the plant," Deputy explains. To streamline operations, Boeing is in the process of installing a new Total Enterprise Asset Management System which is composed of two off-the-shelf systems."


A 747 has over 6 million parts, which have to be logistically organized so that the proper component is ready when the plane reaches each stage in production. Smaller Boeing Jets have more than 3-million different parts. As a result, the construction documentation for a Boeing 747 actually weighs more than the plane itself. The plane’s wingspan alone is longer than the Wright Brothers entire first flight.


The 747-100 became the first commercial jumbo jet to fly on January 21, 1970, approximately six-years after construction had begun at the Paine Field, Everett, Washington facility. Pan American Airlines purchased the first plane and used it to initiate jumbo jet service on their New York to London route. Pan American was actually instrumental in getting the project off the ground because the initial order they placed was for 25 of these planes and the airline put up over $500 million to bind the transaction. Without that order, the project conceivably might never have gotten off the ground. However, Pan Am was the industry leader and their competition always looked to see what they were purchasing before making a final procurement decision. That early purchase opened the floodgates, and the rest is history.


In the meantime, the original plane was really built as a cargo carrier, but Boeing was smart enough to leave itself with substantial flexibility. Other configurations were possible: 50 – 50 cargo and passengers, or a plane dedicated to one or the other. As we have seen over time, the 747 is primarily used for cargo or passengers rather than in tandem. The plane can hold any number of passengers from 300 to 500 by changing the extent of legroom and determining whether to place passengers or an entertainment lounge on the behemoth’s second level. The 747 has been built in numerous configurations for both short and long runs. The shorter runs have been used primarily in Asia because of that area’s unique airline route structure. However, sadly, Pan Am as we knew them ultimately went bankrupt. In spite of their several abortive revivals, they have never again been the leader in aircraft innovative purchases that they were in the earlier years of aviation. However, no subsequent airline has been able to comfortably fill the slot that Pan Am vacated.


The European consortium, Airbus, has announced that it will be constructing a plane that will be very competitive to the Boeing 747 line. Airbus has a tremendous advantage over Boeing, in that they are owned by countries, not shareholders, and thus not subject to Boeing’s transparency problems. They have become a fearsome competitor because of their owners, which furnish them money at below market rates. They have already booked the necessary orders to get the project off the ground and due to the fact that this plane will be even bigger than the 747, we would predict that another major expansion is going to be in the offing in Boeing’s, Everett, Washington Facilities in order to stay competitive. What we are suggesting is that, without much question, the World’s Largest Building is going to be getting a whole lot bigger in the next few years.


"Speaking at a briefing for aviation specialists, Airbus officials said the launch of the super jumbo Airbus A3XX was "inevitable" and would happen within 2 years. The group's A3XX marketing director, Robert Lange, said the development of the super jumbo would form the key plank of the European manufacturer's ambitions to topple Boeing from market dominance. The $8 billion, project enjoys support from 19 airlines providing design and cost-control input to the European consortium. The first aircraft should enter service in 2003 in a three class 550 seat versions, but later all economy 1000 seat stretch versions are already planned for the Japanese domestic market. The aircraft will be suited to traffic growth in Asia, according to Airbus officials, pointing to the focus group in which almost all major Asian carriers are represented. "

"Airbus intends to deliver the first A3XXs in 2003. Although wider than the 747, the aircraft is not much bigger, enabling it to land at all airports capable of accepting 747s. Boeing executives in January claimed that making an aircraft to carry more than 600 passengers was "financial suicide," but Airbus senior vice president John Leahy said worsening airport congestion around the world and a forecasted tripling in global passenger traffic by 2020 would necessitate the building of aircraft larger than the Boeing
747, currently the world's largest passenger plane."

The number of orders that Airbus had received when it announced its go-ahead was a total of fifty planes, now called the Airbus A380. The date that the initial plane will come off the production line has been pushed back to 2006 and will ultimately hold up to 656 passengers. "…President Clinton warned European officials at trade talks in Washington that Europe risked a full-blown trade dispute if European government offered Airbus preferential financing…Since Airbus began in the early 1970’s, successive American administrations have objected to its financing through government loans. The Europeans have always countered that Pentagon spending is tantamount to hidden subsidies to American aerospace corporations, including Boeing..."


However, Boeing Company is still the both the world's largest commercial aircraft builder, as well as the world's largest military aircraft manufacturer. It is also the largest contractor to the National Aeronautics and Space Administration. The company is literally enormous, with military and commercial customers in 145 countries, and over 9,000 commercial jetliners in service. Boeing is a global leader in electronics and information systems, and continues to research technological innovations through its highly regarded Phantom Works. The company has more than 220,000 employees in 27 states in the United States, as well as in Canada and Australia. We comfortably predict even bigger buildings as well as even bigger planes for this huge aircraft manufacturing company.



Geopolitics and Infrastructure


Saloth Sar was born in 1925, in a sleepy village on the Stung Sen River; his parents were religious people, devoted Buddhists who instilled in their children a respect for human life. The village where they lived were called Prek Sbov, and Saloth Sar was a pleasant enough looking man, yet unremarkable; a little on the chubby side, but someone who you felt would be the kind of person that you would really want to have as a colleague. His penetrating gaze was intense, but when he spoke, you could tell that he not only cared for you, but also wanted to give support to your feelings. He was quite obviously a person of intelligence and his passionate wit permeated the surroundings whenever he was present, but he was never pedantic. However, his brother, Saloth Nhep, 71, has not seen his sibling in over thirty years and who still lives in the ancestral settlement; said of his brother, "When he was young, he was really gentle, as I knew him. His character was kind and he studied hard. We simply loved each other" ()


This man that we have been talking about was Pol Pot (Saloth Sar). Described as a gentle soul, he was the vicious leader of the Cambodian based Khmer Rouge and he personally oversaw the cold-blooded killing of approximately 2 million of his people. () Individuals were murdered simply for the reason that they could read and write, in view of the fact that they were teachers or doctors or that they wore glasses or could speak a foreign language. In this way, Pot insanely believed that equilibrium could occur in Cambodia, all people would be on a par, that is, with one exception, Pol Pot. He had been self anointed and would be special. So secretive was this man that his own family was not aware who he was; nor were they sheltered from his violence, which he inflicted indiscriminately on all without regard to ancestry.


Cambodia today is a country of about 10 million people existing in an area approximately the size of the State of Missouri and having an average annual income of $300. () In spite of a noble heritage, the country almost came apart at the seams during the 19th century and willingly became a French protectorate, when France honored numerous requests for assistance from the country’s officials in 1863. On November 9, 1953, Cambodia, Laos, and Vietnam received independence from France in a package deal. Just as Cambodia’s vast empire was disintegrating in the middle 1800s, France’s empire came apart in the middle of the 20th century, and the French could not get out of Indo-China fast enough. The United States was dim-witted enough to replace them as the area’s policeman and lost its first war in history as a result of their bargain.


Although publicly neutral, Cambodia’s eastern provinces were serving as bases for the North Vietnamese Army and the Viet Cong during the Vietnam War, while their ports acted as supply depots. The United States considered these actions antagonistic to its interests and shortly, the country’s ruler, Prince Sihanouk, withdrew from both the government and the country, purportedly for medical reasons (). The country was renamed the Khmer Republic and, as you would have expected, the Khmer Rouge filled the leadership void. During this time, the country was again renamed and it now became Kapuchea.


While conditions in Cambodia had been historically weird, things soon became absolutely bizarre, as the country soon was able to boast that it had neither banks nor currency. In addition, Pol Pot stepped into the breach and with a fervent nationalism and announced his opposition to the Vietnamese Government and all they stood for. The New York Times in an interesting quote stated, "Pol Pot’s army captured the capital on April 17, 1975, after a devastating five-year civil war. During that period of time, the United States dropped more bombs on Cambodia in its campaign against Pol Pot than it had unleashed on Japan during World War II. () How many of us realized that at that time, the United States was even bombing Cambodia.


Once ensconced in office, Pot went on a determined campaign to expunge from the population anyone that could not mesh with the landscape and appear invisible to the outside world. No one was exactly able to pin point who should live or who should die, but Pol Pot knew and instructed his followers with rigid regulations that had to be followed on pain of death. Many believe that Pol Pot was not the worst despot in the history of the world, and we know Hitler killed more people and certainly so did Stalin; but consider these men were leaders of countries with modern transportation and communication systems.


When you are interested in truly decimating a population, it is always helpful to have the country’s logistics operating in your favor. However, Cambodia did not have logistics, it did not have transportation, it did not have roads, and believe it or not, the country literally did not even have an operating government. Cambodia became isolationist to a degree that had never been seen before on the face of the earth. No one could get either in or out of the country unless they blasted their way in both directions and no one no matter what their reason was allowed to visit as well.


It was under these unsupervised condition that Pol Pot began his tedious job of liquidating the population. To his credit, Pot, never wavered from his self-anointed mission and he accomplished it in spite of often impassable jungles, harrowing weather conditions and international criticism. However, in spite of these physical problems, Pot was on a mission and was to be deterred, the man continued on without missing a beat.


Pol had to search out his victims in small villages and steaming Asian jungles. In many instances, he was forced to walk for days in order to find enough victims to make his trek meaningful, and yet in spite in this he persevered. When the mid-day heat became oppressive, he became obliged to travel and pillage only at night, and was forced to carry out his hacking, beating, starving, torturing and killing mission after the sun had gone down. Moreover, in spite of Pot’s strange approach, this was a man that had come from a prosperous and influential family, and there is not much question that he did what he did out of some wildly perverted affection for his country and not for any financial gain. Certainly, someone that was murdering the population for a living had every right to be a little paranoid and Pot was no exception. With good cause, he was extremely sensitive regarding who cooked his meals, who walked beside him on the road and who was safeguarding him while he slept.


And you can’t blame the man responsible for creating unthinkable human misery for being nervous when he dined. Thinking that everyone was out to poison him, was not totally unwarranted and on at least one occasion, our jovial leader had his cooks killed for concocting an unappetizing concoction that gave him a stomachache. On another occasion, when the electricity peculiarly went out at an unexpected time, true to character, he had the maintenance people put to death. Nevertheless, of course, this does not really make him a bad guy. He was loved and admired by his associates and almost was thought of as a god-like person that was going to lead the people to Nirvana.


With all of these frustrations involving his everyday life, lights going on and off and food having to be carefully watched, his wife, not unexpectedly had a nervous breakdown from which, in spite of the best available Chinese psychiatrists that could be provided, she never really recovered, and Pot asked her permission to marry again. She gave her permission and Pot literally took on a second wife. There is not much question that in the lonely job that Pot had taken on, you would need a companion to share both the good and the bad. His first wife had remarked on more than one occasion that she did not realize when she got married that her husband would be obliged to kill people for a living. In talks with here friends, she never diminished the stature of Pot, she only would say that he was more married to killing than he was to her and that was her frustration.


When he was a young man, Pol had won a scholarship to go to radio electronics school in Paris, where he was a serious, but not an extraordinary student. It was while in Paris that he started running with a group of people who claimed that they really knew what the world needed to become a better place. He soon became a card-carrying member of the French Communist Party. On his return to Cambodia, he immersed himself in the teaching of his beliefs to others at a private school until his was driven by his conscience to shape a more substantial mark on society. Pol fled into the jungle to organize the Khmer Rouge. It wasn’t much later that he was able to overthrow the government of Cambodia and evacuate the entire population of Phnom Penh and other major cities, ostensibly for the people’s safety. Although countless died in their forced march through the countryside, Pol Pot contended that he had saved them from an even worse fate. ()


Whatever it was today, the Cambodian nation had once been great. Their people had been mighty and they easily conquered most of Southeast Asia in the 12th Century. That civilization left behind monoliths to its greatness, such as Angkor Wat. Thus, the modern Cambodia, having been reduced to a mere sliver of its former greatness, conveyed upon its residents a feeling of frustration and insecurity in not having been able to fulfill the destiny of their forefathers. This was a nation that wanted to take its rightful place among the consequential nations of the world, but without a Moses to lead them out of the darkness of centuries of decay, this would be impossible. However, that was soon to change, as there was already a self proclaimed Moses there but no one had found him.


Pol Pot scripted his public relations well and portrayed himself as a modern Moses that could recreate the glory of the ancient Angkor civilization; Moreover, he began his quest by convincing the people that the only road to greatness led from the countryside and soon was leading his people from the cities. National insecurity, coupled with his totally misguided objectives, led the country into numerous other absurdities, the most disastrous being, the fatal assumption that the leadership of Pol Pot would somehow help the country consummate its return to greatness. Whatever else he may have been, the simple act of getting people to leave the security of their homes and march into the countryside must have taken a great salesman, and apparently, Pol Pot was just that.


Secondarily, this snippet of a country actually became convinced (at the urging of China) that they could take on and defeat one of the great military powers of the decade, Vietnam. "Border tensions between Cambodia and Vietnam (aside from traditional Khmer fear and hatred of the Vietnamese) goes back to the controversy over the Brevie Line, drawn in 1939 by French colonial administrators and considered by Vietnam to be the official international boundary between the two countries. For years after the French departure, various Cambodian governments attempted to negotiate the return of Cochinchina – known in Cambodia as Kampuchea Krom, which they maintained was a French colony, not a protectorate, that had been promised to Cambodia by early French colonial authorities. The Khmer rouge also felt an abiding distrust of the Vietnamese, who, they believed, had never renounced their determination to incorporate Cambodia into a larger, Hanoi dominated Indochina federation." ()


"…On December 25, 1978, Hanoi launched its offensive with twelve to fourteen division and three Khmer regiments a total invasion force comprising some 100,000 people. Vietnamese units struck across the Cambodian frontier in five spearheads that thrust initially into northeastern Cambodia. One task force drove west from Buon Me Thuot. A second column attacked west from Pleiku, and followed the circuitous Rout 19 to capture Stoeng Treng City (the capital of Stroeng Treng Province). In thus concentrating its initial thrusts in the northeast, Hanoi may have had several objectives. One of these may have been to capture quickly substantial expanses of the Cambodian territory that had been an early spawning ground for the Khmer Rouge and its fledgling RAK in the late 1960s. The remoteness of this would have rendered it difficult to dislodge Vietnamese forces, no matter what the outcome of the war. An early occupation also would have preempted Khmer Rouge units, it they were pressed harder elsewhere, from falling back to this area where they might have enjoyed a measure of public support. The attacks in the northeast also may have been intended to confuse the leadership of Democratic Kampuchea about where the full brunt of the Vietnamese offensive would fall."

"…After the fall of the capital, Vietnamese units continued their advance in two columns into western Cambodia, capturing Batdambang and Siemreab. The columns met at Sisophon and drove on to the Tai border, where there was heavy fighting in March and in April. In the meantime, some remaining Khmer Rouge units offered scattered resistance before they melted away into less accessible areas. There the Khmer Rouge leaders soon rekindled an insurgency against the new government in power, just as they had in the late 1960s, and insecurity persisted in the countryside in spite of the continued Vietnamese presence…. In the 1984 to 1985 dry season, the Vietnamese military command in Cambodia, frustrated because of depredations by the guerrillas, undertook a sustained offensive to dislodge them from their sanctuaries in the refugee camps. These installations were pounded by artillery and were overrun by Vietnamese tactical units. The operation, which was intended to cripple the Khmer guerrillas, had the opposite effect, however. It drove them away from the border, and they undertook prolonged forays deeper into the Cambodian interior."

When the Vietnamese operation had ended, a substantial "liberated zone" had been created in which forces opposed to the Khmer Rouge could lodge hit and run attacks without fear of being attacked within their sanctuary. Effectively, the Vietnamese had shaped a buffer zone between the two countries while creating a militarily friendly regime in that area that bounded their country. Eventually the Vietnamese withdrew, always keeping a watchful eye on the liberated territory.


Pol Pot, ever the super salesman, indoctrinated his illiterate followers into the concept that one Cambodian soldier was a match for eight Vietnamese military men. When the smoke had cleared, the Vietnamese had nearly sent the Khmer Rouge and Cambodia back into the Stone Age. They were saved from this eventuality with the arrival of the monsoon season, just as the Vietnamese had started to partition the country. For the next ten years though, Vietnam, a hated enemy, controlled the cities while, the Khmer Rouge controlled the countryside, and Thailand played host to the refugees resulting from one of the greatest military miscalculations of all time.


Pot, the fatherly espouser of French poetry was now 69 years old and the job of searching out the next killing field was becoming ever more cumbersome as the effects of incurable cerebral malaria took their toll on his aging body. The immensity of constructing 20,000 mass graves to house the dead and dying should be perceived as one of the wonders of the modern world. Hitler and Stalin gave orders causing the deaths of millions, but never sullied their hands. More importantly, Hitler and Stalin did not even come close to eliminating the 20% of their populations that Pol Pot was able to perform.


This was a man that took substantial pride in his work. He exemplified meritorious leadership by invariably being at the forefront when acts of unpleasantry were required, as he would say, a "sine qua non." His was revered by his followers and constantly astounded them with his demonstrations of ever more sophisticated techniques for torture and killing. Pol Pot did not shirk his responsibility, for he was a man who knew how to lead by actions, not words, and he did it precisely and with dignity. For this reason, we are convinced that he deserves our "Evil Incarnate of the 20th Century" Award. History will be the eventual determiner as to whether this award was rightfully bestowed when there was so much legitimate competition. Nevertheless, Pot’s work was rigorous, moreover it was hands-on and he was growing drained from the toil.


Pol Pot () instilled pride in his subordinates. He was constantly extolling them on the virtues of maintaining accurate records of the events that were taking place. He believed that it was important that posterity understood his achievements along with his accomplishments as it related to the betterment of the entire Cambodian society. It is for this reason that he felt that the killing a few million people was a small price to pay for the total indoctrination and subjugation of the country and it was equally important to him that the entire nauseating rape of the Cambodian people be memorialized. By his painstaking record keeping he has provided future generations with chapter and verse of his unparalleled dedication to a cause that we believe has been unrivaled in history for the percentage of the people in one country that have been callously murdered. And all the while, he believed that this was for the greater good, but then again so did Hitler, Stalin and Tojo and so to do the leaders of North Korea and the Taliban.


This maiming, torturing and murdering of his people was carefully chronicled and stands today as a memorial to Pol Pot’s achievements. One particular place has been immortalized as Pol Pot’s favorite for carrying out executions. Today is known as the "Killing Fields" but then it was identified as Choeung Ek. It is here that the remains of 9,000 people have been found buried in 129 mass graves. "A glass stupa built of broken skulls, bones and tattered clothing commemorates the people unearthed from the graves." () Even in decline and death, he left a legacy of killing to hold witness to his achievements. More than 8 million land mines are still buried in various locations throughout the country and they continue on a daily basis to cause the loss of life and limb. The 30,000 Cambodians who have already lost limbs to Pol Pot’s war against civilians arguably will be joined by countless more that will suffer the same fate over the decades to come, as the impossible job of removal proceeds onward at a snail’s pace. Yes, Pol Pot will be well remembered.


The society fostered by Pot was one in which intellectuals were considered adversaries and the mere act of memorializing something on a piece of paper was akin to a death sentence. And yet, the major western powers along with China acting in concert orchestrated his entire performance due to their extraordinary anxiety over a potential victory by Russian Style Communism in Vietnam. However, because what was called the real war was being fought in Vietnam, not Cambodia, the lives of Cambodians were considered as literally inconsequential when weighed against a face-saving conclusion to the Vietnam engagement.


While the people were being murdered internally in Cambodia by their own leadership, the Americans and their allies were bombing the daylights out of the Vietnamese who were using Cambodia as a sanctuary. It was not considered significant that during this period that, the bombing of Vietnamese targets in Cambodia such as parts of the Ho Che Minh Trail that crossed the border in several sectors was having little effect on the Vietnamese, but was doing substantial damage to the Cambodian civilians, who in most cases were unaware that an international war was being waged next door. These folks did not have radios, which were illegal, televisions that couldn’t be seen because there were not stations, newspapers that either couldn’t be delivered or were not produced. The only thing that the people knew was that they were being killed and maimed from both within and without.


The cover-up became so intense that during a particular period of time, when 500,000 Cambodians were being bludgeoned to death by their own government, for being convicted of crimes like wearing glasses, the ever-righteous American CIA denied any killings occurred at all. However, as the evidence continued to mount, the slaughter could no longer hidden from outside eyes and eventually, even Zbigniew Brzezinski, National Security Advisor under President Carter, came out of the closet and admitted "I encouraged the Chinese to support Pol Pot…Pol Pot was an abomination. We could never support him, but China could." In reality, he had not quite come out of the closet far enough; we knew, encouraged and supported the Chinese operation.


Moreover, by this time, having cleared the major cities of their populations, Pot was resting easily in his jungle domain, telling his only interviewer in the last 20 years () that he felt bored and was not positive how posterity will look at his startling achievements, since he was forced to use such strong medicine to impose his will upon his own people. In the meantime, after most of the damage had been done, a number of competing groups came out of hiding in Cambodia, and rallied the people against this murdering despot. It seemed to suddenly dawn upon other Cambodian leaders that the country had been totally despoiled while no one seemed to be looking.


Chronologies of Pot’s ways were soon published and other political parties took control of the country by raising the issues of how much damage he had done. Pot was eventually declared a war criminal and military search parties were sent out to bring him back for trial. However, Pot at this time still controlled the countryside and early on, most of those that went to find him never returned. Because no messages were ever received back from those death squads that were assigned to bring back Pot alive, a major concern soon developed that it may well have been that he was superhuman and had powers that they could not deal with.


However, time was not being kind to Pol Pot’s body. At this point, he was no longer a spring chicken and his own physical strength along with his control over his followers began to rapidly wane. Many of his soldiers upon hearing that they had become wanted men, slipped into what was now "government territory" and began to "tell all" in exchange for their lives to be spared. Moreover, as the situation continued to rapidly deteriorate, Pot was begun to be seen as a disadvantage to the Khmer Rouge. He had become sickly; he could not keep up any more in the treks through the jungle and was not helpful when it came to murdering local villagers. It was said that the best he could do when the killing began was to find a high point where he could watch his associates hack their victims to death and act as a cheerleader. Even in the end, he was quick to chide his associates when their killing strokes had lost their edge.


Thus, he was removed from leadership and Ta Mok became his successor. Ta Mok had been given the unenviable job of steering the course for the Khmer Rouge at a time when that job could well have been compared to captaining the Titanic. The more that the Khmer Rouge were chased by Cambodian Government bounty hunters, the faster they had to move and the higher the toll it took on Pot’s frail body. By this time, the ever-nomadic Khmer Rouge were only one step ahead of the various factions that were bent on their destruction. Staying ahead of all of their potential enemies required trudging day and night through the steaming jungles, not exactly the best therapy for the now 73-year-old Pol Pot, who could hardly walk. His ex troops were growing tired of carrying him from place to place. Eventually, Pot died, probably from malaria, as he had lived, traveling from city to city on his bizarre mission.


Many have said that Pol Pot never did any good for anyone and that all he was only capable of spreading misery. As almost a last bequest, it seems that he has sent us all a message. We are all aware of the fact that gambling holds a tremendous fascination for the most of the people of Southeast ,Asia and of all the various forms that gambling takes, "the numbers" is probably most popular of all. The people selected events to gamble on and then play the numbers that best display the event numerically. Thus, when Pot died, he was 73 years old and literally, the entire country of Thailand played 73 that day. As if ordained by a higher authority, number 73 won and most of the bookmakers in Thailand were wiped out because of the enormous amount of money wagered on Pot’s death. The big win may have been a hollow victory, though with the bookies running for cover, most winners didn’t get paid. Pol Pot’s ultimate last laugh by a most complex man. ()


No one could immediately replace him and the country was torn apart by rival political factions vying for control over what had become, this land of the dead. In reality, none of these competing groups were a much better than the Khmer Rouge and by this time, Cambodia had become so much of an international pariah that no one seemed to care much what happened there anyway. On the other hand, the country was now desperately in need of hard currency. This in turn ultimately created the environment where Cambodia was once again opened up to the outside world. Historically, Cambodia was a natural tourist destination containing ugly reminders of the near past evidenced by millions of human heads neatly displayed in rows, often next to magnificent edifices created by long ago great civilizations. Of all of these creations, Angkor Wat is the most remarkable. Its origins represent the antithesis of everything modern Cambodia stands for. In its heyday it was literally the center of the Pacific Rim universe and was highly venerated, not a place shunned by international governments for so long that no one cares about Cambodia and where the country is or how it is ruled. This indeed was a great civilization, not a literal non-entity as is Cambodia today.


Interestingly enough, in spite of world opinion and strong United Nations support for a trial of the Khmer Rouge leaders, Cambodia years after the war had ended, continued to put up one obstacle after another to delay any trial. These roadblocks are technical in nature but require the country to pass certain forms of enabling legislation. Tied to aid and threatened by a loss of tourism, these laws continually fail to get through the Cambodia parliament on one technicality after another. In spite of the massive damage to the country that the Khmer Rouge had inflicted, it seems that Cambodia is still on a march toward national unity and doesn’t want to endanger their stability any more than it has been already.


They are more satisfied with having the Khmer Rouge killers in their midst rather than create a review of what had occurred. United Nations spokesman, Fred Eckhard frustrated, commented, "It seems like we are now starting at the bottom of the ladder again… It’s a setback, time-wise." The logic, at least to the Cambodians of not prosecuting the Khmer Rouge, is inescapably. "Almost every Cambodian lost a relative to the Khmer Rouge, and many of the killers live freely in villages across the country. Also, the current government and military include top Khmer Rouge defectors. The wider the net cast by the prosecution, the greater the threat to the power hierarchy."


Another factor that enters into the equation is the fact that Cambodian textbooks have been rewritten to exclude the Khmer Rouge period from the country’s history. Amazingly, these years have simply vanished from history and are not accounted for in the country’s schoolbooks. Demographically, this is a young nation with 53 percent of the population under 18 years old. These people remember little or nothing of what transpired during that time. The government feels it is better to keep in that way. An interesting development should there ever be a trial would be the unusual affair of Ieng Sary, who many say was the number third ranking official in the Khmer Rouge and for that reason was sentenced to death in absencia for his actions.


Ieng was an active participant in the murder of over 2 million people, however it was also Ian that led a mass defection of Khmer Rouge soldiers in 1996, literally bringing an abrupt conclusion to the fighting. What was left at that point were only remnants of what had been an elite fighting force and Pol Pot and his followers from that day forward, became the pursued, not the pursuers. The Cambodians were overjoyed at the defection and an overjoyed King Norodom Sihanouk granted him amnesty on the spot. However, today, Leng leads the good life in downtown Phnom Penh, his daily walks through the city go almost unnoticed and it is felt that if he were tried, it would unnecessarily bring back memories that are better off lying buried. Should Leng be tried in spite of his amnesty, a number of government authorities believe that it would cause a revolution in Cambodia, others aren’t so sure:


"Leng Sary is the one they’re most worried about," said a foreign diplomat. The question is not whether Leng Sary will be angry, but whether the people loyal to him will feel threatened, or even double-crossed," the diplomat said. The government’s concern about civil war is inflated, but can the Khmer Rouge blow up a tourist boat in Siem Reap? Sure. Can they blow up a bus in Phnom Penh? Sure. It’s what the Khmer Rouge does best."

Obviously this is a much more complex problem than it would have appeared at first glance. However, to many of the people that were directly effected by the actions of Khmer Rouge, there may be no real choice. However, the Cambodians are a highly complex people and no matter how much pressure they receive from the outside, it is they who will make the ultimate decision.


"Leng Sari must be punished," said Ourng Kheng, 61, a former government official who lost two uncles, his father, and his 6-year old daughter to the regime. He survived by hiding his diploma and eyeglasses in a bamboo shoot and disguising himself as a poor farmer in the south of the country. "The responsibility is not only on a few Khmer Rouge leaders. Every Khmer Rouge leader should be held responsible and punished. We must appeal to every Khmer Rouge leader to stand before the court, before the Cambodian people and the international community in order to give a lesson to the next generation of Cambodian leaders," Ourng Kheng said. "


Interestingly enough, Time Magazine, at the time did an interesting comparison of life in the areas of Cambodia under Khmer Rouge domination and those that were not. This story is short and to the point but you can certainly see the point:


"Life is bad here," says Pou Venh, father of three, a sad-faced man whose body is emaciated by malaria. "There is no land for growing rice, no food, mines everywhere. The school has no furniture." He and his wife try to keep their children from wandering too far, but they don’t even know if the patch of ground around their small wooden shack is safe. Two months ago a pregnant woman was killed by a mine as she walked to the outdoor latrine 20 yards behind her hut."

"Out side the areas the areas that the Khmer Rouge control, villages are acquiring motorcycles, electricity, pagodas, noodle stands. Nevertheless, the Khmer Rouge does not permit such progress to reach Kdep Tmar. Malaria is endemic there and the settlements only doctor was killed by a mine in the forest when he went to gather herbs for his sick son. Kdep Tmar’s people are on a dark, forbidding path that stretches back through years of civil war and bad karma and leads to nowhere but suffering and death. It is the road Pol Pot chose for Cambodia." ()


Today things are dramatically different in Cambodia and many of the grim reminders of the recent past have been put on the shelf in hopes for a national unity and rebuilding. Cambodia is developing a free enterprise system where people are free to create businesses that can set them apart from the poverty of their peers. One such example was the land mine museum created by a former Khmer Rouge Cambodian soldier, 28-year old Aki Ra, located on the heavily traversed route to Angkor Wat. The museum, which graphically illustrates the land mines themselves, and how they are buried, and how they are removed, and what they look like. Probably because of the grisly nature of Cambodia where one person in 250 has lost limbs, the museum became an instant success and Aki soon joined the ranks of those that had made it big. However, local authorities somehow determined that Aki was not a Royal Cambodian Armed Forces officer and therefore could not run his business. Government authorities determined that the now successful operation should be operated by the government itself." If we set up a museum, we will make it bigger with all kinds of weapons that remain from the war, Siem Reap was a battlefield province, and a lot of equipment remains from the war that we can bring to show", said Morn Samon, provincial military commander." ()


Moreover, the country itself still has this strange affair with its recent history of war, torture and deprivation that had occurred over the better part of four decades. The land mind museum was a mere toy compared to the Tuol Sleng Museum, which has had several recreations. It started life innocently enough as the Tuol Svay Prey High School in downtown Phnom Penh. During the Khmer Rouge years, it was turned into a political prison where the art of torture reached it highest peak in world history. Every type of pain that had historically been known to man was carefully tested in the former high school to determine which form of torture was most effective in getting prisoners to confess in the shortest period of time.


It became known as Security Prison 21 and the Pol Pot were most efficient in using it to its maximum. After the Khmer Rouge slunk back into the jungle, it was restored as a museum of torture. "More than 20,000 ‘suspected’ enemies – artists, intellectuals and others – were jailed, interrogated and eventually taken to their executions at the Choeung Ek extermination camp, 10 miles southwest of town. The only seven who survived that camp were sculptures spared by the regime in order to create busts of the illustrious Pol Pot." () Tuol Sleng has often been referred to as the Cambodian Auschwitz with the standard barbed wire and corrugated iron giving witness to exactly what was going on within.


Nevertheless, In spite of $3 billion in foreign aid since 1991, the country is still in a state of chaos. The only appreciable change in the situation is the fact that the gap between rich and poor has widened even substantial more. The country continues to be virtually lawless and few are prosecuted for their crimes (). Cambodia was ranked 174th out of 191 in healthcare by the World Health Organization and because of a lack of doctors and the money to pay for them even if they are available, many of the 11 million people living in Cambodia are in critically poor health. The entire country is infested with malaria and it is the leading cause of death.


"She was a "Remy Martin girl" – a bar hostess paid to tout the popular cognac. He was a married air force colonel. They met at a restaurant and quickly began a torrid affair. But when his wife found out, she put and end to the relationship with a form of brutality common here. The enraged wife, Minh Rinath, hired four accomplices and went to the hoe of the bar hostess, Son Rasmey, a 22-year –old known for her porcelain skin and luxuriant hair. Wile the accomplices held Son Rasmey down, Minh Rinath poured two bottles of hydrochloric acid over her face, arms and back. The attack resulted in horrific disfigurement, burning off most of Son Rasmey’s hair and leaving her face covered with large red scars. Minh Rinath, who confessed to the crime, was tried last month. But instead of giving her the maximum six-year sentence for misdemeanor assault and battery – or even upgrading the charges to attempted manslaughter – the judge ruled Minh Rinath would not have to spend a day in jail. ‘Those who sprinkle acid on the victim, they have lost their husband,’ the judge, Tith Sothy, said in a recent interview. ‘The deserve leniency.’"

As If war and pestilence was not enough, the worse floods in decades almost completely overran the country, "wiping out crops, roads and homes. It was estimated that the flooding in the Mekong Delta was the worst in 70 years and that 480,000 square miles of land are under water in Cambodia, Vietnam, Thailand and Laos and the imminent threat of hunger and water-borne illnesses such as cholera and typhoid…The floods have also scoured acres of deforested lands that had been cleared by commercial logging and hill tribes who still practice destructive slash-and-burn agricultural methods. Treeless plains can’t hold the water, causing topsoil to slide into Mekong tributaries and fill its channels with silt. " Aid for the people was literally non-existent unless you were one of the members of the ruling party, thus the people had to do the best with what they had available. There are almost no paved roads and more than half of the country’s budget comes from foreign aid.


One of the great creators of foreign exchange in Cambodia is sex and predominantly, men visit the country to do just that. It seems that almost all of the children in the country have been abandoned or ensconced in the sex trade. However, while the Cambodian government no longer officially sanctions sex, the fact that Internet has become a powerful in selling sex in the country and its strange attraction. "An estimated 1 million children are believed to enter the multibillion-dollar illegal sex market each year (), according to statistics from an international gathering of child activists, including the United Nations, in 1996. Once children are coerced into "the oldest profession," they are exploited, abused and put at great risk of contracting HIV." () Most hotels in Cambodia have no regulations prohibiting customers from being accompanied by unrelated children to their rooms. Although the government denies being in favor of this occupation, it is one of the few avenues available to Cambodia to bring in hard currency. It also represents a staggering opportunity for government bureaucrats to shake down sex purveyors and make a few illicit dollars here and there in one of the world’s most corrupt countries.


As if kids didn’t have enough problems with being sold into "white slavery", that is the least of their troubles. "Cambodia has one of the highest rates of child abandonment in South-East Asia, its orphanages are overcrowded and homeless urchins roam the capital, Phnom Penyh, sniffing glue and begging. Many sleep in the city’s dump." () Much of the reason for the children being abandoned is the fact that the mothers themselves have probably been abandoned or beaten up by husbands, boyfriends and lovers and they live in such abject poverty that there is nothing left to feed and cloth their children. The only real hope for these children is foreign adoption. However, the paper work has become oppressive and government officials have found the adoption industry an interesting method of increasing their net worth’s. For fees ranging form $5,000 to $15,000, the bureaucrats can be substantially speed up the process. Although it may be hard to believe, effectively, the Cambodian Government has gone into the business of selling its own children to foreigners. However, this maybe the children’s only chance at survival.


Land belonging to people is summarily appropriated by the government for little or nothing and resold to developers or illegal loggers. The multiple party system in Cambodia promotes political bickering to persist unabated with each side looking for its proper share of both power and graft. While the Hun Sen party is currently in power, the strong Cambodian Senate is controlled by Prince Norodom Ranariddh who leads the opposition. While the United States has held its tongue in condemning the government of Hun Sen, and once affiliated with the hated Khmer Rouge itself during the Vietnam War, fearing the fermentation of political instability, things are deteriorating quickly and civil rights in Cambodia are rapidly becoming at best an international joke. Political instability or not, sooner or later the world is going to have to address the continuing mess that is going on in this country and attempt to do something about it. However, it is hard to get a handle on just what to do in this country of enigmas.



Angkor Wat





Angkor was the capital of Khmer Empire for over 600 years beginning in the 9th century and during this time was known as the city of Angkor Thom. () It was then home to over one million residents. The word Angkor has many possible meanings but it is most commonly believed to originate from the Sanskrit word, nagara, meaning city (). Wat is derived from the same root and means temple. Thus, carrying the two definitions to their illogical conclusions, Angkor Wat is the name of the largest temple or building in the area and it certainly is one of the largest and most elaborate structures ever built by man. Moreover, there seems to be little question that it is the world’s largest religious structure and weighs in at about the same size as the "Imperial Palace in Beijing. It is said to have been constructed as a funereal monument dedicated to the Hindu god Vishnu (Buddhism and Hinduism coexisted up to the 14th century)". ()


Its construction required no less than 400 years and in an article by the UNESCO Courier, Luco, Fabienne, May 2000, when referring to Angkor Wat: he said: "It is a phantasmagoric world. When European travelers discovered Angkor in the 19th century (), they were astounded by the grandeur and the mystery of the temples, covered with sculptures of "airy figures stifled and crushed by the forest," in the words of the French writer Guy de Pourtales. "I have before me," he wrote, "not only an empty capital but 700 years of unrecorded history. And death’s most dreaded prodigy: silence." The silence that enveloped Angkor when it was abandoned in the 15th century seemed immutable, but appearance can be deceptive. A fabulous archaeological site, this great stone skeleton is also a living place, at once the realm of divinities and a city of mortals, where everyday business is steeped in customs from a prestigious past.


This monument to mankind’s achievement was a work in progress for over five centuries, from the 9th through the 14th centuries. It rose in Cambodia’s Kulen hills near Tonie Sap, the Great Lake. At that time, it was the glorious capital of Cambodia, which then included major parts of modern Thailand, Laos and Viet Nam. Most of the religious monuments in this region were Hindu and Buddhist, a testament to the country’s close relationship with India. The massive stone temples that were constructed were not the only monuments to Cambodian ingenuity; engineers also built a complex hydraulic system comprising huge reservoirs (barays) linked to immense networks of spider-like canals, dikes and moats. By the 12th century, Angkor was one of the most populated and largest cities in the world and from an agricultural point of view, was entirely self-supporting.


A Chinese diplomatic mission was sent to Angkor in 1296 and Chou Ta-Kuan’s description of life in the city was revealing, as it is the only surviving contemporary account. It went something like this, "Every night in a golden tower, the king had to mate with a nine-headed serpent that took on the appearance of a woman. In the palace, bare-breasted women as white as jade wore their hair in a bun. At the other end of the spectrum, the commoners were "rude, black and very ugly." The nobles were carried about in gold palanquins and dressed in precious fabrics whose patterns were indications of rank. They lived in houses with lead and tile roofs, while those of the common people were covered only with thatch. Farmers tilled their fields on the banks of the Great Lake. In the dry season, when the waters receded from the flooded forest around the lake, the farmers came down from the hills and grew rice."


Siamese troops overran the country in 1432 and naturally plundered Angkor. The rulers of the country hurriedly left and before long, the forest overran most of the ruins. The jungle continued to reclaim much of the land over the next 450 years, but because so much of the Angkor Wat’s construction was either rock or metallic, much has survived nature’s onslaught and once again, Angkor Wat shines in its magnificence. Interestingly enough, the pictures engraved into the stones of Angkor Wat show a civilization that seems to have stood still in time. The inhabitants of Cambodia still use the agriculture instruments depicted in murals on the city’s walls, and they use them in much the same way that they were utilized 1,000 years ago.


At the lake, the local fisherman employs literally the same net to catch his fish and the same style to pitch it into the water, and he uses the same wheelbarrow to bring home his catch. It is cooked under the identical type of fire and served using identical types of eating utensils. In spite of this, the locals that surround the ancient city believe that any structure as magnificent as this could only have been derived directly from the gods and they cannot be convinced that man had anything to do with its construction. Moreover, local residents are so overwhelmed by the structures that they will not even enter them and believe that only nobles, civil servants and merchants should venture inside this holy site. As for the temples, they believe them to be even more sacrosanct, reserved for only priests and dignitaries.


Although there are remains of the complex hydraulic irrigation system that once controlled water in the area, today’s farmer only has sufficient rainwater for one crop of rice a year. Botanists have indicated that the ancient Khmer rice farmer, utilizing his highly complex irrigation and water management systems was amazingly able to harvest three crops of rice a year. However, because the locals are unaware of the methods used by their ancestors, the land produces little and what is grown on the area’s farms is nowhere near enough to allow even a small family to survive. Pursuits such as fishing, handicraft and temple restoration projects supplement the meager harvests that persist, year after year.


The Encyclopedia Britannica depicts the largest and most awesome structure in Angkor Wat as follows:


"The enormous structure of the Wat is some 1,700 yards long by 1,500 yards wide. Surrounded by a vast external clister, it is approached from the west by a magnificent road, which is built on a causeway and lined with colossal balustrades carved in the likeness of the cosmic serpent, associated with the sources of life-giving water. The Wat rises in three concentric enclosures. The western gate complex itself is nearly as large as the complex of central shrines, and both are subdivided into smaller, beautifully decorated courts. Only five of the original nine towers still stand at the summit; although they follow the basic pattern of the Khmer roof tower composed of diminishing imitative stories; the contour of the towers is not rectilinear but curved, so as to suggest that the stories grow one out of another like a sprouting shoot. All the courtyards, with their molded plinths, staircases, porticoes and eaves moldings, are perfectly articulated enclosed spaces. The symbolic meaning of the Wat is clear. Its central shrine indicates the hub of the universe, while its surrounding—the gate complex, the cloister, the city of Angkor itself, and finally, the whole visible world—represent the successive outer envelopes of cosmic reality. That it is oriented toward the west—and not to the east, as was customary—indicates that its builder, Suryavarman II, intended it as his own mortuary shrine; for according to Indo-Chinese mythology, the west is the direction in which the dead depart.


Angkor Wat, which is dedicated to the God Vishnu, covers an area of 500 acres (nearly a square mile) and the height of the building climbs to 700 feet at it highest point (nearly 70 stories). The wall carvings surrounding the structure stand seven feet high, and they go on for nearly almost one-half a mile. Viewing just this one building could take a lifetime of study, and even then, there would undoubtedly be many items of interest that would be missed. These are not the only carvings that appear on the property. Literally, every available centimeter of space is taken up with myriads of engravings that, for the most part depict assorted characters from Hindu legends.


The Khmer kings believed that gods were highly favorable to mountainous regions and in order to appease them, the builders of Angkor constructed artificial mountains with images of both themselves and of their gods at the apex. The buildings in the region were all built on artificially raised mounds to give the gods more comfort. It is assumed that the large amount of earth needed to accomplish this feat was the remainder of what was created when the artificial lakes were cut out of the landscape. In addition, a stone-lined moat was built around the area to insuring the fact that evil spirits would be kept away from what was considered holy territory. The moat was four miles in length and about 200 yards wide. To give you some idea of the immensity of the project, the quantity of stone contained just in the moat was as much material as would have been found in even the largest of Egyptian pyramids.


Angkor was over-run in 1177 by warriors from the Kingdom of Champa (Vietnam) who after invading the area, sacked the city and carted off massive amounts of valuable artifacts before they were eventually beaten back. The city needed a lot of restoration when it was ultimately liberated and a massive renewal program was embarked upon. Moreover, this time, for additional protection the city was enclosed in a wall 26 feet high and 39,000 feet in circumference to insure its sanctity. At the center, the rebuilder, Jayavarman VII, placed what was called the Bayon, which was a symbol of his own religious belief. This structure was a pyramid surrounded by 216 massive stone faces with 54 towers. It totally dominated the landscape and was approximately 15 stories tall. Jayavarman himself is recreated in one of the stone faces and looks smilingly out over the surrounding landscape seemingly at peace with the magnificence of what he had created.


Ta Prohn is one of the numerous temples that appear on the property. What is most interesting about Ta Prohn is the fact that sprongs (Banyon-like trees) started growing around and on top of the structure. Thus, the trees roots surround the temple in an almost eerie fashion and when entering the building the feeling is that you are going into a dank forest of the night, not a temple. It is one of the most amazingly unique combinations of nature and man working in harmony to create a masterpiece. Ta Prohn is a massive structure having almost 600 rooms along with approximately 40 towers. Within this one structure, you can easily take a day to wind your way through narrow corridors in literally a maze of broken stone Buddhas and vegetation. "If you stand with your back to one of the walls, and clap your hand against your chest, the entire enclosure vibrates with a smooth, long bass note, like the sound of a kettle drum. "This is to purify your heart, for paying respects to the queen’, He’d said (the guide)"


These types of awesome monuments to man’s architectural talents engulfed the entire length and breadth of the city. W. H. Ponder wrote a description of the city at sunrise in 1936 which is a classic: "And then, as the light strengthens to the southeast, the tremendous towers of Angkor Wat push their black mass above the gray-green monotony of foliage, and there comes a reflected gleam from a corner of the moat not yet overgrown with weeds. But of the huge city whose walls are almost at our feet, and all of the other great piles scattered far and near over the immense plain that surrounds you, not a vestige is seen. There must surely be enchantment in a forest that knows how to keep such enormous secrets from the all-seeing eye of the sun?"


Because of the fact that the Khmers were so talented in the nuances of irrigation, they were able to create some unusual effects in the city of Angkor. They constructed a series of artificial lakes called Barays, which purposefully had a perfectly rectangular composition. In the center of each lake stood a temple that could only be visited by boat. The acreage that was irrigated was massive, consisting of almost ten square miles and this land was well put to use by farmers who planted food for the community within its boundaries. The property is divided into two distinct parts with one of them having a collection of huge stone elephants abutting the perimeters. These elephants were each apparently carved from a single stone, and the logistics involved in both carving and moving these massive structures to their ultimate resting place are most difficult to conceive.


The Wat’s overall site is prodigious, with no less than a thousand temples strategically located throughout a property, which encompasses over 120 square miles. Interestingly enough, it may well have been the enormity of the construction projects that ultimately did in the Khmer Empire. The Khmer’s neighbors were both envious and powerful, and because of the dedication of the Angkor people to creating massive edifices and irrigation projects, the preponderance of the people were always fully occupied in improving, expanding and repairing those undertakings. Thus, the Khmer did not have a substantive standing army. When incursions took place from neighboring Vietnam, Thailand and Burma, countries who were all consistently vying for regional superiority, holding them off continually sapped substantial resources from the economy and this just may ultimately have contributed to these early Cambodian’s ultimate demise.


Eventually, Angkor became totally indefensible as consistent raids on the city primarily by the Thais required ever-shorter logistical supply lines and less complex water delivery systems. The perimeters were shortened in 1431 when the Khmers retreated to Phnom Penh and although Angkor Wat was maintained from the early 15th century until the late 19th century by Theravada Buddhist monks, and was the focus of annual pilgrimages, it ceased to function as the capital or even a city of consequence. On the other hand, eventually most of the other parts of Angkor succumbed to the jungle that had surrounded them in spite of the Herculean efforts of the Monks to beat it back. It is import to remember that the Wat was located in a tropical area that regularly was attacked by monsoons and floods. The jungle in this type of climatic conditions was able to reclaim land at an amazing pace.


The French attempted to at least maintain Angkor Wat during the later part of the 19th and most of the 20th century until they were summarily thrown out of the country by the locals as hated colonialists. From the time that the French pulled up stakes in 1954 until 1991, when the civil war began to terrorize the country, large quantities of valuable art objects were regularly stolen from the Angkor site and were transshipped through Thailand to art buyers all over the world. However, in spite of wars, the jungle and thievery, the basic site had remained in reasonably good condition, although its size made any reconstruction efforts a massive undertaking. Since the country has returned to a slightly more stable condition, many countries have joined Cambodia in its attempt to restore the Angkor site, including Japan, Poland, German and France. The newest problem that the country of Cambodia must now deal with is how to handle the massive rush of tourists that are going want to visit one of the greatest wonders of the world. A wonder that had been unavailable to prying eyes for at least 500 years.


The world has recently fallen in love with Angkor Wat and almost 500,000 visitors viewed the temple last year with the Cambodian Government expecting to see this number rise to around a million in 2003. The only road leading directly to Angkor Wat is dirt and on rainy days turns quickly to mud. There is a seemingly endless procession of vehicles of every type and description, streaming toward the city. Because of its location near the equator and due to the fact that torrential rains fall during certain seasons, the tourists usually visit during wintertime in the northern climes. Everyone has his own explanation relative to the reason history and story behind this site. One of the tourist guides had a unique explanation regarding what Angkor Wat is really about.


