Houston-based Lyondell Chemical Co. on Monday announced that it is acquiring Hunt Valley, Maryland-based Millennium Chemicals in a $1 billion all-stock deal that includes assumption of $1.3 billion in debt. The transaction will make Lyondell the third-largest publicly traded U.S. chemical production company.
The deal combines two struggling commodity chemical producers that have combined revenue of over $11 billion. The theory behind the deal is that the larger company is necessary to compete in the increasingly difficult chemicals industry. High prices of natural gas — which producers use as a key raw material — have rocked the chemicals industry at the same time as it has been dealing with the dual problems of overcapacity and large debt acquired during the better days of the 1990’s. Although the industry has rebounded moderately, the consensus is that the industry will not return to the glory days of the mid-1990s anytime soon.
Lyondell reported a loss of $302 million last year while Millennium had a net loss of $184 million, and Lyondell expects the deal to save the combined company $50 million. The combined company will keep the Lyondell name, maintain its headquarters in Houston, and employ about 10,000 people world-wide. Lyondell Chief Executive and President Dan F. Smith will keep that role in the combined company, while William T. Butler will remain chairman.
Monthly Archives: March 2004
Calvin Murphy charged with sexually assaulting five daughters
In a stunning development on the local Houston scene, former Houston Rocket and Basketball Hall of Famer Calvin Murphy was charged today with sexually molesting five of his own children in the late 1980s and early 1990s.
Murphy, who is 55 and has been the T.V. color commentator for the Rockets for many years, was charged with three counts of aggravated sexual assault of a child and three counts of indecency with a child. The charges involve five daughters of Murphy’s (from three different women) who were under 17 at the time of the alleged assaults, but are now adults. Murphy has a total of 14 children!
Houston criminal defense attorney Rusty Hardin, who defended Arthur Anderson in the criminal trial arising from the Anderson’s involvement in the Enron scandal, is Murphy’s attorney and claims that the charges against Murphy are false. Murphy had no comment when he surrendered to authorities earlier today, where he posted a $90,000 bond and was released. The Rockets later granted his request for a leave of absence from his broadcasting duties.
Murphy was the subject of a criminal investigation several years ago in connection with allegations that he falsified payment records in connection with a position that he held with the City of Houston. The grand jury that investigated that matter elected not to issue an indictment against Murphy.
The Uses of Failure
Lee Harris over at Tech Central Station has this interesting piece on Americans’ distaste for failure. Mr. Harris notes as follows:
If Americans have one collective shortcoming, it is that we have no use for failure. Success alone is what counts for us; and though we are apt to applaud those who have given their best to come in at second or third place, we all tend to shrink back from complete and abject failure.
That is why, whenever a President looks around for men to be by his side, to guide him and to give him counsel, he will look to those who have been successful at everything that they have put their hand to. It is one of our cherished mottos that success breeds success; and we are confident that if we appoint only successful men to positions of prominence, any project undertaken by these men is bound to be successful, too.
This is our form of paganism, since underlying the American myth of success is the primitive belief that some people are just plain lucky — just as certain numbers are, or certain days, or certain arrangements of the planets.
Mr. Harris goes on to discuss the Greek notion of hubris, which necessarily flows from success, and then recommends as follows:
Failure has lessons to teach us that are often far more valuable than those of success. Success all too often reassures us that we are right, and often with little reason. The man who sells everything he owes in order to buy lottery tickets, and who loses, becomes a little wiser. But the man who sells everything, and wins, will remain a fool forever.
Which is why I am hereby proposing a new department for the United States — the department of human failure, whose secretary should be appointed purely on the basis of his lack of worldly success. He will be required to attend every cabinet meeting, and at the end of each discussion, all the successful men around the table must listen in silence for the fiftieth time as the Secretary of Failure tells them how he lost his business, or how he gambled away a fortune, or how his summer vacation in Florida turned into the worst nightmare of his life.
True, it would not ascend to the lofty heights of Sophocles and Euripides; but it would help.
Thanks to my friend Bill Hesson for the link to Mr. Harris’ piece.
An Essential War
Former Secretary of State George Schultz, now a distinguished fellow at Stanford University’s Hoover Institution, is inarguably a great American. In this extraordinary Wall Street Journal ($) op-ed, Mr. Schultz uses his depth and experience to give us the big picture on why the decision to go to war in Iraq was the correct one. Mr. Schultz begins by pointing out the devastating effect that Islamic fascists have had on the state system, which is the bedrock of international relations:
Today, looking back on the past quarter century of terrorism, we can see that it is the method of choice of an extensive, internationally connected ideological movement dedicated to the destruction of our international system of cooperation and progress. We can see that the 1981 assassination of President Anwar Sadat, the 1993 bombing of the World Trade Center, the 2001 destruction of the Twin Towers, the bombs on the trains in Madrid, and scores of other terrorist attacks in between and in many countries, were carried out by one part or another of this movement. And the movement is connected to states that develop awesome weaponry, with some of it, or with expertise, for sale.
