General Chen Bingde, head of the general staff of China’s People Liberation Army (PLA), has confirmed that his country is constructing its first aircraft carrier, an ex-Soviet Varyag set to begin sea trials next year. Spy-masters in Washington and London have been monitoring the ship’s progress for some time, but Gen. Chen’s comments are the first public commentary on its existence. Purchased from a Ukrainian shipyard in 2002 for $20million by a Macau-based company, the original contract stipulated that the vessel could not be used for military purposes. The buyer claimed the ship would be converted into a floating amusement park, complete with a hotel and casino. Whoops.
Adding an aircraft carrier to its fleet continues to amplify the PLA’s global reach capabilities, and at a time when China is asserting a more aggressive strategic posture in the South China Sea. China has made maritime territorial claims there, drawing ire of the United States and countries in the region, which have insisted instead freedom of international waterways.
That’s why, in part, confirmation of the aircraft carrier is likely to raise the hackles of policy makers in Western capitals, fearful–despite Beijing’s claims to the contrary–that the addition of a major instrument of power projection represents an obvious threat.
While such fears are well-founded, it’s also important to place the Chinese military expansionism within a proper context. In that vein, PPI has offered a series of memos on China’s military over the course of 2010, including this piece explicitly on its Navy. U.S. Naval War College Professor Mike Chase concludes:
[T]he U.S. will need to strengthen its ties to key countries in East Asia and develop strategic and tactical military concepts and capabilities that would allow it to counter China’s growing military power. Meanwhile, U.S. policy makers must seek collaboration with the Chinese military in an effort to highlight the benefits of being a global stakeholder to Beijing.
Other pieces in the series are on China’s military budget and priorities and Beijing’s anti-access/area-denial strategy. Read them here. And finally, back in December, PPI did a fantastic panel discussion featuring Chip Gregson, Asst. Secretary of Defense for Asia, Sen. Chris Coons (D-DE), as well as Joe Nye, Jim Fallows, and the aforementioned Mike Chase. Check out the video here.
Whether U.S. Presidents succeed or fail often depends on a big factor beyond their control: the timing of the business cycle. Lucky Presidents – Ronald Reagan, George W. Bush – experienced downturns early in their first term, leaving plenty of time for an economic rebound to lift them to reelection.
Barack Obama, who took office months after the Great Recession started, must be cursing his luck. Just at the point when investment and jobs normally would be coming back, the U.S. economy has taken a sickening swoon.
Last month’s feeble job numbers – just 54,000 jobs created, far short of the 300,000 or more needed each month to return unemployment to pre-crisis levels – reinforced the public’s growing economic gloom. They also suggested that the administration has erred in viewing the economy’s problems as cyclical.
If that were true, the White House strategy of waiting for the economy to heal itself might make sense. But if America faces structural impediments to growth, we can’t just wait for the economy to revert to normal.
Since the Great Recession officially ended in the fall of 2009, the economy has grown just 2.8 percent per year, well below the average 4.6 percent growth that follows typical recessions, economist Lawrence Lindsey said. And instead of declining steadily, unemployment is rising again.
From GOP presidential aspirant Jon Huntsman to liberal columnist Paul Krugman, commentators across the spectrum are rightly talking about a “lost decade” of economic growth. According to the Wall Street Journal’s Gerald Seib, America has endured 11 straight years of lackluster growth since 2000, the last year in which economic growth exceeded four percent.
The job picture is even worse. As this useful chart shows, the U.S. economy created 23 million jobs on Clinton’s watch and 16 million on Reagan’s. Bush’s job-creation record is a paltry 3 million. And we can’t just blame the Great Recession. Even before it hit in December 2007, the rate of job growth lagged well behind the record of the previous decades.
No doubt about it: the aughts under Bush were a lost economic decade. While no president can be blamed for cyclical downturns, it is fair to say that Bush’s economic policies did little to address the structural roots of slower economic and job growth. On the contrary, his purblind economic policy mix – coupling a spending binge with deep tax cuts – helped dig America into a deep fiscal hole.
Nonetheless, the lingering economic malaise has cast a shadow over Obama’s reelection prospects and boosted Mitt Romney’s political stock – the two are now running neck-in-neck in the polls. The 2012 election will largely be a contest over which party has the most credible plan for reviving U.S. economic dynamism.
The Republicans have a simple fiscal theory that leads to an equally simple solution. They see the size and cost of government as the chief obstacle to growth. Cut public spending, and the economy will sit up on its haunches again and roar.
Many liberals, including Krugman, seem stuck in the Keynesian paradigm, arguing that the problem is inadequate demand, which means government needs to spend more until the economy recovers its “animal spirits.”
Obama is smart enough to reject a witless choice between less or more government. He has, however, yet to develop a plausible plan for restructuring the U.S. economy to unleash economic innovation, capture its benefits in good jobs that stay in America, and boost our ability to win in world markets.
Above all, Obama needs to spell out big, concrete initiatives that can inspire public confidence that his administration has properly diagnosed the economy’s structural ills and prescribed realistic remedies.
PPI has developed bold proposals that meet this standard: An independent National Infrastructure Bank, to unlock hundreds of billions of private investment in state-of-the-art transport, energy and water systems; pro-growth tax reform that closes inefficient tax expenditures and reduces the corporate tax rate; and a base-closing style commission charged with periodically pruning regulations that impede economic innovation and business start-ups, the engine of most new American job creation.
America can’t afford another lost economic decade – and neither can progressives. This is an FDR moment for Obama – a time for “bold, persistent experimentation” to get America’s economy moving again.
