One More Thought...

The economy is getting better...

2012-01-02T16:11:00.002-05:00

Growth in the U.S. is up slightly, 2.4 projected growth for 2012 vs. 2.0 growth in 2011. Consumers are more optimistic. And unemployment inched down to 8.6 percent in November.

http://www.charlotteobserver.com/2012/01/02/2892232/obama-gop-spar-over-economy.html

Fines don't stop financial fraud

2011-12-02T10:48:00.006-05:00

"Unsettling Wall Street: A judge rules against the SEC’s favourite way of penalising financial institutions," The Economist reports in its Dec. 3, 2011 edition.

The long and short of it is Citi reportedly "created a billion-dollar fund half-full of wretched mortgages. It then bet against it, earning fees on both ends of the transaction." After investigating, the Securities and Exchange Commission offered Citi a "plea-bargain" settlement of a $285 million fine.

Jed Rakoff, a NY district judge said to settle the case without establishing the facts "is worse than mindless, it is inherently dangerous." The public interest is "in knowing the truth." Hallelujah.

'Age of the Shoddy' America?

2011-09-20T12:58:00.006-04:00

"How could anyone have imagined that Obama's tired, mid-century Keynesianism would reassure investors, creditors and consumers?" Michael Gerson writes in a Sept. 14, 2011 op-ed.

Gerson hits Obama hard and in the gut, where it counts. Gerson's complaint? That President Obama's policy solutions are reactive rather than proactive.

U.S. problems are not the president's fault, per se. They are a result of http://www.blogger.com/img/blank.gifpolicies that preceded him: an "insatiable entitlement system, a burdensome tax code, a gridlocked political system, and a broadly failing [K-12] education system." Gerson complains that a "typical Democratic stimulus plan" won't solve the underlying issue that the current American economic model is not viable under a time of aggressive global competition. "America has stumbled into the age of the shoddy," Gerson writes.

In many respects I agree. We need long-term solutions, not short-term stimulus that temporarily boost the economy in time for the next election.

One in six Americans is impoverished

2011-09-20T12:49:00.002-04:00

The Census Bureau reported that 15.1 percent of Americans lives in poverty. That rate is the highest of any industrialized nations. It's a sign that the middle class is seeping down to the lower class and not rebounding. It's also a sign of economic decay.

Picking winners & losers in the 'new economy'

2011-09-20T12:39:00.002-04:00

How does a solar energy company that receives a half billion dollars in loan guarantees from the government go bankrupt?

The Associated Press found that Solyndra, a solar panel manufacturing based in Fremont, Calif., was “hemorrhaging hundreds of millions of dollars for years” before the Obama administration decided to give it a $535 million loan guarantee.

The political problem for the White House is two-fold. First, one of President Obama’s major fundraisers in 2008, George Kaiser, was financially connected with Solyndra. Second, the Obama administration reportedly “hurried Office of Management and Budget officials to finish their review of the loan.”

Producing “green jobs” is a worthwhile goal, but not if it comes at the expense of the rest of the economy. Investigations of the company have started. At first sight, it looks as if it’s a prime example of waste, fraud and abuse related to good intentions gone wrong.

AP story on News & Observer, http://www.newsobserver.com/2011/09/16/1492653/white-house-wary-of-solyndra-re.html
You can view lobbying records at OpenSecrets.com: http://www.opensecrets.org/lobby/clientsum.php?id=D000056880&year=2011

Biden in Beijing

2011-08-22T18:33:00.003-04:00

Vice President Biden’s diplomacy tour to China got off to a rocky start. First, he attended a “goodwill” basketball game that turned into an embarrassing brawl between the Georgetown Hoyas and China’s Bayi Rockets in Beijing. Then Biden’s meeting with China’s vice president, Xi Jinping, was hastily brought to an end by Chinese foreign ministry press handlers who manhandled U.S. press and staff members out of the room while Biden was still speaking.

Underneath the blatant tensions were worries about the U.S. economy and its mounting debt. Stock markets around the world have been rattled since the Standard & Poor’s downgraded U.S. long-term debt from Triple A on August 5. Just days before that announcement, China’s Dagong Global Credit Rating agency, which has recently started rating sovereign debt, downgraded its rating of U.S. debt from A+ to A with a negative outlook, putting it on par with Russia and South Africa.

It’s worth noting that Dagong has faced skepticism about its rating credentials, especially after it had given a positive rating to a government agency impacted by a recent fatal train accident in China. Nevertheless, Dagong’s reasons for the downgrade are relevant and rational. Its primary concerns are as follows:

1. An unstable political situation due to partisan fights. Throughout the standoff on the debt limit, Dagong said, neither party showed consideration for the general interest and left “the world in terror.” Political differences has acted “as a curb on the decision-making efficiency” ever since the midterm elections.

2. The U.S. sovereign debt crisis will deepen and continue a declining trend. In part, this is because there is a “severe imbalance between the real wealth creation capability and huge national consumption.” (I take this to mean that U.S. GDP growth is overly reliant on consumption while weak on everything else.)

3. Expected annual deficits have been cut, but debt continues to grow. Dagong cites an eight-year difference between the deficit cut objectives laid out in the new budget control law and the increase in the debt limit through 2013. (I take this to mean that Congress’s plan to cut deficits extends to the out years while it has increased debt in the near term.) Furthermore, Dagong astutely notes that “besides, the deficit cut plan rests on a framework agreement only, lacking credible and feasible policy support.” (In other words, there are loopholes in the plan to cut deficits.) Dagong suggests a $4 trillion, five-year deficit plan is in order.

4. The U.S. has no plan or driving forces to produce national economic growth, making it impossible to reverse the national debt problem. Dagong predicts the Federal Reserve will approve further stimulus with a QE3 policy, which would affect the global economy and shake the status of the dollar.

A Multipolar World

2011-08-22T11:04:00.003-04:00

Boston University's Andrew Bacevich writes that a new era in history has already taken place. The United States is not a "sole superpower." It is a single power in a world with multiple powers, primarily China, Russia, India, Turkey, Japan, South Korea and Brazil. (Note, he puts a big question mark on Europe.)

Bacevich says it's useless to try to prevent this shift. For one, it's already happened. The goal then is to focus resources away from Afghanistan and toward strategic international goals, specifically on these:
-To negotiate boundaries/constraints on the use of force;
-To establish norms for acquiring scarce natural resources;
-To reduce armaments and the international arms trade; and
-To increase diplomatic attention on Taiwan, Kashmir, Korea's 38th parallel, and the Palestinian territories.

The effect of a successful shift in strategy, Bacevich asserts, is a lighter security burden on Washington over the long term. I'd like to know more about the effect and the challenges such a shift in power dimensions presents to us. The goal is an amiable target. The challenge is great.

Politico, Obama & the Valley

2011-08-20T17:10:00.011-04:00

The Politico newspaper can't seem to get out of the Washington Beltway even when it visits California. In a story titled, "Obama gets no bounce from Silicon Valley Boom," reporter Michelle Quinn suggests that the high-tech community in the Silicon Valley is disappointed with President Obama. She then goes on to quote Washington-based lobbyists to back up her claim. Of course, the D.C. lobbyists cite their dashed hopes and doubts that the White House won't be able to squeeze needed funding for the Valley.

Wait, what? As Quinn notes close to her lead, the Silicon Valley is booming with jobs and activity. In fact, as she could have added, the corporate community there is awash in cash.

The story has other weird things too. On page 3, she says, "The industry, long accused of being disconnected from national politics, may become even less engaged." Oh dear, heaven forbid that the industry focus more on producing its products than on influencing politics.

It's not so much the article itself that bothers me. (The story does mention items like trade, patent reform, immigration, broadband and spectrum auctions.) It's the spin. Yes Politico serves an Inside-the-D.C.-Beltway readership. And yes, it's a reporter's job to make a story an interesting read. Quinn does that well. But isn't the point of going to California to cover an event to leave the Beltway behind? Surely, given Washington's problems, it could learn something about innovation and economic growth from the Valley.

See Something, Say Something... Say Whaaaat?

