Showing posts from 2008

Big - and getting bigger and bigger

Business Times - 25 Dec 2008 OBAMA'S STIMULUS PACKAGE Big - and getting bigger and bigger Consensus seems to be that long-term consequences can wait; things need fixing now By LEON HADAR IN WASHINGTON BARACK OBAMA will be inaugurated as the next US President on Jan 20. Yet, if you happen to read the headlines in the major American newspapers or watch television news regularly, you would probably conclude that Mr Obama has been occupying the White House for quite a while, as he and his aides have been bombarding the media and the public through statements and leaks with their continuously changing programmes for fixing the American economy - which tend to be confused with the old and new plans proposed by the current president, George W Bush, for, well, fixing the American economy. The only thing one could be certain about these days is that this American economy is continuing to plunge just as both the departing and arriving presidents are adding billions - no, change that to '

Obama the Mideast Peace-Maker?

Posted on the World Policy Journal blog Leon Hadar: Obama the Mideast Peace-Maker? December 18th, 2008 Posted in Israel, Obama, U.S. Foreign Policy | Since the publication of my retrospective article on Israel in the fall 25th anniversary issue of World Policy Journal, a few colleagues have wondered if I considered revising my somewhat “pessimistic outlook” (the way one of my correspondents put it) about the chances of resolving the Israeli-Palestinian with Barack Obama in office. So have I changed my tune? First, what I was trying to do in my WPJ article was to highlight the gap between the high expectations that many of us seemed to share regarding the Israeli-Palestinian peace process in 1991 (the end of the Cold War, increasing globalization, etc.) with the depressing reality of today’s Holy Land—post-9/11, post-Iraq War, and amidst the present global economic crisis. If anything, my retrospective reflected my sense of realism about the ability and willingness on the part of Israel

Fed reaches end of its traditional road

Business Times - 18 Dec 2008 From now, it may resort to other tools such as printing new money By LEON HADAR IN WASHINGTON PUNDITS have been using a variety of dramatic adjectives - 'rare', 'unprecedented', 'extraordinary', 'radical', 'historic' - to describe the Fed's decision on Tuesday to cut its target for the federal funds rate to a range of zero to 0.25 per cent - a record low - from one per cent. But in a way, in a year that has seen so many 'rare', 'unprecedented', 'extraordinary', 'radical', and 'historic' moves by the US federal government, including the partial and complete nationalisation of several banks and investment houses and the bailing out of many financial institutions, not to mention the long list of fiscal and monetary policies, the decision by the central bank to slash its benchmark interest rate close to zero was not only expected but somewhat anti-climactic, especially when one

Obama should take the other road to Jerusalem

Business Times - 17 Dec 2008 By LEON HADAR WASHINGTON CORRESPONDENT IN EARLY 2002, the then US secretary of state, Colin Powell, was exploring ways to restart negotiations between the Israelis and the Palestinians that had broken down in the aftermath of the second Palestinian Intifadah (uprising). Mr Powell was arguing that a resolution of the conflict between Jews and Arabs in the Holy Land could help lessen anti-Americanism in the Arab world and restore US power in the Middle East which had been challenged on 9/11. The notion that the road to a more stable and pro-Western Middle East leads through Jerusalem - the resolution of the Israeli-Palestinian conflict - was very much the accepted wisdom among members of the foreign policy establishment in Washington as well the view of most of US allies who called on President George W Bush to embrace a more activist US diplomatic approach in the Middle East. But Vice-President Dick Cheney and Defense Secretary Donald Rumsfeld as well as the

On Sino-American relationship

China Must Be Central to US Global Agenda by Leon T. Hadar Leon T. Hadar is a research fellow in foreign policy studies at the Cato Institute in Washington This article appeared in the South China Morning Post on December 10, 2008 The major criticism that East Asian officials would make of the outgoing Bush administration's foreign policy would be Washington's focus on the geostrategic problems in the broader Middle East in the past eight years, and the resulting sidelining of China and most of East Asia on the US global agenda. This neglect of China needs to change. Secretary of State Condoleezza Rice's recent trips to South Asia (to try to defuse Indo-Pakistani tensions in the aftermath of the Mumbai terrorism) and to the Middle East (to attempt to re-energise Israeli-Palestinian negotiations) have been highlighted in leading US newspapers. Treasury Secretary Henry Paulson's meetings in Beijing, as part of the ongoing Strategic Economic Dialogue, have, however, only