"He explained that Angkor was designed as a model of the universe. With the central tower, 216 feet above the ground, representing the highest peak of Mount Meru, the mountain that is the center of the universe in Hindu mythology. The surrounding towers represent other peaks; the walls are the mountains at the edge of the universe and the massive moat represents the oceans. " ()


As the tourist dollars start to pour in, the restoration process is being rushed along at a frenzied pace including the Grand Hotel d’Angkor, a magnificent facility built during colonial times as a jumping off place to Angkor Wat only for the very rich. The hotel has been faithfully restored and has once again become a mecca for wealthy visitors, but it is generally booked months in advance. It has become a "must do" for the well-traveled affluent. In spite of the stunning beauty of this entire landscape, it has its dark side as well. In the nearby village, everything was for sale including recently removed object de’ art from Angkor Wat, there was a price on almost everything including a storefront that was selling teenage girls right in its window. The girls had their prices pinned to their cocktail dresses so that there could be no misunderstanding regarding their purpose. Everywhere, there were beggars, many of whom had been victims of land mines and were missing various appendages. There seemed to be nothing but misery so close to this amazing edifice that it really seemed to be a crime, but so is everything in this desperate country that seems to have been lost in both space and time.



Human civilization developed along the banks of the Nile allowing Egypt to occupy a significantly strategic position as the link between Africa and Asia. Moreover, it borders on both the Mediterranean and the Nile so that the country is also logistically well positioned. However, it is probably for those reasons that civilization began in Egypt so many years ago, approximately 6,000. As time progressed, the people that inhabited this region developed significant skills in architecture, mathematics, and astronomy and became capable of designing and constructing structures that were well ahead of their time.


Early Egyptian religions were a hodge-podge of beliefs that endeavored to be everything to everyone. There were afterlives; animal gods in human form, places bad people went, along with paradises that were only fit for kings when they departed the earth. Egypt came into being from an amalgamation of a series of city states, each having its own form of worship; however as the country homogenized, the number of deities that the people worshiped multiplied like flies and one literally needed a scorecard to keep track of the varying beliefs. Even the priests who had devoted their lives to proselytizing their religion had begun to become overwhelmed by the enormous number of deities that had accumulated.


To make matters even worse, as Egypt began to consolidate the people that they had conquered, the government always allowed their defeated adversaries to keep their gods; on the other hand, they were logically relegated inferior roles. This kept the peace, but in a religious sense, confusion was the order of the day and interpretation of how these various gods inter-reacted with each other became at best extremely difficult. Religion was becoming a blight, and institutions had to be set up to interpret religious interpretations.


The king of Egypt assumed the role of the chief interpreter of the true faith and acted as an intermediary between the people and their religious beliefs. With the passage of time, these deities had multiplied to such a degree that one of the early Pharaohs felt obliged to order the priests to bring some order out of this chaos. The Pharaoh was convinced that the people really didn’t know who was doing what to whom any more, and it was increasingly difficult to pray to Gods when no one knew who they were anymore.


"Egyptian society was a pyramid-shape hierarchy, with a small, wealthy ruling class at the top controlling the government and military, and a broad strata of peasants at the bottom providing the labor. Most people lived in houses of two or three rooms of unbaked bricks that were made from mud of the Nile River bottom. The working class dressed simply, with men wearing kilts or loincloths and women simple shifts. Most garments were linen. The average diet was plain but nutritionally varied, including vegetables, fruit, meat and fowl. According to tomb inscription, Egyptians also consumed massive quantities of bread and beer. "


The only thing that seemed to be common in early religions of Egypt was their extraordinarily brutality, as evidenced by the fact that the more ancient pyramids housed not only royalty, but women, servants and pets that were sacrificed to provide the King with companionship on his trip up the River Styx. As Egypt’s religions beliefs matured, woman and slaves were replaced with their statues, an adjustment for which obviously most of the inhabitants were extremely grateful. Egyptian religions also contained a heavy smattering of creature worship and early figures closely resembled animals. As time went on, the Egyptians began worshiping animals that had become very humanlike in most of their qualities. There were jackal gods, fertility gods, bull-faced gods, and snake gods. Just about every kind of animal that lived in ancient Egypt was represented, with the cat being in all probability, the most prominent.


"The ancient Egyptians were the first people of antiquity to believe in life after death. They were the first to build in stone and to fashion the arch in stone and brick. Even before the unification of the Two Lands (Upper and Lower Egypt), the Egyptians had developed a plow and a system of writing. They were accomplished sailors and shipbuilders. They learned to chart the heavens in order to predict the Nile flood. Their physicians prescribed healing remedies and performed surgical operations. They sculpted in stone and decorated the walls of their tombs with naturalistic murals in vibrant colors. The legacy of ancient Egypt is written in stone across the face of the country from the pyramids of Upper Egypt to the rock tombs in the Valley of the Kings to the Old Kingdom temples of Luxor and Karnak to the Ptolemaic temples of Edfu and Dendera and to the Roman temple to Isis on Philae Island."


Although Egyptian society was to some extent backward when it came to religion, the culture itself was highly advanced in almost all other respects. Architecture, mathematics, and astronomy had become particularly advanced for their time. Thus, the pyramids were a strange combination as symbols of both superstition and science. Moreover, they were built to last forever and after five millenniums, if it were not for looters and pollution, undreamed of in earlier times, they well might have made it. Cairo is both one of the most populated cities in the world and is also one of the most polluted. The pyramid of Cheops is located just a stone’s through away and it has begun to feel the wreath of civilization.


"His name means "bringer of beauty," although he was officially known as the Master of All Justice and Ruler of the Lower and Upper Nile. He was worshipped as a god during his lifetime, some, 4,600 years ago, from the Nile Valley to the Sinai. He designed and built the first true pyramids and founded a dynasty–-Egypt’s fourth—that lasted more than 100 years. But Snefru, known to the Greeks as "the Good King," has long been overshadowed by "the Bad King," Khufu (also know as Cheops), his more famous son and successor. Because Khufu’s Great Pyramid a Giza, on the outskirts of Cairo, is more accessible to tourists, it has become the picture-postcard landmark. Snefru’s monuments, by contrast, sat on an army base in Dahshur, 13 miles away. For much of this century they were concealed behind barbed wire and watch towers, off limits to all but a handful of archaeologists."


Due to Egypt’s strategic geographical position, the country was regularly attacked by envious neighbors and the Egyptians were conquered by the Ptolemies, Greeks, Arabs, Romans, Mamluks, Ottomans and France. Egypt remained under Arab rule until the ninth century, when autonomous hereditary dynasties started to appear. Effectively, during this period, which lasted for about three hundred years, Egypt had become more of a combination of city-states and nomadic tribes than a unified country. One of Egypt’s most serious setbacks occurred during the period between 1347 and 1350, when the plague called the "Black Death’ afflicted the country and wiped out 40% of the population before it eventually subsided from natural causes.


Eventually, The Ottoman Empire under Sultan Selim I absorbed Egypt and ruled it passively for several hundred years. The Ottoman’s were followed by Napoleon who fancied Egypt and conquered it for France in 1798. While this may have sounded like a great victory, it didn’t really take much to accomplish this act because by this time, the country’s population had declined to less than 200,000 people. In 1869, the Suez Canal was opened, and this revitalized both Cairo and the rest of Egypt.


During this period, Egypt’s ruler, Ismail, who had been educated in Paris, attempted to emulate the French and incorporated many of their architectural achievements into his overall development planning. However, it was the British who succeeded the French that were the most recent foreign transgressors. British troops seized Egypt in 1882 in order to protect their shipping interests and the recently completed, Suez Canal. However, of all of the conquerors that had come this way, it was the Arabs, who arrived in 641; led by Amr ibn al As, that left the most indelible mark on the country, which had adopted their religious beliefs, their language and their culture and much of that remains immutable as part of Egypt culture today.


British interest in Egypt stemmed from the Suez Canal as the short route to India. Promises to evacuate the country once order had been restored were broken, and the British army remained in occupation until 1954. Although Tawfik remained on the throne as a figurehead prince, the British consul general was the real ruler of the country. The first and most important consul general was Sir Evelyn Baring (known after 1892 as Lord Cromer).

A nationalist movement led by Mustafa Kamil, a European-educated lawyer, was backed by Tawfik’s successor, Abbas II, during the late 1800s and early 1900s. Kamil agitated for self-government and an end to the British occupation but was ignored by British authorities. ()


However, Britain allowed Egypt a semblance of independence in 1922. The Egyptians, having tasted that, in December of 1945, their Prime Minister Mahmud Nuqrashi in a note to the British mandated that they remove all of their troops from the country without delay. The British rejected this petition, which resulted in massive riots in Cairo and Alexandria. In addition, these riots caused substantial damage to British property, personnel and ego. This seemed to be the time for independence and in neighboring Palestine; David Ben-Gurion declared the establishment of the State of Israel in 1948. However, strangely, this Israeli act was considered by the Egyptians to be only another act of British imperialism.


Rising to the threat of an alien nation arising in the middle of their territory, the Arab Countries commenced hostilities against Israel shortly thereafter. Nevertheless, the Arab armies were uncoordinated, their equipment outmoded, their battle planning nearly non-existent and their soldiers were poorly trained and fed. Other than the highly celebrated Arab Legion from Transjordan, the war was a major disaster for the Arabs, and the blame was placed squarely on the lap Egypt’s King Faruk. Nevertheless, at least one soldier performed admirably for Egypt and received severe injuries for his efforts. His name was Gamal Abdul Nasser who had commanded a small army unit in Palestine. He would be heard from again.


In the period directly following World War II, Egypt was ruled by King Faruk. In 1948, under his aegis, Israel, which was quickly becoming a thorn in Egypt’s side, was invaded by a sizeable force. In spite of the fact that Egyptian troops were able to penetrate within 25-miles of Tel Aviv, they were ultimately beaten back and when the smoke had cleared, Israel had seized sizeable chunks of the Sinai. Ultimately, Egypt and their allies sued for a cease-fire. Israel at that time was absorbing refugees at a torrid clip and was economically contented to return to pre-war bounders in exchange for a semblance of normalcy.


The earlier Egyptian agreements with the British were formerly abrogated by Egypt in 1951, and Faruk was proclaimed the King of both Egypt and Sudan. At that time, Egypt believed that the territory where Sudan is located, the largest country in Africa, was also part of the Egyptian manifest destiny. "Liberation battalions" were created, with the Muslim Brotherhood and auxiliary police becoming fully armed. Shortly thereafter, Clement Atlee, the then British Prime Minister seeing the light agreed in 1949 to remove all British troops from the Egyptian cities and bases, and fold them into the region surrounding the Suez Canal Zone.


Food supplies to the Suez Canal Zone were blocked, and Egyptian workers were withdrawn from the British base. A guerrilla war against the British in the Suez Canal Zone was undertaken by students and the Brotherhood. However, in an act of desperation, in December British bulldozers and Centurion tanks demolished fifty Egyptian mud houses to open a road allowing access to water supplies, much needed by the British army. This incident and one that followed on January 25, 1952, provoked intense Egyptian anger. It was on that date that the British attacked an Egyptian police barracks at Ismailiya, when its occupants refused to surrender to British troops. Fifty Egyptians were killed and 100 were wounded." This signaled the beginning of the end of British rule, and the crowds in Cairo became uncontrollable and destroyed whatever British property they could locate. While the British had seen this as a major concession, the Egyptians had become even more enraged but by this time, though, the British colonial empire in Egypt was seeing the handwriting on the wall and in 1954; the British totally withdrew from the region.


In July of 1952, the Free Officers’ Revolution () championed by Gamal Abdul Nasser altered the Egyptian landscape forever. King Faruk was forced to abdicate in favor of his infant son and he sailed into exile aboard the very same yacht on which his grandfather, Ismail had left for exile about seventy years earlier." Interestingly enough, Nasser became the first true Egyptian to rule the country since the 6th century B.C.


Nasser took over and without more ado, began edging the country nearer to the Soviet Union’s orbit. Moreover, it was during Nasser reign that, with Russia technical assistance, a major architectural triumph was completed, the Aswan High Dam. The logic of constructing this 2½-mile long structure was inescapable. The area in which Egypt is geographically located is one of constant feast or famine. For every year of adequate rain, there seems to be two or three years of drought. For this reason, one of the early and more important Egyptian Gods, was the god of water. Because of the ever-required need for water reserves, almost a century before this another dam had been built near the city of Aswan, which is now called the Aswan Low Dam. The reason for this was the fact that this 2 mile long facility could only hold water reserves for one year. As the population of Egypt geometrically exploded, the land that had once been called "The Breadbasket of Civilization", now could no longer agriculturally support its own population. In spite of this fact, the Nile Delta (the area flooded by the Nile River) only represented less than 5 percent of Egypt’s land and was literally the only agriculturally productive region in the area.


One of the downsides of building the Aswan High Dam was the fact that when Egypt had been so agriculturally productive in past years, it had been as a result of the silt that the Nile carried to Egypt from places as far away as Ethiopia. This silt was rich in nutrients and constant flooding caused the silt to be built up on top of the active farmland whenever flooding would cause the Nile to escape its banks. The silt acted as a very rich fertilizer and as a result along with Egypt’s warm weather, three crops were produced a year. This allowed the country, for most of its existence to be a food exporter.


Nasser needing a symbol upon his takeover of the Egyptian Government announced with great fanfare that this enormous project would be taken on. It would be substantially larger than Egypt’s largest pyramid and in addition, it would be the largest dam of its type ever built. As a matter of fact, the dam would eventually become known as "Nasser’s Pyramid." It would take 10 years to build and during its construction would employ no less than 35,000 people from all around the world. When completed it would provide 1/3 more hydroelectric power than America’s Hoover Dam. This electricity would bring power to over 20,000 Egyptian communities that had never known an electric light and what was left over, could be sold to other countries in the region. But progress only came in fits and jerks, mostly because of the bizarre politics of the region.


At this point in time, Nasser didn’t have a clue of either how to build the structure or where the money would come from. However, Germany had just paid Israel a substantial sum of money for World War II reparations and the Egyptians complained loudly that the Israeli’s would probably use the funds to buy weapons to attract Egypt. The Germans were not interested in financing the project but could see the logic of Egypt’s argument.


They came up with an interesting compromise by offering to engineer the facility. Egypt quickly accepted the deal and two years later, that work was completed. Now, Nasser had to deal with the issue of raising the money to build the dam. He went to the World Bank with the German sketches and pleaded for help. The World Bank expressed substantial interest but their ardor was substantially dampened by the politics of the time. Nasser had embraced the Russian’s and although the World Bank was not theoretical supposed to be political, it was unquestionable controlled by the United States and over a period of time, after originally having given the project its green light, the World Bank ultimately rejected it. This came as a terrible blow to Nasser who at this point did not know where to turn for outside help.


Eventually Nasser came up with the idea of nationalizing the Suez Canal and using tolls to help pay for the Aswan High Dam’s construction. This caused an immediate problem with France, Britain and Israel who saw this power grab as potentially a method of closing to the canal to their shipping and this would not be acceptable. The war raged for a time but worries of Russian interference and offers of Egyptian reparations dampened the warring nation’s ardor. Although Nasser’s grab of the canal was a military failure, because it caused the 1956 War, the United States refused to back its allies and demanded a stop to the hostilities. Today, Egypt continues to hold the canal and nobody expects that it will ever be relinquished.


In spite of its control of the canal, the revenues that Egypt collected were never enough to cover anything close to the construction of the dam, which could somewhat be attributed to the fact that Egypt was busily paying reparations to both France and Britain for its nationalization. The Russians, interested in making trouble in the region stepped into the breach and offered to construct the dam if the Egyptians would use their equipment and their engineers and when the project was completed the Egyptians would give the Russians total credit. By this time, Nasser would have dealt with the devil and the deal was readily accepted. Although the Russians had much more experience with dam building than did the Germans, and substantially modified and improved the original German design, the equipment delivered by Russia was primarily used in cold weather and summer temperature in Egypt often hit 125 degrees. In addition, the logistics of delivering heavy equipment to Egypt for Russia was problematical at best. Russian equipment consistently broke down, was ineffectual and of not great enough quantity.


In spite of agreements to the contrary, it also turned out the Russian labor was ineffective and for this reason, Egypt turned to other Arab countries for assistance. The Russians complained bitterly and almost pulled out of the project, but Nasser was determined and hard feelings were ultimately smoothed out. Work for the first time went on without substantial problems. On the other hand, there were still difficult dilemmas that had to be dealt with. With the project now in high gear, it would not be too long before magnificent temples would be covered forever under water when the dam was filled. International archeologists went into a state of anguish and a number of interesting theories were proposed. The first and least expensive was the strange Egyptian proposal that a giant scuba center be created and divers could see these shrines as sort of an underground museum. Upon hearing what it considered a highly unacceptable solution because of the waters high salinity which would have destroyed these underground monuments in short order, Unesco stepped in with another plan. The world backed Unesco’s plan to raise the monuments out of the water to a level above where the they would not be harmed by the dam’s backup. This became a project almost as complex as the building of the dam itself and the workers were only able to keep a small step ahead of the constantly rising waters. Some of the monuments had originally been built into the mountains themselves, and thus, the entire mountain ultimately had to be cut away and moved to accommodate the plan.


In the meantime, Nasser was fearful throughout the construction that the Israeli’s could unleash a bombing attack and blow up the dam. E believed that this would result in the deaths of approximately 65 million Egyptians. Russian engineers were constantly assuaging Nasser, telling him that because the dam was primarily earthen in nature, it would require a series of atomic bombs to do that kind of damage. Nasser remained nervous to the end and died 6 months before the dam was completed. Sadat, Nasser’s successor opened the dam to substantial fan fare. Over 1,000 lives had been lost in its construction, but that was a small price to pay when Egypt’s agricultural self-sufficiency would be the reward.


However, this was not to happen in spite of the fact that the project from an engineering standpoint fulfilled all of its projected benefits. The problem was that that the population was increasing at an even faster rate than previously calculated and in the end, the dam only became a stopgap measure relative to Egypt’s agricultural self-sufficiency. The land now required fertilization because the nutritionally rich silt no longer flowed over the fields and much of this fertilizer had to be imported. Because of the tremendous amount of water, now being stagnantly backed up by the dam, evaporation also became a serious problem and this in turn made weather planning much more difficult, eventually negatively effecting weather patterns in the region.


On the other hand, not all of Nasser’s efforts were lasting or logical. Because of the never-ending bickering over Israel’s existence, Syria and Egypt determined that it would make some sense to create a union between their two countries. An agreement was reached and the joint country was created in 1958 as The United Arab Republic. That union endured for three years with no visible benefit afforded to either of the parties. The basic problem from the beginning was that the two parts of the country were not directly connected by land; Israel sat in the catbird seat, right in the middle and communication between the two took place mainly by phone. Moreover, the leaders of the two countries were both highly egocentric and it soon became readily apparent that they would be unable to share power with each other. This arrangement collapsed without any fanfare or second thoughts in 1961.


As time passed, Nasser continued to reinforce and train his army with great fanfare and bravado. This saddest thing about this was the fact that both Nasser and his people were really beginning to believe their own publicity; that Egypt’s military was now a force to be reckoned with. The drum rolls, the movie clips and the parades of tanks and soldiers marching in cadence down Cairo’s streets, greatly improved Egypt’s prestige in the region and certainly lifted Egyptian’s spirits. However, in 1962 Egypt for some unknown reason choose to intervene in a civil war that had broken out in the Yemen Arab Republic (North Yemen). Nasser moved a substantial number of troops into the country after a coup was staged by Yemeni army officers, revolting against the royalist regime with which Nasser had a peace pact.


This military action proved to be a disaster for Egypt for several reasons, first of all, the highly mountainous terrain of Yemen was not comparable to the area where Nasser’s troops had received their training. For that reason, they were ill equipped to fight the kind of hit and run action that was waged in the most rugged parts of Yemen. Secondarily, as Nasser’s so-called police action became bogged down, Egypt felt obliged to either send in more troops or withdraw from the region entirely. Retreat, was not a tolerable option for Nasser who had by this time embarrassed himself in every war he had fought and Yemen soon became Egypt’s Vietnam. In order to prove to the other Arab states that he was achieving a victory, Nasser made the tactical blunder of sending in his best troops.


This proved to be especially disastrous in June of 1967, when Israel attacked Egypt. Nasser was goaded into going to war with Israel for the third time because of Israel’s tensions with Syria over the Golan Heights. Sadly for Egypt, Nasser had made the dreadful mistake of signing a joint defense agreement with Syria. The Israeli Army was about to turn the Syrian Army into "shredded wheat" when Syria came to Egypt for help. Among other things, the Israeli’s were talking about occupying Damascus and people in that region believed they were serious. However, there was the small matter of the United Nations Troops that had been deployed between Egypt and Israel, which Nasser still had the sensible option of hiding behind. Nevertheless, the non-confrontational Arab states were crying for Israeli blood and Nasser in a very weak moment obliged. This was a strictly macho move that Nasser knew could ultimately mean the destruction of Egypt.


On the morning of June 5, 1967, Israel attacked Egypt, Jordan and Syria and within three hours, there was literally nothing left of the prized Egyptian Air Force and by June 8th, the Israel forces were at the Suez Canal. Nasser did not communicate the fact that he had already been obliterated, so Syria and Jordan fought on believing that if there was trouble, Nasser would come to their aid. In addition, because of a number of stupid blunders by Egypt’s generals, their force had been caught in the narrow, Mitla Pass and had become target practice for Israel’s Air Force. When the tally was totaled, Egypt had also lost no less than 700 of 930 brand new Russian tanks. Nasser’s foolhardiness had cost him dearly, and now Israel occupied all of Palestine, the West Bank, the Gaza Strip, as well as Sinai and a good piece of the Golan Heights. The Egyptian Army was in shambles, their armor was a twisted pile of junk and without Russian aid, Egypt would have been easy pickings for anybody else in the region as well. Nasser died soon thereafter, but he had made some substantial contributions to the country and left it united in almost every sense.


Nasser’s Vice President, Anwar Sadat replaced him. Sadat was also a former military officer. Moreover, he was a nationalist in the same manner that Nasser had been before him. But unlike Nasser, he encouraged capitalism and allowed the people substantially more freedom than they had previously enjoyed. When elections were held, Sadat who formerly had also served as secretary of the Islamic Congress and speaker of the National Assembly received 90 percent of the Egyptian vote. In spite of the fact that Sadat was making all of the right moves, he was forced to arrest more than 100 senior government officials for plotting against his government. The army didn’t seem to agree that allowing the people a taste of democracy was a good thing.


Later in 1971, Sadat attempted a peace initiative with Israel. He offered to exchange a peace declaration for the return of the Sinai. Neither the United States nor Israel was particularly interested in helping a client of the Eastern Block’s (Egypt) and paid little attention to his offer. Egypt now was forced to restore its military, which in turn put an extreme burden on its economy. Moreover, this caused an extreme economic downturn followed by student riots against the government. In reality, they were against Israel but they took the anger out on their own government. These riots put substantial pressure on Sadat to achieve some kind of triumph over Egypt’s historic enemy, and he started planning for that event.


In October of 1973, Egypt launched a surprise attack on Israel, and at first, it appeared that Sadat had achieved what no other Arab leader had been able to accomplish: victory over Israel. Although this is the way history will record the event, that is not quite the whole story. Sadat’s missiles and planes were actually ineffective against Israel defense lines and a frustrated Egypt turned to Russia for support. Russians took over the guided missile systems and flew the planes to some effect, early in the war.


Moreover, due to the fact that Egypt had done superb military planning, Sadat was able to cross the Suez Canal in less than four hours. Ultimately, Israel, with the help of fresh supplies from the United States was able to entirely encircle the Arab Third Army in the largest tank battle since World War II. When the smoke had cleared, the coordinated Israeli forces had totally annihilated Egypt’s military once again. In the one major air battle fought during this war, Israeli planes and pilots also scored stunning victories over their Russian counterparts. This did not particularly sit well with the Egyptians, who had been looking to them for their military equipment and training. Egypt surrendered and their partner, Syria was left holding the military bag. Two days later, Syria collapsed as well. Egypt was left totally defeated, but for the first time, the Arabs had won a major battle. However, in spite of this supposed victory, the Arabs for the first time, played "the oil card."


In secret meetings with the United States Government, the US agreed to make a number of concessions to Israel relative to rearmaments if Israel would give back parts of the Sinai and return an oil-producing region which had been taken back to Egypt and allow the Suez Canal to reopen. Israel, which at this point was having its own economic problems, agreed. In spite of losing the war, Sadat had gained valuable brownie points with his people because of his initial successes and because of that, in November of 1977, he had the standing to be able to make a trip to Jerusalem and extend the olive branch to Israeli leaders. The consequence of that visit instigated American President Jimmy Carter to offer his services for serious mediation, and ultimately in November of 1978, the Camp David Accord was signed under the American President’s aegis. The remaining members of the so-called Arab League, were not pleased with this outcome, and Egypt’s relations with other Arab countries for a time became severely strained. This series of events brought out the fanatics, and there were many in Egypt itself who were unhappy with this result; in October of 1981, Sadat, a tremendously courageous man, was cut down in cold blood by the Muslim extremist group, Al Jihad (Holy War).


Sadat was succeeded by Husni Murbarak, originally considered a hack, who was only expected to last until someone better could be found. However, it was soon found that he had some extraordinary talents. He didn’t share Nasser’s temper and thought out his moves carefully before coming to a decision. He also lacked Sadat’s emotionalism. Thus, although tough, Murbarak was extremely logical, examining every issue from countless points of view before arriving at a decision. Because of his more calculating nature, during Murbarak’s reign, nothing dramatic has occurred, but on the other hand, there haven’t been any major disasters either.


Murbarak has been even-handed when it has come to religious rights in Egypt, reigning in the fringe groups and directing his attentions toward the centrists. However, Murbarak has made some concessions, and these could eventually come home to bite him if he is not extremely careful extremely careful in balancing the religious exigencies of the region. Egypt’s clerics knowing they had substantial strength in a country which is 90 percent, Muslim, sought more religion in their law and Murbarak has allowed sharia a small but expanding role in the constitutional process. This originally small bite may make it easier for the clerics to demand more as time goes on turning Egypt into another Iran or worse yet, an Afghanistan. It is important that the people remain prosperous and well feed in order to keep them from turning too much toward religion and Murbarak is substantial aware of this possibility.


Moreover, due to the increased liberalization of the Egyptian society by the Government, more students were able to complete college. However, there is not enough industry in Egypt to support the increased number of graduates and it has caused a high unemployment rate among this elite group, in excess of 30%. Egypt’s population is expanding at an alarming rate, with little or no birth control education and with a population of 60 million that is becoming increasingly concentrated in the major cities. Simultaneously, environmental and infrastructure problems have significantly multiplied. Nevertheless, health care is free and there is a reasonably good social security system that has been in place since 1952. While population growth remains high, Egypt is a large country. The more difficult problem is that fact 99 percent of all people in Egypt live, literally on the banks of the Nile River. In this area, population density is 1,500 per square kilometer, one of the world’s highest, while in the rest of Egypt, conversely it is one of the worlds lowest. Also troubling is the fact that, of the total population of the country, 20 percent live in the Greater Cairo area.


By this time, urban sprawl was really getting to Cairo and there are a string of most interesting statistics of the time:


"The city’s population was growing about 300,000 per year in the 1980s, has strained urban services to the breaking point. Public transportation was woefully inadequate in the late 1980s, with about one of every four buses out of commission at any given time. Public water supplies, sewer facilities, and trash collection were all overburdened. Housing was perhaps the most pressing problem because persistent shortages of skilled labor and construction materials hampered efforts to build residential units quickly enough to meet demand. The demand for moderately priced housing was especially high. Some people resorted to clandestine and semi-legal housing arrangements; as many as 200,000 wooden, cardboard, and metal huts were constructed on the roofs of apartment buildings. An estimated 500,000 people were living in the mausoleums in the city’s cemeteries."

From an agricultural point of view, in spite of the abundant resources provided by the Nile and the Aswan Dam, only about three percent of Egypt’s land is useable for agricultural production and the country’s historic crop over the years has been cotton. Because of their abject poverty, most farmers found themselves forced into multiple cropping, something that was easily accomplished when the Nile River overflowed on a regular basis leaving substantial deposits of nutritious silt in its wake. On the other hand, the dam had eliminated that resource and double cropping was something that was literally more than the fragile land could handle. Additionally, concentration on cotton as the premier crop and senseless over irrigation lessened the fertility of what soil was left. Moreover, the same areas that were best of crop production were also the choicest when it came to living conditions. Thus, people were moving into the fertile areas looking for places to live and used valuable agricultural land for living space. This created the situation where internally generated agricultural products were not sufficient to provide nutritional independence for the rapidly increasing population. Therefore, Egypt is now and will be for the foreseeable future, completely dependent on imports to feed their population.


Almost every alternative has been attempted to almost no avail. There is unquestionably water that can be gotten from aquifers in the desert, but little progress in that direction has been made to date. In the meantime, a number of countries in the region have threatened to cut Egypt’s supply of water from the Nile, which in turn would cause the country substantial hardship. Egypt’s neighbors such as Sudan and Libya are not necessarily what you could always call logical folks, and war could easily break out should any country attempt to tamper with Egypt’s fresh water supply.


Sudan, once considered part of Egypt has become a particularly thorny problem due to several reasons. A relentless civil war in the country has displaced an enormous number of people who are undernourished and homeless, many of who have looked to Egypt as a place of refuge. In addition, Sudan is subsidized by the Iraqi Government and many of their political views are not shared by Egypt Government. Sudan has been making serious waves about taking increased water supplies from the Nile and Iraq has been indicating that they would supply the Sudanese with weapons should the need arise. Egypt has taken both threats seriously, and because of the region’s ever evolving problems, a strong military is necessary to insure that even more serious problems don’t arise.


Naturally, this tends to sap the economy and drain what minimal resources Egypt has available. Nevertheless, Egypt has been a standup player on the world scene lately and receives more than their fair share from all of the relief agencies, including the World Bank and the International Monetary Fund. In addition, Egypt receives the second most aid from the United States next to Israel. As the region’s economics continue to evolve, Egypt could even surpass Israel in that category, since Israel’s economy has been booming of late, there borders are reasonably secure, and having established peace treaties with Jordan and Egypt, only Syria and the Palestinians are left to deal with.


One of Egypt’s major sources of revenue is the fact that so many of their people work in the oil producing Arabian States such as Iraq, Saudi Arabia, Libya and Kuwait. As an example, 1 million Egyptian workers were in Iraq when the Gulf War broke out. A substantial amount of money is sent home by these expatriates, providing hard currency for relatives in Egypt. During "Desert Storm," the people scurried home and the flow of income dried up for a time. While this situation is become more normalized, a substantial shortfall developed during that period that has not been made up.


As time passed, Egyptian President Murbarak’s government became entrenched, bureaucratic, lazy and scandal ridden. Moreover, in a recent election, the National Democratic Party, (NDP) was clearly headed in a solidly southern direction, while the officially outlawed Muslim Brotherhood was unquestionable gaining strength. "The 2000 elections – the first ever to be supervised by Egypt’s independent judiciary – have been free to date of the large-scale ballot tampering which characterized earlier polls. That procedural reform, coupled with economic woes, corruption scandals and a revival of Egyptian street politics, predestined the NDP to losing seats."


There were a number of contributing factors, and first and foremost was the disastrous condition of the Egyptian economy, causing the Central Bank to devalue the Egyptian pound. This in turn, squeezed consumer purchasing power and heightened inflation. However, while these problems are serious, there are a number of palliating factors, the primary one of which is the fact that almost all food products are subsidized. In the meantime, bureaucratic glitches were causing unrest among the population. Events such as a high Egyptian official selling permits in the black market for the pilgrimage to Mecca were particularly annoying to the people. In addition, a substantial number of political figures were jailed when it was discovered that they had borrowed substantially from a large Egyptian bank without collateral using their government positions to enforce the loan.


"The case reached into high political circles – along with the members of parliament, a former Minister of Tourism was also indicted, all of them members of them members of President Hosni Murbarak’s ruling party. It also touched the boardrooms of five banks. The accused included the daughter of the chairman of the Nile Bank, Alya Aioti, and her husband, Mahmoud Abdel-Fattah Assam, one of the legislators involved. Although some of the suspects were allowed by a previous prosecutor to leave the country during the trial and have been sentenced in absentia, the country’s current prosecutor is pursuing extradition to bring them back to Egypt."



If I were a country, I would not be happy if my friends and neighbors were places like Sudan, Libya, Syria, Iraq and Iran. With friends like, there is some question whether one really needs enemies. Egypt is between a large rock and a mammoth hard-place. Within the Arab world, they are effectively the voice of Arabism. They are its most populous country and yet, Egypt is effectively economically bankrupt. They have a perceived enemy on their flanks, Israel, that at the very least has an atomic bomb and has a fuse that can be dangerously short when the country’s survival is at stake. Hovering in the background are Palestinians, who desperately want a homeland and are trying to go about getting it the only way one does things like that. They fight for it. It is just a pity that both the Israelis and the Palestinians are fighting over such a small amount of territory, when there is so much land in the region that could be put to good use.


Everyone in the area is surveying the landscape, and whoever shows extreme weakness will be gobbled up by the Muslim fanatics who seem to ride the airflows searching out carrion. Universally, all of the Arabs are forced to show sympathy for one another, in spite of the fact that countries like Iraq have shown no mercy whatsoever when they invade their religious brethren like Kuwait, and if they hadn’t been stopped by the United States, Saudi Arabia as well. They raped, pillaged robbed and burned, and yet, there are those in the governments of both of the countries that were attacked who have good words to say about these people. Naturally, their genuineness could be called into question, but why take the time to bother. It is just one big game.


Moreover, we have other countries in the region such as Syria, who took over Lebanon and enslaved it. They allowed various fanatic guerillas to use the land as a jumping off place for their raids into Israel just so that they would not have to pay the price for their own cowardliness. Before that, they had tried to conquer their friend and neighbor, Jordan, only to be pulverized by Jordan’s army, one of the best in the region. In addition, we have such Welcome Wagon participants in this neighborhood such as Libya, who goes about its business of creating chemical weapons for use against whoever may offend them at any given time. Libya has allowed guerilla-training grounds to be set up on their territory and after their training is completed they then send the objects of their training to pathetic places in Africa to make those countries even more pathetic, if that is possible. Moreover, they are incessantly playing with things like uranium and plutonium and cesium trying to create a big splash in someone else’s backyard. In addition, what about those friendly people from Iran that have just closed down their short attempt at giving their own people religious freedom, that keep their women in bondage and have sadistically removed any vestige of modern society from their country?


For the most part, this group represents a bunch of fanatics that prey on each other or anyone else in the region that shows any weakness. In the middle of the hodgepodge is Israel, who as a standing rule, must be criticized by all of the Arab states, no matter what they do. The Israelis could announce to the world at large that they have just come out squarely for motherhood and every one of the Arab states would be forced into condemning either mothers or children, or both. Among themselves, they can harbor whatever hatreds the years may have fashioned, but to the outside world, there must be only one devil.


Egypt and Israel have created a tenuous peace, which has been patched together because of a mutual needs: Egypt’s anxiety to recover the land it lost when it became provoked into an unnecessary war that they knew that they couldn’t win and the money that the United States pays both Egypt and Israel to remain very silent friends. Israel has no trouble accepting a bashing each time someone in the region stubs his toe, but the Egyptians have a different problem. They must appear to be faithful to the Arab cause, mouth the right words at the proper time, but are not allowed to go to far if they want to keep getting their desperately needed American subsidy. The Israelis have a bit of the same problem, but not quite as tough: they must appear to be good guys, while still maintaining the safety of their citizens.


Egypt is not in a position to be envied: 90% of its population is Muslim, the people are massively underemployed, its standard of living has been going downhill and every so often you really could understand if the troops can get restless. The Egyptians have seen first hand what has happened when fundamentalism took over in Afghanistan, Pakistan and Iran. If they shift too far toward the conservative side of the ledger, their own people will turn them into chopped liver. If they become to friendly with the Western Powers and Israel, the same people will tear them to ribbons. They are walking a very narrow path, and there are many ways to slip off the edge. In the meantime, various civil rights groups have been trying to undertake operations in Egypt.


"Eddin Ibrahim a prominent sociologist and the founder of the Ibn Khaldun Center for Development Studies, was accused, along with 27 others connected to the center, of spreading false reports about Egypt abroad. Prosecutors said he had harmed the country’s image through exaggerated report on various issues ranging from electoral fraud to tension between Muslims and Christians. Other charges against Mr. Ibrahim include accepting foreign donations without government permission, using donated money for personal gain and bribing newscasters to report favorably on the center’s work. "

Ibrahim did not let well enough alone and ranted about the pervasiveness of election fraud in Egypt. For their part the Egyptian Government charged Ibrahim with defaming Egypt, an extremely serious charge in that country. In addition he was charged with attempting to ferment problems between the Muslims and Christians, accepting foreign donations without government permission, using donated money for personal gain and bribing reports to favorably report on the foundation’s work. However, the Egyptians may have just picked on the wrong guy. Apparently they hadn’t done their homework and did not realize that Mr. Ibrahim holds dual citizenship in Egypt and the United States. The U.S. State Department went ballistic over what appeared to be a blatant frame up and an attempt to contain Egyptian civil liberties and in addition a host of civil rights groups from all over the world joined in. We wonder how much longer they are going to be able to walk the tightrope without creating a misstep. It may even break first.




The Egyptian Pyramids


While the Aswan High Dam is clearly one of man’s outstanding recent achievements historically in the field of architecture, two older building feats clearly stand out beyond the rest: in our minds, the Great Wall of China and the pyramids in Egypt. However, the two are poles apart in any number of ways. The Great Wall of China was created to keep out invaders while; the Pyramids were essentially burial grounds for their leaders. The "Great Wall" was not a particularly creative achievement even for its time, but the sheer immensity of it sets this project apart. On a similar scale, but with sophistication unimagined during that era, the pyramids required unprecedented engineering skill.


Egypt’s tourism has been extremely fragile due to the habitually unstable situation in the Middle East. There have been numerous occasions in the recent past when an incident has totally dissuaded people from viewing the pyramids for a substantial period of time. Tourism dropped off the map after the Six-Day War, it sank once again when Sadat was exterminated by extremist assassins; once again it collapsed during the Moslem insurrection in 1992 and got even worse in November of 1997, when in Luxor 58 people were killed by Moslem militants.


Egypt is caught between a rock and a hard place with regard to tourism. It is the country’s life’s blood, but it is also helping to destroy their treasures. Last year alone, over $40,000 was spent just to clean up camel-dung on the approach to the pyramid of Cheops. Thankfully, these beasts of burden are now banned from the approaches, and if you want to ride one of nature’s most nasty creatures, you will now be forced to do it somewhere else. One the other hand, hawkers seem ubiquitous, selling all types of junk that tourists believe they must have at the moment but when it arrives home with them, they can’t quite seem to remember why the urge to purchase had suddenly eclipsed their better judgment. Along with camel dung and unseemly hawkers the area around the pyramid of Cheops also contains another bred, "pyramidiots". These graffiti artists known as "pyramidiots" clutter everything with obtuse sayings and initials making this majestic landscape appear as though instead of being one of the wonders of the world, it now appears as honky-tonkville.


Some of the details of the construction of the pyramids are not hard to piece together. Egyptian architects along with location experts would choose the pyramid’s site with several logistical considerations in mind. Nearby water and a quarry in which rocks suitable for the construction could be mined were absolutely critical elements when picking a location. Once the site had been selected, wooden cargo boats were sent up the Nile from Cairo to transport the rocks from the quarry to the pyramid site. From there, the gigantic rocks were off loaded unto massive wooden rollers with multiple strands of rope attached and in this way slaves were able to pull the boulders onto the pyramid site. Ramps were also used to get the slabs up the pyramids; these ramps were somewhat smaller than those that were used to get the slabs offloaded from the cargo boats. Moreover, because of the greater incline, a larger number of slaves were required to pull the rocks higher and higher up the ramps as construction neared completion. (Pulleys had not yet been invented). The ramps were then dismantled and replaced with stones from the top down leaving no evidence of fact that the ramps had ever existed.


Herodotus talked about fact that the "pyramid was built in tiers, battlement-wise, or according to others, stepwise. When the pyramid was competed in this form, they raised the remaining stones to their places by means of machines formed of short beams of wood. The first machine raised them from the ground to the top of the first step. Above this was another machine, which received the stone upon its arrival, and conveyed it to the second step, whence a third machine advanced it still higher as the process continued. Either they had as many machines as there were steps in the pyramid, or possibly they had but a single machine, which, being easily raised or lowered, was transferred from tier to tier as the stone rose, the upper portion of the pyramid was completed first, then the middle, and finally the portion that was lowest and nearest the ground."


In spite of his grandiose theory, no one ever told us that Herodotus ever saw the construction of a pyramid, and his hypothesis would have required substantially more work than the creation of ramps. It would still seem that some form of pulley would have been required to raise the building blocks, which weighed in at 2.75 tons each, from level to level. On the other hand, supposedly pulleys didn’t exist so the paradox remains.


The logistics of this enterprise, though awesome and complicated, was not beyond the intellectual capacity of the builders that lived during that era. What seems to be unfathomable is the amazing fact that the building blocks when carefully put into place, became totally seamless. The inside of the pyramid was literally a maze of corridors, burial chambers, and museums. However, the entire structure was impervious to atmosphere and no bonding materials capable of that feat either existed or were used in the construction. Moreover, the seamless nature of the building blocks along with advanced embalming techniques had preserved everything in almost its original condition when the tombs were reopened centuries later. The Egyptian workers that worked on pyramid construction were highly skilled and far in advance of competing civilizations by this time had cooper chisels and saws available. They were able to cut smooth edges on the limestone rocks, which became the structure’s building blocks. Craftsmen were also able to cut the stones to incredibly exact proportions and worked from blueprint-like plans etched on papyrus very similar to what we would use today. Even so, that still does not come close to explaining the absolute vacuum that was created within these structures.


The pyramids of Egypt are the only remnants left of any of the original seven wonders of the ancient world. The remains of about eighty pyramids have been unearthed, but those located at Giza, near downtown Cairo are the most famous for obvious reasons. However, in very early Egyptian times, the kings and nobles were buried in unsophisticated brick structures. As the years progressed, structures that one could call pre-pyramids started to emerge. The first pharaoh to build what we would now call a pyramid was Netjerkhet in the 3rd Dynasty. However, It was not until King Djoser’s reign, that the pyramid as we know it came into being.


The pyramid at Giza has been at the forefront of scientific investigation primarily because of the fact that it is located so close to Egypt’s largest city, Cairo. One of the more interesting theories and one that has caused substantial argument in the scientific community has to do with the central passageway in the pyramid. There seems to be a calendar in the passageway that takes into account the six-thousand years for the pyramid’s building in the 3rd millennia B.C. through, the year 3,500 A.D. Interestingly enough, the properties that make up each year are exactly one inch long. This is particularly strange when you consider the fact that the measurement "inch" did not exist at that time. Many attempt to argue the fact away by saying that an inch just happens to be a subdivision of the measurement called a cubit, which did exist then. The Pyramid inch theory had many advocates, a more vocal group of which felt that not only was this an early calendar but it was also a predictor of events to come. This school lost substantial credibility when they indicated that the calendar showed that the world would come to an end on May 5, 2000 when the earth and its moons became aligned on one side of the sun and all of the other planets on the other. The fact that we are writing this story would seem to put that theory to bed.


Djoser had an adjutant named Imhotep that amazingly for his had been schooled in both medicine and architecture. He was able to design a rudimentary building described as a step pyramid for the reason that it was built in stages or steps. Djoser was also able to do some primitive work in body preservation that set the stage for the more sophisticated embalming methods that soon followed. This pyramid rose to a startling height of somewhat more than 200 feet, or about twenty stories, certainly a prodigious feat for the times. King Sneferu in the fourth Dynasty designed the first "modern" pyramid. The tallest of these structures was built by Cheops and stood approximately 50 stories high. This is the pyramid that stands just outside of Cairo immersed in urban blight.


It is at the Great Pyramid of Cheops that we begin to find that there is more to the pyramids than would normally meet the eye. In 1987, a group of scientists who had uncovered a chamber that they couldn’t physically access, lowered a miniature video camera into an aperture that had been created. This camera that had originally been designed to probe the interior of nuclear reactors was lowered into the seam and those peering at video screens showing its decent soon saw an amazing sight on their monitors. Amazingly, inside the pyramid had been placed an entire wooden ship that had been dismantled, 4,600 years ago and left for the Cheops, when he wanted to stretch his long-dead limbs to take for a joy ride, should he become bored. In reality, "Some scholars believe the vessels were intended to carry the spirits of the dead on their eternal journey around the earth with the sun-god Ra…Still others speculate that they were simply funerary boats used to ferry Cheops’ body down the Nile for burial."


No mater what the ship’s purpose, there was no question that the ancient Egyptians believed that in order to them to survive, the Pharaoh had to make a safe journal into the after life to meet with the Sun God. You see, the Pharaoh’s were thought of as "Living Gods" and their deaths only brought them together with all other Egyptian Gods, that is if they were able to make the journey successfully. Thus, the pyramids became known as a kind of resurrection machine each generation worked endlessly to make sure that the device was as near to perfect as they could; you see, they felt that their very lives were on the line if the Pharaoh did not arrive at his destination safely.


The pyramid took 20 years to build and required 100,000 slaves who worked in three-month rotations. There are 2.3 million stone blocks that make up the 449-foot tall structure and they each weigh somewhere between 2.5 and 15 tons. "The Great Pyramid of Cheops, …a model of precision mathematics and construction, had once been covered in a skin of polished limestone and capped in beaten gold. In the crystal clear light of Egypt, it must have been almost impossible to look up it at certain times of day. Reinforcing perhaps the notion that this was the vessel through which the dead pharaoh passed into the sun and the realm of the gods." The plateau on which the pyramid is located also houses two smaller pyramids and the Sphinx. This area has been denominated to be a Unesco, World Heritage Site.


Many archeologists have attempted to make the case that the Sphinx was constructed 8,000 years earlier than the pyramids by a people that have vanished from the face of the earth, a lost civilization. Furthermore, some of this esteemed group even feels that this lost civilization came from Atlantis. There argument seems to go something like this; this is no question that there is substantial water derived erosion on the Sphinx and that in comparing this damage with the pyramids that surround it on the Giza Plain, there is no similar damage to the pyramids. Moreover, the area in which the Sphinx was built receives no appreciable amount of amount and has been left in this parched condition for over 2,500 years. Thus, they query, how do you get water damage on something when it doesn’t exist on surrounding structures supposedly built at the same time? A good question.


They indicate further that you would have to go back another 5,000 years to find an epoch where the Plain received enough water annually to find erosion. The Egyptian Empire did not exist, as we know it in that era and thus the theory of a lost civilization. The argument makes a lot of sense taken in a vacuum, but many of today’s scientists do not believe in that theory and debunk it by showing the results of carbon dating tests which seem to indicate that the Sphinx and the Giza Pyramid co-existed. As to the erosion argument, they indicate that the Sphinx was never in the same league as the pyramids and that it was kind of ancillary project to keep the Pharaohs company when they died but was not a life or death type of critical element. Thus, these people indicate that the Sphinx was a cheap throw-in created out of second-class material that was already weathered by water when it was quarried.


On the other hand, with civilization totally encircling on this area, it is only a matter of time before erosion that is more serious begins to occur. To celebrate the millennium, the Egyptian Government brought in French musician, Jean-Michael Jarre to create a moment to behold for ushering in the millennium. The audience that watched the show numbered in the tens-of-thousands, not including the chorus, which contained a small chorus of 1,000 singers, dancers and musicians. In addition, giant images of Pharaonic Eye of Horus were shown on the side of the Giza pyramids by a series of powerful projectors. As the hour struck twelve, a helicopter was scheduled to lower a copy of the structure’s original golden sheath cape onto the Cheops Pyramid. While the rest of the floorshow went off without a hitch, ultimately cooler heads prevailed and substantial potential damage was avoided by eliminating the golden sheath cape.


Astronomically almost perfect, The Cheops Pyramid was aligned so that its northern portion almost exactly faces due north. As a matter of fact, not only is this piece of information true of the Cheops Pyramid, but it was literally accurate for the other eighty pyramids that have been found as well. Scientists have had a difficult time figuring out how the Egyptians ever discovered where true north was. Some had said that the pyramids were aligned in symmetry with the North Star however these delusional experts soon became the laughing stock of the scientific community when the archeologists were informed by the astronomers that in the sky over Egypt 4,500 years ago, the North Star was not even visible. Kate Spence, an Egyptologist at Cambridge University attempted to determine what caused a modest inaccuracy in direction.