2011-08-20T15:45:00.006-04:00

Ever since the Sept. 11, 2001 attacks, the U.S. government has urged people to be extra vigilant about activities they see. In some ways, the effort seemed to go too far toward the alarmist direction, especially during the period immediately following the attacks. As if the frequent evacuations and military planes flying overhead D.C. skies weren't enough to remind one of danger, it became impossible to miss highway notices like "Report Suspicious Activity." They were and still are constant reminders that the country is under attack.

Since its start, the campaign seemed a little creepy. Calling on people to report undefined "suspicious activities" has a Stasi-like feel. I envision the Gladys Kravitzes of the world busying themselves with the affairs of their neighbors so they can report all their random oddities. (I'd like to know how many of these calls 911 operators field.)

DHS Secretary Janet Napolitano is reviving the campaign. And, it appears she is revamping it to include more specifics about what activities are in fact suspicious. This sounds like an improvement, and I hope it is. A DHS web page about the campaign does emphasize respect for civil rights and civil liberties.

I still don't like the campaign title. As polls and news reports show, too many people are suspicious about people from different religions, races and ethnic backgrounds. The current campaign may only heighten these suspicions.

I admit, however, that there is a need to instill a greater sense of responsibility in people. I can remember several metro rides in Washington, D.C. where no one but me would acknowledge or report unattended bags left in the metro car. Nevertheless, I'd like DHS to change the name. "Shared Effort, Shared Responsibility" has a nice ring.

Immigration: To Stay or Not to Stay?

2011-08-20T13:55:00.008-04:00

The Obama administration announced that it would begin prioritizing deportation procedures for illegal aliens. The announcement is the first major move by President Obama on national immigration policies.

Oddly enough, neither an announcement nor a policy explanation has been posted to the White House web site. Nevertheless, a news report explains that the administration will suspend deportation proceedings against many illegal immigrants who have not committed crimes and pose no threat. It is presumed that it will especially help those who came to the United States as children.

Perhaps the reason the policy isn't spelled out online is because it isn't spelled out. In effect, it gives the Dept. of Homeland Security leeway to make decisions on a case-by-case basis. So it really isn't possible to predict just how many people might be freed from deportation, but perhaps it's true that it will enable law enforcement to focus on the crooked element of the immigration population.

Last year, the DHS removed from the U.S. 387,000 foreign nationals, primarily from Mexico (73 percent) but also from Guatemala, Honduras and El Salvador, and returned another 476,000 foreign nationals to their home countries. Meanwhile, Immigration & Customs Enforcement removed 169,000 known criminal aliens. I can't tell if there's double counting going on here.

So how will the new policy affect these numbers? God only knows. It likely depends on the specifics. Speaking of which, I finally found the pointer on that buried deep in the news story: "White House officials said the policy ratified guidance on prosecutorial discretion issued by John Morton," DHS director of immigration & customs enforcement.

My guess is that the effectiveness of the policy depends on the people doing the discretion.... The long and short of it is we still need comprehensive immigration reform that tackles the problem of having an underground economy and pseudo-citizenship. One day, I'll have to read the details of President Obama's plan.

Health Care - neither a public good nor an individual responsibility

2011-08-13T11:30:00.009-04:00

Here I am pondering the federal appeals court rejection of the individual mandate in President Obama's signature health care law.

The 11th Circuit Appeals Court said Congress went too far in mandating that individuals must buy health insurance. The opinion says lawmakers can't force residents to "enter into contracts with private insurance companies for the purchase of an expensive products from the time they are born until the time they die."

Part of the problem, it seems, is the high cost of individual insurance plans.

The Obama administration argues that individuals who don't have insurance but do obtain health care services force society to "pick up the tab." This is true, especially for expensive emergency-room health care services.

The policy solution lies finding a more targeted and less expensive approach. Parse the facts at the root of the issue--that hospital emergency rooms provide care to those without insurance. What portion of this care is truly for emergencies? Could clinics provide the same type of services? Is there a less expensive means of requiring individuals to take responsibility for their health? Is there a public-private option that could better address the issue?

The U.S. third-party-payer approach to health care is too expensive and inefficient. There is little accountability and much waste. We need more solutions. More options. Congress has had its say, and now the courts have too. Innovative answers are out there; we just need to find them.

Solving problems in the Cloud…

2010-10-15T12:56:00.003-04:00

Washington, D.C.—I attended an event sponsored by the Society for International Development about an IBM product called "innovation jam." IBM reps pitched the "jam" as a tool organizations can use to survey large numbers of people about various issues, such as workplace environments, cost-cutting strategies or product rollouts.

In 2001, IBM started using the "jam"—a cloud-based conferencing tool that harnesses the power of social networking and data mining to inform the decision-making process. IBM has since sold use of the product to multinational firms, the NATO alliance, USAID, the United Nations and others. The reps say the tool enables organizations to solve problems and develop entrepreneurial ideas by engaging tens of thousands of people in the discussion.

"You never know where the million-dollar idea is going to come from," said IBM Senior Management Consultant Montressa Washington. She said people often assume incorrectly that good ideas can only come from CEOs. While in reality, "your million-dollar idea can come from anyone."

In effect, a jam is a crowdsourcing tool. It pulls large numbers of people together around a set of theme-based problems and instructs them to explore potential solutions.

The presentation got me thinking. My interest is in learning about tools schools could use to engage the younger generation in global issues. I want to empower the today's students to work with foreign peers to develop transnational solutions to intractable problems, such as resource scarcity, poverty, and environmental degradation. I truly believe young people have what it takes to offer fresh ideas.

I doubt IBM's jam is the answer since its cost is rumored to be enormous. (Company representatives would not discuss price issues.) The jam and its Cobra data mining instrument may make sense for multinational firms interested in collecting and retaining proprietary rights to ideas and data, but it makes less sense for organizations seeking more altruistic ends.

I wonder what other collaboration tools might be available in the cloud for schools, nonprofit organizations and others. The possibilities seem endless. And there's a lot to learn from IBM's example. The key, it seems, is in leading and facilitating the discussion toward productive ends. The dialogue is unscripted yet controlled.

Gary Scotland, IBM's senior consultant, compares the tool to a jazz jam session that brings the young and old together to improvise music. It makes me wonder what would happen if the young and old came together in the cloud for productive purposes. . . . I can almost hear the harmony.

©Mohr Media

Goldman: Did they or didn’t they?

2010-04-30T13:35:00.001-04:00

The question is did Goldman break the law. It remains to be seen whether Goldman made misrepresentations or false claims. It's a question securities lawyers can feast on, but what about the rest of us? How do we assess exactly what went wrong and right?

The firm is under the gun of scrutiny, and its executives faced a marathon grilling session lasting more than 10 hours from Capitol Hill. The politicians and public are outraged. But what exactly did Goldman do? They profited from the collapse of the housing market, and that seems to be the primary offense that has drawn the public angst.

A review of a few facts:

· Goldman developed financial products that allowed it to bet against the mortgage market—at least the subprime mortgage market.

· It continued to sell clients investments that bet in favor of the mortgage market.

It is not clear that these and other actions were illegal. Based on press reports and political excoriating, it seems that Goldman's major offense was in recognizing the collapse of the subprime mortgage market before the rest of us—politicians included. While the rest of us were in denial, Goldman took steps to protect itself from the potential fallout from the overextended subprime and other loan markets. We happily pursued a policy of ignorance about being overly in debt as a society, while the investment firm hedged its bets against the excess.

Much of the roasting of Goldman misses the point that it protected itself—and therefore also protected its clients and lenders—from the housing market bubble while other firms continued to bet in favor for it. Goldman bet the bubble would burst while Lehman Brothers, Bear Stearns and Merrill Lynch bet it would continue to grow.

Somehow, it goes unnoticed in many press reports and editorials that it was the latter set of firms, particularly Lehman and Bear Stearns, that sought public and private bailouts. It was the collapse of Lehman Brothers that caused the worst damage. (Those former executives are also under legal fire.)

Perhaps Goldman should be credited, at least in part, for acting responsibly. The firm reportedly had traditionally followed a stricter risk manager system than most banks. It wanted to make sure it had enough cash on hand to pay creditors. "At Goldman we had absolutely obsessed over our liquidity position," former CEO of Goldman Sachs and former Treasury Secretary said of his management of the firm during the 1990s. The risk management scheme responsible for its current problems may simply be part of that approach.

