konane's Blog

Percolating just beneath the surface is incremental reform, cutting off another supply chain.  It's always slower and more dangerous when it's undertaken beginning with family as explained in this article.  God's protection be with anyone attempting to eradicate the so called "religion" bin Laden practiced, and which is killing American soldiers in Iraq.

Bold emphasis - mine.

Addendum:  I've read metaphysically that all wars in some manner or other have been based on religious differences.  The global war on terror seems to be no different but instead of Christian against Muslim, it seems to be radical Islam against radical Islam the winner of which gets to rule the entire globe (they think) force conversion, enslavement or kill the rest of us infidels.  Seems Hitler and other maniacal murderers believed something similar at one time.

"The dogs bark, the caravan moves on."

"That Middle Eastern proverb could well describe the events surrounding production of the world's most-hyped dud firecracker, the Iraq Study Group Report. After immense agonies in the mainstream media (MSM), those like myself who predicted the report, once released, would largely be ignored by President George W. Bush, are being proven right and neoconservatives who support a continued commitment to the transformation of Iraq have exhibited renewed influence.

Only a couple of lines in the report were worthy of comment. One appears on page 29 of the printed version: "Funding for the Sunni insurgency (sic) comes from private individuals within Saudi Arabia." This was the first time anybody connected to the U.S. government acknowledged something known throughout the Muslim world. That is, Sunni terrorism in Iraq is not an insurgency, but an invasion; the "foreign fighters" are mainly Saudi, as revealed when their deaths are covered in Saudi media, replete with photographs of the "martyrs."

But this obscure comment was overlooked by most of the MSM, which is also befuddled by the recent sudden departure of Ambassador Turki al-Faisal from his post in the Royal Saudi Embassy in Washington. The MSM and a large part of the American government scratch their heads, barely capable of imagining that the revelation of the Saudi financing of Sunni terrorists in Iraq and the resignation of the kingdom's man in the U.S. would have anything in common.

Yet they are linked. Liberal reformers in the milieu of Saudi King Abdullah point out that Abdullah has called for an end to sectarian fighting in Iraq and has demanded that Shia Muslims no longer be called unbelievers by the Wahhabi clerics that still function, unfortunately, as the official interpreters of Islam in the Saudi kingdom. Abdullah has promised to spend $450 million on an ultra-modern security fence along the Saudi-Iraqi border. Ambassador Turki, it is said, supports Abdullah in these worthy goals.

But King Abdullah and the overwhelming Saudi majority, who want to live in a normal country, are opposed by the Wahhabi-line faction in the royal family. The pro-Wahhabi clique is led by three individuals: Prince Sultan Ibn Abd al-Aziz, minister of defense; Prince Bandar, predecessor of Turki as ambassador to Washington; and Sultan's brother, Prince Nayef. Nayef is notorious for having been the first prominent figure in the Muslim world to try to blame the atrocities of September 11, 2001 on Israel. He is deeply feared both inside and outside Saudi Arabia for his extremism.

Saudi sources indicate that King Abdullah is assembling his forces for a decisive confrontation with the reactionaries. Part of the Wahhabi-line strategy is to depict a U.S. leadership in conflict with King Abdullah, to undermine the monarch's credibility. That is why different versions of a meeting between U.S. Vice President Dick Cheney and King Abdullah, late last month, circulate in the MSM and the blogosphere.

According to credible reports, Cheney urged Abdullah to stiffen action against Saudi-Wahhabi involvement in the Iraqi bloodletting. According to unreliable gadflies, King Abdullah commanded Cheney's presence, to demand that the U.S. immediately attack Iran. But the claim that King Abdullah summoned and berated Cheney does not ring true. King Abdullah is too polite, and Cheney does not take such orders, according to those who know both men.

Many leading clerics and intellectuals among Sunni Muslims indicate that King Abdullah has effectively told the Wahhabis that they will no longer receive official subsidies, and must end their violent jihad around the world. The greatest impact of this development may be seen in Iraq, but Wahhabis everywhere have begun to worry about their future. In a totalitarian system like Wahhabism, the weakest links snap first. And the beginning of the end for them may now be visible in the Muslim Balkans.

