Global Paradigms

Business Times - 02 Mar 2010 How long can Bernanke keep up the juggling act? By LEON HADAR WASHINGTON CORRESPONDENT US FEDERAL Reserve chairman Ben Bernanke's semi-annual report on the state of the American economy last week was comforting. He reassured everyone that the economy was slowly getting better. But, he added, it would take a long time for unemployment to start edging down and thus the Fed had to keep interest rates low to help keep the economy going for a while longer. Bravely, he also said that the Fed would prepare to exit from this period of loose monetary policy. Mr Bernanke's comments during the Congressional hearings on Wednesday and Thursday underlined the need for the Fed to juggle its two primary but conflicting mandates - maximising employment and keeping prices stable. With America's unemployment rate hovering around 9.7 per cent, leaving 14 million people unemployed - nearly half of the unemployed have been out of work for at least six months - Congre...

Business Times - 26 Feb 2010 US climate change legislation loses puff By LEON HADAR WASHINGTON CORRESPONDENT EVEN before the electoral loss that the Democrats suffered in the Massachusetts special Senate race, depriving them of their filibuster-proof majority of 60 seats, most political analysts seemed to agree that the climate change legislation mandating industry reductions in greenhouse gas emissions was facing serious obstacles on Capitol Hill. Although the legislation was promoted by the White House for most of the year, public opinion polls suggested that many Americans, pained by the economic recession, were concerned that it would lead to a rise in energy prices. Moreover, the same polls also indicated that less than 30 per cent of American voters regarded global warming as a top policy priority now. Thus, while the Democrats in the House of Representatives were able to win a narrow approval for an energy bill that included a cap-and-trade mechanism in it - requiring companies ...

Business Times - 24 Feb 2010 Obama drifting into war with Iran He's more dependent on support from conservative Democrats and Republicans who want tougher action against Teheran By LEON HADAR WASHINGTON CORRESPONDENT IT is quite possible that confounding the conventional wisdom, the Obama administration has been conducting secret negotiations with Iran that could open way to a diplomatic detente between the two governments. It is also possible that Washington is working behind the scenes with the Israelis and Palestinians to create the conditions for bringing about a peace accord between these two peoples. It's possible but not so probable. Even if something has been going on in that not-that-much-utilised sphere of 'secret diplomacy' - and once upon a time diplomacy used to be secret and went 'public' only after the deals were made - one would expect in this era of 24/7 news coverage opponents of American-Iranian dialogue in Washington and Teheran and Israeli a...

Business Times - 20 Feb 2010 Trapped in a political gridlock Americans could find themselves facing financial bankruptcy, but there seems to be very little political will on Capitol Hill to do anything about it By LEON HADAR WASHINGTON CORRESPONDENT THE announcement by Democratic Senator Evan Bayh, 54, from Indiana that he would not be seeking re-election this year is continuing to send political shockwaves across Washington. After all, the relatively young and very telegenic lawmaker, who had served as a successful governor of Indiana and was elected in 1998 to the Senate seat once held by his father, was considered to be one of the leading stars in the American political scene. Almost everyone seemed to agree that he was destined to run for, and even get elected, as president sooner or later; in fact, Bayh was on the top of the list of President Barack Obama's choices for the position of vice-president. And as a conservative Democrat representing a traditionally Republican-leanin...

Business Times - 16 Feb 2010 PERSPECTIVE Snowstorms fail to blow away Fed chief's exit strategy There are some novel tools in Bernanke's plan. But how effective will they be? By Leon Hadar US FEDERAL Reserve chairman Ben Bernanke is considered to be one of the world's most powerful public figures. But not even he could overcome the might of Mother Nature that took the form of what has been described by pundits as a 'historic' snowstorm or the 'Snowcalypse', as Washingtonians refer to the mess that hit the US capital last week. Indeed, not even the head of the US central bank was spared from the Washington area's unprecedented winter weather last week with the House of Representative's Financial Services Committee being forced to cancel Mr Bernanke's much-anticipated testimony which was scheduled for Wednesday. He was expected to detail the way he was planning to unwind the Fed's liquidity programmes - trillions of US dollars of aid that have ...