Last week’s less-than-positive jobs report revived ever-hopeful mainstream media talk that economic issues would decisively trump cultural or constitutional issues in the Republican Party’s councils. And indeed, some reporters saw this long-awaited sign even in the entrails of the Christian Right: the annual Washington get-together of Ralph Reed’s Faith and Freedom Coalition, which attracted most of the GOP presidential field. Here’s how Reuters described the confab, under the title, “Social issues fade as Republicans court conservatives”:
Christian conservatives looking to put a Republican in the White House heard a lot about the economy on Friday in a sign that their social issues may take a back seat in 2012…. In contrast to some previous presidential campaigns, social issues like gay marriage and abortion have not been prominent topics for Republicans hopefuls seeking to replace President Barack Obama in next year’s election.
That’s a Beltway wish-fulfillment view of the FFC event, and of contemporary Republican politics generally.
But it’s also not exactly right: There was lots of talk about those supposedly forgotten “social issues” at Ralph’s soiree. The proto-candidate for president who defines the left wing of the GOP these days, Jon Huntsman, did not consign these issues to the “back seat.” Here’s what he had to say:
“As governor of Utah I supported and signed every pro-life bill that came to my desk,” Huntsman said, rattling off legislation that made second trimester abortions illegal, a bill that he said allowed “women to know about the pain that abortion causes an unborn child,” a bill “requiring parental permission for an abortion,” and another piece of legislation “that would trigger a ban on abortions in Utah if Roe vs. Wade were overturned.”
“You see,” Huntsman explained, “I do not believe the Republican Party should focus only on our economic life to the neglect of our human life.”
Turning the “social issues don’t matter” meme on its head, another supposedly non-social-conservative candidate, Mitt Romney, argued that economic and fiscal problems represented a “moral crisis.”
Most MSM treatment of the FFC event missed the rather central point that Ralph Reed’s organization is not a full-on Christian Right group purely devoted to social issues, but instead a “teavangelical” effort explicitly designed to merge the religious and limited-government impulses of the GOP. There is already a massive overlap of affiliation with Tea Party and Christian Right identities. And there’s a more important if less understood overlap in the Tea Party and Christian Right theories of what’s gone wrong with America: an emphasis on alleged judicial usurpations of state and private-sector powers going back to the New Deal, and a hostility to supposed cultural elites who favor both secularization of American society and maintenance of the progressive legacy of New Deal/Great Society programs.
There’s really not that much tension between the economic and social wings of today’s conservative movement. And both appear to converge in an aggressive foreign policy, focused especially on the Middle East. FFC Speaker Rep. Michele Bachmann ended her remarks with a prayer that concluded:
Our nation hangs precariously in the balance financially, morally and also in our relationship with the rest of the world — with our position toward Israel.
Another already-announced presidential candidate, who reportedly received the most impressive response, Herman Cain, told FFC attendee:
“The Cain doctrine would be real simple when it comes to Israel: You mess with Israel, you mess with the United States of America,” he said to a long standing ovation.
In general, bad economic indicators don’t seem to be tilting the conservative movement or the Republican Party in any sort of economics-only direction. Indeed, to the extent that Republican economic policy now focuses on short-term federal spending cuts and long-term elimination of New Deal/Great Society entitlements, it converges with non-economic policies aimed at a cultural counter-revolution remaking America according to mid-twentieth-century values and opportunities. The very people who want to criminalize abortions and restore “traditional marriages,” also want to get rid of unions and collective efforts to make health care or pensions universally available.
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On the presidential campaign trail, Mitt Romney formally declared his candidacy, but on the same day, in Boston, Sarah Palin spoke out against the Massachusetts health reform plan. Palin’s impossible-to-divine ambitions received vast attention. … Michele Bachmann has reportedly recruited Ed Rollins, Mike Huckabee’s 2008 campaign manager, to her cause. … Newt Gingrich followed up his disastrous campaign launch by suddenly announcing a two-week vacation to the Greek Islands, subsequently losing his Iowa political director. … Jon Huntsman became the first candidate to officially announce he was skipping Iowa. And polls consistently show Mitt Romney narrowly leading a field of candidates who will soon be attacking him on many grounds, most notably RomneyCare. While Romney appears to think his economic message and resume will make him ultimately irresistible to both primary and general election voters, it’s unclear he can overcome hostility to his health care record among the former, and coolness towards his Wall Street Republican orientation among the latter. We’ll soon know if what Romney has to do to get the Republican presidential nomination will prove to be too much for him, or too much for the November 2012 electorate.
Last week reports emerged about attempted cyber attacks against the internal networks of three major U.S. defense contractors: Lockheed Martin, L-3 Communications, and Northrop Grumman. All of the attempted hacks tried to access the companies’ internal networks using compromised remote-access security tokens, which are believed to be linked to yet another hack that occurred at a different government contractor, RSA, in March.
Amidst news of last week’s attacks, DoD is preparing a formal cyber strategy and a list of deployable cyber weapons. The strategy is not in response to the incursions, but as the first formal cyber strategy written by the Pentagon, it obviously has bearing on USG’s response to them, as well as future assaults.
The strategy is not yet public, but two important provisions are known: First, that the Pentagon may use conventional force to respond to a cyber attack against the U.S.; second, that the strategy explicitly contains an authorization framework, reportedly requiring the military to obtain presidential approval before deploying cyber weapons.
While it’s time that the U.S. government assembled clear policies to respond to cyber attacks, it is important to recognize the unique challenges contained therein. Two of the most important are 1) assigning responsibility for an attack and 2) assuring that any retaliation avoids excessive collateral damage.
First, unlike attacks with conventional weapons, an attacker has more opportunities to hide his origin in cyberspace. For example, state actors can create plausible deniability behind contracted criminal groups, a tactic likely used by Russia and China. It’s unclear how the new strategy will deal with this point.