What should we do? First and foremost, shore up the state system.
The world has worked for three centuries with the sovereign state as the basic operating entity, presumably accountable to its citizens and responsible for their well-being. In this system, states also interact with each other — bilaterally or multilaterally — to accomplish ends that transcend their borders. They create international organizations to serve their ends, not govern them.
Increasingly, the state system has been eroding. Terrorists have exploited this weakness by burrowing into the state system in order to attack it. While the state system weakens, no replacement is in sight that can perform the essential functions of establishing an orderly and lawful society, protecting essential freedoms, providing a framework for fruitful economic activity, contributing to effective international cooperation, and providing for the common defense.
Mr. Schultz goes on to provide a compelling background to the Bush Administration’s decision to use force in Iraq, noting Saddam Hussein’s violation of the 1991 cease-fire and 17 U.N. Resolutions, and the consistency of the Bush Administration’s decision with prior actions that the U.S. government had taken during the Clinton Administration. Mr. Schultz notes the highlights:
Where do we stand now? These key points need to be understood:
? There has never been a clearer case of a rogue state using its privileges of statehood to advance its dictator’s interests in ways that defy and endanger the international state system.
? The international legal case against Saddam — 17 resolutions — was unprecedented.
? The intelligence services of all involved nations and the U.N. inspectors over more than a decade all agreed that Saddam possessed weapons of mass destruction that posed a threat to international peace and security.
? Saddam had four undisturbed years [from 1998 when he threw out the weapons inspectors to 2002] to augment, conceal, disperse, or otherwise deal with his arsenal.
? He used every means to avoid cooperating or explaining what he has done with them. This refusal in itself was, under the U.N. resolutions, adequate grounds for resuming the military operation against him that had been put in abeyance in 1991 pending his compliance.
? President Bush, in ordering U.S. forces into action, stated that we were doing so under U.N. Security Council Resolutions 678 and 687, the original bases for military action against Saddam Hussein in 1991. Those who criticize the U.S. for unilateralism should recognize that no nation in the history of the United Nations has ever engaged in such a sustained and committed multilateral diplomatic effort to adhere to the principles of international law and international organization within the international system. In the end, it was the U.S. that upheld and acted in accordance with the U.N. resolutions on Iraq, not those on the Security Council who tried to stop us.
Finally, with the depth of insight of one who has lived and studied an earlier dark time in the world’s past, Mr. Schultz concludes as follows:
Sept. 11 forced us to comprehend the extent and danger of the challenge. We began to act before our enemy was able to extend and consolidate his network.
If we put this in terms of World War II, we are now sometime around 1937. In the 1930s, the world failed to do what it needed to do to head off a world war. Appeasement never works. Today we are in action. We must not flinch. With a powerful interplay of strength and diplomacy, we can win this war.
Gordon Prather on Richard Clarke and the Vulcans
The always entertaining physicist Gordon Prather pens this piece on Richard Clarke and the “Vulcans” in the Bush Administration.
American Hustlers
Gordon Wood is the Alva O. Way university professor at Brown University and one of America’s foremost authorities on the history and philosophy of the American Revolution, reflected by his brilliant books “Radicalism of the American Revolution” and “Creation of the American Republic.” Accordingly, when Professor Wood speaks about American history, we should listen closely.
In this NY Times Review of Books review, Professor Wood opines favorably on University of Pennsylvania professor Walter A. McDougall‘s new book — ”Freedom Just Around the Corner” — that explains America’s enormous progress during the period of 1528-1828 to be attributable largely to Americans’ propensity to hustle. As Professor Wood observes:
This unusual book by Walter A. McDougall is the first of what will be a three-volume history of America. If this volume, which covers the period 1585 to 1828, is any indication of the promised whole, the trilogy may have a major impact on how we Americans understand ourselves.
”The creation of the United States of America is the central event of the past 400 years.” Imagine, he says, some ghostly ship, some Flying Dutchman transported in time from the year 1600 to the present. ”The crew would be amazed by our technology and the sheer numbers of people on the globe, but the array of civilizations would be recognizable.” China, Japan, India, Russia, the vast Islamic crescent, South America and Europe are not all that different now from what they were in 1600. ”The only continent that would astound the Renaissance time-travelers would be North America, which was primitive and nearly vacant as late as 1607, but which today hosts the mightiest, richest, most dynamic civilization in history — a civilization, moreover, that perturbs the trajectories of all other civilizations just by existing.”
