Friday Foreign Policy Roundup: 10/29/10

International Community 

BRIC's Increase Power in IMF

Explaining Currency Wars

G20's Effectiveness

Middle East and Africa

George Clooney on Sudan Policy

Afghanistan and Iran Financial Ties

U.S. 

Obama's Foreign Policy Problem

Odds On The Bush Tax Cuts Being Extended

Examining American Power

Should Obama Run Again?

Richard Lugar On American Foreign Policy

Cultural and Political Comments 


Column: Living In A Decaff World

Redefining The Term "Elite"

The Tea Party Gets Oil Money

Glenn Beck's Problem With Woodrow Wilson

Morning Memo Madness

Monday, October 25
Tuesday, October 26
Wednesday, October 27
No MM on Thursday, October 28
Friday, October 29

Photo Credit: The Hindu

Is the G20 Effective?

The main problem with the G20 is that different countries have to balance their international commitments with domestic politics, not the easiest task in the world.  Jim Hoagland argues in the Washington Post today that it seems very hard for a real consensus to be reached because of this very problem.  My contention would be that the G20 is supposed to do one thing: provide a framework.  In that respect, it is a very effective organization.  It is supposed to make sure that all the countries in the organization are on the same page.  Think of it like the global chamber of commerce.

This means that the U.S. does not have to institute the exact policies espoused by the G20, but it does help for international image.  Its main job is to provide a reference point to the world on political and economic management.  In that regard, it is a very effective organization.

Photo Credit: Washington Post

Column (10/29/10): Living In A Decaff World

Every morning at breakfast in the commons I always like to add to the daily tradition of the same scrambled eggs, bacon or sausage, and potato products with a rich and smooth cup of decaffeinated coffee. Some might laugh at my taste in this delectable beverage because I have essentially taken out the one ingredient that makes coffee worth drinking for most people, the caffeine. The reason for this odd change is that I love the taste of coffee, but I do not want the effects of jitteriness and the eventual downward crash that caffeine brings. This is a common trend for most people.

As European Philosopher Slavoj Zizek writes in a piece for the Guardian, a reputable British newspaper, “In today’s market, we find a whole series of products deprived of their malignant property: coffee without caffeine, cream without fat, beer without alcohol. What about virtual sex as sex without sex?”

Indeed, this trend of “taking the punch” out of the product seems to spill over into our everyday lives, especially when it comes to politics and policy. This is a result of constant negotiation of congressman to appease their constituents. Starting with the stimulus package of not have enough stimulants, by this term I mean money, to actually stimulate the economy. On healthcare reform, it involved universal healthcare without a single payer system or a public option.  For Afghanistan, it was the policy to withdraw troops from the country without actually withdrawing right away. Basically, the meat of these policies were cut out to replace it with a tofu like substitute that is only so filling for the consumer.

Continue Reading Here...

See all the stories from this week's edition of the Brackety-Ack.

A Little Political Humor Always Helps

Cartoon From Slate

Morning Memo: Friday, October 29

Good Morning!

"The world must learn to work together, or finally it will not work at all." - Dwight Eisenhower


Top Global Issues: 


New EU Treaty Changes Have Support 


ASEAN Summit: Regional Finance and Myanmar Are The Focus


U.S. Says Syria Destabilizing Lebanon 


China Plans To Keep Tight Control Over Rare Earth Metals


Sec. Clinton Supports U.N. Inquiry Into Myanmar Human Rights Abuses 


President Obama's Planned Trip To India 


Japan and Others Commit Hefty Sums At Biodiversity Conference 


Israel Says New Settlements Will Not Affect The Peace Process 


Figures of Note: 








Opinions of Note: 


Roger Cohen on Turkey 


David Bosco on International Law


My First Thought: Budgets, Budgets, Budgets 


The talk of the town has been about the deficit lately.  In the U.S., Republicans have been campaigning on ways to reduce the deficit down to a respectable level and to eventually balance the budget.  In Europe, the EU is working on fixing its budget provisions in its constitution to allow for economic sanctions to be placed on those countries that go over their maximum debt level.  Is this a good idea?  No, most economies are stuck in an economic slump where stimulus is necessary to keep the economy going.  In order to foster growth for most  the economic sector, it is important to work on passing legislation that will keep stimulus money coming.  Then, after jobs have been created and unemployment is low again, it would be a good idea to start reducing the deficit.  The IMF has stated this multiple times, as have other international organizations.  It is time that we start listening to this advice before it is too late. 


Photo Credit: Reuters 

Work Day, Part II: Senator Richard Lugar Tackles The World

Once again, today is going to be a very busy day for me.  There will also not be a "Morning Memo" today.  In light of that, I have decided to post another video.  This one stars a ranking member of the Senate Foreign Relations Committee Richard Lugar.  He has been a prominent spokesperson for nuclear nonproliferation and a great bipartisan leader in international relations.  I hope you enjoy it!

