Archive for the ‘ELECTIONS 2008 – USA’ Category


Posted by Gilmour Poincaree on January 2, 2009

January 3, 2009

Ian Munro in New York






Posted by Gilmour Poincaree on November 28, 2008

19:31 – 24/ 11/ 2008


MOSCOW, November 24 (RIA Novosti) – A leading Russian political analyst has said the economic turmoil in the United States has confirmed his long-held view that the country is heading for collapse, and will divide into separate parts.

Professor Igor Panarin said in an interview with the respected daily Izvestia published on Monday: “The dollar is not secured by anything. The country’s foreign debt has grown like an avalanche, even though in the early 1980s there was no debt. By 1998, when I first made my prediction, it had exceeded $2 trillion. Now it is more than 11 trillion. This is a pyramid that can only collapse.”

The paper said Panarin’s dire predictions for the U.S. economy, initially made at an international conference in Australia 10 years ago at a time when the economy appeared strong, have been given more credence by this year’s events.

When asked when the U.S. economy would collapse, Panarin said: “It is already collapsing. Due to the financial crisis, three of the largest and oldest five banks on Wall Street have already ceased to exist, and two are barely surviving. Their losses are the biggest in history. Now what we will see is a change in the regulatory system on a global financial scale: America will no longer be the world’s financial regulator.”

When asked who would replace the U.S. in regulating world markets, he said: “Two countries could assume this role: China, with its vast reserves, and Russia, which could play the role of a regulator in Eurasia.”

Asked why he expected the U.S. to break up into separate parts, he said: “A whole range of reasons. Firstly, the financial problems in the U.S. will get worse. Millions of citizens there have lost their savings. Prices and unemployment are on the rise. General Motors and Ford are on the verge of collapse, and this means that whole cities will be left without work. Governors are already insistently demanding money from the federal center. Dissatisfaction is growing, and at the moment it is only being held back by the elections and the hope that Obama can work miracles. But by spring, it will be clear that there are no miracles.”

He also cited the “vulnerable political setup”, “lack of unified national laws”, and “divisions among the elite, which have become clear in these crisis conditions.”

He predicted that the U.S. will break up into six parts – the Pacific coast, with its growing Chinese population; the South, with its Hispanics; Texas, where independence movements are on the rise; the Atlantic coast, with its distinct and separate mentality; five of the poorer central states with their large Native American populations; and the northern states, where the influence from Canada is strong.

He even suggested that “we could claim Alaska – it was only granted on lease, after all.”

On the fate of the U.S. dollar, he said: “In 2006 a secret agreement was reached between Canada, Mexico and the U.S. on a common Amero currency as a new monetary unit. This could signal preparations to replace the dollar. The one-hundred dollar bills that have flooded the world could be simply frozen. Under the pretext, let’s say, that terrorists are forging them and they need to be checked.”

When asked how Russia should react to his vision of the future, Panarin said: “Develop the ruble as a regional currency. Create a fully functioning oil exchange, trading in rubles… We must break HA HA HA HA HA HA HA HA HA HA HA HA .... I GUESS THIS FELLA HAS BEEN WATCHING TOO MANY HOLLYWOOD PRODUCTIONSthe strings tying us to the financial Titanic, which in my view will soon sink.”

(*) – Panarin, 60, is a professor at the Diplomatic Academy of the Russian Ministry of Foreign Affairs, and has authored several books on information warfare.





Posted by Gilmour Poincaree on November 19, 2008

NEWSWEEK (print edition) – November 24, 2008

ROBERT SAMUELSON by Robert Samuelson

So it’s come to this: general motors, once the world’s mightiest industrial enterprise, is now flirting with bankruptcy. Ford and Chrysler may not be far behind. Car and truck sales have collapsed. GM is rapidly exhausting its cash reserves and may soon be unable to pay its bills. Here’s the dilemma: GM and other U.S. automakers ought to be rescued to minimize damage to the economy, but the rescue should require tough conditions that neither the Democratic Congress nor the incoming Obama administration seems willing to support.

In a booming economy, a GM bankruptcy might be tolerable and useful. It would remind everyone of the social costs of mediocre management and overpriced unionized labor. But far from booming, the economy is declining at an apparently accelerating rate. Confidence among small businesses has dropped to a 28-year low, according to a survey released last week by the National Federation of Independent Business.

No one knows what further havoc a GM bankruptcy might inflict. A study by the Center for Automotive Research (CAR) estimates that 2.5 million jobs would be lost in the first year. The logic: if any of the “Big Three” went bankrupt, many suppliers would also fail; because car companies share suppliers, all U.S.-based manufacturers would suffer crippling parts shortages. American production would virtually stop until new supplier arrangements emerged. “It takes 6,000 to 14,000 parts to make a vehicle,” says Scan McAlinden, CAR’s chief economist. “If you don’t have one, you can’t make it.”

This may be too pessimistic. In a Chapter 11 bankruptcy, GM would “reorganize.” It would suspend many existing debt payments and continue normal operations. Perhaps. The snag is that even in “reorganization,” GM would require new loans and these might not be available. “Historically, when companies go bankrupt, there’s ‘debtor in possession’ financing-investors lend you money, but they get repaid first. That market has evaporated because of the credit crunch,” says auto analyst Rod Lache of Deutsche Bank. No loans, no production. Another possible pitfall: worried about warranties and service, customers might shun a bankrupt GM’s vehicles.

Why run these risks when the 6.5 percent unemployment rate seems headed toward 8 percent and almost a quarter of the 10 million jobless have been out of work for six months or longer? Just to satisfy a purist “free market” ideal? It doesn’t make sense. But neither does it make sense simply to heave taxpayers’ money at automakers. The objective is not to rescue the companies or workers; it is to shore up the economy and improve the U.S. industry’s competitiveness. A bailout won’t succeed unless other things also happen.

First, auto companies’ existing creditors need to write down their debts. Even with federal aid, companies will shrink. Economist McAlinden estimates that the country has surplus assembly capacity of about 4 million vehicles, much owned by the Big Three and destined to be shut. GM will need a $25 billion government loan to get through the recession and cover closing costs, says Lache. But GM already has $48 billion of debt. Unless the Old debt is sharply written down, GM would be overburdened and its rendezvous with bankruptcy would merely be delayed. Already, shareholders are essentially wiped out.

Second, labor costs need to be cut. By Lache’s estimates, GM’s hourly compensation- wage plus fringe benefits- totaled $71 in 2007 compared with Toyota’s $47- Health benefits for retirees (many in their 50s, having retired after 30 years) are expensive. These costs contributed to GM’s massive cash drain, $31 billion since 2005- But the United Auto Workers opposes making concessions. Just the opposite. Government aid, says UAW president Ron Gettelfinger, is needed “so that auto companies can meet their health-care obligations to more than 780,000 retirees and dependents.” The bailout should be more than union welfare.

Finally, automakers need a consistent energy policy. Congress demands that companies produce more fuel-efficient vehicles (35 miles per gallon by 2020, up from 25mpg now). But politicians also want low gas prices. These goals are contradictory. To encourage consumers to buy fuel-efficient vehicles, Congress should mandate higher gas prices. Gasoline taxes could be raised gradually (say a penny a month for four years, possibly offset by other tax cuts). Wild swings between low and high fuel prices have crippled the U.S. industry by erratically shifting buyer preferences- to and from SUVs.

In bankruptcy, a judge can modify a firm’s labor contracts and debts. GM needs the benefits of bankruptcy without the uncertain-ties, but the political process- so seem to be discussing are mostly rhetorical gestures against high Other firms from executive compensation (already limited) and in favor of more fuel efficiency (already legislated). The lame-duck Bush administration hasn’t helped the conversation. It rejects additional assistance without saying why; if aid is forthcoming, it doesn’t suggest what might be useful conditions.

We are now seeing the first political side effects of the open-ended $700 billion rescue of financial institutions. With so much money going to so many recipients, boundaries and rationales need to be established. When is public intervention justified? Who deserves support and why? Otherwise, political firepower will increasingly rule. The reason for imposing tough conditions on the auto industry is not only to improve the odds of success, but also- by the sacrifices required- to make the process sufficiently unpleasant so that countless other companies and unions won’t demand similar handouts. In 1979, when it rescued Chrysler from bankruptcy, the Carter administration insisted on concessions from management, investors and labor. We should do as much or more.



Posted by Gilmour Poincaree on November 17, 2008


Nov 13, 2008

by David P Goldman

The United States government needs to borrow US$1 trillion a year, before a new stimulus package, or handouts for the auto industry, or healthcare reform, or a dozen other spending programs promised by the incoming administration of president-elect Barack Obama. Where will the Treasury find the money?

A bizarre jump in the US Treasury’s real cost of borrowing points to severe market disruption if the Treasury deficit continues to rise. It appears that the Treasury market is also a victim of global de-leveraging. The new administration has far less budgetary flexibility that it seems to think. In 1981, under comparable circumstances, Ronald Reagan had far greater room to maneuver. I conclude that the new administration is virtually powerless to prevent marked deterioration of the US economy.

A comparison of Obamanonomics and Reaganomics is instructive. Even in the unlikely event that the Obama administration were to adopt Reagan-style incentives to risk-taking and investment, the effect of such incentives would be weaker and slower to take effect than in 1981-1984.

Exhibit 1: Inflation-indexed 10-year Treasury (TIPS) yield vs 10-year breakeven inflation. Inflation-indexed 10-year Treasury (TIPS) yield vs 10-year breakeven inflation.

As shown in Exhibit 1, the yield of the 10-year inflation-indexed Treasury (TIPS) tripled from 1% to 3% between June and October 2008. Nominal Treasury yields fell slightly, because the inflation-expectations component of Treasury yields (the difference between ordinary 10-year Treasury notes and inflation-indexed TIPS) collapsed, from 250 basis points to less than 100 basis points.

The jump in TIPS yields should ring alarm bells. It is not only that inflation-indexed Treasury yields never have risen so fast and so far since their introduction in 1997. What is most bizarre is that the movement in “real” Treasury yields is not only massive, but in the wrong direction. Both economic theory and all past experience tell us that when economic activity falls, “real” yields also should fall.

Exhibit 2 below shows that 10-year TIPS, or “real” Treasury yields have moved in the same direction as equity market returns. The inflation-adjusted Treasury bond yield is a rough proxy for real long-term interest rates (it is only a proxy because the consumer price index – or CPI – is not necessarily a good measure of inflation). Real rates are supposed to reflect growth expectations; higher growth means higher returns to financial assets, including bonds. TIPS yields are plotted against 12-month returns to the S&P 500. The two lines move together except during the past few weeks, when they take sharply opposed directions.

Exhibit 2: TIPS yields triple while S&P 500 crashes. TIPS yields triple while S&P 500 crashes.

How weird the behavior of TIPS yields has been during the past few months is made even clearer by Exhibit 3, below. We observe that TIPS yields and S&P 500 returns lined up neatly between 2004 and 2008, and suddenly moved in the opposite direction.