It may be the case the firm acted illegal. That is for the Justice Department and regulations to determine. As for the court of public opinion, it is clear that the primary point of anger with Goldman is that it pursued a policy of self-interest while the nation—and the world—suffered the consequences of a major financial collapse. The firm lacked sympathy, so to speak, for the world's economic distress.

The public might be better served by taking aim at the climate of debting and betting, which appears to be both legal and necessary survival tactics in the current financial system.

~PM

Favorite quotes on this issue:

Fareed Zakaria: "It would be a mistake to criminalize retroactively what was standard business practice…. What this case highlights is that the old Wall Street is dead."

The Economist:

"Mr Blankfein gurned incredulously at some of the senators' questions, doubtless baffled that they would characterise as immoral profiteering what he views as prudent risk management…. He argued that criticism of Goldman's motives rested on a misunderstanding of the market-making business. Marketmakers owe no fiduciary duty to clients, and offer no warranties; their responsibility, he argued, is to make sure those they serve are getting the risk exposures they seek."

PPPs for youth AND the workforce

2010-04-22T16:18:00.002-04:00

How does one make a public-private partnership that serves both the business community and the local youth? That's the question that was posed at a forum co-hosted by the Society for International Development and the International Research and the International Research and Exchanges Board. The answer—or the formula for success—is not quite clear.

It is a tricky problem because it involves so many other questions. If the goal is to make young adults more employable, then one must determine what skills they will need—and not just for today's workforce but also for tomorrow's. Goals for vocational education are, therefore, much more difficult to determine than goals for primary education. It is more than reading and writing. It is workforce competencies.

Several panelists at the April 22 forum offered up interesting views, most of which were based on their own experiences working in the development field. Here are some highlights.

David Barth, Director, Office of Education, USAID:

Reconciling differences in values is a challenge. (i.e. The public sector cares about gender equity, which is not a primary concern for the private sector.)
Partnerships aren't always appropriate.

Peter Shiras, Executive Vice President for Business Development, International Youth Foundation:

Measurements of programs' impact are essential for private partners
Blood, sweat and tears: Partnerships take time and effort so you need to make sure they will pay returns in the end. "This is not a cost-free endeavor."
It is especially challenging to establish PPPs in areas, such as Sub-Sahara Africa, where the business sector is weak.
Cultural differences between NGOs and businesses can be mitigated if goals and the roles of each partner is clearly spelled out in agreements from the beginning.
The IYF-Microsoft partnership uses a range of indicators to measure success, including job placement, entrepreneurship and youth volunteerism.

Anay Shah, Business Development Fellow, d.light design, India

The key to success of an Infosys program was in aligning itself to both the passion of the youth and the business interest. It involved an environmental audit of the company by the youth. (Anay Shah)
If private partners can use "bite-size" indicators as measurements for monthly and quarterly reports, public partners can supply them. "The youth time horizon is like the private sector. They want action…. They want to do something now."
Let the youth lead. "They are not indications of future market trends. They are future market trends." And "They youth take something, run with it and make it cool."
Youth are mobile, energetic and adaptable.

Ted Okada, US Global Public-Private Partnerships, Microsoft:

Precision in the agreement/contract is vital.
It is just as important to know what doesn't work as it is to know what does work.
We are developing "large leaps of insight" by "incubating in challenging environments."
On goals and indicators: It is like building a clock. "It doesn't have to be Big Ben. But it does have to tell time."
"Civil society is the third leg [of the public-private parternship]."
Microsoft's partnerships work with communities indirectly, through the World Bank and through local partners.

All (panelists and audience):

In thinking about the private sector, one first needs to know if the business is getting involved for philanthropic reasons (i.e. Corporate Sector Responsibility) or out of self-interest (i.e. to create a skilled workforce for itself).

Asian rebound

2009-08-19T17:27:00.001-04:00

The Economist provides a solid analysis of Asia’s emergence from the global financial collapse. The magazine concludes that the rebound is real thanks to new consumer spending in the Asian economies as well as large cash infusions by governments. Those two points are not unrelated. As The Economist explains, governments were able to pour more money into their economies because they entered the economic crisis in better fiscal positions than Western governments. Likewise, high private-sector savings rates made it easier for consumers to spend stimulus money. (U.S. consumers are thought to have used stimulus money to pay down their debts.)

“Asia’s prudence during the past decade did not allow it to escape the global recession, but it made the region’s fiscal and monetary weapons more effective,” The Economist says. (The magazine also credits the cyclical nature of the manufacturing base and says global finance is flowing again.)

The Economist welcomes the shift in spending habits in the West and East as a sign of rebalancing. And that makes sense because this is exactly what economists have been prescribing for the global economy. The magazine adds, however, that it is still a question mark whether Asian governments can sustain the increases in consumer spending. That will require them to be far more flexible with exchange rates.

So, at the end of the day, we’re still talking about currency values.

Economy Snapshots: Zakaria on capitalism, ethics

2009-06-30T14:50:00.003-04:00

The dust is clearing…

“American capitalism is being rebalanced, reregulated and thus restored,” Zakaria writes in his Newsweek column. “A few years from now, strange as it may sound, we might all find that we are hungry for more capitalism, not less.” The reason is simple: When countries need growth, they turn to markets. Capitalism is still “the most productive economic engine we have yet invented.”

Yet the critics of capitalism are still shouting. Those voices will be quieted in time as the system rebalances itself. This crisis isn’t the first time people have predicted ongoing disaster. Zakaria recounts that market watchers cried “crisis” time and time again—after the 1987 U.S. stock market crash, after the 1997 East Asian crisis and in 1998 after the collapse of the Long-Term Capital Management—only to be proven wrong. Today, China and India are already proving some of the cries wrong merely by maintain levels of economic growth.

As a whole, the global economy still has problems, but at least it is easier now to identify the reasons it collapsed.

So what went wrong? Zakaria cites three main problems:

1. Crisis of finance—financers (banks that were overly leveraged; loose regulations of derivatives; Greenspan eased up too much on money; easy credit; excess consumption—73 percent of the GDP in the U.S.)
2. Crisis of modern democracy—for too long politicians have supplied the public wants rather than the ones they need. “The system cannot impose any short-term pain for long-term gain,” Zakaria says. He suggests the government will eventually need correct U.S. hyperconsumption by raising taxes and cutting expenditures and by addressing problems with Social Security, health care and immigration.
3. Crisis of complacency and complexity—the global economy crashed because no one really knew how to drive the complex vehicle we call “globalization.” Zakaria describes a “mismatch between interconnected economies” and political processes that remain national.

In contrast to the issues above, the underlying capitalist system is not to blame and will survive. Furthermore, solutions for the specific causes of collapse will emerge.

The tougher question moving forward is answer is one about ethics. On this point Zakaria appears less clear. His typical logical-style of writing gives way to a more explorative prose.

Zakaria rightly suggests that it is too simplistic to view economic problems through the lens of a battle between good and evil—something other commentators have cited while calling for change. (The Catholic pope, for instance, has called for a “moral economy.) Zakaria says that “fundamentally, markets are not about morality.” But he goes on to say that the system of self-regulation failed and stronger ethics are needed in the face of tougher competition. The solution? Zakaria calls for a “deeper fix within all of us.”

The dust is clearing, yes. But as it does, the picture that is emerging just might be one we haven’t seen before.

Around the World in a Half Day

2008-05-18T15:36:00.015-04:00

Imagine visiting the Caribbean, South America, the Pacific, East Asia, and Southeast Asia within a day. Now imagine traveling from country to country without the hassle of airports, passports, visas, and luggage. To some extent, that’s what Washington’s Passport DC festival allowed thousands of visitors to do on Saturday as foreign embassies took part in a collective open house party.
Granted, it takes some imagination to liken an embassy tour with an actual vacation in the country. But it’s worth the imaginative effort—not to mention an absolutely free outing.

Here’s a sampling of the sites:

I started the day with a visit to the tropical Republic of Trinidad and Tobago. It is so festive inside the embassy, that it’s hard to believe it is only 11:00 a.m. Drinks are aplenty, the wall paintings are bright and colorful, and a live steelpan band fills the rooms with the sound of Calypso music…. Perhaps, when I’m eighty years-old and ready for retirement, I’ll spend my days in the Islands watching the colorful and diverse birds that migrate through the Caribbean each year.