By recreating the sky that would have appeared to the Egyptians of that time, she was able to determine that by lining up the star Kochab in the Little Dipper and the star Mizar in the Dipper in certain years you would get a line pointing directly to true north. Because of earth wobble, she indicated that these same stars did not always point in that direction and, thus the reason for the slightly skewed fronting, but how in the heck could the Egyptians ever have figured that one out?


Mysteries beget mysteries but there is not much question the Cheops Pyramid weighs in at about 6-million tons and it rests directly on latitude 30, an astronomical work of magic that would have been even a stretch to these early and highly dedicated astronomers.



The Great Lighthouse at Alexandria

The City now known as Alexandria was said to be founded in 332 B.C. by Alexander the Great when he was only 23 years of age. Alexandria, named after the young conqueror, achieved substantial status as the center of the Hellenistic Empire, which then spanned Europe and Asia. Although, Alexander renamed the city, he was not really its founder, as civilizations had existed here for thousands of years. In Alexandria’s, later years, with the ascendance of Rome, the city was still was no less then the second most important city of the world. It was here in Alexandria that the trollop Cleopatra had affairs with both Julius Caesar and Marc Anthony. This miraculous city of the ages became covered by ash, dirt and pollution over the years, and the modern city of Alexandria was constructed directly on top of these ruins by the Ottoman Empire in the 19th century. It was Alexander’s generals that began the Ptolemy dynasty and went on to rule Egypt for the next 300-years.


"Alexandria was once the leading city of the ancient world, a powerful commercial scientific, and literary center. Its international reputation for sophisticated scholarship centered on the library of Alexandria, which contained the intellectual riches of Mesopotamia, Persia, Greece, Rome and Egypt. Called the Mouseion – Shine of the Muses – it was a meeting place of some of the greatest minds. There, Euclid wrote his work on elementary mathematics, and astronomer Eratosthenes gave the first precise estimate of the Earth’s circumference, more than 15 centuries before Copernicus and Galileo were born." ()

The city could boast of many wonders, and when the Arabs conquered Alexandria in 640 AD, they were able to make the statement that they had taken a city containing "4,000 palaces, 4,000 baths, 12,000 dealers in fresh oil, 12,000 gardeners, 40,000 Jews who pay tribute, 400 theatres of places of amusement." Everywhere one digs foundations in Alexandria, another ancient part of the city reappears causing substantial delays while government bureaucrats and archeologists fight over whether the exposed site it too historically valuable to be destroyed by the construction pylons. Moreover, when times are good, which they now are in Alexandria, developers begin demolishing the older structures at an ever-increasing crescendo hasting the city’s rebuilding. Usually, the historic sites come up second to the needs of this bustling, modern city. However, plans are underway to restore many of the fabled monuments in Alexandria. Furthest along are the restoration plans for the "Library" and between the Egyptian Government, Unesco and private donors, over $172 million has been contributed to a learning center that is almost completed which will ultimately house 8 million books, a science museum and planetarium.


As were indicated previously almost every time an excavation takes place, some monument from the era of Cleopatra was discovered and such was the case with the Alexandrian Library, one of the true wonders of ancient civilization. It was also discovered that beneath the site was probably the ruins of the Ptolemaic palace. Unesco gave the archaeologists only about two months to do a study of the property and then continued the five-story deep digging and foundation building. Sadly, for our progeny, whatever was there is now relegated to history. Such is life in Alexandria today, the entire floor of the city; twenty feet down are ruins dating back to ancient times. It has become a contest between developers and archeologists to see who gets there first.


Moreover, Pierre Cardin has also joined the restoration game and unbelievably he has excellent credentials as a Unesco peace ambassador. Cardin, 79 years old, is also head of a worldwide fashion, cosmetics and food empire that has a history of creating grandiose projects. "He once staged a fashion show in Moscow’s Red Square for 200,000 people, used the gardens of Beijing’s Temple of Heaven as a catwalk and has opened boutiques in Vietnam and Latvia." Cardin is obsessed with The Great Lighthouse at Alexandria and is planning a "concrete column covered with mirrored glass that will rise 435 feet and cast colored light beams 34 miles out to sea from the tip of a jetty overlooking Egypt’s Bay of Alexandria when it is completed.


About 16.500 computer-controlled lights inside will illuminate the obelisk. Powerful laser beams will pierce the darkness of the sea, before swinging back to light up Alexandria’s historic monuments. Constructed of a special concrete designed to withstand earthquakes and tidal waves, its facades will be inscribed with Egyptian hieroglyphics, Greek, Latin and Arabic letters. An archaeology research center and cultural facility with an amphitheater also are planned for the site." During the day, the tower will be a vast reflecting mirror creating an image of the surrounding city, but by night, there will be 40 light shows, consisting of multi-colored symbols comprising all of the colors of the rainbow along with long-distance beams. There is already a completed model of the obelisk and the project is only waiting for final funding to begin construction.


The Lighthouse at Alexandria was the last of the lost six wonders of the ancient world to vanish from the face of the earth (). It was built in the third century BC when Ptolemy II (Ptolemy Philadelphus) determined to finish the dream of his father, Ptolemy I (Ptolemy Soter) and construct the world’s tallest lighthouse. Moreover, it was to be no less than forty stories high () with an enormous lantern, mirror and a statue of Poseidon at its pinnacle. The lighthouse and its beacon could be seen from 30-miles away and it was indeed an awesome sight when visualized for the first time.


When finished, this was an achievement of enormous proportions for the time, and travelers from all over the globe came to pay it their respects and gaze at it in awe. It became such a global monument that many famous artists painted pictures of the "Lighthouse" in spite of the fact that most had never seen it. To put the height of the edifice in some perspective, the largest lighthouse ever built in the United States was the "Cape Haterus Lighthouse" which is only one-half the size of its former counterpart in Alexandria. Furthermore, architects accept the fact that the "Lighthouse" was the first skyscraper in history. However, it was the Ptolemy’s, father and son, who had succeeded to the Egyptian thrown after the early death of Alexander the Great, who had insured its completion.


Plutarch reported Alexandria and the lighthouse’s background in his book, "The Life of Alexander", in which he stated that, "The conqueror (Alexander) being so taken by Egypt decided to found a large and populous Greek city, which should bear his name. While in the process of concluding negotiations with his architects on the location of the lighthouse, he had a vision. In the night, as he lay asleep, he saw a wonderful vision of a man with very hoarylocks and of venerable aspect appeared to stand by his side and recite these verses: "Now there is an island in the much-dashing sea, in front of Egypt; Pharos is what men call it." Alexander, ever on the move, having new worlds to conquer did not hang around long enough to see his vision to fruition and never could have dreamed that his revelation would become the seventh wonder of the world. The "Great Lighthouse" was completed in the year 285 BCE and inaugurated by Ptolemy II.


The lighthouse was built in three stages, each dramatically different in shape. The lowest sector was built in the shape of a square, the second level was octagonal and the uppermost was circular having a ramp for access to its pinnacle. This ultimately led to a spiral staircase, which could be accessed by beasts of burden that in turn would carry the fuel to run the beacon at the ultimate top of the structure. This creates an historical controversy; although the fuel to generate the light's beacon was most probably wood, on the other hand historians are certain that there was no wood within numerous miles of the lighthouse’s site. The only solution to this enigma was probably solved by barging wood from African forests located far up the Nile or through the harbor’s (Magnus Portus) Mediterranean access from Cyprus or an adjoining Island. However, in either circumstance, fueling the beacon was unquestionably a logistical nightmare. During the night, the fires rays were picked up by a gigantic mirror in order to guide the shipping safely through the harbor, but during the day, the wood was allowed to smolder, thus pointing the true direction to Alexandria’s Harbor.


The structure was written about by numerous prominent historians. Arab historian El Massooudi in his book "Pastures of Gold" wrote the following: "One of the most magnificent of what we have seen of Alexandria’s wonders is the lighthouse which God the Mighty and Sublime has led his servants to construct as a wonder to the beholder and a guide to the voyager, without which he would never reach the shores of Alexandria. You can see it from a distance of seventy miles from the city …From within, it is very spacious with many corridors, entrances and rooms to the extent that one can easily lose one’s way inside it…Atop it is a mosque said to be blessed where people pray to obtain benediction…We prayed in the aforementioned blessed mosque (this structure was built in 868-884 by the Sultan Ibn Touloun) and saw the wonders of its construction to which no description can do justice." What is amazing about this account was the fact that it was written in 956 AD, 1200 years after the lighthouse was first constructed. The lighthouse would eventually remain in almost continuous operation for over 1700 years, probably a record that will never be equaled for commercial construction.


Another account, but quite a bit less enthusiastic, was noted by Rihlat Ibn Jubair Fi Misr Wa Bilad el Arab wa el Iraq wa el Sham was Saqaliyya, "The Travels of Ibn Jubair in Egypt, the Arab Countries, Iraq, the Levant and Sicily in the time of the Crusades": "At length we reached Alexandria on April 5, 1326… I went to see the lighthouse on this occasion and found one of its faces in ruins. It is a very high square building and its door is above the level of the earth. Opposite the door, and of the same height, is a building from which there is a plank bridge to the door; if this is removed, there is no means of entrance… It is situated on a high mound and lies three miles from the city (the city had expanded by this time) on a long tongue of land which juts out into the sea from close by the city wall, so that the lighthouse cannot be reached by land except from the city. On my return to Egypt in the year 1349, I visited the lighthouse again, and found that it had fallen into so ruinous a condition that it was not possible to enter it. Al-Malik an-Nasir had started to build a similar lighthouse alongside it but was prevented by death from completing the project."


The statue that stood at the top of the structure was most probably a statue of Zeus but any number of other possibilities have been conceptualized including the prospect of dual statues of Castor and Pollux, Zeus’s twin sons. The fact that so many uncertainties continue to plague historians about each and every facet of the lighthouse is peculiar in lieu of the fact that it stood for longer than any of the other world class ancient structures with the exception of the pyramids. Moreover, while only the exterior of the pyramids were open to public viewing, the lighthouse as witnessed by tens of thousands of sailors, passengers and residents of Alexandria as well as tourists from other neighboring cities. Its mere survival for that many centuries speaks volumes for the architectural prowess of its builders and the planning that must have gone into the creation of this massive structure. Even more startling is the fact, that Arab historians have reported no less than 22 earthquakes that have struck the structure during the period of its existence. One of the explanations for its longevity was the fact that the structure was highly regarded by the Arabs, and the Egyptians especially considered it to be a national treasure. Special care was taken to insure that cracks in the lighthouse were promptly fixed and masonry loses were immediately repaired.


This lighthouse was critical in guiding shipping through the crowded port of Alexandria, especially during inclement weather. It was in use for over eleven centuries and acted as an enormous aid to transport throughout the Mediterranean. Eventually the structure was inundated by a series of regional earthquakes and in the late 14th century, became a mere shell of its former self, ultimately being replaced by a fort built partially out of the lighthouse’s debris. The lighthouse soon became known as the Pharos of Alexandria. Pharos was the name of the oblong island in close proximity to Egyptian mainland, on which the lighthouse was constructed. In addition, the structure became so famous that the term Pharos became the root word for lighthouse in Spanish, French, Italian, as well as other languages.


Eventually, treasures were found in the sea around the lighthouse’s original site as early as the 1960’s, and it soon became a popular scuba diving location. In approximately 20 feet of water or less you could come face to face with sphinxes and enormous statutes. In the 1990s, while the site was being used for filming an underwater movie on Hellenistic Alexandria, the Egyptian director found artifacts that could only have come from the lighthouse itself, and filming was halted. Soon state-of-the-art techniques were used by archaeologists to peer through the murky waters and see what was below. An advanced magnetometer, created for the French Military that was designed to plot variances in an area’s magnetic field, has been licensed to explorer Franck Goddio who has filled his 70-foot catamaran with that and other highly sophisticated electronic devices. Thankfully because of Goddio’s work along with that of others, over 7,000 items have already been classified that were extracted from the sea at that location. Some of the items that have been identified are colossal stone statues of pharaohs, and 28 sphinxes, obelisks, dozens of decorated columns and architect blocks, a male stature, 30-feet tall, a statue of Isis (they say that it was this statue that stood in front of the lighthouse, the crown weighed 2 ½ tons, the head 3 tons and the torso 17 ½ tons.), along with smaller objects of art.


Alexandria was one of almost twenty cities built during the reign of Alexander the Great bearing his name. None of the others exist today, but because of the detailed work that went into the planning the layout of both the city and its harbor, it became known as a city for the ages. Alexandria was a truly planned community and the harbor was an architectural wonder during its time. Both the city and its harbor required an extensive canal system to insure that the mud and silt that normally would be carried down the Nile would not build up and clog the port. The canal connected Alexandria to both the Nile and the Mediterranean in spite of the fact that the city was built over twenty miles from the confluence of the Nile Delta and the Mediterranean Sea.


The lighthouse was ultimately destroyed by a series of earthquakes between 1303 and 1349. Moreover, the earthquakes that struck the region in the fourteenth century were very powerful and the land in the that general vicinity sunk over 20-feet, engulfing many other fabled ruins including the "Royal Quarters" that was located on the lost island of Antirrhodos, where Anthony courted Cleopatra. These sumptuous quarters were so enormous that they fully took up 1/3 of the old city of Alexandria. "At a depth of no more than 10 meters, you will find more than 2,300 years of history. We follow the strata downwards, from modern Alexandria to the Ottoman period, the Mamluks, the Fatimids, Byzantines, Romans and finally the Greeks." In order to promote tourism, the Egyptian Government has left most of the objects in place that were found submerged near where the lighthouse used to stand. They are now heavily promoting scuba diving, glass-bottomed boats and submarine tours of the area in an underwater archeological park.




Debtor Japan

Japan today is in debt in excess of 500 trillion Yen, which is in excess of the Country’s gross domestic product. Thus, Japan is by far the biggest debtor nation in the world () and owes 114% of its annual gross domestic product, surpassing the United States, which owes only 60% of its GDP. () Japan’s debt service eats up approximately 22% of their budget while, thanks to a booming economy the United States has been able to pay its budget down a tad and has very optimistic expectations on this score for the future.


However, the Japanese have always shown an inner toughness that is best exemplified by their craving for Fugu. "Fugu is a blowfish, having an organ containing a toxin so deadly that only specially licensed chefs are allowed to prepare it" (). Supposedly, it is the delicious flavor, not the macho thrill that draws consumers. Three hundred people a year are killed by this concoction and it is not a very pleasant way to go. The Fugu, paralyses the muscles while the victim is totally conscious, and gradually suffocates the epicurean by stopping all movement in the lungs. Imagine going to a trendy New York restaurant for fish and not knowing whether you are going to get out alive or not. It has been said that if you can handle Fugu, you can handle anything and we would certainly be the first to agree.


This is the same country, which discovered that Ginko Seeds are edible. This takes took an awful lot of courage because at best because the ripe fruit of the Ginko smell somewhat akin to that a drunk who has had too much to drink and has just thrown up all over himself. However, if you can get by the horrible stench, Ginko tastes great and is especially good roasted. Another tasty dish is mountain potato, "a root that is eaten raw and grated, often with raw tuna and a raw quail egg. When a mountain potato is grated, it secretes a translucent slime that is the exact consistency of mucus, yet is totally without flavor." () Then there is the ever in demand, natto, which in reality means nothing more than fermented beans.


Strangely, even the Japanese think that natto is disgusting and in better company it has been described as vile. However, seaweed, which is regularly served up in Japan, has substantial nutritional value and is quite tasty. And the Japanese have a tendency of eating their food raw, there is nothing worse than Shiokara, probably squid which many have said tastes even worse than natto. In addition, special from Shimpei Yamashita of Stanford University is the diet of the first Japanese Women Astronaut. She is going to take along, "fish, newts, jellyfish, frog eggs, sea urchins, fruit flies and worms." You can certainly see why she is so anxious to be lifted off for part unknown. Other great Japanese delicacies are Ungai, a fresh-water eel, Uni, urchin roe that are small eggs, which are said to taste like low tide if they are not fresh ().


The global economic environment has grown more volatile in nearly every respect, including exchange rates, interest rates, and private capital flows. While banks have gained economic importance in many developing countries, they haven’t expanded their capital base to reflect their increased size and the changed nature of the game. Sadly, most lack expertise in evaluating credit risk, and state-run or state-influenced banks, often disregard it and are more interested in the political implications than sound banking practices.


"‘The new finance is like a highway’, says Deputy U. S. Treasury Secretary Lawrence Summers. ‘It’s more efficient, It gets you to where you are going better, but the accidents are worse.’" as quoted in the Wall Street Journal (5/7/97). The Japanese and Thai debacles demonstrate that the accidents are particularly devastating when there is an insufficient separation among economic sectors and a lack of transparency within those sectors. The Japanese system is built on symbiotic relationships among insurance, banking, service and manufacturing companies. Interlocking directorates and credit arrangements make this system highly effective in good times and vulnerable at the infrastructure level in bad times.


After World War II had ended, the then dominant Japanese industrial groups became commonly known as "keiretsu," which translates as exactly that, "industrial groups." These were offshoots of the conglomerates known as "zaibatsu" (financial cliques) that predated the war and were composed of the likes of Mitsubishi, Sumitomo and Mitsui. Each keiretsu-zaibatsu had as an integral element of its makeup, a trading company (sogo shosha) that was in reality, an intelligence-gathering network for the group.


Until recently, competitors found it impossible to penetrate the defenses of the keiretsu. Japanese post war success stories that emerged independently of the keiretsu-zaibatsu, such as Cannon, Honda and Sony that have emerged without being part of a keiretsu-zaibatsu have primarily succeeded overseas. The keiretsu, successfully lobbied for protective legislation, and when that turned out not to be enough to keep local and foreign interlopers at bay they added collusion among members of their group to their arsenal of methods of keeping foreign interlopers off the playing field. The government, which had its own intimate relationship with the conglomerates, rarely raised an eyebrow.


Moreover, for many reasons, the Japanese Government would not be foolish enough to oppose the keiretsu simply because of the fact that they keep the taxes flowing into government coffers, and they have made Japan’s balance of payments the largest in the world.  Although this is changing dramatically, until recently, Japan also had the world's lowest unemployment rates (literally zero) and an enviable social benefits system. Japanese interest rates have been negligible for years, and literally, the only way they can now decrease it is by having the lender pay instead of the borrower.


However, because of the lack of flexibility within the Japanese Central Banking System, although it did not work the way that it was intended, it was not only the regulations that related to the conglomerates that had became written in stone. There was no fiscal flexibility to reposition within the system. Social patterns such as education, extreme immobility, fanatical chauvinism, religious homogeneity and almost paranoid distrust also fell into an indelible social blueprint:  strong work ethic, massive savings rates, along with strong distrust of foreigners.


With both the business side of Japan’s equation and its social sector varying little over time, there was certainly no reason to change the government, and Japan remained virtually a one party system almost until the last decade. Thus, it was expected that these three components would continue to work arm and arm to perpetuate national economic success. Ultimately, however, Japan's complacency and inflexibly was its ruination.


When one of the members of a Japanese keiretsu has financial problems, the remainder of the consortium has historically been expected to come to its assistance. Thus, if the problem became too substantial, the result could be catastrophic. Japanese banks and insurance companies, however, are large holders for their own account of substantial amounts of real estate and all have massive securities portfolios. Each in turn lends to others in both of these spheres. A massive bank or insurance failure that results in the liquidation of these assets could jeopardize other consortia, thereby affecting the entire system. Japan has indeed created the venue for the ultimate "domino effect."


In another allied development which graphically illustrates how dramatic the economic transformations in Japan have been recently, the Tokyo Mutual Life Insurance Company which recently went down the tube, paid its usual visit to their friendly banker for supplementary funding, Daiwa Bank Ltd, who had been misguidedly keeping this sinking monolith alive for decades. Daiwa Bank determined that literally, the time had come where it was either them or us and intelligently came to the conclusion that it had enough and turned them down. This in turn led to the demise the highly regarded disaster, Tokyo Mutual.


This monolith with incomparably poor management was surviving in the usual fashion; do things the old fashion which we know doesn’t work, and when we run out of funds, go down the block and see our friendly banker to have him bail us out. While everyone knew that this was the way the system worked, nobody did anything about it because it had become part of an "old boy" network, which made everyone at the top comfortable. What happened in the insurance industry in Japan is probably a test case for disaster anywhere. As any normal insurance company will doing in adequately policing its portfolio is to invest the money it receives from policy holders into various activities that it believes will cause it to get a satisfactory return. The yardstick would be to have enough total income coming in to pay for the company’s overhead, to pay claims, and to show a profit.


However in spite of totally incompetent management, Tokyo Mutual Life Insurance didn’t do anything particularly different than any other company of its kind in Japan. Life was rather simple; Tokyo Mutual took in insurance premiums from its customers and used the funds to purchase stocks and bonds. In addition, it lent money for mortgages and dabbled in real estate for its portfolio account. This would have been an excellent scenario anywhere else in the world with the exception of Japan. Stocks, bonds and real estate have subsequently collapsed.


The Japanese stock market is currently at a 17 year low and if it was adjusted for inflation, it would be even more of a disaster. Bonds, which at one time, were paying satisfactory returns are now returning literally nothing as Japan is straining to get its economy humming again by dropping interest rates to near zero. The collapse in their real estate holdings has been even worse, because of the fact that many of the properties were mortgaged, most may be worth less than Tokyo’s equity, thanks to a moribund real estate market all over Japan. Thus, with stocks, bonds and real estate all in the tank, it is not at all surprising to see Tokyo Mutual go under. However, in spite of this awful scenario, at another point in time, Daiwa Bank still would have gone along with renewing and increasing the loan; not wanting to write their loans down to nothing. In Japan, this is no longer that time and there are no funds left for frivolous loans .


Tokyo Mutual is not at all an isolated case and all banks in Japan are facing similar problems with many of their clients. All major corporations in Japan, because of their interlocking relationships own stocks, bonds and real estate. However, although this has created substantial blood letting, the fact is, that for the most part, these corporations are investing their own money in these varying instruments. In the case of the insurance companies, they are investing policyholder funds. Thus, as the value of the portfolio goes down, they are less able to pay claims creating a situation where the insurer is left with nothing but red ink on his balance sheet. While corporate Japan is an accident waiting to happen, a hit-and-run driver who has left the scene without leaving his name has already hit insurance Japan.


"The problems of Japan’s companies and those of its banks are indeed intertwined. The banks have lent 353 trillion yen, or $2.79 trillion at current exchange rates, to Japanese companies according to data from the nation’s central bank. They have extended a further 8.4 trillion yen, or $66 billion, to local governments, most of which are effectively bankrupt. Of course, not all those loans are troubled, but the number of bad loans is increasing. And many are collateralized by assets whose values are now shrinking. Research by David Atkinson, a banking analyst at Goldman Sachs Japan, found 85 percent of problem loans are in the construction, retail, real estate and financial services sectors, which accounted for 62 percent of Japanese companies and 56.1 percent of all domestic loans, as of last September. At current earnings levels, Mr. Atkinson estimates that it would take those businesses 150 years to repay their loans." ()

Japan is already virtually insolvent, in spite of their highly touted "balance of payments" surplus. Its trade balance is not the great panacea that it is trumpeted to be, due to a highly bloated bureaucracy that has caused general and administrative expenses to escalate out of sight. While the Japanese balance of payments runs substantially on the plus side, the margins that it generates are hopelessly thin. Were the profits generated from exports to be subtracted from capital losses incurred in foreign investments in the last several years, the balance sheet would bleed blood red ink.


By contrast, the United States runs a significant deficit balance of payments, a substantial part of which is derived from inter-company transactions. Were we to subtract these transactions from the deficit, the figure would amount to a fraction of a percent of Gross Domestic Product. The profits that have resulted from these trades have been substantially in the black for recent memory. Therefore, while we shudder each month when the trade figures are released, we must comprehend two things: first, the trade deficit in relation to the GDP is lower now than it has been for many years; second, the so-called deficit is a function of our purchases of low margin imported items and the our sale of exported high margin items. (For example, let us say that pre-tax margins in the United States were 30% and in Japan 5%. Let us say that we send Japan $5 billion in goods and they in turn send us $25 billion in goods. In this example, the United States would show, in theory at least, a profit of $250,000 on the transaction). While this example was not meant to be statistically accurate, it is certainly more right than wrong.


When bank loans go sour in the United States, packages of similar assets are securitized and resold to the highest bidder.  The lending institution receives at least something for its non-performing assets and knowledgeable people who may be better equipped than the seller to make the package perform have the opportunity to earn money on it. This, in fact, is how the U.S. Government solved the Savings and Loan crisis.  Uncle Sam sold enormous packages of savings and loan assets to developers, who frequently made the assets perform by investing more money in them.


The same method of operation keeps the entire credit card industry churning along.  Every day, banks put their non-performing credit card debt out for bid.  Professional collection firms take on the bad accounts and historically have been able to generate a tidy profit for themselves.  Most importantly, the inventory moves. Stale goods are not sitting on shelves waiting for some obscure buyer to walk in and say, "that is exactly what I have been looking for." Goods are sold not purchased in the real world, but in Japan, they lay in inventory getting moldy because the system is more interested in its own preservation than being fiscally responsible. Here, seller holds a fire sale if need be, and the proceeds are used to buy more better inventory.


Not so in Japan.  When Goldman Sachs stepped up to the plate to buy non-performing Japanese debt, they got a nasty surprise in the form of the yakuza, (gangsters) which believe they have a vested interest in all Japanese property. Unimaginably, there are some 81,000 Yakuza operating in Japan.  They are involved in "running drug-trafficking, gun-smuggling, prostitution and illegal real estate dealings." Even the United Nations is concerned about the yakuza, and Pino Arlacchi, executive director for drug control and crime prevention, indicated that "Japan has one of the most powerful criminal organizations in the world and an absolutely inadequate judicial structure to fight it."


The yakuza deeply resent attempts to collect "their" loans. This resentment expresses itself as, for example, acts of arson against the home of the head of the collection company.  Many feel that the Japanese banks have already dumped substantially all of their non-yakuza under-performing loans.  They are stuck with Mafia partners on a large part of what remains. This makes a dreadful situation substantially worse and bodes ill for any short-term solution.


In fact, the situation is likely to get worse.  Under normal circumstances, higher interest rates will cause a currency to rise and lower interest rates will cause it to fall. If Japan's currency were not freely trading, this would not have such an enormous effect.  However, the Yen is internationally re-evaluated every minute of the day in relation to all other currencies.  At any given time it is selling at approximately what people around the world believe that it is worth. The Japanese Government cannot influence the Yen's movement unless it intervenes, that is, trades the Yen using central bank funds.  Assuming that intervention is only a temporary panacea, the only way to make a currency fall is lower interest rates and is a very difficult job when the rates in Japan are effectively already at zero.


This rigidity is a major chink in Japan's ability to counter intense competition from the Pacific Rim in currencies that several years ago were devalued as much as fifty percent. Japans more stable currency has permitted them to pay relatively reasonable prices for raw materials, which they import at a higher volume than any other country on earth (with the possible exception of China). As an example, petroleum and construction products must all be imported, so this minor advantage evaporates when held up to the light of day.  The more that is produced the more that must be imported.


Because of the fact that Japanese companies work on historically narrow profit margins, enormous positive imbalances within the import export figures are totally misleading. The tighter the margins, the less competitive that the country becomes and even worse, the easy it is for country’s with depressed currencies to compete with the Japanese. Thus, additional disruptions such as what many see as the inevitable devaluation of the Chinese currency could well cause a run on the Yen unless the system’s excesses, that have gone un-addressed for years within the Japanese Banking System are addressed. Synthetically glossing over these serious problems as Japan has done in the past would be a blueprint for a national and potentially global monetary disaster.


One day after an announcement by bank regulators that the country’s banking problems were fading, the Financial Times reported that Tokai Kogyo had become Japan’s first listed construction company to collapse after its banks refused to make it more loans. This was not just an ordinary failure; it was the eighth largest bankruptcy filing in history of the country and the second largest in the construction industry.


Tokai Kogyo’s failure sent the stock market into retreat because it was a harbinger of billions of dollars in additional unreported non-performing loans. Moreover, this case, more than others, reveals the frightening consequences of a continued cover-up by bank regulators. The amount of money involved is staggering; other construction companies are in the same or worse financial situation, and Tokai Kogyo’s prime bank, Hokkaido Takushoku, already has one of the worst loan records in the country and may well be pushed over the brink. Talk about transparency, inconceivably, after the failure was announced and the investigation begun, it turned out that this loan was not listed as in default at any of the many banks with which the company did business. Japan has a controllable problem; yet, their banks do not even write off the massive bad debts of large defunct companies. 


"The heart of the mess, which developed nine years ago after real-estate prices collapsed, is the huge amount of bad debt that remains on lenders books. Although banks have taken write-offs of $592 billion since 1992, new bum loans pop up as fast as they write off old ones because weak borrowers are going broke at a record pace. And banks may have to pony up another $458 billion to cover shaky loans they haven’t provided for, estimates credit analyst Koyo Ozeki of Merrill Lynch & Company. The result is that lenders still have more bad loans on their books than they did five years ago. And when the banking czars go home next month, Japan will still have a bad-loan problem larger in scale than the old U.S. Savings and Loan crisis was. Failing to fix it means the World’s second-largest economy is vulnerable to a destabilizing crisis, like a wave of financial-institution collapses here that had U.S. leaders sweating bullets two years ago. But even without a collapse, the undercapitalized banks are cutting back on credit to promising young businesses, while keeping their weakest borrowers alive with new loans to avoid taking even-deeper write-offs. This avoids short-term pain, but cripples Japan as a whole by allocating capital where it is least productive."

One can only wonder how the Japanese Government will ever solve their other economic problems if they can’t get over the simple hurdle of letting businesses that are unprofitable close their doors. The government of Japan has sent a loud, clear message that the system will remain in chaos and is totally averse to transparency. A series of financial scandals and corporate bankruptcies have left a mark on both the economy and on the economic expectations of the Japanese. Since World War II, a benevolent government employed and cared for its citizens. Despite its glaring inconsistencies, the system appeared to be viable and trustworthy.


Eventually, however, inflated markets and bloated bureaucracies brought the Japanese economy down.  Interest rates on Japanese Government Securities hit record lows with the benchmark 10-year bond selling to yield 1.435%. According the Wall Street Journal on May 4, 1998, new records were set all over the place. "The new yield, which compares with 1.560% in early January, is by some estimates the lowest recorded globally in about 400 years, exceeded only by long-term government-bond yields in Europe during the early 17th century."  Fear promulgated increased savings and the excess of savings promulgated a very stagnant economy bordering on recession.



The International Institute for Management Development holds itself out as the global expert relative to national competitiveness.  In its 1998 survey, Japan almost dropped of the chart. This was the bottom of a five-year slide from 2nd to 9th to 18th place. The United States maintained the top slot along with Singapore and Hong Kong. Parenthetically, Russia came in last out of the 46 countries analyzed, contested in its incompetence only by India and Brazil. Corruption, bureaucracy and lack of reforms were the key drags on success, according to the World Competitiveness Yearbook



As Japanese companies began failing, the entire scenario began to receive larger than life publicity because the prosecutor's office began to make arrests of high-ranking Japanese officials. As the number of arrests increased, the populace began to realize just how listless and corrupt the system had become.  Reality soon took a harsher tone.  There were layoffs, not only of temporary workers, but also of permanent workers, an economic sacrilege in the Japanese culture. Not knowing whether they would continue to be employed, people began saving even more of their money, and Japanese domestic goods went un-purchased sending the economy into a recession. As this vicious cycle spiraled out of control, The Japanese Government presented an economic package that, they believed would restore much of the former optimism. The program, which was considered by many economists to be both too little and too late, was tinkered with and presented to Parliament repeatedly without becoming accepted. When the chips were down, Parliament found itself unable or unwilling to forge a compromise.


The number of people employed in Japan plunged and the number of people unemployed increased. The ratio of jobs to applicants fell to its lowest point in over a decade.  Unemployment hit an all time record in February of 1998 and has continued to rise ever since. Even these grim statistics did not accurately reflect reality.  Like our own unemployment figures, the Japanese do not even count the workers who have given up looking for a job. However, as bad as things are, they could always get worse. In order for the country to avoid bankruptcy, save their banks and become economically competitive again, the jobs sector will have to take the big hit, but without national unemployment insurance, this will cause substantial dislocation. "Andrew Smithers, Chairman of Smithers & Company, a fund management advisory service, goes so far as to argue that the effect of fundamental corporate restructuring would be so devastating that it is not a practical solution to banking problems. He contends that to achieve internationally competitive rates of return on their capital, Japanese companies would have to reduce employment costs by 40 percent.


Financial experts all over the globe began to worry about what was going to happen to Japan and what was the meaning of the dire statistics that were being produced. Whatever the data may be, the country’s unemployment is at its highest in measured history, raises are almost non-existent and overtime is a thing of the past. Moreover, consumer confidence has been measured by pollsters to be at an all time low and as a result, Japanese capital spending is taking the proverbial gas pipe. The incentive programs enacted by the government have only resulted in increased savings rates. The people of Japan seem to believe that stormy seas are lying ahead and have battened down their financial hatches to better ride out the inevitable economic storm. This year, as been the rule lately, Japan almost certainly faces another negative growth of its GDP.


"That has given to the single biggest culprit in the growing debt problem: falling tax revenue. The Ministry of Finance anticipates about 50 trillion Yen in tax receipts this year, 16% less than the government collected in 1991, when the economy began slowing. That has led to increasingly large spending deficits: This year’s should top 8.5% of annual output. The shortfall has been funded with borrowing, and the result is a ballooning debt."

"In many ways it resembles the U.S. government’s during the 1980s – only far worse by many measures. Evan at its peak, the U.S. debt never surpassed 100% of annual economic output. Japan’s gross liabilities – what it owes without considering government assets, including local-government debt that the national government might have to honor – is 130% of annual output."

"David Asher, an economist with the American Enterprise Institute in Washington, figures that the U.S. debt was about four times annual tax revenues at its peak, around 1992. This year, Japan’s debt will be 15 times revenues, "It’s off the charts," says Mr. Asher."

While Japan desperately attempts to buy time to heal the wounds caused by a sort of national hubris, it continues its global over-reaching, exporting economic chaos in the process. Just as the schoolyard drug dealer "hooks" his victims with an inexpensive fix, certain Japanese elements of the global banking system create a dependency by making their product which is money, so inexpensive and so readily available that even though there may be no particular need for additional funds any particular point in time, this hyper-availability creates a borrower's euphoria that more is better than less and there will be no problem ultimately paying of the additional financing when the loan eventually comes due. Japanese bankers, when they enter their lending frenzy stage, have created an almost Satanical environment where reason seems to fly in face of a potential "better-life" with almost no thought as to how this money will be repaid and the penalties for default. However, this is the way success has been measured in Japan, by the gross number of loans made by lenders, not by the borrowers ability to repay. The competitive bank feeding frenzy when egged on by domestic cutthroat competition, creates an environment where logic is thrown to the winds and the potential to make profits is ceded to sales, not profits.


The Bank for International Settlements reports that Japanese banks account for 34.7% of the $763.5 billion total bank lending in the Pacific Rim, excluding loans made within Japan, but including loans to quasi-public institutions. Japanese banking institutions extended $37.5 billion and 53.4 percent of all foreign loans to Thailand, $22 billion and 39.6 percent of all foreign loans to Indonesia, and $87.5 billion and 42.2% of all foreign money lent to Hong Kong. The exposure that they have admitted to in the Pacific Rim is close to $400 billion in economies and currencies that have already collapsed. Countries without the resources to repay the Japanese will have to make good their debts in currencies that have depreciated substantially against both the yen and dollar, the two currencies in which repayment is usually made. The vast disparities in valuation between the Asian currencies and the yen and dollar have resulted in steep increases in the principal and interest of these loans, making repayment virtually impossible.


When the inevitable economic slow down hit, bankers were undismayed. They simply exported their keiretsu generated "bubble economy" to the rest of Asia by buying their way into markets with low rates and economically imprudent loans. Ron Chernow, writing in the Wall Street Journal reported that, "Before long, the lending had assumed proportions that begged description. From a mere $40 billion in early 1994, Japan’s Asian lending ballooned to $265 billion with $87 billion stored up in Hong Kong alone". Bankers fought with each other to be first in line to put on the books some of the worst loans ever made by man since a Chicago Bank put the mortgage on Mrs. O’Leary’s barn the day before the Chicago Fire. In doing so, this excess of capital overheated economies that did not have the infrastructure to absorb the vast amounts of money being thrown at them, and the countries were left with severe dislocations in their economies. This type of lending was somewhat akin to giving firewater to the American Indians who were not only unused to the substance but were highly reactive to it as well. It has tendency of creating a time bomb that has a tendency of exploding at the worst of all possible times.


Japan’s insatiable bankers by making loans to people unable to effectively use the money are no less guilty of creating world chaos than the highly criticized international lending organizations such as the World Bank and the IMF who historically have thrown money at emerging countries for projects that had been ill conceived and unnecessary. When the smoke cleared on these loans, all that had really taken place in those instances was that the third world borrower’s despotic leadership had pocketed the majority of the funds and left the countries with depleted treasury's and a lower standard of living. The only difference between the two is that the scars left by Japan will be "skeleton buildings" and cranes while the largesse of the World Bank and IMF are factories the don’t turn out anything and dams that have injured marine life while not producing energy. Private and public sector blunders create the same type of damage, they just pick differing types of projects on which to ply havoc.


Indications are that the Japanese economy will continue going down the tube, making the region’s loans denominated in dollars more and more expensive. The yen will probably be forced lower in order to increase exports to make up for the lack of spending in Japan’s home market. On the other hand, if the yen stays the same or goes up, it will more and more difficult to make repayment in the Japanese currency. Thus, the scenario for the Japanese banks is one in which you lose if you win, or you lose if you lose. Moreover, The International Monetary Fund’s bailouts of Indonesia, Thailand and Korea has forced not only additional belt tightening, but slowed exports to these countries to a crawl. Simultaneously, the entire Pacific Rim with their devalued currencies became tougher competition, and now it was no longer for a better life that they were striving for, it was for pure survival.


This "doomsday spiral" has already created a quantity of under-performing loans on Japanese books unmatched in global history. Only one question remains: Is Humpty Dumpty too big and too broken to be put together again? It will certainly not reemerge in its present form. In a world of economic niceties, Japan’s collapse will not particularly bring tears. Remember, Japan occupied almost every one of these countries, and there was certainly nothing benevolent in their despotism. We are in for some exciting times and with North Korea lobbing shells into Japan's airspace, who knows what is going to happen next?


Slightly over a decade ago, Japans people’s belief in their own economic invincibility led them to conclude that the land under the Imperial Palace in Tokyo was worth more than the State of Florida. Japanese banks were charging negligible interest rates relative to the rest of the world at the same time Japan’s positive balance of payments produced a strong Yen, and the world had literally become a Japanese bazaar. The country, financed by its banks, went on a purchasing and building binge that spiraled out of control. It effected not only the global real-estate market, but the world's art market as well.


But there were more than enough willing sellers around to accommodate the Japanese economic bubble. It seemed that everybody in America wanted to be the first to sell the Brooklyn Bridge to the clamoring Japanese investors, and figuratively they did just that, over and over and over again. Probably the worst of a series of dismal Japanese investments was their purchase of Rockefeller Center. After doing nothing but bleeding money for almost a decade, the Japanese owner walked away from a billion-dollar investment. Or how about the Japanese investor who paid tens of millions of dollars for a Van Gogh painting and didn't even have enough money to take possession of it after the auction had ended.


Japan’s society is totally male dominated and in this day an age, we believe that this too will take a heavy toll on the economy until they come to grips with their pre-historic thinking. Fully one-third of the women that responded to a Japanese survey indicated that they are regularly battered by their husbands, and in spite of this, there is really little or no assistance available for them. Japanese domestic violence has been ignored for so long that it does not look like any change is likely to come soon. One of the reasons that this is allowed to continue is that the Japanese society is fairly "closed mouth" over domestic situations, and women not only consider it to be a loss of face that they are be abused by their husbands, but that to complain about it would be even worse.


However, that is not the only problem, the Japanese population is rapidly aging and their social systems are fundamentally built on the family unit. Under other circumstances, this may have been alright, but over the next 50-years, it is estimated that Japan’s population will drop by as much as two-thirds. This will not allow a substantial enough tax base to provide assistance to an aged population. In the meantime, women in Japan are not normally part of the work force and without this essential element, there will not be enough workers available to maintain anything close to the status quo. Change comes hard to this region and it could also come too late.


Life is not always easy for Japanese politicians, as people in that country are extremely traditional and abhor change for change’s sake. The dramatic transformations that are now necessary to keep the Japanese ship afloat may require stronger medicine than the current administration is willing to prescribe. After what is now known as a policy double reverse, Prime Minister Ryutaro Hashimoto came to the conclusion that the only solution to the current crises was to have the public bail out the Japanese banks. The population rebelled against the fact that it was once again being asked to save an industry, which was mismanaged and basically non-competitive. The subject was so politically loaded that questions started to be raised as to whether this kind of thinking would bring down the government, but this certainly not the first time that public funds have been used to bailout inept Japanese management on the part of
Government bureaucrats. It was only five years ago that the Japanese public unhappily footed the bill for the political inspired, nonsensical bailout of housing lenders in a collapse that made the American Savings and Loan Crisis look like mere child’s play. .


The Japanese Government had kept the economy tuned by dreaming up infrastructure projects to keep the economy humming and maintain full employment. The social cost of full employment and jobs-for-life make the social conscientious Nordic counties look like they have been left behind in a time warp. On the other hand, while in Europe the various governments have taken on the responsibility for taking care of the people, in Japan that role is played by the corporations and families. They are heavily subsidized to accomplish this, and this government subsidy takes the form of almost zero interest loans.


Moreover, Japanese companies have not yet learned to put their money away for a rainy day any more than the government has learned not to spend what it doesn’t have. The government has historically relied on the knowledge that Japanese citizens are easily the largest savers on earth and that when the chips are down, the government has a very large piggy bank just waiting to be broken open. On the other hand, with slightly freer markets becoming available to savers in the country, how long are they going to continue being satisfied with literally no return on their money in a country that doesn’t pay interest. Should funds start leaving Japan seeking greener pastures, the money that bureaucrats have been counting on for a rainy day may no long be available.


As we have pointed out, the huge infrastructure developments undertaken in Japan are a direct function of their theory of full employment. In spite of the logic that the day when all of the accounts have to be settled may be just around the corner, government officials continue to believe that anything less than full employment will cause people to lose faith in their country, cause the public to even spend less than they are now creating a depression and causing the government itself to fall. Thus, for the foreseeable future and in spite of statements to the contrary, nothing dramatic is going to change in Japan. In addition, there is a growing demand by war prisoners, women and various countries in the region that were pillaged by the Japanese during World War II, demanding reparations. The Japanese may be able to stonewall this eventuality for a tad longer, but then the roof is going to fall in. Japan has done little in the region from both a psychological or financial to undo the harm caused by their aggressions and mistreatment of prisoners during the Second World War.


While the projects that the Japanese construct are world class and the envy of anyone that has not taken the time to do the arithmetic, the price will ultimately have to be paid. Our figures indicate that bad debts in Japanese banks have soared to over $600 billion, and when the recent new additions to the red ink from the Pacific Rim debacle is factored into the equation, our adding machine starts overheating. But what really sticks in the public’s craw is the ongoing bailout of the Japanese National Railways. This problem has been amortized over 63 years, and as such will simmer in the public’s mind as it continues; with the ultimate amount probably surpassing Japanese bank bad debts. The Japanese National Railways, when they went defunct left the public holding a 28 trillion Yen liability, but in spite of this fact, the politicians are proposing new lines for the bullet train while not having a clue on how to pay for those that are already in place and losing massive amounts of money. These projects make America’s disastrous Amtrak look like a profit making business.


Looking back at history, we find that during periods when slavery existed on earth, it was a rather simple matter to create massive projects. These people put in double time and worked weekends as well and you only had to give them three squares a day or less. That is, if they lived long enough to get them. In effect, old time despots were able to take on the construction projects that they did was because the had literally no labor cost and in their spare time the slaves grew their own food. There were no social services and if the slave died, he died. There was no insurance to pay, no HMOs to deal with and no costly medicines to provide. Beyond that, the people didn’t have a lot of television to watch in those days and there day consisted of carrying rocks from here to there, under the hostel gaze of a brutish superintendent that carried an oversize whip.


In another misadventure, it seems that it is possible in Japan for a municipal body to acquire an interest in a for-profit venture. The New York Times reports that there are 6,794 of these, what they call third sector companies. Of these strange anomalies, seven out of ten are overburdened with debt. An abnormally high number of "third sector" investments have been made by local governments in the theme parks. The New York Times studied 30 of these parks and found that 16 were technically insolvent. The theme park concept made a lot of sense for the Japanese; they were working to hard and relaxing too little. Having a local theme park was an excellent diversion for them.


However, it soon became evident that the themes thought up by the local governments were perplexing at best with each seemingly competing with the others to come up with formats that are more egregious. Additionally, even in some of those parks that were successful, the government people didn’t realize that it hadn’t planed for the "continuous capital investment to update attractions that was necessary to keep visitors hooked, they saw them as a one-time project like a new airport or highway. As a result, attendance generally dwindled rapidly after the first year or two of operation." No one seemed to pay any attention to the problem until recently when Phoenix Resort, a theme park that had actually created a huge artificial beach complete with retractable dome) went under and the amount of debt that they had been carrying turned out to be literally staggering. Because of this incident, a closer look was taken at the third sector and the conclusions were that it is at best run, in a fiscal sense, every bit a poorly as badly as is the Japanese Government itself and represents an additional whole in the Japanese system that had been overlooked to this point.


On February 23, 2001, Standard and Poors lowered Japan’s domestic and foreign credit rating indicating that the large rating service had just about given up any thoughts of a Japanese recovery any time soon. "S&P cut its long-term and foreign debt rating for Japan to double-A-plus from triple-A, citing Japan’s diminished fiscal flexibility due to budgetary constraints. rising debt levels and a slow effort to reform the economy." In the midst of this development, the Japanese stock market traded below the prices that had been established during their financial panic in October of 1998, a new low since November 20, 1985. It is noteworthy to point out that in the same period, the Dow Jones has risen over 700%.


"Yet pressure is mounting on manufacturers. The Japan Iron and Steel Federation reported that the country’s steel exports plunged 12% in December from a year earlier. Shipments to the slowing U.S. fell 19%. Equally troubling, steel sales dropped in three key Asian markets – South Korea, Taiwan and Thailand. Exports were also weak for four of Japan’s five biggest carmakers, including Toyota Motor Corporation and Honda Motor Corporation. Shipments overseas by Toyota, one of the country’s largest exporters, fell 7.6% in January from a year earlier, while Honda’s plummeted 21.8%."



Japan’s yardstick for securities prices, the Nikkei 225 index is down 65% from its record high recorded during the Reagan Administration in January of 1990. Naturally, when you account for the fact that inflation has also taken its toll during that period, also has played havoc with disposable income in Japan. Many Japanese after getting beat up for a time in the stock market took their money out and put it into various savings accounts. While they didn’t loss anything, interest rates in Japan are about as close to zero as you can get, so they took the inflation hit anyway.


"We often discuss the idea that stock prices will eventually track the performance of their underlying companies. If true, this must mean Japan’s companies are, for lack of a more delicate term, big freaking disasters. As it turns out, they are: According to noted economist Martin Wolf, in 1998 the accounting book value for public Japanese companies was 6.5 times higher than their aggregate market values. To translate, the market treats companies in Japan as if they are mass destructors of capital, not creators." ()

However, while we were never aware of those statistics, we would give another, more ominous slant to why the Japanese stocks are selling at such incredible discounts to book. The Japanese are not fools, if any legitimate company in that country could be acquired at 15% of book value, the line would be forming around the block. Getting brand names and an entrée into Japan in most cases would be worth a substantial premium, not discount to almost any non-Japanese multinational. Thus, we believe that another, more plausible reason for these gigantic discounts, may simply be the fact that in Japan, GAAP means something totally different in Japan than it means in the United States, we suggest that the definition may well be Government Accepted Accounting Pretense. The government has allowed both Japanese companies and lenders; extensive latitude on what assets may be included on their balance sheets. Companies that have gone bankrupt many years ago are still carried original cost by both industries. The continuing hoax permeates a corrupt economic system.