Exhibit 3: Scatter plot of TIPS Yields vs 12-month S&P 500 returns, January 2004 through October Scatter plot of TIPS Yields vs 12-month S&P 500 returns, January 2004 through October 20082008.

Just when we should have expected “real” Treasury yields to collapse along with equity market returns, they spiked upwards, and by the largest margin on record. Evidently something has changed, and changed drastically. One component of Treasury yields, expected inflation, has collapsed, and the “real” component has jumped.

There is no question as to why the expected-inflation component has fallen, for it has done so along with the S&P 500 and the main commodity price index (the Constant Maturity Commodities Index published by UBS and Bloomberg). This relationship is shown in Exhibit 4 below.

Exhibit 4: 10-year breakeven inflation, Constant Maturity Commodity Price Index and S&P 500, 10-year breakeven inflation, Constant Maturity Commodity Price Index and S&P 500, February 1, 2008 to November 6, 2008 (normalized).February 1, 2008 to November 6, 2008 (normalized).

Equity, commodity and Treasury bond markets all are registering a deflationary crash in precisely the same way. That seems clear enough. The dog that barked, but shouldn’t have, is the “real” component of Treasury yields.

The answer to the mystery of tripled real Treasury yields is to be found in the collapse of leverage in the global financial system. Indirectly, the rapid expansion of leverage in the global banking system contributed to demand for Treasuries. When de-leveraging commenced in August, an important component of demand for Treasuries declined sharply. That is bad news for Washington, but even worse news is that it will continue to decline sharply, just when Washington most requires global support for the US government debt market.

Global leverage indirectly increased demand for Treasuries in three principal ways:

1. It fed the boom in raw materials prices, increasing demand for Treasuries on the part of central banks as well as financial institutions in commodity-producing countries.

2. It pushed up the value of emerging market currencies, prompting emerging market central banks to intervene in foreign exchange markets by purchasing dollars which then were invested in Treasuries.

3. It contributed to the rise in global equity prices, which prompted investors to diversify their portfolios and purchase safer assets including Treasuries.

The carry trade, in which investors borrow low-interest currencies (dollars or yen) and buy high-interest emerging market currencies, created demand for Treasuries by funneling money into emerging markets that ended up as dollar reserves in their central banks.

Exhibit 5: Net foreign purchases of US Treasury securities, 12-month rolling total. Net foreign purchases of US Treasury securities, 12-month rolling total.

At the peak of demand for US government securities, net foreign purchases of Treasuries came to $400 billion per year, according to the Treasury’s TIC data base (Exhibit 5). Who were the buyers? The Treasury data offers some answers.





Exhibit 6: Foreign holdings of US Treasury securities as of August 2008 (US$ billions): total holdings, year-on-year % change, and year-on-year absolute change.

total holdings, year-on-year % change, and year-on-year absolute change.

We observe that the biggest increase came from offshore banking centers (the UK, Switzerland, Luxembourg, and Caribbean banking centers). This tells us little because anyone may transact through such centers. “Other emerging markets”, notably Brazil and other commodity producers, were the second-largest contributor, followed by Japan and the oil exporters.

Private purchases of Treasuries are larger than official flows in recent years, as shown in Exhibit 7:

Exhibit 7: Private vs official net purchases of US Treasury securities. Private vs official net purchases of US Treasury securities.

As noted, private purchases of US Treasuries seem to scale to global wealth. We observe a fairly close relationship between global equity market capitalization (as measured by the MSCI World Index) and private purchases of US Treasuries, as in Exhibit 8.






Exhibit 8: Private net purchases of US Treasuries scale to MSCI World Index, 1988-2008. Private net purchases of US Treasuries scale to MSCI World Index, 1988-2008.

An exception occurred during the peak of the US equity boom of the late 1990s, when Treasury purchases fell off at the peak of the boom. Evidently this exception reflected the general euphoria of the time and investor preference for riskier assets. We do not have Treasury data past August, and it well may be the case that a similar exception will emerge during the second half of 2008, as foreign investors increase their net purchases of Treasuries while stock markets crash, and for a symmetrically opposite reason. Investors may prefer safer assets.

We cannot directly estimate the impact of de-leveraging on the Treasury market, but it seems clear that the explosion of leverage during the past five years had a profound, if temporary, impact on the world market’s demand for US government securities. As a rough gauge of the growth of global leverage, we observe that between 2003 and 2008, US banks’ claims on foreigners nearly tripled from $1.2 trillion to $3 trillion.

Exhibit 9: American banks’ claims on foreigners. American banks' claims on foreigners.

We can observe in the movement of market prices, though, a close relationship between the breakdown of the carry trade and the rise in real Treasury yields. Withdrawal of leverage from the system forced market participants to liquidate carry trade positions, that is, to unwind short positions in Japanese yen, and to liquidate long positions in carry trade currencies such as the Brazilian real, Turkish lira, South African rand, Australian dollar and so forth. I use the parity of the Brazilian real to Japanese yen as a rough proxy of demand for carry trade. As Exhibit 10 below makes clear, the collapse of the carry trade (the fall of the Brazilian real against the yen) closely tracks the rise in 10-year TIPS yields. The visual relationship is confirmed by econometric analysis.

Exhibit 10: Inflation-indexed (TIPS) Treasury yield vs Brazilian real/yen parity. Inflation-indexed (TIPS) Treasury yield vs Brazilian real/yen parity.

The Treasury market benefited from the explosion of bank leverage during the past 10 years, as emerging market central banks became the most important new buyers of US government securities. De-leveraging and the collapse of commodity markets combine to destroy global demand for Treasuries, limiting the US government’s capacity to borrow from overseas sources.

Other major holders of US Treasury securities are likely to wish to reduce their holdings rather than to increase them. China’s accumulation of foreign reserves represented “rainy day” savings for the nation, and the severity of the present crisis shows how well-advised China was to accumulate a large volume of reserves. China has announced plans to spend the equivalent of 20% of gross domestic product in a stimulus program which is likely to increase the country’s demand for foreign capital goods.

China’s trade surplus is likely to diminish sharply, both due to falling export demand and import growth arising from the stimulus package. Chinese reserves are likely to cease growing and may even decline as a result. Oil-producing countries, moreover, may have to spend reserves in order to maintain import levels as a result of the collapse of oil prices.

Foreign net purchases of US Treasury securities peaked at a $400 billion annual rate, and will fall sharply from this level. Domestic resources to purchase Treasury securities, moreover, are thin. When Ronald Reagan took office, America’s personal savings rate was 10%; today it is around 0%, although it has spiked up in recent months. Disposable income in the US now stands at slightly under $11 trillion. If the US returned to the personal saving rate of 1981, individuals would save $1 trillion a year, enough to fund the Treasury deficit, assuming that all net new portfolio investment flowed into Treasury securities. Nothing, though, would be left over for investment in anything else.

One way to gauge how onerous the Treasury’s borrowing requirements appear compared with available savings is to take the ratio of government borrowing to gross private savings, as in Exhibit 11 below.

Exhibit 11: Federal budget deficit as a % of gross private savings. Federal budget deficit as a % of gross private savings.

We observe that in 1981, the deficit stood at around 15% of gross private savings, and reached 30% at the worst. The deficit already has reached 50% of gross private savings, before the new administration has had the opportunity to increase spending.

In 1981, moreover, the United States was in current account surplus, and foreign purchases of Treasury securities were a very small factor in the financing of the government deficit. Today, the current account deficit (and the corresponding capital account surplus) is almost 6% of GDP.

It is far from clear from whom, and on what terms, the US Treasury will obtain $1 trillion a year, or even more, to finance its deficit. The overseas well has run dry, and domestic financing of the deficit would require a drastic increase in the savings rate at the expense of spending, or outright monetization of the debt by the Federal Reserve.

One way to increase the government savings rate, of course, is to increase taxes, but that is an unlikely course of action during a severe recession.

Monetization of debt remains a possibility, and to some extent would only continue the current trend. Total Federal Reserve Bank credit outstanding has more than doubled in the year to November 6, 2008, rising by $1.2 trillion to $2.06 trillion. This reflects loans, securities purchases, and related actions by the Fed to bail out the financial system. If the deflation persists, the Federal Reserve may be compelled to purchase US government debt.

Another possibility is that risk appetite among investors at home and abroad will continue to fall, inducing a portfolio shift towards Treasury securities. In this case “crowding out” will occur through risk-preference. It will not be so much that competing borrowers are crowded out of the lending market, but that investors will stampede away from risk. In this scenario, even a very low federal funds rate will not help to restore economic activity.

The point of lowering the risk-free rate is to push investors towards riskier assets. In a normal business cycle, falling output leads to lower yields on low-risk bonds, which in turn encourages investors to add risk to their portfolios by investing in businesses. If the safest of all investments, namely US Treasuries, suddenly offer much higher real yields, comparable to the boom years of the late 1990s, why should investors take risk?

In any of these scenarios, the result of global de-leveraging is dire: the more the US government tries to bail out businesses and households, the more bailing out the economy will need. The Bush administration’s response to the financial crisis, and the likely content of the Obama administration’s economic program, will deepen and prolong the economic downturn.

It is not generally remembered that the premise of the Reagan administration’s tax cuts was Robert Mundell’s work on the optimal level of government debt. Mundell, who won the Nobel Prize in 1991 for his work on international economics, observed that an increase in government debt might represent an improvement in market efficiency, if it corresponded to an increase in incomes. That might occur if a reduction in taxes caused an increase in the deficit, while stimulating economic growth. In that case, Mundell argued, a tax cut would increase efficiency if the additional revenues arising from the growth effect were larger than the interest on the bonds issued to cover the ensuing deficit.

In 1981, Ronald Reagan had a very different starting point:

1. The personal savings rate stood at 10%.

2. The current account was in surplus.

3. The top marginal tax rate was 70%.

The capacity of the US and the world to finance an increase in the federal deficit was much greater, and the incentives arising from reducing the top marginal tax rate from 70% to 40% were much greater than any incentives that might be envisioned from tax cuts from the present level.

Even the best-designed economic policy would be hard-put to provide growth incentives without a substantial increase in the savings rate and a corresponding reduction of consumption, implying a very sharp economic contraction. If the Treasury tries to spend its way out of recession, the results are likely to be very disappointing.

David P Goldman was global head of fixed-income research for Banc of America Securities and global head of credit strategy at Credit Suisse.

(Copyright 2008 Asia Times Online (Holdings) Ltd. All rights reserved.










Posted by Gilmour Poincaree on November 17, 2008

Nov 14, 2008

by Julian Delasantellis (*)

In Jonathan’s Swift’s 1726 novel Gulliver’s Travels, explorer Lemuel Gulliver is shipwrecked off an unknown island; he swims ashore, falls asleep, then awakens, most surprisingly, to find himself tied up by the residents of the Kingdom of Lilliput.

“When I awakened, it was just Day-light. I attempted to rise, but was not able to stir: For as I happen’d to lye on my Back, I found my Arms and Legs were strongly fastened on each Side to the Ground; and my Hair, which was long and thick, tied down in the same Manner. I likewise felt several slender Ligatures across my Body, from my Armpits to my Thighs.”