That the crisis of Wahhabi credibility would become manifest simultaneously in Washington, Baghdad, and Sarajevo might seem counter-intuitive to many Westerners, especially given that the former Yugoslavia is considered by foreigners to be marginal and insignificant. But for those who know the Islamic world, it makes perfect sense. The Saudis have tried for almost 15 years to use the difficulties of Bosnian and other local Islamic folk to drive the Balkan Muslims away from their traditional, spiritual, and peaceful form of Islam into Wahhabi radicalism. But Wahhabi agitators who went to ex-Yugoslavia to sow discord and reap recruits for terror have begun to show deep anxiety about the loss of their Saudi support, and now act in an ever more provocative and aggressive manner.

For their part, the Balkan Muslims are demonstrating an attitude of disgust and repudiation toward their alleged Saudi patrons, such that the Muslim Balkans may become the first "Wahhabi-free zone" in the global Islamic community, or umma. Months ago, Bosnian chief Islamic cleric Mustafa Ceric issued a document readable here, stating, "the most perilous force destabilizing the umma presently is from the inside." The Bosnians, according to Ceric, are "determined in [their] intention to protect the originality of the centuries-long tradition of the Islamic Community in Bosnia-Hercegovina."

In October 2006, imam Dzemo Redzematovic, leader of the Slavic Muslim minority in newly-independent Montenegro denounced the Wahhabis for "introducing a new approach to Islamic rules [that] is unnecessary and negative because it creates a rift among the believers" and "claims some exclusive right to interpret Islamic rules."

The Wahhabis had lost their chance in Bosnia-Hercegovina but were under close scrutiny in Montenegro. They were also active over the border, in southern Serbia. On November 3, as described here, a group of fanatics disrupted Friday prayers at a mosque in the town of Novipazar, assailing the imam for refusing to follow their "guidance." In the ensuing affray, two local Muslims allegedly replaced "the weapons of criticism" with "the criticism of weapons," and the Wahhabis were met with gunfire. Iraq, it seemed, had come to ex-Yugoslavia.

I was in Sarajevo when this incident occurred, and the outrage of the local Muslims against the Wahhabi interlopers was palpable then and has grown more aggravated since. Bosnian Muslim intellectuals became more militant in their anti-Wahhabi idiom. On November 18, a distinguished professor of Arabic at the University of Sarajevo, Esad Durakovic, wrote, "The snowball called Wahhabism has been rolling down the Bosnian hill, but it is still not certain which side is going to be struck by the avalanche.... Wahhabi efforts are extremely decisive and resolute... the response has to be more appropriate and urgent... Wahhabis are wrong when they think that they can act as a Taliban in Europe (just as they are wrong about everything else)... We have to act immediately." (translation here)

A week later, on November 25, Professor Resid Hafizovic of the Faculty of Islamic Studies of the University of Sarajevo was even bolder. An outstanding Balkan scholar of Sufism or Islamic spirituality, Hafizovic dramatically warned, "They Are Coming for Our Children." He accused the Wahhabis forthrightly:

Hafizovic identified the Wahhabi trail of blood traced through the past decade "Recognizing it as a continuation of the inferno in Iraq, Chechnya, Afghanistan, and Palestine, the most powerful civil and religious authorities... should immediately take responsibility for preventing the hell Wahhabis are constructing in this country."

Questioned on Bosnian television about the country's receipt of aid from Saudi Arabia during the Balkan Wars of the 1990s, Hafizovic said: "I would be very pleased if a full stop were put once and for all to the talk of the great and fabulous aid that Saudi Arabia has given [us]... Because we have to pay. The Saudis and their envoys keep asking us to pay... the price is such that we have to sell our people, our religion, our 500 years of religious and cultural tradition and legacy. And this is precisely what they want: our minds, our hearts, our souls... Let us put an end to this story once and for all and say: Dear [Saudi] gentlemen, if you keep rubbing our noses in the aid - and you are - we will give it back to you." Hafizovic and other Bosnian Muslim clerics and intellectuals call Wahhabism a virus.

Given these developments, global eradication of the Wahhabi virus may be in sight. "

http://www.tcsdaily.com/article.aspx?id=121906A

There have been rumblings about this for about a year.

My son sent me this link. 