A luxurious and stately mansion accommodates Indonesia's diplomats to the United States. The embassy is filled with massive mirrors, ornate furniture and sculptures, and huge effervescent chandeliers. It’s hard to believe that a country with a GDP per person of $1,290 (compared with $41,640 in the United States) can afford an embassy worth more than $150 million. But I guess anything is possible in politics…. It’s interesting to note a bit about the building’s history. At the turn of the 20th century (1903), a young man from County Tipperary, Ireland built the 50-room mansion for $853, 000 after having struck it rich as a gold miner in Colorado. The Indonesian government bought the place in 1951 for $335,000—a fraction of the original cost.

The Columbian Ambassador to the United States opened up her home for the public’s viewing pleasure . Simply said, it was beautiful. It included amazing works by Fernando Botero, Ana Mercedes Hoyos and other Columbian artists, freshly painted and bright walls, and a tastefully-decorated dining room. Ah, now that’s a home worth seeing.

Save the dollar, not the day

2008-04-29T16:40:00.006-04:00

Policymakers in Washington and in the Federal Reserve need to stop thinking about stimulating the economy in the short-run and start thinking about what’s right for the long-term. We need economic growth, not an influx of cash to stimulate consumer spending and financial lending. We’ve seen where a stimulus-oriented focus has produced: shady credit schemes, an unsustainable housing bubble, soaring energy and commodity costs, and a weakening dollar.

Want to know why the dollar keeps falling? John Chapman provides a solid explanation in a WSJ op-ed:

“But exploding fiscal deficits, the housing correction, protectionist threats and $200 billion in tax hikes scheduled for 2011 are fueling loss of confidence in the U.S. dollar.”

Want to know what this effect could mean for the U.S. consumer and investor? Chapman provides a glimpse:

“If foreign holders of dollars or dollar-denominated assets sell them, all the good effects of being the de facto international reserve currency start operating in reverse. Until fiscal and monetary policies change, all this implies future inflation and higher interest rates.”

Chapman notes that the Fed Reserve’s foundation for continuing to cut interest rates in spite of the rising inflation is flawed.

It’s time the Fed and Washington begin thinking about what’s in the long-term interest of the United States. Short-term measures for short-term relief are leading us in a dangerous direction.

The ‘Talking point’ TV Heads

2008-04-28T14:46:00.003-04:00

A NYT report, Behind TV Analysts, puts a new meaning behind the term “talking heads.” It is a standard practice now for top television networks to hire former military officers to provide “expert” analysis about the U.S. war effort. The problem is, the networks have rarely, if ever, disclosed the fact that those same officers carefully coordinated their new analysis with the Pentagon. As FOIA records now show, they routinely met with Defense Secretary Donald Rumsfeld and used Pentagon talking point memos as guidelines to spin the media.

Listen with care.

For more information, see

Economist packs the house

2008-03-07T20:03:00.004-05:00

Policy forums are regular occurrences in Washington, D.C. Forums that draw large crowds are less common. So it is noteworthy when a speaker—an economist no less—draws in hundreds of attendees on a gloomy Friday afternoon.

The host at the Johns Hopkins University SAIS event introduced his guest speaker as the “controversial and always thought-provoking” William Easterly.

Easterly is an economics professor at New York University and a senior fellow at the Center for Global Development who is controversial because he challenges the conventional wisdom about foreign aid programs. Easterly argues that the best foreign aid plan is to have no plan at all. His latest book, White Man’s Burden, is so contentious that it is a taboo object inside the doors of international aid agencies.

One former World Bank employee who shocked her colleagues by bringing the book to work one day likened the experience to bringing Lady Chatterley’s Lover inside a convent.

Easterly finds fault with the entire international aid establishment. He says IMF/World Bank Sourcebook Poverty Reduction Strategy papers are useless; UN Millennium Development Goals are unachievable; Columbia University Economist Jeffery Sachs is misguided; and Microsoft Founder Bill Gates is simply wrong about development.

Easterly’s thesis is that aid programs based on big utopian plans to help the poor consistently fail. For evidence, he points to Africa—the continent that has received the largest portion of foreign aid is still the world's poorest.

So, if foreign aid doesn’t achieve economic development, what does?

Initially, Easterly said he had no answer to that question. But since publishing his book in 2006, he has decided to provide one (mainly, to respond to critics who complain that he offered no solutions to the problems he cited). “I am feeling increasing pressure over time to come up with an answer to development,” Easterly said.

Easterly now concludes that the answer is individual freedom. “What will achieve the end of poverty is freedom,” he asserted.

Just what that means exactly for the developing world is not clear. Does Easterly propose freeing the “Third World” from international aid? No, he suggests that aid can still serve a role in feeding the hungry, healing the sick, and educating the masses. But none of those services will end poverty itself.

So why, I ask, would a free market system succeed in ending poverty? It would produce prosperity and economic growth. But like foreign aid, free markets will never eradicate poverty entirely.

By pretending that they will, Easterly advances neither the goal of free markets nor of foreign aid. What's needed is a discussion of how the developing world can freely participate in a global market system.

Another celebrity arrest -- but this one is different

2008-01-27T16:24:00.000-05:00

Sometimes, it seems headline after headline emanating from Hollywood and saturating the American media involves an arrest of some famous actor or actress. Twenty-one year-old Lindsay Lohan posed for this photo after her July 2007 arrest charges of cocaine possession and drunk driving. Paris Hilton served time for violating a suspension of her driving privileges – a probation imposed after pleading no contest to a reckless driving charge. Hilton’s pal Nicole Richie was arrested twice for driving under the influence. And let’s not even discuss Brittney Spears.

Male actors wind up in trouble too. The web site, The Smoking Gun, lists Kiefer Sutherland, Matthew McConaughey, Macaulay Culkin, and Mel Gibson, among others. The charges? Drunk driving, drug possession, public brawling. Most all of these cases involve celebrities acting irresponsibly after a night out partying. They simple had too much fun and didn’t know when to say “when.” It’s a scene that seems to happen so far, the news story writes itself.

But here’s one that doesn’t happen often: a celebrity arrested for fighting on behalf of a cause -- a cause to save lives. Hayden Panettiere, an 18-yearold actress on NBC’s “Heroes,” displayed real-life courage last fall when she and a band of surfers intervened in a hunt of pilot whales of a Japanese coast of Taiji. For that act of violating international commerce, the Japanese government issued arrest warrants against Miss Panettiere and the band of surfers who joined the protest.

Whale hunting is a brutal sport -- unlike any other. Videos of the hunt are difficult to watch. The scenes of bloody red waters, helpless mammals, and vicious hunters are enough to turn one's stomach. It is much easier to turn away from such horror than confront it.

Miss Panettiere and her colleagues deserve credit for their courageous efforts to shine new light on the horrific practice of whaling by Japanese fishermen. It’s an issue worthy of a fight – and even an arrest.

Hayden Panettiere is in Washington, D.C. this week to raise awareness to the whaling issue. For more information, see SavetheWhalesAgain.org or watch one of the many videos posted on YouTube about whale and dolphin hunting by the Japanese, go to:
http://www.youtube.com/watch?v=PxQM1yi4f_s
or http://www.youtube.com/watch?v=T0YCD3Zcuw8&feature=related.

Crazy about corn subsidies in Iowa

2007-12-12T17:55:00.000-05:00

Washington, D.C.—Sometimes political issues are best examined far from the nation’s capital, a place where backroom corporate lobbying, daily distractions of national news, and mind-numbing legislative details cloud the picture. Some topics are easier to grasp when they are viewed through the most basic lens. Simplicity yields insight.

At least that’s the case when it comes to the federal agriculture policy – a topic that is as complex as it is relevant to hundreds of millions of people who consume U.S. farm products. That’s what college graduates Ian Cheney and Curt Ellis discovered when they took the unusual step of moving to the Iowa countryside after graduating from college in Boston. King Corn, a limited budget documentary, tracks their lives as they farm an acre of corn in Iowa to learn about the U.S. food supply.