Who were his captors, the Lilliputians? Not much individually, but acting in unison they had managed to temporarily detain poor Gulliver.

“In a little time I felt something alive moving on my left Leg, which advancing gently forward over my Breast, came almost up to my Chin; when bending my Eyes downwards as much as I could, I perceived it to be a human Creature not six Inches [15 cm] high, with a Bow and Arrow in his hands, and a Quiver at his Back. In the meantime, I felt at least Forty more of the same Kind (as I conjectured) following the first. I was in the utmost Astonishment, and roared so loud, that they all ran back in a Fright; and some of them, as I was afterwards told, were hurt with the Falls they got by leaping from my Sides upon the Ground.”

Beware, Barack Obama. Upon your arrival in Washington on January 20, beings of essentially similar stature (little people in intellectual if not physical stature) will most likely attempt to bind the new president to the inanities of the past. The success, or lack of success, of Obama’s presidency will depend on his ability to cast off the ropes and make his own way in a very strange land.

As Obama promises his daughters a new puppy, and, as a result, luxuriates in the absolute adoration of the American masses, the search on the rightward side of the political spectrum for scapegoats for last week’s electoral catastrophe gathers pace. As usual, the beginning of the search is marked by the formation of a circular firing squad.

Many in the quickly forming “Palin in 2012” avalanche contend that the US Republican Party’s recent dire fortunes were the result of the party, both under George W Bush and John McCain, being insufficiently conservative; an argument similar to that put forward by those who believe Britain lost the Revolutionary War with America because taxes on tea were too low.

Of course, the counter-argument states that the electoral defeats were inevitable once the United States stumbled and fell into the yawning chasm that was the world financial train wreck which followed upon the failure of the Lehman Brothers’ investment banking house on September 15 (see Silences say it all, Asia Times Online, September 16, 2008)

Only now do we recognize what we did not see in the immediate hours following Lehman’s downfall – that the unknown quantity and ownership of the credit default swaps (CDSs) that were activated upon Lehman’s bankruptcy filing cast such a dark pall of default risk over the entirety of private world finance that everybody with a financial stake in the system greater than just a few coins in their pockets started looking for the exits, and the exits just weren’t big enough to handle the stampeding horde.

In the 19 trading days between Lehman’s fall and the lows on October 10, the US Dow Jones Industrial Average lost more than 3,000 points, almost 32% of its value. Foreign stock markets, for those Americans who fell victim to the brokerage houses’ siren song that overseas diversification equaled safety, fared even worse, with Japan’s Nikkei 225 average down 42% from Lehman’s filing to its lows on October 28. Not Joe the Plumber, had he been in possession of an actual plumber’s license, could have snaked out the pipes that the McCain campaign then fell into and remained in right through to election day.

In a long article in the Washington Post the day after the election, reporter Anne Kornbluth provided an inside look on how those two weeks irrevocably transformed both the campaign, and John McCain’s prospects.

Sen Barack Obama, so steady in public, did not hide his vexation when he summoned his top advisers to meet with him in Chicago on September 14.

His general-election campaign had gone stale. For weeks, he had watched Sen John McCain suction up the oxygen in the race, driving the news coverage after the boisterous Republican convention in St Paul, Minnesota, and suddenly drawing huge crowds with his new running mate, Alaska Governor Sarah Palin. … And then, the next morning, a global earthquake hit: Lehman Brothers, the giant investment firm, filed for bankruptcy, triggering the biggest corporate collapse in US history and an international financial meltdown, and transforming the presidential race. It was a moment neither the senator from Illinois nor his advisers had anticipated, but one for which they were uniquely prepared.

In the days that followed, the newly chastised Obama team became more aggressive, with a message they had refined over the summer. The candidate himself, criticized as too cool, too cerebral and too detached, suddenly had the opportunity to show those qualities to be reassuring and presidential. For McCain, already struggling with the economic issue, the Wall Street meltdown became part of a much different narrative. By the time the senator from Arizona made the surprise announcement on September 24 that he would suspend his campaign, a powerful image had been framed: of an ‘erratic’, older Republican who could not be trusted to handle a crisis, economic or otherwise. In a race that had been thought to be even, the polls showed Obama to be pulling ahead, a lead that he would not relinquish through three debates and the election’s closing weeks.

The question then becomes, if it was then Lehman chief executive Richard Fuld’s destiny to essentially don a suicide bomber’s vest and go blow up Republican chances in the election, why wasn’t Lehman saved? After all, US Treasury Secretary Henry Paulson had already engineered the rescue of Bear Stearns in March (see A risk-free revolution, Asia Times Online, April 2, 2008) and set the Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac down the road towards an inevitable de facto full government ownership in mid-summer. Why wasn’t the rescue of Lehman the third-time charm?

Paulson couldn’t rescue Lehman. He had been tied up by the Lilliputians.

What a sad destiny it must be to be a teacher of history in America, a place that despises the very concept of history, a land where it is well believed that the history of the past can and should be regularly altered in order to serve the necessities of the present.

To a certain extent, being a teacher, or even someone who respects and cherishes history in this circumstance is like being the proprietor of an ice-cream fountain in a city wholly populated by the lactose intolerant, for it seems that Americans have the same reaction to accepting the lessons of history, even recent history, as the bodies of the people who can’t metabolize the key ingredient of a milkshake.

Those who say that Lehman should have been saved have already forgotten the history of the late summer. Beginning with the rescue of Bear Stearns in March, but especially gaining force with the pre-rescue (when the government’s commitment to their solvency was made just a bit more explicit than previously, leading up to the receiving an pledge of full government backing in early September) of the GSEs in mid-July, a bellowing bedlam, caterwauling cacophony was heard from America’s well-cosseted chattering classes that there was something wrong with all these interventions.

It was all supposedly so un-American, they bleated on their blogs, and on cable news shows. Where was the great tradition of rugged American individualism, of the nation where the failures of some cleared away the underbrush for the glorious successes promised by God for the entrepreneurial class of the chosen people on John Winthrop’s Shining City on a Hill-blah-blah-blah?

In what was still the bitterly polarized America of the pre-Obama age (that obviously no longer exists – this is now apparently a country of 300 million souls all in mad, squealing, passionate love with each other), the government rescues inevitably got sucked into the mire.

A movement developed around Tennessee Republican Senator Jim Bunning, then spread to the editorial pages of the Wall Street Journal and beyond, trumpeting the supposedly pure, unfettered capitalism of a fantasy bygone age. This movement saw the ideological combat that would attend the autumn’s election contest, searched desperately for a weapon to hold on to in the trenches, even if it was just imaginary. For the Democrats and liberals, this was all just schadenfreude, the joy they got from the right’s misfortune.

If Paulson had had any sense, or if Bush had still been able to summon up but one last measure of the steely-eyed/brook-no-dissent determination that led America into its catastrophic Iraq quagmire, all this palaver would have meant little. Neither was the case. Whoever was in charge of the US executive branch in late summer, they attended to the dopey din and rather explicitly let the message slip that the cupboard was bare for all future rescues.

I noted this determination to let the free markets do their damnest without the prospect of government assistance in late August (see Tough love’s fatal attraction, Asia Times Online, August 27, 2008); by the time the GSE’s were brought fully under the Federal Reserve’s wing on the weekend of September 6-7, the resolve was even stronger.

Thus, when the great captains of American finance capital were summoned to the fortress-like redoubt of the New York Federal Reserve Bank the following weekend, the private-sector bankers were stunned to learn that it was the government’s plan, very unlike the case of Bear Stearns in March, to have them, not the public sector, rescue Lehman. This they were not willing to do;
government and the bankers bickered all weekend; when it became clear that neither side was going to turn away from their positions at the last minute, this adolescent-like game of chicken ended with Lehman filing for bankruptcy and the whole world crashing.

What cautionary tale does this provide Obama?

Living on America’s west coast gives one a unique perspective to the current concept of what political consultants call the “24-hour news cycle” – throwing up for grabs each day a new, separate, discreet contest for the political actors to win or lose. Thus, as the radio political talk shows here are signing off at midnight, on the east coast it’s 3am, and the newspapers that will define the next day’s contests are starting to roll off the presses; 5am east coast time sees the cable news networks open their sleepy eyes; at 7am comes the national morning broadcast network chat shows, and with that the battle for that day is fully joined.

Who are the contestants which take the field of battle? Well, now America essentially has six network news operations, with CNN, FOX and MSNBC supplanting the three traditional networks (MSNBC and NBC News operate independently, well at least sometimes they do) and many fewer newspapers and newspaper journalists than previously.

What is new is the whole new population of Internet-generated and delivered content, whose material goes a long way towards determining who will win or lose the day’s debate. You have news sites operated by the traditional networks, which regularly produce content that never makes it onto the air; news blogs, opinion blogs, combinations of the two; many times all are cross-pollinating their existence by their perpetrators appearing on the afternoon shows on the cable news networks.

Whatever the qualifications are to be included in this brood, it is obvious that to hew to the zeitgeist of the time by being an honest-to-God breathing, bleating pundit, knowing anything about what you are talking about in a specialized subject is not one of them. It is far more important to be able to fill up the dead air until the next commercial break with derogatory and incendiary rhetoric about your ideological opponent.

When this group, having no knowledge of the dire situation that the financial markets were in, and caring not a whit about that state of ignorance, made it a cause celebre to oppose all new “bailouts” as a betrayal of the people’s will, and when Paulson, seeing that he was losing these daily media engagements, listened to them, the die was cast for Lehman and the markets.

Paulson soon did a quick volte face and saved AIG, then just about everybody else in the markets who could get their fingers onto a federal check, but by then the dam had burst, and the world had flooded. (Paulson did another about-face on Wednesday, when, in response to the massive unpopularity of his Troubled Asset Relief Program, or TARP, he scrapped the program’s original focus on buying distressed mortgage securities from the banks in favor of the much more questionably effective action, but one in line with current thinking, of taking equity shares in banks.)

It might be a surprising argument for a pundit like me to argue that pundits should be ignored. Of course, with my finely honed pundit skills (don’t try this at home), I could cut the Gordian knot by arguing that only Asia Times Online pundits are worth taking seriously.

After the February 1, 2003 Columbia Space Shuttle tragedy, when the vehicle disintegrated during re-entry, killing all seven crew members, one pundit actually opined that this had made the obviously upcoming Iraq invasion by the US less likely, as it dimmed Americans’ faith in the promises of technology and, by extension, techno-war. Nothing was further from the truth; we now know (to me, it was pretty obvious then) that it was only blood that would quench the raging Oedipal fire consuming President George W Bush’s soul.

Still, the Bush that ignored the pundit class in 2003, and in doing so drove America off a cliff in Iraq in 2003, followed the same class to the letter in not rescuing Lehman in September, and, in doing so, proceeded to once again drive both the world economy and his party right off a precipice.

When, president-elect Obama must wonder, should the pundits be listened to, and when they should be ignored?

