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Showing posts from November, 2010

Why US can't churn out a rerun of Plaza Accord

Business Times - 01 Dec 2010



Business Times - 01 Dec 2010


Why US can't churn out a rerun of Plaza Accord

Unlike in 1985, the perception now is that the US is driven by its own economic self-interest

By LEON HADAR
WASHINGTON CORRESPONDENT

AT A time when the need to fix the global financial imbalances between the United States and China dominates the policy agenda, veteran diplomats and economic officials are recalling with nostalgia a similar effort to settle the economic tensions between the US and Japan in the 1980s.

Then, as now, Washington was preoccupied with mounting budget and trade deficits, and many US officials and lawmakers were worried over competition from a rising East Asian economic power - Japan - which they accused of pursuing mercantilist trade policies.

The conventional wisdom then, as now, was that reducing the US deficits and bringing savings and investment more into balance globally would require the devaluation of the US dollar against the Japanese yen.

That in …

my new piece on Huffington Post on Korean crisis

Bad Omens for Obama -- and America

Business Times - 24 Nov 2010


Bad omens for Obama - and America

Washington may experience a legislative and policy gridlock if Republicans decide to take the uncooperative route

By LEON HADAR
WASHINGTON CORRESPONDENT

IF YOU want to understand the direction US domestic and foreign policies will go in the last two years of the first - or only - term of President Barack Obama, keep the following things in mind.


In less than a year - just after Labor Day 2011 - American policymakers, lawmakers, the media and the rest of Washington's power elites will be getting ready for the presidential and Congressional elections of 2012.


Winning in 2012 is going to become the top - and perhaps the only - priority, setting the agenda of almost everyone here, from the White House occupant and the Republican and Democratic Congressional leaders to the lowly government bureaucrats and Capitol Hill staff.

No one is probably going to challenge Mr Obama for the Democratic Party's presidential nomination, …

Bruised both at home and abroad

Business Times - 18 Nov 2010


Bruised both at home and abroad

President Barack Obama has his work cut out to devise a strategy that would deal with global economic challenges

By LEON HADAR
WASHINGTON CORRESPONDENT

US PRESIDENT Barack Obama returned this week to Washington from a 10-day trip to Asia, an excursion that involved several geo-strategic and geo-economic juggling acts. He set out to strengthen relations with India; hoped to conclude a free trade agreement with South Korea; stabilise the Sino-American balance of power by expanding security ties with allies; improve America's standing with Muslims during the visit in Indonesia; win support of other economic powers for the rebalancing of the global financial system.

And framing the Asia tour - including participation in the G-20 meeting in Seoul and the Asia-Pacific Economic Cooperation (Apec) summit in Yokohama - has been an effort to win the support of an economically distressed and wary, if not hostile, American public.

At…

The Choice: Military Quagmires (Mideast) or Economic Opportunities (Pacific Rim)

Please read my new article on The Huffington Post

Being practical about trade

Business Times - 13 Nov 2010


Being practical about trade

Most Americans have no ideological commitment in the debate over trade. They want working policies that help create new and well-paying jobs.

By LEON HADAR
WASHINGTON CORRESPONDENT

IF YOU insist on challenging the notion that the vote in the recent US mid-term elections was not driven by any ideological fervour, reflecting the non-ideological and pragmatic disposition of most Americans, just consider the two politicians - a Democrat and a Republican - who represent the State of Ohio.

The Democrat Sherrod Brown was elected to the Senate in the 2006 mid-term election, when the Democrats regained control of the House of Representatives in what was described as a 'wave election' in which the Democrats were supposedly on their way to establishing a dominant position over the American political system. President Barack Obama's historic victory in the 2008 presidential election seemed to underscore that New-Democratic-Majorit…

The dangers of dragging the Fed into politics

Business Times - 12 Nov 2010


The dangers of dragging the Fed into politics

By LEON HADAR
WASHINGTON CORRESPONDENT

THE US Federal Reserve's decision to inject more money into the financial markets is being blasted by a prominent political figure - and I'm not referring here to the leaders of China, Germany or Brazil.

The former governor of Alaska and republican presidential candidate John McCain's 2008 running mate - and quite possibly a 2012 presidential candidate - may not be a leading economic policy wonk but Sarah Palin is now bashing the policies being pursued by Ben Bernanke, the Fed's chairman. She argued that the new round of quantitative easing (QE2) through the buying of US$600 billion in long-term US Treasury bonds - purchases that will total up to US$900 billion and be completed by the end of the third quarter of 2011 - posed a major threat to American and global economic recovery and could ignite inflation and devalue the US dollar.

Welcome to the Palin and B…

Policies set to clash in Washington

Business Times - 05 Nov 2010

PERPESTIVE
Policies set to clash in Washington

A potentially gridlocked legislative process could retard the economic recovery and hurt business

By LEON HADAR
WASHINGTON CORRESPONDENT

ON THE same day that the US Federal Reserve launched a new round of quantitative easing, as it announced its plan to buy US$600 billion worth of government securities through the middle of next year, President Barack Obama and Congressional leaders were facing their first post-midterms economic-policy challenge: Should they extend the tax cuts that were passed under president George W Bush and that are set to expire at the end of the year?

The newly elected Congress where Republicans will control the House of Representatives and increase their numbers in the Senate will not convene until January next year.

This timeline is forcing the current Democratic-controlled Congress and the White House to make a difficult choice and demonstrate the way that a potentially gridlocked legis…

On the Tea Party and foreign policy on the Huffington Post

A blunt message to Obama, allies

Business Times - 04 Nov 2010


A blunt message to Obama, allies

By turning to Republicans, voters say Obama will need to do more to fix the economy if he wants to get re-elected in 2012

By LEON HADAR
WASHINGTON CORRESPONDENT

SOME political analysts had predicted that the 2010 midterm elections would turn into a Republican tsunami that could drown the Obama administration and the Democrats who could end up losing their majority in the House of Representatives as well as the Senate.

According to this worst-case scenario for the Democrats, the Republicans would have picked up more than 70 seats in the House and win even the Senate races in California and other Democratic-leaning 'blue' states.

Well, the 2010 midterms are probably not going to become a Republican tsunami, with the Democrats expected to lose less than 70 seats in the House and to retain a slim majority in the Senate. But even the most enthusiastic Democratic cheerleader and Obama supporters will have to agree that a p…

Fed set to fire up monetary engine

Business Times - 02 Nov 2010


Fed set to fire up monetary engine

By LEON HADAR
WASHINGTON CORRESPONDENT

IT IS appropriate that the decision to launch another round of monetary stimulus by the US central bank is going to be made the day after the midterm congressional elections. At a time when the majority of Republican lawmakers as well as many Democrats are opposed to the introduction of even the most modest fiscal stimulus programme, it is Ben Bernanke, the chairman of the Federal Reserve, and his colleagues on the institution's policy-making body who are being forced to 'do something' to re-energise the sluggish economic recovery.

If anything, with the Republicans increasing their strength in the newly elected Congress - thanks in large measure to the support of the fiscally ultra-conservative members of the Tea Party - the chances that US lawmakers would back even a short-term stimulus package are close to zero. Most opinion polls suggest that a majority of Americans hav…