It's Like A 'Participant' Ribbon, But In Statue Form

Early last month, the town of Fushe Kruje, Albania dedicated a statue to George W. Bush. The Americans in the audience will probably wonder why in blazes someone outside of Texas would do that. After all, Bush isn't exactly Mount Rushmore material. Many would argue that Buah was in fact one of the worst Presidents of all time.

There are others that will ignore the 41 men that came before Bush and compare him exclusively to Obama- generally favorably, and while asking the question 'miss him yet?'- but these people aren't even worth the hassle. And I've gone double-barreled on some pretty stupid things in my day.

Anyway. Why Bush? Why Bush of all the Presidents? Long story short, he was the one who showed up. Bush was the one who took time out of his schedule to roll into Fushe Kruje and say hi. Albania, despite everything America has done to go out of its way to inspire people to burn our Presidents in effigy as opposed to making statues of them, has a special affection for the United States for two reasons: first, they credit us with bringing them out of the Cold War era; and second, Albanians in Kosovo were under threat of Slobodan Milosevic and his "ethnic cleansing" campaign, and when we bombed Kosovo, we saved those Albanians.

Of course, all the events of consequence happened in the period between the Reagan, Bush 41 and Clinton administrations. All Bush did was go over and say hi as part of a multi-country trip. But since he did and the others didn't, he's the one that got the statue.

Bush's statue joins a rather eclectic list of foreign dedications to American presidents. Three of the others, one of which needs far more explanation than the others:

*Monrovia, Liberia, named for James Monroe in 1824, during his administration, as that is the point the country was "founded" by freed American slaves. As we've stated here, it didn't end well.

*A statue of Abraham Lincoln stands in Ciudad Juarez, Mexico, on a street also named for him. The statue stands as part of a trade with Mexico made in 1969, which in turn is the reason Washington DC has a statue of Benito Juarez, that city's namesake. The two were the respective heads of state during the Civil War and were on good terms with each other. Juarez is held in similarly high regard in Mexico.

*Rutherford B. Hayes has a Paraguayan soccer club named for him, called Presidente Hayes. Americans know Hayes largely as the guy who stole the Presidency from Samuel Tilden in the 1876 election.

Not long beforehand, Paraguay was being led by a man named Francisco Solano Lopez. Lopez was watching a conflict unfold between Brazil and Uruguay. Since Uruguay's 1830 independence, that nation had been seeing shaky internal relations that would eventually gel into the two major factions at the time, the Colorados and the Blancos. This conflict spilled over into Brazil, damaging Brazilian farmland. In 1864, Brazil demanded restitution. Uruguay refused.

Brazil invaded, on the side of the Colorados. Argentina was unhappy with this and joined in the war; they supported the Blancos. Brazil won and installed a Colorado government, dismaying Lopez. Uruguay was an ally of Paraguay. He at this point requested to move Paraguayan troops through Argentina so he could join in as well. Argentina told him no; the war was over and there wasn't really any point anymore.

He did it anyway. In fact, he attacked Argentina. According to the book Stupid Wars by Ed Strosser and Michael Prince, Paraguay sacked the city of Corrientes without so much as a declaration of war. This got all three countries angry at Paraguay: Argentina for blindingly obvious reasons, Brazil because he was in support of the Blancos, and Uruguay because it was now a Brazilian puppet state. Cue what became known as the War of the Triple Alliance, in which it was Paraguay against Brazil, Argentina and Uruguay.

Paraguay, after a couple initial victories against the Argentinians, ran up against the much hardier Brazilian forces. Here, Paraguay's luck turned. It wouldn't stop turning for the next six years. Lopez's forces took battering after battering after battering, but he kept throwing more and more troops into the grinder. At one point in 1865 a draft was held, conscripting boys as young as ten years old and men as old as 60. It wasn't nearly enough to get the troops up to comparable numbers, much less comparable strength. By 1867, troops fought semi-nude for lack of supplies. And lest they not win under these conditions, Lopez would off them himself. "Conquer or die" was the motto, the threat, and the promise.

Meanwhile, what troops remained kept getting pushed north and north and north into the jungle, where in 1870 Brazilian troops finally picked off Lopez. And all it took to reach him was the death of a widely-varying estimate of Paraguay's total population that we'll peg here at 60%. Not just from war, but also food poisoning, poor adaptation to changing climates, and disease (both in general and from all the dead bodies laying around).

Argentina and Brazil spent most of the next decade squabbling over who got what parts of Paraguay. Argentina wanted to annex half of the country, Brazil wanted to leave it in place as a buffer zone and had a second standoff with Argentina to keep them from invading. Eventually, in 1878, they sought a mediator.

