Global Paradigms

Business Times - 05 Mar 2009 Not all economists are Keynesians Many economists, including Nobel laureates, disagree with the Obama administration's economic recovery strategy By LEON HADAR WASHINGTON CORRESPONDENT PRESIDENT Barack Obama has insisted that the majority of mainstream American economists support the general premises underlying his economic policy and, in particular, the notion that the federal government should have a central role in stimulating the economy and helping end the recession. 'There is not disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy,' Mr Obama said on the eve of his inauguration in January. Indeed, the conventional wisdom these days is that, frightened by the recession and the credit crunch that produced it, 'most economists' are now embracing public spending to repair the damage, including many of those economists who have long resisted a significant government role in a market...

Business Times - 05 Mar 2009 NEWS ANALYSIS Is Obama alienating Wall Street? And is Wall Street sabotaging the president's policies? By LEON HADAR IN WASHINGTON WALL Street has not given a welcome shout to US President Barack Obama. The Dow Jones Average has dropped almost 1,500 points since Mr Obama's inauguration a little more than a month ago, and nearly 3,000 points since his election on Nov 4. But Mr Obama seemed to be shrugging off the bearish mood in the markets on Tuesday, urging Americans to look past the decline on Wall Street. 'The stock market is sort of like a tracking poll in politics,' he said. 'You know, it bobs up and down day to day,' he insisted. 'And if you spend all your time worrying about that, then you're probably going to get the long-term strategy wrong.' Playing the role of the nation's chief investment analyst, the president suggested that Americans should consider buying some bargain stocks. 'Profit-and-earning rat...

Business Times - 03 Mar 2009 Obama will face huge political and legislative obstacles in garnering support for his three dramatic policy proposals By LEON HADAR WASHINGTON CORRESPONDENT A FEW days after the historic 2008 presidential election and in the midst of the worst economic downturn in American history since the Great Depression of the 1930s, Rahm Emanuel was selected by then President-elect Barack Obama as his chief of staff. He explained what would turn out to be the guiding principle of the new Democratic administration: 'You never want a serious crisis to go to waste.' 'What I mean by that is that it's an opportunity to do things you could not do before,' he said. Mr Emanuel's advice may have sounded a bit Machiavellian. But Mr Obama's top White House aide demonstrated that he was a brilliant student of the history of the American presidency. Indeed, two of the great US presidents in the 20th century - Democrat Franklin Delano Roosevelt (FDR) and ...

Business Times - 27 Feb 2009 Time to leave US financial crisis to the foxes By LEON HADAR WASHINGTON CORRESPONDENT PUNDITS in Washington are obsessing over the intellectual odyssey of economist Lawrence Summers who has been transformed from an avid free marketer of the 1990s, when he served in the Clinton administration, into a supporter of massive government intervention in the current financial crisis as President Barack Obama's top economic advisor. '(British economist John Maynard) Keynes famously said of someone who accused him of inconsistency: 'When circumstances change, I change my opinion',' Mr Summers recounted recently in an interview with Newsweek magazine to explain why he had been a proponent of deregulating the financial markets during the height of the age of financial globalisation and why now in the era of 'de-globalisation' he has been promoting a more activist role for Washington in regulating Wall Street. It's not that Mr Summers was...

Business Times - 18 Feb 2009 Obama can't have his bipartisan cake and eat it too By LEON HADAR WASHINGTON CORRESPONDENT DURING the 2008 election campaign, Democratic presidential candidate Barack Obama pledged that as president he would usher in a new era of 'post-partisan' politics in Washington. This was seen as a commitment by the young and change-oriented Mr Obama to bridge the partisan divide between Democrats and Republicans by, not only bringing members of the opposition party into his cabinet, but also by fashioning a legislative and policy strategy that would be acceptable to the majority of Democratic and Republican lawmakers. Many Americans shared Mr Obama's revulsion over the partisan gridlock in Washington that makes it difficult to pass critical legislation on Capitol Hill, and as a result, constrains the ability of the White House and Congress to reach compromises on hard choices that are necessary to reform the American political and economic systems. Fo...