The answer lies in the mostly ignored issue of how the public at large views the punditry’s histrionics. Some react like fans of the exhibition that is American professional wrestling, fervently wishing that the pundit on their side break an aluminum folding chair over the head of their hated opponent. However, for most, these ideological spectacles are roughly equivalent to the roar of a huge bear when the circus trainer has him up on one leg on a stool and is taunting him with a whip and chair – it is for them pure escapist, mindless entertainment.

So the modern version of Machiavelli’s Prince should adhere to the people’s, as opposed to the pundits’, views? How? Through reading polls? That’s the last thing one should do. A public policy wholly designed around poll results would resemble that of a manic depressive simultaneously taking a full regimen of both tranquilizers and stimulants. Americans regularly report to pollsters wildly inconsistent and unreal beliefs, such as wanting both higher government spending and lower taxes, or that all of the country’s fiscal difficulties could be solved if only the foreign-aid budget that only benefits “all those foreigners” was slashed (at around US$30 billion, the foreign-aid budget is less than 1% of the Federal budget, as opposed to the current modest estimate of a nearly $500 billion deficit for fiscal year 2009).

No, what a great leader must do is to fire the pollsters and polemicists and find out where the people really want to be led. Conservatives think that a candidate advocating higher taxes is automatically taking a deep drink from a hemlock-filled chalice, but what the people really won’t accept is higher taxes disappearing into the miasma of the bureaucracy without seeing any benefit.

Currently, the punditocracy is working itself into its usual frothy lather over the pending rescue of General Motors that will soon emerge from the upcoming lame-duck session of the US Congress, claiming it as another bailout betraying free-market principles. The people, on the other hand, would see the possible million or more prompt job losses that would ripple through the auto industry and its suppliers in the event of total GM shutdown, and wonder why the politicians are waiting so long to act.

As the players enter Center Court at the All England Lawn Tennis and Croquet Club, more commonly known as Wimbledon, they are given advice in the form of a sign containing excerpts from If, the Rudyard Kipling poem written in 1895:

,blockquote>If you can meet with triumph and disaster

And treat these two imposters just the same …

Yours is the earth and everything that’s in it

And – which is more – you’ll be a man, my son.

And if Obama can meet and overcome the challenge of the legions of fatuous haranguing imposters, of both the right and left, who all day and night pollute the public square with their unending, ultimately pointless bloviations, he’ll be a great president.

(*) – Julian Delasantellis is a management consultant, private investor and educator in international business in the US state of Washington.

(Copyright 2008 Asia Times Online (Holdings) Ltd. All rights reserved.





Posted by Gilmour Poincaree on November 16, 2008





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HELPING HUSSEIN – A Muslim campaigner reflects on the need to defend Barack Obama’s Christianity to American voters

Posted by Gilmour Poincaree on November 15, 2008

October 2008

by Neal Hussein (*)

My name is Neal Hussein, and I have worked for Senator Barack Obama’s campaign for US President. I BARACK HUSSEIN OBAMA - IN CAMPAIGN - 2008have had the unique — and at times unsettling — opportunity of being a Muslim named Hussein trying to convince American voters that Barack Hussein Obama is a Christian with no Muslim sympathies.

Obama’s father was born Muslim but later renounced Islam. As the senator chronicled in his first memoir, Obama’s parents separated when he was two, and he was raised by his agnostic mother and his grandparents. Obama’s father was mostly absent from his life; nevertheless, Obama’s association with Islam has persisted because of his middle name, internet-based rumors and the several years he spent living in Indonesia as a child.

Twenty-four hour news stations exploded with the ‘breaking news’ last fall: “As a child, Barack Obama attended a madrasa!” After several days of talking heads discussing the story at length, a reporter finally sent back footage of the school in session. The students wore western uniforms in integrated classes. American late-night comedy shows had fun, showing the hysteria of the cable news channels, followed by The Daily Show host Jon Stewart whispering conspiratorially to viewers, “psst, somebody tell them madrasa means ‘school.’”

While the furor died down, the stigma remained in the electorate’s minds

One day, while canvassing door to door in New Hampshire, my partner and I were invited in by a likely Democratic voter. Upon learning our names, she was quite excited by the novelty of having a pair named Neal Hussein and Benjamin Jacobs come to her door. That was probably the one moment when the diversity I added to the campaign was an asset in talking to voters.

Every other time I introduced myself as simply Neal, and never mentioned my ethnic origins or religious affiliations. Doing so might negate all the benefits that my knowledge of foreign affairs brought to the campaign.

In the New York campaign office, a co-worker named Hani Khalil was talking with a potential voter who had called to check if Obama really was a Muslim. After several minutes of refuting it, Hani got off the phone and said to me, “what I really wanted to tell him was ‘I am a Muslim from Chicago and would probably know if he was one too.’”

Political campaign work requires us to grin and bear it, no matter what comes your way. For example, on Super Tuesday I did visibility work in downtown Manhattan when a woman approached me and asked, “what does Obama think about white people?”

I politely pointed out that Obama’s mother was white.

“His mother’s dead!” she snapped.

Still grinning, I pointed out that Obama had many white friends and worked closely with the other 99 members of the Senate, where he was the only black man.

Obama was asked about the rumors directly, and with a seemingly patient smile he responded with the facts: He is a Christian and was sworn into the Senate with his hand on the Bible, not the Qur’an.

As a Muslim listening to the debate, it was hard to not hear Obama ask, ‘Why would it matter if I was?’ I had to remind myself that he wore the same patient face when accused of being too black, then not black enough, or too diplomatic, or any of the other distractions he has had to push past to remain on message. While some are upset that by his campaign’s distance or seemingly mild reaction to these ‘smears,’ Obama still enjoys a large amount of support from Arab and Muslim communities. These groups have even been surprisingly patient with his ‘disappointing conventional’ statements on Israeli-Palestinian matters.

“Arab and Muslim Americans are almost whole hog (even though it’s haram) behind this campaign,” Khalil explains. “And many, including myself, still see this as a useful starting-off point for more organized efforts at civic engagement in our communities.”

Perhaps voters’ fears that Obama is Muslim stems not from actual suspicions, but instead is a convenient pretext for not voting for a black candidate, without having to admit to racism. While mistrusting someone for being black is unacceptable in most parts of the country, voting for religious reasons remains widely tolerated.

This problem cannot be seen in a vacuum. Many less educated, rural voters hear much of what they understand about politics through religious figures, and the idea of America as a Christian nation has been reinforced over decades and generations. The current administration has exacerbated the problem through continuous references to ‘Islamo fascism’ and ‘Islamic extremism.’ As Muslim Americans become a larger, more integrated part of American society (by recent estimates there are currently two to six million Muslim Americans) this mentality is likely to slowly morph or evaporate, but probably not by November 4.

Ironically, one of the campaign’s bigger public relations problems was not big enough to save us from the religion issue. Midway through the Democratic primary race, the fiery rhetoric of Jeremiah Wright, long-time minister at Obama’s church, became the rage on all the 24-hour cable news channels. Suddenly the candidate who was struggling to prove he was not too soft was having to prove he was not too extreme.

A co-worker who worked Muslim outreach in several states during the primary lamented the fact that Obama’s participation in Wright’s church for 20 years might become a big enough issue to cost him the primary election, but would never be large enough to wipe away rumors of him being a Muslim. A Pew Research Center study shows 13 percent of registered voters currently believe he is a Muslim, up from 10 percent in March.

That Obama’s religion is still a central issue in the campaign seems to indicate that the senator has done well selling his economic plans and dealt with many of the questions surrounding his foreign policy experience — issues of actual substance. Perhaps voters have not been fooled by the persistent rumors. Because of this and because we believe our own message of hope, we will keep smiling until November 4. Until then though, I don’t think we will exhale. et

(*) – Neal Hussein is an Arab American who worked for the Obama campaign in three states during the primaries. He currently works as a risk analyst in Cairo and is an organizer with Democrats Abroad.





Posted by Gilmour Poincaree on November 14, 2008

November 14, 2008 – updated 1 hour, 53 minutes ago

From Reza Sayah and Janullah Hashimzada

“For us, the change of America’s president – we don’t have any good faith in him,” said Muslim Khan, a Barack Hussein Obamagrizzled Taliban spokesman who is one of the most wanted men in Pakistan, in a rare interview with CNN. “If he does anything good, it will be for himself.”

With an assault rifle on his lap, Khan answered 10 written questions, sharing his view on a range of topics from slavery to Obama’s middle name – Hussein.

He spoke in the remote Swat Valley of northwestern Pakistan, the site of frequent and fierce clashes between Pakistani troops and Taliban and al Qaeda militants.

There was no opportunity for follow-up questions.

Khan said Obama’s election may change conditions for black Americans.

“The black one knows how much the black people are discriminated against in America and Europe and other countries,” he said. “For America’s black people, it could be that there will be a change. That era is coming.”

He said he doubted Obama’s victory would lead to changes in relations between the United States and the Taliban.

U.S. forces dislodged the Taliban rulers of Afghanistan shortly after the September 11, 2001 terrorist attacks on New York and Washington.

America and its allies have battled the Taliban and al Qaeda in Afghanistan ever since, with fighting spreading across the border into Pakistan.

“American should take its army out of the country,” Khan said. “They are considered terrorists.”

Obama has minced no words in describing how he would administer U.S. policy toward the Islamic extremists in Afghanistan and Pakistan.

When he accepted the Democratic presidential nomination in August, Obama pledged to “finish the fight against al Qaeda and the Taliban.”

And the president-elect included a blunt warning in remarks on the evening of his election victory: “To those who would tear the world down,” he said, “we will defeat you.”

Khan noted that Obama’s middle name was fairly common in the Muslim world, referring to him at times as “Hussein Barack Obama.”

“If he behaves in the way of a real Hussein, then he has become our brother,” he said. “If Barack Obama pursues the same policies as Bush and behaves like Bush … then he cannot be Hussein. He can only be Obama.”





Posted by Gilmour Poincaree on November 12, 2008

November 7, 2008


Originally published on Friday, November 07, 2008




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Posted by Gilmour Poincaree on November 11, 2008

[08.11.2008]- Actualización 9:40 am de Cuba

Agencia Reforma

La crisis financiera actual representa también la crisis de un modelo cultural que tiene como principal NOAM CHOMSKYdoctrina al fundamentalismo del libre mercado, aseguró en entrevista Noam Chomsky (Philadelphia, 1928), calificado como el intelectual más influyente del planeta por las revistas Foreign Policy y Prospect Magazine en 2005.

“Donde la liberación financiera ha tenido lugar, a menudo resulta ser desastrosa, un hecho que debe ser suficientemente familiar en América Latina”, dijo el lingüista y profesor emérito del Instituto Tecnológico de Massachusetts.

“Este modelo intelectual ha sufrido un duro golpe. Ha sido modificado radicalmente por la intervención del Estado, el mismo tipo de intervención que ha sido prohibida para los países pobres. El modelo será objeto de nuevas modificaciones de acuerdo a los intereses de los centros de poder económico que en gran medida controlan la política estatal”.