Second, if the U.S. government is able to correctly attribute an attack, its response would have to comport with international law, specifically a statute known as the Law of Armed Conflict (LoAC). The United States is bound to the LoAC through multiple treaties such as the 1907 Hague Conventions and the 1949 Geneva Conventions, as well as through customary international law. Two elements of the LoAC pose particular challenges in the cyber realm: proportionality and distinction.
Proportionality may be a particularly tough nut to crack, as we know that the Pentagon’s policy will permit retaliating against a cyber attack with conventional weapons. It’s new ground, and the argument could be made that launching a missile in response to a computer-based attack is inherently disproportionate. However, we must recognize that a cyber attack has the ability to cause actual loss of life if, for example, it were aimed at air traffic control systems and caused planes to crash. Under the new policy, only an attack of this magnitude would allow a conventional response to a cyber attack, and it is imperative that such a response be proportionate.
Distinction is another problematic element of the LoAC because cyber weapons can have unintended consequences. The amount of damage that a conventional weapon does is known before it is used even though it may damage unintended targets. Not so in the cyber world: Vital military and civilian assets may reside on the same network, thus making it difficult to limit damage to the legitimate military target. Furthermore, cyber weapons are different because entities that reside in cyberspace are interconnected on a global scale: attacking a target on a server in China can also cause damage to another server in Canada. This actually happened in 2010 when the U.S. military took down a jihadist website hosted in Saudi Arabia that led to disruption to more than 300 servers in Saudi Arabia, Texas, and Germany.
These are only a couple of considerations that complicate the use of cyber weapons, and developing a strong cyber capabilities must occur within the context of these considerations. With so much of its vital national assets relying on the Internet, the U.S. must equip itself with both the strong defensive capabilities and project power in cyberspace, as well as with robust policies to regulate these capabilities.
Amid the high drama of fiscal brinkmanship in Washington, it’s easy to forget that reducing budget deficits isn’t the biggest economic challenge we face. Even more important is kick-starting the great American job machine and reversing our country’s slide in global competition.
Critical to both goals is shoring up the decaying physical foundations of national prosperity. Without world-class infrastructure, the United States won’t be able to attract private investment, sustain rapid technological innovation and productivity growth, or keep good jobs from going overseas.
According to a new Gallup poll, general economic concerns (35 percent) and unemployment (22 percent) top voters list of worries, with federal deficits and debt a distant third at 12 percent. Fiscal restraint is important, but it must be balanced against the larger imperatives of jobs and global competition. Among other things, this means leaving room for public investment to replenish the nation’s stock of physical capital.
America can’t build a more dynamic and globally competitive economy on the legacy infrastructure of the 20th Century. Thanks to their parents’ far-sighted public investments, baby boomers grew up in a country that set the world standard for modern infrastructure. But after a generation of underinvestment, compounded by politicized spending decisions, we now face a massive infrastructure deficit that exerts a severe drag on U.S. productivity.
Meanwhile, China and other fast-rising countries are building gleaming new airports and bullet trains. To keep from falling farther behind, the United States needs to make large-scale capital investments in repairing decrepit roads and bridges; upgrading air and sea ports; building “intelligent” transportation systems and smart energy grids; modernizing the air traffic control system; speeding up our pokey rail networks; and leading the world in deploying ultra-fast broadband.
But with the government strapped for cash, it’s reasonable to ask where the money to rebuild America will come from. The answer is that we need to look more to the private sector. U.S. companies are sitting on $2 trillion in idle cash, and pension funds, overseas investors and sovereign wealth funds also are looking for places to invest. Although the federal government will have to put up seed capital, its main role should be to leverage private investment in state-of-the-art infrastructure.
That’s why America needs a National Infrastructure Bank. As proposed by the bipartisan trio of Senators John Kerry, Kay Bailey Hutchison and Mark Warner, the bank would use a modest, one-time appropriation of $10 billion to leverage enormous investments — $640 billion over 10 years — for projects with the greatest potential to put Americans to work and enhance U.S. competitiveness.
President Obama has repeatedly endorsed a national infrastructure bank and proposed the idea again in the budget he sent to Congress in February. But the Senate bill (and a separate House proposal championed by Rep. Rosa DeLauro) have decided advantages over President Obama’s proposal. The president’s approach starts with a smart idea to create programs that work more with the private sector to find financing solutions. But unlike the Kerry proposal, it does not focus enough on the most powerful tools for leveraging private investment: loan programs that include a reasonable cap on the federal share of project costs. Obama’s bank would also be housed within the Department of Transportation, whereas the Kerry bill would make the bank an independent, quasi-public entity. That’s an important difference, because to attract hard-headed capitalists who expect a real economic return on their investments, the government’s financing facility must be genuinely free of political interference.
An independent infrastructure bank would select projects based on their ability to generate real economic returns rather than their influential political patrons. As a self-sustaining entity that would not rely on future appropriations from Congress, the bank would not be subject to the pork barreling and earmarking that distorts federal and state infrastructure spending, especially on transportation.
It’s time to get serious about our dilemma: the U.S. economy is creating too few jobs to bring down unemployment to pre-recession levels. For that, we’d need nearly 12 million new jobs, or about 100,000 more on average than the 200,000 the economy is creating each month. Big capital projects would immediately create those jobs where they are most desperately needed–in the hard-hit construction industry, which is still struggling with a 20 percent unemployment rate.
In the short run, a big national push to build modern infrastructure could create high-skill jobs that can’t be exported. In the long run, it will ensure America’s return to being an engine of production, not just a global center for consumption. That’s why, as Congress struggles to contain federal deficits and debt, it needs to make room for a National Infrastructure Bank to rebuild America.