"Japan’s banks have been selling off their stock market assets in advance of the end of the fiscal year, at which time – for the first time – their equity holdings will be carried at their market value. This will pull just one of the myriad veils away from Japanese corporate accounting: Investors will see the devastating losses in principal these banks have endured and how many working-dead companies’ stocks the banks have relied upon in order to make their balance sheets seem less like a train wreck. At least one big company, Toyota Motor is using this opportunity to buy back more than $2 billion of its stock from banks, a good move for its shareholders…Lack of accountability has allowed Japanese companies to continue to invest their retained earning – which represent only 7% of the operating surplus in Japan, as opposed to 33% for U.S. companies – into low-return investments rather than paying it back to shareholders in the form of a dividend. This is a problem that today exists only for the worst of American companies, many of which have developed the debt problems of their Japanese counterparts, yet have continued to provide returns on retained capital." ()

On the other hand, there are always opportunities available for those looking between the cracks in under the worst of conditions. In order to prop up the Japanese economy, the government has done everything but give money away, and they are in the process of driving down rates even further. It is probably cheaper now to borrow money in Japan along with hedging the currency risk then it is for the multinationals to borrow in their own countries. "Bankers say that by borrowing yen from Japanese investors, countries including Croatia, Uruguay and Brazil () – and companies such as Deutsche Telekom AG – are saving as much as several percentage points in borrowing costs. That is even accounting for the expenses of converting those yen into other currencies, and of hedging against the risk that the yen will appreciate sharply and thus make the debt more expensive to repay." ()


Although this all seems innocent enough, the buyers were almost entirely made up of people taking their money of their postal savings accounts. Keep in mind that because Japan was a closed country for so many years, the investing public was limited to Japanese instruments. Now, as the product line becomes more diverse, there are many more opportunities for the public to chose. One of the biggest assets that Japan had was the fact that it had the highest savings rate in the world and all of that money was held by the government. This in turn allowed the government to take on projects, such as their bullet train, which they probably never would have contemplated under other conditions. As the money in the postal savings accounts dwindles, Japan will become much more restricted as to it its fiscal options.


Japanese consumers are dramatically changing their ways and all indications point to the fact that if the quality of the product is competitive, branding is no longer considered significant. Thus, as China continues to ramp up increasingly competitive products, the Japanese are flocking to their goods. Exacerbating that trend is the fact that China is now the manufacturer of choice in the Pacific Rim and numerous Japanese corporations have moved their production facilities to the Mainland with the result that Chinese exports to Japan have recently shown a dramatic increase. Last year two dramatic milestones were reached for Japan, they imported more product from China and the rest of the Pacific Rim than they did from a combination of North America and Western Europe. Their negative balance of payments with China was $25 billion and mushrooming. China’s entry into the WTO will make these numbers even worse as trade between the country’s become even easier and more of Japanese production relocates.


Japan’s archaic school system has not helped the country out of its economic morass and it looks like a change is going to be forthcoming. The long hours and dreary classes have literally created a society of robots that seem to be great a following orders and performing routine tasks but hard put to innovate. Many have said that Japanese scholastic system tends to drain the innovation out the people before they have finished high school. While the system worked to perfection after the end of World War II when the country was rebuilding, Japan is now a sophisticated society that requires unique thinking to help it retain its position as a global economic leader. The change in a flawed system is coming rather late in the day and the results if any will not be felt for years to come, probably too late to have any definitive effect on today’s problems.


"Japan has been floundering economically for more than a decade, and the change is meant in the part to help ensure the country’s ability to compete. Somewhat paradoxically, the drive to give millions of students more electives and unstructured time out of school for their personal use comes as public anxiety over dropouts, adolescent crime and what is perceived here as an epidemic of underachievement among the young is higher than ever."

On Thursday, March 8, 2001, Kiichi Miyazawa said it like it is, the Japanese Government’s finances were close to a "catastrophic situation." People, especially high-ranking officials just do not talk that way in Japan and when some skeptics raised the question of whether he just was trying to drive down the price of the yen, he adamantly denied it. Mr. Miyazawa’s statements were echoed by Masaru Hayami, the governor of the Bank of Japan who in a speech to the Japanese Parliament indicated that "We should look squarely at the reasons whey we could not make the economic recovery a certainty, despite the full measure of financial and fiscal measures we took in the last 10-years." The New York Times noted that the Bank was on a charm offensive trying to mend all of the fences that they had broken over recent years. The times also indicated that the consensus thinking was that a zero-interest rate would be restored soon in Japan.


In another ominous but business wise, a strangely encouraging sign, Aiwa, a major Japanese electronics producer that is owned by Sony, has bit the "made in Japan" bullet. They are committed to do a restructuring which includes the closing of eight of their nine factories; they are going to cut their workforce by 50% and then Aiwa is going to farm out the great majority of their production to China and other low cost producing countries in Asia. This was a concept that would have been inconceivable only several years ago. Historically, the Japanese had always preferred to control their production so that they could keep workers happily employed while maintaining strict quality controls. However, while this had done wonders for maintaining high quality products, as Japan’s labor force became more affluent, hourly wages ate deeper and deeper into profit margins until ultimately, Japan’s companies were becoming less competitive as labor and raw material costs took a deeper bite of profits.



While Japanese industrial companies have manufactured products in plants all over the world, this development will mark the first time that a substantive effort by a major Japanese company to allow their production to be handled by non-Japanese owned factories is taking place. This move transforms the cradle to grave theory that has permeated Japanese society for generations into a cocked hat. Other companies in the same industry will have to follow Aiwa’s example if they want to continue to sell their products and this will lead to substantial dislocations within Japan’s blue and gray collar communities. Obviously, unless Japan is able to give a substantial shot in the arm to their service industries as has occurred in the United States, the unemployment outlook is going to go from good to glum in about a year as everyone starts to play their game of catch-up with Aiwa. Within a short period, Aiwa expects sales to drop by a third as the company focuses on its more profitable lines.


Japan has made more than their share of mistakes but it certainly doesn’t appear like a nation that is going to sink into the sea any time very soon. A few interesting statistics can rapidly put things in perspective. The United States economy accounted for 31.5% of the global economy, Japan 14.5% and Germany 6%. The European Union as a whole accounts for twenty-five percent. George Melloan reported in the New York Times of February 13, 2000, that the Japanese GDP fell 2.4% in the third quarter of 2000 from the year earlier and Prime Minister Yoshior Mori’s government has now seen its approval-rating drop to 14%. We believe that if Attila the Hun was coming into office in Japan he would have arrived with substantially higher numbers than that in spite of his pillaging, murdering and raping. We are not sure what that says about the chances of Mori’s government surviving for any great period of time.


In the meantime, another force has raised its ugly head in Japan, hard core nationalism, the far-right, ultraconservatives or something similar is being preached as the gospel by a growing number of people who are asking, why is Japan the only country which tells it children what terrible things it did during World War II? Why is it the only country that has agreed not to employ an offensive army? Why did it take so long for the government to legalize the country’s flag and its anthem? These folks question whether or not the United States started the war with Japan in 1941, they are certain the rape of Nanking never took place and the Chinese made the whole thing up and they are positive that the Taiwanese comfort women were throwing themselves at the manly Japanese soldiers because they were so handsome, not because they had been sold into white-slavery.


These revisionists are absolutely positive that the infamous "unit 731" of the Japanese army did not really experiment with chemical weapons on live prisoners; they say that Japanese do not do those kind of things, which for them is comment enough. Moreover, the group was able to induce the Japanese Government to get out of the factual history writing business, they believed that they had people, more familiar with the truth and that were highly qualified scholars that could a much better job. These were people who are intimately familiar with all of the falsehoods being spread about Japanese wartime misdeeds and they will soon be rewriting history to more accurately reflect the circumstances that actually took place during the Second World War. This sounded like interesting news to the Government and enabling legislation was passed that literally gave a green light to Japan having and new and better history. It didn’t take long before a new primer was in the works which dramatically altered reality.


While this scenario is certainly going to make some naïve Japanese feel a lot better, it is certainly not going to make them any friends in the rest of Asia. We would only hope that someone gags these boisterous folks before they really cause some trouble in the neighborhood. There is hardly any question that this neo-fascist group isn’t going to get the Land of the Rising Sun into deeper trouble with their neighbors than there already are. See if you have the guts to tell the wacko running North Korea that the Japanese ruler’s of that country were benevolent and only spread happiness and joy when they ruled his country and he will be demanding $20 billion in war reparations instead of $10 billion he is now asking, and for good measure, he will probably deliver a couple of international ballistic missiles loaded with atomic bombs right unto their laps revisionist laps.


To tell the Chinese that the Rape of Nanking did not happen is going to go over like a lead balloon. China, getting advance notice of what the new Japanese history is going to recount has already voiced its dissatisfaction. Moreover, to tell the Chinese, the Taiwanese and the Koreans that their women chased the extraordinarily macho Japanese soldiers until they couldn’t run from them anymore, could literally lead to armed conflict. () "All told, Japan recruited as many as 200,000 women from China, Korea, the Philippines and Taiwan to provide sexual services for its military. Some were openly rounded up and pressed into service, others were deceived with offers of jobs as housemaids." () Moreover, the Japanese illiterate went on to say that the people that say they were gassed by Japanese chemical unit "731" are dreaming and that it just did not happen is akin to Hitler’s "Big Lie" theory, the more outrageous the story is, the more people will somehow believe it.


It is interesting that poor business cycles often bring out the loony element in a country. Certain Hitler’s rise to power was a direct result of the business slowdown in Germany after World War I. The same thing could be said about Napoleon. People in trouble tend to look for short-term solutions and they often find that they wind up with something far worse than when they started. If these book burners and history tinkerers get the upper hand, look for Japan lose any chance at all of once again becoming a real world economic power. From that point on, we would look for Japan to soon become an unimportant, decimated province of China.



The Seikan Railroad Tunnel

One of the infrastructure projects that Japan became involved with was called the Seikan Railroad Tunnel. Japan needed a way to connect its main island of Honshu with the neighboring island of Hokkaido. Historically, the two islands had been connected by a series of ferries but during inclement weather, which was not unusual in the Tsugaru Strait, transportation became questionable. However, in 1954, a typhoon that appeared as if from nowhere, sank five ferry boats, creating a loss of life of over 1,400 people. This created a public outcry and the engineers went back to the drawing board. At the time, there was airline service, but it was then highly expensive and to some degree time consuming, if only because of the fact that from a logistical point of view, the airport was a substantial ride from, for example, downtown Tokyo.


Engineers came up with a prodigious program to construct a tunnel connecting the two islands. When finished it would become the longest railway tunnel in the world and in spite of the logistical and architectural problems that were foreseen, there was no question in anyone’s mind that the project would get the green light. The tunnel got its name by combining two characters: Aomori City’s "Ao (Sei)" and Hakodate City’s "Hako (Kan)" These are the cities at the beginning and at the end of the tunnel, depending which direction you are starting from. It took them ten years to come up with a plan that the bureaucrats in Tokyo would accept. This was probably due to the fact that the proposed tunnel was massively expensive; and even at that time, it was projected to cost approximately $600 million and it would take about ten years to build. Many politicians in Japan felt that another ferry disaster would cause the government itself to fall and for that reason, the project went ahead.


Construction began in 1964 and, rather than ten years, the work took 25 years to complete. Instead of costing a tad under $600 million, the final figure came in at $7 billion. It was the most expensive infrastructure project that had ever been completed in Japan to that time. The year was now 1988 and thirty-three workers were killed during construction in various accidents. While this is a terrible loss of life, relative to the massive nature of the project, the Japanese in stated that the loss of life was within actuarial limits.


While the tunnel was originally designed to carry the "Shinkansen", the bullet train, on a route between the two islands, by the time the tunnel had been completed, 15-years late and $6½ million over budget, the country could no longer afford the cost of connecting it up. This oversight added substantially to the project’s cost, because the necessary high-strength rails, gentle curves and slopes that were incorporated into the development, thinking that the bullet train would eventually be hooked up, proved to be an unnecessary expense. Thus, the project became a freight and passenger tunnel, but it was in no way connected to the high-speed rail line. A second tunnel had to be created as well; this was the service tunnel or pilot tunnel. Once that was completed, the tunnel itself was started and crews began working from opposite directions.


The completed tunnel was three-stories high and 800 feet below the seabed. This makes the Ao Hako tunnel easily the deepest ever constructed. Old time techniques had to be used in its construction: drilling, blasting and then mucking because of the uncertainties of the geology that construction people were drilling through, the much faster technique of using a boring machine was just not an option under these geologically uncertain conditions. The seabed had been wracked by earthquakes over the years, and there was not enough data available at the time to determine exactly what the workers would be drilling through and when would they be doing it.


Even using the more the more conservative drilling method, a patch of soft rock was collided with in 1976, and a "blowout" occurred causing an avalanche of water to flood various sections of the tunnel. The actual water flow was 80-tons a minute and it took round-the-clock construction crews over two months to clean up the damage. When the project was finished, 60 miles of tunnels had been created, including the pilot and service tunnels, which now double as maintenance and escape tunnels. The main tunnel, runs a total distance of 33 miles, making it easily the longest railroad tunnel in the world.


The undersea segment of the tunnel is 14.5 miles long, which has only recently been eclipsed by the Chunnel under the English Channel. Japanese construction people have estimated that 13,800,000 million people were involved in various parts of the construction process, which would surpass the number of men under arms in both the Japanese and United States armies in World War II. We know of no other project in world history that required that kind of logistical support. Massive projects like the Great Wall of China and the Ho Che Minh Trail, while utilizing almost every available body available, didn’t even come close. It is even doubtful that the population of the world when the Great Wall was built came anywhere close to the 13.8 million people that Japan has estimated were employed on this one tunnel. This number of workers actually represented one-quarter of the working population of the country at that time.


Moreover, the two stations (Tappi Kaitei and Yoshioka Kaitei) at either end of the tunnel are both under the water, probably making them the only two submerged railroad stations ever built.


Some other interesting statistics that were released,


    1. 3,000 tons of explosives were used;
    2. 168,000 tons of steel were sued, enough to build 42 Tokyo Towers;
    3. 11,649 cubic feet of material were excavated from the site, 5l1 times the volume of Tokyo Dome;
    4. Over 61 million cubic feet of concrete were poured;
    5. The concrete tunnel wall is approximately 1 meter thick;
    6. 30 tons of water seep into the tunnel every minute;
    7. 12 huge pumps are used to bring water seepage back to the surface;
    8. 765 miles of electric cables were used;
    9. 21,540 slabs of track were laid;
    10. 847.000 Meters of injected soil was used, 1.6 times the volume of the Kasumigaseki Building.


Fundamentally, historians are fairly familiar with the Japanese island of Honshu, which is the home of Tokyo, and most other large cities, but Hokkaido is a different story. Newsday talked about what the island looked like back in 1988 when the service opened for business.


"…Hokkaido, for one thing, is Japan’s wild west, a still undeveloped island of exotic people (Japan’s blue-eyed aborigines) and scenery (right out of Siberia, which sits next door on the Asian mainland). On a clear day, it looks nervously across a narrow channel right into the Soviet Union."


It would have seemed that the tunnel would have been an extremely valuable addition to Japan’s infrastructure and a revenue-producing project. However, substantial usage coupled with severe conditions has caused equipment to wear out much faster than had originally been estimated. Re-construction has already begun at a massive cost. Back in 1954 when the original plans were started, engineers did not expect that the airplane was ever going to become a serious contender to compete with the country’s railroads. However, when construction actually began some two decades later, to some degree the handwriting was already on the wall relative to air travel. The bureaucrats ran new numbers that showed the airplane replacing the railroad as the choice method of getting between the two locations. In spite of this fact, government officials order the project to move ahead if only because Japan was then in an economic downturn and the construction job would put a lot of people to work. Of course, at that time, the cost estimate was only 10% of the final cost.


Amazingly, the number of people that are now using the railroad is substantially less that the number that were using the more economical ferries at the time when construction had begun. When the tunnel was finished in 1988, it carried over 3 million people; which figure has been receding regularly since and today stands at around 1.9 million, almost 200,000 less then the 2.07 million passengers the Seikan ferries registered in their final year. On the other hand, the number of flights arriving each day at the airport in Hokkaido in 1988 stood at 44, while today, it has tripled to 117. Hokkaido is no longer the Wild West. Extrapolating these figures, you can see that almost 80 percent of the passenger traffic is now handled by plane.


Moreover, since construction began, ferry service has changed dramatically, new aerodynamically stable jetfoil boats have been developed that are capable of either riding out the weather or beating it. To make things even worse for the tunnel, the trip is more convenient, takes about half the time, and is cheaper. "As for fares, the high-speed ferry costs 2,130 yen one way, which is far lower than the 5,340 Yen it costs to take the limited express train and the 3,150 Yen to take the rapid train. For the most part, JR Hokkaido, the company that owns the train service, has been non-plused by what has gone on in spite of a lack of traffic and increasing losses. Riding the train is pleasant enough with the rounded curves and prolonged grades. The temperature of the system is kept at a comfortable 68 degrees and massive ventilators keep the air both pleasant and smoke free. "Long rails have been used throughout the line because of the smoother ride they offer and to minimize maintenance. In particular, the signal circuit for the Seikan Tunnel is based on an uninsulated rail circuit, which does not require insulated connections, and so rails were welded together to form a single rail that runs the length of the tunnel. This "super long rail" is the longest single rail in the world."


However, the Japanese are pulling in their belts and have had enough of these kinds of infrastructure fiascos. The railroad people are now answering to a very unhappy government. However, this project, along with other massive construction schemes begun by a full-employment oriented government, no longer make sense and the reigning-in process is beginning. JR Hokkaido, wanting to show the government that they are indeed concerned about what is going on, put carpeting on their trains and created a train devoted entirely to karaoke. The chances that this will succeed are just about non-existent and the tunnel that is the longest of its kind will continue to be an amazing feat of architecture but an economic debacle.



The Bullet Train

The Japanese Government has been able to keep the lid on their problems by not addressing bad bank loans, bankrupt corporations and mounting debts. The problem simmers because the Japanese politicians determined that confrontational politics have no place in the Japanese order. The public is as yet unaware of how the finance and transportation ministries are going to deal with this absolute mountain of debt. When the government informed the populace of another double header, the transportation problem coupled with the country’s banking disaster, the people just threw up their hands and stopped spending altogether, deepening the hole considerably and throwing the country into recession. What would happen if the people really knew the facts.


The Japanese National Railway, has long been financially critically ill; its pieces have been distributed and the interest on its remaining debt has been enough to send the Japanese nation into shock. When the bailout is complete which will occur sixty-one years from now; there won’t be enough tax money available to address it in anything but small fragments, the cost will have been at least the equivalent of three American Savings and Loan Disasters and six Mexican Fiascos.


The high-speed rail phenomena began in 1965 when the Japanese National Railways inaugurated electrified bullet-train rail service ("shinkansen") on its Takaido line, which serviced both the industrial centers of the east coast of Japan and the Island of Honshu. Service was continually extended until the route was over 700 miles in length and had 60 trains, each making almost three trips a day at an average speed of 135 miles per hour. The world gasped.


Modern railroads had their start in England, but it was not until 1981 that Europe began getting into the modern railroad game in earnest. In spite of the advances made by the Europeans, the Japanese remain both the innovators and leaders in this field. The Japanese trains, invented by Hideo Shima (who died in 1998) are fast, quiet and an event to behold. High-Speed trains have major refinements not required in old-fashioned railroad trains. Substantially longer rails (over ½ mile), so that the glitches at track ends would be more seamless and the trajectory straighter and flatter.


Of course, each of these requirements upped the price. The extra long pieces of metal for track were difficult to handle in all stages of production and delivery making them a logistical nightmare to deal with. Eliminating grades and curves required the construction of tunnels and bridges that were extremely costly. In addition, the train windows were sealed, making air-conditioning mandatory and much more costly wheel suspensions had to be added for a smoother ride. Even more expensive was the fact that the train was electrically motorized in each car rather than being pulled by a locomotive. This eliminated air brakes, increased the train’s speed, allowed for each car to be literally independent of the whole and created a safer overall ride. On the other hand, the cost of accomplishing this was substantial and it was not fully appreciated how complex the engineering would be when the project was initiated. To its dismay, one of the early investors in the project was the World Bank, which gave the country $80 million towards financing the project, since in those earlier years the country just didn’t have the money to pull it off by itself.


And you can well imagine why, as the original train service extended 320 miles in length, traveled in a straight line without any substantial changes in elevation throughout its length and required 3,000 new bridges and tunnels to be built to accommodate it. When the project was completed, both Shima, its inventor and the President of the National Railways admitted that they had not put a pencil to the project’s overall cost and they resigned in embarrassment over how much money had been spent. In spite of this fact, literally all of the railroads in Europe beat a path to Shima’s doorstep and he received awards from just about everywhere for his sterling accomplishment. He later became head of Japan’s National Space Development Agency, and he served in this role until his retirement.


In spite of the incomprehensible amount of money necessary to carry forward these grandiose schemes, no one in government has been dissuaded from going ahead with one nonsensical project after another. Japan does not easily lend itself to high tech innovations in travel because of the fact that the main island of Japan is more like a megapolis than a countryside and the cost of acquiring right of way is prodigious.


In spite of this fact, the Japanese Government announced during recent elections that five new bullet train routes were going to be constructed. This meant more jobs, it meant better transportation, and the people were overjoyed. Overjoyed as well were the mayors of every city where the trains would stop. Enormous bounties are paid by cities to have the train stop in their location, in spite of the fact that this only slows down what was meant to be a high speed train, the practice is pervasive, and the enormous price of getting the train to stop at a particular station is added to the tax base of the people that live there. This is a cost of doing business, you might say, but a very high one indeed.


Yet, what already is in place, as time has gone on is already falling apart at the seams; for example, there have been over 20 instances of "concrete falling from tunnel walls onto tracks." In one instance, chunks smashed a freight train, causing it to derail; in another, falling pieces hit an auto beneath an overpass. While inspecting tunnels in December, the private railway company that operates bullet trains in western Japan amazingly found about 40,000 weak sections. Says Iwao Trsukahara, a worker in the Saga prefecture who helped build the rail lines: "Knowing how the work was done, I wouldn’t ride the shinkansen. The crumbling concrete is graphic evidence of the rotting underbelly of Japan’s economy. Workers often cut corners to finish construction quickly. Steel-reinforcement rods sometimes weren’t installed at all.


A new line is being built between Tokyo, Nagoya and Osaka, Japan’s most important economic centers. The brand spanking new train will use the Nagoya Railway Station (which has not had a renovation in 63 years) for its home. Can you imaging these newly designed trains geared to run 300 miles per hour coming into a ice-age Tokyo Train Station and creating a sonic boom that collapses the whole ball of wax into a heap. So where do the non-bullet, freight trains go if the high-speed ones are talking over the tracks. There is one obvious problem that remains unanswered, and one not so obvious. The easy one is: how do you make room for a mile-long freight train to be passed when the bullet-train in question is traveling at 300 miles an hour. The Japanese accident record for their trains has been outstanding, but they certainly are "an accident waiting to happen."


In addition, there are 125 private and joint private-government financed railways in Japan. Some of them are even tourist lines. Others operate like the Japan Railway Freight Company, which owns its own trains (including locomotives and cars) and terminals, yet have no track. It leases track right of way from the companies that form the Japan Railways Group, the very same folks that run the bullet trains. The Japan Railways Group is a successor to the failed Japanese National Railways, which tanked in 1987 from an over abundance of debt. The whole thing almost seems most incongruous.


In building this super-fast trains, poor-quality cement was used. When Japan ran out of sand from its riverbeds, it substituted beach sand without removing the salt (an ingredient that accelerates corrosion). More than three decades of daily pounding has created a recipe for disaster. "There is no way to estimate the extent of the fatigues," writes Kazusuke Kobayashi, an engineering professor at the Chiba Institute of Technology whose book "Concrete Is in Danger" was a bestseller in Japan last year. The possibility of an overpass suddenly collapsing while a bullet train runs through cannot be ruled out. Japanese engineers have announced to the press that they are extremely disturbed by how little money the country spends on maintenance. Taketo Uomoto, a University of Tokyo engineering professor, figures that less than 10% of the country’s construction budget goes toward preservation and repair. "We don’t have a habit of taking care of existing structures," he says. "Historically we had wood structures that were destroyed by fires so regularly that we got used to rebuilding."


Hosei University political scientist Takayoshi Igarashi believes the neglect has a sinister motivation: Japanese construction companies, which have considerable political clout, make a lot more money building new roads, dams and trains than they can make by patching up the existing ones. So the country keeps building. And building. "Japan is like a drug addict," says Igarashi, who likens the nation appetite for concrete and steel to a junkie’s craving for his next fix.


In 1998, the most recent year for which figures are available, Japan spent 15% of its GDP on construction, compared with than 8% in the U.S. "What Japan has done is far more enormous than anything the socialist countries did," says Igarashi. The spending continued during the boom years and even after the bubble burst a decade ago. Prime Minister Keizo Obuchi shows no signs of trying to kick the construction habit. Since taking office 18 months ago, he has made old-fashioned Keynesian pump-priming a centerpiece of economic recovery plan, spending $142 billion on supplementary budgets to pay for public-work projects."


The article goes on to give several examples of how out of control Japanese spending has become,


"All that building has left Tokyo and other local governments with debt totaling an estimated $6 trillion. Landscapes are littered not only with crumbling tunnels and bridges, but also with white-elephant projects built to win votes and reward construction companies for their patronage. That’s why rural Oita prefecture in Kyushu built an airport used almost exclusively by farmers to fly their green onions and bell peppers to Tokyo. And why Kyushu’s Kagoshima prefecture has a $117 million, 675-meter bridge that connects the mainland with an island inhabited by 350 people. Hokkaido has a wide ribbon of highway that almost nobody drives on. And Kobe is building an airport even though there’s a perfectly fine terminal in Osaka, just 16 miles away."



Another one of the problems relative to high-speed trains is the fact that the wider the gauge, the smoother the ride, but the more expensive the construction. All American gauges are similar, with the obvious exception of the old scenic mining railroads in the West that didn’t connect to any other line and are today only used for showing tourists the Wild West as it once was. However, in Russia for example, there is probably a gauge for each time zone and they have a whole bunch of time zones, and in Europe, you have a different gauge for virtually each country.


Japan has learned the hard way that smaller gauge size decreases costs dramatically and has done two things to accommodate the economics. The first is to reduce the gauge size of the bullet trains, and the second is to invent a train-wheel that is (more or less) universal. Thus, in spite of the fact that the original Japanese trains use conventional gauges, more recent tracks constructed for the bullet trains are much more narrow. "This is rarely a problem in the United States, where the only narrow-gauge lines as we noted earlier are a couple of scenic tourist railways; but in Japan, the bullet trains operate on a different gauge from standard trains, so a transfer between lines in the past has meant getting off the train. On a gauge-changing train, each wheel on the power car has an independent suspension and traction motors. When changing gauges, the weight of the axle is carried on linear bearing running down the side of the tracks."


Still unsatisfied, the Japanese are still pushing the envelope and have a new technology that will allow the trains to travel close to 300 miles per hour. The Japanese are using the new technology called "maglev" (Magnetic Levitation), which requires a magnetic system raising the train slightly off the metal tracks and letting it travel on a bed of air. "The super conducting magnets on the train induce a current within coils on the sides of the U-shaped guideway, which then act as electromagnets that push the cars away, causing them to float above the guideway. But, the superconductors involved, need to be kept at cryogenic temperatures. Still, the system has carried passengers at speeds exceeding 340 miles per hour." Some have called this the first new mode of transportation since the invention of the airplane, and the fast paced Japanese are eagerly awaiting developments.


In the meantime, there seems no question about the fact that if you had to build a high-speed train, Japan would just about the last place you would pick. Compared with rapid-transit railways in Europe, the construction cost per kilometer for the shinkansen is very high. Why?



Why Shinkansen Requires High Construction Costs


In general, rapid-transit railways require a large investment in electric-related construction, including signaling and safety systems, power systems and communication systems. However, the civil engineering costs, such as banking, bridges and tunnels, still dominate the expense ledger by accounting for approximately 70% of the train’s total cost.


The "shinkansen" requires higher civil-engineering costs than European rapid-transit railways for the following reasons:


1. Too many tunnels: high mountains are common in Japan and the ratio of tunnel sections to the total length of the shinkansen tends to be high. The total tunnel length of the existing four-shinkansen lines is an unbelievable 30.8% of the total length of the lines.

2. Few sections can use economic banking: Frequent earthquakes, heavy rain and deep weak ground on the plains do not suit the economic banking method and few sections can use it. Elevated track (including site acquisition cost) costs about four times that of banking the track.

3. High environmental costs: To meet the strict environmental standards, cost for sound barriers and ballast mats, etc., tend to be high.

4. Short station-station distance: The distance from station to station is too short (30 to 40 km) to achieve rational transportation compared with European rapid-transit railways. Station construction requires higher costs, raising the total construction price tag.

In spite of all of the negatives, Japan’s trains are a wonder of civilization, and whether or not they are ever paid for, mankind has once again demonstrated the ability to conquer nature, given the time, the money, the knowledge and the resources. While the bullet train does not economically work in Japan, these trains will still be running throughout the rest of the world, where at least they will probably be more economically viable.




Akashi Kaikyo Bridge





A suspension bridge was built between Kobe and Awaji-shima in Japan that has so dwarfed what had preceded it, relative to all of the other suspension bridges ever built, that any serious comparisons are almost nonsensical. The bridge’s construction cost was $4.3 billion, and it stretches 12,838 feet across the Akashi Strait. To give you some idea of the magnitude of what this means, it would take four Brooklyn Bridges to cover the same body of water. In actual total length, the Brooklyn Bridge is only about 1/6th the size of the Akashi Kaikyo. It is easily the longest suspension bridge in the world and is twice the size of both the Verranzano Narrows Bridge in New York and the Golden Gate Bridge in California. However, if you laid the Verranzano and the Golden Gate Bridges end to end, they would be only a tad longer than the Akashi Kaikyo Bridge by itself. The towers that give the bridge it’s support rise to almost the equivalent of 100 stories above the their base and are large enough to allow ships of any size to comfortably pass under it.


Because of the fact that the ports of Kobe and Awaji-shima are so active, the bridge was built particularly high to accommodate anything that the world’s ship builders could throw at it, now or in the foreseeable future. Moreover, that wasn’t the only problem that had to solved: the Kobe area has a history of having some of the worst weather on the planet, and it was critical that the bridge be constructed so that gale force winds would not cause it to collapse. Ultimately, the builder was able to design this bridge to withstand 180 mile an hour winds. In addition, annual rainfall in this area even in a relatively dry season can equal 57 inches a year, and if that wasn’t enough, the bridge is located directly on an earthquake fault line, the region is a magnet for tsunamis and hurricanes that are about as normal here as sushi.


Given all of these challenges, you might have thought that the engineers would have just plain given up the ghost. Instead of that, they used some very interesting architectural innovations in getting the job done:


"They supported their bridge with a truss, or complex network of triangular braces, beneath the roadway. The open network of triangles makes the bridge very rigid, but it also allows the wind to blow right through the structure. In addition, engineers placed 20 tuned mass dampers (TMDs) in each tower. The TMDs swing in the opposite direction of the wind sway. So, when the wind blows the bridge in on direction, the TMDs sway in the opposite direction, effectively "balancing" the bridge and canceling out the sway. With this design, the Akashi Kaikyo can handle 180-mile-per-hour winds, and it can withstand an earthquake with a magnitude of 8.5 on the Richter scale!"

Earthquakes with a magnitude of about 2.0 or less are usually called micro- earthquakes; and they are not commonly felt by people. The only way that we even know that they exist is by the fact that local seismographs are able to sense them. Upping the ante, the next level on the Richter Scale contain those earthquakes in which the magnitudes hover between 4.5 and 8.0. There are thousands of these every year but anything above the level of 5.5 can be very serious if it strikes the wrong place at the wrong time. At the top of the earthquake scale are those over 7.0. Those from 7.0 to 8.0 are considered "Major" and those over 8.0 are considered to be "Great." The Los Angeles Earthquake of 1994 only had a magnitude of 6.7, and you probably can still remember the damage that it caused. The San Francisco Earthquake of 1906 had a magnitude of 7.9 and The Great Earthquake of 1964, also known as the Good Friday Earthquake, that hit Alaska registered about 8.0. Fortunately, it struck a remote area where there were few people, for if it had hit San Francisco or New York, we would have had to rebuild those cities literally from scratch. On the average, one earthquake of such size occurs somewhere in the world each year


The largest earthquakes ever recorded run in the 8.8 to 8.9 range. Although the Richter Scale has no upper limit, the largest known shocks have had magnitudes in the above range. If an earthquake of this nature struck under the ocean, there might not be any damage at all, at least visibly, and if it were not for our highly sensitive scientific instruments, we would not have known that it even occurred. Contrarily, an earthquake of this magnitude could well send shockwaves to the oceans surface that would create enormous tidal waves, which could be devastating depending upon where they struck land. For each whole number value of Richter Scale increase, the power of the earthquake being measured increases by 10 times and the energy released elevates by 32 times. Moreover, an earthquake 12measuring 12 on the Richter Scale is estimated to have the power to split the earth in half.


"The amount of energy released by a magnitude 4.3 earthquake is equivalent to the energy released by the atomic bomb that destroyed Hiroshima, Japan, and is equivalent to about 20 kilotons of TNT. The largest earthquakes recorded to date measured about 9.5 and released as much energy as 66 million Hiroshima–sized atomic bombs."


Thus, we are able to grasp the magnitude of what the engineers that constructed the bridge were able to accomplish. The mere thought that they could even attempt to control a force of that magnitude is beyond my own comprehension, but many people in Japan have bet an awful lot of money that these guys knew exactly what they were doing. In this prodigious project, they had to create a monolith whose cables if strung out in a single line would circle the globe 7½ times. Amazingly, the Akashi Kaikyo Bridge was originally programmed to be three-feet shorter than it is today. The reason for the difference is that during its construction, the bridge was hit by the Great Hanshin Earthquake, which unbelievably stretched the bridge itself the additional length. However, that earthquake came nowhere near testing the upper limits of the bridge’s flexibility. Additional statistics show that the bridge is also the tallest, the most expensive and as we had mentioned earlier it is the longest. .



Kansai Airport

Japan has become the home of great projects and of all of those we have looked at, the Kansai Airport is probably the most amazing. It was the largest single public works project of the 20th Century and when you consider the structures that have been created in the last 100 years, you are talking about a lot. When the second stage of Kansai Airport (Osaka) is completed, the total cost of the two combined stages will have been an eye opening $22 billion. The airport is located on an island five miles from land, and when it’s total construction cost was originally announced no one in Japan seemingly could even fathom its price tag. The airport was built on a 504-hectare island located in almost sixty feet of spongy clay seabed. Its landing fees are the highest in the world, and yet a second expansion of the facility is planned that will eclipse the first stage in cost.


In spite of the airport only recently having been completed and with Japanese bureaucrats interested primarily in attempting to impress Olympic Officials for Osaka’s bid for the 2008 Olympic Games, government officials formally announced their intention to build another runway, 4,000 meters long, with a satellite terminal building, a second passenger terminal building and cargo and fuelling facilities. Ultimately, the plan is for the airport’s total area to be doubled, have but these expansion announcements had been made even before the architectural and economic problems had even been addressed. The airport’s terminal is the longest building ever erected by man, one-mile long and ten stories high.


Japan, a diminutive country with a very large and highly concentrated population, is at a distinct disadvantage in the airline business. Land anywhere close to large cities is extremely costly, and in terms of a modern new jetport, financially prohibitive. Thus, for the most part, Japanese planners have determined that their best bet is to expand seaward, but at a massive cost. In the meantime, as they attempt to open new and sophisticated engineering frontiers within their architecture, modest mistakes tend to greatly magnify themselves and soon become whoppers. However, It was known from the very beginning that it would be difficult to maintain the land under Kansai Airport on a perfectly level basis because of the fact that it is built on top of a spongy seabed bottom. On the other hand, they did not expect the airport to sink back into the sea, which is exactly what seems to be now happening.


On the other hand, Kobe along with Osaka, Japan’s largest city next to Tokyo had every reason to believe that their local airport facilities were quickly becoming saturated and outmoded. It was critical to have a method available to get their goods to market and to get them their on time. It was at this time, that Italian architect Renzo Piano was engaged to create a modernistic terminal in the shape of a wing. It was four stories high and when looked from the ground is in the shape, of a toroid that mimics that of a magnetic field. His design centered around an ocean location three miles away from the nearest land, only because there was no land available within reasonable proximity to the cities. In order to keep the airport level (in reality to keep it from coming apart at the seams), a mammoth system of hydraulic jacks was put in place under the airports foundation, and a highly complex, computerized system raises and lowers the 3-million ton structure as if it were a babe in arms.


There seems to be no question that Piano carried out his job in superb fashion, and when it was finished, the airport was considered an architectural and engineering miracle. The terminal is built with passenger comfort in mind, and the facilities are extremely spacious. The Kansai Airport concourse is made of glistening marble, which is almost constantly being polished, keeping it at a high state of gloss. Moreover, a gleaming double-decker bridge whisks people from the airport to the mainland in a manner of minutes. In addition, should you desire to travel from the airport to Kobe, a jet-boat is available on airport property, as well as a train which can take you non-stop to Kyoto, Japan’s premier tourist city.


Moreover, as with almost all their massive infrastructure projects, the Japanese severely under-estimated its final cost of construction. When all of the bills were finally tallied, the overruns were in the neighborhood of 50%. These additional costs have been blamed, in part, on the fact that the Airport’s president was its also chief executive officer and as such awarded all of the contracts to political associates. United States companies in particular were blackballed from the bidding process, and things became so heated that the U.S. Government filed formal protests against the highly biased Japanese system.


Suspicions about corruption in the bidding process later proved to be entirely justified when the airport’s president was indicted and eventually convicted of having taken large bribes to rig contracts. On the other hand, the airport opened at the worst of all possible times, due to the fact that the Pacific Rim financial crises had just erupted and business in general had already started tailing off. In the meantime, Osaka had shown little or no growth in its industry, totally throwing into a "cocked hat" all economic forecasts for the airport had been originally assembled. The landing fees were so out of line that most American carriers cut back their flights to and from Kansai dramatically, and this plague soon spread to the airlines of other countries. Kansai came to its senses and began offering discounts for new routes and an 11% across the board discount which went into effect early in 2001.


Some interesting economic statistics were brought to light in the Sydney Morning Herald in a story entitled "It’s Banzai for Kansai" by Ben Hills:


"It will cost nearly 1 million yen ($13,000) to land a Boeing 747 on Kansai’ single windswept runway – that’s three times as much as the charge in Hong Kong, 14 times more than London’s Heathrow, and nearly 30 times as much as Los Angeles International Airport. Sky-high charges for rents and services will mean passengers will be slugged $13 for a cup of coffee, a departure tax of $35 and $18 for the bus to downtown Osaka, 30 miles away."

Half the airlines that originally planned to fly to the new airport have pulled out. There will be just 317 international flights a week on its single 3,800 yard runway, and the airport – originally planned as Japan’s first 24 – hour gateway – will have its power turned off at night to save money. Last week the president of the airport authority, Tsunehara Hattori, finally conceded that Kansai would be a financial disaster. It will lose nearly $2 million a day - $700 million in its first year – and may never pay a dividend to its long-suffering investors and taxpayers.

The Kansai Airport Authority was formed by a consortium of over a 1,000 local companies, along with various government organizations. The first move out of the box for engineers was to start moving earth from the recesses of Osaka into the bay to be used as landfill but first "the scuba divers had to descend 60 feet to the bay’s floor and create a base. This required the divers to move heavy boulders into place by hand. Then came the barges which unloaded 750 million cubic feet of rock and gravel to create a 2.5-mile long, 4,000-foot-wide mass – the world’s biggest man-made island." The amount of earth that was ultimately transferred became literally astounding. When completed, the land under the airport contained 70 times the volume of the Great Egyptian Pyramid. In spite of the movement of all of the earth, the deadline for the airport had to be extended several times because the project had started sinking into the sea even before it was completed.


It has already been admitted by airport officials that if a heavy storm happens to blow by, substantial elements of the airport will be underwater. The airport has already sunk 17 feet and no one seems to believe that it has stopped. Actually, engineers estimate that currently, the island is dropping 2-inches a month, or two feet a year. "Despite hydraulic supports driven into forty meters of rock, and sensors which are supposed to detect the settling if it exceeds even ten millimeters, Japanese officials have announced plans to reinforce the structure of the terminal building to minimize any risk to the 10,000 passengers that can pass through Kansai Airport in one day." Because of this and other navigational problems, the airport is the only one in the world with two lighthouses. The concern is that in inclement weather, shipping will run right into the airport property. Can you imagine what would happen to the Japanese "face" should a boat hit a plane as it is taking off?


In the meantime, the area is known to have some of the worst weather on the planet and naturally, everyone is aware of the giant Kobe earthquake that occurred not so long ago. As I recall it, Kansai Airport was approximately seventeen-miles from the quake's epicenter and that quake was a whopper. It measured 7.2 on the Richter Scale. They say that the airport could withstand a quake rated at 9 on the scale, but to put that in prospective, a measurement of around 11 on the scale would split the earth in half so it gives you an idea of the power that was unleashed. However, the airport only moved a coupled of inches and whatever damage it created was minor. The airport’s next test came from a typhoon that slammed the airport and the bridge leading to the mainland with130 mile winds, about as fearsome as a typhoon gets. Once again, damage was minimal with the exception of the fact that so much water was dumped on the bridge that it had to be closed to traffic. The bridge and the airport are said to be equipped to handle 190 mile an hour winds, something that almost never occurs.


By the time engineers had finished filling and refilling the earth, Kannan Kada Mountain located in the Osaka area had been totally carved up and carted into the bay. With this amount of environmental rhubarb going around, the fishermen started complaining bitterly to the Japanese Government, saying that the seabed’s that produced their catches was being destroyed. The water quality had unquestionably deteriorated, and what was once a glimmering blue sea had now become a churning brown waterway containing little life. The fishermen were determined to be and they were reimbursed millions upon millions of dollars for their commercial and preceded to file suits against every governmental authority in sight and when the dust had cleared, they collected a massive amount of damages. The fees that they received were basically for relocation as it was universally assumed that the area would never again be financially logical for commercial fishing.


On an airport-to-airport basis, an interesting comparison in cost was made with the recently opened state-of-the-art, Denver Airport in the United States. Experts had estimated that the Denver Airport has five times the capacity of Kansai and was delivered at one-fifth the cost. On an efficiency basis, the Denver Airport seems to be 25 times more viable than that of Kansai. In addition, the Kansai Airport could not necessarily be considered to be an all weather airport having only one runway, which could be underwater at any given time. In another bizarre development, female personal are subjected to severe limitations on their work hours under Japanese law, and considering the fact Kansai is supposed to be a 24-hour facility and the fact that almost the entire staff handling check-in’s and reservations are female, we are not sure how this thing is going to work itself out.


However, there is no question that the Japanese Airport is a spectacular architectural achievement and that the overall facility is literally awesome.


"The huge man-made island on which the airport stands demonstrates the power of civil engineering to create an artificial landscape, a kind of second nature. Likewise, the Kansai Airport’s terminal, designed by Renzo Piano Building Workshop in association with Norikari Okabe, reveals the ability of its architects, engineers and contractors to construct what in effect is a miniature city under one roof. The 1.7 km long terminal has connected office buildings, interior shuttle trains, elevated highways, car parks and commercial complexes that are like pieces of a city displaced from the mainland and arranged in a more organized form…It is a monumental structure. At the same time it is also, the most playful air terminal built since Saarinen’s winged TWA terminal at JFK, New York. Kansai’s 1.7 km of steel and facades flow down the island like a futuristic space shuttle. The terminal with its centripetal docking wings, looking poised to soar over the bay exudes the joy of travel…The building reflects the wind of change. Piano added a pulse, which reflects human rhythms to buildings, designed to smoothly execute functions. He visualized the flow, the building then automatically acquired its expression."

In a late bid to join the Western World, Japan’s Kansai Airport has become a smuggler’s paradise, as contraband goods flow through the facility as though it had sprung a massive leak. Recently the airport confiscated 32.2 kilograms of drugs, including marijuana, hashish, and hallucinogenic tablets. In spite of the fact that there are almost two hundred customs inspectors employed at the airport, they are not enough to handle the 20,000 passengers who arrive daily. Thus, the situation is simply that there are not enough airport security personnel to inspect everyone. While the Japanese are really bummed out about this situation we don’t think that they candle to contraband that flows in and out of the international airports in the United States.


Interestingly enough, originally, one of the bizarre reasons for the erection of the Kansai Airport was the fact that the neighboring airport at Narita was swiftly becoming more of a joke than an airport. It seems that six vegetable farmers did not want to give up their occupation and location no matter how much money they were being offered and at last count, had be able to hold up construction of a second runway and a general airport expansion for over 25 years. It is apparent from the substantial damage that these farmers have caused to the regional economy, that Japanese law does not provide for eminent domain. In other words, in the United States if that same situation had came up, a court would quickly determine a fair value for the property, the farmers would be given a government check for that amount and then be hastily escorted off the property by U.S. Marshals should they not want to leave.


Every recent large airport in the world that has recently opened has had more than its share of problems. While the problems at the airports in Denver and Hong Kong were more of a highly technical nature, the problems at Kansai are much different. In spite of a fairly smooth run early on, lately there has been nothing but bad news. Cost overruns, the fact that the airport is sinking into the sea, the building of a second runway and terminal at a literally obscene price are all extremely serious problems. However, the actual functioning of the airport has gone fairly well. This facility, when all is said and done, will have cost in excess of $22 billion, a number, which so outdistances any runner-up airport in cost that comparisons become meaningless. Probably a good figure to use would be, that when the second stage has been completed, this airport will have cost 5 times, what the next most expensive facility in the world has cost with the possible exception of Hong Kong.


On the other hand, costs are going up as the land that would serve as the fill for a new facility is gobbled up by construction projects. Whatever the case, Kansai, is both an architectural and economic wonder. It is unbelievable that the Japanese even undertook this project in the first place, but, on the other hand, it well may be they had no choice.



Surprising China

At the moment, China is the world's most populated country: somewhere between 1.3 and 1.7 billion people live within its borders, nobody in China, or anywhere else for that matter can really be certain. A number of years ago, the Chinese adopted an intense population restriction formula, which allowed only one child per family. As a result, India will probably surpass China in population early in the 21st century. Interestingly enough, although only 22% of Chinese live in urban areas, there are 40 cities in the country with over 1 million people. Ethnic Han Chinese comprise approximately 92% of the population, followed by Zhuang, Manchu, Hui and Miao peoples.


The Chinese literacy rate is relatively high: 78% of the population is able to read and write. On the other hand, advanced education requires proof of allegiance to the Communist Party, which restricts universal higher education and excludes a substantial talent pool from the elite. Most curricula throughout the system, stress courses in math and science because the national leadership believes that the country lags in those disciplines, which they believe are essential to the country's technological growth.


China has no state religion, and the government claims it does not stand in the way of people who want to practice religion. Confucianism, Buddhism and Taoism are the most common forms of organized religion, but in practice, people seem to treat religion as a menu and often combine parts of all three in their services. Ancestor worship is universally practiced. However, whenever a religion begins to look more like a political forum such as the hated Falun Gong, the Chinese are quick to crack down and have gotten substantial bad publicity recently because of their treatment of a number of religious minorities. Moreover, religious movements have sprung up over the years in China, mostly offering a better life, inoculations against tyranny or something better in the hereafter. The come and they go but their attraction to the Chinese is almost magnetic. They have witnessed the rise and fall of "the Taoist Yellow Scarf Society during the Han dynasty in 184 A.D., the Wu Dou Mi Religious Society during the Jin dynasty in 399 A.D., the Bai Lian Sect in 1796 and the Taiping Rebellion during the Qing Dynasty in 1850." ()


The Falun Gong headed by the highly revered Li Hongzhi who is now living a secluded life in America, started simply enough as a spiritual movement. Their leader who had some charismatic qualities was not above changing the facts to suit the situation. One of the key messages that he espouses is the fact that he is the living Buddha and has substantial supernatural powers that will protect his followers. In order to insure that his flock could more easily accept that view, he changed the date of his birth to coincide with the birthday of Buddha. Given a substantial public relations push, Li determined that the group should go even further in getting their message across. Many people in China see membership in the group as being an easy way to obtain an American Green Card as a religiously prosecuted minority. This seems to be about the only logic that can account for some of the heavy-duty thinkers that have joined the religion.