"Ghost Car" 

http://www.youtube.com/watch?v=y-SOBm70PjM&mode=related&search 

Well how interesting given the Libertarian party's stance on legalization of drugs.  If they would revise that position, also embrace a position of defending the US on the War On Terror no matter which nation it takes us to, you just might hear that great sucking sound of people bailing from both Dems and Repubs to a very strong third party which is fiscally responsible and which will do something real about invasion by illegal aliens.

"World's Smallest Political Quiz"        ..... over time I keep scoring as a conservative Libertarian.    You're welcome to post your score if you care to.

http://www.self-gov.org/quiz.html

Herman Cain, fabulous radio host who sits in for Neal Boortz sometimes.  I like Tiger and like this idea!

By Herman Cain

Source Townhall.com

"The current announced crop of 2008 Republican presidential contenders is about as inspiring as Saturday's leftovers for Monday's lunch. John McCain. We've seen that movie. Do we have to watch the sequel? Rudy Giuliani. Great leader, hates terrorists, but farther to the left than a Blue Dog Democrat. Mitt Romney. Where does he stand on the issues today?

Thankfully, as Monday turns to Tuesday, hope springs eternal for Friday night when, in my case, I order two pieces of fried catfish fillet and my favorite sides from my favorite restaurant. No more leftovers, no more cold sandwiches, just wide-eyed visions of spicy catfish with a dash of Tabasco. Which leads us to the 2016 presidential race. And Eldrick "Tiger" Woods.

The next president, likely a lifelong politician with too much inside-the-Beltway circular thinking, will have finished his two terms by 2016. By then we will still be victims of Beltway politics-as-usual and impotent leadership from both parties. The voters will long for a candidate who inspires the nation with an unwavering passion to fix problems and place policy over politics.

Tiger will be 40 years old in 2016. The Republican Party should begin grooming him now for a run at the White House. His personal attributes and accomplishments on the golf course point to a candidate who will be a problem solver, not a politician.

Tiger's success on the golf course, which will translate to success in the White House, is a product of his character, discipline and leadership by example. Tiger has one objective when he steps up to the first tee - win. The Republicans desperately need a candidate who will not seek personal legacies through political victories that compromise conservative ideology and increase the scope of federal government. Tiger's legacy is already set.

This year Tiger, at the age of 30, became the youngest golfer in history to amass 50 PGA victories. He currently has 54 career victories, fifth on the all-time list. Tiger already has 12 victories in major tournaments, second to Jack Nicklaus' 18 major wins. And, this year Tiger won a record seventh PGA Player of the Year Award. After dominating his competitors for so many years, do you really think Tiger wants to schlep around the Senior Tour when he turns 50?

History may bode well for a Tiger Woods presidential bid. In 1952, Dwight Eisenhower, then a popular former World War II general and Supreme Commander of Allied forces in Europe, cruised to victory with 83 percent of the electoral vote over political insider Adlai Stevenson, the Democratic governor of Illinois. In 1980, Ronald Reagan, a former actor and governor of California, won 90 percent of the electoral vote over sitting President Jimmy Carter. To say Americans today are disillusioned with Congress and the President is an understatement. A November 6 Fox News/ Opinion Dynamics poll found 38 percent approval of President Bush, and just 29 percent approval of Congress.

Tiger has surely contemplated both his future goals in golf and his next challenges when he retires from the game. How refreshing to have a political outsider run for president again. I mercifully don't sense many phony platitudes toward a "compassionate" streak in Tiger. This is the same guy who beat the 1997 Masters Tournament field by 12 strokes - a record that still stands - at the age of 21, and then stated, "I've never played an entire tournament with my A-game. This was pretty close.'' Imagine what he would do to Islamic terrorists and Nancy Pelosi.

If the Democrats maintain control of Congress and the presidency through 2016, the big issues of restructuring Social Security, replacing the tax code and instilling free market forces in the health care system will still not be fixed. If the Republican Party regains the majority in Congress and retains the presidency, there is no guarantee that they will have the courage to make bold changes. Only an outsider will possess the leadership and the conviction to tackle the big issues without regard for the polls, media spin or inane promises of bipartisanship.