Estados Unidos (EU) ha destinado 700 mil millones de dólares para salvar a los bancos, el ex presidente de la Reserva Federal Alan Greenspan dijo que cometió un error al confiar en el libre mercado, el Premio Nobel de Economía Joseph Stiglitz comparó la caída del sistema financiero con la caída del Muro de Berlín, a diario pierden las bolsas de valores y se dice que lo peor está por llegar.

-¿Cuál es la magnitud de la actual crisis económica?

Nadie sabe qué tan grave será. Y no es una sola crisis: hay varias. Una es la crisis financiera que se encuentra en las primeras páginas. Otra es la recesión en la economía real, es decir, la economía productiva. Una tercera, en EU, es la inminente crisis del ineficiente y costoso sistema privado de atención a la salud, que socavará el presupuesto federal a menos que se aborde en serio. Estos interactúan de manera compleja.

No veo ninguna utilidad en compararla con el Muro de Berlín. Ese fue un paso crucial para la caída de la URSS. No hay indicios de que las instituciones del Estado capitalista estén enfrentando un destino similar, excepto sectores como los bancos de inversión y algunas otras en el sector financiero, y por muy diferentes razones, sectores industriales como el automotriz en EU.

-¿Cuáles son las lecciones de esta crisis?

La más inmediata es que el fundamentalismo de mercado fue un desastre, lo cual no debería sorprender a los latinoamericanos o a otros sometidos a esta disciplina. Más específicamente, la liberalización financiera conduce al desastre. También, que la liberalización es un serio golpe c ontra la democracia. Otra lección subraya la sensible observación del principal filósofo social estadounidense del siglo 20, John Dewey: la política es “la sombra que las grandes empresas proyectan sobre la sociedad”.

-¿Será el ocaso del poder de los Estados Unidos y el inicio de la hegemonía de China o la India?

Es muy poco probable, a pesar de que la crisis puede llevar adelante el proceso de diversificación de la economía mundial. Los EU tienen enormes ventajas, aparte de su abrumador poderío militar. Europa tiene una economía de escala comparable, pero es heterogénea, y ha sido renuente a dar un paso adelante en los asuntos mundiales, prefiere permanecer bajo la sombra de EU. China y la India han estado creciendo, al igual que otros países de Asia que desafían la ortodoxia neoliberal, pero tienen enormes problemas internos. Un indicador está dado por el Índice de Desarrollo Humano de la ONU: China ocupa el lugar 81; India, el 128 (apenas por encima de Laos y Camboya). Y eso es sólo la superficie.

-¿Es la crisis de las finanzas o la crisis de un modelo cultural?

Es la crisis de un “modelo cultural” si por esto nos referimos a un sistema doctrinal: el fundamentalismo del libre mercado. Pero, a pesar de las pretensiones, esa doctrina nunca fue aceptada por los mismos centros de poder occidentales, pese a que fueron felices en predicarlo a los demás. Esto es un patrón histórico que se remonta por siglos, y es un importante factor en la creación del Tercer Mundo en las regiones colonizadas.

Autor de “Hegemonía o supervivencia. La estrategia imperialista de EU”, Chomsky menciona que Ronald Reagan, quien es reconocido como el “sumo sacerdote de los libres mercados”, incrementó el tamaño del gobierno, rescató el Continental Illinois Bank y fundó el consorcio Sematech para salvar a la industria de semiconductores estadounidense, entre otras acciones.

La crisis económica también ha evidenciado el “desmantelamiento” que sufre la democracia a causa del sistema del libre mercado, consideró Chomsky, quien se ubicó en la onceava posición de la lista de junio pasado sobre los intelectuales más influyentes del mundo. En la lista elaborada por Foreign Policy, editada por el Fondo Carnegie para la Paz Internacional, los primeros 10 fueron musulmanes. “En una democracia, las organizaciones populares, sindicatos, partidos políticos y otros, podrían estar formulando soluciones y presionando a los representantes políticos para ponerlas en práctica y no hay ninguna señal de eso”, sostuvo.

Es sorprendente, agregó el icono de la izquierda internacional, que los principales medios de comunicación estadounidenses insistan en invertir recursos públicos para salvar a los bancos, sin ningún tipo de control público, mientras que condenan el rescate de la industria automotriz.

Los empleados de la industria del auto ganan 56 mil 650 dólares al año, casi lo que gana en un día Robert Rubin, actual presidente del Comité Ejecutivo de Citigroup, y uno de los responsables del actual desastre económico, en su calidad de ex Secretario del Tesoro de Bill Clinton, apuntó.

-¿Qué puede esperar el mundo y Estados Unidos si Barak Obama gana las elecciones?

Las bases de Obama parecen ser las de un demócrata centralista, tal vez no como Clinton. Un análisis más detallado tendría que considerar caso por caso.

-¿Qué representa el que un afroamericano pueda llegar a ser presidente de EU?

Es bastante significativo, como el hecho de que en las elecciones del partido Demócrata los candidatos fueron una mujer y un negro. Hace 40 años habría sido prácticamente inconcebible. Este es uno de los muchos indicios de la militancia popular de la década de 1960 y sus secuelas.

-¿Cuáles serán las consecuencias de la crisis económica en el ámbito cultural?

Eso es impredecible. Las crisis económicas a menudo se han visto acompañadas por la aparición del gran arte.





Posted by Gilmour Poincaree on November 10, 2008

Publicado em 10/11/2008





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Posted by Gilmour Poincaree on November 4, 2008

MONTREAL — A Quebec comedy duo notorious for prank calls to celebrities and heads of state has reached Sarah Palin, convincing the Republican vice-presidential nominee she was speaking with French President Nicolas Sarkozy.

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IT’S TIME – America should take a chance and make Barack Obama the next leader of the free world

Posted by Gilmour Poincaree on November 4, 2008

Oct 30th 2008

From The Economist print edition

IT IS impossible to forecast how important any presidency will be. Back in 2000 America stood tall as the undisputed superpower, at peace with a generally admiring world. The main argument was over what to do with the federal government’s huge budget surplus. Nobody foresaw the seismic events of the next eight years. When Americans go to the polls next week the mood will be very different. The United States is unhappy, divided and foundering both at home and abroad. Its self-belief and values are under attack.

For all the shortcomings of the campaign, both John McCain and Barack Obama offer hope of national redemption. Now America has to choose between them. The Economist does not have a vote, but if it did, it would cast it for Mr Obama. We do so wholeheartedly: the Democratic candidate has clearly shown that he offers the better chance of restoring America’s self-confidence. But we acknowledge it is a gamble. Given Mr Obama’s inexperience, the lack of clarity about some of his beliefs and the prospect of a stridently Democratic Congress, voting for him is a risk. Yet it is one America should take, given the steep road ahead.

Thinking about 2009 and 2017

The immediate focus, which has dominated the campaign, looks daunting enough: repairing America’s economy and its international reputation. The financial crisis is far from finished. The United States is at the start of a painful recession. Some form of further fiscal stimulus is needed (see article), though estimates of the budget deficit next year already spiral above $1 trillion. Some 50m Americans have negligible health-care cover. Abroad, even though troops are dying in two countries, the cack-handed way in which George Bush has prosecuted his war on terror has left America less feared by its enemies and less admired by its friends than it once was.

Yet there are also longer-term challenges, worth stressing if only because they have been so ignored on the campaign. Jump forward to 2017, when the next president will hope to relinquish office. A combination of demography and the rising costs of America’s huge entitlement programmes—Social Security, Medicare and Medicaid—will be starting to bankrupt the country (see article). Abroad a greater task is already evident: welding the new emerging powers to the West. That is not just a matter of handling the rise of India and China, drawing them into global efforts, such as curbs on climate change; it means reselling economic and political freedom to a world that too quickly associates American capitalism with Lehman Brothers and American justice with Guantánamo Bay. This will take patience, fortitude, salesmanship and strategy.

At the beginning of this election year, there were strong arguments against putting another Republican in the White House. A spell in opposition seemed apt punishment for the incompetence, cronyism and extremism of the Bush presidency. Conservative America also needs to recover its vim. Somehow Ronald Reagan’s party of western individualism and limited government has ended up not just increasing the size of the state but turning it into a tool of southern-fried moralism.

The selection of Mr McCain as the Republicans’ candidate was a powerful reason to reconsider. Mr McCain has his faults: he is an instinctive politician, quick to judge and with a sharp temper. And his age has long been a concern (how many global companies in distress would bring in a new 72-year-old boss?). Yet he has bravely taken unpopular positions—for free trade, immigration reform, the surge in Iraq, tackling climate change and campaign-finance reform. A western Republican in the Reagan mould, he has a long record of working with both Democrats and America’s allies.

If only the real John McCain had been running

That, however, was Senator McCain; the Candidate McCain of the past six months has too often seemed the victim of political sorcery, his good features magically inverted, his bad ones exaggerated. The fiscal conservative who once tackled Mr Bush over his unaffordable tax cuts now proposes not just to keep the cuts, but to deepen them. The man who denounced the religious right as “agents of intolerance” now embraces theocratic culture warriors. The campaigner against ethanol subsidies (who had a better record on global warming than most Democrats) came out in favour of a petrol-tax holiday. It has not all disappeared: his support for free trade has never wavered. Yet rather than heading towards the centre after he won the nomination, Mr McCain moved to the right.

Meanwhile his temperament, always perhaps his weak spot, has been found wanting. Sometimes the seat-of-the-pants method still works: his gut reaction over Georgia—to warn Russia off immediately—was the right one. Yet on the great issue of the campaign, the financial crisis, he has seemed all at sea, emitting panic and indecision. Mr McCain has never been particularly interested in economics, but, unlike Mr Obama, he has made little effort to catch up or to bring in good advisers (Doug Holtz-Eakin being the impressive exception).

The choice of Sarah Palin epitomised the sloppiness. It is not just that she is an unconvincing stand-in, nor even that she seems to have been chosen partly for her views on divisive social issues, notably abortion. Mr McCain made his most important appointment having met her just twice.

Ironically, given that he first won over so many independents by speaking his mind, the case for Mr McCain comes down to a piece of artifice: vote for him on the assumption that he does not believe a word of what he has been saying. Once he reaches the White House, runs this argument, he will put Mrs Palin back in her box, throw away his unrealistic tax plan and begin negotiations with the Democratic Congress. That is plausible; but it is a long way from the convincing case that Mr McCain could have made. Had he become president in 2000 instead of Mr Bush, the world might have had fewer problems. But this time it is beset by problems, and Mr McCain has not proved that he knows how to deal with them.

Is Mr Obama any better? Most of the hoopla about him has been about what he is, rather than what he would do. His identity is not as irrelevant as it sounds. Merely by becoming president, he would dispel many of the myths built up about America: it would be far harder for the spreaders of hate in the Islamic world to denounce the Great Satan if it were led by a black man whose middle name is Hussein; and far harder for autocrats around the world to claim that American democracy is a sham. America’s allies would rally to him: the global electoral college on our website shows a landslide in his favour. At home he would salve, if not close, the ugly racial wound left by America’s history and lessen the tendency of American blacks to blame all their problems on racism.