“We don’t know a thing about corn. It seems like a good time to find out,” they explain to a skeptical Iowan farmer at the beginning of the film when they ask to lease the land.

Cheney and Ellis discovered a life where the living is easy, the people are kind, and – thanks to Washington lawmakers – the corn is utterly inedible. In fact, according to the film, Iowa farmers can no longer feed himself with their own crop. So they ship it out of state for processing.

It’s easy to spot the villain in King Corn. Federal farm subsidies are to blame for distorting the market and producing some very unhealthy unintended consequences.

King Corn won’t satisfy fans of action-packed Hollywood blockbusters. Nor will it appeal to fans of hard-hitting exposés in the style of Sicko.

“I’m not Michael Moore,” said film producer Aaron Wolfe as he explained his simple approach.

King Corn’s unhurried pace will please filmgoers seeking an unembellished narrative that tackles a subject relevant to everyone who consumes corn-based products: beef, chicken, anything with corn syrup in it. If you eat, this film is relevant to you. However, you might prefer to opt for a good article on the subject rather than sit through this slow-moving film.

Let the budget battles begin

2007-11-14T21:31:00.000-05:00

President Bush vetoed two appropriations bills this week, officially initiating the start of a long awaited battle that’s been brewing all year.

First he knocked down an education and health bill, complaining that it would spend $10 billion more in 2008 than he could allow. Then he kicked a transportation and housing funding bill back down Pennsylvania Avenue. A temporary measure gives Bush and the Democratic Congress until December 14 to settle differences over those bills and nine others. (Bush has signed a bill giving the Defense Department $459 billion to spend in 2008.)

Over the next month, they’ll either find a compromise or exchange blows until the strongest side wins. Neither President Bush nor the Congress has much public support to rely upon for the fight. That suggests both sides will cave.

Though the chances are, the brawl will be bloody – at least in a political sense.

It’s been 12 years since the last major partisan fight between Congress and the White House over end-of-the-year budget decisions. President Clinton won that battle against a freshman class of Republican Revolutionaries. But the victory was achieved only after a 21-day government shut down.

Senator calls for less rhetoric, more reason

2007-11-08T14:35:00.000-05:00

U.S. foreign policy in the Middle East faces an impending crisis if President Bush does not alter its course in dealing with Iran, Republican Sen. Chuck Hagel, R-Neb., said while speaking to a prominent foreign policy crowd in Washington, D.C. Thursday morning.

The proposal comes at a time of escalating tensions between the Bush administration and Iranian President Mahmoud Ahmadinejad, mainly over Iran’s nuclear program.

In a direct challenge to Bush’s confrontational approach to dealing with Iran, Hagel called for a new strategy geared toward containing Iran’s nuclear ambitions and stabilizing the region. The plan calls for engaging Iran’s politicians and population using all means available, including diplomatic, cultural, economic. It also stresses a redefinition of U.S. goals, from one of regime change to strategic interests.

“We must be clear that the United States does not seek regime change, and that improved relations are a real possibility,” Hagel said.

Hagel criticized U.S. politicians’ use of “bellicose rhetoric” against Iran, saying it exacerbates tensions. While he took issue with presidential candidates and U.S. senators (who approved a resolution naming the Iranian Revolutionary Guard as a “terrorist organization”), he saved his harshest criticism for Bush.

“Loose talk of World War III, intimidation, threats, bellicose speeches only heighten the dangers we face in the world,” Hagel said, adding that Bush’s language could easily turn into a self-fulfilling prophesy. “We are in a situation here where it is truly more dangerous each day.”

Beware of the dollar's demise

2007-10-31T16:34:00.000-04:00

Today’s Washington Times reports that Al Qaeda has shifted its strategy away from physical attacks to America to tactics meant to drain U.S. resources and economy.

In at least some respects, their strategy is already working. Although the U.S. economy appears to be holding steady against ongoing rifts in the lending industry and housing market, the dollar has plunged to new lows. As it has fallen, the prices of natural resources like gold, copper, oil, natural gas and diamonds have spiked.

That puts the United States at a distinct disadvantage in its war against al Qaeda.

Gold is al Qaeda’s currency of choice. It is a reliable resource, is valued worldwide, and is utterly untraceable. And thanks in large part to the dollar’s decline, an ounce of gold is worth more than today than ever before. In fact, its value is at a 27-year high. Following Wednesday’s Federal Reserve quarter-point rate cut, the price of gold surged past $800 per ounce. That’s up from $300 per ounce in 2001.

Ironically, according to Bloomberg, gold jumped 5.4 percent on September 11, 2001 and spiked one percent in March 2004 when al Qaeda claimed responsibility for the Madrid terrorist attacks.

Intelligence analysts have long known about al Qaeda’s reliance on gold and diamonds. And although news reports of terror financing has been deficient, a 2002 Washington Post report detailed Osama bin Laden’s and the Taliban’s trade and distribution of the precious metals. Two years later, the BBC reported that Osama Bin Laden ostensibly offered gold-based bounties to assassins of U.S. and U.N. officials in Iraq.

The rise of gold, no doubt, has aided al Qaeda's treasure chest.

Meanwhile, thanks to excessive deficit-spending by Congress and President Bush, U.S. national debt to Treasury holders now exceeds $9 trillion. That's up from $5.8 trillion in September in 2001. You can bet al Qaeda welcome that news.

A forum for reconciling U.S.-Iranian rows

2007-10-30T12:03:00.000-04:00

An evening forum at the National Cathedral Oct. 29 fostered a free-flowing discussion on the tense U.S.-Iran relationship. In contrast to the bellicose rhetoric coming from the U.S. and Iranian presidents, the public meeting was both constructive and informative. Perhaps that’s due to the setting – a place of for prayer and reflection.

The Cathedral College’s Center for Global Justice and Reconciliation hosted the event in an effort to educate the public on the historic factors shaping U.S.-Iranian relations, which have deteriorated during a 28-year absence of diplomatic relations.

Sadly, the two countries appear headed for war due to tensions between U.S. and Iranian leaders. “We are witnessing some of the darkest moments in history,” said Dr. Abbas Amanat, professor of history at Yale University and author of “In Search of Modern Iran: Authority, Nationhood, and Culture.”
A Cathedral College web cast of the event is available for viewing.

The Kremlin's Alternet?

2007-10-29T17:16:00.000-04:00

Rising powers can challenge U.S. leadership in economic and political spheres. But, thanks to U.S. centralized control of Internet domain names, Protocal code numbers, root servers, and technical standards, it seemed safe to assume the United States would continue to dominate cyberspace for eons to come. Not anymore.

The Internet -- the last bastion of freedom -- will soon have competition.

Russian President Vladimir Putin is creating a new network kept separate from the Internet. That, according to Washington Post, is part of a plan to make Russia a "global information leader by 2015." Sites on the Kremlin-controlled net will be fully established, monitored, and approved by the top Russian brass, the WP reports.

While the project appears to be in the planning phase, it's easy to see its relevance. Information on the Russian-web might still be accessible, but much of the data supporting the system will be beyond Washington's probing reach.

Bush-Cheney War Rhetoric Heats Up

2007-10-24T19:57:00.002-04:00

When President Bush commented on the prospects for a World War III during his recent televised press conference, it wasn’t clear if he was threatening to start a world war or predicting one would happen.

The comment was carefully cloaked in ambiguity. Yet it foretold an explosive future:

“We have got a leader in Iran who has announced that he wants to destroy Israel. So I have told people that if you are interested in avoiding World War III, it seems like you ought to be interested in preventing them from having the knowledge necessary to make a nuclear weapon.”

White House Spokeswoman Dana Perino told reporters Bush wasn’t making a declaration, he was making a “rhetorical point.” If Iran pursues nuclear weapons, “you would have World War III.”

Sounds imminent.

The Bush administration’s policy became clearer on Oct. 21, when Vice President Cheney delivered a foreign policy speech condemning Iran.

“The Iranian regime's efforts to destabilize the Middle East and to gain hegemonic power is a matter of record. And now, of course, we have the inescapable reality of Iran's nuclear program; a program they claim is strictly for energy purposes, but which they have worked hard to conceal; a program carried out in complete defiance of the international community and resolutions of the U.N. Security Council. Iran is pursuing technology that could be used to develop nuclear weapons.