Work Day: Random Topics

I have quite a bit that I need to do today, so I have decided to keep you entertained with another edition of Bloggingheads.  I hope you enjoy it!

A Little Political Humor Always Helps

Cartoon From Slate

Morning Memo: Wednesday, October 27

Good Morning!


"The world has achieved brilliance without conscience. Ours is a world of nuclear giants and ethical infants." -Gen. Omar Bradley

Top Global Issues:

U.S. Hopes To Start Talks With Iran

Final Draft Of Controversial French Pension Reform Expected To Pass

Iran Admits To Giving Money To Afghanistan

Upcoming ASEAN Conference To Focus On Community Building

EU Deficit Violations Could Become Law

Asian Leaders Begin Talks With China On It's Currency

New Corruption Index Released

Figures of Note:





Opinions of Note:

Jonathon Pearl on U.S.-Jordon Nuclear Deal

Michael Levi on the Kyoto Protocol

My First Thought: Fighting in Forums

I always admire how far we've come.  The international community now is fighting in international forums instead of fighting war.  Many will hate the U.N. for its bureaucratic impulses, but I say let it live on.  The world is much better place when we have multilateral cooperation.  It allows for people to come together and work in tandem on so many different problems.  One week, there can be a meeting of the top European nations, next week it could be the top Asian nations, or even a climate meeting.  To me, that shows progress. The progress of the last 100 years in international cooperation has come alive, and I hope it is here to stay.

Photo Credit: Irish Times 

Reflection: Another Short Edition

I have a lecture to attend tonight, so here are the links:

1. My first thought was America's decline
2. Explaining the currency war
3. Redefining the word elite
4. What Obama should tackle on foreign policy
5. Odds of Bush Tax cuts being renewed
6. An assessment of Obama's power strategy (2nd to last post)

That's all folks, see you tomorrow!

Run Obama Run...Maybe?

With Obama's poll numbers sinking, some have arugued that he should not seek his parties nomination in 2012.  The Christian Science Monitor says that Obama is not down in the dumps yet:

But it could be a lot worse. Mr. Obama could be President Reagan in August 1982, when voters were even less enthusiastic about the prospect of having the commander in chief running for reelection in two years. Nearly half of today’s voters – 47 percent – say they would like to see Obama run for reelection in 2012 versus 36 percent who said in August 1982 that Mr. Reagan should run again, according to the latest Pew Research Center/National Journal Congressional Connection poll.

Reagan went on to win reelection by a whopping 18 points.

President Clinton also had a rough first midterm election in 1994, and he faced reelect numbers similar to Obama’s at the time – 44 percent. Mr. Clinton, too, won reelection easily in 1996.

For Obama, the polling on “should he run for reelection” is about the same as job approval, which is at 46 percent in the latest Pew survey. For Reagan, the job-approval numbers were better than the reelect numbers, but eventually they were the same. According to Gallup, 42 percent approved of Reagan’s job performance in August 1982. By February 1983, Reagan’s job approval had sunk to 35 percent – the same percentage of voters who thought he should run for reelection, compared with 57 percent who thought he should not.

The common denominator with all three presidents is a lousy economy during the first two years in office. And indeed, if American voters don’t see much improvement in the 9.6 percent unemployment rate by 2012, Obama can probably kiss reelection goodbye – assuming he runs.

The keyword is "if" the economy gets better.  I agree with this assessment.  Obama is not necessarily unpopular because of his policies, although I did argue that in my last post as not going far enough for U.S. power, it is mainly because of the economy.  Bottomline, if the economy gets better, so do Obama's reelection chances.  

America's (Dis)advantage: Obama's Failed Strategy For Increasing U.S. Power

I posed the question this morning about the U.S. being the greatest country on earth?  The answer for most people would be yes.  I am a bit more skeptical on some points though.  Part of the problem with President Obama's strategies on foreign policy is that the U.S. is losing leverage as a world power.  China, and the other BRICs, are starting to take over as the movers and shakers of the foreign policy community.  Now, the U.S. must work in a multipolar and globalized world, where everyones interests are intertwined and there is no easy solution.

Martin Indyk, the director of foreign policy at the Brookings Institute, published a notable essay that talks about the entanglement of interests as Obama's biggest hurdle in foreign policy.  He also notes that since the U.S. is losing power and prestige, Obama had to set up a domestic policy agenda that would foster reform to make America appear strong again.  Are intertwined interests and the loss of foreign influence the U.S. biggest problems?  Not necessarily.  It is easy to make the case that this is true, but the U.S. still holds great sway in NATO, the U.N., the G20, the G8, the IMF, the World Bank, and whatever other multilateral forums you can think of.