If Newt Gingrich’s self-destructive criticism of Paul Ryan’s Medicare proposals pushed Republicans more firmly into Ryan’s corner (e.g., Tim Pawlenty’s forced statement that he would sign a bill implementing Ryan’s budget as president, even though he intends to present his own “ideas”), you might think the results of last Tuesday’s special congressional election in New York would then exert counter-pressure against Ryan’s plan. After all, it’s pretty clear that Republican candidate Jane Corwin’s support for Ryan’s budget was the central issue in the campaign, and contributed to her loss in a strong GOP district. But for the most part, conservative opinion-leaders are resisting the pressure, either rationalizing Corwin’s loss as attributable to other factors (mainly through an unconvincing claim she would have won without the presence of self-proclaimed Tea Party candidate Jack Davis splitting the GOP vote), or simply arguing that Republicans need to do a better job of explaining Ryan’s proposal.
In any event, last week’s results guarantee that Democrats will keep relentlessly tarring the entire GOP with the unpopularity of Ryan’s specific take on Medicare. Whatever individual Republicans actually think, they probably calculate they’d rather take their chances on a general election loss over Medicare than invite a primary challenge by dissing Ryan. Many also undoubtedly hope the president will eventually give them “cover” by supporting a budget deal including enough changes to Medicare and Medicaid that makes it describable, accurately or not, as Ryan Lite.
Elsewhere, it’s been another wild week on the Republican presidential campaign trail, particularly on the Wingnut Right. Three national polls of Republicans have shown Georgia-based radio talk host Herman Cain leaping past more highly-regarded competitors to a high-single or low-double digit position of support, despite low name ID and meager (up until now) media coverage. The Hermanator (as he likes to call himself) has already been regularly winning straw polls after candidate speaking engagements, and is at this point the unquestioned favorite of Tea Party activists around the country. He’s been wowing audiences in Iowa in particular, and a Public Policy Institute poll of likely Caucus-goers in the Hawkeye state to be released later today will reportedly show him running second.
The media attention Cain has now earned will be a mixed blessing, making him more of a national conservative celebrity, but also inviting the kind of negative scrutiny he has avoided as a fringe candidate. It could well produce both effects, as illustrated by the mockery he’s already getting for conflating the Declaration of Independence with the Constitution in his announcement speech. In Wingnut World, it’s gospel that the latter document incorporates the former, which is how both Christian Right and Tea Party folk import God, natural law, and an implicit right of resistance against Big Government into the Constitution. Odds are Cain wasn’t being ignorant, but was simply blowing a dog whistle to conservative activists. His insouciance about foreign affairs could be a bigger problem, as could publicity about his past support for TARP and his service on the Federal Reserve Board back in the 1990s. Above all, Cain’s new prominence will bring race back into the national political discussion with a vengeance, even though many of his supporters seem to feel he represents sort of definitive rebuttal against charges that anti-Obama sentiments reflect racial undertones.
Even as polls have been raising Cain, however, an even bigger phenomenon could be unfolding as Sarah Palin—assumed to have been driven away from a 2012 run by poor poll numbers, savage Republican Elite criticism, and her highly remunerative day jobs—is suddenly behaving very much like a proto-candidate. First up, it came out that she had commissioned a full-length feature film centering on her persecution by the forces of Establishment Evil, to be released next month in Iowa, followed by other early primary states. Then she sprang into action by becoming the chief Celebrity Guest at the annual Rolling Thunder motorcycle rally in Washington, and is on the verge of launching a bus tour that will eventually make its way to Iowa. By all accounts, she’s viewing this re-emergence on the national scene as a test of whether she could launch a viable candidacy while pursuing an “unconventional campaign” that apparently would involve low-substance “patriotic” appearances with her large and famous family in tow.
The impact of all this turbulence on the rest of the field is an interesting sub-plot. As someone whose candidacy would be mortally endangered by a Christian Right/Tea Party coalescence around Cain, or a campaign by her doppelganger Palin, Michele Bachmann had quite the nerve-wracking week, including a damaging and clumsily handled no-show at an important Iowa Republican fundraiser she was supposed to headline. Meanwhile, Mitt Romney, considered the likely beneficiary of any surge of support for a presumably unelectable right-wing candidate like Cain or Palin, made his first appearance in Iowa in many months. As he sought to maintain a delicate balance between dissing Iowa and committing to the kind of full-tilt campaign in the state that undid him in 2008, Romney delivered a shirt-sleeve speech to an audience at a state facility in Des Moines. But before he could get into his altar call, fire alarms went off and Romney had to cut short his remarks and urge the crowd to calmly head to the exits. Ever snake-bit in Iowa, the Mittster was foiled on this occasion by someone overcooking a bag of microwave popcorn.
Football, they say, is a game of inches. So too, is Middle East peace making — both figuratively, and in some cases quite literally. President Obama was reminded of that last week when his comments about terms of reference for future Israel-Palestinian peace negotiations provoked a significant public debate, and in some cases, a furious reaction.
Many Republicans – some acting out of purely political motives – and many Democrats, myself included – acting out of genuine concern – reacted quickly and negatively when President Obama adopted as American policy on Israeli-Palestinian peace talks what had previously been described by this Administration as a “Palestinian goal”– that is, a Palestinian state “based on the 1967 lines, with mutually agreed swaps.”
In the view of some, including the White House, that statement was not new U.S. policy. Those views assert that negative reactions suggesting otherwise “misrepresented” the president’s statement, or perhaps more importantly, his intended meaning.