The Iranian regime needs to know that if it stays on its present course, the international community is prepared to impose serious consequences. The United States joins other nations in sending a clear message: We will not allow Iran to have a nuclear weapon.”

Cheney goes on to suggest that Iranian citizens deserve a better regime.

“The irresponsible conduct of the ruling elite in Tehran is a tragedy for all Iranians. The regime has passed up numerous opportunities to be a positive force in the Middle East. For more than a generation, it had only isolated a great nation, suppressed a great people, and subjected them to economic hardship that gets worse every year. The citizens of Iran deserve none of this.”

The comments bear a striking resemblance to the administration’s rhetoric in the lead up to the Iraq war. Like the plan for Iraq, it seems the goal in Iran is not only to neutralize the regimes’ weapons systems but also to abolish the regime itself. Unsettling.

Understanding a protest

2007-10-22T10:34:00.000-04:00

As international economists met inside the World Bank headquarters in Washington, D.C. October 20, a small cadre of protestors held their own meeting about a half block away in Murrow Park.

Having a journalistic curiosity and deep respect for the First Amendment freedom of expression, I decided to visit the scene to witness the events. I wasn’t sure what to expect. The news media had reported on disorderly protests occurring the night before in Georgetown. I found a peaceful gathering . As one Generation X tourist observed, it almost looked like a tiny Grateful Dead concert that lacked the music.

Organizers for Saturday’s events had secured permits from the city to protest in Franklin Square and Murrow Park. And for the most part, participants respected the permit limits. When the demonstrators did test the boundaries earlier in day, District police officers chased and pushed them backward. According to the protestors, a homeless man received the worst of the ruckus when police threatened him physically.

Naturally, the forceful response by the police confirmed protestors’ view that authority isn’t to be trusted. “We were chanting peacefully,” one said while expressing dismay about the chase. He described himself as an anti-authoritarian – a position likely bolstered by aggressive confrontations with police during protests.

Other activists voiced their mistrust of authority, particularly of crowd-control officers.

“Look at them,” one said, pointing to the throng of police officers who surrounded the park. “They are charged robots with big sticks…. The cops are here to protect property, corporations and organizations.”

It was a strange experience to see so many officers lined up along the barricaded streets. Some seemed less than human. One refused to respond when I approached innocently, asking, “Has it been a peaceful protest?” His face twisted up in uncomfortable aversion. I moved along and found a female officer who answered cheerfully that yes, it had been a peaceful demonstration.

Clear grievances; less lucid causes

Protestors included a mix of anti-capitalists, anti-free traders, anti-authoritarians, vegans, and a few outright anarchists. Some said they are simply disgruntled by a global economic system, which seems unfair. “I am just angry,” one said despondently.

About a third of the crowd wore black handkerchiefs to cover their faces. The black cloths drape down from their noses past their chins, making them look a little like bandits. Sadly, many protestors feel compelled to hide their identities. They fear government intrusion, which could include wiretapping and recordkeeping of their private lives, a masked youth told me. The fear was only exacerbated and perhaps substantiated by uniformed and plain clothes law enforcement officers who photographed the crowd earlier in the day.

The majority of the crowd was not masked. They rested casually on the lawn as activists took turns at the podium. The speakers addressed a wide-variety of issues. Some favor sustainable development—economic systems that maintain the natural environment. Others rallied on behalf of a socialist movement that is sweeping large swaths of South America. Still others ranted against U.S. government and international lending institutions.

“The Bush administration are the terrorists; the World Bank and the IMF are the terrorists,” a Haitian activist shouted from the podium, complaining that the policies of the White House and the world’s largest financial institutions distorted the Haitian economy and way of life. “They have stolen out resources.”

Up close, the protestors seem somewhat more reserved. I speak with a small group of masked demonstrators. They were skittish about being interviewed but willing to engage in discussion. They described themselves as anti-authoritarians who oppose oppression in all its forms.

“Authority is inherently violent,” one said.

“Authority should not exist,” another added. “I don’t need someone telling me what to do.”

They described an idealized vision of a world existing without authority. An ideal world would resemble the protest community – a system based on spontaneous order that requires little organization. It is a peaceful existence; one sustained by communities supporting one another, they said.

Some of them demonstrated an astute understanding of economics. For example, a young woman asserted in simple terms that the issuing and inward collapse of subprime mortgages – loans banks haphazardly issued to low-income borrowers unlikely to meet the repayment obligations – has a detrimental impact on the global economy.

She and her companions discuss IMF/World Bank loans to Third World countries, which often cannot afford to repay the loans.

The lending institutions foster “a system of perpetuating debt,” one said. Another adds, “They are basically pimping [developing countries].”

It is not clear what economic system they favor, and they’re not sure if the system they oppose is based on a pure capitalistic model. “I don’t think it is. But I don’t think it should be,” one said.

Message of chaos

The two-day gathering wasn’t entirely without incident. A woman was injured Friday night when the anarchist contingent of the protest group held an un-permitted nighttime march through the streets of Georgetown. According to their call to action, the anarchists targeted Georgetown because it is a “playground for the rich and the elites.” They rebelled against the “enclave of privilege” by throwing bricks threw the windows of Abercrombie and Fitch and United Colors of Benetton retail stores.

Unfortunately, the anarchists not only harmed the store windows, they also wounded a young woman who works in one of the stores. A YouTube video shows her with a bloody forehead and knee.

Judging from video, the march achieved its goal of disrupting the Georgetown’s busy nightlife scene. It’s hard to accredit the anarchists with accomplishing anything more. Their message is blurred and largely unarticulated. They barely respond when a reporter asks them to explain their cause.

News coverage of the three-day protest focused primarily on the disruptive march. It is easy to see how the disruptive actions taint the message of the entire demonstration. Just as the controlling presence of the law gave activists more reason to distrust authority, the violent actions of the anarchists gave the police force reason to mistrust the protestors.

My hope is that activists stop seeing free-market economists as evil and enter into a dialogue about inevitable economic dilemmas of the complex global system.

WSJ sheds light on highly-complex 'Gordian Knot'

2007-10-19T11:46:00.000-04:00

Structured Investment Vehicles, SIVs, are highly complex financial structures that allow banks to profit from securities backed by debt such as home and commercial mortgages and credit-card receivables. Although only a fraction of the investment community operates the specialized SIV funds, it is a $400 billion industry that poses a significant threat to the global financial system. WSJ's How London Created a Snarl in the Global Markets is a must read for anyone interested in understanding the root problems in the debt markets and how a proposed $100 billion privately-funded bailout might lessen the pending blow.
For more information, see WSJ's October 18th page one story.

Why not resolve to act?

2007-10-17T16:00:00.000-04:00

Rarely has a House resolution caused so much distress. Resolutions, after all, have no chance of becoming law. They are simply nonbinding expressions of congressional sentiment, which usually go unnoticed.

Yet when the House Foreign Affairs Committee approved a resolution on Armenian genocide last week with a 27-21 vote, the world took notice. In a matter of days, the action gave way to thousands of news articles. Media coverage included the White House’s failed attempt to kill the resolution; Turkey’s recall of its ambassador to the United States; an impromptu visit to Turkey by two Cabinet undersecretaries, and ongoing reports of the diplomatic fallout.

At issue is the official accounting of WWI atrocities caused at the end of the Ottoman Empire. The resolution (H. Res. 106) sponsored by Rep. Adam Schiff, D-Calif., urges President Bush to recognize the “systematic and deliberate annihilation” of 1.5 million Armenians by Ottoman Turks between 1915 and1923 and to characterize it as “genocide.” Turkey vehemently rejects the label, which connotes intent to exterminate an entire national, racial, ethnic or racial group. And historians are at odds over the extent to which the Armenian deaths were caused by deliberate genocide or were the result of mass mobilization and starvation during the civil war.

It is not the first time the U.S. Congress has raised the sensitive issue.

Since 1975, the House has introduced 10 preceding resolutions on the “Armenian Genocide.” For the most part, the resolutions never made it to the House floor or were abandoned as unfinished business. At times, however, Congress has acted forcefully on the issue. For example, in 1996 the House passed a funding bill that threatened to reduce aid to Turkey by $3 million unless its government agreed that Turks committed genocide.