So I would argue that it is not a loss of influence, but it is finding a way to keep that influence.  Obama recognizes that the U.S. can only be influential as long as it keeps up domestically.  Once the U.S. loses the top spot in the economic sphere its days as a world leader are pretty much numbered.  So, Obama took on the strategy of reforming healthcare and financial regulation to keep up with the Jones. Although well intentioned, it sucked up quite a bit of his political capital, made him unpopular at home, and forced him to make bad deals that reflected poorly on his administration.  Not to mention that Obama tried to take a middle course on everything like Afghanistan and Iraq just like he did with healthcare making mediocre policy choices.

I agree that it is smart to shore up domestic priorities to get more power in the international community, but at the cost of hurting his presidency.  This meeting in the middle platform has made for middle of the road policy choices.  The problem is that President Obama has tried to make everyone happy, when that is impossible.  In the end, he will have bad policies because he did not have the guts to go for the gold and instead settled for second bananas making weak policies that will not create the domestic reform necessary to keep America great for the future, undermining his whole objective.

George Clooney Discusses Sudan

This is a rather long video, but discussing Sudan policy is much better when you have a handsome and charismatic actor doing it!

Oddsmaker: Extending The Bush Tax Cuts

Domestic policy guru Ezra Klein gives his odds how much the extension of the Bush Tax Cuts would be for the depending on how how much of congress the Republicans controlled.  He says: 

If Republicans take the House and the Senate, how much likelier is a full extension of the Bush tax cuts? I'd say it goes up to 70 percent, and the only reason I don't say 100 percent is that President Obama has more incentive to pick a fight with Congress. Nevertheless, the compromise will almost surely include a temporary extension of the tax cuts for income over $250,000.

Now, if Republicans take the House, how much likelier is a deficit-reduction deal that increases revenues or cuts spending by at least$700 billion over the next 10 years, thus making up for the tax cuts? Maybe 10 or 20 percent? And I think I'm being generous here.

What if the Republicans take the Senate, too? I'd think the chances might actually go down, as Obama would need to fight on behalf of his base if he's going to remain viable for 2010. You might see some changes made to Social Security, but nothing on the order of $700 billion over the next 10 years.

Obama's Foreign Policy Presidency

I have argued several times that after the midterm elections, President Obama will have to focus on foreign policy because that is where he and Republicans have the most common ground, especially on Iran.  Foreign policy also has the potential to split the GOP between the freedom agenda Republicans and the isolationist Tea Party Republicans.  The question is, where should Obama focus his energy.  Analyst George Friedman says Iran:

This leaves the obvious choice: Iran. Iran is the one issue on which the president could galvanize public opinion. The Republicans have portrayed Obama as weak on combating militant Islamism. Many of the Democrats see Iran as a repressive violator of human rights, particularly after the crackdown on the Green Movement. The Arabian Peninsula, particularly Saudi Arabia, is afraid of Iran and wants the United States to do something more than provide $60 billion-worth of weapons over the next 10 years. The Israelis, obviously, are hostile. The Europeans are hostile to Iran but want to avoid escalation, unless it ends quickly and successfully and without a disruption of oil supplies. The Russians like the Iranians are a thorn in the American side, as are the Chinese, but neither would have much choice should the United States deal with Iran quickly and effectively. Moreover, the situation in Iraq would improve if Iran were to be neutralized, and the psychology in Afghanistan could also shift. 

If Obama were to use foreign policy to enhance his political standing through decisive action, and achieve some positive results in relations with foreign governments, the one place he could do it would be Iran. The issue is what he might have to do and what the risks would be. Nothing could, after all, hurt him more than an aggressive stance against Iran that failed to achieve its goals or turned into a military disaster for the United States. 

So far, Obama’s policy toward Iran has been to incrementally increase sanctions by building a weak coalition and allow the sanctions to create shifts in Iran’s domestic political situation. The idea is to weaken President Mahmoud Ahmadinejad and strengthen his enemies, who are assumed to be more moderate and less inclined to pursue nuclear weapons. Obama has avoided overt military action against Iran, so a confrontation with Iran would require a deliberate shift in the U.S. stance, which would require a justification. 

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Redefining Elite

There has been a lot of talk about a new opinion piece in Washington Post by Charles Murray about the "New Elite."  The gist of his argument is that the old elite are the those who went to Harvard and Yale years ago when admission was mostly based on family standing, but now elites are more diverse and have their own category of activities.  Essentially, they do not participate in the same things as the "ordinary Americans" do, like reading the Left Behind Series or watching Nascar. 

Much of the commentary has been about saying why the elitist label is nonsense.  As someone from "Real America" let me explain why I would be considered an elite.  I am not a Republican, I do not like Nascar, I am not an evangelical Christian, I love existentialist philosophy, I am not against gay marriage, etc.  For the record, I do not think that this makes me an elitist, it just means that I just means that I have different tastes.  For me, I could consider those who are Republicans and evangelical Christians as elitists because they subscribe to a core doctrine of ideas that I will just never understand.  