The Falun Gong staged a massive protest in April 1999, which drew substantial attention from Chinese officials. Moreover, one thing lead to another, and literally a war was declared between the religion and the national government. The Chinese government has not shown a proclivity to handling descent well and as the stakes were continually raised, the sentences handed out to the faithful became substantially more severe. Instead of reorientation along with job demotions, we are talking about long prison terms at hard labor. But what is this religion all about and why is that China is so dead set against it?


"Gong? The movement has been drawing attention in the West for the last two years. Some Western China scholars are even praising it for the scientific basis of its principles. Falun Gong has drawn the attention of Chinese intellectuals too, particularly those searching for a spiritual movement that is grounded in traditional Chinese thought but takes account of rational, scientific and modern considerations. Whatever their educational background or technological knowledge, all Chinese lean towards wearing a "Confucian thinking cap, Buddhist robe and Taoist sandals." I am no exception." ()

The hardly seems to qualify as a contemporary combination of science and religion. It would seem that Li Hong-zhi has established a pot pourri of witches brew by mixing some reasonable facts with some of the most outlandish statements made since Kansas banned the teaching of evolution. He teaches his followers that illness and misfortune are caused by the evil deeds that they do. He also teaches that inanimate objects such as stone, wood, earth, steel and air are purveyors of morality. He envisions tall building standing on sea bottoms, Atlantis style and is certain that people populated the earth hundreds of millions of years ago. If these cockeyed concepts weren’t enough, it appears that he is readying a wheel to implant in the stomach of his followers in order to protect them from harm. Naturally, Li has been able to protect his disciples from harm and whenever an example of a miraculous escape or cure crops up, the leader of the Falun Gong steps up to take credit for it. Li writes:


"These incidents are so common that they are no longer worth counting…You might or might not encounter them, but I will guarantee that you will have no danger. That is what I will give you. My saintly body will protect you until you are able to protect yourself."

We would wonder what his followers that are being tortured in Chinese jails fell about Li’s gospel. In reality, so far, there has been little backlash and if anything, the number of his followers is increasing. However, this is exactly what the Chinese were afraid of and their war against Li’s clan increased dramatically. This escalation in turn brought a greater reaction from the Falun Gong’s irrepressible leader who felt substantial comfort when cajoling his flock to withstand in whatever ways available the government’s onslaughts against.


However, he was issuing his fighting words from half way around the world by e-mail, hardly front line duty. His cries for action achieved the desired result and a number of religiously orchestrated self-immolations took place in the name of the Falun Gong, which received worldwide press coverage. Each side would continually raise the stakes in their poker game and neither side has come even close to a victory. Nevertheless, one thing is certain, this tiny religion has come closer than any other group in China since the end of World War II, to becoming the mouse that swallowed the elephant. Li’s statement can be well categorized with the following:


"For example, some students were arrested and imprisoned. When they couldn’t endure the severe torture, they wrote repentance statements. But in their minds, they were thinking: ‘This is to fool them. I’ll still practice after I get out, I’ll still go out to validate the Fa (another name for the Falun Gong) and I’ll still go to Tiananmen Square in Beijing, the site of protests.’ But this is unacceptable. It’s because this kind of notion is something developed in the human world after humans have become depraved. But gods aren’t like that. They don’t have thoughts like these. Once they’ve decided on a certain path, they’ll definitely stick with it to the end." ()



With a landmass of 3.7 million square miles, China is only slightly larger than the United States. Of all the countries in the world, only Russia and Canada are geographically larger. China, contains the highest point in the world, Mt. Everest, and one of the lowest, Takia Makan, an oasis, which is over five hundred feet below sea level. The Yangtze River is almost 4,000 miles in length, and only the Nile and Amazon exceed it in size. The land for the most part is unsuitable for agriculture as mountain ranges make up much of China's terrain. It has 22% of the world's population and only 7% of its arable land. Yet, it is agriculturally self-sufficient due to the use of highly technical production techniques. On the other hand, the food is only of the subsistence variety, and as the country's wealth increases, it is likely that the population will desire a more varied diet. Under those conditions, it is doubtful that China can maintain the delicate balance that it has established between production and consumption.


Chinese eat many foods that may appear strange to westerners such as Bird’s Nest Soup, which comes from the secretions of the cave or cliff swallow and is considered a delicacy, or jelled blood, a concoction made from pig or duck blood, which has a gelatin like appearance but has a salty flavor. However, when you are in a particularly festive mood, bull penis is always recommended but is usually reserved for holidays and special events. Nevertheless, more expensive but excellent is drunken shrimp which is served live, swimming around in a bowl of rice. At expensive restaurants, the shrimp are allowed to swim around in a highly flammable liquor which first gets them higher than a kite and when they are plowed, they are then set ablaze, and the shrimp are consumed piping hot and while still alive but totally off the wall.


If this exciting palate tempting morsel doesn’t do it for you, then we are certain that boiled fish flotation bladder would be an acceptable alternative or if not, certainly monkey brains would do the job. In order to get the full flavor, the brains must be eaten directly from the open skull of a live monkey. This is something that is sure to tempt the palate of the most adventurous eater. However, many people have an aversion to eating live animals and perhaps you would prefer to have your dinner not attempt to get off the plate while you are eating it. Dead, cooked rat fits this scenario to a tee. Rats are said to have an excellent flavor and at one time were highly abundant in China. The fact that their taste is so much in demand has diminished both their population in China and to a larger extent, the diseases that they normally carry. You say that still doesn’t to it for you. We are sure that we can please.


Well then how about Sa Kuo Yu Toe, or fish head soup. The heads bobbing about in the soup tureen give off a sensational flavor, but looking into another animal’s eyes while eating can become slightly disconcerting. For an aperitif after a great meal, there is nothing like fine snake wine in China. It is only a bottle of fine wine containing a small snake that has been immobilized and drowned in an alcoholic bath. After the wine has been served and the bottle finished, the snake makes an excellent morsel for dessert.


An alternative desert that is highly prized by the natives is Cho Do Fu which means "smelly tofu" Many have said that the only problem with this dish is that it smells like an outhouse. () () An even more important part of the Chinese diet is the exotic camel tendon chowder, which most gourmets have put in another league from cow tendons, which tend to be grainy. Another Chinese dish that has taken the country by storm is the ever-popular Tiger Penis Soup, which originated in Korea. This hard to come by delicacy is only available to the very rich and is probably the most expensive dish served in the country.


The gentrification of China has literally occurred overnight and while most feel that the new China provides substantially more opportunities that the old one. However, in order to get in on the potential you have to move to where it is happening, that is the big cities. The young people in China who are historically, very family minded; suddenly find themselves without their traditions and without old time friends. In order to fill that gap an alternative is springing up and taking the country by storm. In rural areas, surrounding the bigger Chinese cities a new and very successful business is burgeoning. Old style cooking down on the farm style. Resorts similar to those that had sprung up in the Catskill region of New York are growing like topsy in China, bringing the people back to their roots, but primarily only on the weekends. Below is a story of Mr. Liu, one of the entrepreneurs who has become very successful in bringing the city slickers back to the farms.


"His main aim, he says, is to "give the guests what they demand." Mostly, that means such nostalgic mainstays of Sichuan life as rice scooped from a communal wood bucket, cold plates of local pork and rice liquor straight from the clay jug. But it also means setting out tables amid the greenery for games of mahjongg – the favorite pastime here. Sometimes, work units Chengdu rent the entire place for parties, especially at Chinese New York, in a home-spun version of the corporate retreat…I May, you can’t find a spare chair to sit-down," says Mir. Liu. Even on chilly winter weekends, with hardly a leaf on the sycamores, lunch tables are full, the gardens packed with game players in overcoats."

Historically, the country had been like a big brother, with all workers being employed by the state in some capacity or other. These state-owned enterprises (SOEs) in turn would take care of the people, literally from the cradle to the grave. As China moves towards a more market oriented economy in which the SOEs are not the only employers, another system had to be substituted. China has now determined to go with something more similar to the American Social Security system in which the people make direct contributions into a fund run by the national government and when they retire, they are in turn paid out of that endowment. The fundamental reason for the change is the fact that, as in most other countries, the Chinese population is getting elderly and the SOEs are no longer able to take care of the workers and remain competitive at the same time. However, the system will primarily function only for those people that live in the cities where the industries are located. It would appear that no particular consideration has been given to the 800 million rural peasants who live on farms. Apparently, the central government believes that they these people can continue to live off the land, the same way that they have been doing all of their lives.


"China’s Minister of Labor and Social Security, Zhang Zuoji said: ‘In rural areas… the main form of insurance is still provided by families, which completely conforms to the national condition and ethics of China’" ().

However, it seems that China has missed the point. They are trying to bring the country into the current century and have chosen to move people off the farm and into the cities to work in industrialized facilities. As the young people are uprooted, or in the alternative uproot themselves, looking for a better life, they may be leaving the infirmed behind, thus unable to take care of themselves. However, it would appear that there is method to the Chinese madness, it would seem that with this one move, they have addressed the nomadic population that has taken hold in China, moving from job to job, and from city to city. Living in the rural areas has now become a road to nowhere and loyal family members are going to think twice about looking for the good life and leaving their revered parents behind.


The World Bank in a recent report indicated that while the world's economy was growing at a rate of 2% a year in the first half of this decade, during that time, China beat all comers by averaging a global high of 12.8% but this of course was a from a very low base. Of the top nine countries in the study, all but Kuwait and Jordan are from the Pacific Rim. The runners up were Kuwait, New Guinea, Singapore and Malaysia in a dead heat, Thailand, Vietnam, Jordan and Indonesia.


China has a long and worthy history, which includes a substantial number of major, globally important innovations, in spite of the fact that for a good deal of its recent history, China was basically isolated to the outside world. Since the early 1800s, the country to a large degree has been in turmoil, with power largely decentralized and revolutionary movements becoming the order of the day. Historically, China could well have fallen into a series of fiefdoms without Western assistance in suppressing these revolutions. Witness the Boxer Rebellion in 1900, which was brought under control primarily by the United States Marines. In spite of Western attempts to keep the country on an even keel, Imperial China (the Qing Dynasty) collapsed in 1911, leaving China in chaos.


China’s allegiances shift with the wind; this is evidenced by the fact that they were on the side of the Anglo-French during World War I, for whatever little that meant. In exchange for mostly vocal support of the Allies, which is about all they could give, they were promised the German concessions in the province of Shangdong at the end of the war. As often occurs with these types of things, someone screwed up big time and the Treaty of Versailles and gave the property to Japan. Enraged, the people gathered in Tianamen Square to protest on May 4, 1919. This event marked the beginning of what became known as the "May Fourth" nationalist movement.


Chiang Kaishek took over the leadership of the Nationalist Party (KMT) in 1925 and began unifying the country by force. This created the conflict between the Nationalists who were pitted against the Communists. As often occurs in these types of encounters, the Communists eventually won control of the countryside and the Nationalists, the urban centers. As Chiang Kaishek's troops were closing in on what could have been the decisive battle of that long engagement, in 1934, the Communists used a great deal of sense and turned tail and ran. They didn't know where they were headed but they didn't stop moving for over a year, and by that time, their forces had been diminished by over 95%. This became known as the "Long March" and it went for such a length of time because local leaders, who were basically "warlords," were not overjoyed to see this motley crowd setting up camp in their regions and the group was asked to move on. Among those on the march were Mao Tse Dung and Deng Xiaoping who ultimately became two of the most important leaders of modern China.


Meanwhile, the Japanese were busily occupying Manchuria and by 1937, much of China itself. If it were not for Japan's attack on Pearl Harbor in 1941, China might well have become a part of Japan’s empire. However, Japan was forced to turn its attention to the advancing Americans, who after a slow start soon began leap-froging the Pacific. Before the American forces had finished decimating Japan, the Japanese had killed at least 20 million Chinese and had ravaged China's industries. During that period, the American Commander in that region, General Stillwell, tried to get the United States Government to supply materials to help the communists fight the Japanese by using the seemingly logical argument that the Nationalists were inept and corrupt. In spite of the argument's logic, the General was turned down because the United States Government was backing the Nationalists, probably for all of the wrong reasons.


On the other hand, as soon as World War II had ended, the Nationalists and Communists resumed their conflict with a vengeance. The Nationalists courted disaster by their continued corruption and mountainous debt. The corruption endemic to that entire regime was never addressed. The Chinese Nationalists solved their debt crisis by printing mountains of worthless paper money. This phase of the war was short and by 1949, the Nationalists were ensconced in Taiyuan (Formosa) and the Communists were solidifying their hard-earned victory throughout Mainland China.


However, not everything went well with the Communists either; Mao's "The Great Leap Forward," an attempt to make China agriculturally self-sufficient in 1958, ended in failure with 30 million people dying from hunger. His government blamed the weather, but the facts argue correctly that it was a case of very poor planning. In 1962, China broke with their former communist ally, Russia, and in 1966, Mao began what was called, The Great Proletarian Cultural Revolution, unleashing the plague, which eventually became known as the "Red Guards." In bizarre fashion, the Red Guards soon began attacking everything in sight but when they took on the Chinese Army the Government began to have second thoughts relative to the monster that they had created. The Red Guards had become an equal opportunity assaulter and when they were not indulging in beating up on the army itself, needing new world’s to conquer, they started attacking each other, causing riots throughout the country in 1967.


The Cultural Revolution ended by proclamation in 1969, and the country returned to relative calm. Mao died in 1976 and Deng Xiaoping, who himself had been purged twice during the Cultural Revolution, assumed leadership. "Deng had been a work-study student in the early 1920’s. He joined the Chinese Communist Party in 1924. When fighting between the Chinese Communists and the ruling Nationalists broke out in china in 1927, Deng threw himself into revolutionary work. As on of the military leaders who led the Chinese Communist Party (CCP) to victory in 1949, he developed a reputation s an outstanding military strategist as well as a skilled administrator. After the revolution succeeded, Deng worked briefly in his native province in southwestern China before moving to Beijing, the capital , where in 1956, he wa appointed general secretary of the CCP, then one of China’s highest posts."


Although Deng was closely associated with Mao Zedong during the revolutionary years, he was always more practical than the visionary, indeed utopic, Mao. As Mao’s policies became more radical during the late 1950’s and early 1960’s, Deng increasingly found himself at odds with the top leader. When Mao launched the Cultural Revolution in 1966, which was an attempt to return Chinese society to Communist principles, Deng, after president Liu Shaoqi, became the second most prominent victim of Mao’s purges of party officials. While exiled from power, Deng worked part-time in a tractor factory in rural Jiangxi province in south-central China.’ ()


He immediately instigated reforms, primarily in the field of agriculture, eventually making the country nutritionally self-sufficient. The people took Deng's more benevolent leadership as a sign that reforms had become the order of the day in China. However, they soon learned that repression was still alive and well. In May 1989, it appears that the people overstepped the unspoken guidelines that had been laid out for them in secret by the Government. The Tianamen Square massacre occurred, sending a very clear message that those in power in Beijing were not yet ready to accede anarchy to the populace.



Deng died at the time China initiated its own Industrial Revolution, and at one point the country was utilizing fully one-half the concrete poured in the world. Moreover, during this period, control over the city-colony of Hong Kong and then Macao reverted to China. When the story of the first half of the 21st Century is written, it will state that China in a relatively short period of time became the leading producer of industrial products in the world. As to this potential industrial prowess to create even greater achievements from here, we have no doubt. To realize the potential, China, must overcome the problem of internal population dislocations.


The globe has been recently been faced with enormous temporary movements of people seeking work in wealthier countries. At times, this process causes massive dislocations when conditions suddenly change, such as when some very rich countries in the Pacific Rim like Malaysia discovered that they could no longer afford the luxury of foreign laborers and had to send people packing to all corners of the globe. Serious problems developed when many of these foreigners choose not to leave and when the countries of original origin became unhappy taking back vocally unhappy refugee groups.


Some 1.6 million Asians and citizens of the Middle East were working in Kuwait and Saudi Arabia before they fled Iraqi War in 1991, and naturally they all also wanted to leave at once. This caused severe breakdowns in the area's transportation systems as these work-nomads conflicted with the logistics of the war effort. Tens of millions of global workers have left destitute regions for more affluent ones, in pursuit of higher wages and improved opportunities. At least 2.5 million "undocumented" Mexicans live in the United States, let alone millions with visas or naturalization papers.


China is a country where millions of people recently began following seasonal employment throughout the country in order to better themselves. This recent phenomenon has taken hold more so in China than anywhere else on the planet; dissimilar income distribution also has raised crime rates and driven international migration. It is currently estimated that there are over 100 million nomadic workers in China. Obviously, any deterioration of the economy will create a need for social support services that could seriously disrupt China’s attempts at economic stabilization. In addition, any major slowdown in the economy will obviously dislocate itinerant laborers first and cause a massive disgruntled segment of the population that the government will have to delicately deal with.


State companies in China have admitted that there are 27.53 million surplus workers (redundant and jobless according to the Ministry of Labor) being forcibly carried by the government. This is an increase of over seven million since the previous time these statistics were released, and it is commonly believed that even these redesigned numbers substantially understate the bureaucratic nepotism practiced by managers to keep the people from becoming discontented.


China had already acknowledged the existence of over 20 million unneeded workers in the ailing state sector, which is now undergoing radical restructuring. The commentary emphasized that the new figures did not include about 130 million surplus rural laborers. It is difficult to harmonize these almost unlimited numbers of Chinese Gypsies nomadic wandering the country as most of the rest of Asia still for the most part lies in economic ruins. Yet in spite of nomadism, the Chinese leadership has taken an inflexible position relative to its currency: "There will be no devaluation despite growing pressure to do so," Deputy Prime Minister Zhu Rongji, said in a newspaper report.


Because of the recent depression that infected other countries in the Pacific Rim, foreign investment in China dropped a substantial 35% in 1998. Other countries in the area devalued their currencies and because of it, now may have become economically more competitive than China. China's export advantage to some part is derived from unpaid prison labor, may soon be lost to a tougher foe in the form of the devalued currencies of its neighbors.


However, we believe that China poses a serious challenge to the entire globe should its economic machine grind to a halt, civil unrest will grow and the country loses its already waning agricultural self-sufficiency. At this point, China could once again become isolationist and withdraw from the global economic arena. The disastrous consequences for its domestic economy can be easily imagined. While this scenario is highly unlikely, China is now in a position to undercut world prices in literally every manufactured product. Globally, nations are being beaten up by skyrocketing oil prices on one hand, unemployment on another and Chinese competitiveness making up the third corner of a deadly triangle. Should things get even worse, China has plenty of room to lower prices even more sending even more Latinos and Europeans into the unemployment lines. As unemployment increases, tax collections diminish creating an economic death spiral for all countries involved. Sooner or later, this will be the unpleasant scenario that we will all have to face.


This problem is hardly limited to China, but China’s problem is of a much larger dimension than that of other countries. As opposed to the orderly migration of the past, which in its greater sense, historically resulted in personal transference of allegiance and the ultimate permanency of citizenship, the migrations or dislocations of today have created an itinerant workforce that wafts dangerously from one country another country. This transient army survives by plying the globe, scavenging work from indigenous populations for what would be considered to be locally unacceptable compensation with little hope of governmentally approved permanent residency within either the national or the regional borders (). These will be the new mercenaries () of the 21st century, and as population problems intensify, borders that are flexible when people leave may not be open when it is time to return. In Asia, workers can be allowed in and thrown out as the need for additional bodies waxes and wanes.


In Europe the situation is not so simple, borders are porous for several reasons, the first and foremost is the fact that the people of all of the European Community countries have equal access to each other’s borders. Thus, the laborers in Portugal, Spain and Greece have gravitated to the higher wage paying countries of Germany, France and the Nordic countries. The EU will eventually only tend to equalize the suffering of Europe, The second reason that Europe acts as a ready home for nomadic laborers is the fact that many countries on the continent either don’t or physically can’t their borders because of corruption or geographic impossibility. Italy is one such country and peoples from all over the world are able to slip in Europe by heading in that direction.


In the Pacific Rim, the richer countries had imported millions of workers from the poorer nations. Malaysia and Thailand were particularly big in bringing in foreign workers to do the more menial work. When their economies collapsed, the respective governments determined that it was time for these migrants to return from whence they had come and it was so ordered. These poorer nations by this time were in even worse shape, places like Indonesia and the Philippines could not reabsorb such prodigious elements of their population and resisted taking their own people back. In addition, the transient laborers were not exactly excited to going back to poverty and they also did not line up for the ferry ride home. This created serious problems with many people being killed during this period of time.


The United States in all of its prosperity is not exempt from not having a clue relative to what to do about it immigration problem. With unemployment at record low levels, the approach that the United States has been using recently, of excepting professionals that have particularly needed talents no longer seems to fly. It is the menial laborers that are now in demand and as the population of the United States becomes even more upwardly mobile, the problem will become more intense. The immigration regulations are now undergoing an extreme tinkering and a dramatic shift in the type of people that immigrate will be seen in the near future. But what happens here when the economy starts to back up which it looks like it is doing now?


This process of nomadic migration is gaining momentum with the occurrence of a particularly unique trend. Whereas previously women never migrated, at least without a male partner, but they are doing it today and in greater and greater numbers. As productive land becomes less and less available to indigenous populations and the rural poor also become part of the itinerant poll of migrants. Both of the above factors have accelerated as poverty, at least on a relative scale, becomes worsened.


India, with a population of 949 million people, and estimated to be on target to overtake China as the world’s most populous country by the year 2047, with a then population of 1.62 billion, certainly represents an appetizing target for global business; a market with pent-up demand for almost every kind of product and a middle class that can afford to purchase them. Before your mouth starts watering too much, lets look at the situation, as it exists today.


It has been perceived as strange by the uninformed as to why China has peaked the interest of so many of the world's major industries and India, similarly positioned, has been treated by global investors as a pariah. The global perception and the actual facts in this case are one in the same. Pure and simply, the Indian government is extremely reluctant to go through the painful process of creating a favorable business environment, which in turn has resulted in a startling relative constriction of foreign direct investment. This is illustrated by offshore funds infused into China last year were twenty times more than those earmarked for India. Although China is not exactly free of bureaucracy, India has created new meaning for the term and stultification has risen to a level heretofore unheard of in global business relative to democratic country.


This is not unusual when analyzing the attitudes towards business normalization practiced by the diametrically different governments. Whereas China until recently had no infrastructure, India’s has fallen apart from abuse and can only be restored at a staggering cost. In spite of the fact that India had a national phone network decades ago, by the turn of the century, callers will be able to reach almost all of China and literally none of India. What roads China had were literally, only usable by foot traffic, animals and some bicycles. Today, China is putting the finishing touches on a band of four lane highways connecting the length and breath of the country, while India’s congested thoroughfares make traveling any distance a painful experience.


China has embarked on massive projects to create power, dams, and grids while energy plants can be seen rising throughout the landscape. By contrast, the absence of adequate power supplies acts as a major deterrent to factory construction in India. Any attempt to attract foreign labor, financing or other assistance is met with unconscionable bureaucratic bungling, political paranoia and restrictive regulations. While China is not necessarily idyllic when it comes to bureaucracy, India has given bribery and indolence new meaning.


China has gone from agrarian state to industrial one in less than two decades. It used to be a nation that could not meet its own people’s needs. Now it wants to supply the globe. Through the use of low wages, forced labor and modern, more sophisticated production equipment, the country has seized many markets from its neighbors/competitors, Thailand, The Philippines and Malaysia. However, China in their rush to a market economy has seemingly forgotten their vaunted healthcare system for the rural poor. The free clinics that once serviced the medical needs of the farming communities and the so-called "barefoot doctors" have all but vanished. In decentralizing its system, Central Government planners attempted the shift the burdens of healthcare and education away from the federal government and unto the provincial bureaucrats. While this was a logical concept, there are 800 million Chinese peasants in rural communities who mostly do not earn enough to even pay for food and taxes and the outlying provinces are hard-pressed to afford anything let alone expensive subsidies such as these. "The rural health system has become a hodgepodge of hospitals and clinics that are often privately run and almost always prohibitively expensive, where treatment for a cold can eat up two months income and giving birth in a hospital tow years of hard-earned cash." ()


In China’s new, pay-as-you-go economy, the government clinics that formerly dotted the countryside are still there, but they have now been privatized and have been turned into profit making institutions. Doctor’s visits that used to cost 60 cents, still do, but it is the extras that eat your lunch, important things like medicines have gone through the roof. Even formerly free immunizations now costs money and a system that provided for everyone is now producing a recurrence of tuberculosis which has quadrupled in the last 15-years. Giving birth in a hospital can take up to two-years income and the only alternative is to have children at home. However, for the most part, there may not be any running water or sanitary conditions. Infant deaths have risen substantially in recent years because of this fact. If is both the lack of available educational and health facilities that are causing many, whose families have tilled their own land for hundreds of years, to leave for the cities and a potentially better life. It couldn’t be any worse but maybe China figured this out as the only way to fuel their massive factories and production quotas.


With this type of steamroller competition, there is no longer any margin for error in the economies of China's Pacific Rim competitors. China now suffers excess capacity problems in many industries, and factory prices have fallen over 10% in just over a year, and are headed lower. Having built and maintained industrial facilities that are adaptable, it can convert relatively easily from one production line to another. This is not the time for other macho governments in Asia to prove who is has the biggest "credentials"; it is time for their leaders to take a constructive stand before they are eaten alive by the Chinese.


China in some cases has literally no labor cost because their factories are often located on prison sites. In such plants, the only fee a criminal gets is bread, water and another day on earth. Despite these low labor rates, China has been caught in the vortex of down-drafting currencies. For many prisoners, bread and water in exchange for 20-hour workdays is the good news and life sometimes can get even worse for those incarcerated under the Chinese system. When a prisoner's production falls below acceptable levels, he is no longer considered useful by the state. At that point, his body, which is thought of as state property, is summarily reclaimed.


The hapless convict is executed, usually by lethal injection, which tends to preserve organs for export more effectively than competing methods. The old method of "skinning, quartering and chopping people in half at the waist" does not cut it when internal organs are needed. The victim’s organs are medically removed and packaged for resale internationally or if required, the recipient can receive his new organ within China itself.


Chinese "parts salesman" are discreetly sent on global marketing missions in search of those in need of body upgrades. In a recent New York City arrest of Chinese organ dealers, the available menu was found to include kidneys, corneas, pancreases, skin and lungs guaranteed to come from non-smokers, all neatly catalogued with prices attached. The traveling parts salesmen also offer cut rate transplants if the buyer wants to have the surgery performed in China. As body component orders in this industry increase, crimes that the government considers capital in nature have been substantially expanded to meet production demands. Currently, according to the New York Times, robbers and counterfeiters sit on death row. The growth rate has been prodigious thanks to industrious and sophisticated sales and marketing techniques employed by the Chinese.


Amnesty International stated that in 1996 that China executed more than 4,300 people, which would mean that it did away with more criminals than the rest of the world combined and made a shambles of the runner-up Ukraine, which could only dispense with several hundred. China sentenced an additional 6,100 to death, thus insuring an adequate supply of organs for international sale in the ensuing years. While china has indicated that it is changing its ways, international organizations have seen little change in their policies.


Of particular interest to Chinese economists are the facts that this industry has not suffered capacity problems and sales are made almost exclusively for hard currency. The materials are readily available in whatever quantities are desired, at little or no cost, and the economic crisis in the Pacific Rim has not impacted business. Socially, the business makes even more sense, as society's undesirables are eliminated at a profit to the State. Although Amnesty International, the United States State Department and other governments are upset by the practice, China appears not to give a damn one way or the other.


There are not enough niche markets available to deflect the recent currency devaluation of China’s neighbors, and there is not much question that the Yuan had become relatively overvalued. China now faces a situation where they have over capacity in most areas of production, a gypsy labor detachment of over 100 million people wandering the country looking for work, and a currency that has effectively appreciated in value 50% on a comparative basis. Although China’s economy has held up admirably under the circumstances, the jury is still out as to how much long that this can continue in the dog-eat-dog competitiveness of the Pacific Rim.


Moreover, China, which does not have excessive foreign debt, is holding the line relative to devaluation, more because of "face" than practicality. On the other hand, there is not much question that if China devalued at this vulnerable time for the region, it could well bankrupt almost all of its Pacific Rim competition and send the countries back into the Stone Age. China's leaders seem to by aware of this delicate balance and are rightly concerned, it would appear that they are waiting for the Pacific Rim to recover before further considering if and when they may devalue the Yuan. The risks involved are tremendous, and the other countries know it. Korea which is going through a Japanese style reorganization because of their inherent system of supporting under-managed companies that have managements that could not make money if they were given the keys to Fort Knox and a wheel barrel, has taken the position of offering buyers long-term contracts at substantially reduced prices. This is what it is going to take to stay competitive with China’s newly discovered instincts for economic survival make it an awesome competitor. When the time comes to close the trap, it is likely that its leadership's timing will be impeccable.


Chinese Vice Premier, Zhu Rhonji, in a meeting with then Deputy Treasury Secretary Lawrence Summers told him that, "China’s unequivocal commitment to hold the current Yuan exchange rate" was in cast in stone. But you had better believe that in some places stone doesn’t last as long as it does in others, and this particular stone may be of the short-lived variety.


Just as everywhere else, China has its share of fraud in spite of still being a communist nation where extreme wealth stands out like a sore thumb. On the other hand, the bureaucrats that run the country need their creature comforts, and who can blame them. It seems that during the building of a series of dikes along the Yangtze River to protect the hundreds of thousands of people who live along its banks from flooding, officials who had to visit the area as part of their work were extremely inconvenienced by a lack of five-star hotel facilities near the construction site. All being of the same mind, they plucked $120 million from the dike allocation funds and built a hotel at which they would be proud to stay. This money represented almost forty percent of the total allocation towards the system of dikes and forced workers to use inferior products to finish the work. On the other hand, the hotel has become a major money loser because no one in the region has the money to afford one night, let alone several. Thus, when the dike bursts because of the inferior products that went into it, the downstream hotel along with vacationing bureaucrats will probably be swept into oblivion, a fitting end to this saga. But this is life in modern China.


The Chinese Government insures the availability of food for its population by buying agricultural products and storing them in various warehouses around the country until they are needed for transshipment to their final destination. These purchases by the State literally are the life’s blood of 900 million people whose livelihoods are agriculturally based. The basic problem with the system is the middlemen. The system is highly complex and its nuances are so substantial that they do not lend themselves to repetition in this commentary. However a short form explanation of the process would be as follows: the provincial governments borrow money from the State to make purchases and these loans have to be paid back when the agricultural products are sold.


A recent audit by the Finance Ministry and the Central Bank has shown that the Chinese equivalent of $25.8 billion has literally vanished from these state grain-purchase funds over the last six years. This is surprising for several reasons. The first is the enormity of the disappearance, and the second is the government's admission of an internal error, an admission that highlights the Government's view of the gravity of the problem.


Feeling secure in the inventory figures that they were receiving, the Central Government initially had no concerns regarding agricultural self-sufficiency. It was only after early audits showed dramatic slippage that the government went into orbit. Now, the Central Government was faced with their second problem. In China, the provincial governments function autonomously. While everything is eventually reported to Beijing, this can take substantial time. In addition, regional leaders sometimes feel that when they owe money to the Central Government, the stated amount of the debt is only a guideline, not an obligation. Thus, in the course of the investigation it was found that the money had been spent on things regional leaders viewed as more pressing, fun things such as cellular phones, cars, stocks, futures trading and investments in apartment buildings and hotels. Buying high and selling low is where most of the money went when bureaucratic novices though that they could beat the markets.


The extreme oddity of this situation is the fact that this wasn’t the action of one rogue province run by a maniac, it was pattern that repeated itself within all regions of China almost like spontaneous combustion. In reality, the fault lies to the some degree at the feet of the Central Government. While the rules stated that all agricultural production had to be sold to the State, when the bottom fell out of prices a decade ago, the government turned a blind eye to farmers selling their products directly. When prices recovered, the Chinese Government never reined in the practice. As a result, two virtually diametrically opposed policies existed for a period, side by side. Farmers went where they could do the best. If prices dropped, they sold at a "floor" rate set by the Central Government to the Central Government. If prices rose, the farmers would sell to the highest bidder. That, coupled with the poor administration of the State Grain Bureau, caused much of the problem.


Still leaders in Beijing are at a loss to explain how these billions of dollars could have gone up in smoke under their very eyes. Worse yet, the offenders seem for the most part to be the leaders themselves, the provincial governments and the farmers.


Moreover, the Chinese stock market has become a legitimate method of separating the hopelessly naïve pheasants from their hard earned money. Inconceivable amounts of currency were removed from mattresses and other hiding places and the funds used to purchase securities in the emerging Chinese securities markets. The only problem with this that the regulations governing the marketplace in China are toothless and for the most part not enforced. The bad guys, using Internet and countless other strategies are able to spin stories about Chinese companies and their prospects which would put Ponzi to shame. Unbelievably, a common chicken-breeding operation with about as much growth opportunities as rock was touted as the second coming in the Chinese stock markets.


The stock’s price went into the stratosphere and it was at this time apparently that the company’s management started to believe their own propaganda. They raised $250 million from local banks, telling them that the money was for expansion purposes and proceeded to use the borrowed funds to prop-up the chicken ranch stock when it started to go south. Eventually, almost everyone lost, the banks, the company and the investors. A number of senior executives of the Chicken company felt obligated to beat a hasty retreat from the country. The Chinese equivalent of our Securities and Exchange never monitored the company’s growingly optimistic announcements, the banks never checked to see where their money was being used and the poor investors weren’t even certain what business the company was in. Moreover, no one really knew where to go to find information about the company in spite of the fact that the chicken operation was listed on a major Chinese exchange. Chinese stock markets are the "Wild West" of the global securities industry and no one is watching the store. The money that has been already lost is incalculable.


While China in theory has joined the ranks of global leadership, its political infrastructure is little changed. The local Communist Party Chief is in charge of all small towns and rules dictatorially. The local police who act as his right arm back him up. Salaries for Party Chiefs are not high and they augment their earnings through extortion and other sundry crimes. Effectively, each city, town and hamlet has a similar feudal system, with the Party Chief acting as a Lord and exacting tribute; the police are the knights that enforce its collection. The Lord's coach is almost always a black limousine, and paying jobs are sold to the highest bidder, set at a predetermined scale based on the annualized bribery related-income of the home office.


The Central Government states this type of corruption is rare. However, an article in the March 11, 1999 New York Times indicated otherwise: "…corruption is now virtually built into the middle levels of China’s vast authoritarian apparatus, under an ideology that has become a hollow shell while the new market economy swells around it. Westerners often decry human rights conditions in China, citing political restrictions on writers and intellectuals in the large cities. But for hundreds of millions of ordinary Chinese who live in towns and villages, it is the unrestrained authority of a local party chief that is usually most oppressive.


" Hu Angang who is a professor of the School of Public Policy and Management at Singh University stated "that illicit siphoning of funds from projects and companies wiped out the equivalent of 13% to 16% of China’s gross domestic product, or about $150 billion, over the last decade…it is of the Government’s top challenges. They are fighting a kind of social pollution…Last week; authorities in South China’s Guangdong province sentenced seven people to death for tax fraud. Among them were two tax officials who used fake tax receipts to claim rebates on exports. Dozens of senior Chinese officials have also become entangled in smuggling scandals uncovered in the coastal cities of Xiamen and Shantou." ()



However, rampant fraud is now getting so out of control that it literally has to be addressed. China, a country that has not been able to figure out how to collect taxes is now being pulverized by high-tech tax cheats. Moreover, they have been getting away with in massive numbers. However, on March 1, 2001, the Central Chinese Government sentenced seven people to death in the province of Guangdong for tax fraud. Moreover, it has been said that this will easily by the biggest case of corruption in the Communist era. The fraud was relatively simple to pull off due to the fact that China has little or no controls in place. A former prosecuting attorney and two high ranking tax officials along with four others have been accused of using shell companies with no offices, employees or business to issue fake tax receipts effectively collect rebates from the central government for non-existent exports.


China has a policy of supporting local industry by offering substantial rebates on their 17 percent value-added tax, which is normally levied on the production side in exchange for hard-dollar exports. So far, tax officials in Beijing are already talking about the fact that the fraud has already eclipsed the 50-billion Yuan ($6 billion) threshold and is rising. "A series of cases of export tax rebate fraud are under investigation which may involve 50 billion Yuan," an official from the Shanghai Customs Office told Reuters. For the most part, this particular scheme was unique in that it addressed non-existent companies and goods, but it is common practice by Chinese companies to receive their export credits and then resell their products into the domestic market.


"This is quite a common practice, you simply sort out the export papers and then sell the stuff on the domestic market. It’s money for nothing." () Interestingly enough, the Central Government caught on to the fraud by a ninety-five percent increase in export tax rebates. In Guangdong, the rebates soared a startling one-hundred-eighty-five percent, a number so large that it could no longer be ignored. Meanwhile, back at the ranch, national police chief, Li Jizhou was placed on trial for acting on behalf of smugglers and taking bribes. This was a case in Xiamen in which eighteen people have already been convicted and are awaiting the execution of their death sentences. It seems as though the sleeping giant is slowly waking up, at least as far as tax fraud is concerned.


The Government of China is literally allowing some of the corruption in the country to proliferate because of their own exigencies. China is close to becoming a member of the World Trade Organization. The members of that august body want to know that everything that a country seeking membership is doing is squeaky clean in spite of the many outrages the members themselves may commit. China’s leaders, while they await word on their acceptance into the WTO, are actually promoting the copying of current western movies on videodisc. The Chinese population has recently gotten caught up in the play-at-home movie hysteria syndrome, according to the Government, but they cannot afford Western prices to legitimately purchase the discs. Thus, large factories exist in China whose sole purpose is to copy this intellectual property illegally.


China’s Central Government has not shown a lot of tolerance for competing political parties and a number of leaders of the China Democracy Party were sentenced to long prison terms is for only the act of existing. Then we have the Alliance for Democratic China whose leader’s, Wang Yigzheng; only known crime was advocating political reform to combat corruption. An Jun, the founder the nongovernmental organization Corruption Watch, was sentenced to four years in prison on April 5, 2000 on charges of inciting the overthrow over the government when it seems that he was only trying to get the bureaucracy to accept the fact that bribe taking was siphoning to many assets out of the Chinese system. Although the country’s fathers are well aware that corruption is a serious problem in their country, they are just not interested in hearing about it in newspapers, the Internet or in public forums.


"China Finance Information Network was shuttered shortly after it published a report on corruption. Moreover, on September 19, 2000, a Hebei court sentenced Qi Yanchen, a founding member of the Quasi-independent China Development Union, to a four-year prison term, in part for posting parts of his book, The Collapse of China, on Internet. Huang Qi, who ran a website out of the Sichuan province, was charged with subversion after he poster letters criticizing the 1989 massacre. Officials in Sichuan accused Jiang Shihua, a high school teacher ad Internet café manager, with subversion for posting articles critical of communist authorities. In August, state security police in Shandong province shut down New cultural Forum, a website set up by pro-democracy activists." ()


This is a big business with China itself manufacturing 20-million VCD players annually. By the end of 1998, the last to figures were published, about 50 million homes owned these players, probably more than the number in use in the Untied States at that time. Movies on the street sell for a little as 80 cents according to the New York Times, while the players can be had for around $70. Thus, an American movie is often dead in the water before it even hits the Chinese theaters due to the fact that it has literally been seen by everyone and even if it hasn’t, for around a buck, a family of eight can buy the show, a heck of lot cheaper than going to the theater.


The normal time it takes these pirates to crank up their copying apparatus is two days from the time an American Movie premiers. That is pretty fast action when you consider that it takes almost that long to fly the copy to the Mainland. Officials say that they are doing their best to crack down on the illegal industry, but in an business where the machinery can be readily repositioned and set up again in less than three hours, what good would it do to close a plant. An official of a legitimate Chinese movie maker that had their own films ripped off said that trying to put a stop to the practice is "just like drawing water with a bamboo basket".


In spite of the pervasiveness of corruption, China’s leaders are loath to make any drastic changes. Corruption is only punished when offending officials make too much of a show of their newfound wealth. Opulent homes and mistresses are historically unknown in rural China and are sure tip-offs that improprieties have been committed. In the meantime, the system continues to flourish. The quality of leadership is ever more diluted by a downward spiral of incompetence exacerbated by inexperienced people with bags of cash assuming high-ranking municipal jobs for which they are totally unqualified. Novice office holders seeking to maximize the yield on their investment are constantly on the lookout for new ways to shake down their constituency. How long before this system reaches the breaking point is anybody’s guess, but retribution is not far away.


Having set the stage, now let us tell you about the real China. The country is conservative and it is paternal, an almost paradoxical combination. The government plays the role of both mother and father to the people, attempting to create the environment that they think in the long run will most help China’s overall manifest destiny. Chinese leaders have substantial flexibility because of the fact that China is not a democracy in any sense of the word, and when something is placed on the drawing board that makes long-term sense, the leaders usually jump on it. However, China, as opposed to its neighbors, has not taken advantage to any great degree of its diversity of modern made very little use of use of its substantial hydroelectric power sources.

Yunju Monastery

The Junju Monastery (Xiyu Monastery) is not that much to write home about. It is not exactly off the beaten track considering the fact that it is only 15 miles south of Zhoukoudian, in Beijing Province. The Monastery taught young men how to become Buddhist teachers and has existed on this spot for no less than 1,500 years. That was, until the Japanese came along during World War II and burned the place to the ground. The monastery was rebuilt after the war was over and remains a religious school to this day.


In 605 A.D., there was widespread persecution of Buddhists in this section of China that included burning Buddhist religious texts. Because of book and scroll burnings, the religious works that were contained at Yunju were transferred to indestructible tablets. Until recently, the tablets were hidden in caves.


The monastery was abandoned during World War II and in 1939, the south tower in the Yunju Monastery collapsed. A villager who lived nearby named Baoquan and found one of the tablets in the midst of all of the wreckage. He took one of the tablets home intending to use it as a millstone, but for whatever reason, Zhang ultimately buried the stone in back of his family’s house. The Japanese came and went and with the stones largely still undiscovered. In 1957, a scholar passing through the region happen to find Zhang, who at the time was busily plowing his field. Zhang was asked if he had ever seen any stone tablets in the area. Zhang remembered exactly where he had planted the tablet and proceeded to dig it up.


This started the equivalent of an archaeological gold rush as Chinese academics rushed into the area to mine the discovery. This turned out to be the largest single discovery of Buddhist scriptures in history. Sadly, it was soon discovered that the engravings, although neatly arranged on iron racks in cement storage rooms, had been subjected to climatic changes and environmental pollution over the years, and in many cases, the writings can not be deciphered. In an attempt to raise enough money to insure the stones could be placed in an area where their deterioration could be kept at a minimum, Beijing allowed a minimal amount of press to convey the story. Soon, the site became crowded with Chinese visitors that were willing to pay big bucks to view the tablets. For whatever reason, this spot, which for a time became the hottest tourist spot for resident Chinese in the region, soon lost its cachet because of the way the tablets were being stored and the tourists just stopped coming. Once again the tablets fell into to a state of oblivion.


While China has authorized a nominal amount of funding for its many worthy archeological projects such as this one, the funds are disbursed among so many worthwhile ventures that what is left over will hardly make a dent. No one has come up with a method of restoring the stones’ luster, and short of placing this massive number of stone carvings in a totally clean room that is temperature controlled, the unrelenting decay will continue to obliterate historically significant archeological treasures.


If a method of preserving this find is not employed soon, the world will lose another priceless treasure. These are most unusual tablets in that they are in the form of a single book, which traces the Buddhist Religion from its origins. Although almost totally unknown in the West, this book is probably the most critical history of religious conditions that existed in China during those early times. The delicate stone chiseling was begun early in the 7th century and over the next millennium, 16,000 monks worked round-the-clock engraving 35 million Chinese characters onto the stone tables.


What they spent all those years copying was a 3,400-volume set of over 900 Buddhist classics, all of which were combined into one massive book. Moreover, these tablets are not the diminutive variety: they range in size from two feet by one and one-half feet to eight feet by two feet. Not only that, but the inscriptions are contained on both sides and the slabs that they are written upon weigh a prodigious amount. .


Recently, a German Archeologist named Josef Guter, who is the director of the Vokshogeschool in Bremen, Germany, was allowed to visit the nine caves where these tablets were being stored. He was utterly astounded. These caves were carved out of a solid rock cliff, rising 1200 feet above sea level in order to insure them against pillaging. He was so astounded by these 14,300 stone tables that made up the parts of the most massive single book ever found on earth that he immediately reported his discovery to Unesco and requested that they name the Yunju Monastery and its treasures, a "World Heritage Site".


While the Yungu tablets were not seen or known in the West until Guter’s discovery, during the 1950s, then former Indian Premier Jawaharlal Nehru was shown the engravings. We are told that he made a proposal on the spot to purchase a number of the stone carvings for their exact weight in gold. While this gives us some inkling of the tablets’ intrinsic value, until Unesco makes up its mind, nothing is happening and the fabled tablets continue to rot.


The Great Wall of China

The government of China during the Qin Dynasty about 200 years before the Christian era began determined that they had the best little spot on earth. The country was run by Qin Shi Huangdi who was also the first emperor of China. It seems that they had neighbors all over the place that were coveting what they had, and every once in a while they would attempt to grab a piece of property here and a piece of property there. These neighbors were highly educated god-fearing people that would have done justice to almost any community, but the Chinese just had something or other against these folks, whom they disparagingly referred to as the "Mongol Hoard."


Qin Shi Huangdi being both paranoid and fearing for his life determined to build a Wall around his kingdom to keep the Mongols and evil spirits out of his kingdom. This became known as the Great Wall of China or "Wan-Li Qang-Geng) which means 10,000-LiLong Wall. In reality, Qin did not originate the concept of walls which had been around for a long time and when he started building in earnest he was able to incorporate what was left from four aged fortification walls that were located in the North of China which had been built 500 years earlier or approximately 2500 B. C.


The first real enemy that Qin determined to address was the Hsiung Nu tribes of the north. These were the forbearers of the Huns, a highly nomadic and viscous group of marauders. On the other hand, Qin added about 3,000 miles to the Wall’s length and while construction was carried on at a frenzied pace, his contractors add a mile a day to the structure; an most amazing feat. While most of the wall was made of stone, as it expanded ever further from its source, this material was not readily available in distant locals and when that occurred, he had his workers would construct the wall out of compacted earth or whatever was locally available.


In reality, everyone was Qin’s enemy at that time because he was a particularly ferocious fellow that believed in torturing and maiming his subjects as well as his enemies. "He made nonconformist thought a capital offense and sentenced thousands of intellectuals to years of forced labor on the Great Wall." On the other hand, he was a fabulous general and under his rule, seven adjoining warring states were subjugated and for the first time China became the nation that covers the area that it literally has today. When Qin’s Empire ultimately dissolved after only 15 years, it was followed by the Han dynasty in 206 B.C. Their rule was more benevolent and under Han Wu-Di, wall building began again in earnest. After having destroyed the Xiongnus, the Hans wanted to protect their expanded borders in Central Asia rebuilt and restored the Qin built wall and extended its distance by 300 miles across the Gobi Desert. This allowed for the establishment of the Silk Roads and the opening of China to international commerce. Because no one could get into China at that time without passing through the "Great Wall", it soon became legendary and this was a period of great prosperity in the country. It was under the Hans that the first public school system was established.


The fact that these folks had terrible table manners, sacrificed their neighbors to pagan gods, and were totally unfamiliar with the sayings Confucius caused the Wall to be constructed. It was quite an architectural feat. The peace-loving Chinese were obligated to turn many of the own people into slaves in order to get construction moving, and it progressed nearly a mile a day but only with great loss of life. Another name for the "Great Wall" was the "Wall of Death" due to the fact that as construction workers died from various causes, they were sealed into the wall itself and it became a four thousand mile tomb stretching from the Gobi Desert to the Yellow Sea. There was a lot of room to put bodies in the Wall because, while it had masonry and rocks on the outside, the interior was mostly fill, packed earth and bodies. The Wall could hold literally as many bodies as were required because its dimensions were a prodigious 15 and 30 feet wide and 25 feet tall.


Interestingly enough, while those in the West believe that the wall was a momentous achievement, the Chinese were not quite as sanguine about it. As a matter of fact, there is little mention of the "Great Wall" in early Chinese literature, almost none in art and stranger yet, even Marco Polo failed to make mention of its existence. In addition, the Chinese could not have been at all happy with the fact that during World War II, the Japanese used the wall as a transportation device to quickly move the troops over the rough terrain from one part of China to another, allowing the Japanese to plunder China to their heart’s content.