New battle for commanding heights

Business Times - 12 Dec 2008 These days, with huge industry bailouts, it seems the US is following in the economic footsteps of Russia and China By LEON HADAR WASHINGTON CORRESPONDENT DURING the height of the globalisation era of the 1990s, political economists Daniel Yergin and Joseph Stanislaw, published The Commanding Heights: The Battle Between Government and the Marketplace That Is Remaking the Modern World, a treatise on the relationship between the government and the marketplace which became an instant best-seller and was turned into a documentary. Taking the title from a 1922 speech by the founding father of the Soviet Union, Vladimir Lenin - who used the phrase 'commanding heights' to refer to industries in an economy that effectively control and support the others, such as oil, railroads, banking and steel - the authors defined globalisation as a period in economic history when free markets predominate, and governments relinquish control over the 'commanding heigh

So is Obama going left, right or centre?

Business Times - 10 Dec 2008 By LEON HADAR WASHINGTON CORRESPONDENT LEFT-wing activists in the Democratic Party have been critical of the US President-elect's choices for the national security and economic teams whose members would be in charge of managing the policies of the next administration, including the handling of the financial crisis and the withdrawal of US troops from Iraq. After all, presidential candidate Obama ran on a platform of 'Change' during both the presidential primaries and the general election. One of the main reasons for his successful challenge during the Democratic primaries to the20candidacy of Senator Hillary Clinton, the darling of the Washington establishment and an earlier backer of the Iraq War, was Obama's consistent opposition to the military adventure in Mesopotamia. Yet, Obama ended up selecting Clinton as his Secretary of State while retaining Republican Robert Gates as Defense Secretary. Where is the promised Change in foreign polic

Team Obama - can rivals play and win?

Business Times - 03 Dec 2008 Conflicts between his foreign policy stars could delay the changes he has promised By LEON HADAR WASHINGTON CORRESPONDENT SCIENTISTS who study the way our brain processes images describe a condition known as visual agnosia, or the lack of visual knowledge, when one can observe an object through normal visual acuity but cannot make a meaningful perception from this sensation. It seems that when the visual region of a person's brain is partially damaged, he or she can produce a faithful rendering of an illustration but have no idea what it is. One 'sees' but does not 'know'. But even if your brain has not been injured recently, you may have experienced a form of visual agnosia when you were watching US President-elect Barack Obama unveiling his national security team. It was not very difficult to see that Mr Obama has nominated Senator Hillary Clinton, his rival for the Democratic presidential nomination, as his secretary of state, and tha

Obama does it the pragmatic way

Business Times - 28 Nov 2008 By recruiting Clinton era economists, he may be signalling that he does not plan to move towards a New New Deal By LEON HADAR WASHINGTON CORRESPONDENT SOME pundits have been drawing parallels between the coming presidency of Democrat Barack Obama and that of Franklin Delano Roosevelt who was elected to four terms in office - serving from 1933 to 1945 - during one of the most tumultuous times in US history. According to what could be described as the New New Deal Narrative, historians and journalists have noted that both Mr Obama and FDR were elected in the wake of a devastating financial crisis and during the ensuing economic recession. In this narrative, Mr Roosevelt's predecessor in office, Republican President Herbert Hoover and George W Bush, another Republican president and current White House occupant whom Mr Obama will replace next year, play the role of the antagonist in the respective historical dramas. Both Mr Hoover and Mr Bush were strong ad

The Hillary nomination: the good news...

My post on @TAC: The Obama Glass Totally Empty? Posted on November 24th, 2008 by Leon Hadar I’m aware that some of my colleagues have been depressed about the notion that the Clintonites are taking over the Obama Administration. I’m certainly disappointed by the expected nomination of Hillary Clinton to be the next secretary of state. But I was encouraged after reading Scowcroft Protégés on Obama’s Radar in the WSJ today, and especially this The relationship between the president-elect and the Republican heavyweight suggests that Mr. Scowcroft’s views, which place a premium on an Israeli-Palestinian peace accord, might hold sway in the Obama White House. And this Mr. Scowcroft said his biggest piece of advice for the new administration was that it should make a renewed push to help broker an Israeli-Palestinian peace deal. He also endorsed Mr. Obama’s call for diplomatic engagement with Iran. “Compared to the other alternatives we face with Iran, we ought to give it a really good, si

US economy waits for its saviours

Business Times - 25 Nov 2008 The transition provides an opportunity to highlight the ideological differences between Reaganomics and Obamanomics By LEON HADAR WASHINGTON CORRESPONDENT FOR those of us who had got used to former Pentagon chief Donald Rumsfeld saying over and over again that 'We seemed to have turned a corner in Iraq' - only to discover again and again that things were getting worse, there was a sense of deja vu listening to Treasury Secretary Henry Paulson reassuring reporters last week that he wasn't expecting another collapse of a major financial institution. 'I've got to tell you,' Mr Paulson said. 'I think our major institutions have been stabilised. I believe that very strongly.' But by the end of the week, we found out that notwithstanding Mr Paulson's assurances, in reality, the stock market was falling and falling. . . In particular, financial institutions were very hard hit, especially Citigroup whose shares lost half their v

Good for GM = good for USA?