Namely, Rutherford B. Hayes. He gave both Argentina and Brazil chunks of land, but he permitted Paraguay to continue to exist. Paraguay was eternally grateful that they had not ceased to exist, and proceeded to plaster Hayes' name all over the country, something they still do today to the utter bewilderment of most Americans who get a good look at how Hayes is honored. As part of Hayes' Fabulous Paraguayan Hero Package, he has a soccer team named for him (which in turn managed to win a top-flight league title in 1952).

It's estimated that Hayes only spent a couple hours of his life on the matter; probably less time than I've spent on this article. The writing and vetting of the treaty were handled on the lower rungs of the diplomatic ladder and Hayes was merely handed something to look over and sign. Which largely, when you get technical, means he did only barely more than Bush did to get his statue. But he still signed a treaty nonetheless.

Either way, sometimes you just can't predict what your legacy's going to be.

Bernie Madoff Was An Amateur

Let's stay on the topic of stupidity today. It's such a rich vein to tap, stupidity. There's just so much of it to marvel at.

When's the last time you thought about Albania? Such an architectural marvel, that nation. But if you think America has been taken in by Enron and Goldman Sachs and the like, you haven't seen anything yet.

Tirana is not New York. Albania knows a lot less about how to play the financial markets than Wall Street. They weren't helped by being a Communist regime under Enver Hoxha until 1991. So when the Iron Curtain came down, one of the things Albania had to do was get itself a financial system.

Their first attempt was good old fashioned banks. Three state-run banks had 90% of the money. They also had some bad loans. Not being total lunkheads like we were, Albania's government started to regulate credit ceilings.

Unfortunately, the Albanian people WERE total lunkheads, and responded by pulling their money out of the banks. But where would the money go? There weren't enough private banks to serve the purpose.

Ponzi schemes. Gigantic Ponzi schemes.

As you might be aware from the Bernie Madoff scandal, a Ponzi scheme needs a steady influx of new investors in order to keep going. The continual addition of money by new investors helps to keep the old investors involved. The earliest ones even get paid some of that money.

Albania managed to break a Ponzi scheme. Not because they busted it. No, no. The government was fooled too, even calling the so-called private deposit-taking institutions good for the economy. In fact, when a bill was passed in February 1996 giving the Bank of Albania the power to close just such things, the Bank couldn't get the government on board. The scheme runners bought enough of them to make sure they were.

So the government didn't break the Ponzi scheme. Albania broke the Ponzi scheme because two-thirds of the country got in on the ground floor. In this paragraph from the IMF's story on it, you can see some of the competing schemes (oh yes, they were competing with each other) showing one of the warning signs- raising interest rates- as well as the fervor of the investing:

The proliferation of schemes had baleful effects. First, more depositors were drawn in. Although VEFA had the largest liabilities, it had only 85,000 depositors. Xhafferi and Populli between them attracted nearly 2 million depositors—in a country with a population of 3.5 million—within a few months. Second, the investment funds felt pressured to compete and began to offer higher interest rates on deposits. In July, Kamberi raised its monthly interest rate to 10 percent. In September, Populli began offering more than 30 percent a month. In November, Xhafferi offered to treble depositors' money in three months; Sude responded with an offer to double principal in two months. By November, the face value of the schemes' liabilities totaled $1.2 billion. Albanians sold their houses to invest in the schemes; farmers sold their livestock. The mood is vividly captured by a resident who said that, in the fall of 1996, Tirana smelled and sounded like a slaughterhouse, as farmers drove their animals to market to invest the proceeds in the pyramid schemes.

When the IMF stepped in to try and put a stop to it, they were smacked around by both bought politicians and lunkhead voters. Eventually, though, the situation became too dangerous for even the politicians, and they set up a committee to try and deal with the schemes.

It was too late. The first scheme, Sude, collapsed before the committee could even meet. (Who was Sude run by? A 32-year-old gypsy fortuneteller. With a crystal ball and everything. She was ultimately entrusted with $100 million.) The government finally acted, but only after other schemes, confidence shaken by Sude's failure, were collapsing left and right and there was no more money for the government to make from them. A law banning pyramid schemes was passed, but there was no definition of what a pyramid scheme actually was. Even some of the actual pyramid schemes were waved off as "bilateral loans".

It was too late for the government to even save itself; a full-scale uprising was underway by March 1997 that would soon see a new interim government seated that would actually do something. Some 2,000 people would die, the south was in anarchy, people would flee the country, those weapons taken out of the armory that weren't used in the uprising would end up largely migrating to Kosovo. The soldiers and cops weren't about to stop it; they'd already deserted and in fact had done some of the weapon looting.

And through it all, four of the ten major schemes were still alive. They obviously weren't getting any new money, but they stayed in the game by slowly- very, very slowly- paying back investors, just barely enough to get people convinced that everybody would eventually, on some distant day, get their money back. Regulators wouldn't gain control of the last of them until March 1998.

All could have been avoided had the Albanian people just gone along with the regulation of credit ceilings.