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Showing posts from September, 2008

Tortuous route to Washington's US$700b bailout

Business Times - 30 Sep 2008
Intertwined with the long and hectic negotiations was the presidential election campaign, especially John McCain's

By LEON HADAR
WASHINGTON CORRESPONDENT

ONE of the most dramatic and consequential weeks in Washington's history ended on Sunday after the Bush administration and US lawmakers reached a deal over the US$700 billion rescue of US financial markets. The deal is expected to be approved by Congress.

The political and legislative spectacle unfolded on Capitol Hill after Treasury Secretary Henry Paulson and US Federal Reserve chairman Ben Bernanke had warned Congressional leaders that America could experience a devastating collapse of the financial markets and an economic slump akin to the 1929 stockmarket crash and the ensuing Great Depression.

US lawmakers gave the green light to the administration's bailout plan and its centrepiece - using some of the US$700 billion of taxpayer money to buy distressed assets from failing banks - before t…

McCain changes tack as public opinion dips

Business Times - 26 Sep 2008

He suspends campaign and plans to skip TV debate to focus on financial crisis

By LEON HADAR
WASHINGTON CORRESPONDENT

W HAT a huge difference a week makes in the economic and political opinions of the nation! At the beginning of last week, the major topic of debate in Washington was whether John McCain's choice for vice-president, Alaska governor Sarah Palin, would sway women voters to elect him in November.

And the conventional wisdom among the pundits was that McCain's masterful choice of Palin as his running mate was halting Barack Obama's political momentum and making it more likely that McCain would replace George Bush in the White House next year.

Moreover, the topic of the first televised presidential debate scheduled for today was on national security and foreign policy, which were always the preferred topics of McCain, the former war veteran who was one of the leading boosters of the 'surge' of US troops in Iraq, a move that Obam…

The real US enemy now is Wall Street, not terrorism

Business Times - 25 Sep 2008
By LEON HADAR
WASHINGTON CORRESPONDENT

AMERICAN television stations protect themselves against possible action by the US Federal Communications Commission, which has the right to regulate 'indecent' broadcasts. They do that through self-censorship of 'inappropriate' content to make them suitable for 'family' or daytime viewing, including through 'bleeping'. That usually happens when comedians on a television show use the 'F' word or other coarse language.

This week, US television viewers experienced quite a lot of bleeping on live TV programmes when this or that man or woman 'on the street' was asked to comment on the proposed US Treasury's US$700 billion financial rescue plan for Wall Street.

'You tell that (BLEEP) Paulson to shove his (BLEEP) plan to help those (BLEEP) in (BLEEP) Wall Street into his (BLEEP) (BLEEP),' was the response from one of the more polite interviewees.

It is a typical expre…

The eerie parallels between Sept 11 and Sept 15

Business Times - 24 Sep 2008
By LEON HADAR
WASHINGTON CORRESPONDENT

US PRESIDENT George W Bush is standing next to his Cabinet's Alpha Male who has become the crisis manager. Mr Bush declares that America is facing a clear and present danger that is stunning in its proportions and calls on Congress - and by extension, the American people - to give his administration unprecedented broad legal authority to take action against the looming threat to life as we know it.

Trust the Man and his wise advisers, President Bush asserts. Give us a blank cheque to pursue a very, very costly policy. Trust us, guys! We know what we're doing.

Sounds very much like the scene we saw last Friday when President Bush, standing in front of the White House, was joined by Henry Paulson, the Secretary of the Treasury and former Wall Street banker, and the professorial chairman of the Federal Reserve, Ben Bernanke.

Mr Bush warned of the catastrophic consequences of the financial meltdown and requested that…

Washington's "solution" : have we all become socialists now?

Business Times - 23 Sep 2008

The US$700b financial bailout plan seems more like a 'European' policy - straight out of the book of, say, a socialist Swedish government

By LEON HADAR
WASHINGTON CORRESPONDENT

A FEW weeks ago during the crisis in the Caucasus involving Georgia and Russia, Republican presidential candidate John McCain wanted to proclaim his support for the pro-American government in Tbilisi. He declared: 'We are all Georgians today!'

Against the backdrop of the most devastating economic crisis since the Great Depression and as the Bush administration proposed what could become the largest financial bailout in United States history, it is doubtful that anyone in Washington or Wall Street is spending too much time thinking about the fate of Abkhazia or South Ossetia.

And as the plan to give the authority for the US Treasury Department to buy up to US$700 billion in mortgage-related assets - it will raise the national debt ceiling to US$11.3 trillion - is debate…

Pig with the Lipstick eaten by Wall St bear?

Business Times - 17 Sep 2008
Democrats pounce on McCain's remark about the economy amid latest financial woes

By LEON HADAR
WASHINGTON CORRESPONDENT

HERBERT Hoover was one of the most intelligent and talented men to ever occupy the White House. A noted reformer, a humanitarian and an engineer who administered major refugee relief efforts in Europe during World War I and served as a successful secretary of commerce, Mr Hoover had the bad luck to head the winning Republican presidential ticket in 1928. He entered the White House at the outset of the 1929 Great Depression.