So Mr Obama’s star quality will be useful to him as president. But that alone is not enough to earn him the job. Charisma will not fix Medicare nor deal with Iran. Can he govern well? Two doubts present themselves: his lack of executive experience; and the suspicion that he is too far to the left.

There is no getting around the fact that Mr Obama’s résumé is thin for the world’s biggest job. But the exceptionally assured way in which he has run his campaign is a considerable comfort. It is not just that he has more than held his own against Mr McCain in the debates. A man who started with no money and few supporters has out-thought, out-organised and out-fought the two mightiest machines in American politics—the Clintons and the conservative right.

Political fire, far from rattling Mr Obama, seems to bring out the best in him: the furore about his (admittedly ghastly) preacher prompted one of the most thoughtful speeches of the campaign. On the financial crisis his performance has been as assured as Mr McCain’s has been febrile. He seems a quick learner and has built up an impressive team of advisers, drawing in seasoned hands like Paul Volcker, Robert Rubin and Larry Summers. Of course, Mr Obama will make mistakes; but this is a man who listens, learns and manages well.

It is hard too nowadays to depict him as soft when it comes to dealing with America’s enemies. Part of Mr Obama’s original appeal to the Democratic left was his keenness to get American troops out of Iraq; but since the primaries he has moved to the centre, pragmatically saying the troops will leave only when the conditions are right. His determination to focus American power on Afghanistan, Pakistan and proliferation was prescient. He is keener to talk to Iran than Mr McCain is— but that makes sense, providing certain conditions are met.

Our main doubts about Mr Obama have to do with the damage a muddle-headed Democratic Congress might try to do to the economy. Despite the protectionist rhetoric that still sometimes seeps into his speeches, Mr Obama would not sponsor a China-bashing bill. But what happens if one appears out of Congress? Worryingly, he has a poor record of defying his party’s baronies, especially the unions. His advisers insist that Mr Obama is too clever to usher in a new age of over-regulation, that he will stop such nonsense getting out of Congress, that he is a political chameleon who would move to the centre in Washington. But the risk remains that on economic matters the centre that Mr Obama moves to would be that of his party, not that of the country as a whole.

He has earned it

So Mr Obama in that respect is a gamble. But the same goes for Mr McCain on at least as many counts, not least the possibility of President Palin. And this cannot be another election where the choice is based merely on fear. In terms of painting a brighter future for America and the world, Mr Obama has produced the more compelling and detailed portrait. He has campaigned with more style, intelligence and discipline than his opponent. Whether he can fulfil his immense potential remains to be seen. But Mr Obama deserves the presidency.



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Posted by Gilmour Poincaree on November 4, 2008

False registrations and bussing the homeless.
Bishop, a viewer, writes me that Illinois sends absentee ballots by email. I’m trying to find out which other states do that. Ohio and Florida make no mention of it on their websites. I’ve called several states but couldn’t get through (they’re very busy right now). If anyone has info on this please let me know.

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Posted by Gilmour Poincaree on November 4, 2008

Tuesday 4th November 2008 – 9:18AM,

by Matthew Sparkes

Doubts over the security and accuracy of electronic voting machines have surfaced once again, as several US states report ballot mistakes in the final and most crucial leg of the presidential election.

So far there are reports of complaints from voters in West Virginia, Colorado, Tennessee and Texas, with some claiming that their vote was registered for the wrong candidate.

The Princeton University Center for Information Technology Policy recently released a report outlining a flaw in the AVC Advantage voting machine from Sequoia.

The flaw in the machine, which is used in many states, allows it to be compromised in just seven minutes. Simply replacing one ROM chip is enough to change the outcome of the election by recording fraudulent votes.

Researchers are questioning the accuracy of machines, as well as their security. With touchscreen voting machines, the angle at which the screen is viewed

can affect its calibration, potentially leading to accidental mis-voting. There are also reports suggesting screens could be maliciously calibrated to deliberately favour one candidate over another.

“If one candidate has a check box in one place and a different candidate has it in a different place, you can set it up so that if you press on one candidate it gets recorded for another candidate,” says Matt Blaze of the University of Pennsylvania’s computer science department, speaking to Wired.

In the 2000 presidential election, one of the closest run in many years, it was estimated that more than a million votes were lost. Since then these machines have been replaced at great cost, but doubts over accuracy and security remain.

Some US states have already dismissed electronic voting machines altogether. Florida, for example, switched to optical scanners where voters mark paper ballots with a pencil, following a largely unsuccessful general election which saw 18,000 votes go unrecorded.

Optical readers have the benefit of leaving a paper trail of ballots which can be manually rechecked in the case of a dubious electronic result.

It has been estimated that the error rate when using touchscreen electronic devices is 1%, while optical scanners reduce this to 0.7%.



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Posted by Gilmour Poincaree on November 2, 2008

Thursday, October 30, 2008

Earl Ofari Hutchinson *

Republican presidential contender John McCain got one thing right about Democratic rival Barack THEM DARNED PYROMANIACS WILL VOTE ON McCAINObama. He told Larry King that he didn’t think race would be much of an issue in the final vote. As McCain put it only “a tiny, tiny, minority” will vote against Obama because he’s black. McCain was not just campaign bloviating to puff up his oft touted credential as a play it straight on race guy. The notion that because millions of whites passionately back Obama race is permanently off America’s table is more hope and prayer than reality.

Still despite endless and obsessive speculation that race could derail Obama in his slog to the White House it won’t and it probably never would have. Start with McCain and Obama; McCain made the personal and pragmatic choice not to make race an issue either directly or indirectly through code words, snide hints, and racial guilt by association attacks. When the Jeremiah Wright flap cropped up, he could have hammered Obama as a stealth race baiter. He turned thumbs down on that. Later when VP mate Sarah Palin and some others in his campaign were etching to unload on Obama-Wright again, he still said no.

That decision was not totally due to honor and noble intent. A too frontal racial attack would have brought instant screams of foul from Democrats, and millions of voters who demanded that the campaign be a clean, issues focused campaign. McCain read the political leaves correctly and saw the political peril in flipping the race card. The occasions that he slipped and rapped Obama as a socialist and a terrorist fellow traveler brought universal condemnation that he was going negative or worse running a dirty campaign.

Obama helped things even more. The firm message in his signature slogan of hope and change, campaign literature, TV ads, rallies, in pitches to contributors, his core of advisors, and major endorsers was that the Obama presidential campaign and an Obama presidency would be broad, non-racial and issues driven. Anything else would have instantly stirred horrifying visions to many of Al Sharpton and Jesse Jackson. His candidacy would have been DOA.

But McCain and Obama’s best efforts to make race a non issue in the campaign would have fallen short without the sea change shift in public attitudes. The decade since the Rodney King beating, the O.J. Simpson trial, and the urban riots, has been a period of relative racial peace in America. During that time polls consistently showed that more whites than ever are genuinely convinced that America is a color-blind society, equal opportunity is a reality, and blacks and whites if not exactly attaining complete social and economic equality, are closer than ever to that goal. Though the figures on income, education and health care still show a colossal gap between poor blacks and whites, the perception nonetheless is that racism is an ugly and nasty byproduct of a long by-gone past.

The passage by huge margins of anti-affirmative action measures in California, Michigan, and Washington, was not simply a case of whites engaging in racial denial or a cover for hidden bias. Many white voters backed the initiatives because they honestly believed that color should never be in the equation in hiring and education, and that race is divisive.

It’s is easy to see why they believe that. “Whites only” signs and redneck Southern cops unleashing police dogs, turning fire hoses on and beating hapless black demonstrators have long been forgotten. Americans turn on their TVs and see legions of black newscasters and talk show hosts, topped by TV’s richest and most popular celebrity, Oprah Winfrey.

They see mega-rich black entertainers and athletes pampered and fawned over by a doting media and an adoring public. They see TV commercials that picture blacks living in trendy integrated suburban homes, sending their kids to integrated schools and driving expensive cars. They see blacks such as former Secretary of State Colin Powell and his successor Condoleezza Rice in high-profile policy-making positions in the Bush administration. They see dozens of blacks in Congress, many more in state legislatures and city halls. They see blacks heading corporations and universities. And those blacks who incessantly scream racism about their plight are roundly reviled for feeding racial paranoia.

There is even some talk that the so-called Bradley Effect, the penchant for whites to lie to pollsters about their true racial feelings and vote against a black candidate, may actually turn into a reverse Bradley Effect this election. That’s that many whites will vote for Obama because he’s black. That notion is just as dubious as the Bradley Effect. But to even raise the possibility tells much about changing times and attitudes.

If Obama wins and that seems likely, race will be, as McCain says, only a tiny, tiny factor. That’s a tribute to him, Obama and the millions of America voters that were determined to make sure that race did not hurt Obama on November 4th

* Earl Ofari Hutchinson is an author and political analyst. His latest book is The Ethnic Presidency: How Race Decides the Race to the White House (Middle Passage Press, February 2008).

Posted by The Hutchinson Political Report at 5:49 PM

Labels: Barack Obama, john mccain, Racism, sarah palin



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Posted by Gilmour Poincaree on October 31, 2008


O presidente do Instituto de Pesquisa Econômica Aplicada (Ipea), Marcio Pochmann, disse, nesta quinta-feira (30), que é difícil avaliar se o pior da crise financeira internacional já passou porque a situação indica ser de longa duração. “Está em xeque o padrão de crescimento do século 20, que aliás é fortemente degradante do meio ambiente”, afirmou o presidente da instituição, que é uma fundação pública vinculada ao Núcleo de Assuntos Estratégicos da Presidência da República.

Pochmann destacou ser necessária a reconstrução da regulação do sistema financeiro internacional. “As ações até agora são contra os efeitos da crise, e não sobre as causas da crise”, disse. Para ele, as causas estão ligadas à descrença na moeda de curso internacional, o dólar, e à necessidade de refundação das regras e das instituições do sistema financeiro internacional.

Segundo Pochmann, instituições multilaterais como o Fundo Monetário Internacional (FMI) e o Banco Mundial ficaram à margem do enfrentamento da crise e as decisões estão sendo tomadas pelos bancos centrais dos países. Ele declarou que os derivativos no mundo são mais de US$ 600 trilhões, enquanto o orçamento do FMI é de US$ 400 bilhões. “É uma desproporção enorme”, disse. Pochmann considera necessário ter autoridades multilaterais renovadas, com capacidade de intervenção. “Isso significa acordo entre países.” Com a eleição nos Estados Unidos este ano, ele avalia que decisões sobre o que considera as causas da crise devem ser tomadas no médio prazo e a partir do ano que vem.


O presidente do Ipea disse também que “não é irreal imaginar uma expansão ao redor de 4%” para o Produto Interno Bruto (PIB) brasileiro em 2009. Ele explicou que, por um efeito estatístico, se este ano o PIB crescer 5%, o PIB do ano que vem terá aumento entre 2,8% e 3%, “a não ser que haja recessão, o que a gente não espera”.