Business Times - 09 Feb 2010 Populist pressure could push Obama into China bashing Amid difficult economic ties, China has emerged as a convenient target for both Democrats and Republicans By LEON HADAR WASHINGTON ONE of the fantasies concocted by Obamaniacs in the aftermath of the 2008 presidential election was that the Chinese leadership would welcome the election of an African-American president with whom supposedly they shared a non-white heritage. Mr Obama, who was born in Hawaii and went to primary school in Indonesia, highlighted his 'civilisational' affinity with East Asians when he noted during his first visit to the region that he was the America's first 'Pacific president'. In fact, not many US watchers in Beijing were celebrating the change in the balance of power in Washington after the Republicans lost their control over the White House and Capitol Hill in 2008. Indeed, consider one of the ironies that have characterised the Sino-American relationship ...

Business Times - 06 Feb 2010 Should Geithner start looking for a new job? By LEON HADAR WASHINGTON CORRESPONDENT WHEN "sources close to the White House" tell reporters that the US President remains "confident" about your "leadership" and "job performance", is it time for you to start looking for another job? Indeed, for several weeks, the American media has been reporting that Treasury Secretary Tim Geithner retains the confidence of President Barack Obama as well as of leading Congressional Democrats even as lawmakers and journalists continue to raise questions about why the Federal Reserve Bank of New York held back information about the government's bailout operations at a time when Mr Geithner served as its president. They have been asking whether Mr Geithner, who came to his current job from the New York Fed, was behind the decision by the New York Fed in December 2008 to request that American International Group (AIG) keep secret certai...

Business Times - 05 Feb 2010 Obama needs a coherent strategy to deal with Iran By LEON HADAR WASHINGTON CORRESPONDENT US President Barack Obama came to office promising to replace his predecessor's Axis-of-Evil approach to Iran with one based on diplomatic engagement. But against the backdrop of the stalled nuclear talks with Teheran and the rise of the Green Movement in Iran, Mr Obama's engagement policy has been coming under criticism - and not only from the neoconservatives. In a Newsweek commentary, Council on Foreign Relations president Richard Haass has called for 'promoting regime change' in Iran. Mr Haass is not a neoconservative but a self-described 'card-carrying realist' and a former official in the administrations of Bush I and Bush II. For a long time, Mr Haass seemed to be in agreement with Mr Obama's pursuit of diplomatic engagement with Iran. And while he is not in favour of using military force to achieve regime change in Teheran, he believe...

Business Times - 02 Feb 2010 Bernanke faces curbs on Fed's independence Confirmation for second term comes with political strings that may stymie policymaking By LEON HADAR WASHINGTON CORRESPONDENT WITH supporters like this, who needs detractors? Take, for instance, Senate Majority Leader Harry Reid, a Democrat from Nevada, who said after announcing his intention to vote to approve the confirmation of Ben Bernanke as Fed chairman for a second term: 'I made it clear that to merit confirmation, Chairman Bernanke must redouble his effort to ensure families can access the credit they need to buy or keep their home, send their children to college and start business.' Offering what sounded, at best, as a lukewarm endorsement of Mr Bernanke, Mr Reid added that Mr Bernanke 'assured me that he will soon outline plans for making that happen, and I eagerly await them'. Mr Reid, who had the task of mobilising the Senate votes to approve Mr Bernanke's re-nomination, seemed t...

Business Times - 29 Jan 2010 Obama's shift to political centre He seems to be moving his focus away from healthcare reform and climate change to rising deficit and joblessness By LEON HADAR WASHINGTON CORRESPONDENT SHIFTING gears for the second year of his administration and responding to the growing economic discontent among American voters who seemed to be turning against him and the Democrats who now control the White House and Congress - demonstrated in the loss of the Democratic Senate seat in Massachusetts - US President Barack Obama seemed to be moving towards the political centre during his first State of the Union address late on Wednesday night. He shifted his focus away from healthcare reform and climate change to the more immediate concerns of the American people - the expanding deficit and the continuing high rate of unemployment. While he still remains a popular president, Mr Obama has spent much of his first year in office and most of his political capital on what ha...