Tiger Woods could be an inspiring figure for the country, the likes of which we have not seen since Martin Luther King, Jr. and Ronald Reagan. Tiger's late father Earl Woods said in 1996 that the then-young golfer "will do more than any other man in history to change the course of humanity." The elder Woods added, "I made him a promise.'You'll never run into another person as mentally tough as you.' He hasn't. And he won't."

The Republican presidential candidate in 2016 must not come from inside the Beltway. He must come from inside the fairway, for all of us. "

Herman Cain is host of the nationally syndicated radio talk show The Bottom Line with Herman Cain and a contributing columnist on Townhall.com. "

http://www.townhall.com/Columnists/HermanCain/2006/12/12/tiger_in_2016!

Good metphysical article.

From SteveQuayle.com

"So You Think Your 401(k) Money is Safe

The popular accounts have little protection from theft. Smaller companies have raided the funds in hard times.

December 10, 2006
By Kathy M. Kristof
L.A. Times

MUSKEGON, MICH. — Jim Elliott, 55, spends his days clambering onto the tops of houses, taking measurements for the wooden trusses his company sells to support roofs through long, snowy winters.

Photo: Lost savings: Jim Elliott, 55, had put $230,000 in a 401(k) retirement account, but his employer took the money. Pensions come with federal insurance, but 401(k)s have no such protection. Elliott, who had hoped to retire at 60, now has another job. (Adam Bird / For the Times)

Not long ago, Elliott thought his ladder-climbing days would soon be over. With a few more years of work, his 401(k) account would be large enough to let him retire at 60 and spend his days with his three grandchildren.

Then Elliott learned that his former employer had looted the company's 401(k) plan. The $230,000 he had saved over three decades was gone.

A government-appointed trustee is trying to recover the money, but workers have been told they can expect to get back perhaps half what they lost.

"I'm going to be up measuring roofs when I'm 75 years old," said Elliott, a husky man with steel-gray hair. "I didn't do a lot of things over the years because I was trying to save for retirement. Now I see I was paying for somebody else's vacations."

If Elliott had a traditional pension, his retirement checks would be guaranteed under a federally backed insurance plan. But no comparable protection exists for 401(k)s, even though they are rapidly replacing pensions as the financial backbone of retirement for most Americans.

By law, all assets in 401(k) plans must be covered by private insurance policies known as fidelity bonds. But the bonds are required to cover just 10% of the retirement plan's assets or $1 million, whichever is less.

At companies with fewer than 100 employees — such as Elliott's company — the plans are not subject to annual independent audits that could deter embezzlement.

An estimated 9 million Americans have their savings in 401(k) and profit-sharing plans small enough to be exempt from the annual audit requirement. That's about 20% of the people in defined-contribution retirement plans. ....."

Better get your tofu recipes out .... soon they're going to place limits on the amount of beef and milk products we can purchase.

"Cow 'emissions' more damaging to planet than CO2 from cars

By Geoffrey Lean, Environment Editor
Published: 10 December 2006
Source The Independent

"Meet the world's top destroyer of the environment. It is not the car, or the plane,or even George Bush: it is the cow.

A United Nations report has identified the world's rapidly growing herds of cattle as the greatest threat to the climate, forests and wildlife. And they are blamed for a host of other environmental crimes, from acid rain to the introduction of alien species, from producing deserts to creating dead zones in the oceans, from poisoning rivers and drinking water to destroying coral reefs.

The 400-page report by the Food and Agricultural Organisation, entitled Livestock's Long Shadow, also surveys the damage done by sheep, chickens, pigs and goats. But in almost every case, the world's 1.5 billion cattle are most to blame. Livestock are responsible for 18 per cent of the greenhouse gases that cause global warming, more than cars, planes and all other forms of transport put together.

Burning fuel to produce fertiliser to grow feed, to produce meat and to transport it - and clearing vegetation for grazing - produces 9 per cent of all emissions of carbon dioxide, the most common greenhouse gas. And their wind and manure emit more than one third of emissions of another, methane, which warms the world 20 times faster than carbon dioxide. ..........."

http://news.independent.co.uk/environment/article2062484.ece

Dontcha just love people who re-write history as they go along????  Looks like Peanut is doing it again but got caught in a lie by a screen capture sent to the Powerline attorneys by named readers ........... plus they've posted that screen capture of the Carter Center web page which I verified at the time of posting this entry. 