But as we know, when it comes to issues about Israel and the Arab-Israeli conflict, nuance matters. This is a place where inches count.
Reaction to that one passage in the “Winds of Change” address, and the media’s almost singular focus on the matter, overshadowed what was one of the most important and impressive speeches of President Obama’s tenure. And in the end it was only a handful of missing words, representing real-world American commitments that were at the heart of the commotion.
There was so much to celebrate in his address: From the soaring and inspiring vision of a boundless future of prosperity for billions of people across the Middle East who have never known freedom, to the impressive and important commitments to Israel’s security, and to America’s determination to stand up for its values and interests in defeating efforts to isolate and delegitimize Israel at the United Nations and beyond.
In fact, an address that was billed as a landmark speech about change in the Arab world was one of the President’s most impressive and pro-Israel addresses of his presidency.
But you’d probably never know that. And that’s a shame.
By saying that an Israeli-Palestinian peace deal should be based on the 1967-lines with mutually agreed swaps, but omitting the next key phrase – “that take into account demographic changes and realities on the ground” – it was by just a few inches that the president missed the goal line of putting his statement in line with a half century of his predecessors.
It was the vagueness of his remarks, and the omission of a key few words, which necessarily go hand-in-hand, that caused so much alarm.
The truncated phrase was treated with great significance, because this Administration has consistently declined to affirm the validity of a 2004 official letter of commitments from President Bush on behalf of the United States to the Prime Minister in Israel, in which among other key commitments, the U.S. reaffirmed its promise to ensure that Israel would have “defensible borders” distinct from the 1967 lines that would accommodate demographic changes and reality on the ground – ie, major Israeli population centers in the West Bank.
Furthermore, despite the president’s repeated calls for a Jewish State, he has yet to embrace the position taken and assurance provided by Presidents Clinton and Bush that under any final peace accord, the refugee question will be addressed within the borders of a Palestinian State, and not Israel.
Had the Obama Administration previously embraced that letter and those critical U.S. promises, there would have been not nearly the outcry.
But that inexplicable breakdown, seeming to call into question America’s commitment to assurances made in writing by an American president to the State of Israel, codified by Congress, and endorsed in the Clinton Parameters of January 2001, laid the groundwork for the stinging reaction to the President’s incomplete reference to the ’67 lines.
In that context, like Tonto to the Lone Ranger, the Israelis were left asking, ‘What do you mean by swaps, Kimosabe?’
A few days later, President Obama gave another speech on the Middle East, this time even more pro-Israel, but once again, you may not know that, either.
Among the important things President Obama made clear in his second address on the Middle East at the AIPAC policy conference, was that, indeed, he agreed with his predecessors, Presidents Bush and Clinton, that any changes on the ground in a peace agreement must reflect today’s demographic realities and Israel’s unique security needs. His statements on that matter put him firmly in-line with American leaders going back to the 1960s, when President Johnson first established America’s policy that no one could expect Israel to go back to its indefensible 1949/1967 lines.
Why does that matter? History and perspective, of course. Consider the Israeli perspective: In the 1967 Six-Day War, in which Israel survived a miraculous third attempt by a combined force of Arab armies to ‘drive the Jews into the sea’, the nascent Jewish state made important territorial gains.
The city of Jerusalem, after 19 years of Jordanian rule that suppressed freedom of worship for Jews and Christians, was liberated and reunified. The West Bank, known for millennia and in the Old Testament as Judea and Samaria, was brought back into contact with the rest of Israel. The Golan Heights, for years a launching pad from which the Syrian army terrorized Israeli towns, was won in an epic and heroic battle. And the Sinai Desert and Gaza Strip, soon to be offered to Egypt in exchange for peace, were conquered.
Like the Sun rises, Russia and other Arab allies at the United Nations pressed their condemnations of Jewish State. In a typically hypocritical move targeting Israel, some in the world body demanded that for the first time in history land won in a defensive war be fully returned to the aggressors.
The United States – defending its ally Israel, our interests in the region, and basic fairness – rejected that approach. Our elected leaders understood that it was the very indefensible boundaries of 1949/67 encouraged Arab aggression and dreams of destroying the Jewish State and the Jewish People. The United States understood that Israel could not ever be expected or pressured to go back to what became know as ‘the Auschwitz borders.’ That is why America fought so hard to ensure that UN Resolution 242 specifically did not force Israel had to relinquish all of the land it had captured in its war of self-defense, did not force Israel back to indefensible borders and need not exchange territory in a one-to-one ratio.
That is the diplomatic tradition many feared the president was undermining, at a time when Israel is under threat from a genocidal Hezbollah to the north, an unstable Egypt and Syria to its south and northeast, and a Hamas/Fatah unity government that seems ready to abandon the peace process on multiple fronts. The Palestinians rushed to enshrine the president’s position as new preconditions for talks.
But they’re likely to be disappointed. The president made it clear during his second AIPAC speech that he is aligned with those decades of American diplomacy stretching back to the U.S. stand on UNSC 242. That is precisely the diplomatic tradition that the President embraced during his AIPAC speech, a clarification that – again – has been under-appreciated by some.
Perhaps realizing that his first remarks were incomplete and left an impression he had not intended, President Obama, in his speech to AIPAC, built on the pro-Israel foundation of his Winds of Change Address, not only completing the thought he’d begun the prior week, but expanding on several themes in praise-worthy ways.
President Obama powerfully restated in emphatic and unmistakable terms how strenuously the United States will oppose Palestinian efforts to attain unilateral recognition of a Palestinian state in the absence of peace and an end to all claims. This clear leadership stance, and the president’s forceful denunciation of efforts to delegitimatize and isolate Israel are deeply appreciated and underscore the President’s commitment to safeguarding the Jewish state.
