Showing posts from August, 2009

Bernanke: the easy choice?

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

A statistical recovery - or a genuine one?

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

Obama's engagement policy isn't naive politics

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

'Birthers', 'deathers' and the fear of change

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

Obama's looking at the bigger picture

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

What a difference 0.1 percentage point makes

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

Did regulations cause current crisis?

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

Time running out for Obama

Business Times - 04 Aug 2009 Time running out for Obama Slide in opinion polls is making it difficult for him to win support on key legislation in health reform and climate change By LEON HADAR WASHINGTON CORRESPONDENT HE was elected as US president in the midst of the worst economic downturn since the Great Depression of the 1930s and at a time when America was fighting two unpopular and very costly wars in the Greater Middle East. Now after occupying the White House for the last six months, US President Barack Obama should be benefiting from an upward political momentum. After all, the economic news seems to suggest that the policies adopted by his administration, including a massive fiscal and monetary stimulus, are creating the conditions for an apparent if slow recovery. Hence the GDP contracted at an annual rate of one per cent, which reflects a significantly slower decline than the past two quarters - of 6.4 per cent - and better than expected by most economists who had predicte