Think about it, if I were to attend a Nascar event and not find any interest in it whatsoever, but the people around me were to be enthusiastic about it and I asked them: "What's the big deal about watching cars go around in circles and sometimes crashing into each other?"  They would probably say: "You just don't understand."  For them, I am outside their inner circle of activities.  The same could be applied if I were to go hunting.  I don't find getting up at 4 a.m. to set up decoys and wearing camoflauge to sit in ditches and trees to kill animals particularly appealing, but some people do.  It does make them lower than me, it just means we do not have the same interests.  

Is it possible that maybe we all just have different views on the world.  The world "elitist" is just an insulting type of political rhetoric that is just as insulting as the word "redneck" would be to a Republican.  We can all agree to disagree, but this inane namecalling only makes the problem worse.  Couldn't we all just agree to have coffee, for the "elites," and beer, for the "rednecks," and agree to stop using these catchall phrases as campaign platitdues?   

Currency War Explained

The term "currency war" has been thrown around a lot lately, so here is an article from Anne Lowry of Slate about what that actually means:

A "currency war" is just a headline writer's term for what economists describe as "competitive devaluation." It's helpful, in this context, to think of a dollar or a euro—any currency, really—as just another product: Its value goes up and down according to market forces. At any given time, any given currency exists in a global market determined by supply (how much of a currency exists) and demand (how much investors want to buy goods and assets denominated in that currency).

A country can make its goods and services "cheaper" in the global market—or, if you prefer, "more competitive" in the global market—by devaluing its currency. And it can devalue its currency in a number of ways, from printing more money (the greater the supply of its own currency, the less valuable it tends to be) to buying another country's debt (the greater the demand for another country's currency, the more valuable it tends to be). When a country's currency falls in value, its exports usually grow, because its goods and services are cheaper on the global market.

So what's happening now? The United States sparked the current "currency war" by telling China in September that it needs to let the yuan appreciate in value and by announcing its intention to let the dollar slide. In early September, Treasury Secretary Timothy Geithner ruffled feathers in Beijing by criticizing China's manipulation of the yuan, which is worth less than it would be if the Chinese did not buy billions of dollars of U.S. debt. "Frankly, [the Chinese] haven't let the currency move very much so far," Geithner toldBloomberg News. "I think we'd like to see them move more quickly." Then, Congress passed a mostly symbolic resolution threatening tariffs against Beijing. On top of that, earlier this month, the Federal Reserve announced its "quantitative easing" policy—printing possibly a trillion new dollars, thereby further eroding the value of the dollar.

Continue Reading Here...

A Little Political Humor Always Helps

Cartoon From Slate

Morning Memo: Tuesday, October 26

Good Morning!

Top Global Issues:

French Riots Continue And Cost Taxpayers Quite A Bit Of Money

U.S. Army Denies It Undercounted Iraqi Deaths And Condoned Prisoner Abuse

Serbia Moves Closer To EU Membership

U.N. Warns Of Sudan War If Independence Vote Happens

Japan And India Plan To Increase Trade

Japan Protests Over China Boats Near Disputed Islands

Israeli Settlement Building Has Increased 4-Fold Since Last Settlement Freeze

How Cholera Is Spreading In Haiti

Figures of Note:





Opinions of Note:

David Ignatius on China and America

Mort Zuckerman on American's Pride

My First Thought: America's Decline?

I pose the question: is America in decline?  This has been a debate that is circulating around the international relations community for quite a long time.  While everyone speculates, it is very hard to tell.  I think that part of the problem is even if the U.S. is on a downward spiral, who would want to admit it?  Americans were born, well, in America.  We feel connected to the values that make our nation great.  For years, we have believed that if we just stuck the principles of the founding fathers everything would be fine.  Then came the rise of the rest.  Suddenly, new models of development emerged like China and Brazil.  This left Americans flabbergasted because now everything we have been taught about the values of a great civilization could be wrong.  No one wants to admit it, but sadly the truth can sometimes be hard to bear.

Photo Credit: East African News 

Reflection: Interpretation

All of the stories that I have posted are mostly stories because of interpretation.  The Iran-Afghanistan ties articles are based on what the U.S. believes could be going on between those two nations.  The secret donors as oil companies could be as good or as bad as you want it to be.  The media does a great job at hyping up stories to explain what they really mean.  A great way to cut through what they say is to ask yourself what this story means to you?  Every story has an interpretation, remember that.

Part of this is blog culture and instant opinion.  We all want to speculate what something means before we have all the facts.  As a blogger, I am just as guilty as everyone else.  What we must do is find ways to filter stories.  Let them simmer for a few days.  Then, after all the facts are in place, give opinions.  It might seem hard to do, but it could very well be the difference between a a good Shirley Sherrod story and a bad Shirley Sherrod story.

