Democracy Is Bad For Afghanistan

Charts: The S&P 500 closed at 1189, up .2% on the day and 1% on the week. Resistance is at 1190. The Dow is facing stiff resistance at 11,000, which is holding the broad index back. Yield on the 10-year note blew past resistance of 3.95% Monday (scary) but fortunately the 4% danger zone is providing substantial resistance so far. The charts are bullish so long as yield on the ten-year stays under control.

Fundamentals: Since the beginning of the year, the government’s household survey shows the US economy created 1.1 million jobs. The payroll survey on the other hand shows a net loss of jobs. The household survey is more accurate because it captures small and micro-sized businesses, which the payroll survey ignores. The household survey also shows discouraged unemployed workers looking for jobs in huge numbers, this is a first since the recovery began a year ago and a sign that the labor markets are turning around. The Senate and the House have both passed extensions to unemployment benefits but are unable to reconcile the two different bills. If they can’t reconcile, then unemployment extensions will stop. Discouraged workers will only keep looking for jobs if benefits dry up. This very much needs to happen for the recovery to continue.

Geopolitics: For 1979 to 1989, the Soviets occupied Afghanistan and deliberately weakened the country’s tribal structure. From the early 90s to 2001, the Taliban did the same thing, systematically weakened the tribes. After 2001, the Bush Administration and the Taliban each controlled different parts of the country and they both continued weakening the tribes for different reasons. For 30 years the Afghan tribes have been eviscerated and enfeebled. For America to win its war, Afghanistan needs to develop back into a tribal society, then a feudal society, and someday in the distant future: democratic capitalism.
President Karzai is calling the US Army an occupying force and threatening to join the Taliban if he isn’t allowed to run phony-baloney rigged elections. Karzai (rightfully) hates democracy and wants to be a tribal overlord. Unfortunately, Afghan tribalism can only be built from the bottom up, not the top down. The USMC is doing just that in Marja, where they pay money directly to local tribal leaders who then disburse it within their clan. Fearful of the strengthening effect this has on Marja’s tribal structure, the Taliban tries to kill any tribal leader who accepts money from the Marines. In central Marja, the tribal leaders are safe and tribal structures are firming up. In northern Marja, a large percentage of the local leaders are being killed or brutalized.
Here is proof that everything depends on rebuilding Afghan’s tribes and not holding any more elections: In the most remote northeastern corner of the country there is a province called Nuristan where the tribes were never destroyed, not even the British in the 19th century could scratch these fiercely independent tribesmen. In a brilliant move, a few months ago, General McChrystal pulled all NATO forces out of Nuristan. Within short order the Nuristani killed every Taliban fighter in their province. If every Afghan province had tribes as strong as those in Nuristan, the Taliban would cease to exist in about 2 months. Elections massively hinder this goal.
Karzai needs to be mollified by having elections indefinitely postponed. Obama knows this and can hopefully keep Congress and the UN out of the loop.