Global Paradigms

Business Times - 06 Oct 2009 US jobs data show situation could worsen Unemployment at its highest in 26 years means confidence could take a hit By LEON HADAR WASHINGTON CORRESPONDENT THE report coming out of Copenhagen about US President Barack Obama's high-profile failure to win the Olympics games for Chicago made for a less than auspicious backdrop for the other depressing news last week. The latest jobs report that was issued by the US Labour Department on Friday seemed to be worse than the economists had predicted. The consensus among economists had been that the American economy would lose 190,000 jobs in September. Instead 260,000 were lost, with the unemployment rate rising to 9.8 per cent, the highest it's been in 26 years or - to make it sound even worst - in a quarter century. If the decision by the International Olympic Committee (IOC) to reject Chicago's bid to host the 2016 Olympic Games came as blow to the perceived international star power of President Obama ...

Business Times - 29 Sep 2009 Changing the global economic leadership G-20 will provide an important arena for US, China and others to coordinate their policies By LEON HADAR WASHINGTON CORRESPONDENT FOR close to 25 years, the United States and the other six largest economies, aka the G-7, were considered to be the board of directors of the global economy. In many instances, the governments of these seven industrialised powers were not able to agree on joint action; but when they could find a way to cooperate, their collective decision-making would send shock waves through stock markets worldwide and pull up or push down global exchange and interest rates. This exclusive club of rich economies was formed in France in 1975 (with six members). Canada joined a year later. The group expanded to eight members when Russia was invited to join in 1997. The decision to add the emerging economy of Russia to the grouping was driven mostly by geopolitical and not economic considerations, at a time ...

Business Times - 23 Sep 2009 Stage is set, but don't expect much from G-20 By LEON HADAR WASHINGTON CORRESPONDENT AFTER attending the United Nations (UN) General Assembly meeting in New York, the leaders of the world's 19 largest economies and the European Union (EU) will be travelling to Pittsburgh, Pennsylvania, to take part in the third economic summit since the start of the current global recession. In the last two G-20 summits, the assembled leaders had embraced fiscal and monetary stimulus policies that were supposed to help their economies get out of the greatest economic recession since the Great Depression of the 1930s. The main goal of US President Barack Obama, the host of the G-20 summit, and the rest of the leaders who will be convening in Pittsburgh this week will be to examine policies that could allow them to start bringing an end to those costly monetary and fiscal policies - the so-called 'exit strategy' - without hurting the prospects for an economic ...

Business Times - 17 Sep 2009 US financial reforms far removed from political reality By LEON HADAR WASHINGTON CORRESPONDENT EXACTLY a year after the collapse of Lehman Brothers and the ensuing financial crisis, US President Barack Obama has urged Congress to move on stalled regulatory reforms of the nation's financial system. Mr Obama, who was speaking to Wall Street business leaders, also stressed that the 'the old ways that led to this crisis cannot stand', stating 'the need for change and change now'. 'We will not go back to the days of reckless behaviour and unchecked excess that was at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses,' the president insisted, as he drew attention to the way American taxpayers had 'shouldered the burden of the bailout' and were 'still bearing the burden of the fallout - in lost jobs, lost homes, and lost opportunities'. Indeed, Main Street ha...

Business Times - 16 Sep 2009 Why Obama had to impose those Chinese tyre tariffs By LEON HADAR WASHINGTON CORRESPONDENT LATE last Friday night as everyone in Washington was asleep, the White House imposed 35 per cent tariffs on tyres from China. President Barack Obama and his top aides may have hoped that issuing a press release at the onset of a lazy autumn weekend would reduce the overall political impact of the decision to impose trade sanctions on the Chinese. But the late-night announcement in Washington, which was driven by the political pressure from trade unions and other protectionist forces, ended up puncturing the image of Mr Obama as a free-trader. It also increases the prospects for a new Sino-American trade battle at a time when the president and the Federal Reserve have been implementing expansionary fiscal and monetary policies whose costs in the form of rising deficits are being financed by the Chinese. Indeed, after the news from the White House, officials in Beijing p...