Notable was the President’s statement that Israel cannot be expected to negotiate with Hamas, which he rightly called a terrorist organization. His explicit call once again for the Iranian proxy to meet the quartet conditions – recognizing Israel and its right to exist, renouncing violence, and accepting prior agreements between the PA and Israel, was fundamentally important, and ensures that Hamas must fundamentally change, or else remain a pariah.
The President also explicitly signaled his support for a long-term, but not permanent, Israeli military and security presence in the Jordan Valley. This stance is vital, and like his effort to align administration policy with administrations past, is not just commendable, but significant. And in both speeches, the President stressed not only “ironclad” American support for Israel’s security, but insisted that a future Palestinian state be demilitarized.
His remarks on issues beyond the narrow question of the Israel-Arab dispute are also vitally important – in particular, Iran. Again, President Obama said clearly and unequivocally that Iran cannot be allowed to acquire nuclear weapons and that it is American policy to prevent them from doing so.
Both speeches were strongly pro-Israel in the broadest sense. From the President’s vision of a Middle East made up of progressive Arab states more focused on investing in their own human capital and building tolerant, prosperous societies – rather than scapegoating Israel, to his embrace of Israel and its future as a Jewish state with peaceful neighbors, there is much to appreciate. It’s time to say so.
In recent weeks Mitt Romney has been seeking to bolster his claim to be the mainstream establishment candidate capable of beating Barack Obama in the general election. It’s a logical enough claim for any candidate to seek to make, except that his most compelling argument has had more to do with dollars than ideas.
Last week, the Romney campaign arranged for more than 400 activists to travel to Las Vegas to participate in a telethon that the campaign claims raised $10.25 million in a single day. Two events in Boston later in the week were reported to have raised $2 million.
By June 30, the date on which donations from the last quarter will be published, the Romney campaign is hoping to be able to comprehensively demonstrate financial dominance over the rest of the field. Romney’s staff is keen to emphasize its fundraising prowess, not as a means to articulate Romney’s arguments about issues, but as an argument in and of itself.
Following the latest fundraising effort, the Romney campaign posted an article on their website claiming, “When it comes to money, President Obama and Mitt Romney occupy a plateau far above everyone else”. The message is clear: it doesn’t matter if you really like Tim Pawlenty or Ron Paul or any of the several other respected Republicans in the race: Mitt Romney is the only candidate with the cash to win.
Arguments about fundraising power and the supposed credibility that it gives a candidate are ubiquitous in primary campaigns. Newt Gingrich has already felt this bite: One of the key ideological moments in the GOP contest so far was perhaps Newt Gingrich’s apparent flip-flop over Paul Ryan’s budget plans for Medicare. The moment may well have made support for the budget a shibboleth for conservative voters, while the attention given to Gingrich’s misstep will make it harder for candidates to evade the issue.
Amidst the furor, however, one of the key arguments made by Gingrich’s detractors was that it had damaged his campaign’s ability to raise funds. Much was made of the fact that within 24 hours of his comments on ”Meet the Press”, 13 out of 18 co-chairs for Gingrich’s Florida fundraising effort dropped out. A ‘veteran Republican strategist’ was widely quoted as questioning whether Gingrich can “even make it to July 4th, because his fundraising is going to dry up.”
Primary elections are a vibrant part of American democracy. They contrast favorably with systems in most other democracies where the selection of candidates that the electorate chooses between is still largely controlled by party bosses.
Therefore, it’s tragic that the opportunity to have open discussions about ideas within America’s two great ideological traditions can be drowned out by questions about fundraising. This focus not only distracts from important issues, but also maintains the role for party elites that primary elections were intended to abolish.
Thirteen Florida co-chairs are supposedly able to hail the demise of Newt Gingrich’s campaign, while a small group of Romney fundraisers send a dramatic message to party activists and primary voters that, arguments over issues aside, his is the only campaign capable of defeating Obama’s formidable electoral machine.
There is currently legislation before Congress that would mitigate the oppressive effect that money in politics can have on the vibrancy of American democracy. The Presidential Funding Act would provide $4 for every $1 raised by candidates from small donations of $200 or less. Participating candidates must accept limits on the size of donations they are able to receive.
Such reforms would make candidates who inspire widespread support, but lack access to the tiny proportion of wealthy donors who contribute the majority of campaign finance funds, to be competitive. That would allow primary campaigns to be more about issues and less about money and organization. By negating “I can raise the most” as an argument it would enrich and broaden public discourse and keep our democracy lively and strong.
To find out more about the damaging role of money in politics please visit https://www.youstreet.org/ or go to Americans for Campaign Reform (ACR)on Facebook.
Republicans are crying foul over Democrats’ resort to “Mediscare” tactics to win an open House seat in New York. Democrats are chortling because they think the GOP’s heretofore unstoppable austerity offensive may have met its Stalingrad.
All this is diverting to aficionados of partisan thrust-and-parry in Washington. But the rest of the country may be less amused. By adhering to unbending, absolutist positions on Medicare and taxes, could Democrats and Republicans be cracking open the door to a serious third party challenge in 2012?
On Tuesday, Democrat Kathy Hochul won a traditionally Republican House seat in upstate New York in a special election. She relentlessly linked her GOP opponent to Rep. Paul Ryan’s plan for making deep cuts in Medicare while preserving the Bush tax cuts for the rich. Many Democrats now see this as the winning formula for next year’s elections.
Ryan complained yesterday that Democrats are “shamelessly demagoguing and distorting” his plan. It was hard to feel any sympathy for the earnest House Budget Commission chairman, however, since Republicans in 2010 spent millions on ads shamelessly blasting Democratic candidates for backing the proposed Medicare cuts in Obamacare. There’s actual double hypocrisy at work here, since Ryan’s Medicare proposal works through the same health exchanges Republicans find so objectionable in Obama’s plan.