Pochmann afirmou ainda que no seu modo de ver “seria interessante” a redução ou uma parada com viés de baixa da taxa básica de juros, a Selic, que foi mantida ontem sem viés pelo Banco Central em 13,75% ao ano. Ele comentou que “dentro da visão ortodoxa do Banco Central, é interessante destacar que estancaram a subida dos juros”.

Para Pochmann, a desaceleração da atividade econômica em função da crise internacional faz com que haja uma tendência de queda no “núcleo duro” da inflação. Ele comentou ainda que há uma convergência de queda nas taxas de juros no mundo devido à crise e que a taxa brasileira é das mais altas. As declarações foram feitas em entrevista coletiva ao chegar para a 4ª Jornada de Estudos de Regulação, no Ipea.

Fonte: Agência Estado





Posted by Gilmour Poincaree on October 31, 2008

October 31, 2008 – Reuters

Troubled financial giants getting cash infusions from the U.S. Federal Reserve owe their executives more than $40 billion for past year’s pay and pensions as of the end of 2007, the Wall Street Journal said in an analysis.

The sums owed are mostly for special executive pensions and deferred compensation, including bonuses, for prior years, said the paper.

The Journal also cited investment banks Goldman Sachs Group Inc, which owes its executives $11.8 billion; JPMorgan Chase & Co, which has a payment of $8.5 billion pending; and Morgan Stanley, which owes between $10 billion and $12 billion to executives.

Criticism of executive pay has gained momentum this election year with presidential candidates from both major parties lashing out over rich payouts for CEOs of companies that have suffered big losses in the U.S. housing market bust and ensuing credit crisis.

As a result, the government has sought to rein in executive pay at banks getting federal money as part of the Bush administration’s $700 billion bailout program.

But overlooked in these efforts is the total size of debts that financial firms receiving taxpayer assistance previously incurred to their executives, which at some firms exceed what they owe in pensions to their entire work forces, the Journal said.

For instance, nine banks paid out an estimated $50 billion of bonuses in 2007, based on the total compensation expense for the companies and assuming that for investment banks about 60 percent of total compensation was allocated for bonuses, and for commercial banks about 20 percent went to bonuses.

Goldman Sachs, Morgan Stanley and JP Morgan Chase did not immediately return calls seeking comment.



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Posted by Gilmour Poincaree on October 31, 2008

Friday, October 31, 2008

by Richard Holbrooke *

THE WINNER of America’s presidential election will inherit a perfect storm of problems, both economic and international.

He will face the most difficult opening-day agenda of any president since – and I say this in all seriousness – the man who saved the Union, Abraham Lincoln. But a more instructive precedent is 1933, when Franklin Roosevelt offered inspiring rhetoric and “bold experimentation” to a nation facing economic meltdown and a breakdown in public confidence.

For me, the choice is simple – and not only because I am, by temperament and history, a Democrat. The long and intense political campaign has revealed huge differences in the two candidates’ positions, style, and personal qualities. And the conclusion seems clear.

Judgment: John McCain has shown throughout his career a penchant for risk-taking; in his memoirs, he proudly calls himself a gambler. His selection of Sarah Palin, a charismatic but spectacularly unqualified candidate, as his running mate, is just the most glaring of many examples of the real McCain. His bravery in combat attests to his patriotism, courage, and toughness, but his judgment has been found sorely lacking time and time again over his career.

Barack Obama is tough, too, but in a different way. No one should underestimate how difficult it was to travel his road, against incredible odds, to the cusp of the presidency. But where McCain is impulsive and emotional, Obama is low-key and unemotional. He makes his judgments in a calm and methodical manner; McCain’s impulsiveness is anathema to Obama, and rightly so – one cannot play craps with history. Having seen so many political leaders falter under pressure, I prize this ability above most others. And Barack Obama has it.

The economy: The first priority of the new president will be the economy and the financial crisis. Since the crisis hit, Obama has been calm and, indeed, presidential. He consulted the best advisory team in the nation, weighed each course of action carefully, and then issued a series of precise, calm statements. Meanwhile, McCain has veered bizarrely, issuing contradictory statements, “suspending” his campaign (while continuing to campaign), and urging that the first debate be cancelled (when it was all the more needed). Advantage Obama.

Foreign policy: The most explicit disagreements between the candidates are over Iraq, Iran, and Russia. But there are deeper differences. McCain’s positions, with the notable exception of climate change, suggest that he would simply try to carry out George W. Bush’s policies more effectively. Obama offers a different approach to foreign policy.

By starting to draw down combat troops in Iraq, Obama would change the image and policies of America immediately. By engaging Iran in talks that would cover not only the nuclear issue but other aspects of Iran’s destabilising role in the region, he would either reach agreements that lowered the dangers from Iran, or he would mobilise a stronger international coalition to isolate Iran. Either way, engaging Iran is the right policy, and it is hard to understand why Bush and McCain have continued to hold out against such an obvious change of course, which, if carried out with firmness, will not compromise American or Israeli national security.

On Russia since its invasion of Georgia, Obama and his running mate, Joe Biden (who was the first member of Congress to visit Georgia after the invasion), emphasise helping Georgia rebuild its economy and maintain its independence in the face of a continuing Russian campaign against it. McCain, on the other hand, wants to punish Russia by such actions as expelling it from the G8.

Such measures may ultimately be necessary, but they will not help Georgia survive as an independent democracy. Moreover, even after the outrage in Georgia, there are issues of common interest – such as energy, climate change, and Iran – on which the West and the Kremlin must cooperate. This was true even during the Cold War, and remains true today, yet McCain seems not to recognise it.

Leadership: In the end, all presidential elections come down to the intangibles of leadership. The vote for a president is a sort of private contract directly between each voter and his or her preferred choice. Who do you want to see on your television screen for the next four years? To whom do you wish to entrust the nation’s fate?

Here again, the contrasting styles of Obama and McCain offer a clear choice between a calm and confident man and a highly emotional one, between a major change in the nation’s direction and a minor one, between a conciliatory style and a more combative one.

Effectiveness: Finally, in a year in which the Democrats are certain to increase their majority in both houses of Congress, an Obama victory would offer the Democrats control of both the legislative and executive branches for the first time since 1994, and with it the possibility of legislative achievement after years of stalemate. After so many years of polarisation at home and unilateralism abroad, the choice for president seems clear.

* Richard Holbrooke is a former US ambassador to the United Nations and the chief architect of the 1995 Dayton Peace Agreement that ended the war in Bosnia.

© Project Syndicate, 2008



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Posted by Gilmour Poincaree on October 29, 2008

Oct 24, 2008

by Zhiqun Zhu

John Hay, the 37th United States secretary of state, said in 1889, “The Mediterranean is the ocean of the past, the Atlantic, the ocean of the present, and the Pacific, the ocean of the future.”

The future is now. The “Asia-Pacific century” is not a prediction any more; it’s reality. Based on purchasing power parity, three of the four largest economies in the world are in Asia – China, Japan and India. And if the United States is included, then all the top four economies are in the Asia-Pacific region.

The United States has longstanding interests in Asia. Two of the world’s potentially most explosive places are located in East Asia: the Korean Peninsula and the Taiwan Strait, where the United States has significant economic, geopolitical and strategic interests. Since the end of World War II, the US has had extensive economic interactions with Asian nations. It played an instrumental role in Japan’s post-war recovery and the economic takeoff of the four Asian “tigers” – South Korea, Hong Kong, Singapore, and Taiwan. Since the early 1980s, China has also benefited enormously from America’s huge investment and its insatiable consumer market. It is not an exaggeration that East Asia is of critical importance to America’s future.

One wonders whether the fact that Asia has not been a major foreign policy issue in the 2008 US presidential election is good news or bad news. The new US president must move beyond President George W Bush’s preoccupation with the “war on terror” and pay more attention to Asia.

Mixed legacy

On the positive side, US alliances with Japan, South Korea and Australia remain strong. In the past eight years, Japan, South Korea and Australia all had leadership changes, and in Japan’s case there have been four different prime ministers. All these Asian leaders have firmly supported America’s “war on terror”. They have all visited Washington to show solidarity with Bush.

One of the rare bright spots in Bush’s foreign policy is China. A stable and strong relationship between the United States and China is probably Bush’s greatest foreign policy achievement. Bush and his family are now considered “friends” by the Chinese government and Bush’s decision to attend the Summer Olympic Games in Beijing, though controversial at home, was welcomed by China where members of the Bush family were warmly received.

Prodded by the United States, the new Kuomintang (KMT) government in Taiwan headed by Ma Ying-jeou has abandoned the pro-independence policies of his predecessor Chen Shui-bian and has endeavored to improve cross-strait relations. As a result, military conflict in the Taiwan Strait is becoming much less likely now.

However, Bush has also failed miserably in East Asia overall, most notably with regard to the unresolved issue of North Korea’s nuclear program. Opportunities to denuclearize North Korea have come and gone during the eight years of the Bush administration.

An agreed framework was reached between the US and North Korea in 1994. Denuclearization of the Korean Peninsula seemed to be within reach. President Bill Clinton sent his secretary of state Madeline Albright to North Korea in October 2000 to talk to North Korean leader Kim Jong-il directly. Clinton was even prepared to visit North Korea himself to improve relations.

After Bush came to office in January 2001, he refused to honor the 1994 agreement and rejected direct talks with North Korea directly. After the September 11, 2001, bombings he labeled North Korea as part of the “axis of evil”. North Korea was outraged and felt cornered; it hardened its position on the nuclear issue and decided to proceed with nuclear technology. Even many South Koreans felt offended: North Korea is poor, but it is not evil.

Eventually China launched the six-party talks in 2003. The US accepted this multilateral forum for discussion but still refused to deal with North Korea directly. After tough negotiations, North Korea finally agreed, in February 2007, to shut down its main nuclear reactor in exchange for food and aid from the other five parties.

In June 2008, North Korea blew up the cooling tower of its Yongbyon nuclear reactor and handed over to the US a declaration of its nuclear activities. However, by August, the US had not removed North Korea from the state sponsors of terrorism list, as it had promised earlier, while insisting that it wanted independent verification of North Korea’s nuclear disarmament. Accusing the US of breaking its promise, North Korea then announced it had suspended disabling its nuclear facilities.

In a dramatic development, on October 11, Bush decided to remove North Korea from the list of states that sponsor terrorism. This was an encouraging step, but it may have come too late.

As a result of Bush’s policies, the new US president will face several serious challenges in East Asia.

The immediate security challenge is a nuclear-capable North Korea. Recent reports about Kim Jong-il’s poor health added complexity and uncertainty to the nuclear issue and security in East Asia.

For Washington, the shortest diplomatic route to Pyongyang is through Beijing. China has a strong interest in preventing the nuclearization of the Korean Peninsula, in part because it does not want to give Japan an excuse to go nuclear.

North Korea has not accounted for dozens of Japanese citizens abducted by North Korean agents in the 1970s and 1980s, and the new US president needs to explain to Tokyo that as important as the matter is, it should not be linked to North Korea’s denuclearization. Japan can seek to resolve the abduction issue through other channels, preferably by engaging with North Korea directly. The United States must coordinate its policy closely with China and other nations in the region in order to break North Korea’s nuclear stalemate.