Professor Wood remarks further:
[Professor McDougall] unabashedly writes of Americans and assumes throughout that there is something called an American character. Only the character he describes may not be what many Americans would want to admit about themselves. Unlike other national narratives, which he says tend either to celebrate or to condemn America — and in righteous seriousness — his book aims to do neither. Instead, he wants to tell the truth about ”who and why we are what we are,” and to tell it entertainingly. His is thus a ”candid” history. Its major theme is ”the American people’s penchant for hustling.” We Americans, he claims, are a nation of people on the make.
. . . But we have more con men and hucksters than other nations not because we have a different nature or are worse than other peoples. It is just that ”Americans have enjoyed more opportunity to pursue their ambitions, by foul means or fair, than any other people in history.”
Of course, he admits that there are many hustlers in a ”positive sense: builders, doers, go-getters, dreamers, hard workers, inventors, organizers, engineers and a people supremely generous.” These qualities are what justify Americans’ faith in themselves and their destiny in the world. But the negative connotations of hustling and swindling are very strong and dominate much of our literary and popular culture, and, indeed, our entire history. ”If the United States . . . is a permanent revolution, a society in constant flux,” then, McDougall writes, we would expect all periods of American history at all levels of the society ”to be washed by turgid, overlapping waves of old and new forms” of what he calls ”creative corruption.”
Because our high and noble ideals of freedom and individual rights contrast so vividly with the often grotesque realities of American life, every period of our history, McDougall says, is marked by disharmony. He then quotes Samuel P. Huntington to clinch his point: ”America is not a lie; it is a disappointment. But it can be a disappointment only because it is also a hope,” a hope expressed in Bob Dylan’s words as ”freedom just around the corner.”
The price of all this hustling was high, and McDougall does not flinch from describing the violence created by the dynamism of white Americans, including the elimination of hundreds of thousands of native people, mostly from disease, and the enslaving of hundreds of thousands of Africans. Other historians have graphically described the chicanery and greed of white Americans in their scramble for power and profit in early America. But these historians have usually written out of anger and righteous indignation. Not McDougall. He cynically, or he would say realistically (since cynicism suggests a moral judgment that human nature might be different), accepts, even celebrates, all the bribery, land-jobbing and double-dealing as the consequence of Americans’ having so much freedom.
Professor McDougall’s observations particularly resonate with me. Houston has been a wonderful and generous home for my family and me over the past 30 years, and this great city was developed largely by the unwieldly entrepreneurial spirit that Professor McDougall identifies in his book. The freedom that we Americans savor invariably involves risks, and one of those unfortunate risks is the risk of being cheated. But as Professor McDougall reminds us — just as Sir Thomas More did in this earlier post — man’s attempts to eradicate such wrongdoing often harbors the greater risk of eradicating our freedom.
The ten-year anniversary of the Rwandan genocide
A decade ago, fresh from a disastrous intervention in Somalia, the Clinton Administration and the United Nations failed to intervene in Rwanda, and the result was one of the worst episodes of genocide of the 20th century. In 1994, Rwanda’s president was mysteriously assassinated, and an existing civil war between the two main ethnic groups — the Hutu and the Tutsi — turned into a campaign of genocide, which the rest of the world largely ignored. An estimated 800,000 people (mainly Tutsis) were murdered in 100 days.
In this interesting post, Daniel Drezner addresses the long-term implications of the world’s tepid response to the Rwanda genocide. Given the ongoing genocide currently taking place in Sudan, and the potential for it in places such as Iraq, one is certainly justified in asking: When will the world learn?
Donald Trump: You’re fired!
To those who know about his business affairs, Donald Trump has always been more successful as a self-promoter than as a businessman, particularly for those who invest in his projects. This NY Times article reports on the ongoing negotiations between Mr. Trump and the bondholders on his lagging Atlantic City casino properties. Unless Mr. Trump gives up control of the properties, it appears that they are headed for bankruptcy, which would almost assure that Mr. Trump would lose control.
Scramjets?
The Richard Clarke Affair — Where does the buck stop?
This NY Times article examines an American cultural phenomenon that several historians are noting — that is, a national culture of shifting blame, which is reflected best in American politics.
Along those lines, several friends of this blog have asked why I have not commented on Richard C. Clarke’s testimony earlier this week before the 9/11 Commission. Actually, there are several reasons. First and foremost, numerous other bloggers have already done an outstanding job in tracking the various issues raised by Mr. Clarke’s testimony, notably Glenn Reynolds and Daniel Drezner. I could not improve on their efforts.
