1115.org

We seem to think we have a divine right to tell other countries how to conduct their affairs. For some reason, they don’t always seem to appreciate being told what to do:

A day after the Bush administration urged India to step up pressure on Iran’s president, Mahmoud Ahmadinejad, on his coming visit to New Delhi, India tartly said it did not need “any guidance on the future conduct of bilateral relations,” making it plain that no saber rattling from its friends in Washington would impair its relationship with a vital energy supplier. “India and Iran are ancient civilizations whose relations span centuries,” the Indian Foreign Ministry said in a statement on Tuesday. “Both nations are perfectly capable of managing all aspects of their relationship with the appropriate degree of care and attention.”

I do believe that’s the diplomatic equivalent of “Go f**k a duck!”

Given that reaction, it probably wasn’t very diplomatic of us to do this, right? Presumably Condi Rice has or should have a passing interest in maintaining more than merely frosty-cordial relations with what may well be an emerging superpower. Presumably the State Department likewise has or should have an interest in stationing a halfway competent ambassador in New Delhi. If such a person were so stationed, he might advise against making public statements urging India to say such-and-such to so-and-so country on a given topic. Of course, since the person being so advised would be our Condi — who knows more about anything and everything than anyone else because she has a Ph.D. and she’s from Stanford (even if her Ph.D. isn’t) — such advice may or may not be taken.

But the Bush administration, in its ineffable wisdom — the same ineffable wisdom that has led us to triumph in Iraq and Afghanistan and TWAT — came up with David C. Mulford as the U.S. Ambassador to India. He’s been there for more than four years.

I wonder how impressed the Indian government was when they heard that David C. Mulford was going to be the next U.S. ambassador. Mulford — hey look, another Ph.D.: Dr. David C. Mulford — was a head honcho at Credit Suisse First Boston for eleven years before he became ambassador to India. He is best known for being the godfather of the infamous debt swap that led to Argentina defaulting on hundreds of billions of dollars worth of debt in 2002. Paul Blustein, writing in the WP, described it as:

…one of the most spectacular economic collapses in modern history, a debacle in which Wall Street played a major role.

The fantasyland that Argentina represented for foreign financiers came to a catastrophic end early last year, when the government defaulted on most of its $141 billion debt and devalued the nation’s currency. A wrenching recession left well over a fifth of the labor force jobless and threw millions into poverty.

An extensive review of the conduct of financial market players in Argentina reveals Wall Street’s complicity in those events. Investment bankers, analysts and bond traders served their own interests when they pumped up euphoria about the country’s prospects, with disastrous results.

The debt swap led to accusations of skullduggery and a formal judicial investigation into financial wrong-doing (the key charge: terms of the deal were revised at the last minute to produce an extra profit of $150 million for the lead managers of the deal, a profit that they allegedly didn’t get to keep all to themselves).

But apart from that whiff of criminal enterprise, respected economists and the IMF didn’t think very highly of Mulford’s debt swap plan at all (and it was his baby all the way). Prof. Brad DeLong approvingly quotes from Blustein’s book:

The… megaswap… ranks among the most infamous deals that Wall Street has ever peddled to a government…. For CSFB and a half dozen other Wall Street firms, the megaswap would be a bonanza… more than $90 million in fees…. For Argentina, it would be a bust, rendering the country’s solvency even more questionable than it was already….
[…]
The IMF… had kind words for it in public…. But behind the scenes… the swap drew scron from the Research Department…. Mussa’s anger boiled over in a table-pounding, finger-pointing exhibition (note: Michael Mussa, a University of Chicago-trained economist, was the IMF’s chief economist for 10 years)…. Mussa’s staff had calculated that the transaction would save $12 billion in debt payments from 2001 to 2005… at an effective interest cost of 16 percent…. To borrow so much at such a high cost made no sense for a country that was already having grave difficulty….

When Mulford was appointed ambassador to India, the snark in government circles in New Delhi was: “Have they sent him here to talk us into a debt swap now?”

Ironically, just before Mulford arrived in New Delhi, “Indian regulators banned the local brokerage operation of CSFB for two years for alleged price-fixing”. Not that Mulford had anything to do with that.

Mulford’s appointment also seems to bear some similarity to John Bolton’s appointment as U.S. Ambassador to the U.N.:

President George W. Bush’s move to send Mulford to India has garnered mixed reaction. Some observers have questioned his credentials for the job, believing he has little clout within the Bush Administration, unlike Blackwill, who was close to Bush and many of his senior advisors. Observers have also questioned Mulford’s temperament, with the new ambassador-designate not exactly known as the diplomatic type.

“Mulford’s combination of Wall Street bluff and political skills has earned him a reputation as a blunt and determined practitioner, one who has been known to upset bankers and government officials,” according to one profile of the man who will soon be the new occupant of Roosevelt House.

Past media reports have also described him as “aggressive” and “abrasive” with a “fiery temper.”

I guess the ways of the Bush administration are forever destined to be inscrutable to those outside it.