Alec Saunders SquawkBox

This is rich.  The NY Times says in Bush Seeks Help of Allies Barred From Iraq Deals that the Whitehouse was blindsided by the Pentagon.  Senior diplomats are saying that the objective of rewarding coalition partners could have been achieved by simply giving them preferential treatment, rather than excluding those who opposed the war. 

"What we did was toss away our leverage," one senior American diplomat said. "We could have put together a policy that said, `The more you help, the more contracts you may be able to gain.’ " Instead, the official said, "we found a new way to alienate them."

Alienate… that’s for sure.

From CNET.  Ailing calling-card business hurts Net2Phone. The Internet telephone company’s first-quarter revenue drops partly because of its quicker-than-expected exit from an unprofitable calling-card business.

Not unexpected.  The tables below are created from their financials.  This one shows their mix from 2002 to 2003.  The calling card business cratered, true.  But so did the wholesale long distance and international long distance businesses.  Nothing about Net2Phone, despite their recent $65MM capital round, is healthy.

The most interesting thing is that these guys have never made a penny in their entire existance, yet they still get funded.  The tables below show that in 2001 / 2002 they lost a staggering $612 million.  In 2003, they made $17 million, after a $58 million settlement with Cisco pushed them into the black.  Why do people keep throwing money at them? 

More reporting on the Wolfowitz memo.

• AlertNet: Canada says US Iraq rebuilding rules hard to grasp. 
• NewsAsia: US bars France, Germany, Russia and Canada from Iraq contracts.
• Financial Post: U.S. bars Canada from lucrative Iraq reconstruction contracts.  The “soundoff” commentary on this one can be quite entertaining to read, especially from self-righteous americans wanting to discuss WWII.
• CNN: Anger over Iraq contracts list
• CBC: Canada shut out of Iraq rebuilding contracts.
• Miami Herald: Canada Protests U.S. Ruling on Iraq Bids. Interesting that in this story, McClellan defends this policy as appropriate and reasonable, but when asked it if was productive to alienate these countries, replied “I don’t think it is.”
• The Guardian Unlimited: Canada Protests U.S. Ruling on Iraq Bids.

And reaction in the blogosphere:

• Betsy Newmark in Raleigh NC get’s defensive. She writes “This is as it should be.”
• T.J. Griffin writes “Since when is Paul Wolfowitz in charge of diplomatic relations?”. 
• Poligeek writes “Wolfowitz & Co. throw some more gas on the fire”.
• And over on the Rant “I actually sympathize with the Bush administration in their decision to exclude French, German and Russian companies from Iraq, but feel this decision will have unnecessarily negative consequences for a very long time to come.”
• Ezra Klein at Pandagon writes: ”That is about all the proof anyone needs that our intervention is economically motivated, for us to tell foreign businesses that they can’t bid because it would compromise our security. ”
• Vince, over at Articulate Babble needs to be read for himself to be appreciated.  Link here.

There’s lots more. Head to www.technorati.com and click on the breaking news link.

Qwest taps into Net telephony. The company begins selling Internet phone service to some customers in Minnesota, claiming it’s the first major telecommunications provider to offer VoIP calling to U.S. homes.

Canada shut out of Iraq reconstruction

From the papers this morning:

• National Post: U.S. shuts Canada out of Iraq jobs.
• Globe and Mail: Canada barred from Iraq contracts.
• The Toronto Star: Canada on Iraqi contract blacklist.
• The NY Times: Pentagon bars three nations from Iraqi bids.  No mention of Canada here, though. I guess, in the eyes of New Yorkers, we’re really not a nation.
• The Washington Post: Only allies to help with rebuilding.

Wolfowitz’ memo cites “the protection of the essential security interests of the United States” as the reason.  An unnamed State Department official states:

The $18 billion is taxpayer money, “so the U.S. should have a say in how that is spent. We’re spending it on those who have already contributed to Iraq. . . . They contributed blood and treasure to liberate Iraq.”

Wolfowitz should remember that “the essential security interests of the United States” are shared by Canada, and NATO members France and Germany, through a large number of multilateral treaties and shared defence agreements, and right here in North American through the longest unguarded border in the world.

It’s true that our government opposed the war in Iraq.  It’s also true that our soldiers are dying in Afghanistan, and that our country has generously contributed substantial dollars (“treasure” as that nob in the State Department called it), from the pockets of ordinary, taxpaying Canadians, to the post-war Iraq rebuilding effort. 

As a Canadian taxpayer, I am incandescent with anger.