Business Times - 15 Sep 2009 Time has come for Obama to walk the walk His ability to make hard choices on issues will have major impact on US' position globally By LEON HADAR WASHINGTON CORRESPONDENT US PRESIDENT Barack Obama's dramatic address to a joint session of Congress last week, during which he implored lawmakers to back his sweeping healthcare overhaul, was clearly an attempt to seize control of healthcare debate. He wants it to create a political momentum that could drive forward one of the most important changes in America's social-economic policy since the Great Society legislation of the 1960s. Indeed, if Mr Obama's speech helps him win over a sceptical public and persuade wavering Democratic and Republican lawmakers to come up with far-reaching healthcare legislation which would cut health costs and expand coverage to million of non-insured Americans, he would be following in the footsteps of presidents such as Franklin Roosevelt and Lyndon Johnson who had ...

Business Times - 10 Sep 2009 Obama faces backlash from middle classes left behind By LEON HADAR WASHINGTON CORRESPONDENT AS Americans were preparing to start their long Labor Day weekend last Friday, they might have been cheered by new data showing that job losses had slowed down in August. But slowing job losses is not recovery: unemployment surged higher than expected in August to 9.7 per cent, the worst in 26 years. Overall, there are 14.9 million Americans out of work. The US economy has lost a net total of nearly seven million jobs since the recession began in late 2007, with some of those losses coming in August, as employers shed 216,000 jobs. So the only good news was that America experienced the smallest total loss since August last year. Clearly, notwithstanding the less bearish mood in Wall Street, no one will be popping the champagne corks in Washington this week, as President Barack Obama and lawmakers return after a summer recess that was dominated by the nasty political ...

published on realclearworld.com: http://www.realclearworld.com/articles/2009/09/06/the_case_for_engaging_iran_97136.html September 6, 2009 The Case for Engaging Iran By Leon Hadar The U.S. and its allies are currently drawing the outline of new UN sanctions against Iran. U.S. President Barack Obama should resist the pressure from those politicians and pundits who, in the name of helping dissidents and promoting democracy in Iran, would effectively torpedo a pragmatic policy of opening a dialogue with Tehran which could lead in the short term to a deal to freeze Iran's nuclear program. The conventional wisdom in Washington is that Obama's proposed initiative for diplomatic engagement with Iran is all but dead in light of the political upheaval that has followed the questionable outcome of the June 12 presidential election in Iran.The country's internal turmoil, in this view, has diminished the chances of resolving the diplomatic standoff over the Islamic Republic's refu...

Business Times - 05 Sep 2009 Has Obama let down voters? Critics are angry at what they consider his betrayal of a large-scale liberal agenda and are worried the nation would suffer as a result of a shift to the political centre By LEON HADAR WASHINGTON CORRESPONDENT SUGGESTING that Barack Obama could become another Bill Clinton sounds like a piece of good news and probably cheer-up many fans of the current Democratic president. After all, Bill Clinton ended-up being the only Democratic White House occupant since president Franklin Delano Roosevelt to serve two full terms in office. And while historians may not remember Mr Clinton as a great president, most of them would almost certainly rate him as a better-than-average one who had led America during a time of relative tranquillity and the most economically prosperous years Americans had known for decades. Centrist Democrats aka New Democrats have insisted that Mr Clinton's electoral longevity, including his impressive victories in...

Business Times - 27 Aug 2009 Bernanke: the easy choice? By LEON HADAR WASHINGTON CORRESPONDENT PRESIDENT Barack Obama ended speculation that he might appoint a new head of the United States central bank when he announced that he would be nominating Federal Reserve Board chairman Ben Bernanke for a second term. Mr Bernanke, whose first term will expire next Jan 31, is a Republican who was first nominated by former President George W Bush in 2005 to replace Alan Greenspan. While Mr Bernanke will still have to be confirmed by the Senate for a second term, it is a done deal and he is expected to sail through the process on Capitol Hill. In fact, Senator Christopher Dodd, the Senate Banking Committee chairman, has already released a statement saying, despite serious differences he had with the Fed chairman in the past, Mr Bernanke was the 'right person' for this job right now. Mr Bernanke has become a convenient target for the Republican and Democratic lawmakers who have been exploi...

Business Times - 25 Aug 2009 A statistical recovery - or a genuine one? The upbeat mood of central bankers and Wall St investors isn't trickling down to Main Street By LEON HADAR WASHINGTON CORRESPONDENT US FEDERAL Reserve chairman Ben Bernanke and other central bankers meeting at the annual Federal Reserve symposium in Jackson Hole, Wyoming last week seemed to be exuding a sense of optimism about the condition of the American and global economy (see opposite page). Indeed, Mr Bernanke insisted in a speech that the American economy was starting to emerge from recession and aggressive intervention by Washington was working. 'After contracting sharply over the past year, economic activity appears to be levelling out both in the United States and abroad, and the prospects for a return to growth in the near term appear good,' he said. But he did temper that upbeat attitude by cautioning businesses and consumers that problems would continue to persist in both the credit and job ...