To sum up my posts:

1. My first thought was the U.S. midterms will make all the difference.
2. Oil companies funding the Tea Party
3. BRIC countries are getting more voting power in the IMF
4. Glenn Beck's weird obsession with Woodrow Wilson
5. The complicated relationship between Iran, Afghanistan, and the U.S.

Thanks for reading, see you tomorrow!

Karzai, Iran, U.S. and The New York Times: It's Complicated

If I had to create a Facebook page for Afghanistan President Hamid Karzai, it would probably say his relationship with the U.S. is "It's Complicated."  A New York Times Story came out on Sunday saying that some Afghanistan officials are receiving millions of dollars from the Iranian regime to keep the Iranian relationship with Afghanistan stable.  This angers the U.S. because Iran is on the naughty list for the U.S. and Afghanistan is our pet project for democracy, not a good combination to be working together.

The New York Times had a follow-up story today admitting that it was true, Afghanistan had received money from Iran, but it is not for nefarious purposes.  My take on this is that Iran might become just another Pakistan for the U.S.  I always describe Pakistan as the "frienemy" of the U.S. because it likes to help us and then help the Taliban when they find it convenient.  Most people can agree that Afghanistan is a mess, there is no tidy solution to the problem, but this communication with Tehran only makes it worse.

I have contradicting feelings about this Afghanistan-Iran relationship.  On the one hand, it makes sense.  Iran and Afghanistan are both in the Middle East and could trade with each other.  It is also not that much different than any other relationships that Afghanistan has with China, Pakistan, or other nations that might not always like the U.S.  On the other hand, I have to condemn it because it does jeopardize the U.S. mission to have Iran bribing officials in Afghanistan to support the other team.  In the end, Afghanistan will always have relationships like this with other nations and their is not much the U.S. can do about it.  All I can say is: It's complicated.

Photo Credit: New York Times 

Britain Imposes New Carbon Tax

Britain passed a carbon tax yesterday to try and raise revenue to offset their deficit.  Here are the details:

United Kingdom — The government today quietly imposed a £1B-per-year (US$1.58B) carbon tax on around 4,000 of the largest businesses and public sector bodies in the UK as part of its spending review.

The move was not announced as part of chancellor George Osborne's (pictured at left) speech to parliament. Instead, it was left to a statement by the Department of Energy and Climate Change in which it detailed its spending review settlement and confirmed the Carbon Reduction Commitment (CRC) would be reformed so that the Treasury keeps revenue raised through the carbon pricing scheme.

"Revenue raised from the CRC Energy Efficiency Scheme will be used to support the public finances (including spending on the environment), rather than recycled to participants," the statement said.

The spending review document confirmed that the move would raise £1bn by 2014/15 to help tackle the deficit.

Continue Reading Here...

The Secret Funding Continues

There has been so much hub ah over the allegations by Democrats of "secret funding" by foreign influence.  I don't take quite the conspiratorial approach that some liberals do about a secret GOP network underground donors.  Their a political party, not Lex Luthor fighting Superman.  I do however find that funding coming from corporations who are using congressman as part of their game to repeal financial regulation or to stop energy legislation does pose a problem.  The Guardian points out that recently the Tea Party has been funded by BP and others to oppose President Obama's environmental policies.  The story notes:

An analysis of campaign finance by Climate Action Network Europe (Cane) found nearly 80% of campaign donations from a number of major European firms were directed towards senators who blocked action on climate change. These included incumbents who have been embraced by the Tea Party such as Jim DeMint, a Republican from South Carolina, and the notorious climate change denier James Inhofe, a Republican from Oklahoma.

The report, released tomorrow, used information on the Open Secrets.org database to track what it called a co-ordinated attempt by some of Europe's biggest polluters to influence the US midterms. It said: "The European companies are funding almost exclusively Senate candidates who have been outspoken in their opposition to comprehensive climate policy in the US and candidates who actively deny the scientific consensus that climate change is happening and is caused by people."

The real test will be when these candidates vote in congress.  To me, that is when "secret funding" becomes the most problematic.

Woodrow Wilson: Evil Progressive

Glenn Beck loves to espouse this ridiculous theory about President Woodrow Wilson starting the Progressive takeover of the country.  Most of his analysis comes from conservative academics, but many believe it to be legitimate history.  This bothers me because I find the biases of historical references to hurt our telling of history and it also is just bizarre.  David Greenberg at Slate takes apart most of Glenn Becks ideas about Woodrow Wilson:

Of all the eccentricities of today's resurgent right, one of the strangest has to be the virulent, obsessive hatred of Woodrow Wilson. For a long time, conservatives have talked about turning back the clock to a period before America veered off course. Typically, though, they have wanted to repudiate the 1960s—politically, to repeal the Great Society; culturally, to beat back the sexual, civil, and women's rights revolutions. Occasionally, as when policymakers debated a New Deal-style response to the 2008 recession, conservative polemicists have reached back further, blaming our woes on FDR and Keynesian economics.