I love technology revealing the truth.

Screen capture if it doesn't copy to my blog available here:  http://powerlineblog.com/archives/016168.php

"This morning Newsweek publicist Natalia Labenskyj emailed us the political stories in Newsweek's new issue. One of the items in Labeskyj's email is Eleanor Clift's softball interview with Jimmy Carter, which I happened to read. Here is one question and answer that caught my attention:

[CLIFT:] You're obviously aware of your main critic, Mr. Stein, who used to be with the Carter Center.

[CARTER:] Thirteen years ago! He hasn't been associated with the Carter Center for 13 years.

In answer to the question posed in the heading, Carter would lie and then keep right on on lying.

Sincere thanks to readers Glenn Bowen, Peter Beddow, Tommy Germany, John Purcell, Colin MacLeod, William Hughes, Bart Lidofsky, Dr. David Shafer, William Katz and Jerry Heyman for the screen capture of Professor Stein's Carter Center page. ......."

I've read in a metaphysical article that both China and Iran are supposed to undergo "soft" revolutions.  I pray this is the beginning of that for Iran.  There have also been photos on the web which show a younger hostage taker back in 70's which looks like a much earlier version of Ahmadinejad.  He of course denies it and we know lunatics never lie.  If nothing else has been accomplished the US involvement in Iraq has flushed him out in the open so the people of Iran can see just how trigger happy he is and hopefully toss him off his throne.

I signed up to receive email from them.

"Space Weather News for Dec. 8, 2006 http://spaceweather.com  

SOLAR TSUNAMI: When sunspot 930 exploded on Dec. 6th, producing an X6-category flare, it also created a tsunami-like shock wave that rolled across the face of the sun, wiping out filaments and other structures in its path. A telescope in New Mexico operated by the National Solar Observatory recorded a must-see movie of the wave, featured today on http://spaceweather.com  . "

From Powerlineblog.com.  My question is ....... does Carter have any shame at all......?????????????????????? 

Former Middle East envoy Dennis Ross has accused Jimmy Carter of improperly publishing maps that did not belong to him. Ross says he commissioned the maps for his use, but that Carter appears to have ripped them off for use in his book, Palestine: Peace, Not Apartheid.

Ross' charges (if true) are probably the least of the problems Carter faces with respect to his book. Several days ago, as Scott reported, Kenneth Stein resigned as Middle East Fellow of the Carter Center of Emory University. He stated that "President Carter's book on the Middle East, a title too inflammatory to even print, is not based on unvarnished analyses; it is replete with factual errors, copied materials not cited, superficialities, glaring omissions, and simply invented segments."

But at least it has good maps.  "

Hat tip: Laura Mirengoff  "

http://powerlineblog.com/archives/016146.php

Capitalism at its finest .... a win-win for the entire world.   

This is what struck me as most important "That fruit seller is a successful entrepreneur.

"Exactly a century ago, Cemex became the first Mexican cement producer. In 2000, Cemex became the largest cement producer in the world beating out France's Lafarge and Switzerland's Holcim. Although the Cemex market profile has changed over the last hundred years, its early success came from their ability to serve micro-markets -- selling a bag at a time to poor folks.

In a micro-market like this, a homeowner who lacks a title to his house and property (an "informal" homeowner) but has a bit of extra cash, might buy a single bag of cement and a dozen cement blocks and use it to add a few square feet to a house wall. Finishing the house often takes years, but in the end he has a real house. And like 55% of all American wealth, this is where he saves -- he lives in his savings "account."

Cemex mastered this part of the market and has prospered. But poor homeowners throughout the developing world remain poor because their savings account is frozen and so they can't leverage their property. Unlike Americans, these informals have no diversity in their savings. Informal shelter, and the cottage industries they often house, are nearly always their total savings. And also unlike Americans, their savings - their capital - can't be used to back up a credit card or get a home improvement loan. An informal homeowner can't even make a contract with a utility company to deliver electricity or water since the utilities have no way to know who owns the house so have no certainty of being paid.

