Thursday, January 17, 2008

No Sunshine For Bush In Mideast

From the Hartford Courant:
No Sunshine For Bush In Mideast

January 17, 2008

Some U.S. presidents facing political and economic problems at home seemed to have embraced the political dictum, "If it rains in the Midwest, seek the sunshine in the Middle East." Hence in June 1974, as he was drowning politically and personally in scandals that would lead eventually to a humiliating resignation from office, President Richard Nixon took a triumphant seven-day trip to four Arab states and Israel where, as Time put it, "the huzzas and the hosannas fell like sweet rain."

President Bill Clinton, who was also beset by scandals in the last years of his term, was eager to salvage his legacy as a statesman by inviting the Israeli and Palestinian leaders to Camp David in July 2000 to negotiate a historic peace accord.

But neither Nixon nor Clinton could warm the political weather in Washington.

President George W. Bush seems to dismiss the lessons learned by his predecessors, fulfilling Santayana's prophecy that those who cannot remember the past are condemned to repeat it. Bush continues to suffer low approval ratings, and there's little hope that the televised images of his weeklong trip to the Middle East will rescue his legacy.

Bush's Mideast tour is dominated by the grand geopolitical design du jour for the region now that the U.S. March to Freedom has been halted by free elections that brought radical Islamic movements to power in Iraq and Palestine: The threat of the rising power of radical Shiite Iran would supposedly make possible a "strategic consensus" between Israel and the moderate Arab-Sunni regimes in Saudi Arabia, Egypt and Jordan and create incentives for Israel and Palestine to make peace.

Not unlike the earlier Bush administration's fantasy of establishing a liberated Iraq as a democratic model for the rest of the Middle East, the current strategy is based on illusions. The Arab-Sunni regimes recognize that it was the U.S. ousting of Saddam Hussein and the ensuing mess in Iraq that helped shift the balance of power in the Persian Gulf toward Iran, and that Washington lacks the means to reverse the situation. That explains the recent moves by Arab Gulf states and Egypt toward detente with Iran, demonstrated by the surprising visit of Iran's top national security adviser, Ali Larijani, to Egypt and Iranian President Mahmoud Ahmadinejad's attendance at the 28th annual summit of the Saudi-led Gulf Cooperation Council.

At the same time, it's the accepted wisdom in the Middle East that the gap between the Israelis and the Palestinians over core existential issues (Jerusalem, Jewish settlements, Arab refugees) is not bridgeable at this time, and that much of what the Bush administration continues to spin as the re-energized "peace process" is nothing more than a series of photo-ops staged in Annapolis, Jerusalem and Ramallah.

Voter anxiety over economy to decide White House race

Business Times - 18 Jan 2008

Voter anxiety over economy to decide White House race


POLITICAL and economic analysts are continuing to debate whether the American economy is heading towards a full-blown recession. But they all would agree that Michigan - the state in which Mitt Romney, the son of the late governor of the state, won the Republican presidential primary on Tuesday - is in the midst of what has been described as a 'one-state recession'.

Most observers seem to recognise that Michigan's faltering economy was a major issue in Tuesday's presidential primary and this explains why Mr Romney - a successful business executive who placed the bad economic news coming out of the Great Lakes State at the centre of his campaign there - achieved an impressive victory, winning 39 per cent of the votes in the primary, compared to 30 per cent for Senator John McCain and 16 per cent for former Arkansas governor Mike Huckabee.

Indeed, exit polls indicated that half the voters in Tuesday's Republican primary in Michigan - a state that has lost jobs for six consecutive years and is facing the longest job losses since the Great Depression of the 1930s - ranked the economy over the Iraq War, immigration and terrorism as the most important issue facing the country.

The Michigan recession could be the harbinger of the recession that could engulf the entire American economy in a few months. Sections of Detroit and other parts of the state which once upon a time in America were considered to be the centre of American manufacturing, symbolised by its booming auto industry (Mr Romney's dad was also a chief executive of an auto-making company), now look like ghost towns.

Hence, the abandoned factories and the deserted neighbourhoods reflect the depressing economic realities. Each day brings more news about thousands of workers being laid-off by the auto companies, rising home-foreclosures and mortgage delinquencies, and the closing-down of factories (Pfizer just closed its two centres in the state).

Michigan is still the home of the three big automakers - General Motors, Ford and DaimlerChrysler. But the Big Three have reported a drop of close to 30 per cent in their production in the last six years, which resulted mainly from foreign competition in the US market and has resulted in 120,000 lost jobs.

But what is happening in Michigan is just an extreme case of what is taking place around the country, reflected in reports about individuals who cannot pay their debt and are declaring themselves bankrupt. Indeed, as American voters are going to vote in the state primaries in the next weeks, they are exposed to bad news - not in Iraq, but in the economy: dismal retail sales; sharp declines in the stock prices; the continuing housing and credit crises; and the rising energy prices.

And while Iraq has had very little personal impact on individual Americans, most of them are aware that the economy is in trouble every time they purchase gasoline - and they assume there is a link between the two things.

On Tuesday, just as voters in Michigan were going to the polls, CNN and other cable news station were leading the news with reports about the bailout of the large financial houses of Citigroup and Merrill Lynch by investors from Singapore, Saudi Arabia, Kuwait and Korea, producing fear-provoking images of exotic Arabs and East Asians coming to the rescue of a sinking American economy.

The Wall Street Journal analysed the issue in a report titled 'New Masters of the Universe', which carried the pictures of Lee Kuan Yew and Prince Alwaled bin Talal.

At the same time, journalists covering President George W Bush's visit to the Middle East revealed that the head of the World's Only Remaining Superpower was pleading with the Arab sheikhs in the Persian Gulf to help the American consumers by increasing their oil production which could lead to a fall in energy prices.

But everyone expects the Saudis to turn down Mr Bush's request and recognise that the rise in energy prices is a result of growing demand by the Chinese, who are also helping to finance the US current account deficit.

All of this only exacerbates the anxiety among the members of America's middle class - who according to polls are sensing that their economy is on the eve of recession and that America is heading in the wrong direction. That sense of anxiety is responsible for Mr Romney's win on Tuesday. It is bound to dominate the presidential primaries and, indeed, the entire race to the White House that will conclude in November.

American voters will demand that their candidates explain how they would deal with the situation they find themselves in. It will be interesting to hear those candidates who have coherent ideas and plans for the long-term restructuring and revival of the economy.

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