However, I must admit that I am somewhat frustrated by the way in which the issues that Mr. Clarke’s testimony raised have played out in the mainstream media. I concede that much of the media storm is a byproduct of the 9/11 Commission hearings and the related television coverage. Regrettably, most folks do not take the time to research these issues on their own, so their impressions and views toward the issues are often formed through television viewing and commentary. That is unfortunate because television, for business reasons, tends to sensationalize news such as Mr. Clarke’s testimony when, in reality, such testimony does not relate anything particularly new. Thus, people who evaluate such issues through the prism of television tend to believe Mr. Clarke is revealing something not previously known when, in fact, he is not.
The fact of the matter is that, long before Richard Clarke’s testimony this week, the U.S. Government and intelligence community’s failure to deal effectively with the actions and threats of Islamic fascists had been well-documented. Gerald Posner’s excellent “Why America Slept: The Failure to Prevent 9/11” relates how the failure to prevent the 9/11 attacks was systematic and had its seeds for failure sown repeatedly in twenty years of fumbled intelligence investigations and misplaced priorities. Similarly, Laurie Mylroie’s “The War Against America: Saddam Hussein and the World Trade Center Attacks: A Study of Revenge” and “Bush vs. the Beltway: How the CIA and the State Department Tried to Stop the War on Terror” both describe in excrutiating detail how the U.S. government’s approach to dealing with Islamic fascism has been compromised by restrictions placed on the intelligence agencies and political wrangling. Finally, former CIA agent Robert Baer’s “See No Evil: The True Story of a Ground Soldier in the CIA’s War on Terrorism” insightfully relates from the “ground floor” how each administration over the past 25 years allowed the intelligence agencies to become a political football, which directly led to the substandard intelligence that facilitated the 9/11 attackers’ success. These are just a few of the recent books that have examined the same issues that were raised during this week’s testimony before the 9/11 Commission.
Inasmuch as I have read the foregoing books and several others on these issues, Mr. Clarke’s testimony was not particularly insightful or noteworthy to me. I will read his book eventually to compare his insights to those contained in the books mentioned above, and I will post about it when I am through.
However, in the meantime, to the extent that Mr. Clarke’s position is that the Bush Administration is more culpable for the 9/11 attacks than any one of the previous five (three Republican, two Democrat) administrations, his position is fundamentally flawed. America’s intelligence failures over the past generation have been the result of a litany of bipartisan mistakes. If Mr. Clarke is suggesting that the Bush Administration’s failures in this area are any more egregious than those of its predecessors, then he is doing his country a grave disservice and, in fact, is engaging in precisely the type of political posturing that has been so damaging to the intelligence community over the past 25 years.
Courtesy of Phil Carter and Mark Kleiman, the most insightful commentary that I have reviewed on the 9/11 Commission hearings to date comes from UCLA School of Public Policy professor Amy Zegart, author of “Flawed by Design” that deals with the national security process. Professor Zegart — who had Condi Rice as her thesis adviser — makes the following observations about the national security process, and what happens when government fails to establish clear priorities for the intelligence community:
. . . The [9/11] Commission asked the wrong question. Was terrorism a priority? Of course it was. The real question is how many other priorities both administrations were confronting. I’ll tell you: too many.
Clinton wrote a Presidential Decision Directive in 1995 that sought to establish clear priorities for the intelligence community. There were so many in the top tier, they actually divided them into Tier 1A and Tier 1B. But it gets better (or worse). There was also a Tier 0, apparently for the very very very top priorities. Note to self: when you can’t list priorities with regular numbers, you haven’t really made priorities.
As time passed, priorities were added to the list but old ones were never removed. By 9/11, the National Security Agency had roughly 1,500 formal requirements, and developed 200,000 “Essential Elements of Information.” I’m not making this up. See the Congressional Intelligence Committees’ Joint Inquiry Report, December 2002, p.49. Intelligence officials told Congressional investigators that the prioritization process was “so broad as to be meaningless.”
This is not new. For the past 50 years, there have been more than 40 major studies about the intelligence community. A common theme among them has been the spotty and fleeting attention policy makers have given to setting intelligence priorities. One former senior intelligence official told me that during the Cold War, he was asked about the state of the Soviet economy exactly once, when the Secretary of Defense wanted to convert rubles to dollars for a budget presentation to Congress.
Professor Zegar hits the nail on the head. Rather than finger pointing, the 9/11 Commission needs to recommend a basic procedure by which the government establishes clear priorities for the intelligence community. As Mr. Carter points out, if you prioritize everything, you effectively prioritize nothing. Hopefully, the Committee will rise above the usual political posturing and focus its recommendations on revamping and reinvigorating an intelligence community that we have allowed our political leaders to eviscerate. The success of the war against the radical Islamic fascists depends on it.