The fact that the Wall was originally constructed by a totally mad emperor who was more afraid of demons and goblins than he was of the Mongols didn’t help one bit. He had learned that demons could only penetrate places by going in a straight line, by creating the weaving wall that tended to follow the earth’s geography, he his advisors led him to believe that the wall would certainly keep out all evil spirits. Moreover, this was the very same emperor of China that created one of the most unusual tombs in the world. It contained an army of 6,000 life-sized soldiers each with a unique expression, to probably guard his spirit in the great beyond. It is conceivable, although somewhat unlikely that each of these "terra cota" soldiers as they become known, was actually a true likeness of those that had so fiercely guarded Qin in real life.


China’s first emperor was concerned that others would learn the secrets of his tomb, so he had all of the builders buried alive in when the tomb was finished. His tomb has never been fully excavated because of several reasons, among others, the people living in this region today, still fear the demons that they believe have taken control of the surrounding property, the tomb is a morass of secret passages and rooms which are well hidden underground and cannot be easily located. Archeologists indicate that there many are great treasures still hiding within the tombs but efforts to locate the historical finds have been both poorly organized and insincere.


The emperor that originally started construction of the Great Wall was quite paranoid and more than a little wacky. Qin Shi Huangdi, proceeded to burn all of the country’s history books, buried alive the country’s academia, created as system of uniform weights and measurers, evolved the first true Chinese currency, unified China and standardized written language. Certainly a very large mixed bag of accomplishments. He also became extremely concerned about living forever and was given a potion containing arsenic and mercury, which the priests said, would provide him with eternal life. He died shortly thereafter living the kingdom to his dimwitted son who was son expunged by his unhappy subjects. For all of the accomplishments and failures of the Qin (Ch’in) Dynasty, it only lasted a total of 15 years. (221 B.C. – 206 B. C.)



As the wall went up, the Mongols continued their pillaging and raping in the vicinity. This only made the Chinese work harder at getting the job done. When it was finished, there was great celebration in all of the land, while the Mongols walked through the Wall at the many open parts that had never been joined. You see, the Wall was not continuous in spite of history’s many stories leading us to believe the contrary and this architectural achievement although magnificently conceived was a total failure at doing its job. At best, the wall was cheered by the superstitious population for being proficient at keeping out the non-existent demons and it in addition it may have had some use as an early warning device. Within the wall’s ramparts, there was the ability of creating signal bonfires. Interestingly enough, these signals, that were given off were highly sophisticated, if there was a force of less than 500 troops, one smoke column was sent up, two columns indicated that the force was under 3000 and so on. Although this would not be helpful in keeping away Mongol hoards, at least the Chinese Army would have advance warning that they were coming or in the alternative would be aware of how many were coming to diner so that they could plan ahead.


Because of the fear of the Mongols, during the Ming Dynasty (1368 – 1644) the Great Wall was both enlarged and spruced up. Cannons were placed in strategic locations on the wall and the massive watchtowers that have now become so much a part of the Walls heritage, were added. "The truth is, though, that the Great Wall was actually a series of walls built and rebuilt by different dynasties over 1,000 years. In addition, while they often served the same purpose, these walls reflected the times --- both natural and cultural --- in which they were erected. For all its seeming timelessness, the Great Wall is indeed an emblem of China’s evolution." Moreover, The Great Wall as we have come to know it, was constructed by the Ming’s. "The Ming not only built more of the wall than any other dynasty, but theirs was also bigger, longer, more ornate and more imposing. Theirs is the wall with which we are familiar," It seems that the Ming’s had discovered a new way of making by using kilns and this method was extensively used in the wall’s construction. Many have said that without this process they could not have accomplished many of their wall building feats.


Those in charge of the Cultural Revolution thought so little of the Great Wall that they used its rocks, gravel and other components for the basics in other construction projects. It was not until China opened up to outsiders, that government officials realized the awe that the Wall was held in by non-Chinese. All of there early heads of state that visited China, from the Mongolia, United States, Russia, Britain, France and literally everywhere else wanted to pay homage to the wall and the Chinese opinions of its value soon changed.


The Wall’s history as a tourist attraction started soon after the wall was constructed. The Chinese Government seeing a buck in the deal early on started taking Mongol tourists for visits to the awesome structure. The Mongols who for the most part, lived in tents were overwhelmed by what they saw and were given discount tickets for addition visits. This replenished the Chinese treasury mightily. In the Ming Dynasty, some 1500 years later, substantial additions and modifications were made to the structure creating the Wall, as we know it today. By this time, the Chinese and the Mongolians had inter-married so frequently that the only logic historians could see in this restoration of the "Great Wall" was to keep the Mongols from leaving. Contrary to early folklore, the Great Wall of China is not visible from the moon, but the people doing the public relations work on the project were stuck with the story.


China by this time having come to grips with the fact that the Great Wall is indeed newsworthy and a magnet for tourism, has finally gotten with it and on February 22, 2001, officials reported that the Wall was actually 310 miles longer than they had previously thought. Having made that announcement, the Chinese Government was also preparing us for a series of Wall lengthening announcements to come by indicating that beacon towers extend even further. Thus it will not be long until their public relations people are able to come up with a literal series of expansion announcements, keeping the Wall in the news.


"A recently discovered section stretches to the edge of Lop Nor, a desert used as a nuclear test site until China stopped testing in 1996, the Official Xinhua News Agency said Thursday. Previously, the Wall’s westernmost end was thought to be a remote fort4ress at Jiayu Pass. The rediscovered earthen wall extends from Gansu province the neighboring northwestern region of Xinjiang, according to Xinhua. It makes the Great Wall 4,470 miles long instead of 4,100 miles. Xinhua said."

There was a great deal of logic in building the wall based on early Chinese tradition and folklore. It was felt that a wall could both define individual people’s property and keep ferocious demons away at the same time. However, everything in early China was walled, houses, cities, municipal buildings and even agricultural plots and this tradition has continued on until even today as evidenced only by looking at where the center of the Chinese Government is located; within the Walled or Forbidden City. Thus, it was extremely fitting that a wall would have been created defining the boundaries of greater China.



The Three Gorges Dam

The country has tried very hard to control its population explosion with relative success as a result of the harsh manner in which it the government edicts were carried out. China was determined to become agriculturally independent and moved people around like pieces on a chessboard to achieve this goal. They wanted to make access between their cities easier, and the country went into a building mode that at one time was using fully one-half of all the concrete poured in the world. To say that when the Chinese set their minds on something, that the earth seems to move, may be awfully conservative.


While China has the World’s largest reserves of hydroelectric power, they are utilizing on a small fraction of what is currently available within their boundaries. Moreover, China is very concerned about the country’s energy shortage and for that reason has begun the construction of the largest dam in the world, the Three Gorges Dam. When it is completed, it will become the most expensive construction project in the history of the earth, costing no less than $25 billion. On the other hand, the project has been graft-laden, and the amount of money that has already vanished is extremely large. Some independent estimates of the dam’s eventual cost range as high as $72.2 billion, an amount that cannot be borne by the Chinese Government.


The dam itself will rise 60 stories high, and 134 million cubic yards of dirt and stone will be extracted from the earth to prepare the site. The project will use almost 400,000 tons of steel reinforcing rods, and nearly 40 million cubic yards of concrete, which will be poured into the construction site. It is interesting to note that the Gezhouba Dam, erected to create a safe passage for the Yangtze while Three Gorges Dam was being built, itself is an imposing structure and, if standing alone, would rank among the world’s largest dams. The Three Gorges Dam will hold 51.4 billion cubic yards of water when filled to capacity. The dam in terms of electrical capacity will be almost fifty percent larger than its nearest competitor, the Itaipu Dam located on the border between Brazil and Paraguay. While the Three Gorges Dam will generate 18,200 megawatts of electricity, Itaipu only churns out 12,600.


The dam when it starts generating electricity in 2003 will easily churn out more power than any other man-made object. The energy it will produce will be the equivalent of just under 20 average-sized nuclear plants, thus requiring 26 of the world’s biggest generators of 700 megawatts each to complete the task. Fifteen 500-volt transmission lines will deliver 84.7 billion kilowatt hours of electricity annually, the equivalent of burning 40 million tons of coal. Lines will send energy directly to Shanghai and beyond, while the reservoir of water that will be backed up by the project will extend almost 400 miles (the length of Lake Superior) and average almost a mile in width, raising the area’s water table by 575 feet. Two million people will be displaced by the project and almost 70,000 acres of fertile land will be inundated by the massive amounts of water that will be backed up as the droplets await their turn to go through the massive generators.


Eighteen thousand people work on the project each day, which will ultimately stretch 1.4 miles across the Yangtze River (Chang Jiang – Long River, the third longest in the world). The dam will substantially diminish the threat of floods (300,000 people were killed in the 20th century by floods of the Yangtze River, and in 1998 over a million people were displaced by its raging waters) in the area, which have plagued the region. The Three Gorges Dam will also make the river substantially more navigable, adding another commerce highway to the already bustling roads that have recently been completed. Builders estimate that instead of flooding every ten years, after the dam’s completion, flooding will only occur every hundred years. It is anticipated by the project’s architects that the building of the Three Gorges Dam will increase the amount of goods transported down the Yangtze from 10 million tons to 50 million tons, with transportation costs through this channel dropping by approximately 35% due to volume savings. Ten thousand ton barges, will transverse the waterway through five navigation locks, 918 feet long and 114 feet wide having a water depth of 16.4 feet. When the Three Gorges Dam is complete, ocean traffic will be able to navigate the river for 1,500 miles from its mouth.


The logistics that had to be added included a new road carved through treacherous terrain in order to get supplies to work crews in the area, while a new airport was also installed for rush shipments of personnel and equipment. Apartment buildings were constructed to house the thousands of workers employed by the project, and a for-profit agricultural community (a joint venture of British and Chinese interests) is already producing 6 million chickens, 60,000 pigs and eggs from 200,000 hens to feed the workers and their families.


Taming the Yangtze was a dream going back to the "Grand Tactics to Build up the Country" proposed by Sun Yatsen in 1919. The river is "…home to 300 million people and rests in one of the world’s most fertile regions. In an 11-month growing season up to three varieties of rice and other crops are raised in the rich alluvial soil left behind by centuries of flooding." Plans were ultimately put together for beginning the project during the 1930s and 40s, but with the advent of World War II, all hopes for progress were shelved. Ultimately, in the early 1970s, Chairman Mao gave his official go ahead to the project, but it was another two decades before all the pieces fell into place. One of the major advantages this project derives from the fact that the air quality in China is among the worst in the world. China burns primarily fossil fuel for energy, and that takes the from of high-sulphur coal. Energy is produced by 430,000 medium- and small-scale industrial boilers (95 percent of them coal-fired), and China consumed over 350 million tons of coal.


Because of this fact, fully a quarter of all deaths in China are caused by pulmonary disease. This problem is becoming more endemic every minute. China once one of the poorest countries on earth, yet in a short span of time has become the fourth largest producer and consumer of electrical power on earth. That progress has come at an enormous premium. A recent World Bank study estimated the total cost of air and water pollution at about 8 percent of China’s Gross Domestic Product, or about $50 billion annually.


The Journal of International Affairs published some interesting statistics on the above subject in an article by Lawrence R. Sullivan entitled, "The Three Gorges Dam and China’s Energy Dilemma":


"This energy has not only fueled domestic economic growth rates of 8 to 10 percent during the 1980s and early 1990s, but it has also turned the People’s Republic of China (PRC) into a major indigenous producer of energy equipment and an important buyer on the international market. One of the most energy-intensive economies in the world, China consumed 37 quadrillion British thermal units (BTUS) of energy in 1996, two-thirds by its industrial sector. Of total energy production in the same year, 70 percent came from coal-fired thermal plants that burned 1.4 billion tons of coal. Consequently, China has attracted the interest of such notable energy multinational corporations as the American Bechtel and Westinghouse and Switzerland’s Asea Brown Boveri (ABB) and has received huge financial support for various energy projects from the World Bank and the U.S. Export-Import Bank. Unfortunately, its heavy reliance on coal as a source of energy has made China a major contributor to carbon emissions. In 1996, total emissions were 805 million tons, or 13 percent of the world’s total, second only to the United States in gross terms."


The article goes on to say that, "in spite of the fact that five of the top ten most polluted urban areas in the world are located in China – including Chongquing in the province of Sichuan – the Chinese government has put great emphasis, beginning in the early 1980s on expanding electrical power generation by as much as 9 percent annually, with much of it coming from increased production and burning of coal."


There is a lot of downside to the massive undertaking that many Chinese are now calling the "modern Great Wall." The area in which it is located, among the magnificently beautiful in the world, Three Gorges Canyons, has inspired Chinese poets and writers for centuries. Most of what has stirred them will vanish, with the water level rising almost 600 feet in the canyons, very little will be left of the once magnificent panorama. In the meantime, when backed up, the river that will be formed by the dam will destroy both villages and artifacts that have been in use for centuries. As the waters of the dam backup through century of ancient human civilizations and modern mines and factories, the pollution of the Yangtze will rise to dangerous levels. Both the World Bank and the U.S. Export Import Bank have agreed that the negative environmental impact of the dam is just plain too high for them to become involved in financing it.


The government is moving as many archaeological sites as possible to escape the rising waters, but critics say that as many as 1,300 valuable, historic sites will disappear forever beneath the dam’s waters, including a number of stone-age sites 30-35,000 years old. Nineteen cities and 326 villages are in the water’s path, while the 530 million tons of silt that will be backed up yearly is expected to clog the river channels of the city of Chongqing for decades. Up to 2 million Chinese will have to be relocated, and although they will not have much choice, there is not equivalent land available.


Critics of the dam suggest that in no less than 70 years shipping on the Yangtze will grind to a complete halt, caused by the massive amount of silt that the river’s no longer raging torrents will be able to carry downstream. "Some hydrologist say, the Yangtze’s heavy load of sediment and its shifting floor of gravel will hamper the dam’s turbines, fill the bottom of the reservoir and cause even worse flooding." Moreover, there does not seem to be much doubt that the Baiji river dolphin, already on the Chinese government’s endangered species list, will be wiped out of existence by the Three Gorges Dam project.


While all of the inhabitants have been promised new land for the property that they are going to give up, the "promised land" is nowhere as rich as the alluvial soil fund abutting the Yangtze River. In many cases, people have been placed in homes on mountaintops where the soil will produce literally nothing or totally different and less profitable crops. Worse yet, the dam is constructed directly over an earthquake fault line, which could cause even greater problems down the road. .


This is not the first time the Chinese have tried to dam the Yangtze. It had been attempted once before in the late 60s and early 70s. In an article from the Sunday Telegraph London, 9/29/96,a story called "Valley of the Dammed" by Elizabeth Gilbert, tells what happened better than we could ever do.


"I was an act of savage ambition, even during the post-war era of proud happy dams. America had Hoover, Egypt had Aswan, but the Chinese wanted something else altogether: a network of 62 dams along the Yangtze, the Yangtze, the third-largest river in the world, a muddy brute and unpredictable killer. But China persisted, technology triumphed, and the project was duly completed. The whole system performed perfectly until August 4, 1974. That was the morning it started to rain."

"The rain turned into a typhoon, which caused a flood. On the night of August 7, all 62 beautiful new dams broke, one after another, in a fast row, like buttons on the Incredible Hulk’s shirt – pop! Pop! Pop!~ - all the way down the river."

"The last dam to fall that night was a monster called Banqiao, the pride of the fleet. Banqiao had been constructed under Soviet supervision and was called the Iron Dam because – officially – it was indestructible. When the flood wave reached Banqiao, it crumbled in an instant – taking with it a string of workmen who had just been sent out across its crest (in the dark, in waist-deep water) to build with sandbags a last line of defense against the river. Tens of thousands of people died in the immediate aftermath; a hundred thousand or more died in the following months from famine and disease."


There is no question that this is one of the greatest engineering and architectural projects ever attempted in the history of mankind. There is no question that the Three Gorges Dam will provide clean energy for a country whose lungs are about to burst from the pollution. It appears equally true that there are many important downsides to the equation as well. Interestingly enough, history judges monoliths by their sheer size and technical prowess, as opposed to their utility. The Three Gorges Dam will rank along with the Great Wall and the Pyramids as attributes to the human ego.


In an interesting sidelight to the story, an elderly Chinese official named Madam Qian Zhengying is the chief government proponent of the dam project. A few decades ago she was also in charge of building the 62 dams that all broke in one night.




From the Incas to the Shining Path


Peru was a land where many culture flourished over a substantial period of time. While when we think of the country’s origins, it usually brings to mind, the highly industrialized and adaptive Incas, there were obviously many interesting people that inhabited this territory. "Since the 1970’s excavations in Peru have uncovered architectural remnants of several other highly organized societies that existed long before the time of Christ. In fact, many ruins of temples and other monumental structures that have emerged recently from the dry Andean earth are among the oldest in the world – some as ancient as the pyramids of Egypt. These discoveries have revolutionized our view of when and how complex societies developed in the Americas. And they have led scientists to rethink the very nature of civilization itself." () Keep in mind, that the concept here is not the origin of man, it is the beginning of civilized communities that we are concerned with. There is little question that man did not appear in South America until rather late in earth’s chronological cycle.


While early theory held that the Incas were only a branch of the Mayan civilization that had originated in Central America, that concept has been disproved by recent scientific evidence and the real story may have been that the situation was exactly the reverse of what we have believed. Societies have been discovered in Peru that date back so far that they challenge the historical logic that civilization began in the Middle East and or Asia. However, the current argument, is what is civilization, is it the origin of man or when he began living within a homogeneous community in which responsibilities were logically assigned or is it something else.


The answer is obviously highly subjective and extremely complicated. In the meantime, there still does not seem to be a serious argument against the fact that man wandered into this region using a circuitous route through Siberia and over a land bridge which then existed between that continent and Alaska in about 12,000 B.C. However, man did not arrive in South America until a millennia later. Domestication of animals began in Peru in approximately 5,000 B.C., and by that time numerous varieties of plants were being grown, harvested and stored by a stabile communities that included permanent structures in their makeup. Major Peruvian towns existed on the Pacific Ocean where abundant sea life was available without any particular expertise.


Various tasty members of the mollusk family could be gathered up at will without even going in the water at low tide, in literally all of the seasons. Peru’s first really substantive buildings were erected about 2,000 years later and can be found along the coast. Many rose three stories in height. It was during this same period that the production of "cotton fabrics with complicated designs depicting cats, condors, and other animals" () began. As time went on, the people were able to live without the natural resources of the sea and moved inland and farm production became the principal method of food production. At the same time, the manufacture of pottery began in earnest. From that point forward, increasing sophisticated societies evolved which included all of the elements required by the current definition of civilization.


What are those elements and why are they import? Among the critical requirements seem to be that the community is located at a place certain, it is not nomadic, the domestication and breeding of animals, the propinquity of a food source, the ability to store surplus production to insure against bad times, the erection of building and the hierarchy of power. Apparently, anarchy was never a successful format in civilized societies. In addition, both the ability to communicate through a written language and the use of wheels have also been important requirements in a search for civilization. We will address those issues later. We think that the attempt to define of "civilization" is nonsensical. Learned people from different disciplines would use varying definitions to describe its occurrence. Obviously many elements are critical, but the seeming importance of creating a city in one particular place in order to be civilized is controversial at best.


The Arabs in the Sahara are forced to be nomadic in their search for food, as are the Eskimos and the native tribes in Africa. Were the Indians that inhabited North America any less civilized because they lived in highly portable tepees, which were necessary for their search for food? Hardly. What makes the wheel or even language a critical element for being civilized? Would we call Hitler or Stalin civilized because they had all of the critical elements that have been noted at their disposal? In my opinion they should be considered far more barbaric than just about any culture that we can think of. Simply put, we believe that civilization is the coming together of a number of human being for mutually supportive purposes while acting in the best interests of the greatest number of people in the group. However, we are certainly left with the understanding that the Incas were neither the first civilization in South America, nor were they the longest lasting. They were the ultimate copycats taking a little from each people they conquered and the end result became a highly sophisticated society. However, there is little question that were the last great Native American society.


The Incas were a benevolently warlike people that dominated substantial territory primarily in the rugged Andes Mountains of South America. However, you could call the Incas an accident waiting to happen. For centuries they were non-aggressive, but had neighbors that envied pieces of their territory and had no compunctions about invading Inca territory. An envious neighboring tribe was on the verge of subjugating the Incas when an Inca Prince rose to the occasion, rallied his troops and won the battle. From that time forward, the Incas grew aggressive and acquired territory at a rapid clip.


At their peak, the Incas controlled territory controlled literally the entire western region of South America, a region whose length would have been approximately equal to the distance from New York City to Panama. () The Incas were great public relations people and as their kingdom expanded ever outward, they created massive fortresses that contained boulders so large that none of their neighbors could even understand how they got there. The most logical explanation they could find was that the Sun God had aided the Incas. The equally logical inference was drawn that the Incas were superior warriors and that perhaps benevolent subjugation was better than a sacrificial death.


While we think of the Incas as a people that had some longevity, in reality, their era lasted only about 100-years. In spite of that fact, the Incas subjugated between 10 and 12 million people who spoke different languages and lived in varying climates. Inca leaders were strong believers in the carrot and stick approach to diplomacy. They would offer certain rights to prominent members of the targeted region’s population in exchange for total domination, and if that single offer was not accepted within a reasonable time frame, all hell would break loose. The Incas made it abundantly clear that the offer would not be either negotiable nor extendable, and that the alternative was war, destruction and domination. As all of the Inca’s neighbors were weaker than they, most of these offers were quickly accepted. The Incas’ solid reputation for torture and sacrifice sealed the bargain.


Once they joined it, most subjugated peoples never saw much of the rest of the Inca empire. Extensive travel was forbidden and the use of money was not advanced. Inhabitants were obligated to donate a substantial part of their labors to state sponsored enterprises. This could include building roads, making pottery, serving in the army, or growing crops. Like prominent Egyptians, the Inca leaders entombed all of their prized possessions with them when they died, including women, servants, weapons, ornaments and food. These accoutrements of the newly deceased were buried dead or alive, and all ceremonies included placing the deceased in a sitting position. The higher the rank of the deceased, the more possessions kept him company on his trip to the great beyond.


Many citizens, generally women, found that they had been branded for a sacrificial death at a young age. When the time came, the sacrificial individual, who had been trained to accept death as a high honor, usually went willingly to the killing altar, where the priests provided wine to deaden their senses, and then strangled them. The Incas believed that young children were the best sacrifice to their Sun God, and only the most physically perfect children from the very best families became Inca chopped liver.


After the sacrifice, the families of the now deceased often threw parties that lasted several days to celebrate their sacrifice for the country’s betterment. In addition to the Sun God, there were also Gods who walked the mountains. The Incas believed that they could only expand their territory without reprisals if they maintained harmony with these gods. To placate the mountain gods, the Incas brought young children up into the mountains and left them there to perish.


Accomplished builders, the Inca constructed over 16,000 miles roads through treacherous mountain passes and over gorges to move armies from place to place. Logistically speaking, the Incas were substantially ahead of their time. They were among the first peoples to increase farm output by terracing their landscapes in mountainous regions and their rope suspension bridges were among the finest and most technically advanced in the world. Early on, they began to use the decimal system of mathematics and were highly advanced in this pursuit. The Incas were also highly renowned for their exceptional stone works, which were every bit the equal of the Mayan monuments. While the Incas used llamas extensively as beasts of burden, like the Maya they lacked the wheel, which unduly complicated life for this highly advanced race.


More troublesome was the lack of an official writing system, which forced the Inca to employ an oral tradition. However, they did use a complicated system of different colored strings with knots that were called quipus, to keep records. We know little about how this system really functioned, and it was only after the Spaniards had conquered almost all of South America that the Inca social system was researched and addressed in writing. On the other hand, the Incas took great pride in their oral history, much of which the Spanish memorialized in their writings. Nevertheless, the stories varied from region to region, calling their accuracy into question.


The Incas were talented revisionists who used their history as a highly sophisticated propaganda weapon. We are left with stories that are probably largely a contrivance of Inca public relations. However, historians were able to derive with some degree of accuracy the succession of Inca leaders, approximately when they ruled and who they conquered. On the other hand, there was really not a lot of history to convey, and the Incas were first noted somewhere around 1200 AD. On the other hand, they made no mark on history until the early 15th century, when they started expanding. They were conquered by the Spanish in the early 1530’s. From that point on, those who survived blended into the landscape and soon took on more Western ways. The Incas and their neighbors were stripped of their religion and given the choice of becoming Catholics or being sacrificed. Having had enough of sacrifice for the time being, many new converts were created on the spot. However, old ways die hard, and a number of Inca traditions were permanently grafted onto local Catholicism.


In 1532, Cortez had just finished conquering the Aztecs in Mexico. At that time, Francisco Pizarro, an illiterate pig farmer, () arrived in South America with the objective of pilfering Inca gold. He brought with him a solid contingent of 105-foot soldiers, sixty-two horsemen and a variety of weapons unheard of in the New World. It is interesting to note that the Spanish invader had the unmitigated nerve to think that he could defeat a highly trained Inca army of over 200,000 dedicated soldiers. On the other hand, he had a number of things going for him. First and foremost, Western diseases had already been introduced into the Inca territory and they extracted a terrible toll in human life.


The massive epidemics confused the Inca, who credited the Spaniards, with all of their modern accoutrements with the ability to spread disease and death at will. Legend has it that for a time the Incas even believed that the Spaniards were representing the Inca Gods and were sending acting as intermediaries in sending them unpleasant messages. Eventually, the Incas started to believe that they had somehow incurred their god’s wrath and had lost their favor. In the Incas haste to make amends, they did the logical thing and dramatically stepped up their sacrifices, in this case because of a lack of available home-grown sacrifices they primarily began using subjugated peoples, something they themselves was a poor substitute for their own purer lineage.


Well, this turn of events indeed became a bad hair day for the now panic-stricken Incas. Things just went from bad to worse, in spite of the fact that the Incas had treated the people that they had conquered reasonably, it didn’t sit well with the subjugated that they were constantly being called for additional human offerings. There were negotiations among the opposing groups mediated by senior Inca Officials at which time a bill of particulars was submitted by the enslaved. Its salient points contained demands for a substantial reduction of human sacrifice. The Incas were not well-mannered when being dictated too and not only declined the request but immediately installed a state of martial law and strongly indicated that they would do whatever was necessary to get back into their gods’ good graces even if it took every subjugated person in the kingdom. However, this act of constantly going back to the sacrificial well really made some of the negotiators annoyed and due to this fact, a large number of the Inca’s subjects not only joined but substantially aided Pizaro in his conquest.


Another advantage that Pizarro had, was one that would be almost inconceivable for a Westerner to fathom. As a historical fact, the ancient Peruvians had started mummifying their ancestors thousands years before the Egyptians and while the Egyptians tried to make their dead as comfortable as possible, the Peruvian dead were to become an inconceivably a critical part of their ongoing society. Pedro Pizaro, Francisco Pizarro’s brother was amazed by the fact that when he interceded for an Inca friend with his girlfriend’s family in asking for her hand, Pedro was taken in front of a long dead ancestor of woman’s and after sitting around for awhile was eventually told by the ancestor’s relatives that the mummy had approved the union. Pizarro was stunned, but new light had been shed upon the religious and social practices of the Spaniard’s enemies. They soon discovered that were no major decisions made in the Inca society without consulting these grisly mummies. If this wasn’t a tough enough concept to come to grips with, the Spaniards soon learned what the Incas enemies had know for some time, the Inca dead were taken to battle with them as well. Can you picture what their adversaries must have though when on the battlefield they not only were they faced with an enormously efficient highly trained living Incan army but also were facing a contingent of long dead people being carried aloft as there charge was commenced. I for one will tell you that this would cause me severe agita to see dead people charging at me. No wonder the Incas were so successful in the battles. The scared the stuffing out of their enemies.


The Inca believe that the dead, if properly treated would provide the living with peace and prosperity. Moreover, Peru was absolutely ideally suited for mummified ancestor worship. They had the very cold and dry peaks of the Andes mountains available and this was an ideal place to freeze-drythe dead after their bodies had been drained of fluids and cavities field with unusual herbs, which helped to preserve the bodies. Unusually, this is area of the world has produced a succession of societies that believed in similar bizarre afterlife theories and we cannot pinpoint anywhere else in the world where the dead kept on as an active part of society. The Incas feed, clothed and assigned a large contingent of cadre’ to look after the every need of those that had departed. This included the dressing every morning of the dead with magnificent clothes and bedecked with jewels, then it was time for breakfast, which often contained up to seven courses. This cadre’ of the dead believed firmly that the dead should be highly respected and given every accommodation in death that they would have had in life. Great banquets were held for the dead by the mummy-keepers and when the departed souls determined not to imbibe, their caretakers were more than willing to eat their share. These caretakers lived the good life among their dead eating, drinking and partying with their charges. They ultimately became a force to be reckoned with in Inca society.


Once a year a big party was held in the Cuzco’s Town Square in which the dead were brought out in all of their finery to be paraded in front of the people. This literally became a gruesome fashion show, when relatives wanting to one-up their neighbors had their long deceased ancestors regaled in ever finer fashion so that they would look better than the dead belonging to their neighbor’s ancestors. Family mummies were held high in the air so that everyone could witness how magnificent they were in death. A separate district was created to house the dead and they had their own residences in Cuzco; magnificent structures where they’re every need was attended to. Believe it or not, these people saw little difference between life and death from almost any point of view. They strangely believed that their ancestors could have sex, go to the bathroom and make momentous decisions. Not only were these particular traits attributed to the dead but even more importantly, the planting of fields, the sun, the rain and complex battle plans always awaited until consultations with the mummies were completed. As the society of the dead evolved, their keepers became interpreters of the wishes of the dead and because of that could determine many critical events.


Because of the fact that most of those in the region held similar religious beliefs as did the Incas, one of the great horror tactics of war that they learned early on was to capture the enemies dead. They would then threaten their enemies with two choices, they would either to give them back the mummies if the enemy capitulated or burn them. Universally, this was more than the enemy could bear and they ultimately got the message and became part of the general community. Worship of the dead became so overwhelming that eventually the Incas came to believe that only the emperor could own land and he would own it whether he was dead or alive. Thus, a new emperor concerned about his status after he died was literally forced to conquer substantial new territory in order to have a large plot after he died. This theory was one of the reasons that the Incas became such fearsome warriors. They weren’t fighting just for their lives, they were fighting for their afterlives. Moreover, when the Inca conquering frenzy had reached its zenith, they controlled more territory than the Roman Empire did at its height.


Ultimately, the pendulum had swung to far in favor of those that were administering the dead and the emperors determined that enough was enough. However, by this time the cadre of the dead had amassed substantial power and a civil war erupted when they determined not to give up the good life without a fight. Ultimately the emperors were victorious but not before thoroughly debilitating their forces with this internecine battle. In addition, so many valuable resources had been heaped upon caring for the dead that the Inca Empire had become economically speaking, a basket case. Picture trying to manage a social security system for both the aged and the dead. However, in spite of bizarre state of events, this indeed was the society that Pizarro chanced upon in 1532.


Thus, Pizaro, almost before he started had a massive secondary force of formerly subjugated warriors to back up his front line soldiers. He was also attacking a highly confused, disillusioned and substantially weakened enemy who was carrying the most substantial amount of baggage in world history. Pizarro’s first stop was Tumbez, a city that is located on what is now called northern coast of Peru. Soon after Pizarro landed, using advanced military techniques, he was quickly able to capture Atahuallpa Inca, one of the most highly ranked Inca leaders. At this time, Athahuallpa was in a struggle with his brother Huascar to become chief of all the Incas. He became highly distressed at his incarceration, not because the Spanish had captured him, but because he felt his brother was gaining both time and strength while he languished in jail.


Disgusted with his situation, he offered Pizarro a room of almost 3,200 cubic feet, totally filled with gold and gold objects in exchange for his freedom. In addition, once Pizarro had removed the gold, Atahuallpa told him that he would fill 6,400 cubic feet with silver and give it to his capturer as well. Pizarro was naturally overjoyed and promptly accepted. While waiting for the bounty to arrive, Atahuallpa ordered his generals to kill his brother; the only other pretender to the Incan crown, and this was neatly accomplished.


When Pizarro was satisfied that Atahuallpa had completely delivered on his end of the bargain, the Spaniard naturally had him tortured to for information regarding where more gold could be had. After garnering everything that Atahuallpa knew he had him killed. Thus, Pizarro had, by a stroke of massive good fortune, accumulated gold and silver booty in substantial quantities to ship back to his benefactors in Spain and he had dispensed with the Incan leadership by overseeing the elimination of both potential kings literally simultaneously. Pizaro was now fully in charge, and his total conquest brought to the end the highly productive but surprisingly short Incan era. While the Incas were not truly benevolent rulers in any sense of the word, the Spanish ultimately taught them what a real dictatorship combined with modern torturing techniques could accomplish.


However, ruling the Incas did not mean that the battle was totally over. Tradition can become a force of its own and as long as the dead were still lying around small rebellions broke out from time to time. Pizarro determined that the only way to end this ancestor worship for good was to grab all of the mummies, burn them and then bury them in coffins. This caused considerable anguish among the people because they felt that death was a social experience and being in a coffin without any fellow mummies to keep them company was just not right. However, the Catholic Priests were horrified with this ancestor worship and cheered on Pizarro’s efforts even providing wooden coffins to place the remains of the long dead. For the Incas, this act was the last straw and it was only then that they finally capitulated. The festival of Corpus Christie is still celebrated annually in Cuzco and where the people carry massive Catholic effigies around the town square just as that done five millennia earlier with their dead. Many archaeologists believe that this ceremony is the last throwback to the Incas strange religious convictions. The Church was not particularly concerned about what these people did with their spare time, they were only interested in adding to their list of the converted.


Today Peru is a typical third world country with a population of almost 25 million people. Its capital is in Lima, the country is said by some to be a republic, and it is bordered by Ecuador, Colombia, Brazil, Bolivia and the Pacific Ocean. It is located on the Western edge of South America and is a beautiful country with substantial natural resources. In spite of being extremely gifted by nature, basically, this is an agricultural and fishing society that speaks the Spanish language and is largely Roman Catholic. Many of the peasants have gone into the coca growing business to elevate themselves and their products have gravitated to regions around the world bringing in substantial hard currency.


"’Over the last three years, Peru has become a major producer of Cocaine," said Ricardo Soberon, a lawyer at the Andean Commission of Jurists and an expert in the illegal drug trade. "And it will mean our society is even more open to the corruption and violence that it brings." For years, Peru has been the world’s largest producer of coca leaf, from which cocaine is made. Coca is grown by 200,000 poor farmers on the sloping jungle valleys of the eastern Andes. Traffickers then smuggled semi-processed coca into neighboring Colombia for refining into cocaine."

Peru historically spends a measly $18 per capita on public health and 90% of rural residences lack potable water and sewerage, resulting in high death rates from infectious diseases. In the last year for which statistics are available, 1,200 children died weekly from malnutrition and extreme poverty, while 38% of the survivors suffered chronic malnutrition. This is almost inconceivable for a country that has received so much of nature’s bounties.


In recent years, the country has been troubled by drug smugglers, revolutions, war with Ecuador, bribery of officials and hyperinflation. Its leader until recently, President Alberto Fujimori, previously a college administrator with no political experience, is unique as far as national leaders go in that he had dual citizenship in both Japan and Peru. He was recently able to take advantage of that fact when members of his political party were found committing insensitive acts that lead directly to him. Indicating he needed a vacation, he took the next plane to Japan and has since indicated that he will not be coming back.


Women in Peru are treated as second-class citizens and comprise 72% of the country’s illiteracy rate. In the meantime, the birthrate of women in the countryside is almost three times higher than that in the urban areas, indicating that no effort is made to even modestly educate these people about anything. The United Nations Committee on Elimination of Discrimination Against Women came out with a damning report on July 7, 1998, which took Peru to task for lapses in education, birth control, domestic violence, reproductive health and overall discrimination.


However, women aren’t the only ones that Peru discriminates against. Native Americans are given the bottom end of the totem pole so to speak. "Peru’s Indian and mixed-race majority suffers from a legacy of racism by the light-skinned elite that dated back to the Spanish conquest. They are barred from top jobs, political posts and even trendy discotheques and cafes. Race roles are clear; the descendants of Peru’s might Inca empire work mainly as maids, laborers or street vendors. Members of the European-descended elite occupy most positions of wealth and power." In spite of the fact that 80% of Peru’s population is made up of Indians or those of mixed race, judges allow clubs and disco’s to bar them. In addition, economists have stated that one-percent of the population controls over sixty-percent of the nation’s wealth.


There has been no question that Fujimori has been a strong leader and accomplished many things that were thought almost impossible. On the other hand, corruption at the very top of the Peruvian Government combined with a secret police department that would easily put the KGB to shame in making people disappear did not sit well with anyone. Fujimori was insensitive in getting the message that his people had enough of his dictatorial ways and he barely escaped the country, only one step ahead of the executioner. However, with all of the poverty and illiteracy, only Chile and Argentina, in Latin America have out-performed Peru’s economic statistics, which show the country growing at a rate of 5% per year for the last decade.


When Fujimori arrived on the scene, there were guerrilla groups operating in various parts of the country that made a livelihood out of kidnapping and holding their hostages ransom. The President was able to remove these groups as a threat in rather short order but made the horrendous political mistake of throwing an American , whom he indicated was consorting with the guerillas, in a Peruvian Jail, in spite of demands for release by the U.S. Department of State. This action did not bode well for him recently when he direly needed allies.


Peru got one more break when on September 12, 1992, "…a special Peruvian police undercover unit captured Abimael Guzman, leader of the fanatical Maoist guerrilla group known as Shining Path (a fanatical group that is said to have made the Khmer Rouge look like angels) in his hideout on a quiet, middle-class street in Lima. The fall of one of the 20th century’s most elusive terrorists made headlines around the world and proved decisive in a war that had cost 25,000 lives since the Shining Path had launched it in 1980. Many more would have died if Shining Path ever had taken power with their Khmer Rouge like philosophy." After this literally heroic effort, Fujimori dissolved the undercover group that had been successful in eliminating them and scattered the group to winds. The Peruvian Government just felt that these people were under the wing of the United States CIA and were just too independent to be trusted. Moreover, they were most probably right.


Boding well for the future, Peru’s inflation has now come down to workable levels, and in spite of his other shortcoming, Fujimori was able to defuse a tense situation with neighboring Ecuador that could have turned into an all out war. He was far less successful in dealing with Illicit drug crops and their distribution but he did make nominal inroads. However, all of his accomplishments were consummated at a heavy price. Fujimori closed down Peru’s Congress and its courts in 1992 – less than two years after he assumed power. While both the Congress and the courts eventually reopened, the message he sent had been heard, loud and clear: do my bidding or else. He had set the pattern for his next eight years in office and it was not a pretty picture. .


However, Fujimori was not even close to being done with his tampering, and he continued to tinker at great risk because this was a new and very frail democracy. The country’s constitution clearly indicated that the President could serve no more than two terms, but wanting one more bite at the apple, he had this provision reverse on a technicality. In 1993, the Peruvian judicial tribunal, which has the final say in these matters, determined that Congress had overstepped themselves in allowing Fujimori to run for a third-term, that court was shuttered and has strangely never reopened.


"A report issued in February of 2000 by two U.S. observer groups, the National Democratic Institute (NDI) and the Carter Center, concluded that "political conditions for free and fair elections have not yet been established." They noted the enormous difference in media access between Fujimori and his opposition; the biased media coverage, including insulting and defamatory attacks against opposition candidates and parties; the open harassment of opposition groups and election monitors; and the misuse of public resources in the campaign. Three Peruvians out of four now believe the elections are not being conducted fairly. "

Fujimori ran against Alejandro Toledo among others in an election that turned out to a farce. Charges of every voting irregularity known to man were brought against the President and his party. In spite of the rigged election, there was still no clear-cut winner because neither candidate had received a majority. Toledo, the Stanford educated economist was convinced that he could not win a rigged election against Fujimori and refused to participate in a run-off election, because among other things his statisticians found that there were a million more ballots voted than there were registered voters in the country. Having grown up in Chicago I can understand Mr. Toledo’s problem with the numbers but no one ever demanded a recount in Cook County and lived to tell about it so there were never any problems. Peru seemed to operate in much the same way.


Fujimori’s security adviser and head of dirty tricks, Vladimiro Montesinos was caught with his hand where it shouldn’t have been and fled to Panama once political asylum had been arranged. Stories abound in Peru that Montesinos was really the power behind the power and kept his position by having a copy of a birth certificate from Japan that shows that Fujimori was born there and not in Peru. Should this have been the case, Fujimori would not have been eligible to run for President. This was about all Fujimori could handle, considering his advanced years, and on September 16, 2000, he fled to Japan. Now, new elections are being readied, and Peru may just have a chance to get its act straightened out.


"The maneuver that brought an end to Fujimori’s 10-year reign was the airing of a videotape on Peruvian television that showed his top adviser, Vladimiro Montesinos, pulling wads of dollar bills from his pockets and handing them to an opposition party congressman. Shortly after that transaction, the legislator defected to the government’s side. The incriminating video appears to have prompted a showdown between Fujimori and a segment of the Peruvian armed forces loyal to Montesinos. "He probably figured his best move would be to rid himself of Montesinos, but Montesinos and the regional army commanders probably said "no," says Mirko Lauer, a columnist for La Republica, a Lima daily. The resulting compromise: the shady former intelligence chief would go – but so too would his boss. "


Toledo is by no means a sure thing in any new elections, as he had gotten involved in a degenerating political mud slinging campaign with Fujimori’s political party and participated in anti-Fujimori rallies that concluded in violence. On the other hand, Fujimori’s party, although he had not cultivated a successor, does control the media in the country and that is an important factor in manner in which people cast their ballots. In the meantime, the Swiss Government has found $50 million in an account attributed to Montesinos.


As Peru’s political morass becomes ever more stultifying, there has been a particular leak in the dike from a familiar source. "Coca is coming back because our corn and rice don’t have a stable price and coffee and cacao prices have also dropped," said Julio Fernandez Davila, 47, a former coca farmer who was mayor of Tres Unidos from 1990 to 1998. "The farmers don’t want anyone to know it, but they are beginning to grow coca again between their rows of coffee and corn planting so they will not be detected." Interestingly enough, as recently as 1995, Peru led the world in the production of that product and we just may be revisiting that time once again.



Machu Picchu

The Andes, located in South America are among the world’s highest mountain ranges climbing over 20,000 feet in various spots. Cuzco, the region in which Machu Picchu is located, lies on the eastern slopes of the Andes facing the Amazon Basin and was the capital of the Incan Empire. The general area is fertile and has substantial water resources although it is extremely rocky. However the amazing architectural ability of the Incas allowed them to create terraced fields on the slopes of almost vertical mountains permitting them to produce a substantial quantity and variety of agricultural products; indeed, more than enough to take care of all the inhabitants in the region. Moreover, it is these terraces, which, seem to literally blend into the landscape that creates this region’s awesome beauty. As with everything Inca, the entire city of Machu Picchu combines the unsurpassed qualities that man and nature have to offer and the spectacle is stunning. There are 40 rows of terraces each 10 feet high along with 3000 stone steps to transverse the terrain, combined with one of the most sophisticated irrigation systems invented in that hemisphere.


The gullies, produced by years of erosion caused by the fast flowing mountain tributaries, the dense foliage and breathtaking landscapes work together to make Machu Picchu are delight to the senses as the city sits on a ledge approximately 8,000 feet above sea level, surrounded by towering snow capped peaks. The summit on which Machu Picchu sits, is literally vertical and its solid granite wall made it a Herculean Task to have ascended to its peak. It still remains a world class mystery as to how the Incas discovered this place, once having discovered it, got to its summit up the sheer granite wall, were then able to logistically deliver building materials without roads or pulleys or how on earth they even re-supplied it. Machu Picchu, located a mere 50 miles away from the then Inca Capital was only accessible by traversing a literally impassable jungle. Moreover, it stood at the very outskirts of the Inca civilization at that time. Why it was built, how it was found and how it were traversed are mysteries that have still never been solved.


Interspersed among these breath-taking views are valleys that, while once arid, were irrigated by the Incas through the use of an extremely complex system of canals and dikes. These valleys are still producing prodigious quantities of agricultural products. Because of the peaks and valleys (the variations in height), diverse flora and fauna are present in substantial quantities, adding to the overall attractiveness of the region. Orchids cover the trail leading to Machu Picchu surrounded by millions of butterflies, bringing an almost artistic blend of color to the area. Condors with wingspans of up to twelve feet were early denizens here, along with the ever-present wildcats, spectacled bear, and cock-of-the-rocks. It was also here, at almost 8,000 feet on a precarious mountaintop that Machu Picchu was constructed by the Incas towards the end of the fourteenth century. Although breathtakingly magnificent, Machu Picchu was to the Incas just another stop on the series of roads that had been constructed to connect their vast empire, which at one time covered parts of Ecuador, Bolivia, Chile, Peru, Argentina, and Columbia. Everything in Machu Picchu was designed to blend the earth with the sun or even as some archaeologists have pointed out, meld the two together with the through the use of natural beauty. The place was called the Hitching Post of the Sun and it was here that early stories say that the Incas attempted to tie up the sun to prevent it from leaving. In many respects, it appears that they succeeded.


It is extremely unusual that Machu Picchu was not found for so long a period. As was have discussed earlier, Cuzco, a major city in early times and a major center of commerce today was in relatively close proximity of the lost city of Machu Picchu. Machu Picchu lay hidden, as the Incas may have intended, for over four-hundred years when Hiram Bingham III, the Director of the Peruvian Expedition of the University of Yale with the help of a local farmer by the name of Melchoir Arteaga re-discovered it in 1911. The remarkable part about this discovery is the fact that, in reality Bingham was looking for Vilcabamba, another lost city of the Incas when he stumbled by accident across Machu Picchu. The city had been untouched, and was probably the most well preserved discovery of its kind in archaeological history.


Even more extraordinary was how brilliantly the city accentuated its magnificent surroundings, making the vista appear as though, it was literally created by Mother Nature herself. Machu Picchu fit its surroundings like a glove, and it looked as though it fit in exquisitely where it was. It was probably the spontaneous harmony with nature that the city’s builder’s had fashioned that made this area such an instant mecca for tourists in spite of the intricacy in getting there. Machu Picchu today is approximately five-square miles in area and the climate is semi-tropical, warm and humid. Bingham, who apparently thought that he had discovered Nirvana was naturally overjoyed at his thrilling achievement and headed back to the United States to tell one and all about his discovery. Moreover, at the same time, Bingham embarked on a campaign to garner funds to cut away the jungle and restore this glorious site. He was an excellent salesman and was back the following year with his pockets overflowing and a team of men who eventually beat back the grudging jungle. As the jungle was gradually uncovered, large rocks were found everywhere and they in turn were evacuated. When all was said and done, a city of over five-square miles was brought back from a long rest.


The landscape and the city blend in uniformly with the miraculous terraces that remain in pristine condition along with the ramps that take you effortlessly from level to level. The vistas are breathtaking as the city lies 2,000 feet above the Urubamba River in a narrow saddle between much higher surrounding mountain peaks. It appears almost mystically that the stones that make up the terrace’s retaining walls were sculptured by an unearthly being that knew exactly how to place and trim them to correspond harmoniously with their environment. In a piece done by Unesco titled the World Heritage Review, some additional elements of the Machu Picchu puzzle are described in some detail.


"Access to the urban part, which is clearly differentiated from the agricultural sector by a large perimeter wall, is via a beautiful lithic porch with double jambs. This architectural feature of the Inca building style marks the location where the road from the city of Cuzco came to an end. This sector consisted of 172 enclosures of different shapes and sizes connected by 109 stairways that make it possible to move over such steep slopes. The enclosures are divided into "neighborhoods," each with specific functions according to their formal characteristics and the cultural evidence found in the excavations. One sector, for example, was destined for storage, doubtless of the harvests of maize grown on the terraces; another is distinguished by the large number of mortars found there, probably for making chich (corn beer), which is still very widely used in religious festivals in the Andean world. Other sectors consisted of houses for the people who carried out the different specialized manufacturing activities or religious ceremonies, or administered agricultural output. Some enclosures, such as the Coricancha (Temple of the Sun in the Quechua language) or the Aqllawasi (House of the Virgins), stand out for the fine finish of their walls, comparable to the exquisite buildings in the imperial capital, Cuzco, and were no doubt the most important buildings on the site.