But it has been a long time since Woodrow Wilson—intense, private, cerebral—galvanized much anti-government fury. If anything, the reformist president of the Progressive Era, once a great icon of democrats worldwide, has been flayed more often by the left—for his idealistic internationalism (given a bad name by George W. Bush), his wartime suppression of dissent (of which Bush, again, reminded liberals), and his racist predilections (a stain on his record now impossible to ignore). The right had largely ignored or forgotten him.

Continue Reading Here...

A Little Political Humor Always Helps

Cartoon From Slate

BRIC Get More Power In IMF

The IMF recently voted to give more power to Brazil, Russia, India, and China (BRIC).  This is a big step because these nations are becoming the emerging economies of the world.  Giving them more voting power not only guarantees more equality in the IMF, but it also means that this could be used as a bargaining chip for future financial agreements.  Of the specifics, Reuters say:

In the end, the grand bargain transfers six percent of voting power to under-represented "dynamic" emerging economies, putting China below the United States and Japan in IMF voting power from sixth place. The changes will also see Europe give up two seats to emerging economies on the 24-member IMF board.

Of course, this still makes the U.S. and many European nations the top dogs in the IMF, but at least this is a start towards greater equality.  Europe is also very reluctant to give up more seats, some have proposed up to 6 or 8 seats, because that would further illuminate Europe's declining status as a world power.  The IMF is mainly a European run organization, just like the World Bank is predominantly ran by the U.S.  In the end, this is a minor victory towards a bigger step for the BRIC countries.

Photo Credit: Google Images

Morning Memo: Monday, October 25

Good Morning!

'It isn't enough to talk about peace. One must believe in it. And it isn't enough to believe in it. One must work at it.'' - Eleanor Roosevelt


Top Global Issues: 


Wikileaks Iraq Documents Fallout


Japan's Anger About China's Rare Earth Metals Ban


French President Nicholas Sarkozy's Approval Ratings At Lowest Level Because Of Pension Reform


India and Japan To Sign Nuclear Deal


Senator John Kerry Visits Sudan: Believes January Referendum Will Happen 


Afghanistan President Hamid Karzai Stands By Private Security Ban


Israelis and Palestinians Watching U.S. Midterm Elections Closely - Outcome Will Affect Negotiations 


Treasury Secretary Timothy Geithner Says China's Yuan Will Appreciate


Haiti's Cholera Outbreak Gets Worse


Shia's Gain Seats In Bahrain Elections 


Figures of Note: 










Opinions of Note: 


Nicholas Kristof on Afghan Women 


Max Boot on Britain's Defense Cuts 


My First Thought:  It's All About The Midterms 


There are now about 10 days left until the U.S. Midterm elections.  This is the time when politicians will begin to hit the public hard with smear ads and positive ads touting their "wonderful" voting records or their "outsider status."  Outside the campaign rhetoric, Republicans and Democrats will have to find some common ground to work with one another.  Republicans will probably take back the House, and possibly the Senate.  That means that they will have to find something to work on with President Obama.  The question is what?  I think that this is the question that world is asking.  Many are wondering what foreign policy plan will the U.S. adopt? What economic plan will they start? What will happen to economic and defense spending levels?  All of these are vital questions.  They impact the U.S.'s role on the world stage.  America is at a critical juncture in history.  It could either be on the rise or the decline, but it will have to choose.  This election will be extraordinary because whoever wins will determine America's future, whatever that may be. 


Photo Credit: The Globe and Mail

CFR.org - The World Next Week: October 21, 2010

CFR.org - The World Next Week: October 21, 2010

Friday Foreign Policy Roundup: 10/22/10

Middle East

Osama Bin Laden in Pakistan

Iran Wants More Nuclear Talks

Israel Might Deserve Nuclear Weapons

Palestinians Might Declare Unilateral or Multilateral Statehood

Very Little Hope For Afghan-Taliban Talks

Asia

Defining The U.S. and China Relationship

China's New Leader

Paul Krugman on China's Rare Earth Metals

Political and Economic Freedoms Not Necessarily Linked

Japan's Lost Decade A Lesson For The U.S.

Conversation About China's Currency

Europe

Russia, France, and Germany Talk Security and Economic Partnership

Attack On Russian Parliament

France's Pension Protests

Charles Kupchan Discusses European Politics

U.S.