Business Times - 21 Nov 2008 A poll shows lots of Americans seem to think so - but saving the Big Three US automakers isn't so straightforward By LEON HADAR WASHINGTON CORRESPONDENT THE option chosen by the Bush administration of providing emergency assistance of US$700 billion to Wall Street in the aftermath of the collapse of Lehman Brothers and other financial institutions was compared at one time to the decision to invade Afghanistan and to oust the Taleban regime and destroy the power base of Al-Qaeda that had masterminded the 9/11 terrorist attacks: a costly but right response to what was perceived to be a clear and present danger. Indeed, with the exception of ideologues on the political left and right, most members of Congress and the media ended up approving both the war in Afghanistan and the Wall Street bailout plan. The expectation in Washington was that then defence secretary Donald Rumsfeld would help win the war by capturing and punishing Osama bin Laden and his top

Washington: boom town amidst the gloom

Business Times - 18 Nov 2008 The capital tends to grow and prosper during times of economic and international troubles By LEON HADAR WASHINGTON CORRESPONDENT WHETHER you examine economic indicators or study anecdotal evidence - rising unemployment, home foreclosures, business bankruptcies, falling consumer confidence, deserted shopping malls - they all seem to point to one conclusion: the American economy is in a recession and may be sliding into a depression. Unless, that is, you happen to live and work in Washington, DC, the capital city of this nation that is supposed to be in the midst of economic distress. In my neighbourhood, they have just completed the construction of a tall luxury apartment that overlooks the new and the always packed Bloomingdale's department store. And guess what? The manager tells me that the very expensive apartments are selling 'like hot cakes' and that his company is planning to put up one or two more buildings in the area. 'There is alre

G-20 marks time as it waits for Obama

Business Times - 17 Nov 2008 NEWS ANALYSIS Summit drags its feet on major issues as it waits for Bush to leave the stage By LEON HADAR IN WASHINGTON THE meeting of leaders representing the world's 20 largest economies that took place in Washington over the weekend should be described as an 'historic' event for two main reasons: First, it was a dramatic response to one of the most devastating global economic crisis since the Great Depression of the 1930. And it marked the shift of economic power from the 'old' club of the seven industrialised nations of North America, Western Europe and Japan to the 'new' emerging economies in Asia, Latin America and Africa. But in practical terms, the presidents and prime ministers who attended the two-day summit of the Group of 20 have refrained from launching a major collaborative effort to deal with the continuing instability in the financial markets. Instead, they reiterated calls for greater oversight of the financial m

G-20 talks will be a photo-op

Business Times - 14 Nov 2008 By LEON HADAR WASHINGTON CORRESPONDENT TWO dramatic developments would serve as backdrops for the gathering of the leaders of the world's 20 major economic powers in Washington over the weekend. Hovering over the meetings of the Group of 20 (G-20) would, of course, be the ongoing global financial crisis that has overwhelmed economies around the world, raising the spectre of a worldwide global depression. At the same time, the summit will also be dominated by a sense of hope that has swept America and the international community in the aftermath of the historic election of Barack Obama as the leader of the world's most powerful economy. But the charismatic and relatively young Mr Obama, who has committed his incoming administration to reform and revive the American economy and work with US partners to do the same in the global arena, will not be in the room during the meetings this weekend. The leaders of G-20 economies, who were hoping to meet the U

Obama walks a tight rope between change and continuity

Business Times - 12 Nov 2008 By LEON HADAR WASHINGTON CORRESPONDENT THE meeting between US President-elect Barack Obama and President George W Bush at the White House on Monday during which they talked about the economic and national-security problems is part of the ritual of the transition of power that takes place every four years. But at a time when America is confronting one of the most devastating economic crisis in recent memory and its military forces are engaged in two major wars, in Iraq and Afghanistan - three wars if you add the war on terrorism to the list - the handing of the nation's top leadership position from a failed and controversial president to a one who promises to mount dramatic changes in US domestic and foreign policies acquires a historic significance. Indeed, historians compare the passing of the presidential torch from Mr Bush to Mr Obama to another important change that took place when Republican president Herbert Hoover lost the election to Democratic