Back from the beach....

...and here some of my latest:

Dangerous Delusions
Commentary by Leon Hadar | August 15, 2007

IRC Right Web

A television adaptation of Nebula Award-winning author John Kessel's short story "A Clean Escape," which aired on ABC's new sci-fi anthology series titled Masters of Science Fiction, is set in a post-Apocalypse future, but it reminded me of current events. Psychiatrist Deanna Evans interrogates a distinguished but disoriented man who appears to be suffering from a memory lapse. After a climactic buildup, it is revealed—and this is a spoiler alert, if you don't want the story ruined—that he is the U.S. president, responsible for a global nuclear holocaust. They are two of a few hundred survivors of a nuclear war that resulted from the president's decision to launch a preemptive nuclear strike against a "rogue nation." Yet, not remembering what happened, he is unable to acknowledge his role or to take responsibility.

Kessel's president lives in a world of make believe, in which he is a patriotic American, committed to serving his country and ensuring that democracy reigns supreme worldwide. No, he says again and again, there was no nuclear holocaust! No, America is prospering and his family is alive and well! No, he isn't the president, just a hard-working citizen! But Dr. Evans forces him to overcome what could be a form of short-term memory loss and face reality. She shows him photographs of the destroyed White House, of the dead bodies of his wife and daughter, of devastated cities. "Mission accomplished, president?" she asks.

Sound vaguely familiar? Indeed, at times it seems to me that President George W. Bush and his advisers, not unlike the fictional president in "A Clean Escape," reside in a world of make believe of their own creation—let's call it the "Neocon World."

In their alternate reality, the ouster of Saddam Hussein was part of the war on the terrorists who perpetrated the 9/11 attacks. In the real world, Saddam Hussein had no ties to al-Qaida, whose leaders and members are now hiding in Pakistan (which in the Neocon World is an ally of the United States in the war against al-Qaida). In the Neocon World, there were WMDs in Iraq. In the real world, such Iraqi WMDs do not exist. In the Neocon World, the United States has liberated Iraq. In the real world, U.S. troops are facing a powerful insurgency, and most Iraqis want them out. In the Neocon World, the United States has turned Mesopotamia into a model of political and economic freedom. In the real world, Iraq is ruled by a Shiite government committed to narrow ethnic interests and religious values, its economy is ruined, and it is disintegrating into a bloody civil war. In the Neocon World, the United States is now spreading democracy in the Middle East. In the real world, the United States is providing huge arms packages to help strengthen the power of the theocracy of Saudi Arabia and the military regime of Egypt. In the Neocon World, the Iraq War is strengthening the position of the United States and its allies in the Middle East. In the real world, the Iraq War strengthened the hands of anti-American Iran and its allies in the Middle East, including Hezbollah and Hamas.

Remember Hezbollah and Hamas? Well, in the Neocon World, the Cedar Revolution and free elections in Lebanon helped empower the pro-Western forces in Lebanon. In reality, they helped empower the pro-Iran Hezbollah movement that represents the Shiite community. In the Neocon World, Israel's attacks on Hezbollah and other targets in Lebanon were going to destroy the military and political infrastructure of that movement, and by extension weaken Iran. In the real world, the Israeli military operation in Lebanon turned Hezbollah and its leader into the most popular players in the Arab world and played into the hands of Iran. In the Neocon World, the free elections in Palestine were going to lead to the emergence of a moderate Palestinian government that would make peace in Israel. In the real world, the free election brought into power the radical Islamic Hamas that refused to recognize and make peace with Israel. In the Neocon World, economic sanctions against the Palestinians were expected to weaken the political and military power of the elected Hamas government. In the real world, Hamas overpowered the militias affiliated with the more secular and moderate (and corrupt) Fatah and forced them out of the Gaza Strip. (Read the rest).

Time for “Benign Neglect” in Mideast?
August 14, 2007
Leon T. Hadar
San Diego Union-Tribune, Reno Gazette-Journal, Columbia (MO) Tribune

Muslims and non-Muslims have been fighting over this territory for years, resulting in thousands of casualties and hundreds of thousands of refugees, as negotiations mediated by foreign governments have failed to resolve the conflict.

But nobody is calling on Washington to launch a new peace initiative. Why? Because we're not talking about the Israeli-Palestinian conflict, we're talking about the Armenians and Azeris clashing over Nagorno-Karabakh.

Most Americans know what is happening in the West Bank, thanks to the prominent news coverage the Arab-Israeli conflict receives. For years, pundits have been warning that unless Washington does something to end the bloodshed—revive the “peace process,” send a new special envoy to the Middle East, convene a peace conference—the entire region could unravel, triggering another oil embargo or even World War III.

But Nagorno-Karabakh receives little attention. Yet, this territory has been the source of a bitter dispute between Armenia and Azerbaijan since the beginning of the 20th century. The two nations fought over the disputed territory in the final years of the Soviet Union. Since the war ended in 1994, most of Nagorno-Karabakh has remained under Armenia's control, while the parties continue to hold talks.

There is no doubt that the United States and the rest of the international community would welcome a resolution to the conflict. Indeed, many have been trying to help the Azeris and Armenians overcome their differences.

Washington also has been trying for some 30 years to resolve the dispute between Greece and Turkey over Cyprus—and to end the Turkish occupation of the northern part of the island.