Civics Lesson On Treaties  


Obama's Plan For Trade Imbalances

Foreign Policy Not Important In Elections

Alliance Politics and Multilateral Forums


U.N. Biodiversity Conference 


Russia, China, and Venezuela Talk Weapons

G20: Meaning and Policy Proposals 

Videos


China's Currency


Women and Islam  


The Rent Is Too Damn High Party

Other Gems

Melinda Gates Wants To Change The World

Partisan News Study

Obama Will Go On The Daily Show


Morning Memo Madness


Monday, October 18
Tuesday, October 19
Wednesday, October 20
Thursday, October 21
Friday, October 22


Photo Credit: Washington Post 

Tea Party and Tradition GOP Test: Foreign Policy

I have already brought up how foreign policy seems to be very minimal in the 2010 midterm elections.  This is understandable because the economy is the top priority to most voters, but foreign policy should be very important in the discussion.  I have also said that Obama might actually be able to work with the Tea Party brigade on foreign policy because liberals have a similar belief in nonintervention with regards to conflicts.  Not surprising because libertarianism derives some of its views from liberalism.

However, the split will probably come between the Tea Party and traditional GOP.  Remember, the traditional GOP (who includes John Boehner, Mitch McConnell, Eric Cantor, Mike Pence, etc) are part of the neoconservative crowd, don't let their new labeling fool you.  Furthermore, most of them have strong support for the old Bush "Freedom Agenda," like Iraq and Afghanistan.  By contrast, the Tea Party are very isolationist in their views, believing that we must practice what we preach at home before we go abroad and preach to other nations.

Where the split will come is on crucial policy matters.  Will the Tea Party freshman really support troop increases if proposed by the traditional GOP?  Will they actually support more defense spending or be like Barney Frank and Ron Paul to cut it?  Granted, Obama will have his challenges with those conspiracy theory candidates who do not trust multilateral organizations.  Why I say this is a problem is because the traditional GOP will be in the leadership position.  With John Boehner as speaker he may not want to listen to the yahoos in the Tea Party below him who do not support his beliefs in foreign policy decision making, causing the rift.

In a way, its Dick Cheney vs. Ron Paul.  Who will win?  My answer is whoever speaks the loudest.

Photo Credit: Google Images

Paul Krugman's Argument Against British Fiscal Austerity

In his column today, Paul Krugman says that there is a problem with the British spending cuts recently enacted by the Tories and Liberal Democrats in power.  His main argument is that this is mostly motivated by ideology over actual substance, of which he is probably correct.  When I talked about the "Two Models" in the "Morning Memo" this is what I was talking about.  Here is the critical test, will the U.S. model of stimulus, or not enough I should say, or the British austerity model work?  We will see in a few months.  The main belief is that with such low interest rates for such a long period of time, Britain and the U.S. will look like Japan did during the "Lost Decade."

To conclude, I will indulge you in Professor Krugman's analysis:

In the spring of 2010, fiscal austerity became fashionable. I use the term advisedly: the sudden consensus among Very Serious People that everyone must balance budgets now now now wasn’t based on any kind of careful analysis. It was more like a fad, something everyone professed to believe because that was what the in-crowd was saying.

And it’s a fad that has been fading lately, as evidence has accumulated that the lessons of the past remain relevant, that trying to balance budgets in the face of high unemployment and falling inflation is still a really bad idea. Most notably, the confidence fairy has been exposed as a myth. There have been widespread claims that deficit-cutting actually reduces unemployment because it reassures consumers and businesses; but multiple studies of historical record, including one by the International Monetary Fund, have shown that this claim has no basis in reality.

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The Duh Report: China Hinders Sanctions Against North Korea

A recent report was commissioned and released to Reuters News service regarding China helping North Korea economically.  Not surprising, despite sanctions, China is allowing North Korea to import luxury items, use its goods and airspace without inspection.  I call this the "Duh" report, because it points out the China and the U.S. have very different interests regarding North Korea.

For instance, China sees North Korea as one of the last communist allies left in the world.  It also wants to keep the region stable.  Whereas, the U.S. wants to keep North Korea from getting a nuclear weapon and eventually see regime change.  Senator Richard Lugar ordered the report as a reminder of the different interests regarding the U.S. and China in North Korea.  I do not find any of this surprising, just a reminder of differing policies between the two nations.

Pensions Plans That Piss People Off

French Parliament just passed a bill that would raise the retirement age in France from 60 to 62.  The bill is part of Sarkozy's plan to reduce the deficit and bring France closer to Germany and other EU countries with pension reform.  Bloomberg reports:

France’s Senate approved President Nicolas Sarkozy’s bill to raise the retirement age by two years as labor unions promised to maintain their protests for an eighth week against the measure.

Lawmakers in the Sarkozy-controlled upper house of Parliament voted 177-153, clearing the way for final passage. A comparable version of the legislation was approved by the National Assembly on Sept. 15. A committee comprising members of both chambers is scheduled to meet Oct. 25 to merge the bills.

Bloomberg continues:

Sarkozy has refused to retreat from the plan that would bring France closer to Germany and the U.S., which are moving toward setting 67 as the full-retirement age, according to the Organization for Economic Cooperation and Development.

