Global Paradigms

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...

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...

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...

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 ...

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...

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...

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...

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 ...

Business Times - 11 Nov 2008 The Obama Meme? By LEON HADAR WASHINGTON CORRESPONDENT HERE is a prediction on which I'm willing to bet my (401) K retirement plan (or what's left of it): In the next year or two we're going to see the rise of new movements for political change around the world whose common theme will go something like this: 'Why can't an Obama-like political leader be elected in ?' In short, whether you're in, say, Russia, Argentina, Egypt or Britain, watch out for that 'Obama Meme'. A 'meme', a term coined by the evolution theorist Richard Dawkins, is an idea, theory or fashion that propagates itself and can spread around the world similar to the contagious behaviour of a virus. The notion that such memes would evolve through a process of competition became very popular during the 1990s when globalisation and the development of the Internet led many thinkers to suggest that memes that evolve in America's free-market of ideas...

Business Times - 07 Nov 2008 Paradigm change, Clintonomics redux, or just muddling through? By LEON HADAR WASHINGTON CORRESPONDENT WALL Street may have suffered some sense of anxiety in the aftermath of Barack Obama's presidential victory with the Dow Jones falling more than 300 points. That nervousness seems to fit with the conventional wisdom that Wall Street has traditionally preferred Republicans in dealing with the economy. But interestingly enough, the Democrat Obama has been more successful than candidate John McCain, the representative of the pro-business Republican Party, in collecting election campaign contributions from leading members of the American financial industry. Mr Obama also performed better than Mr McCain in New York, New Jersey and Connecticut where Wall Street investors make their home. In fact, most investors were rooting for Mr Obama. According to renowned financial commentator Jim Cramer: 'Obama is a recession. McCain is a depression.' Mr Obama ha...

Business Times - 06 Nov 2008 Obama sweeps to victory as markets, war, demographics produce an electoral earthquake By LEON HADAR WASHINGTON CORRESPONDENT RACIAL prejudices were swept aside as Barack Obama won the White House yesterday - an event whose historic magnitude recalls the landing of the first man on the moon. The Democrat defeated Republican John McCain and will be sworn in on Jan 20 next year as the 44th US president - and the first African-American one. His march became a rout as he captured not only battleground states like Ohio and Florida but also scooped up traditional Republican-leaning 'red' states like Virginia and Colorado. With 349 electoral votes against Senator McCain's 173, it wasn't even close. 'Even as we celebrate tonight, we know that the challenges that tomorrow will bring are the greatest in our lifetime,' said the president-elect. But the change he has repeatedly promised has already signalled itself. The election of the 47-year-ol...

Business Times - 04 Nov 2008 By LEON HADAR WASHINGTON CORRESPONDENT IN one of the famous scenes in the 1972 film The Candidate, Robert Redford who has just won a race for a Senate seat from California, surrounded by celebrating supporters during a victory party, pulls his press secretary into a room while throngs of journalists clamour outside, and then asks him: 'Marvin. . . What do we do now?' It's quite clear that whoever wins this year's US presidential race today is not going to pose that question to his aide. Instead, he is more likely to ask his adviser: 'What do we do first?' Indeed, after confronting what amounts to be an existential threat to US national interests - a devastating economic crisis and two long and costly wars - the next occupant of the White House might end up wondering whether his victory in the 2008 presidential race was such a good news. For all practical purposes, the winner, even before he is inaugurated as the next president on Jan...