"The enclosures are complemented by a great public square in the center of the urban sector, as well as two minor squares. Special building with an obvious ceremonial function complete the urban sector, including the noteworthy Temple of the Three Windows and the Intihuatana, a specially sculpted stone for astronomic observations, as well as a complex ritual system of interconnecting baths and springs. This magnificently conserved city, which must have housed between 1,000 and 2,000 people, has justifiably become the representative image of the most highly elaborated Inca notions of architecture, natural objects, and sacred landscapes. On the one hand, the irregular lie of the land was converted into terraces which, while echoing the surroundings, were used for construction and farming. On the other, they respected more than a score of important rocks that were integrated into the layout of the city, like scale models of the surrounding topography. Machu Picchu was obviously a highly planned city, meticulously designed to fit an extraordinary natural setting."

"Machu Picchu is only one of a series of Inca Settlements in the historic sanctuary, although it is without a doubt the most important. There are in all thirty-two architectural complexes of differing sizes and characteristics indicating the various functions they fulfilled. Patallaqta, Runkurakay, Sayaqmarka, Q’onchamarka, Phuyupatamarca, Winaywayna, Intipata, and Intipunku are other settlements located nearby. All of them are closely interrelated as regards building style, types of buildings and basic arrangements, including the remarkable agricultural terraces, quarries for supplying raw materials and springs of abundant, clean water. What is more, all of them have in common the characteristic harmony between natural and human-made features. All these settlements are connected to each other and to the city of Cuzco by the Inca road, one of the admirable feats of engineering in the Andean world. Nowadays, a thirty-eight kilometer section has been converted into one of the most popular routes for adventure tourism. To cover it in three or four days means not only traveling back in time, but also traversing the region’s complex ecology, including the low valley in the middle course of the River Urubamba, inter-Andean ravines with evidence of glacial moraines, grasslands above 4,000 meters and tropical spots in the lowest and warmest strip of jungle. It also means encountering a complex range of engineering works, such as paved roads, never-ending stairways, anti-erosion drainage works, bridges and tunnels excavated in the rock, lookout points sited in strategic places to enjoy the scenery, tambos or resting places and minor cities that once lived off the abundant output of this part of the Andes."


The Inca’s had no written language so with nothing to advise us on the true intentions of the inhabitants, we can only postulate as to the specific use the city planers had for Machu Picchu. One theory has it that it was more likely than not a home for the members of the Inca royal family and their guests. An alternative chronicle that has been put forward is that it was the mountain retreat of the Inca leader Pachacuti Yupanqui and still another holds that it was a solar observatory. Moreover, there is even an additional theory that holds that it was built as a convent for so-called Virgins of the Sun and that these women worked to provide all of the necessities of life to the Inca Priests. From the portion of the city’s archaeological remains that have been restored, there is no question that, of the people found buried in Machu Picchu, the great majority were women but the men may have been away fighting the Spanish. In reality the best scientific evidence available today seems to point to the fact that this city was plain and simply a luxury country home to be used by Inca rulers when life in their capital became to hum drum or as some have said, that it was a "playground for the emperor and his court.". There seems to be little question that Machu Picchu was a seasonal resort and in spite of its size, probably a full time home to no more than 100 or so even at its peak.


The city was self-sustaining, with the inhabitants being able to provide the necessary agriculture for nourishment. The buildings were extraordinary for the period and were constructed of granite with very steep thatched roofs to protect against extended periods of rain, which was common. The publication, Crystalinks, goes on to describe some of the scenic parts of the city:


"Only from the nearby hilltop observatory of Intipunku can you realize the full extent of Machu Fichu’s colossal conception. The citadel is a stupendous achievement - urban planning, civil engineering, architecture, and stone masonry. Who built this symphony in stone, this vast complex of buildings so well constructed that even five centuries in the inexorable grip of the Peruvian jungle has deprived them only of their thatch and reed roofs? The architectural forms are unmistakably characteristic of the Incas, but beyond that, its origins are veiled in a mystery as thick as the early morning mist swirling around its craggy fastness. At any moment, it seems, a gold-encrusted and befeathered Inca warrior will materialize between the curiously sloping doorjambs. The enigmatic Incas knew neither the wheel nor any written language, but forged an empire stretching 2,300 miles along the mighty Andean heights."

Yet, the city was found intact with no sign of hostilities that could have caused the mammoth exodus that occurred in the 15th century. Many theories have been expounded to explain this most bizarre event, from the hypothesis that an epidemic wiped out the population (syphilis, smallpox and malaria are three very likely subjects under this theory) to the possibility the Spaniards discovered the town and killed everyone in it, taking all of the valuables. However, this would have been out of character for the barbaric Spaniards, while it was true that they had no scruples when it came to killing, torture and slavery, if anything the Spanish kept copious notes on what they pillaged. . Orders from Spanish headquarters in Madrid mandated that they very specifically inventory their finds and their exact locations. Officers in the field were rotated on a regular basis; thus the Spanish Royalty were able to cross check the count by comparing inventory, location and projections with the previous estimates. Had the Spanish found Machu Picchu, historically, there should have been volumes on this subject, and yet nothing has been found, nor written about it in Spanish texts.


Another theory holds that since wars between competing Inca sects were not at all uncommon, it was the rule rather than the exception that everyone on the losing side would be put to death. This theory does not seem to fly either because the city was found intact. It would have been highly unlikely for the populace to have gone to their deaths without putting up some kind of fight or the winning side not pillaging everything in sight The last theory, probably the most speculative of all, has as its hypothesis that a young priest defoliated one of the sacred Virgins of the Sun, something that was really considered a bad thing to do. Discovery of this fact would have caused the entire location to be damned and everyone abiding there would have been either killer or excommunicated, so the city would have literally disappeared from the face of the earth. We believe that none of the theories is even close to correct and there is substantially more to the Inca social system than meets the eye. It may be that this question is one that neither history nor archeology will ever answer but the answer could be a simple as the fact that the Incas wanted to shorten their supply lines and Machu Picchu in spite of its magnificence had become expendable.


The Incas were road builders easily on a par with the Romans, and they were centuries ahead of the pack in the building of canals. Agricultural developments and tunnel building were their forte’ and they far surpassed the norm in their respect for nature and their ability to blend the environment together with man’s works. In spite of these achievements, they were able to accomplish these feats without a written language, without the wheel, without the pulley and without the normal metal instruments normally required to cut stone into its finest constituencies. They were bridge builders par excellence and they had an excellent grasp of astronomy.


In spite of not having the normal accoutrement of construction materials, the Incas were able to construct the city of Machu Picchu at a height of over 7,000 feet above sea level. They were obliged to transport building blocks great distances and up tortuous cliffs because of a lack of quarrying rock in Machu Picchu’s vicinity. In order to preserve a civilization in this area, they had to create irrigation, landscape the mountains and cut rocks to exact measurements to accurately construct their temples, their commercial buildings and their homes. When all was completed, they had created seamlessness with nature that has probably never been duplicated by any society on earth. These were truly the world’s first environmentalists.


While the Incas seemed to know just how to meld nature and with people, current day Machu Picchu is not faring nearly as well. The following will give you an idea about the commercialism that is running rampant: "Standing in the Inca citadel of Machu Picchu, guide Adriel Quispe faces a stone that resembles a scaled-down cruise ship. The sacred Intiwatana, or "hitching post for the sun," is carved out of a single block of granite with a funnel shape one top. The shadows it casts probably marked the seasons for the Incas. Quispe tells the rapt crowd of tourists: "This stone is beyond price." Well, sort of. In September, for a $200 fee, a camera crew filmed an ad there, propping a beer bottle and glass on the stone. Their six-meter-long crane gave way, and a cameraman fell on the Intiwatana. A corner of the monument snapped off, marring its perfect lines. "It is as though they stole a part of the Incas’ knowledge." Says Quispe." Once the stone had been destroyed, the film crew picked them up and handed them to the flabbergasted curators who came running to the scene. In reality the "contoured granite block, once used by Inca astronomers to predict solstices, is essential to Inca mythology and forms the centerpiece of the protected archaeological ruins at Machu Picchu…"


The film crew was from J. Walter Thompson Group and they were, in effect there without permission. "Gustavo Manrique, the director of National Culture Institute in Cuzco, said he felt "moral anguish" after the film crew allegedly sneaked their heavy equipment into the sanctuary at dawn, in violation of their permit. Staff at the production company now face criminal charges and up to four years in prison. The head of Cervesur, the local brewer that hired the film crew, offered to help repair the damage. If ancient Inca practices were to be invoked in this case, the interlopers might find priests drilling holes in their skulls to purge them of evil."


Currently there are an average of almost 3,000 tourists a day bringing human pollution to the area, and yet the Peruvian Government is pushing the envelope by using every available resource to bring in even more. They are striving to increase this number by 2.5 times within the next four years. In the mean time, approval has been granted by the Government to build a major road through the area, which will demolish the magnificent agricultural terraces that are still traditionally irrigated and farmed. In the meantime, hiking has not been any great help to the area with liter strewn all over the terrain. A Peruvian National Institute for Natural Resources (Inrena) spokesman estimated over 120,000 people and their accompanying donkeys and horses loaded with gear make their way along the trail every year, leaving behind trash and slowly wearing away the road and the small ruins which line it. "They look like an Arab caravan," the spokesman said."


In addition, the Peruvian Government is trying to make life a lot easier for occasion tourist as well. Not only will the new roads cut travel time, but also a cable car that is awaiting Peruvian Government approval is expected to take visitors to the Machu Picchu summit in absolute luxury. The cable car is scheduled to leave from village of Aguas Calientes and take riders to the ruins, 8,000 feet above sea level. Unesco wasn’t too happy with this idea and even talked about pulling the plug on their World Heritage designation. "The cable car system…would very seriously affect the World Heritage values, authenticity and integrity of the Ciudadela and its surrounding landscape."







India has made it clear that they are open for business and are no longer going to pursue the peculiar economic policies that created so many problems for them over the last 20 years. The government’s statement that it now realizes that something must be done to raise the standard of living for its people, while providing them with competitive opportunities, seems to deal with current global realities. But wait, lets us read further before jumping to conclusions. The fact is the government accepts the premise that it is critical to bring in outside expertise, financing and industry in order to accomplish the barest minimum of their objectives before the end of the 21st century. A closer look at what the country has accomplished may reveal more than appears at first glance but first we are going to see who these people were and where they came from.


India proper was actually a combination of what are now the countries of India, Bangladesh and Pakistan. This area, in reality was composed of numerous separate states ruled by petty local princes who always seemingly were vying for a slice of what his neighbors had. In spite of local rivalries, the entity seemed to flourish under British rule. Britain came onto the Indian scene in the early 17th century when their far flung, British East India Company (Company) began operations in this area. The Company was more like a country in itself in the respect that it proceeded to establish trading zones within India and supplied both military and political resources to these districts.


Business was extremely good in India and Britain competitors on the continent soon noticed that their competitors were growing increasingly affluent due to the resources that they were confiscating from that country. Fearing competition in their largest and paramount market, the English Government replaced the trading company’s private army with seasoned British regulars and began a campaign of subjugating the country, its people and its resources. This was accomplished in short order as the people of India were well aware that the British knew how to run a country without one of India’s historic problems, corruption which has remained invasive to this day. Furthermore, the British were able to eliminate the constant bickering that had been going on between rival states.


Additionally, the Indian people for the first time were allowed to become part of the bureaucracy, however at a very low level. As the people gradually developed the basic tools of government a desire for more say in their affairs was heard by the British rules. In 1919, the colonialists transferred authority in limited doses to the locals. When World War II broke out, the British desperately needed India’s help in their war effort, and an agreement to give them independence when the war ended was extracted at that time. However, the British didn’t mean a word of it and no sooner than had Germany capitulated then British reneged on their deal with India. However, the Indians were not surprised as they were well aware that the British had probably reneged on every deal that they had ever made.


Strong political parties started to emerge such as the National Indian Conference as did leaders such as Mohandas Karamchand Gandhi, or Mahatma () Gandhi. Gandhi was totally committed to independence for India and went about it in a very unique manner. "Gandhi emerged in 1920 as the main exponent of a nationalism that sought to achieve its aims through nonviolent means, such as the nonpayment of taxes or the symbolic defiance of government authority through strikes or peaceful demonstrations. Gandhi’s aim was an India that would not simply gain political freedom but would use its freedom as a means to find its own path of development…Gandhi’s vision was rejected by the Muslim League, headed from the mid-1930’s by Muhammad Ali Jinnah. Before 1947, Muslims formed about a quarter of India’s population. Jinnah argued that Gandhi’s vision of unity would only ensure the dominance of the Hindu majority over the Muslim minority. The league, therefore, demanded the division of India into Hindu and Muslim states. " () The British, totally sapped by World War II, no longer had the resources to hold their empire together and bravely capitulated to great international fanfare. Independence and partition agreements were signed and everyone got their wish on August 15, 1947. Sadly, almost pathetically, the British began their lengthy pullout from India on that day.


However, nobody was aware of what the combination of partition and independence meant at that time. The Muslims weren’t excited about life with the Hindu’s and vice versa. An enormous migration began along religious lines with streams of refugees headed in both directions waving a final farewell to the British who tried to keep their heads up under the worst of circumstances. While it was not readily apparent on the surface, it was not only the fact that these two religions couldn’t find an accommodation with each other, but it was also the fact that there was a built up hatred between these groups. The mass migration was joined by massive violence in which at least one million people were killed and 14 million became refugees. Gandhi himself was assassinated on January 30, 1948 by a Hindu who held Gandhi personally responsible for the partition that he had agreed to.


This was a tremendous blow to the emerging country, but luckily, Jawaharlal Nehru was ready to step into Gandhi’s shoes and did it in style. While he shared many of Gandhi’s views, he was his own man and the country soon became better for it. Nehru borrowed from all economic models while quickly learning how to play the major powers off against each other for India’s benefit. But in an ominous move that signaled stagnation, he protected a substantial number of industries against foreign influence. This ultimately set the stage for a national lack of incentive and competitiveness. It created the environment for shoddy products and political corruption. In trying to do his best to make the new country work, Nehru had set the stage for India’s stagnation. India’s downhill slide can be best exemplified by the fact that fresh water is less available now than it was when the British ruled the country. In addition, what little of it there is has become highly polluted by a lack of industrial controls and air pollution is considered a disaster with the World Bank estimating that 40,000 Indians die prematurely each year due to this problem. The country has about the same abominable literacy rate today than it had fifty years ago and


India has had an uphill battle since its creation 50 years ago when it housed a mere 370 million people as opposed to today’s 970 million. At the time that India received their independence from Great Britain, it was considered to by the "jewel in the crown" of the British Empire. It dramatically marked the demise of that country as a world power and by giving India its independence, it created the largest democracy on earth. India, while occupying only 2.4% of the world’s landmass, it is supporting 15% of the global population, of which a startling, 40% are under 15 years of age. This is caused by an uncontrolled birthrate that will make India more populous than China in the early part of the 21st century. While thirty percent of the population exists under the poverty line, India maintains the third largest army in the world. India brought to the world when it became a country, the largest number of people living in dire poverty on earth.


It is a country which contains countless political parties and seldom is there ever a national majority vote on any subject because of the diversity of interest and social customs, Countries in the Pacific Rim that had started far behind India a half century ago, now have per capita incomes more than 25 times that of Indians. The only comparison that makes India look good is when you look at the two other countries they were separated at birth by the British. Bangladesh and Pakistan. From an economic and political perspective, India has outperformed both in outstanding fashion, however that says very little.


The government has no financing incentive programs, and Indian Bankers look upon making loans to farmers in much the same manner their brethren in the Western part of the United States viewed the Dalton Gang. This left the farmers at the mercy of loan sharks that charge interest rates that would frighten Shylock. Obviously, those that worked the land for a living regularly lost their farms, their possessions and their lives. Not being able to face the realities of what had occurred, suicide became fashionable to such a degree that the Indian Government even began talking about providing crop insurance, something that has been available in most of the world for the last century. "The state government is approaching the Indian government with a request to extend the crop insurance scheme to commercial crops like cotton," said Chandrababu Naidu, Andhra Pradesh’s chief minister. One of the residents who did not want to be identified, indicated that the chances of the government stepping in before everyone lost their land to well manicured moneylenders was minimal. These lenders would then be forced to plant their inherited crops, to which he commented, "Let’s see how much production the government can get out of a bunch of money lenders."


In the two months from mid-December to the middle of February 1998, the Wall Street Journal reported that over 100 Indian farmers had committed suicide because of crop failure. The method of choice was drinking the pesticide that was incapable of keeping the crops from being devoured by parasites, the primary villain being known as the "tobacco caterpillar." Many farmers who tried to do away with themselves by drinking the poisoned cocktails were unwittingly saved by the fact that supplier charlatans had watered the solutions so dramatically that the products’ potency had been completely drained.


Although India is serious about attracting global economic players, they have really not figured out how to do it. In Madhya Pradesh there was an astounding discovery of diamonds, and the State believed that the world would soon be beating a path to its door. Indeed, they all came to call, De Beers, Rio Tinto, CRA and Ashton Mining. The Madhya Pradesh Government didn’t ask for much, just a 10% royalty on all diamonds sold and an 11% equity interest in the winning mining company along with taxes and infrastructure development projects.


Not only was this request a deal breaker, but in the fine print, state bureaucrats added that the diamonds would have to be sold to the highest bidder, rather than through the existing diamond cartels. In reality, this deal along with many other could never have become a fact because locals think of the diamonds as India’s national treasure, which should not be dug up by foreigners. Unhappily for India, there is no local company that has anywhere near the expertise to operate the sophisticated mining operation that is required under the circumstances. Thus, the diamonds will go unclaimed and for the near future will remain India’s prized underground possession.


Setting up for business in India is not a "walk in the park" under even the best of conditions, as energy is iffy even in modern buildings unless back-up generators are procured prior to moving in. Data along with just about everything else can be lost when the daily power outage occurs. Water cannot be counted on either unless the enterprising company places its own water tank on top of its facility, thus anticipating the regular intervals when the water supply becomes contaminated or ceases to function altogether. It may take years before telephone lines can be installed, and air conditioning, even if is available, will usually blow out the overloaded power lines. Even if you have your own generator, that is only the beginning, because as a rule, building facilities don’t come with light fixtures. When you rent space in India, you get one thing: space, hopefully with four walls, but believe it or not, something often much less.


Real Estate projects are hard to get off the ground for other reasons as well, bureaucrats represent a nightmare when permits are needed, utility employees usually need to be bribed in order to get services installed and labor regulations regarding hiring and firing represent a nightmare. If the materials for construction and operation are not available locally, import duties are frightful and getting products from the dock to the site is a full time job and extremely expensive. An example of how bad things are is the fact that India, with the second largest population on earth, has no shopping centers. Small mom and pop businesses represent the bulk of the retail economy in this country. There are two principal reasons for this, the first and most critical is the fact that small businesses have their rents subsidized by the government; this not only ferments unfair competition but encourages incompetence. The second reason is a combination of the bureaucratic nightmare discussed above and the fact that all land in India is divided into extremely small parcels () thus requiring enormous perseverance and substantial money to accumulate a parcel big enough to accommodate a large structure. Real Estate people all of the world are drooling over the opportunities this anomaly presents but at the moment, there is little that can be done.


India has stayed with a complex caste system within which there are thousands of sub castes, thus making for an extremely complex arrangement where you almost can’t tell who is doing what to whom without a scorecard. An interesting insight into India’s caste system is provided by Mr. Gurcharan Das, chairman of Citibank India’s Advisory Board and formerly CEO of Procter and Gamble, India. He indicates, in part, that rural India’s entire social culture is organized around caste, even when adding the educated middle and upper-middle classes to the mix. Das states that, "Caste divides Indian society into groups whose members never intermarry and usually will not eat with each other; their status is decided by who will and will not take water from each other’s hands. Everyone within a caste is a brother and without is a stranger. Caste varies by region, and the relative positions of castes can differ from village to village. But everywhere caste rules are rigid, and those who deviate from them are shunned. There is little room for individuality when the group – defined by family, ancestry, kinship, village, class and caste – is supreme."


India has never been too concerned about the rights of others when it came to intellectual property. The pervasive feeling within the country is that India is playing catch up and it is easier to "catch up" when you make your own rules. High-tech companies have been slow to bring their trade secrets into a country that in the past has considered reverse engineering the only game in town. Indian intellectual property laws lack cohesiveness and enforcement is literally non-existent. Additionally, what little protection that can be found within the court system is archaic, slow moving and biased toward indigenous companies that more often than not were trying to simulate products, names and contents of others. An example of the depth of the problem, Tata Timken estimates that in the field of automobile spare parts (a critical industry because of import regulations and tariffs), some 40 to 50 percent of all products are bogus. Although legitimate products may be available, poor distribution throughout the country hampers delivery.


It is in the area of pharmaceuticals where Indian piracy takes a back seat to no other country. Their chemists can reverse engineer the most complex of medicines in almost no time at all. Many pharmaceutical companies such as Pfizer will not sell to India at all because of the country’s attitude in not respecting intellectual property. The Indian theory is that copying is alright, at least in the field pharmaceuticals, because monopolies tend to keep prices up and a patent creates a monopoly; and India has too many sick and poor people to have to worry about the niceties of playing by the rules. In addition, the government has come up with some new rules of their own which through convoluted logic seem to convince them that they are doing the right thing. India’s intellectual property laws have evolved to where they will recognize the methodology of the manufacture but not the end product. Thus, indigenous companies by using a different method of getting to same conclusion are free to create whatever they want at will.


Corruption in India is a pervasive and catastrophic problem. Nowhere is the predicament more of a problem that in India’s military. Moreover, one of the most astounding charges of corruption that we have ever witnessed concerns India’s loss of military planes. Indian newspapers have reported that as many as 82 planes have been lost during a recent 42 week period from non-combat crashes. The cost of this to the Indian Government, just for replacement of these losses, is estimated in the billions of dollars. But why do they crash? There are three schools of thought on the subject. The first holds that the training of Indian pilots is poor by any standards and when they graduate from flight school, they are just not equipped to operate a plane. While this is more likely than not, it certainly does not bode well for India in any battle with neighbors, or anyone else for that matter. The second often argued possibility is that the planes are poorly made. However, this argument does not seem to hold water because India purchases all of their military aircraft from other nations, which have not reported these kinds of problems.


Lastly, and more typical of the average Indian’s approach to anything that goes wrong in India, corruption. One of the major Indian papers ran a story last year about how people were cleaning up in "bogus aircraft parts." Unbelievably, the outcry has gone up by the populace that the Indian Air Force was purchasing second-hand or homemade parts for their fighters. Some wags, apparently not understanding the rigid system have already started making demands for an investigation. In the meantime though, in a land where people can’t find work, it is certainly unusual that the Indian Air Force cannot seem to be able to recruit pilots, even at high pay and large bonuses. It is not a stretch to believe that the pilots know something.


However, there is a new movement afoot in India, it is called Internet Justice and it was started by a website called Tehelka means sensational in Hindi and it turned out that the web site was as good as its name. They opened up a phony corporation and started to go about town (New Delhi) offering various politicians bribes in exchange for doing favors for their company. However, they always were accompanied by a hidden camera and microphones that faithfully recorded the happenings. Before they were done, they had accumulated over 100 hours of videotape, which was eventually cut down to a 4½-hour documentary.


The cover story they used was made patently ridiculous just to see how far the greedy politicos would go and they even invented a non-existent product that they needed help on called thermal imaging binoculars. Ultimately caught in this web of payoffs were, Bangaru Laxman, president of that party that leads India who resigned, Jaya Jaitley leader of Samta Party, also a member of the government coalition directed the binocular manufactures to pay the bribe money to a particular party official who must have been the bag man. Another victim of the videotape was George Fernandes, India’s Defense Minister who was implicated in the military procurement side of the scheme. Railways Minister, Mamata Banerjee also said she would quit in disgust over the scandal; however, Mamata often resigns and then changes her mind.


"As we look at the footage of the sting," Mr. Tejpal wrote on the Web site, we are still astonished at how blinding the greed was that two rank amateurs with close to no knowledge of defense hardware, hawking patently absurd product, could go so far as to slice open an entire industry of high corruption." ()


The minority Congress Party had a lot of fun with the announcement and Kapil Sibal a legislator was able to get in a few licks: "This has been like a godsend, this government came to power as the only party that believed in morality. The morality plank is over. The sheen is lost. And people now say these guys are worse than any before." However, graft and corruption in India are only in these eyes of the beholder, as for the public, this kind of stuff is just plain old news. They seem resigned to the fact that no matter which party comes to office, there will be a certain amount of graft and that is not going to stop. In spite of their sanguine attitude toward corruption, most admit that lately it has become totally out of control.


"For out-of-power politicians, corruption may be good news, but for most Indians it is the bane of public life. It can be hard to keep track of them all. They have ranged across the film lots of Bollywood, the pitches of fixed cricket matches and the backrooms of the Bombay Stock Exchange. They brought tragedy in Gujarat, where high-rises shoddily built with the connivance of corrupt politicians and bureaucrats collapsed in Ahmedabad, killing hundreds." ()

However, a while back, global investors took a cursory look at India and liked what they saw. A country rededicated to modern economic theory and committed to make capitalism work. Stocks in India were selling at invitingly low price/earnings ratios, and amazingly there were over 7,000 listed public companies to chose from. The markets had become mature because they had been in existence for decades, and most importantly, the second most populated nation on earth just could not be ignored when setting up a truly global portfolio.


However, the global community was really not aware of how things work in India. All security trades are manually executed, and ownership is transferred by hand in a cumbersome process harking back to the Indian system that was in existence hundreds of years ago. The individual corporations, for a large part, control the transfer of their own shares, and depending upon their own bias, at any given time you may or may not receive what you purchased. If, for example, the powers that be, wish their stock to go higher, they endlessly delay transferring their shares, thus creating a market in which if an investor wants to make a purchase, he will have to pay dearly. On the other hand, suppose that the directors of a company want to declare themselves options and therefore want shares prices lower. They simply supply all of the stock that has been backed up at the transfer agent and let gravity run its course.


Ketan Parekh, an Indian broker was arrested recently by the Central Bureau of Investigation for his recent default on millions of dollars of pay orders to the Bank of India. This indictment follows on the heels of a raid by officials several days before by the Income Tax Department, the Enforcement Directorate and the Directorate of Revenue Intelligence on Ketan and a number of his associates. He is being charged with insider trading and theft. Recently, insider trading charges also led to the resignation of the president of India’s largest exchange, on March 30, 2001, all of the nine elected members of Calcutta Stock Exchange resigned because of irregularities, but the Parekh affair has caused a stock market disaster. An interesting chronology of events was prepared by the NDTV.Com in India.


The sequence of events in the recent operations were:


    1. Ketan Parekh is said to have got pay orders issued from Madhavpura Bank for more than Rs 130 crore.
    2. A pay order is considered to be the safest financial instrument as it is issued only against cash.
    3. Ketan Parekh is said to have gone to Bank of India, Mumbai and taken money against the pay orders
    4. Bank of India was under the impression that Mr. Parekh would have paid Madhavpura and it never anticipated any payment problems.
    5. As the stock markets fell, Bank of India presented the pay orders to Madhavpura Bank, which refused to meet the demands, as it did not have the funds to meet them. Later Bank of India is said to have discovered Madhavpura had never received the money from Mr. Parekh.
    6. This is when Bank of India asked Mr. Parekh to pay up. But since his assets were seized during the income tax raids, he has no money or collateral to give the Bank of India.


India’s products have had a record over the years of being shoddily produced and generally not competitive with global standards. Yet, a decade old company in India, Titan Industries, has become the sixth largest watch manufacturer in the world by concentrating on price, quality and upscale fashion. Titan has captured 75% of the high-end market in India, and now is attempting to go outside its borders to compete internationally. The perception of Indian quality is so poor that Titan has been forced to disguise its origin in both its advertising and its company literature, which is emphasized by a quote from Xerxes Desi, Titan’s Managing Director; "India’s reputation is a bit of a problem, so we’re playing it down." But in order to become a global player, their watch has to be available in foreign countries. That is the rub.


Because of India’s restrictive laws, no import of watches is allowed into this country. Thus, when Indian companies attempt to enter global markets, other nations begin playing hardball with those of Indian origin. In the case of watches, the company has been restricted from entering trade shows in various areas around the world. While India’s laws work in their largely non-competitive economy, these same laws tend to restrict the occasional superstar from rising above the throng. Moreover, the end result of this archaic game directly stifles their own exports, and more dangerously, it impedes the country’s ability to earn hard currency. We can envision no early return of India’s industry to global competitiveness with this continued irrational thinking.


India is one of the world’s last refuges of public sector banking, with no change in sight. Even with a policy of state controlled banking, the government does not allow mergers and acquisitions to take place. This is true even when absorption of a weaker bank by a stronger is logical. Entrenched bureaucrats, who are not interested in making waves, concentrate their risk within the public sector so that even if a loan fails to perform, they have the advantage of blaming another bureaucrat for the resultant run on the system.


However, because of the absolutely awful service provided by state-run institutions, India allowed the creation of nine privately owned banks that are offering online banking, top-drawer service and attentive personnel. Moreover, because these bank come on India’s new economic reforms they can be much more aggressive about a number of things. They can enter into acquisitions of each other to add growth and economies of scale and they can issue ADR's to provide the necessary capital for expansion. ICIC Bank has already listed on the New York Stock Exchange. However, nothing is easy in India, and beside the front running of their securities and brokerage firms defaults under Indian Law must be indemnified by the banks, making things much more treacherous than they need to be. Abnormal restrictions have held this sector’s share of the Indian banking pie to just a tad over 5% and although the only industry growth is limited to this small group (), acquisitions are only logical within the group because of the archaic nature of the public sector.


"Expanding a bank in the traditional way, by opening new branches, can be a chore in India, analysts say, since a government license must be granted for each branch. Bankers would like to see regulations loosened so they can buy individual branches of state-owned banks. They do not believe that the government is even considering it. India has suggested it will reform and eventually privatize its state-owned banks, but there are big obstacles, including high levels of non-performing debt, and fears of job losses among the large work force." ()

No matter how badly they perform, for the most part bank executives have all the trappings of civil service personnel. Their jobs are secure as long as they are willing to play the political game of making loans to the correct borrowers. There has been literally no desire within the government to bring change to this disastrous element in the economy, which by its nature stifles the ability of new businesses (which have been the life’s blood of many economies) to flourish. As if it was as intended by the country’s fathers, India has been able eliminate innovation from its society by permitting this system to endure.


When the latest in a long series of inept Indian governments assumed office, one of the first pledges that they made was deregulation of the insurance industry. This was not what you would call an eleemosynary gesture on the part of the government. Insurance coverage for Indian citizens remains woefully inadequate due to a lack of domestic insurance companies with sufficient reserves to provide additional lines and quantities of coverage. At the same time, there is a general lack of construction (infrastructure) coverage available, and this has been a factor inhibiting foreign competition in the Indian marketplace.


Making matters all the worse is the fact that until recently, for some bizarre reason, insurance company’s use of computers was banned by the government. General Insurance Corporation of India, the state insurance company, is divided into four parts, each of which operates on a semi-autonomous basis. One of these subsidiaries, Oriental Insurance, has projected that without undue governmental interference, they could become fully computerized within several years. In an industry where so much data is required to be analyzed on a regular basis and in a country where quill pens are still de rigueur, it is no wonder that India has somehow lost its way.


India has literally no means of intra-country distribution and it is often easier to import goods from abroad and have them indigenous products delivered where they are needed as opposed to sending them to various geographical regions within the country. Such is the case with sugar, which because of skewed bureaucratic thinking has become scarce in spite of a government hoard of over five million tons.


Most of the sugar that is produced in the country, by law must be sold to the government at prices substantially below the market. This disincentive has caused the production of sugar to drop precipitously and the situation has come down to the fact that many sugar cane crushers now have literally little or no cane to mill. What is in the warehouses cannot be economically transshipped from where it is located to where the sugar is needed. Thus, India finds itself in the odd position of needing to import 500,000 tons of sugar while having more than enough in storage to meet its needs.


Yet when people in the industry complain about this logistic anomaly, they are informed by Mr. Rahhuvansh Prasad Singh, the Minister of Food and Consumer Affairs, "the wholesale price of sugar has increased by 19.3 percent in just the last year." Holly Cow! But what good is that arbitrary price if you cannot sell the product and no one will pay that for it including the government. However, the Indian’s have a way around the soaring price of food. In northern India, a strange combination of tea and Yak Butter has caused a sensation. However, there is little export market for Yak Butter so the Indians do not have to worry that this delicacy will be in short supply in the near future.


At one time, India was perceived to be both the leader and savior of the world’s non-aligned nations and as such gained much international political attention. For many years, India took an intermediate position between that of the great powers and by careful positioning, was able to play them off against each other with a modicum of success. India enjoyed the prestige of this position for some years, but apparently became totally politically confused when the thaw came between the East and West. But then, how could it be otherwise? The Indian government has been in a constant state of turmoil since Ghandi and in 1997 and 1998, the country had three different governments: The Vajpayee Government," lasting 31 days, the Deve Gowda Government, which lasted 11 months, and the Gujral Government, which lasted for 10 months. With governments coming and going like revolving doors, no one was in office long enough to evolve a cohesive foreign strategy.


Among other political catastrophes, India’s recent unilateral peace initiative to Baghdad succeeded in alienating both Iraq and the United States. India was bracketed with other stellar performers, Cuba and Yemen in the Security Council vote calling for Iraq’s surrender. India’s non-aligned leadership collapsed entirely when it joined Bhutan and Libya in voting against the Comprehensive Test Ban Treaty, which passed 158-3 in the United Nations General Assembly. According to an article in Foreign Affairs, July/August 1997, by Ramesh Thakur,


"The next month, the General Assembly voted to fill five nonpermanent seats on the Security Council. India and Japan keenly contested the Asian vacancy. What was expected to have been a close vote, requiring several ballots, turned into a rout. Japan romped home 142-20. The two defeats proved that, 50 years after independence, India is neither rich enough to bribe, powerful enough to bully, nor principled enough to inspire."

India is a bureaucratically run government, which is democratically elected, and no matter which party is enters office, each seems to have been plagued by the same snafus as its predecessor. Politics is an avocation in the country and with over 600 political parities to choose from, running the gambit all the way from the Vegetarian Party to the Anarchist’s Party, printing ballots has become a logistical nightmare. They must be printed in no less than twenty different languages and in pictures for those that do not read or write. Another element of Indian politics is the fact that assassination is an important part of political campaigning, as tempers always run hot at election time. Moreover, Indian Provinces of Assam, Kashmir and Punjab have been trying to secede for years and denizens of these states take their politics seriously. Ballot stuffing has become a way of life for Indians who feel strongly about a particular cause, and it has been said that Chicago ward-healers could learn some new tricks from those that have cut their teeth on Indian politics.


The New York Times () reported that, "Although no reliable figures exist for this campaign (the 1998 election), the extent of the problem (criminalized politics) emerged in the 1996 vote, when one study counted more than 1,500 of the 13,886 candidates with having criminal records, including murder, kidnapping, rape and extortion. The Times, in the same article, went on to point out that in India, "...criminals were defined as those who had exhausted their appeals – a process that usually takes 20 years or more." In addition, the Times pointed out that almost all of India’s 600 parties and all of the major ones have fielded candidates with criminal pasts and that "more than 150," or a third, of the lawmakers in the Uttar Pradesh state legislature have criminal records. Anand Mohan Singh exemplifies much that is wrong with Indian Politics. While a Member of Parliament, Mr. Singh had a local political official killed in cold blood in front of countless horrified spectators. While out of jail on bail awaiting trial on murder charges, during a parliamentary debate Mr. Singh informed an opponent who disagreed with some of his statements, "Say that again and I’ll come and break your teeth."


However, in many villages, the people are not really allowed to vote at all. Thugs enter the polling places when they open and cast the people’s votes for them and then declare the polling station closed. In other places, employers demand their workers to adhere to their voting instructions or lose their jobs. "Among nearly 5,000 candidates in the current election, hundreds are gangsters and criminals, men and women awaiting trial or already convicted, but free on bail for crimes like murder, kidnapping and blackmail." Indian politicians are hardly the pacifists that we have come to expect.


In the early part of this decade, it finally seemed as though India was headed in the right direction. Other Asian economies had totally eclipsed its progress over the previous 20 years. Unfortunately, for the Indian people, progress slowed later in the decade and by the end of the decade, India went into historic relapse; the patient has not shown vital signs since.


Historically, working in the public sector was considered the highest calling an Indian citizen could attain. Globalization has caused a dramatic disparity of income between the sectors; bureaucrats now only receive a small fraction of the income of their counterparts in private industry. This has created an environment that is plagued with petty jealousy, and as a result, the entire country is much the worse for it. The more qualified government employees leave for private industry at their first opportunity, leaving a residuum of unqualified bureaucrats to run government. These people are usually only able to address problems that come to them tied in a ribbon of money.


The government has not been able to make any progress with its deficit to gross national product ratio, which has been hovering around a highly unacceptable 6%. Needless subsidies continue to support industries that would eventually perform better if they were subject to competitive market forces. Industry in general remains hampered by paperwork, inefficiency, bureaucracy, nepotism and voodoo economic theories. The caste system keeps talented people out of the creative labor pool. India has well earned its substantial skid in the competitiveness ratings supplied by the World Economic Forum.


"By the spring of 1975 harsh economic measures had brought the economy back under control. At the same time, however, Gandhi was convicted of corrupt practices in the election of 1971. Although she maintained her innocence, opposition to Gandhi grew, bringing together elite politicians anxious for power with a grassroots opposition movement that had been building in the previous year. Gandhi's response to this mounting pressure was to declare a state of national emergency in June 1975. Opposition politicians were jailed, the press was censored, and strong disciplinary measures were taken against a bureaucracy that had grown slack and corrupt. Initially the country did well under the so-called Emergency Rule: Hindu-Muslim riots, which had been increasing in the late 1960s and early 1970s, virtually ceased, prices stabilized, and government seemed to work with honesty and vigor."

"As stringent measures and corruption in the government continued, however, the Indian public grew resentful, and open opposition to Congress leaders and the bureaucracy surfaced. In the fall of 1976 Gandhi pushed though amendments to the constitution that would have entrenched many of the emergency provisions. At the same time her younger son, Sanjay, was associated with a coercive family planning campaign and similar measures, and government leaders enjoyed a lack of accountability to the public." ()


Improvement that could occur in the private sector through privatization is non-existent because India has not even begun to utilize this highly productive economic avenue. The country still adheres to archaic principals of not allowing business once opened to even shut subsidiaries, thus placing an enormous tax on failure. The global perception that the Indian government is reluctant to go through the painful process of creating a favorable business environment has resulted in a startling constriction of foreign direct investment. This is illustrated by the discrepancy between offshore funds infused into China recently and those sent to India; the former was twenty times more than the latter.


This is not unusual when analyzing the attitudes towards business normalization practiced by the diametrically different governments. Whereas China had no infrastructure, India was left in relatively decent shape by the retreating British Colonialists. On the other hand, what had been carefully created has fallen apart from abuse and can only now be restored at a staggering cost. In spite of India having a national phone network decades ago, currently, callers will be able to reach almost all of China and literally none of India. This is an extremely interesting statistic when you consider that until less than a decade ago, phone literally did not exist in China and India had used them since they were invented. What roads China had were literally only usable by foot traffic, animals and some motorcycles. Today, China is putting the finishing touches on a band of four lane highways connecting the length and breath of the country, while India’s congested thoroughfares make traveling any distance, a painful experience or an impossibility depending on the weather.


China has embarked on massive projects to create power, dams, and power grids while energy plants can be seen rising throughout the landscape. By contrast, the absence of adequate power supplies acts as a major deterrent to factory construction in India. While foreign sources would love to create an energy infrastructure in India, the government has increasingly resisted these overtures.


An underpowered India has energy needs, which increase approximately 8% per year, while the supply has been growing at a less hefty two to three percent. Thus, this already hapless country is falling further and further back into the dark ages. At peak times, energy deficits average almost 20%, making blackouts a way of life. Here we see another one of the multitudinous problems effecting India’s ability to rationally function. In this case, the problem is that whatever the central government promises to do in the name of increasing energy production becomes unraveled when the project reaches the state level. This problem is constitutional in nature and essentially asserts that the central government has the power to set policy relative to energy, but the purchasers of the derivative power are, for the most part, the states, and it is here where the ball of yarn unravels.


Each state has an Energy Board and each and every one of the 19 State Energy Boards’ (SEBs) are bankrupt, therefore, it is hardly a surprise that their agreements to purchase or arrange for the purchase of energy is of no economic value. Worse, yet, the SEBs universally sell energy to farmers at a fraction of what they charge industrial users, for political purposes, thus throwing the quasi governmental agencies further into the red. On average, farmers pay only 10% of what industrial users are charged causing simultaneously, a massive subsidization of farm products and a stultification of industry.


Moreover, just as night follows day, because energy is cheap, farmers tend to waste it. While the number of farms has remained stagnant over the last decade, farm usage of energy has risen from 25% per cent of the nation's output to almost 50%. So what we see occurring is a constantly increasing usage from those who are paying almost nothing, pushing the SEBs further and further underwater. With economic policies such as these, it is not hard to understand why the SEBs lost approximately $2.5 billion last year and are in debt for an equal amount to the central government. The provision of subsidized energy costs the central government $3.5 billion per year.


When the losses and the debt and subsidies are added together, you can see that we are really talking about a very substantial amount of money, which the country just cannot afford. This has become truly a vicious circle. The only solution is to make the SEBs politically independent so that fees charged for energy can become more consistent and the bureaucratic logjam between the central and state governments can be eliminated. There has recently been a move in that direction but at the rate progress in India takes hold, maybe something constructive will occur in this area sometime during the next millennium.


Nor is India any better at addressing individual rights; India’s record regarding women is shameful. India is within spitting distance of being able to send a rocket to the moon and has certainly demonstrated its atomic capabilities, yet less than four women in ten can read. It literally took an act of the legislature to create a slot for women in Parliament in spite of the fact Indira Gandhi led the country for 17 years. And yet, not only are women in India allowed almost no rights, the country is now involved in an imbroglio with a French television station called Fashion TV or FTV. It seems that FTV which has over 90-million viewers in India, is not particularly careful to see that its models are fully clothed and the in India, it has been said that the information ministry which monitors television have become a bureaucratic group of people that are full time "nipple counters". This dispute has turned into a maelstrom between the liberals exemplified by Vir Sanghvi, a popular Indian Columnist who stated, "Only a fool would believe that Indian culture is so fragile that it can be destroyed by Naomi Campbell’s breasts" and the conservatives represented by the Hindu supremacists who have attempted to stop beauty contests and women’s wearing of jeans.


"Liberal Indians, while acknowledging they live in a conservative society, see the FTV ban threat as just the latest example of a new intolerance promoted by the Hindu revivalist Bharatiya Janata party and its extremist allies, who together dominate India’s coalition government."

However, in terms of pure viewers, India is third behind the United States and China. While the United States and China limit the number of channels that can operate, in India, if you have the bucks and do not go overboard on the sexual side, you can come and go as you believe. With just a tad under 30 million-cable viewers in India, it appears that there are unbelievably somewhere around 40,000 cable operators. As opposed to television operations in the United States, there are multiple copies of just about every show on Indian Television. While it is basically, the only industry in India that is not over-regulated, the competition is enough to dissuade the most avid of television entrepreneurs. However, when the folks in the countryside are getting Baywatch, you know that they are not going to be able to keep the Indians down on the farm much longer.


India is a country that has many strange beliefs and they die-hard; there are countless recent instances where women have been cremated alive when their spouses have died. This is called "sati," and it is based on Hindu teachings that a woman has no existence independent of her husband. Female fetuses are regularly aborted, even though the United Nations has estimated that their population has a short fall of over 50 million women. Uniquely, but not illogically, there are only 92.7 woman for every 100 men. Women cannot directly share in an inheritance, and therefore only receive a share in a male sibling’s largesse. Daycare is non-existent, and therefore, it is almost impossible for a woman with a family to continue working.


Freedom is one of those ephemeral things that has to be experienced to be valued. We are all aware that India has protected its caste system from contamination by outside organizations concerned with civil liberties and individual rights for ages. The system goes back so far that everyone living within it seems to take servitude more or less for granted. With the explosion of international communications, this situation will soon come to an abrupt end. The powers that be in India believe this as well and actually were attempting to push this inevitability forward into the 21st century.


India does not currently have any private Internet services and the entire country has a community of less then 30,000 people connected to the Web. Moreover, India has some of the best software writers on the globe while having less than .00003 percent of its population online. The Delhi-based National Association of Software and Service Companies (Nasscom) believes that at least 150 domestic and foreign providers would move into the market if allowed to by the government. It is a case of extreme wonderment that approximately 2.8 million people are directly or indirectly involved in an industry that didn’t even exist a decade ago, it is already producing 2% of India’s total economic output and the bureaucrats running the Indian Government are not even coming close to getting the message. In the meantime, prices for Internet installation and usage are outrageous and the literally all of the content is government controlled. Additionally, even if someone was desirous of paying the high tariff, the installation process tends to drag on forever because of bureaucratic nonsense and the substantial payoffs that are required.


Moreover, the cost of this malaise has been substantial to the country in terms of future earnings. Almost as though by accident, Indian programmers have become top-drawer when it comes too responsive programming and add over $8.0 billion per year to India’s balance of payments. The fact that the country is willing to forgo the opportunities that this new innovation offers in terms of bringing much needed hard currency to the country is almost beyond logical comprehension. While other industries require substantial brick and mortar investments, software writing requires only a computer and dedicated personnel to bring home the bacon.


The Indian Government should have turned itself into a pretzel in order to accommodate this innovation but the allayed disadvantages perceived by an ignorant bureaucracy caused a slowdown in this field to nearly destroy one of the best chances India has had in generations to join the world community. Indian leaders apparently are hardly excited about the process of their population communicating with the outside world and finding out how badly screwed up, things remain in this Alice and Wonderland type country. Luckily, for all concerned, the evolution of the Web is bigger than the government and ultimately; stodgy bureaucrats will have to make their peace with its exigencies.


Another area where Indian people have made substantial headway is a rather unique entity known as the call center. When an American appliance purchaser needs to know information regarding his warrantee, find out how to fix a widget or where the nearest place you can get a washer for your" whatchamacallit", very often these days, you could bell be connected to Bangalore India and not have a clue that the voice on the other end isn’t located either in Dayton or Omaha. It is critical for the American Companies that hire the "call centers" that they convey the fact that they convey an intimacy in their conversations that could only be successfully accomplished by literally someone next door.


If the American party ever realized that he was talking to someone in India, a half a continent away, he could come away with a number of negative conceptions. The fact that the company he does business with does not hire Americans, that foreigners could not possibly deal with the intricacy of his problem or that, the company he is doing business with is trying to save money at the expense of providing good service. Thus, a very fine line is maintained, and stepping over it could create an unacceptable backlash. However, this has become big business and colleges have sprouted up to teach trainees the proper dialect along with local color. The more proficient the caller becomes, the higher his wages and getting a degree in this specialty creates substantial demand for these advanced candidates.


The people working in the call centers receive somewhere between $1,600 and $2,100 a year, big money by Indian standards but less than a sixth of minimum wage in the United States and only about 6-percent of what their American counterpart would bring home. Most Indians understand and speak English reasonable well and it is said that they watch shows like ‘Friends’ and "Ally McBeal’ to learn the lingo. The next day they are able to converse with their callers about the latest baseball scores or American politics. Taking the conversation to far a field can result in embarrassing moments, but long time call center workers don’t let that happen. "India is on its way to being the back office for the world," said Shriram Ramdas, one of the founders of Bangalore Labs, which manages Web sites and other information networks for companies from a futuristic office in the International Tech Park on the outskirts of Bangalore." () From an American point of view, the bottom line is that it is approximately 40% cheaper to do business in Bangalore than it is in the States.