Business Times - 20 Aug 2009 Obama's engagement policy isn't naive politics By LEON HADAR WASHINGTON CORRESPONDENT ONE of the central themes of presidential candidate Barack Obama was his willingness to engage with foreign governments whose policies ran contrary to American interests and values. Mr Obama's suggestion that he would be willing to start a dialogue - and perhaps even meet the ayatollahs in Teheran, the Ba'athists in Damascus or members of the antiquated communist regimes in Pyongyang and Havana - ignited a lot of criticism among his political rivals who portrayed him as 'inexperienced' and 'naïve' - not to mention his depiction as a Chamberlain-like 'appeaser'. But Mr Obama dismissed those charges, rejected the axiom promoted by then president George W Bush - that US diplomatic engagement with so-called 'rogue regimes', including the members of the 'Axis of Evil', amounted to providing legitimacy to these 'bad gu...

Business Times - 18 Aug 2009 'Birthers', 'deathers' and the fear of change Obama has a tough job winning over many middle-aged-to-elderly white men and women By LEON HADAR WASHINGTON CORRESPONDENT WE FIRST witnessed the birth of the Obama 'birther' story. You couldn't surf the Web or switch on cable television news channels without being bombarded with 'reports' that Barack Hussein Obama - the emphasis being on 'Hussein' - was not born in the US but in Kenya (or perhaps in Indonesia). And since he was not a natural-born citizen, he was therefore not eligible for the presidency. So, Obama the Kenyan is illegally occupying the White House; he isn't really the president. The 'Obama-is-Kenyan' story was first circulated on some of the more radical right-wing blogs during the 2008 presidential campaign - the same blogs that also informed us that Mr Obama was educated in a Muslim madrasah, and/or was an Al-Qaeda mole, and/or that he was...

Business Times - 14 Aug 2009 Obama's looking at the bigger picture By not shaking up the political foundations, he's less likely to create conditions that could threaten his presidency By LEON HADAR WASHINGTON CORRESPONDENT OUR friendly Martian trying to make sense of the life and times of Barack Obama by monitoring what the members of America's chattering class say about him six months into his presidency would probably be quite confused. Who exactly is this guy who just a few months ago had been heralded as a 'transformative' post-partisan, post-racial president? Is he changing the way business is done in Washington, standing up to entrenched economic and political interests and their well-paid lobbyists? Is he shifting the direction of US foreign and defence policies? The answer to these and related questions depend very much on where one stands on the political map. Pundits on the political right are portraying the White House occupant as a left-leaning liberal ...

Business Times - 11 Aug 2009 What a difference 0.1 percentage point makes By LEON HADAR WASHINGTON CORRESPONDENT KEEPING score in Washington, not unlike on Wall Street, is possible only if we recognise that 'winning' or 'losing' in political battle as in financial combat reflects one's success - or lack of - in beating the expectations game, in doing better than expected by the experts who compose the conventional wisdom. So after economists had predicted that the July unemployment rate would be 0.1 or 0.2 of a percentage point higher than June's 9.5 per cent, and the US Bureau of Labor Statistics reported on Friday that unemployment fell to 9.4 per cent, the Obama administration seized on the news to produce a spin that made it look as though the White House's efforts to end the economic recession were making a real difference. President Barack Obama's press secretary, Robert Gibbs, told reporters that the new unemployment report was 'more evidence ...

Business Times - 07 Aug 2009 Did regulations cause current crisis? Some economists contend government intrusion into capitalism, and not capitalism, is to blame for the financial mess By LEON HADAR WASHINGTON CORRESPONDENT THE intellectual starting point for much of the conventional wisdom regarding the origins of the current financial crisis is that it was brought about by capitalism gone wrong and that it combined with the failure of the US government to prevent it through effective regulation of the financial system. Not surprisingly, most of the policy prescriptions advanced by economic pundits and embraced by lawmakers and officials have called on the government to take forceful steps to discipline the free and wild market system that is supposedly responsible for the mess we are in. But a contrarian view that points to the government and its regulatory agencies as prime agents of this economic mess has been promoted by free market-oriented research institutions and magazines. Tha...