Showing posts from September, 2009

Changing the global economic leadership

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

Stage is set, but don't expect much from G-20

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

US financial reforms far removed from political reality

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

Why Obama had to impose those Chinese tyre tariffs

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

Time has come for Obama to walk the walk

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

Obama faces backlash from middle classes left behind

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

The Case for Engaging Iran

published on 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

Has Obama let down voters?

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