In all likelihood, however, we are going to learn to live with such conflicts, ranging from the dispute between India and Pakistan over Kashmir and the civil war in Sri Lanka to the bloody disputes that continue to ravage sub-Saharan Africa.

The fact that Washington focuses so much of its energy and attention on the Arab-Israeli conflict, while turning a blind eye elsewhere, indicates that U.S. foreign policy has lost its focus. (Read the rest).

Pax Americana or Primus Inter Pares?
by Leon T. Hadar

Leon Hadar is a Cato Institute research fellow in foreign policy studies and author of Sandstorm: Policy Failure in the Middle East.

Who is currently the biggest superpower? Many countries view the United States either as the bully or policeman of the world, a sort of successor to the British Empire. But as Leon Hadar explains, the United States should shed its notions of global hegemony — and accept being first among equals in the global community.

Mirror, mirror on the wall, who is the biggest superpower of all?" That is the question being asked by foreign policy pundits in Washington, D.C., these days, as they ponder the impact of the U.S. military quagmire in the Middle East on the global position of the United States.

The cover of a recent issue of The Economist, the British magazine that has always been bullish on U.S. power — it considers the United States to be the successor to the British Empire — is quite simple: "Still No. 1" it reads, next to a drawing of Uncle Sam standing in the boxing arena and ready to punch again despite his (minor) injuries.

Hobbled hegemon

The magazine calls the United States a "hobbled" hegemon and concludes that while the problems in Iraq may have weakened the United States, it is still likely to remain the "dominant superpower."

Much of the support for the America-Is-Still-Number-One thesis, which not surprisingly is also very popular among members of the foreign policy establishment in Washington — after all, who really wants to be a member of an elite in charge of a declining power? — is based on numbers.

The United States has the largest and most advanced economy and the largest and most powerful military. Even those who are doing a lot of cheerleading for China these days agree that that country will not become the world's largest economy before 2050 — and even that proposition is very "iffy." (Read the rest).

Business Times - 22 Aug 2007

Can Bernanke save the financial markets?


LAST Friday's decision by US Federal Reserve chairman Ben Bernanke to cut its discount rate by a half-point would probably be recalled one day as a timely move by America's central banker to avert a global financial meltdown. In this narrative, Mr Bernanke has been following in the footsteps of his predecessor, Alan Greenspan, riding to the rescue of the global financial markets that seemed to be experiencing rising anxieties in response to the sub-prime loan crisis.

Or perhaps the Fed chairman would be accused of perpetrating the sin of 'moral hazard' by 'bailing Wall Street' and throwing a lifeline to investors and financial institutions who got themselves into trouble through their reckless behaviour and greed. Hence, Mr Bernanke hasn't only created incentives for these irresponsible market players to continue following their self-destructive impulses. Printing more money could reduce the value of the US dollar and, by extension, the purchasing power of American consumers.

The 50-basis-point cut in the little-used discount rate to 5.75 per cent from 6.25 per cent has clearly produced the 'Bravo! Bravo!' cheers from Wall Street and helped create the sensation that the Great Maestro - as Mr Greenspan was known - was back in the Fed. The Fed has also added liquidity to the financial system through open market operations. Moreover, in a highly unusual conference call, officials encouraged banks to borrow at the regional Fed banks' discount windows for 30 days or longer rather than just overnight.

The Federal Open Market Committee in a statement said that 'tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward'. That meant that 'the downside risks to growth have increased appreciably. The committee is monitoring the situation and is prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial markets,' it added.

With the Dow surging by 233.3 points, many investors have concluded that not unlike Mr Greenspan, Mr Bernanke could be counted on to always be there to protect them.

Indeed, Mr Greenspan's dramatic move during the 1990s - cutting the overnight federal funds rate in response to the collapse of the Long-Term Capital Management hedge fund and following the Mexican peso crisis - led many observers to believe that the new global financial markets that emerged following the revolutions in the architecture of these markets, including the major de-regulation efforts in the United States, would be able to survive potential political and economic pressures.

Mr Bernanke's moves last week may have contributed to this sense of self-confidence by suggesting that the US central bank would be able to pursue the same successful policies in the post-Greenspan era. But unlike the 1990s, the collapse of the sub-prime loan sector and the growing weakness of the entire US housing industry have contributed to a sense of economic insecurity among many Americans, and the sense that 'Main Street' is now going to help bail-out 'Wall Street' could play into the hands of the economic populists around the country, and in particular on Capitol Hill.

The Fed may have tried to pre-empt such criticism by describing last Friday's move as an intermediate step. Unlike Mr Greenspan, Mr Bernanke has refrained from cutting the more significant federal funds rate. But the cut in the discount rate is seen as an effort to affect the psychology of the markets by sending a signal the Fed would be ready to provide liquidity since, as the Fed pointed out, 'financial market conditions have deteriorated and tighter credit conditions and increased uncertainty have the potential to restrain economic growth from going forward'.

But the financial markets are quite confident that the Fed would have no choice but to ease the federal funds rate by 25 to 50 basis points before the next FOMC meeting on Sept 18.

The Fed could argue that such a move would not only protect the rich investors on Wall Street, but would probably also save American consumers by preventing a dangerous recession that could lead to lost jobs and less consumer spending. But if the Fed's efforts would fail to restore the confidence of the financial markets and to bring the bulls back to life, Mr Bernanke's temporary fix may have made a bad situation worse by pursuing a loose monetary policy that has, after all, produced the current financial mess.

Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.


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