Business Times - 16 Feb 2009 COMMENTARY A stimulus victory for Obama Now, even a slight economic improvement in the coming months will raise his clout to ask for more help from Congress By LEON HADAR WASHINGTON CORRESPONDENT IF A WASHINGTON political or economic pundit had predicted a year or two ago that the US Congress would pass a package of spending and tax cuts totalling US$787 billion, he would have been seen as suffering from hallucination. Or perhaps that he was confusing 'billion' with 'million', or was thinking about US$7.87 billion and just forgot to put a dot in the right place? That Congress - including the Senate, where the ruling party did not have a filibuster-proof majority (61) - would consent to approve such a colossal spending and tax-cutting package proposed by a new president who had been in office only 24 days (and let's not forget that the president was an African-American whose middle name was 'Hussein') would be considered as part o...

Business Times - 13 Feb 2009 Here we go TARPing again to nowhere For markets, it may be safe to assume that Washington hasn't found a way to fix the mess By LEON HADAR WASHINGTON CORRESPONDENT I WOULD not be surprised if a new term, 'Geithnerism', is soon going to be used by lawmakers and investors. Named after US Treasury Secretary Tim Geithner, it could become shorthand for the response from an underwhelmed Capitol Hill and a jaded Wall Street to another of the many efforts by Washington to restore calm and generate confidence in the financial market: a sort of 'Here we go TARPing again to nowhere'. This sentiment would exactly characterise the reactions to the Obama administration's 'much anticipated' and 'long awaited' revamped Financial Stability Plan to tackle the still-unfolding financial crisis announced by Mr Geithner in the ornate Cash Room of the Treasury Department earlier this week. 'This is a dangerous dynamic, and we need to ar...

Business Times - 11 Feb 2009 COMMENTARY Stimulus showdown in Washington IN CASE you have been gripped by a sense of nostalgia for the high political drama of the 2008 US presidential race, the current fight in Washington over the economic stimulus plan being promoted by the Obama administration - and challenged by Republicans - could provide you with at least some temporary relief. No one seriously doubts that President Barack Obama is going to win the current fight over the fate of the proposed US$800 billion government spending and tax cut plan. The US House of Representatives has already approved the earlier Democratic version of the stimulus plan legislation without any support from Republicans. And the Senate is expected to approve a watered-down version of the House bill totalling about US$827 billion, and that would consist of about 60 per cent spending and 40 per cent tax. The bill is being supported by 58 Democratic and Independent Senators joined by a small group of moderate ...

Business Times - 10 Feb 2009 Obamaniacs should accept the hard facts of politics By LEON HADAR WASHINGTON CORRESPONDENT DURING the 2008 presidential race, candidate Barack Obama's meteoric political rise reminded some observers of Chance the Gardener aka Chauncey Gardiner, the character played by Peter Sellers in the 1979 film, Being There (adapted from a novel by Jerzy Kosinski). Chance the Gardener finds himself homeless upon the death of the owner of a house in Washington and becomes the central figure in a comedy of misunderstandings. His ordinary silence and unremarkable utterances ('As long as the roots are not severed, all is well') are mistaken for profundities. He is embraced by a group of politicos and eventually the general public, and seems to be on his way to the White House. Mr Obama's detractors who compared Barack the Candidate to Chance the Gardener, suggested that not unlike the character in Being There, Mr Obama was uttering empty slogans ('Yes. W...

Business Times - 06 Feb 2009 So where does Obama really stand on trade? The US president, who made populist noises on the campaign trail, is facing a new reality By LEON HADAR WASHINGTON CORRESPONDENT WHEN candidate Barack Obama seemed to be advancing protectionist-sounding policy proposals in the midst of the election campaign, suggesting that if elected he would renegotiate with Mexico and Canada the terms of North American Free Trade Agreement (Nafta), some of his advisers pleaded with free traders at home and abroad to take it easy, please. Mr Obama was making these populist noises during the Democratic primaries as a way of ingratiating himself with powerful anti-globalisation constituencies in his party, they explained, adding with a wink that Mr Obama was a centrist and internationalist pro-free trade Democrat in the tradition of former president Bill Clinton. But Mr Obama reiterated the sceptical views on liberalising global trade during the general elections. 'I did not ju...