As a result of this capital being "dead" -- that is, their savings are illiquid -- the potential market it represents is rarely considered by multinational businesses. And when they do think about it, they usually conclude that there isn't a viable strategy to open it widely to their products.

But this market could be enormous. It wasn't long after the collapse of the tech stocks that a new conversation started in the business community; "What," they asked, "is the next big thing?" Well today, these informals hold one of the largest discrete pools of capital ever accumulated. But it is not on anyone's radar screen since these frozen savings are held by the world's poor and so they are relegated to the margins of this conversation despite its enormous size.

Nevertheless, this capital is there and eager to enter the global marketplace if only it can be unlocked. So let me propose a "key" for opening the market and then suggest ways for businesses to help facilitate it.

Unlocking Frozen Capital

Several years ago, the World Bank acknowledged that there was a large "informal" (extralegal) business sector in all developing countries. It was not made informal by tax avoidance but by bureaucracy avoidance (see Doing Business 2004). Ongoing research into the structure of these informal economies reveals the legal, regulatory and bureaucratic barriers for small businessmen and homeowners which block their entry into the formal economy. In fact, these barriers impede modernization for the entire society and render futile the various efforts of aid organizations to significantly reduce poverty. This failure compels poor countries to become dependent on outside sources of capital (commercial loans, government debt and foreign aid).

Recently the new US Millennium Challenge Corp. established the criterion for its grant-aid recipients stating that they must remove the barriers to formalization. So far, the MCC's clients have strongly supported this approach, which could signal the start of a quiet revolution. But more needs to be done. If these efforts - and those of many other organizations - are successful, this opening for the poorest people in the world could not only give them a ladder up out of poverty but be "the next big thing" in the global economy benefiting everyone in the equation. But in the end this transformation will be driven by markets and businesses, not changes in public policy which, though necessary, can never be sufficient.

Markets at the Bottom of the Pyramid

Businesses are not philanthropies. So doing business at the so-called "bottom of the pyramid" (BOP) requires new strategies and tactics that are generally not familiar to traditional businessmen. There is a real market at the BOP, and that market could evolve more quickly with the help of the business community. But to capture the interest of multinational corporations, they must see clearly how they can profit from this opportunity.

The first step is being convinced that the market is real, since this capital is essentially invisible. It is the cold, dark matter of global finance. But the informal economies of many countries have been mapped by a number of researchers, and the pattern is consistent throughout all poor countries in every part of the Third World. The force driving the social and economic transformation of these countries in the second half of the 20^th Century was urbanization, just as it was in 19^th Century in North Atlantic countries. And this trend will continue, even accelerate, for the foreseeable future.

The process is familiar; the rural poor - mainly subsistence farmers or their children - migrate to cities in search of work. But the focus on jobs and employment is misleading. Unlike Mexicans migrating North for jobs, these people, mainly, become entrepreneurs not employees. Some fellow on the sidewalk with his blanket spread out and covered with pieces of fruit is an entrepreneur, not an employee. Even nominal "employees" in informal businesses put their time at risk because they are paid from profits and so are more like partners than employees.

And the system works. There are four to five billion poor, and growing. Look closely. That fruit seller is a successful entrepreneur. He was there yesterday and will be there tomorrow and almost certainly has a house and family.

Another surprise is that these poor entrepreneurs save, although their savings are relatively small and, once made, they become all but illiquid. Moreover, without viable alternatives to savings, this pool of frozen savings is constantly growing, which fuels a process that continuously moves their capital from live to dead, or liquid to illiquid. In so doing it also freezes a large part of national savings.

The economic problem is that frozen savings can't be leveraged or spent without great difficulty and, thus, prohibitive cost. Since any excess earnings must nearly always be invested in shelter, urbanization ends up being a form of forced savings; it's a process of freezing, not a freeing the wealth of the nation. Individually, the size of these invested savings is small, but in aggregate it is huge, correlating with the growth of enormous, third world mega-cities.

The process is almost the same everywhere. It begins when a squatter takes land and starts making a shelter. Any money spent on creating shelter or starting a business becomes frozen in the structure since it is invisible to the law. Every time the squatter expands or improves his home, or invests in his business these illiquid savings continue to grow.