Business Times - 26 Jan 2010 Obama's new populist push against Wall St President and his aides hope new approach will help boost his political fortunes By LEON HADAR WASHINGTON CORRESPONDENT AFTER one year in office and against the backdrop of growing anti-Wall Street anger among Americans being fuelled by continuing high unemployment rates and the signs that the big banks are once again taking reckless risks in the pursuit of quick profits, US President Barack Obama has decided that the time has come to alter the political-economic narrative of his administration. Indeed, in the aftermath of the disastrous loss of the Democratic Senate seat in Massachusetts - a dramatic reflection of the populist mood around the country - and as he fights for his political survival (and that of his own Democratic Party), Mr Obama has decided that the time has come to get tough - really tough! - with Wall Street. Launching a verbal assault against the mega banks and stating that the current economi...

Business Times - 22 Jan 2010 Obama faces revolt of the independent Tea Party movement wants action on jobs, not healthcare reform - which they see as wasteful government spending By LEON HADAR WASHINGTON CORRESPONDENT ON THE eve of the one-year anniversary of Barack Hussein Obama's historic inauguration as the 44th President of the United States - the first African-American to hold that office - the new president ended up getting clobbered, big time, in Massachusetts. No, President Obama was not running for any political office in the Bay State this week. But the fact that a little-known Republican politician (his main claim to fame was posing nude for Cosmopolitan magazine in 1982 when the magazine named him 'America's sexiest man') succeeded in defeating, by a decisive margin, a prominent Democrat in a special election to fill the US Senate seat that was held by the late Edward Kennedy (and before that by his brother, John F Kennedy) - was a devastating political blow...

Business Times - 19 Jan 2010 Channelling populist anger to Wall Street Obama's US$90b bank tax aimed at pacifying angry Americans, undermining Republicans By LEON HADAR WASHINGTON CORRESPONDENT THE opening session of the Financial Crisis Inquiry Commission (FCIC) hearings on Capitol Hill - during which bankers from America's top financial institutions faced tough questions about the role that the banks had played in the financial collapse - looks like the first scene in a populist drama being staged by the Obama administration and its allies in Congress. The main villains in this political production are all those infamous Wall Street companies that, after being bailed out by the American taxpayer, are now getting ready to reward their employees with record pay - around US$145 billion, according to the Wall Street Journal. Moreover, this is happening at a time when many Americans are losing their jobs and most of them are continuing to experience economic pain. There is no doub...

Business Times - 14 Jan 2010 Coming on TV: Congressional probe into financial crisis By LEON HADAR WASHINGTON CORRESPONDENT IT is a production that will not cost as much as the American science-fiction epic film Avatar. And it is probably not going to attract as large a television audience as the reality shows American Idol and The Biggest Loser. But the televised hearings of the Congressional Financial Crisis Inquiry Commission (FCIC), which holds its first public hearings on Capitol Hill today, could prove to be one of the most dramatic spectacles of the season, offering some of Washington's leading investigators an opportunity to confront Wall Street's top financial executives, and examine the root causes of the 2008 financial crisis. The year-long investigation by the FCIC, a bi-partisan 10-member panel established by Congress and which was allocated US$8 million for its work, has been compared to the work done by the 9/11 Commission which Congress formed in order to examin...

Business Times - 12 Jan 2010 It doesn't look good for jobs - and for Obama A weak job market is slowing the momentum of the economic recovery By LEON HADAR WASHINGTON CORRESPONDENT FIRST, let us go to the bad news: the US Labor Department report issued on Friday indicated that with 85,000 jobs lost last month, the American jobless rate was unchanged at 10 per cent in December. These numbers have disappointed Obama administration officials and some economists who had expected fewer losses of about 10,000, with optimists predicting a slight growth in employment. US officials have tried to spin the depressing news as not-so-bad news, suggesting that taking into consideration the job growth in November - according to revised figures, 4,000 jobs were added in that month - points to a process of 'stabilisation' of the American economy. 'Today's employment report, though a setback from November, is consistent with the gradual labour market stabilisation we have been seeing...