Copyright (c) 2009 The Daily Star Tuesday, February 03, 2009 The US is no longer a global hegemon By Leon T. Hadar Commentary by Changes in the status and power of nations, just like changes in economic conditions, are not always immediately apparent. There is, in the jargon of economics, a recognition lag between the time when an economic shock, such as a sudden boom or bust, occurs and the time when it is recognized by economists, central bankers and the government. Recognition lag explains why, for example, economists have only recently acknowledged the current economic recession - several months after it began. And recognition lag might well be why officials and pundits are now failing to recognize the detrimental impact of the combination of the Iraq war and the financial crisis on America's standing in the international system. Some attribute Washington's current difficulties in dictating global developments to the Bush administration's mismanagement of US dipl...

Business Times - 03 Feb 2009 100 days of stimulating and bailing-out Obama's early months will be dominated by one agenda: giving the economy the right jolt By LEON HADAR WASHINGTON CORRESPONDENT 'ECONOMIC Signs Turn from Grim to Worse' screamed the top front-page headline of The Washington Post last Friday, reflecting the sour mood in Washington as well as on Wall Street and Main Street. Sales of new homes are plummeting. Businesses, including corporate giants like Microsoft and Ford Motor, have announced massive layoffs as unemployment claims continue rising while stock prices keep on falling each day. Later, the US Commerce Department reported that consumers and businesses cut spending during the last three months of 2008, causing the US economy to shrink by 3.8 per cent - the fastest economic contraction in 25 years. The toxic mix of a global credit crunch, a collapsing US real estate market and a decline in consumer spending are combining, as the prophets of gloom and ...

Published in the new issue of The American Conservative. F e b r u a r y 9 , 2 0 0 9 T h e A m e r i c a n C o n s e r v a t i v e 33 [ A m e r i c a n R a j : L i b e r a t i o n o r D o m i n a t i o n ? : R e s o l v i n g t h e C o n f l i c t B e t w e e n t h e W e s t a n d t h e M u s l i m W o r l d , E r i c M a r g o l i s , K e y P o r t e r ] Averting the Clash B y L e o n H a d a r IT WAS BOUND TO HAPPEN. In the same way that the movement against U.S. military intervention in Vietnam split, amoeba-like, during the drawdown of the war in Southeast Asia, the opposition to the war in Iraq seems to be disintegrating now that the presidential candidate who promised to withdraw from Mesopotamia—a position that is currently supported by 70 percent of the American people—has occupied the White House. In fact, opponents of President George W. Bush’s decision to oust Saddam Hussein and the ensuing American occupation of Iraq have never constituted a unified political force. The a...

President Barack Obama might turn out to be a foreign policy pragmatist, eschewing the grand strategies and big-label crusades that inspire the minds of Washington’s cognoscenti. After eight years of the Bush administration’s foreign policy fantasies, the notion of an Obama administration muddling through foreign policy choices should be welcomed, even by those who will inevitably be disappointed when Obama fails to live up to their high expectations. Read my latest commentary on the issue.

Business Times - 29 Jan 2009 A lot riding on the stimulus package By LEON HADAR WASHINGTON CORRESPONDENT ON THE same day that Timothy Geithner was sworn in as the new US Treasury Secretary, several major US corporations, including Home Depot and Caterpillar, announced that they would be cutting more than 75,000 jobs in the US and worldwide. The news about the layoffs, not to mention the never-ending reports about crumbling banks and home foreclosures, served as a depressing backdrop for the start of the workweek for the man who was about the fill the shoes that had been worn for the first time by one of America's Founding Fathers, Alexander Hamilton. The bets are that Mr Geithner will either emerge as one of the most important Treasury secretaries in US history - if he succeeds in re-energising the stagnant financial markets and presides over an economic recovery - or that he will be recalled as America's top economic official who ended up going under, defeated and doomed, toge...

Business Times - 26 Jan 2009 COMMENTARY Obama's Treasury man resorting to China bashing? Geithner's 'currency manipulation' remarks raise fears that new US administration sees Beijing as global competitor By LEON HADAR WASHINGTON CORRESPONDENT IF, AS Samuel Johnson once said, 'patriotism is the last refuge of the scoundrel', then protectionism provides the last protection for the economic loser. And 'China bashing', on the other hand, seems to be the first sanctuary of the maker of policy or law in Washington searching for a scapegoat to blame for his or her nation's geoeconomic and geostrategic woes. In many traditional English mystery novels, we discover at the end of the story that the butler did it, while in the Washington tale of economic mess, the role of the butler is played by the Chinaman who emerges as the villain of first resort. So it was not surprising that US President Barack Obama's choice of Treasury Secretary, financial wunderkin...