The retirement overhaul is needed to balance the pension system’s budget by 2018, Sarkozy says. The changes are part of his effort to reduce the total deficit. This year, the gap will stand at 7.7 percent of gross domestic product and Sarkozy plans to cut it to 6 percent next year.

Arguments have been made by unions that it is wrong to raise the retirement age, particularly against those who work in the fuel industry.  There have been riots and protests for days over the bill.  The BBC says:

Unions say retirement at 60 is a hard-earned right and say the reform is unfair to workers.  

BBC says of the action: 

The protest movement has been spearheaded by the trade unions, although all sections of society have been represented - including schoolchildren. The unions have called two further days of protests on top of the rolling strikes, on 28 October and 6 November. The unions have been blockading all 12 refineries in France in a bid to change the government's mind.  Police also removed protesters from two fuel depots, in Toulouse and Grand Quevilly. Prime Minister Francois Fillon said it would take several days for fuel supplies to return to normal.  More than 2,000 filling stations around the country have run dry.

Photo Credit: BBC News

Obama's Plan For Trade Imbalances

I have not said much on what the Obama administration thinks about the foreign trade imbalance and how they plan to solve it.  The New York Times reports:

The Obama administration on Friday urged the world’s biggest economies to set a numerical limit on their trade imbalances, in a major new effort to broker an international consensus on how to handle festering exchange-rate tensions.

Officials from Britain, Canada and Australia quickly expressed support for the idea, and as a late-night Friday negotiating session in South Korea continued into Saturday morning, France and Japan came on board. But Germany, Europe’s largest exporter, expressed resistance, and China, whose currency battle with the United States has threatened to derail the process of global economic cooperation, has not formally weighed in.

The range of responses illustrated the challenge in securing support among the Group of 20 economic powers before a meeting of their leaders next month in Seoul, South Korea.

Treasury Secretary Timothy F. Geithner offered the administration’s proposal at a two-day meeting of G-20 finance ministers and central bankers in Gyeongju, South Korea. Mr. Geithner called for the biggest industrialized economies to keep their current-account balance — whether a surplus or a deficit — below 4 percent of gross domestic product.

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China and the U.S.: Are We Really That Different On Monetary Policy? Yes!

Ezra Klein, who I would call the king of explaining economic and domestic policy, explains the Federal Reserve's newest strategy and what China has been doing with its own version of the Fed.  On the Fed's latest policy he says:

What the Federal Reserve is not prepared for, Bernanke said in Boston, is dealing with persistently low job growth and inflation when it's already dropped interest rates as far as they can go. "Monetary policymaking in an era of low inflation has not proved to be entirely straightforward," he sighed. But the fact that bankers might wish for a more straightforward situation doesn't mean they can sit the crisis out. "Central banks, for the first time in many decades, [have] to take seriously the possibility that inflation can be too low as well as too high."

And the Fed does have other tools. The two Bernanke suggested he'll use are buying large amounts of long-term securities, which brought down interest rates during the crisis, and committing to keep interest rates low for an extremely long period of time. The problem, he admitted, is that "we are still learning about the efficacy and appropriate management of these alternative tools."

Which suggests the Federal Reserve will be cautious. And that can be a problem of its own. If the Federal Reserve intervenes but does too little and it has no effect, it will lose credibility amid fears that it cannot effectively backstop the economy. Jan Hatzius, Goldman Sachs's chief economist, worried over this dynamic at a fiscal policy conference earlier this month. "In this kind of situation," he said, "stimulus tends to be underprovided compared to what's necessary. I think we'll do quite a lot, but it will still fall short of what we need." It's up to Bernanke to prove him wrong.

This morning, Ezra says this about China and the Fed:

 The next round of quantitative easing will probably see an arm of the American government purchasing Treasury bonds in order to lower interest rates. In recent years, the main mechanism China has used to hold its currency down has been ... purchasing Treasury bonds. Which has, as any economist will tell you, done a lot to lower our interest rates.

So in a simplified way, China's been practicing quantitative easing on the United States for some time now: By purchasing our bonds, they've kept interest rates artificially low, which is part of why it was so easy for us to have a credit bubble. And we hate them for it.

That's partially because it's not a perfect analogy. Remember that there are two sides to the Fed's quantitative easing: The creation of new dollars and then the purchase of bonds. China, by contrast, has been purchasing bonds with their money. That means China's purchases have kept the yuan weak and the dollar strong. It also hasn't had the inflationary effect that the Federal Reserve is hoping to have by creating hundreds of billions of dollars out of thin air. And it was, from our perspective, poorly timed: They were doing it during an expansion, which helped fuel a bubble.

Nevertheless, it's part of the reason that quantitative easing on its own isn't likely to do much unless we're willing to get into huge numbers (Paul Krugman has mention $8 trillion to $10 trillion). There are already players -- and not just China -- buying our bonds to keep our interest rates from rising.