A billion or so poor families and hundreds of millions of informal businesses yield trillions in this "dead capital" (Adam Smith's term). Six years ago, one well-respected researcher published an estimate that this dead capital was worth nearly ten trillion dollars globally. By comparison, the total loss of market capitalization in the 2001 "tech bubble" crash was just over four trillion dollars.

Viable markets in poor countries would provide continuous opportunities for growth and commerce that were not based on speculation but on making and selling real things to buyers with cash. But the cash of these buyers at the BOP is frozen solid so entering this new market is not simply a matter of waiting for the aid agencies to help countries formalize their markets, and then opening up your widget store in the capital city.

The Lost Art of Entering the Formal Market

How can these poor entrepreneurs join the formal market? For years they were carried in official statistics as "unemployed." So how do you even find them? Well, finding them is easy as the poor are living and working everywhere in developing countries just as they were in Scotland when Adam Smith wrote about them 250 years ago. And they live, mostly, in squatter settlements on marginal land and in the fringes of big cities. Their houses are crude by our standards and their businesses are mainly "cottage" industries. But as the numbers of informals grow larger through urbanization, and their settlements become more permanent, so their savings grow.

At the most basic level, their "business" might be to buy a pack of cigarettes in the morning and then sell them one at a time at stoplights for a few pennies profit. But they may also own a small office building, or a truck, or even a fleet of trucks. There is no formula, just the universal condition that they are invisible to the law. They occupy a parallel economic universe, and so are unable to buy products that people with identities, addresses, demonstrable income and credit history take for granted.

The key to unlocking this pool of dead capital begins with legal and regulatory reforms which define and protect private property. This is a political process which America pioneered, intellectually and practically, so we should be experts. But we only did it once and Jefferson is long dead. This means our blueprint is a few centuries old and so now it has become a lost art. Although many developed states run a modern political economy very well, they have forgotten how to build one. The challenge is not to invent a new program. America's Founding Fathers have shown us, and all other developed countries, how to figure out what to do and how to compress this haphazard process of centuries into one of only a few years.

Blueprints, Not Aid; Inputs Not Outcomes

Milton Friedman suggests that what poor countries need today is America's original blueprint. They need those inputs of modernization we established in the 18^th Century, not the outcomes we have in the 21^st. But it is just these outcomes that we try to export to the developing countries. Western aid agencies and the World Bank work very hard to distribute Western capital to poor countries to little avail. But they have done very little to free up that capital they already have by legalizing these informal homes and businesses. We don't need heavy equipment operators, we need lawyers and political economists who understand the missing pieces.

But there is a moral hazard in expecting the World Bank to do this work because the Bank exists to provide Western capital to poor governments. But the poor countries don't need gifts of outside capital -- they have plenty. They need technical support to create systems that free up the capital already there. Moreover, the World Bank's entire portfolio is around $120 billion and its private sector arm's is around $25 billion. If the existing savings were made liquid, aid funds would be lost with the table scraps.

It is the Western business community, not aid agencies, that needs to become the leaders in fixing this problem. But an effective strategy is much more than a snappy ad campaign. Businesses need to proselytize on behalf of a truly modern economy and then play a part in making it happen. Do well by doing good. They can support the needed reforms in developing countries by a number of means. First, they should have their investment teams quietly suggest to political leaders in poor countries that these reforms are important to their investment decision but will also be useful in encouraging modernity and economic growth for the entire economy, not just the enclave in which these foreign firms operate.

Multinational corporations will benefit in many ways. Most obviously it will expand their markets. If you have a desirable product, there are 4 billion people who might be interested. Also these businesses will gain better property rights for their own investments, products and copyrights. After all, their neighbors, their employees and often their suppliers don't have real property rights themselves so it is somewhat unreasonable to expect them to respect the rights of foreign businesses.

Changing the Climate of Opinion

The business community has a very poor record of supporting free trade think tanks. It is understandable that a company may not wish to fund an NGO advocating significant reforms, no matter how beneficial. They want to sell soap-flakes, not political change. But there is a whole universe of think tanks that very effectively promote a growing global network of free market groups. Organizations such as the Atlas Economic Research Foundation, the Fraser Institute, the Cato Institute, the Heritage Foundation, the Hoover Institution and many others have a real impact on the intellectual climate for change. And university think tanks, such as the Mercatus Center at George Mason University, are becoming more active as advocates not just chroniclers of reform in recent years. These organizations and others like them need significant additional support from the business community.