He failed to pursue effective policies to end the depression and has been remembered by historians as the US president who kept saying again and again for four years that the 'economy was fundamentally sound' while things went from bad to worse to horrible. All the while he insisted that if only Americans regained confidence and began to invest and buy more goods the economy would recover. It didn't.

So wh…

Palin's toxic world view is worrisome

Business Times - 16 Sep 2008

It is a dangerous mixture of ignorance and arrogance, inexperience and religious fervour

By LEON HADAR
WASHINGTON CORRESPONDENT

AT first I thought that the guys at Fox News Television, the Republican Party's unofficial propaganda outlet, were pulling my leg. A few hours after Republican presidential candidate John McCain stunned the country by announcing that he had chosen Alaska's governor Sarah Palin as his running mate, Steve Doocy, one of Fox's anchormen, told viewers that the Republican vice-presidential candidate was a foreign policy expert of sorts.

She was, he assured his viewers, very much like the Democratic vice-presidential candidate, Senator Joe Biden, a former chairman of the Senate Foreign Relations Committee and a veteran member of Washington's foreign policy establishment, who has travelled around the globe and has met many world leaders.

'But the other thing about her, she does know about international relations because …

Republican pair need crash course on economics

Business Times - 12 Sep 2008

By LEON HADAR
WASHINGTON CORRESPONDENT

A FRIEND of mine who lives in New York City told me that she and her husband were planning to vote for independent party presidential candidate Ralph Nader this year. 'He is the only one who is ready to tax all these millionaires in Manhattan,' she said.

The only problem is that these two Naderite voters make a living making expensive jewellery for a rich clientele on the East Side of Manhattan. And a Nader administration that would end-up squeezing her customers for more taxes could eventually hurt my friend's business.

'Don't you get it?' I asked.

'Well, I didn't think about it,' she responded. 'I didn't take economics in college.'

Indeed, as George Mason University economics professor Bryan Caplan explains in The Myth of the Rational Voter: Why Democracies Choose Bad Policies (Princeton University Press, 2008), the average American voter holds mistaken views about econom…

Things heat up as Nov 4 draws near

Business Times - 09 Sep 2008

Democrats and Republicans are wooing US voters with vastly different, strident messages. Whose will prevail?

By LEON HADAR
WASHINGTON CORRESPONDENT

IT SEEMED appropriate that just a day after the Republican Party ended its presidential nomination convention, following on the heels of a similar gathering of Democrats, the US government reported that the unemployment rate in the economy jumped to 6.1 per cent last month, its highest level in five years.

At the same time, the Bush administration placed the two giant mortgage companies Fannie Mae and Freddie Mac under the control of the federal government in what could amount to the largest taxpayer- backed bailout of US companies.

And according to the report issued by the Bureau of Labor Statistics last Friday, more than 600,000 US jobs have been lost since January with unemployment rising to a level that reflects the dawning of a full-blown economic recession.

Another sign of mounting economic problems was a rep…

McCain's V-P choice isn't presidential material

Business Times - 05 Sep 2008

By LEON HADAR
WASHINGTON CORRESPONDENT

A FEW years ago, I was hired as a part-time 'contract worker' by an agency of the US federal government. No, it wasn't the Central Intelligence Agency (CIA) or, for that matter, any other national security government agency. Although I am an American citizen and have no criminal record, my boss insisted that since my parents were not born in the US, I had to go through a security examination. What followed were several months of rigorous investigation by Federal Bureau of Investigation (FBI) agents, who among other things interviewed my family members and friends, former employers, university professors, etc, and studied a very long questionnaire I had to fill and on which I had to list all my places of residences going back to high school.

I mention one of the least important chapters in my life in order to contrast this experience with that of the person who could in a few months not only have access to t…

And the Palin selection

check-out my myposts on the topic on @TAC.

Which story will US voters embrace?

Business Times - 02 Sep 2008


Will Obama come across as more 'American' - and thus more electable - or will it be McCain?

By LEON HADAR
WASHINGTON CORRESPONDENT

S OMETIMES even cliches can sound profound. Like when politicians and pundits were referring to last week's Democratic National Convention as 'historic', as a 'defining moment' and as a 'day to remember'.

Or when one of the young delegates to the gathering that nominated Senator Barack Obama as the party's presidential candidate told a television reporter that she felt as though 'history was being made tonight, and I was part of it'. Her tearful mother, sitting next to her in the huge outdoor stadium added: 'I wanted my daughter to be a witness to something that I had never believed will be taking place in my lifetime.'

Exactly 45 years after civil rights leader Martin Luther King delivered his historic 'I have a dream' speech, his dream of doing away with the scour…