Being called a demagogue by the party of death panels and death taxes is like being called ugly by a crab.
Nonetheless, Democrats need to resist the temptation to pay back their opponents in kind. They need to retain the flexibility to slow down Medicare’s cost growth, which as Bill Clinton said yesterday at the Peterson Foundation Fiscal Summit, is the sine qua non of any serious proposal to reduce federal deficits and debt.
Medicare spending is by far the biggest driver of federal spending growth. Together with Social Security, it represents nearly one-third of federal spending. According to the Social Security and Medicare Trustees, the government is slated to transfer over $3.4 trillion in general revenues to Medicare by 2020. This problem needs to be tackled now, even if it complicates Democrats’ ability to run on “Medagoguery” in 2012.
Meanwhile, “progressives” aren’t helping by running a ridiculously over-the-top ad showing a Ryan look-alike pitching a wheelchair-bound granny off a cliff. True progressives believe in solving the nation’s core dilemmas, not fetishizing the status quo. Cutting the nation’s debts down to manageable size will require both higher revenues and lower rates of entitlement spending growth.
If Democrats and Republicans can’t produce a fix along these lines, they practically invite the 2012 version of Ross Perot into the race.
Many economists are racing to declare a ‘manufacturing revival.’ The latest to join the bandwagon is Paul Krugman. In his latest column, Krugman writes (my emphasis added)
Manufacturing is one of the bright spots of a generally disappointing recovery…..Crucially, the manufacturing trade deficit seems to be coming down. At this point, it’s only about half as large as a share of G.D.P. as it was at the peak of the housing bubble, and further improvements are in the pipeline…one piece of good news is that Americans are, once again, starting to actually make things.
Oh, how I wish Paul was right. Unfortunately, I still don’t see it in the trade numbers. In fact, the real trade deficits in capital and consumer goods are both nearing all-time (negative) records. Meanwhile, the real trade deficit for industrial supplies and materials has improved in large part because of an enormous surge in real exports of energy products, including coal, fuel oil, and other petroleum products (yes you read that right) and a sharp decline in imports of building materials. I don’t find either of these convincing proof of a resurgence of manufacturing.
As you might expect, time for some charts. Here’s a chart (below) of the real trade balance in capital goods in billions of 2005 dollars, calculated on a 12-month basis.
Capital goods include computers, telecom gear, machinery, aircraft, medical equipment–the heart of U.S. advanced manufacturing. Within a couple of months, if current trends continue, the capital goods trade deficit will be at a record level. What’s more, there’s no sign of any great domestic capital spending boom that could suck in imports.
And not to digress, these figures probably substantially underestimate the deterioration of the capital goods trade balance because of the import price bias effect , where the government statisticians do not correctly adjust for rapid changes in sourcing from high-cost countries such as the U.S. and Japan to low-cost countries such as China and Mexico (for a good reference see the new paper “Offshoring Bias in U.S. Manufacturing” by Susan Houseman, Christopher Kurz, Paul Lengermann, and Benjamin Mandel in the latest issue of the Journal of Economic Perspectives) .
Now let’s turn to consumer goods. Here’s the chart (right) of the real trade balance in consumer goods, in 2005 dollars.
No sign of any real improvement here either, I’m afraid. The trade balance retreated a bit during the recession, but since then has surged back. Once again, there’s no sign of a sustainable improvement in the trade balance.
The situation with motor vehicles is a bit more ambiguous. As the chart to the left shows, clearly there has been some gains in the motor vehicles and parts trade balance. However, it has started deteriorating again.
Finally, we come to the one area, industrial supplies and materials, where there has been a clear improvement in the real trade balance. Industrial supplies and materials includes fuel imports and exports; steel and other metals; building materials; chemicals; and a grab bag of other things including newsprint, audio tapes, and hair.
Since 2006, there has been roughly a $150 billion improvement in the industrial supplies and materials trade deficit, measured in 2005 dollars (I say roughly because this is one case where the chain-weighted procedures used to construct the figures gives quirky answers that aren’t additive. So when I give the following numbers, please please don’t divide them into $150 billion to get a share of the improvement). Part of that is a decline in real imports of crude oil, which fell by roughly $30 billion (measured from 2006 to the 12 months ending in March 2011). But another $30 billion, more or less, came from an increase in real exports of petroleum products such as fuel oil and lubricants. I’m not sure whether a gain in exports of fuel oil really tells us much about the fortunes of manufacturing overall.
Another contributor to the improved trade balance is a decline in the imports of building materials. Once again, not a sign of strength.
So I see no sign in the trade data of a great manufacturing revival. The topline improvement in the real trade deficit has mostly come from industrial materials and supplies, and within that from a swing in the energy sector imports and exports.
Let me finish with a quote from a piece that Paul Krugman wrote back in 1994. In that piece, he scoffed at worries that foreign competition was hurting U.S. manufacturing. He argued that
A growing body of evidence contradicts the popular view that international competition is central to U.S. economic problems. In fact, international factors have played a surprisingly small role in the country’s economic difficulties…. recent analyses indicate that growing international trade does not bear significant responsibility even for the declining real wages of less educated U.S. workers.
Americans, conditioned by harsh experience to expect nothing but trouble from the Middle East, have been thrilled and inspired by the Arab Spring. But now a practical question looms: Just how far are we prepared to go to help these rebellions succeed?