Asia also poses tough economic challenges to the new president. The US must become actively involved in economic integration with Asian nations, otherwise it risks being marginalized in Asia. It cannot afford to continue to stand on the sidelines as the 10-member Association of Southeast Asian Nations and northeast Asian nations discus a regional free-trade zone.

The United States had been the dominant economic power in Asia, but now China has become the largest trading partner of almost every country in Asia. Economically, the US is already playing second fiddle. Asian economies are some of the biggest holders of US Treasury bonds with Japan and China together holding about half of all Treasury bonds sold abroad.

China has become America’s third-largest export market after Canada and Mexico, and its foreign exchange reserve is quickly approaching US$2 trillion. The recent financial crisis in the US makes it imperative for the new president to work more closely with East Asian nations. Shortly after the US Congress passed the $700 billion financial rescue package in September, the People’s Bank of China (central bank) reportedly expressed interest in purchasing $200 billion worth of US Treasury bonds. Undoubtedly, East Asia will be part of the solution to the current financial problems in America.

The biggest challenge for the US and its new president is China. The challenge from the re-emerging power of the Middle Kingdom is on all fronts. China’s economy continues to gallop forward, despite the impact of the financial crisis in the West. For many developing countries, China’s development model, the so-called “Beijing Consensus” of economic liberalization under tight political control, offers an attractive alternative to the “Washington Consensus” of the US.

After Beijing passed the Olympic test with flying colors, and after Chinese astronauts successfully conducted their first space walk, the Chinese people have every reason to celebrate. As a result, nationalism has grown even stronger in China. Dealing with this increasingly powerful and proud nation of over 1.3 billion people is no easy task – and China-US relations have become increasingly complex.

From issues ranging from trade imbalances to independence protests in Tibet, the two countries have many differences. The recent US sale of $6.5 billion worth of weapons to Taiwan certainly does not bode well for bilateral ties. The rise of China – a nation that does not share core values with the United States – will be the most pressing foreign policy challenge for the next American president.

Bush has preferred unilateralism in foreign policy, and in Asia he has preferred strong bilateral alliances built upon historical ties with key allies. But this bilateral alliance structure is rooted in Cold War ideology and is outdated today. The new American president must go beyond unilateralism and bilateralism and move towards multilateralism on a wide range of issues.

In Asia, the new American president must be a uniter, not a divider. In addition to resolving North Korea’s nuclear dilemma, fighting infectious diseases, piracy on the high seas, global warming, and financial crises all require multilateral cooperation between the United States and the nations of Asia and the world.

Zhiqun Zhu, PhD, is MacArthur Chair in East Asian Politics and associate professor of political science and international relations at Bucknell University in Pennsylvania. He can be reached at

(Copyright 2008 Zhiqun Zhu.)

Speaking Freely is an Asia Times Online feature that allows guest writers to have their say.




SARAH PALIN’S ALASKAN WASTELAND – The New Republic: A Look At Governor Palin’s Environmental Record

Posted by Gilmour Poincaree on October 28, 2008

Oct. 10, 2008

(The New Republic) This column was written by Sheila Kaplan and Marilyn Berlin Snell.

There’s no reason to doubt Sarah Palin’s sincerity when she talks about her commitment to family In this undated photo provided by Coeur Alaska, shown is the entrance tunnel and water treatment facility for the Kensington Gold Mine against Lion Head Mountain near Juneau, Alaska. Seven Alaska Native village corporations have signed a resolution supporting the Southeast Alaska Conservation Council, one of three environmental groups who sued the U.S. Army Corps of Engineers over permits issued to the mine, which is slated to begin operations in late 2007 - AP Photo and -more specifically -special-needs kids. When she introduced her son, who has Down syndrome, to the audience at the Republican convention, the family tableau drew cheers. And she issued a promise. “To the families of special-needs children all across this country, I have a message for you,” she told the crowd. “For years, you’ve sought to make America a more welcoming place for your sons and daughters, and I pledge to you that, if we are elected, you will have a friend and advocate in the White House.”

Unfortunately, as governor of a state with a birth-defect rate that’s twice the national average, and which has the gloomy status as repository of toxic chemicals from around the world, Palin has pursued environmental policies that seem perfectly crafted to swell the ranks of special-needs kids. It’s true that Alaska’s top leaders have placed industry wishes over environmental protection for years. But, instead of correcting this problem, she’s compounded it. Peer into her environmental record, and Palin ends up looking a lot like George W. Bush.

In the past 20 years, research has shown that exposure to some metals and to chemicals such as pesticides, flame retardants, and polychlorinated biphenyls (PCBs) can cause birth defects and permanent developmental disorders both prenatally and in the first years of childhood. And Alaska is vulnerable to some of the worst environmental pollutants out there. In a state whose wealth depends on the exploitation of its natural resources, the toxic byproducts of mining and energy development, such as arsenic, mercury, and lead, are particular problems. Alaska Natives, such as the Inuit people, ANCHORAGE, Alaska - Reuters - Alaskan beluga whales listed as endangered, Sarah Palin disagrees. The depleted population of beluga whales that swim off the coast of Alaska's largest city was listed as endangered on Friday by the federal government. Alaska Gov. Sarah Palin, the Republican vice-presidential candidate, called the listing 'premature' after she had pressed for more time to make beluga population counts - CLICK ON THE PHOTO FOR THE FULL ARTICLEeat a diet that is heavy in fish, seals, and whales – animals that are high on the food chain and therefore more likely to be contaminated with high doses of PCBs and mercury. And the state is vulnerable not only to homegrown pollution, but also to industrial pollution: Trace gases and tiny airborne particles are contaminating the polar regions, carried there on atmospheric and oceanic currents, according to the National Oceanic and Atmospheric Administration.

The mess of pollutants in Alaska has clearly taken its toll. In general, the state has double the national average of birth defects. While the causes are unknown, environmentalists point to the region that includes the North Slope, an area slightly larger than Minnesota, where most of Alaska’s oil is produced. The byproducts of oil production can cause serious nervous system disorders, and the North Slope and its environs, home to Alaska Natives and itinerant oil workers, has the highest prevalence of birth defects in the state – 11 percent – compared with 6 percent statewide and 3 percent nationwide.

Palin, however, has not addressed these concerns. Her administration irked environmentalists in February 2008, when it opposed legislation that would have given parents at least 48 hours’ notice before schools were to be sprayed with pesticides and other toxic chemicals. Currently, parents get 24 hours, which the bill’s proponents say is not sufficient for parents who want to arrange to keep kids SARAH PALINout of school for a few days after the chemicals are applied. Palin’s administration argued that the bill was too restrictive and would force schools to notify parents before cleaning toilets with disinfectant – which, supporters say, is not true. In the same month, members of Palin’s administration testified against language in legislation that would have banned polybrominated diphenyl ethers – a flame retardant that, studies show, harms the developing brain.

Then, in the summer of 2007, Palin allowed oil companies to move forward with a toxic-dumping plan in Alaska’s Cook Inlet, the only coastal fishery in the nation where toxic dumping is permitted. The Bush administration initially OK’d the companies’ request to increase toxic releases, but the permits could not be issued without Alaska’s certification that the discharges met the state’s water-quality standards, says Bob Shavelson, executive director of Cook Inletkeeper, an organization founded to protect the area’s watershed. Palin complied. “Palin’s Department of Environmental Conservation issued that certification [based on] the long-discounted notion that ‘dilution is the solution to pollution’ – turning the federal Clean Water Act on its head and actually increasing toxic pollution,” Shavelson says.

Palin next took on the Clean Water Initiative, also known as Proposition 4, which appeared on the Alaska ballot on August 26. The measure would have limited the runoff of toxic metals – known to cause developmental and birth defects, according to the Centers for Disease Control and Prevention – from all mining operations, but it was aimed at stopping the proposed Pebble Mine, a huge mining proposal that was controversial for its potential impact on Bristol Bay, the world’s largest commercial wild salmon fishery (for which Palin’s oldest daughter was named). The project had been in the works for years, and, when she ran for governor in 2006, Palin told the Alaska Journal of Commerce that, if the mine was green-lighted, “there will be remediation from now to eternity.” Once in office, though, environmental concerns took a backseat. In a TV interview six days before the vote, Palin said, “Let me take my governor’s hat off for just a minute, and tell you personally, Prop 4 – I vote no on that.” Alaska’s mining industry parlayed Palin’s face and words into an advertising blitz – and came from behind to defeat it.

Palin’s latest anti-environmental effort also came in August, when she attempted to block California’s plan to curb its air pollution. The Golden State is trying to reduce its toxic emissions with a port fee that would pay for pollution-reduction projects around the state. Arguing that it would hurt Alaska’s economy, Palin asked California Governor Arnold Schwarzenegger to veto the proposed legislation.

Finally, Palin was pushed by environmental activists and Alaska Natives to pressure the military in its cleanup of one of the most contaminated sites in Alaska–but the state didn’t act. This was on the old Northeast Cape Air Force base on remote St. Lawrence Island in the Bering Sea – one of the state’s closest spots to Russia. When the military closed its operations in the 1970s, it left thousands of barrels of toxic waste, containing solvents, fuels, heavy metals, pesticides, and PCBs, a group of toxic organic chemicals that have persisted in the environment. For the past few years, the Army Corps of Engineers has been slowly cleaning up parts of the site and claims it will leave it safe. (One federally funded study still in progress by the state’s premier watchdog on chemical pollutants, Alaska Community Action on Toxics (ACAT), tested the local water and got a reading that was more than one thousand times the level that the EPA considers safe. “If the Corps of Engineers want to fill up their canteens in there, they are welcome to it,” says Kathrine Springman, the toxicologist who did that study. “Actually, I wouldn’t want them to drink it … anymore than I would ask them to drink Drano.”)

But critics say the Army is taking too long, and that its plan will leave too many untreated chemicals, PCBs in particular, at the site. According to Pamela Miller, ACAT’s executive director, Palin should have used her powers as governor to forge a better cleanup plan. “Certainly this was also a pattern in the Murkowski administration, but, under Palin, it’s gotten worse,” she said. “Her administration has done nothing to work with the military to avoid possible contamination.” Scientists have also opposed the Army’s plan, saying it will leave the area dangerous.

Supporters note that Palin did boost school spending for children with the most severe disabilities, but, in general, the Alaskan government under Palin has done nothing to protect those children and future generations from the toxic stew that the state has become. “She doesn’t have a good understanding of the science,” says Ruth Etzel, who until recently was research director at the Alaska Native Medical Program in Anchorage. “What she tends to do is talk about personal responsibility as the key to good health.”

Andrea Doll, a Democratic state representative from Juneau, says she tried to get Palin interested in her bill on flame retardants early on: “I told her about the bill. She totally was not interested in any way, shape, or form. It was that look on her face – that ‘don’t even go there’ look.

by Sheila Kaplan and Marilyn Berlin Snell

Reprinted with permission from The New Republic.



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Posted by Gilmour Poincaree on October 23, 2008

MSNBC on Republican Voter Registration Fraud.

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