Contrary to what some might argue, Congress’s semi-annual debate over the genocide question is not an intellectual exercise based on historic interpretation. Rather, it is an exercise of democratic representation by two competing interest groups: Armenian Americans and Turkish Americans. This year, the Armenian camp appears to be winning owing to its large Armenian population in key districts, including House Speaker Nancy Pelosi’s 8th district of California.

Unlike most congressional disputes, the Armenian resolution is having disastrous consequences on both the U.S. image abroad and its operations in Iraq. Turkish officials could impair U.S. goals in Iraq simply by asserting greater control over their own borders. Turkey is also considering invading Iraq’s northern region to quash Kurdish rebels.

Although advocates for pushing forward with the resolution like Rep. Tom Lantos, D-Calif., argue that Turkey cannot afford to upset its relations with the United States, the reality is the reverse. Washington politicians underestimate the extent of the U.S. utter reliance on its strategic ally. Since launching the Iraqi war in 2003, the U.S. government has become beholden to Turkey for use of its Incirlik Air Base for purposes of transporting cargo, armed vehicles and fuel to U.S. forces in Iraq.

It is commendable politicians like Lantos want to elevate human rights as a foreign policy objective. But insisting on rebuking the 19th Century Ottoman Turks is not the way to regain moral authority. Unfortunately, it lends weight to criticism of U.S. hypocrisy – that Americans voice support for human rights while prioritizing strategic interests.

The congressional censure would have more credibility if U.S. politicians were spending just as much effort to protect the millions of Iraqis displaced by the war. Yet few took notice this week to a United Nations Assistant Mission for Iraq report that illustrated the increasingly urgent needs of the 2.2 million Iraqi refugees living abroad and another 2 million displaced within Iraq. The humanitarian crisis involves food shortages, deteriorating security situations, and exposure to infectious diseases, the report warned.

Rep. Alcee Hastings, D-Fla., introduced legislation (H.R. 3674) last month to help provide necessities to Iraqi refugees and to expedite the State Department’s immigration proceedings for Iraqis who worked for the United States. So far, only eight House members have signed on as cosponsors. The backing pales in comparison to the 214 House members willing to sign onto Schiff’s Armenian genocide resolution.

It is easy to condemn mass killings that occurred in a foreign land nearly a century ago. It is much harder to prevent the disastrous civilian deaths and dislocations resulting from your own country’s decision to wage war.

Turkey should come to terms with the past and reconcile its differences with Armenia over mass killing of millions of civilians. U.S. politicians should realize that their resolution won’t help facilitate the reconciliation or restore the U.S. reputation as a moral authority. The only way Congress can show the world it is serious about human rights is by addressing the current humanitarian crisis.

Putin ends speculation

2007-10-02T17:40:00.000-04:00

Vladimir Putin has kept Russian watchers guessing for months about his post-presidential plans. His recent appointment of new cabinet members only intensified the guesswork on the pending transfer of power. Now he has provided a key answer to Russian observers. As most political analysts suspected, Putin will stay in power after completing two terms as president in March. Putin will move offices and adopt a new title by becoming the next prime minister – a position he is likely to elevate.

The plan virtually ensures there will be more diplomatic fireworks to watch in the years ahead.

The Economist on Islam, the Amerian Way -

2007-09-08T14:04:00.000-04:00

Muslim worshipers fare better under America?s constitutional system than they do under European laws, The Economist argues. The difference is a matter of structure. US citizens are protected by constitutional and civil rights that the central Supreme Court upholds. By contrast, Europe?s decentralized enforcement of the European Convention on Human Rights offers weaker protections for religious liberties. The Economist makes a persuasive case that America?s longstanding tradition of supporting religious liberty fosters open and transparent practices. However, the article?s presumption that services in the States are easier to examine ignores the fact that US laws forbid government monitoring of religious services.
in The Economist by The Economist, 1 September 2007
This abstract was edited by Brijit. Read more

A fresh French-American dialogue

2007-09-05T22:23:00.000-04:00

Nicolas Sarkozy not only offers promise for the French economy, he also has the potential to restore diplomatic ties with the United States. His August vacation in New Hampshire, which he spiced up with a friendly luncheon with President Bush, symbolized that a new era in the French-American relationship is underway. While the news is hopeful, it is doubtful that Sarkozy will follow the Economist’s advice to unreservedly embrace the strong euro, rejoin and strengthen NATO, and endorse Turkish membership in the EU. While the new president does offer fresh thinking, he still must answer to the independent-minded French.Read more here...

The Rule of Russian Spies

2007-08-26T13:07:00.000-04:00

The Economist’s August 25th article on “Russia under Putin” is a must read for anyone who has the faintest interest in understanding Russia’s reemergence as an influential and autocratic state. Its eye-opening account shows how former FSB/KGB agents rose to power under Vladimir Putin’s reign.

After Putin’s December 31, 1999 ascension to the presidency, the former spies spent the next decade consolidating governmental power, media outlets, the Yukos oil company, and large portions of the economy under Kremlin control. They live not by a Western rule of law but by a spy-like code, which justifies the killing pro-Western journalists or anyone who speaks disapprovingly of the government.

That code is reinforced by the rulers’ self-perception of having a diving right of absolute power. They enjoy public support by both secular and religious citizens, who further fortify the FSB reign.

The Economist predicts the former spies will fail as business managers. Spies, afterall, are tacticians by nature. They are skilled in practices of destroying entities, not in the management of corporations.

On the international front, the former FSB/KGB agents are carrying out a self-fulfilling foreign policy that envisions an exaggerated sense of the enemy – especially of Western powers, technologies and influences. “By perpetually denouncing enemies on every front, it has helped to turn many countries from potential friends into nervous adversaries,” the Economist argues.

The article’s fascinating illustration is worth the time it takes to read it. Read more

Economic optimism in South America

2007-08-20T20:59:00.000-04:00

Latin America's Economies: Up From the Bottom of the Pile -

Free trade and fiscal discipline in Brazil and Mexico are facilitating economic growth, democratic reforms, and an emerging middle class, The Economist reports. This concise and useful summary shows that even as Venezuelan President Hugo Chavez steals headlines with his socialist policies, most Latin American government are embracing the free market. While the 38.5 poverty rate in the region attests to some less-than-rosy conditions, The Economist remains optimistic, arguing that now is the time for governments to invest in education.
in The Economist by The Economist, 18 August 2007
This abstract was edited by Brijit. Read more here...

Pay attention to Pakistan

2007-08-20T20:53:00.000-04:00

Afghanistan and Pakistan: Who is Hunting Whom? -

Though it's been nearly six years since President Bush promised to isolate and condemn any country that harbors terrorists, the administration has turned a blind eye to Pakistan's border with Afghanistan, where Al Qaeda operatives have built a stronghold. While anxious US politicians pump $1 billion annually into Pakistan to help secure General Pervez Musharraf's shaky hold on the government, The Economist argues rather convincingly that over the long term, the fight against terrorism (and dictatorship worldwide) would be better served by embracing democracy in Pakistan instead of propping up Musharraf.
in The Economist by The Economist, 18 August 2007
This abstract was edited by Brijit. Read more here... (Go to www.brijit.com if the link above does not work.)

A White House Wedding?

2007-08-20T20:43:00.000-04:00

It May Not Be Easy to Say 'I Do' at the White House -

President Bush's last major accomplishment in office might be presiding over the wedding of his recently engaged daughter, Jenna. A well-orchestrated White House wedding, Seelye surmises, could earn Bush some popular support in the waning days of his administration, just as the nuptials of Tricia Nixon and Luci Baines Johnson helped their fathers during a different war. An amusing piece that manages to seem superficially sympathetic as it twists the knife.
in The New York Times 'Week in Review' by Katharine Q. Seelye, 19 August 2007
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Bush Promises a ‘Strong and Resolute’ Second Term

2004-11-05T12:37:00.000-05:00

Can His Tough Talk Help Him Win Friends and Spread Freedom?
By Patti Mohr (written on November 5, 2004)

President George W. Bush is widely criticized for alienating many of America’s allies during his first term. His push to move forward in Iraq with or without approval by the United Nations Security Council, his administration’s brazen attitude toward “Old Europe,” and U.S. disengagement on the Arab-Israeli conflict are a few of the reasons why. Some of the diplomatic disagreements were inevitable. Others, arguably, could have been avoided.