Here at home, business leaders can support the idea of spreading property rights as a fundamental objective of US foreign policy, something now only a marginal part of foreign aid. Businesses have a vital interest in these reforms and they should press the administration and their Members of Congress to insist on change and also let them know that MCC is on the right track.

And finally, there is considerable profit to be made from engaging in the business of just formalizing the several billion properties and businesses that populate most of the poor countries. Banks, insurance companies, IT firms, law firms, mapping firms and utilities all stand to benefit immediately and directly from the process of formalization. And those businesses already in poor countries will realize immediate opportunities from their newly formal customers.

Changing the Business Model

Because this formalization process is a win-win for everyone - governments, the World Bank/IMF, aid donors, businesses, banks and, most of all, the poor themselves - and because these reforms are enjoying increased visibility (for instance awarding the recent Nobel Peace Prize to a banker to the poor), it is likely that over time these systems will be established in most poor countries just by a slow build-up of momentum. And when this happens these new markets will be opened.

There are two commercial opportunities. The first is to accelerate the process of formalization. Those who will serve this market are the sectors mentioned above. Initially firms that can devise commercial approaches to stimulate and manage these reforms will have the most opportunities. Formalizing a billion properties will require the investment of $300 billion to $500 billion from which businesses will seek to profit.

The second part is selling to the new formals. This is appealing because these billions of poor entrepreneurs have little or no debt secured by their property. And entrepreneurs need capital, so if they were given access to credit secured by their existing property then markets for the entire range of manufactured goods would open up. The challenge here is how do you sell to them, and the answer is right-sizing and credit.

Cemex and Other Examples

Cemex built its early growth largely by serving this mini-market, one which it still serves today. Selling to the market at the BOP cannot follow the Sam's Club bulk model. In fact, in most cases, it can't even follow the Wal-Mart model, though it is intriguing that Wal-Mart is moving into China. Service through training or education, distribution through little neighborhood stores, reformulation and mini-packaging are some of the keys to success at marketing to the BOP.

A new marketing strategy is needed because people who are not exposed to modern manufactured goods may need help in utilizing them effectively. Also, they cannot hop in their car and run over to the store but often have to walk to distribution points. Yes, poor people eking out a living need shampoo, but it need not smell like fresh raspberries. And, finally, they may not be able to buy a pint or a quart at a time. For example, Lever Brothers had considerable success in India by selling single-use packs of shampoo and other products. That's a good model.

But all this only works if the poor can get credit once a house is formalized. This is a significant problem. Banks in poor countries have almost no experience with small loans. They normally make loans to facilitate trade, corporate finance, and to raise sovereign debt. The current Micro-lending model, developed by Nobel laureate Mohammed Younis, is important but mainly to prove poor entrepreneurs are good credit risks, not because it is opening this dead capital. Compared to a securitized loan, social-contract lending is inefficient and relatively costly. Moreover it will never be able to mobilize more than a tiny fraction of the investment needed to fund this transformation. But banks can do it if they employ the power of computers and specialized software programs that allow them to make a profit on a $100 loan. This step is key.

A Rare Win-Win Scenario

Bringing the poor into the modern global economy has benefits across the board, not just for the informals. The governments of poor countries will have a broad tax base so long as the transformation is not used as a pretext for over-taxation or over-regulation, either of which will drive people back into the informal sector and so kill the effort. But there is an enormous incentive to manage such a system sensibly.

If governments can resist using formalization to exploit poor people, they will have security, stability and access to credit. As a result, the overall society will be more stable and so less susceptible to extremism. Foreign aid institutions can stop wasting money on things that don't work. Local businesses will see an increase in their market, so they will buy more from multinational firms thus increasing trade as well as sales. International and domestic banks will acquire a large new pool of secured borrowers. Poor governments can better rationalize their economies and broaden their tax base. And, finally utilities will be able to identify and serve an enormous new customer base.

American firms should go after this business. It's there. Waiting. "

Peter F. Schaefer has worked in the Third World since 1970, in both the public and private sectors. "

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