"Eavesdrop, for a moment, on an imaginary call center conversation. Sam is talking to Ted in Texas, who is complaining about his gas bill. Sam puts the caller at ease, with his reassuring mid-western drawl and small talk about last night’s Miss Texas pageant and the explosive revelations on a talk show. What Ted does not know is that "Sam" is Subbarayan Shanmughasundaram and what may appear to be the suburbs of Dallas is in fact Tiruchchirappalli, in the south Indian state of Tamil Nadu." ()


Transportation suffers from similar infrastructure underdevelopment. All of the seaports in India combined do not handle as much traffic as the single port of Rotterdam in Europe. Corruption is king, and unless you are totally familiar with the territory, it is so expensive to bring goods in or out of the country that many organizations just give up the attempt altogether. The ports are all government-owned and operated, and the Mafia-like organizations that control these facilities are extremely canny when it comes to dealing with political nuances. These criminal cartels have a well-earned reputation for always being willing to step up to the plate when there is a call for funding by this candidate or that one. Moreover, by and large, they are supporters of all the parties that are competing for office and because any candidate that does not get their nefarious support is almost a guaranteed loses, they are pretty much left to their own devices in running these transportation fiefdoms. It is in the interests of the politicians to let these facilities remain clogged, inefficient and rife with corruption. In India, elections are lost because of a lack of campaign contributions, not because the people ever get together and vote the incompetents out of office.


However, ports remain congested because all of them are operating above their capacity. While this may seem like a normal event, we might add that this is the only thing in India that operates beyond its engineering rating. Yet, because of the inherent inefficiencies built into the system, the capacity of Indian Ports is a fraction of what a modern, well-maintained facility is able to generate anywhere else in the rest of the world. The average loading time throughout the country’s docks has been estimated by experts to be eight days. Thus, perishable goods have almost no chance of getting to their destinations without at least a degree of spoilage.


Having to deal with a turn around time of this magnitude also gives criminals substantial opportunity to rifle cargoes and shake down owners not only once but several times. Not only is the time that merchandise spends in port almost obscene in its inefficiency, but the average ship that has arrived at its destination must sit at anchor for an average of three days before it can find docking facilities. Thus, imports suffer the same fate as exports if their contents are at all fragile. The fact that shipping has such a dramatic turn-around time adds substantially to the cost of transportation, making products that would other wise be very production, overly expensive.


Most of the cranes used at the ports were erected in the 1950s and can only groan under their loads as their rusted out interiors give every indication of loading their last, each time bulk or container cargo is hoisted. To illustrate the ineffectiveness of India’s ports, one only has to look at the system located in nearby Sri Lanka, which operates at three times the speed of India, or the one in Singapore, which can load and unload at a speed of 400% of the India ports. But change comes slowly in this backward country, which had a port system that was the envy of the world when the British pulled out.


Due to the fact that India is backward in so many areas, it would normally follow that they are also behind the times when it comes to understanding common problems relating to health. Simple matters like the donation of blood are made difficult by India’s traditions, and at times people are willing to risk death instead of getting blood from a person of a lower caste in spite of medical assurances to the contrary. Similarly, many Indians believe that among the lower castes, certain inferior qualities are contained within the people’s blood and that they run a substantial risk of becoming mentally enfeebled by a transfusion from the wrong caste or religious sect. Indian schools make no effort the assuage the population of that these beliefs are not only erroneous but tend to stagnate the countries ability to grow. Having walls between various ethnic groups that make of the culture tends to inhibit interaction among these groups and cause economic stagnation.


As a result of this type of archaic thinking, on a relative basis, there has not been any blood in India’s blood banks for years. This strange anomaly has caused the donation of blood to become one of the few true growth industries in the country. Thus, potential donors hang around hospital emergency rooms making themselves available should the need arise, and it arises often. The amount of blood in India donated from historic sources is only a fraction of what would normally be required. The patient, hysterical that he will be inflicted with the subhuman blood carried by frowned upon elements in the Indian society, ultimately lapses into a coma and his relatives go looking for blood. They only have to indicate the blood type desired to the throng waiting in the hospital waiting rooms and the battering begins.


Price and caste are the two most critical questions but as the patient’s condition continues to decline both tend to lose a modicum of their importance. Because this system has been allowed to flourish on a quasi medical basis, far from developing devils within their systems from people beneath them in caste, lately, the Indian blood recipients often receive something far more ominous contained in their donation: AIDS! Indian hospitals are more often than not equipped to analyze the blood being donated, because of this fact; the recipients become infected with dread diseases from the last minute experience. The result may be that the recovering patient has had several horrible things happen to him simultaneously, he has received blood from someone that he would not even shared the same sidewalk with under other conditions and now has a disease even more critical than the one that brought him to the hospital in the first place.


India determined that if there was anything that would allow them to escape the shackles of mediocrity, it would be the creation of an industry based on computers, Internet and the writing of software. In some cases, they have succeeded admirably. But think of the disadvantage their people are at when the bureaucrats running the Indian Government determined that, because they couldn't "black out" maps when they were on contained on CD ROM discs, it would be necessary to ban the import of this media entirely. As an example, all of the discs produced by the eminent encyclopedia maker, Encyclopedia Britannica are not allowed within the boundaries of the country.


While this may seem to be just a haphazard ruling made by incompetent government officials, that is hardly the case. India's censors uniformly agree that this new media publication does not give them a fair shake. In normal publications when territorial lines are shown and the government watchdogs dogs do not agree with the delineation, the words "External boundaries of India as depicted are neither correct nor authentic" can be stamped on the page. The Encyclopedia Britannica considered by Indian censors to by an irreverent publication had the audacity to include the statement that India had been in a state of war with Pakistan and China on several occasions since its partition and this obscured some boundaries. While the rest of the globe would find no fault with this statement, you will not find many copies of the Encyclopedia Britannica in Indian Libraries.


In addition, in the "this could only happen in India" department, we have the story of the new millennium. As you are aware, the fanatical Taliban in Afghanistan somehow or other came up with the theory that the enormous Statues of Buddha were deemed idolatrous and destroyed by explosives. As a little known prelude to that event, a substantial number of cows were sacrificed by the Taliban because they had purportedly waited so long to destroy the statues and had somehow or other, annoyed god because of their foot dragging. Well, you know how cows are revered in India. Thus, many of the Hindus took the matter personally and "Member of the All India Hindu Protection Committee entered the 200-year old Kheruddin Mosque in Amristar late Wednesday, burned copies of the Islamic holy book and threw pork, a meat forbidden to Muslims, into the main compound." () Apparently this attack by the Protection Committee had something to do with clashes between Muslim protesters and police which left 14 dead in the city of Kanpur which had something to do with the Hindu’s burning a Quran in New Delhi, also protesting the Buddha’s being blown up. Somehow, I think that I have gotten aboard a daisy chain and cannot get off.


While some of India’s dogmas can be passed off as a bad joke, the weight of idiocy in virtually every facet of life has developed a country where nothing can function, and as other country’s move ahead, India is falling ever further from the competitive path.



Taj Mahal



India is a 5,000 year-old culture with a rich history that has produced, would you believe, over 300 million gods. Although modern India is not long out of the Dark Ages, in the past it had no problem creating one of the great shrines in human history, the Taj Mahal ("Crown of the Palace"). This world-class structure was built from 1630 to 1653 and was erected by Shah Jehan in Agra, seat of the Mughal Empire, as monument by to his wife, Mumtaz Mahal ("Chosen of the Palace"). She was the Shah’s second wife, and they soon became inseparable. When she died giving birth to their fourteenth child, while campaigning with her husband, he was grief-stricken and the country came to a standstill. "Mahal had been the Shah’s inseparable companion on all his journeys and military expeditions. She was his comrade, his counselor, and inspired him to acts of charity and benevolence towards the weak and the needy."


Had he not built the Taj Mahal as a monument to his favorite wife, the nation would have soon stopped functioning altogether. Although there is not much question that the Shah was madly in love with his wife, he also had a harem of over 5,000 women and an incestuous relationship with his daughter, saying, "a gardener has every right to taste the fruit he has planted." It is hard to believe that a man so crass could have even imagined a structure so breathtaking.


The king had been determined to build the most magnificent structure the world had ever seen in honor of his fallen companion. He determined that she would be laid to rest in Agra in a garden of the banks of the quietly flowing Jamuna River. The Shah then brought together a group of what were considered to be the best architects in the world. He gave them a blank check and told the group to design a mausoleum that would cause everyone to stare at in awe. They worked with moonstone, jade, lapis, lazuli, coral, carnelian and jasper, along with generous portions of gold and silver, to etch magnificent carvings on all parts of the structure.


They hired the best craftsman available worldwide, and when the count had been competed, twenty-thousand artisans from all over the globe were assembled to begin the decades long process. A two-mile long ramp was erected in order to gradually lift the materials onto the level of the building. Precious stones were imported from everywhere, and the white Makrana marble was quarried and delivered by river from Jodhpur in Rajasthan. This white-faced mausoleum wasn’t created as something that would be attractive because it would be so massive, like the Great Wall of China or the Egyptian Pyramids. The ultimate cost of construction was in excess of 32 million Rupees, a princely sum (more like a kingly sum) in those days. Extensive logistics were the order of the day, and in spite of the highly complex nature of the construction and the massive numbers of people involved, detailed records were kept of the inventory of construction materials and their origin.


This monument would be delicately constructed by artisans, not slaves, and it has been said the structure was designed by giants and finished by jewelers. Workers were selected for their expertise in various nuances of construction and were brought to India from Delhi, Qannauj, Lahore, Mutan, Baghdad, Shiraz, Bukhara, France, Italy, Turkey and wherever else they could be found to work on this most prodigious project. The artisans were offered princely sums to participate and the overall cost of the structure in wages alone must have been awesome. "The architectural design uses the interlocking arabesque concept, in which each element stands on its own and perfectly integrates with the main structure. It uses the principles of self-replicating geometry and a symmetry of architectural elements." A herd of 1,000 elephants was assembled to act as beasts of burden for the project. This is probably the largest herd of elephants ever in one place and at one time.


It is built in Islamic style and is made of carefully detailed masonry and lovingly cut marble. The walled garden and the central canal and magnificent minarets give such an awesome appearance that first time visitors have been known to break down into tears. The green Persian garden begins at the main gateway and runs to the foot of the Taj Mahal. The garden was an attempt by landscape artists to translate the perfection of heaven into terrestrial terms by following certain formulas. In Islam, four is the holiest of all numbers – and the gardens were thus laid out in the quadrate plan. Two marble canals studded with fountains and lined with Cypress trees (symbolizing death) cross in the center of the garden dividing it into four equal squares.


"A clever system was devised to procure water for the Taj through underground pipes. Water was drawn from the river by a series of purs (manual system of drawing water from a water body using a rope and bucket pulled by bullocks) and was brought through a broad water channel into an oblong storage tank of great dimensions. It was again raised by a series of thirteen purs worked by bullocks....An ingenious method was devised to ensure uniform and undiminished water pressure in the fountains, irrespective of the distance and the outflow of water. A copper pot was provided under each fountain pipe – which was thus connected to the water supply only through the pot. Water first fills the pot and then only rises simultaneously in the fountains."

"The fountains are thus controlled by pressure in the pots and not pressure in the main pipe. As the pressure in the pots is uniformly distributed all the time, it ensures equal supply of water at the same rate in all the fountains. The garden is irrigated by the overflowing of canals. The north-south canal has inlets of water through fountains. The east west received its water through an interconnection with the north-south canal. Thus, the quarter near the canals received an adequate supply of water and could be used for growing flower-plants which would not obscure the general view, while the distant quarter got a smaller supply of water and were suitable only for tall trees"

The main gate is a massive structure rising more than 100 feet in height and is made out of red sandstone. The gate is covered with verses from in Koran, written in Arabic. There are domed pavilions on top of the gate, which signify royalty, and the writings that appear on its surface were carefully honed to have virtually no variation in size.


Although the structure was more than twenty stories high when completed and stands on a raised platform, every square inch it was a work of art. As an example of how much attention was paid to detail, the minarets that surrounded the structure were constructed with a miniscule outward bias in the unlikely event that an earthquake hit the temple, the minarets would not fall inward on either the tomb or the central building, but away from the structure. It has been said the right-hand of the man in charge of construction was executed by the Shah when the job had been completed so that he would never build so magnificent a monument again. Overall, the site is completely walled and inside of the barricades rest two mosques and an imposing gateway. The tomb is white marble encrusted with precious stones in the shape of inlaid flowers and sculptures. There is a central dome surrounded by four small domes and the construction was arranged so that if a flute was played at a particular part of the dome, the sound reverberates exactly five times. The strangest thing about this acoustical miracle is the fact that only the notes of the flute would have this effect.


The monument’s marble gives off different hues of light at different times of the day, thus creating an ever-changing panorama. Persian rugs, gold lamps and candlesticks, silver doors and sheets of pearls covering the sarcophagus, sadly were carried off by looters. As it stands today, its beauty is unparalleled, but at the time of its completion, it must have been beyond imagination. In all, there were almost thirty different rare and semi-precious stones that were used for inlay work in various parts of the Taj, and these stones were brought in from almost everywhere: the jade and crystal were delivered from China, the Turquoise from Tibet, Sapphires from Sri Lanka, and diamonds from Panna. Restoration has taken place, but certain elements in the original blueprints are not available at any price today, so the Taj Mahal will never be completely restored.


Agra itself was the favorite Mughal emperors, and the Taj Mahal is not the only magnificent object that was created here. In the article, India Travelog, Royal City of the Taj Mahal, it is said that: "Agra was the chosen city of the Mughal emperors during the early years. It was here that the founder of the dynasty, Babur, laid out the first formal Persian garden on the banks of the River Yanuna. Here, Akbar, his grandson, raised the towering ramparts of the great Red Forest. Within its walls, Jehangir build rose-red palaces, courts and gardens. Shah Jehan embellished it with marbled mosques, palaces and pavilions of gem-inlaid white marble.


At Sikandra, on the outskirts of Agra, Akbar built his own garden mausoleum, and at Fatechpur Sikri he created a whole new city – a leap of the imagination in the form of a unique concept of planning and design which gave expression to a style of architecture that was a perfect blend of Islamic spatial concepts and the Hindu genius for decorative sculpture. Across the river, Jehangir’s gifted queen Noorjehan designed an exquisite marble inlaid tomb for her parents.


Even so, Agra’s crowing glory remains the Taj Mahal, a monument to love built by Shahjehan in memory of his beloved queen, Mumtaz Mahal. In the book, Wonders of the World, said it is stated, "Built in charming environs, the Taj Mahal is one of the most beautiful architectural works in the world. Without doubt, the Taj Mahal ranks as amongst the most perfect buildings in the world, flawlessly proportionate, built entirely out of marble. Intended to be a commemoration of the memory of Shah Jehan’s beloved wife, in reality it is his gift to the entire human race."


The builder himself, Shah Jahan, was so moved when he looked at what had been constructed that he said, "…The sight of this mansion creates sorrowing sighs and makes sun and moon shed tears from their eyes. In this world this edifice has been made to display thereby the Creator’s glory."


The British painter Hodges in 1783 says about the tomb, "It appears like a perfect pearl on an azure ground. The effect is such I have never experienced from any work of art." Bayard Taylor joined the list of people awed by the structure when he visited it and said, "Did you ever build a castle in the air? Here is one brought down to earth and fixed for the wonder of ages."


History indicates that the Shah was not quite finished when the Taj Mahal had been completed. He had intended to build yet another mausoleum every bit as magnificent as the first on the other side of the river. His plan was that the two structures would be connected by a magnificent bridge, just as two lovers, holding hands for all eternity. What an awe-inspiring sight that would have been! This plan came up short, however, when Aurangzeb, the Shah’s son, deposed his father and imprisoned him for life in the Agra Fort, which was located within the overall property.


Ultimately, the British conquered India, and although they were overwhelmed by the beauty of the structure, they knew how to make a buck. They started the public relations mill grinding and came out with the theory that British Officers should spend their honeymoons at the Taj Mahal, dancing on the terrace with their new wives and spending the evening in the Jawab and the mosque itself. It also become a rendezvous for British lovers, and although the whole thing seems a tad commercial and a perversion of a deeply religious monument, you can really understand where they were coming from.


Of substantial interest is the fact that entire country only receives a little more than two million tourists year (Britain, meanwhile, receives 22 million) and although many of them visit the Taj Mahal, the total is unbelievably low considering the magnificence of this structure. Possibly this is caused by the fact that India always seems to be at war with someone, and in many cases it is at war with itself.


Because of the multiplicity of language, religion, culture and political conflicts, the U.S. State Department continues to strongly urge Americans to avoid all travel to Srinagar, Jammu and Kashmir Valley because of separatists. Kashmir terrorists have threatened to attack New Delhi and India always seems to be at war with Pakistan. While there are many beautiful things to see in India, the poverty is pervasive and heart rending, and to imagine all of this beauty in a country where almost no one seems to have enough to eat is a paradox. Disease is rampant and is a threat, especially for travelers that are not used to the indigenous diseases and have not been properly protected. Medical care is spotty at best and seems to have been encroached by the entrenched religious fervor, making some of the treatments appear to be forms of black magic.





Greece is a peculiar little country, which for the most part has government officials that are bizarre little people. The country has created strange alliances and although a full member of the European Community, It has probably fallen further from its illustrious past than any other country on earth. We make that statement with literally no fear of being contradicted and use the following from the Story of Civilization, The Life of Greece by Will Durant to prove our point:


"Excepting machinery, there is hardly anything secular in our culture that does not come from Greece. Schools, gymnasiums, arithmetic, Geometry, history, rhetoric, physics, biology, anatomy, hygiene, theology, agnosticism, skepticism, stoicism, Epicureanism, ethics, politics, idealism, philanthropy, cynicism, tyranny, plutocracy, democracy: these are all Greek words for cultural forms seldom originated, but in many cases first matured for good or evil by the abounding energy of the Greeks. All the problems that disturb us today – the cutting down of forests and the erosion of the soil; the emancipation of woman and the limitation of the family; the conservatism of the established, and the experimentalism of the unplaced, in morals, music, and government; the corruptions of politics and perversions of conduct; the conflict of religion and science, and the weakening of the supernatural supports of morality; the war of the classes, the nations, and the continents; the revolutions of the poor against the economically powerful rich, and of the rich against the politically powerful poor; the struggle between democracy and dictatorship, between individualism and communism, between the East and the West – all these agitated, as if for our instruction, the brilliant and turbulent life of ancient Hellas. There is nothing in Greek civilization that does not illuminate our own."

Today as in yesteryear, Athens is Greece's largest city. Almost half of the total population of the country's 10 million people lives in Athens or its suburban environs. The city is growing at an accelerating pace, as more and more people give up their rural existences for life in the big city. The county in general and Athens in particular are already severely smog ridden and overcrowded which is a situation that government bureaucrats see as something with get a lot worse before it gets better.


Greece is fortunate or unfortunate enough to host the Olympics in 2004; moreover, Athens is going through a face-lift unseen since the time of Homer. Stadiums are rising, buildings are being torn down like weeds and new ones are going up universally. The city is getting a much-needed subway, and the crevice-filled roads are being spruced up and the numerous potholes are getting a long overdue repairing. What all this means in plain English is simple the fact that traffic has ground to an absolute halt, and moving around this city will definitely be hell for at least the next few years. In addition, we are talking about a country that has had the highest incidence of road accidents in Europe over the last several years and there is going to be one hell of a mess when Olympic-sized crowds start to arrive.


Winning the host job for the Olympics and having the youth of the entire country all congregating in downtown Athens simultaneously are not the only problems facing Greece’s largest city. Greece occupies the southern end of the Balkan Peninsula, and shares borders with Albania and Macedonia among friendlies. Because of this unlucky stroke of fate, Greece finds itself full of unwelcome refuges leaving their own war-torn countries en masse and joining the unemployment lines in a country that has enough problems of that nature to last it well into the next millennium.


Foreign investment in Greece has not been substantial and probably for good reason. For example, American industry has invested two and one-half times as much in impoverished Portugal as it has in Greece. On the other hand, the country has so little industry that an infrastructure hardly exists for investment and taxes are so complex that they literally terrify multinationals. While all other European Countries have gotten on with privatization programs, the Greek Government owns a higher percentage of producing industry now than at any time in its history and the figure is spiraling out of control.


Recently, the U.S. State Department did a study on how friendly Greece was to American business, which will give us some insights into why the country hasn’t cut the mustard with the multinationals.


  • "Greece has both EU-mandated and Greek government-initiated trade barriers. Greece maintains specific barriers in services such as law, aviation, and motion pictures.
  • Greece maintains nationality restrictions on a number of professional and business services, including legal advice. Restrictions on legal advice do not apply to EU citizens, and U.S. companies can generally circumvent these barriers by employing EU citizens.
  • The Greek flag air carrier, Olympic Airways, has a monopoly in providing ground handling services to other airlines, which must either contract from Olympic or self-handle. As of January 1, 1998, airlines will be able to choose between two ground handling agents, one of which will be Olympic. This is part of a EU-directed liberalization of ground handling.
  • Greece insists on testing U.S. wheat shipments for karnal bunt disease; it will not accept U.S.D.A. certificates stating that wheat comes from areas free from the disease. The testing method used provides a high incidence of false positive results. After one shipment was rejected late in 1996, Greek importers have been unwilling to risk importing from the U.S.
  • Greece has not been responsive to applications for introduction of bio-engineered (genetically modified) seeds for field tests despite support for such tests by Greek farmers.
  • Greek film production is subsidized by a 12 percent admissions tax on all motion pictures. Moreover, enforcement of Greek laws protecting intellectual property rights for film, software, music, and books is problematic.


Both local content and export performance are elements, which are seriously taken into consideration by Greek authorities in evaluating applications for tax and investment incentives. However, they are not legally mandatory prerequisites for approving investments. New investment incentive legislation is under preparation. Greece restricts foreign and domestic private investment in public utilities. Private power production for sale to the national grid is limited to "nontraditional" energy sources (e.g. wind and solar).


U.S. and other non-EU investors receive less advantageous treatment than domestic or other EU investors in the banking, mining, maritime and air transport sectors and in broadcasting. There are also restrictions for non-EU investors on land purchases in border regions and certain islands (on national security grounds). Greek laws and regulations concerning government procurement nominally guarantee nondiscriminatory treatment for foreign suppliers. Officially, Greece also adheres to EU procurement policy, and Greece has adhered to the GATT Government Procurement Code since 1992.


Nevertheless, many of the following problems still exist: occasional sole-sourcing (explained as extensions of previous contracts); loosely written specifications which are subject to varying interpretations; and allegiance of tender evaluators to technologies offered by longtime, traditional suppliers. Firms from other EU member states have had a better record of accomplishment than U.S. firms in winning Greek government tenders. It has been noted that U.S. companies submitting joint proposals with European companies are more likely to succeed in winning a contract. The real impact of Greece's "buy national" policy is felt in the government's offset policy (mostly for purchases of defense items) where local content, joint ventures, and other technology transfers are required.


In December 1996, the Greek Parliament passed legislation (Law 2446, article 16), which allows public utilities in the energy, water, transport, and telecommunications sectors to sign "term agreements" with local industry for procurement. "Term agreements" are contracts in which Greek suppliers are given significant preference. The reason for the signing of these agreements is to support the national manufacturing base. This was made possible as a result of Greece's receipt of an extension until January 1, 1998, to implement the EU's Utilities Directive 93/38."


With these restrictive policies toward foreign investment it should not be surprising that the government has been backed into taking over failing companies because of the country’s huge unemployment, especially among the highly educated. As these intellectually bankrupt sophists become part of the country's social portfolio, bureaucrats and political cronies are placed in jobs for which they have little or no experience and Greece’s competitiveness slides further from the norm. Moreover, when tied to the increase in oil prices, this has sent deficits rising across the board of state-run enterprises with no literally relief in sight. The unemployment rate in Greece has gone up steadily from 1960 when it stood at only 2 percent of the labor force to a point today where it has reached almost 11 percent and threatens to go even higher. There are many causes for the unemployment, and while this figure is not particularly inconsistent with that of the rest of Europe, it is woefully high relative to the country’s historical numbers and its agrarian type of economy. Unemployment of this kind just does not occur under normal circumstances in this type of economy.


Being a primarily agricultural society, the younger generation in an effort to leave the soil went to school, where many received a higher education in just about every field that doesn't have something to do with growing crops. These folks just couldn’t wait to get away from the ancestors land. After finishing school and receiving a diploma, this cadre of future industrialists packed up their belongings and went to Athens to get a taste life in the big city. Their only problem was that their expectations far exceeded the number of jobs available and most found themselves living in unappetizing tenements at night and sitting around coffee houses during the day philosophizing about a better life, but no one knew where.


In spite of national hopes to the contrary, Greece is still agrarian, but even the farms have had their share of modernization that has substantially diminished the number of hands that it takes to harvest crops. Planners in Athens had suddenly found themselves with a city crammed with highly educated people that couldn't find work, and yet these same people were either unwilling or unable, because of economic considerations, to go back home. In addition, Greece, which had a history of family traditions that relegated women to working the farm, raising the children and cooking the meals, suddenly changed as Greece's birthrate went south along with that of the rest of Europe. Young women now wanted a higher education and a bite at the golden apple as well. There was little or no room for this sudden acceleration of people into a workforce that was already hamstrung by an infrastructure that was clinically static thanks to the immovable government bureaucracy


Another major factor that will continue to plague government planners is the fact that even when jobs are available within categories that are deemed satisfactory to newly diplomaed graduates, the expectations of getting paid a reasonable salary to go with the increased responsibility required is about as realistic in modern Greek society as the resurrection of the Doo Doo Bird. Entry-level wages in all industries have remained harshly unsatisfactory, for good reason, the businesses are not doing well enough to pay more, and the country has not streamlined its industry to be competitive with its competition in the Common Market.


Also nipping at the heels of those young Greeks that are new to the job marketplace is the ever increasing torrent refugees, legal or otherwise, willing to work for less. Thus, the refugees take the lower paying jobs at wages no ethnic Greek would accept, and this puts pressure additional on all categories of the work force all the way up the line. To some degree, Greece is in a particularly bad position because of the high education level of its native workforce and the country’s lack of either industry or technology. Because of an a government which either does not know what to do or one that doesn’t want to rock the boat, we do not see any change in this phenomena in the foreseeable future. However, there is not much question that a bunch intellectuals sitting around coffee houses with nothing else to do can be a terrific breeding ground for disaster and even worse. If the Greek Government does not come to grips with an already disastrous situation, unrest may become the order of the day.


Greece has always been proud of its prowess as a naval power. Greek families have historically led the way in providing new and better technology for transporting goods and people throughout waterways of the globe. In recent years though, this edge seems to have suddenly vanished, and Greece has given up the reigns as a ship building power to such unlikely places as Japan, Korea and Norway. The finitude of foreign registry has also taken its toll, as Liberia and Panama have substantially more shipping under flag and implausible countries such as The Bahamas, Cyprus, Malta and Singapore are closing in. The hard-nosed Greek shipping magnates have left their family fortunes in the hands of genetically softer progeny, and the results are causing the nation to lose its edge in this, the only arena where the nation’s industry had always stood tall.


Portugal and Spain have benefited immensely from their relationship within the European Union, as they have turned their lower labor costs into a tremendous magnet for industry. Both within and without this has worked to those country’s advantage. Lower wages and those country’s friendly economic environments have attracted industry and allowed their workers to land jobs all over Europe. They have both changed their laws to encourage the countries of the EU to invest within their borders and have shown a rapid transformation from agrarian to industrial life styles. Greece, whose arable land is only a small fraction of the nation's size, is rapidly sinking into the role of farmer for the common market because they have little else to show for their efforts and because of petty squabbling among diplomats and strange political associations, Greece does not appear to be willing to forget their historic international prejudices long enough to remold their industrial base.


Although tourism could ultimately become somewhat of a salvation, the traffic problems in Greece’s large cities, when coupled with the omni-present smog and total lack of first class accommodations have taken a drastic toll on whatever hopes those in this industry may have had. Furthermore, although Greece has many geographically and climatic advantages, the country’s total lack of the "right" social accoutrements have not brought an exodus of a affluent class to their shores. Moreover, most of the wealthy Greeks have chosen to live elsewhere, usually in tax havens to protect the wealth that they have accumulated against the critical needs of an under-performing government to impose higher and higher taxes to pay for their previous incompetences.


While much blame can justifiably leveled at the Greek Government and their inflexibility when it comes to almost everything, the onset of war in Yugoslavia along with a longstanding, major league rift with Turkey causes people to have second thoughts when they chose the location of where to spend their holidays. Greece can only hope that she is able to present herself well when the Olympics are played in her home if she wants to avoid the stamp of second-class citizen of the world for the foreseeable future.


Greece is going to have to come to grips with massive unemployment among its young and its population, being the fourth oldest in Europe (as a percentage of overall population) is getting its greatest test since the advent of Rome, two millennium ago. Greece ranks among the world’s top nations in terms of life expectancy for both men and women. However, Greece spends a lower percentage of its Gross National Product (GNP) than any other European Country, including poverty-stricken Portugal, on social programs. Thus, you have a substantial number of people that are sitting around on rocking chairs doing nothing when the could be gainfully involved.


Moreover, employees are obligated to pay in the highest percentages of income into their system for retirement, while the Greek Government ranks at almost the bottom in terms of what it returns. In addition, the State is equally niggardly when it comes to both unemployment allowances and family benefits, which would indicate that something has bureaucratically gone haywire. Furthermore, mandatory retirement regulations are complex to implement, and many people are able to retire at 45 or younger, under which circumstances they are ultimately be able to collect social security for more years than they have worked. This creates an enormous drain on the system and with a crashing birth rate, accompanied by Greece’s bizarre policies on early retirement along with people living much longer; the Greek retirement system is devastated. Moreover, this already calamitous situation becomes even more critical when an additional factor is added to the equation: unemployment. It does not require much of a stretch to assume that this system will become totally bankrupt unless drastic changes are not instantaneously made to the structure. Not only do the unemployed not contribute to the system, but they also deplete it due to the unusual fact that in Greece, the same resources supply both retirement and unemployment funds. Moreover, because of the large elderly voting block, benefits to the retired have increased with time, in diametric opposition to logic and the availability of funds. Greece, for politically expediency has sold its future for less than a bowl of porridge.


Unabated inflation has also taken its bite from the social security fund, as have the almost non-existent interest rates paid to the fund by the Bank of Greece. Scrooge would have found the Bank to his liking, as they are literally unmatched in the parsimonious amounts that it pays in interest to the retirement fund. Some Government demon that apparently wants to squeeze blood from a turnip, must sit in a room somewhere trying to figure out how low a fixed rate that the fund can pay without having an actual revolution on its hands. Transparently, what little is left in the already hopelessly depleted fund is being used to subsidize the Government by the payment of below market rates. Already hopelessly bankrupt, the Greek Government has not been even able to pay into the fund, employment taxes related to federal employees. When government bureaucrats have been asked how this is possible especially when you consider the fact that this sector has become the largest debtor of the fund, there is no rational answer forthcoming. Nevertheless, the system still manages to somehow survive because payouts to retirees tend to be so low.


As Greece catches up with the standard of living in the remainder of the EU, today's disparities will cause greater and greater hardships on the elderly. However, because of historically close family ties, members step in and supply auxiliary funds when social security is not enough, but the next generation may not have anyone to help them over the social security shortfall hurdle. Greece, if doesn’t address this problem in a hurry will have a broken system, impoverished poor and streets crowded with the elderly begging for bread and crying for alms. Moreover, If current population trends continue in Greece, as a very generalized statement, in thirty years, based on current United Nation’s demographics, no person in the country will have an uncle, aunt, brother, sister or first cousin in thirty years. Who then will take care of the elderly in this totally depleted system?


Greece as a country has always prided itself on the fact that serious crime was almost non-existent. Furthermore, the country has always shared a little something with Albania with whom they share a common border. As the Serbs ravaged Kosovo, refugees poured into Albania, the poorest nation in Europe. This pushed penniless Albania against the wall, as its social safety net had to support both displaced people from Yugoslavia and poverty stricken Albanian citizens. In turn, not knowing what to do or where to go, many of the ethnic Albanians fled across their borders to Greece, where they had heard that it was easier to make a living.


As will happen under these types of conditions, most of those that crossed over the border didn't wait for the nuances of a Green Card or Citizenship, they just lingered until dark and climbed over whatever barriers were in place and into what they thought would be a better life. While Greece may have been the equivalent of manna from heaven to the Albanians, for the already economically saddled Greeks, the arrival of this unwanted horde caused a drastically negative transformation in the Greek life style. You see, many in Albania have historically though that an honest living consisted of stealing, hijacking and murder. These types of occurrences were traditionally infrequent in Greece to say the least and currently their underdeveloped criminal justice system is bursting at the seams.


However, the pure statistics show how dire the situation really is. Best estimates place the number of illegal refugees in Greece at 650,000. Greece has indicated that it will issue only 235,000 Green Cards to this group, meaning that 415,000 people will have to be forcibly rounded up and sent back to whence they came; in almost all cases, Albania. On the other hand, the Albanians have become frighteningly adept at creating their own Green Cards and Passports, which are occasionally even superior to the real thing. For this reason we are not optimistic that many of these apparently unwelcome immigrants will be either found or shipped back. We believe that the Albanians are only getting started, wait until they start manufacturing early retirement passes for their brethren and they start retiring to the Greek vineyards.


Concerned that this indeed is the case, Public Order Minister Chrysochoides has been advocating the hiring of another 2,500 police officers that will aid in the round up of illegal aliens and guard the formerly porous borders with Albania, Yugoslavia, Bulgaria and Macedonia. The problem with this course of action is the fact that no money has yet been authorized for this massive police buildup, with all available excess funding having been thrown at construction projects involving the 2004 Olympics.


To give you some idea of how bad the problem has become, Public Order Ministry statistics show that nearly half of the lesser crimes, such as home break-ins and petty-theft, are committed by Albanians. The percentage of crime to population goes right off of the chart. Assuming that the Government Statistics are correct, that 11 million people now live in Greece and that the vast majority of the 650,000 (6% of the population) illegal aliens are Albanians, statistically you find that this small percentage of the population is committing an colossal magnitude of total Greek crimes relative to its percentage of the population. The Albanians are truly a breed apart.


The Greek Government tried to play down the effect that their unwelcome guests were having on the country, but they did not to want to unduly alarm tourists. However, when a second Albanian bus hijacker held a significant number of Greek’s hostage, demanding ransom or he would kill all aboard, the international press throughout the world got the message of what was going on in this country loud and clear. Worse yet, for the Greeks, the event was covered like flypaper in the international press. The fact that Greek Commandos ultimately dispatched the hijacker did little to assuage the feelings of the people that before this incident had not been publicly made aware of the monumental upsurge in criminal activity with Greece. The people went ballistic when the government started to confess the tremendous upsurge in criminal activity that had taken hold at the very roots of the Greek system.


Prime Minister Costas Simitis came out with one of the most powerful statements in Greek history when he stated: "Whoever fails to respect law and order has no place in our country and must leave. Greece is a hospitable country, has in recent years encountered unprecedented "criminal phenomena" which are trying the naturally hospitable feeling of the Greek people." The pure issuance of a statement that strong must have put fear in the hearts of the Albanian criminal cartels. Now things will start getting a lot better.


Jokes about police ineptness, which made the rounds after the previous bus hijacking, were not totally silenced by the commandos’ victory. The commandos are basically a military unit and the locals became even more concerned that this special unit had to be called in because the police were unable to handle it. Police Chief Loannis Georgakopoulos did little to quell the anxiety when speaking to reporters in Thessaloniki said; "The Greek police have little experience in dealing with situations of this kind." That statement and a couple of drachma may get you on a bus in Athens, but that is about it.


Without an enormous public relations effort to prove that Greece wants to clean up its act, the Albanians may become the only tourists in Athens over the next several years, and who else but them would attend the Olympics. Unless something is done in a big hurry, Greece will find that the only industry they have left to bring in hard currency, tourism will be left badly injured, possibly fatally.


Strangely, while the scenario above was unfolding, Greek Foreign Minister George Papandreou was holding court with his counterparts from Albania and Macedonia. The Hellenic Star reported in their July 22-28, 1999 issue:


Papandreaou and his Macedonian and Albanian counterparts, Aledksandar Dimitrov and Paskal Milo, met in the restaurant of a small guest house on the small reed-filled fishing Island of Agios Ahilios, just a few kilometers from the borders with Macedonia and Albania in Prespa Lake.

All three ministers pledged cooperation on a wide range of issues, including the construction and improvement of road and rail links…Efforts to improve relations in border regions led the ministers to agree to create a pilot program allowing local residents easier cross-border access in a 20-kilomer area with each country where frontiers meet.

The program aims at allowing residents "more ability to travel…while making sure we are strict on border crime and illegal immigration," Papandreou said. A flood of illegal immigrants from Albania into Greece has created tensions that have hampered otherwise improving relations between them, but bilateral issues were avoided during the three-way meeting.

Talk about sending the wrong message! The way this public relations release seems to be worded indicates that while borders are going to be more carefully guarded and that only legal aliens are going to be allowed to enter Greece, the total number of new arrivals is probably going to expand exponentially. Any further opening the Greek border in the name of friendship will allow Albania to export another million or so thieves and murderers to Greece, extracting the final revenge for their neighbor's historically insensitive relationships.


Greece also shares a border with Turkey, a country that when known more regally as the Ottoman Empire, occupied it from 1453 until 1829. Although Greece went through of succession of varying types of governments; kingdoms, a disillusioned monarchy and later a form of democracy involving out-of-control military juntas, it was only when some bureaucrat in the Greek Government told Mussolini to go fly a kite, did the Nazi's invade and once again Greece was occupied, but this time for only a few years, but by this time they were used to it.


Things have gone swimmingly since then, with time for some of the most truly bizarre military governments taking power by either being elected or grabbing office from hapless political parties. These outlandish groups were composed of either a cadre’ of incompetent army officials or a group corrupt politicians. War with Turkey and Macedonia was never more than a stone’s throw away. The problem with Macedonia has mostly been addressed but the Greek-Turkish fight over Cyprus has remained an open wound for both countries, which continues to fester. Worse yet, Greece has used Cyprus as bargaining chip for Turkey's admission to the European Union, something that the Turkish Government would dearly like to have, but historically, the Turks don’t deal with blackmail very well.


It is certainly an oddity that Turkey, which has been playing ball with the West for the longest of times, has to beg for entrance into the EU, while Greece, which regularly played footsie with the Russian, Chinese and Arabs, looks like it has it made in the shade. Shows you what you get for being loyal.


Cyprus for many years had a population that was divided approximately 80% Greek and 20% Turkish. Although there was a bias toward Greece because of both population and territorial history, Cyprus existed as more as a piece of land than it did a territory or protectorate. In 1959, because of agitation by the majority population, Britain, Greece, Turkey and Cypriot leaders agreed that an independent country would be formed and that the constitution of the new government would guarantee the freedoms of the Turkish minority.


In spite of "the best laid plans" the two nationalities were soon at one another's throats and it took the armed forces of the United Nations to step between them and avoid substantial bloodshed. That kept the lid on a bad situation until 1974 when the Cypriot National Guard, led by officers from Greek Army in a major misjudgment, seized the government. Under the laws of physics as we understand them, one reaction causes an equal and opposite reaction, and it didn't take long in coming. A week later, the Turks, who in reality did not give a tinkers dam what happened to Cyprus, became enraged at what they considered dirty dealing by the Greeks. When the smoke had cleared, Turkey controlled forty percent of the Island, having gone right through UN forces that divided the two combatants, like a hot knife cutting butter.


The Greeks voted to create a separate government (or country) on their 60% of the Island and promptly expelled the resident Turks while Turkey soon did the same to them. For whatever reasons, Greece's Government was globally more widely acceptable than that of Turkey, which at the time was only recognized by North Korea. Although the Greeks were not happy with the situation, they soon played the one bargaining chip they held. They knew that Turkey was desperate to become part of the European Union and that they could effectively block their admission by a blackball. Normally Turkey doesn't negotiate with their backs to the wall, but in this case their government thought that the means may justify the end and therefore a deal could be possible.


The fact that Turkey has been on the right side in wars in Bosnia, Serbia, Kosovo, Iraq and the USSR during the cold war while supplying bases, armaments and men to NATO and the United Nations has meant little to the EU. The fact that Greece has wavered, wilted and withdrawn every time the slightest taint of trouble arose did not change the game either. Now, with the deck stacked against Turkey and on the 27th anniversary of their intervention in Cyprus, the agenda may once again swing toward a resolution with Greece.


Prodded by no less than Secretary General Kofi Annan, the Group of Seven and Russia leaders have made it known to Turkey that it is time for Glafcos Clerides, the leader of the Greek side of the island, and Rauf Denktash, the head of the Turkish enclave, to sit down and talk this over. The end game would be the creation of a new nation under the primary control of the majority Greeks with certain guarantees for the Turks (where have we heard that story before?). In exchange, the Turks would receive their highly sought after membership in the EU.


Although it would seem that Turkey would be selling its own people down the river, we don't think that when push comes to shove, they are going to have major conscience pangs over the experience. After all, Turkey has the biggest army in NATO, and the Greeks are a pushover. If there is any trouble or back peddling on guarantees, the Turks can always retake whatever they want of Cyprus back whenever they feel like it.


Obviously though, as part of the deal Greece and Turkey would have to withdraw the majority of their forces there, and the UN force would be replaced by a supposedly unbiased NATO presence. Sounds simple in principal, but in practice the leaders of the opposing communities are for the most part intransigent, and serious messages will have to come from the home office before either one of them gets off the dime.


Apart from heavy things like international relations, Greek drivers offer a sense to levity to an otherwise problematic picture. We ran across a great article in the Letters to the Editor column of the Athens Community News, 7/25/99. The author was apparently not willing to give his or her name, but we loved it anyway:


"As a foreigner spending already 6 months in Athens, I have some views of Greek-style driving, whether agreeable or not, to relate to you readers.

To my experience here, the Greek drivers, male and female, young and old, can incredibly increase their vehicles' speed from 0 kph to 120 kph in a flash (!) even in not-so-busy streets in Athens. When you look through the rear of your car while driving on nearly deserted streets, there will be one of many kinds of vehicles that appear suddenly behind you, and by the time you see it, it is so close that he/she can see scratches on your car's bonnet. Should there be any safety distances between two vehicles in case of sudden stop?

At a traffic light, I can hear loud honks from cars behind, even though my car is the tenth in line waiting in a queue for the green light, and quite sure that I, and others behind who honk their horns, have to wait at least one more turn to pass the intersection. What are those honks for, then? Well, maybe just to remind us to move our cars as soon as we see green light, isn't it?

Young drivers, mostly not over 25 years of age, drive like crazy stunt men in movies. No wonder, you can watch news about fatal accidents on TV every day. I cannot become a real Greek-style driver. I do smoke and talk on my mobile phone, but never while driving. I even bought a hand-free kit to be used with my mobile phone for my own safety. I have my loving family waiting to see me returning home after work everyday. According to local practices, a driver is supposed to have a cigarette in one hand holding the wheel, and keep talking on mobile phone held in another hand. Conversation on mobile continues even at U-turns. Believe it or not!

Traffic signs are neglected. I have to be more careful when entering one-way streets, since a vehicle may surprisingly, and suddenly appear on the opposite direction.

Sirens are never paid attention to.

Some may argue that these things can be experienced in any country. Yes, I agree. But I don't expect to gain experiences in a civilized European country like Greece. However, those have never spoiled good sides of this marvelous country. I still enjoy visiting archaeological sites, islands and beaches as usual. I will feel safer visiting places if driving behavior were improved. Law enforcement is not necessary if drivers really know "how to" drive."

When first you visit Athens you are literally overwhelmed by the hustle and bustle of the town, traffic jams and construction are everywhere and a kind of sameness permeates the landscape. Everyone is going somewhere and they are all doing it simultaneously, cell phones are ubiquitous with every block having coffee houses with their resident expatriates and locals always seemingly materialize smoking standard fare dark cigarettes materializing like the set for a "B" movie. The omnipresent markets, which give the impression of Middle Eastern bazaars, seem to operate with a bustling life of their own.


Athens’ name is derived from that of Athena, the Greek Goddess of wisdom. The city was the site of the first Olympics in ancient times as well as its rebirth in 1896, where the games were held at Athens’ Panathenian Stadium after a short lapse of over 1500 years. The International Olympic Committee, which awards the games, sets certain standards for the host city and the bids are usually contingent on the number of modern upgrades that are proffered by the competing localities. These required amenities are nuances such as what new housing facilities will be added for athletes and visitors, upgrades to sports arenas and the kind of transportation system that allows the officials, athletes and visitors the ability to travel effortlessly from event to event on a timely basis. Athens has literally none of these amenities.


However, Athens is a natural spot for the Olympics because, fundamentally, it is their historic home, and their remarkable wonders that abound are spectacles that should be witnessed by everyone. Moreover, Athens is already a world-class tourist attraction with three million people visiting the Acropolis annually. From the summit of the Acropolis you can see all of Athens, as well as the ruins of Agora, an enormous area, primarily comprised of crumbling temples that is under constant restoration and excavation. Agora was the city’s central district in the glory days of Greece, and many of the temples that were built there have already been restored to their original beauty.


In a San Francisco Examiner article entitled "Acropolis, Sentinel of the Gods," by Jack Biesterfeld, 8/13/1995, tells a most interesting story:


"The Gods fought over the Acropolis. It was decreed that whosoever gave the city the most worthy of gifts would become the patron god of the city, to be honored and worshiped and ruled by the god. Poseidon determined to be that god, struck the rock of the Acropolis with his mighty trident, and a great inland sea sprang forth. The gods were impressed.

Then came Athena. But instead of an earth-shaking demonstration of power, the goddess caused an olive tree to grow in the middle of the saltwater sea. This, the gift of life, was truly the better gift. From that day, Athena has been the goddess and the patron of Athens, the Greek city that is one of Europe’s most interesting capitals."

The benefits of being a host city to the Olympics are substantial, since the city will be covered by every television broadcasting station on earth, many giving the town publicity 24 hours a day. The total income to be generated by this event is humongous, while the millions of visitors needing event tickets, hotel rooms, guides and cars and those tourists wanting to view the monuments and desiring the best of cuisines become camp followers of the Summer Olympic event, which occurs only once every four years. But the best part of being the host city is the fact that it always gets a long overdue sprucing up, and in Athens’s case, the sprucing was more hopelessly overdue than most.


Usually when the bureaucrats are forced to confront their voters with the fact that their taxes are going higher because of needed infrastructure improvements and this pronouncement always engenders a tremendous backlash. On the other hand, when the Olympics are coming to town, never a whimper is heard. There is something particularly galvanizing about this event, which does not occur elsewhere on earth. Moreover, if people like what they see in person, they will be back, if they are taken with the television views of the city they will visit, and meanwhile old monuments become new, modern hotels replace dilapidated facilities and a transportation system, which has broken down, gets a real fix. Athens is overjoyed at being picked for the host role, and everyone has rolled up their collective sleeves to be ready. But they are not quite making the cut and it is still a push to determine whether they will continue to make the Olympic Committee’s construction timetable.





One of the earliest major walled cities was constructed around 1200 BC. The city was Troy, it was a well fortified, heavily armed, had a well-trained military, and it stood on a magnificent piece of property. It was strategically located at the entrance to the Dardanelle’s, and because of that, the Trojans were able to charge massive tolls to shipping that went through their waters. This did not endear them to anybody, and for the most part, the Trojans were thought of as the "Gatekeepers from Hell." For this and other reasons, the Greeks coveted this land and also were righteously indignant over how some of their Gods were being treated.


The war waxed and waned over a number of years with a lot of people getting hurt. Eventually, a Greek soldier by the name of Drudjion came up with a capital idea. "The Trojans are into horse raising," he said, "so why don’t we just build this enormous horse and put a bunch of soldiers in it? The Trojans will wonder what is going on and bring it inside of their gates and our soldiers inside will climb out, open the gates and we will conquer Troy." Almost everyone thought that this was a bad idea, but it turns out that Drudjion’s uncle was the General in charge of the Greek Army. His wife had told her husband that if anything had happened to her sister’s son Drudjion during the time he was away, she would hold her husband personally responsible and cut him off. Fearing a psychological incident, the horse was build, and just as planned, the Trojans, baffled by this large wooden edifice, brought it inside the gates.


Contrary to popular conception, Drudjion forgot to place breathing windows in the horse and all of the soldiers inside soon suffocated to death. The horse stood in the square and eventually the decaying soldiers started to stink up the entire neighborhood. Well, you can imagine what the Trojans thought when they opened the beast up to find out what was causing the stench and found all of those dead soldiers lying inside. Being deeply religious, many believed that the wooden horse and the dead soldiers were a peace offering by the Greeks and some say that they opened their gates to let their newfound friends in for a big party. Herodotus and Thucydidies wrote a dissenting opinion on the matter and indicated that the gates were thrown open to remove the stench and a drunken Trojan soldier forgot to close them, letting to Greek army in to pillage the town.


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