Many political analysts say they hope Bush will use his second term to forge better diplomatic relations with its U.S. allies.

“American leadership is not at a high point. We all know that,” said Patrick Cronin, a former senior official at the U.S. Agency for International Development during Bush’s first term. “And there’s a huge opportunity and challenge facing President Bush now that he’s been reelected. Whereas [Senator John F.] Kerry would have had a global honeymoon, Bush starts from essentially a hole internationally in terms of American prestige and influence.”

All things are possible in a second term. Having put political constraints behind them, second-term presidents can clean house, adopt new policies, and begin again with a fresh slate. Former President Richard Nixon wasted no time changing his Cabinet. He fired most of his staff within weeks of his reelection. President Clinton also reshuffled his Cabinet, when many of his top officials left for the private sector.

Bush isn’t likely to make any drastic changes in his Cabinet or in his policies. Although a few top officials – including Attorney General John Ashcroft and Bush’s top adviser on Iraq – stepped down days after the election, White House officials said Bush asked his advisers to continue working for him. Some are still expected to resign, but not immediately. Most observers suggest Secretary of State Colin Powell is just waiting for the right time to step down. Meanwhile, his competitor in shaping policy, Defense Secretary Donald Rumsfeld, said he plans to stick around. And Vice President Dick Cheney – a central figure in the administration’s foreign policies – isn’t retiring anytime soon.

One thing became clear very quickly. Bush is determined to maintain consistency in his policies and his worldview.

“I personally believe that the character of this administration has been set, and by and large, we are going to see more of the same,” said Kurt Campbell, CSIS vice president and director of the International Security Program. He suggested the November 2 election reinforced in the administration a “very deep psychological belief that we are right and we are on the right track.”

A Democratic Peace in the Middle East?

Bush talks a lot about promoting freedom and democracy as an alternative to terror. It’s more than nice-sounding rhetoric. It’s his mission, his mantra. He means what he says and doesn’t mind when others disagree. The goal guides his policies in Iraq and drives his agenda in the Middle East.

Bush says he knows there are naysayers who have doubts about the strategy, and he disagrees with them:

“There is a certain attitude in the world, by some, that says that it's a waste of time to try to promote free societies in parts of the world. I've heard that criticism,” Bush said shortly after the election. “And I fully understand that that might rankle some, and be viewed by some as folly. I just strongly disagree with those who do not see the wisdom of trying to promote free societies around the world.”

Bush adopted the strategy after the September 11, 2001 attacks against the United States showed him that oppressive regimes can be breeding grounds for terrorism. It’s a major shift from the policy of strategic alliances that his father once embraced. And it’s basis is one in which Bush has faith. More than being a formula for security, Bush sees the approach as spreading freedom, which he says is a universal right given by God, throughout the world. Bush’s is likely to strengthen his commitment to promoting freedom in his second term.

“The desire to promote political reform in the Middle East is going to remain a key central objective of U.S. policy,” said Jon Alterman, the director of the Middle East Program at the Center for Strategic and International Studies.

The concept has its intellectual basis in Democratic Peace theory, which says democracies will promote peaceful ties with one another. It explains U.S. policy in Iraq, which Bush sees as being a model that will spread democratic reforms throughout the Middle East. Iraq hasn’t worked out the way the administration architects imagined, but they are not about to turn their backs on the plan now. Bush made clear that he is sticking to his objectives of training Iraqi troops and preparing the country for elections.

Policy objectives could be constrained by U.S. budget deficits and an overextension of U.S. Reserve forces. However, the Bush administration’s goals for broader Middle East could evolve more toward pushing economic reforms rather than forcing political changes. Gulf countries like Morocco and Jordan that have undertaken economic reforms might prove to be the examples the administration hopes Middle Eastern countries will replicate. “There is going to be a search for success stories,” Alterman said.

Alterman suggests U.S. diplomats will face a sort of dichotomy in the Middle East due to a coziness with leaders that publics will resent. “It’s my judgment that governments are going to accommodate themselves increasingly now that the Bush administration is in for another four years. But on the public level people are going to be less willing to work with the administration,” he said.

Challenges Ahead

Bush faces more immediate challenges. He will have to find ways to sustain U.S. military commitments in Iraq and Afghanistan while also confronting Iran and North Korean about their nuclear programs.

“The one problem that is unavoidable is what to do with Iran,” Alterman said. Divisions within the first-term Bush administration thwarted the United States from forming a policy to confront Iran about its developing nuclear program. In the absence a U.S. policy, the European Union took the lead in negotiating with Iran.

Many leaders say Bush’s greatest use of U.S. leadership would be in bringing leaders together to on a plan to get the Middle East peace negotiations back on track. Bush’s closest wartime ally, British Prime Minister Tony Blair, names it as his highest priority. Visiting Bush at the White House just over a week after the election, Blair urged Bush to help move the process forward.

Richard Hass, president of the Council on Foreign Relations, said he thinks the trick will be in making sure Israeli goes beyond its disengagement from Gaza, and ensuring that Gaza does not become a lawless failed state. “Failure here would not only make it much more difficult for the United States to promote democratic reform in the Arab world or slow terrorist recruitment, but would damage its reputation everywhere,” Hass wrote recently in the Economist.

A Sympathy Vote for the Undecideds

2004-11-01T14:28:00.000-05:00

On this election eve, I find myself sympathizing with all those people out there who are still undecided about who to elect president. What weight of responsibility do they bear? This relatively small but significant number of voters will decide the direction of the country. Millions of Americans are counting on them to make the right decision. The fate of the free world lies in their hands.

Many pundits argue that the undecided voters don’t really exist. That they made up their minds long ago and are just holding out for attention. I say those pundits are wrong. The undecided voters are real are very perplexed.

President Bush and Senator Kerry long ago divvied up the vast majority of voters into passionate followers. But neither candidate has been able to sway that small percentage of voters in the middle. This time around, there are no Reagan Democrats. There are no Clinton Conservatives. The choice is between one extreme and another -- the far right and the far left. The Iraqi war and the unsustainable budget deficit obscures the dilemma even further.
Bush’s preemptive war in Iraq has set a dangerous precedent for U.S. use of force in foreign countries. Bush’s edict to take the war to the terrorists has real consequences for the innocent citizens living in Iraq – and for that matter any other country we invade in the future. Estimates of civilian fatalities in Iraq from U.S. strikes are somewhere between 14,000 and 100,000. The U.S. actions abroad are allowing terrorists to recruit new members and are turning moderates against us. Bush makes no apologies for his decisions and says he would make the same choices if he could do it all over again. Of course, a president can doesn’t have the benefit of hindsight when he makes decisions and cannot express regret without facing consequences. But where does this example lead us in the future? Preemptive action is sometimes necessary. But do the hawks in the administration now have free reign to use force in other countries without evidence of an eminent threat against the United States? Can either candidate allow us to save face and restore our credibility?

On the domestic side, the candidates differ over the traditional tax-or-spend questions, but those questions would be negated for the most part due to the large and unsustainable deficits awaiting the next generation. Sure, the next president can propose tax-or-spend changes in the short term. But sooner or later, he will have to acknowledge that his campaign promises are unrealistic, and he will struggle with the structural deficits that no one but Federal Reserve Chairman Alan Greenspan wants to talk about.

We will – hopefully – soon know who will lead our country over the next four years. But that won’t tell us everything. We still won’t know how the next president will address these very difficult decisions the Iraqi occupation and the budget deficits pose. Once the excitement of the election subsides, the winner will surely put his campaign promises aside. Then we will know whether the undecided voters made the right choice.

Welcome to My Blog - a place to sit back, relax, and think about the not-so random things in life.

2004-10-29T20:56:00.000-04:00

This is not about whether life is completely pre-determined or not. It is about whether we can make sense of all the complications in life: the 24-hour news cycle that includes fiction as well as fact, the new technologies that are suppose to make our lives easier, but in fact, come with their own complications, and the millions of decisions we face every day. Do blogs help make sense of the world? I plan to find out.