Early successes in Tunisia and Egypt may have created a false impression of the brittleness of the region’s ancien regime. Elsewhere, dictators and autocrats are proving harder to dislodge. And despite the toppling of longtime strongman Hosni Mubarak, democratic consolidation in Egypt is anything but assured.
Around the Middle East, popular demands for individual freedom, economic justice and self-determination have hit a stone wall of reaction and sheer inertia. Hopes that liberal democracy will take hold in the region hang in the balance.
For the United States, the strategic stakes are enormous. Consider, for example, what the end of the al-Assad family’s monopoly on power in Syria might mean. In addition to opening up one of the region’s most sinister police states, it could deprive Iran of its most dependable ally, further isolating Tehran’s rebarbative clerics. Peace with Israel might be too much to hope for, but regime change could loosen Syria’s ties to the rejectionist front of Hezbollah and Hamas, and curb its murderous meddling in Lebanon.
Yet what’s happening across Syria now is a kind of rolling Tiananmen Square, as Assad unleashes tanks and snipers on protestors, killing nearly 1,000 civilians and counting. This brazen reign of terror makes a mockery of President Obama’s admonitions to Assad to “lead the transition” or get out of the way. Assad is no part of the solution, he is the problem, and Washington needs to hold him accountable for his crimes.
The administration should press for a U.N. investigation that would pave the way for indicting Assad and his cronies in international tribunals for crimes against humanity. In truth, Washington has limited leverage on Assad, but it ought to play a long game, doing everything possible to delegitimize his regime, empower human rights and democracy activists, and strengthen civil society in Syria.
Also high on our priority list is Yemen, where al Qaeda in the Arabian Peninsula is busy plotting terror attacks on the United States. Despite strong internal and external pressure, President Ali Abdullah Saleh has thrice reneged on promises to step down. This augurs more civil strife and chaos, and opportunities for Islamists to entrench themselves in the country’s ungoverned spaces. Given the terror threat, the United States needs to play a more forceful hand in getting Saleh to yield to popular demands that he resign, paving the way to elections and a more representative government.
Libya is of less consequence, but the United States already is embroiled in the revolt against Muammar Qaddafi, albeit in a supporting role. NATO air strikes have prevented the dictator’s forces from carrying out his threats to crush the rebels. The opposition, however, lacks the organization, weapons and military training to defeat his armed forces. The prospect here is for stalemate and protracted civil war, unless the United States and its allies undertake to equip the rebels with the tools they need to finish the job.
Egypt poses an especially thorny problem for U.S. diplomacy. As the biggest Arab country and political trendsetter, what happens there will have major repercussions throughout the region. Although popular protests brought down longtime strongman Hosni Mubarak, political power is firmly in the hands of the army’s senior officers. As Larry Diamond notes, the army has arrested thousands of peaceful demonstrators and is trying them in military tribunals. It also has ignored growing attacks by Islamist extremists on Coptic Christians, perhaps as a way of underscoring its indispensability as the sole bulwark of social stability in Egypt. Also worrisome is a compressed timetable for Egypt’s first post-Mubarak elections, which will be held in September. That gives the nation’s authentic democratic forces little time to organize a counterweight to the Muslim Brotherhood, which could be poised to score big gains.
In Egypt, fortunately, the United States does have leverage. The military has received billions in U.S. aid, and Obama last week promised additional economic assistance. Washington can best sustain the momentum of the Arab Spring by using its influence to prevent the Egyptian military from blocking a transition to democratic and genuinely civilian rule.
Until now, Washington has been mainly a spectator to an indigenous popular rebellion against tyranny, corruption and injustice in the Middle East. To ensure that these movements for freedom and self-determination aren’t rolled back, we ought to be prepared to give at least some of them a decisive push.
It’s happened so quickly that its significance may have been obscured, but one of the biggest recent developments in Wingnut World has been the rapid devolution of conservative opinion on the pending debt limit crisis–from demands for hard-line negotiations to outright rejection of negotiations at all, often supplemented by claims that the government doesn’t need new debt authority anyway.
This last phenomenon, which Jonathan Chait and others have been calling “debt-ceiling denialism,” is spreading like kudzu since it was first notably articulated by Sen. Pat Toomey (R-PA) in a January column in the Wall Street Journal. There are different forms of the argument, but the common threads are the claim that the federal government can prioritize the use of revenues in a way that avoids debt default, and the complaint that the whole issue has been manufactured by Democrats to avoid big spending cuts. Toomey attracted 100 House members and 22 Senators to his “Full Faith and Credit Act” legislation that would supposedly avoid a default by forcing debt payments to the top of the spending priority list.
Short of explicit denial that a real breaching of the debt limit would be a bad thing, other conservatives (including presidential candidates Tim Pawlenty, Michele Bachmann and Herman Cain) take the parallel position of opposing any increase in the debt limit on grounds that spending (without, of course, any tax increases) should be cut enough to make the increase unnecessary.
The usual reaction in Washington to this sort of talk is to dismiss it as tactical positioning for the “deal” that will ultimately be cut—as “hostage-taking” aimed at maximizing the “ransom.” Perhaps that’s exactly what it was initially. But at some point, arguments that the hostage’s life is worth nothing, or worse yet, that the ransom limit increases are perpetually unpopular among the overwhelming percentage of Americans who have no real idea of the merits of either side of the can be earned precisely by killing the hostage, undermine the very idea of a deal, particularly when refusing to negotiate with Democrats is a posture that conservatives value as an end in itself anyway. Indeed, the trend in conservative rhetoric on this subject is to accuse Democrats of hostage-taking by their adamant refusal to accept vast spending reductions. It’s a dangerous gambit, made even more tempting to Republicans by the fact that debt dispute.
The key question is the extent to which the GOP’s business elites forcefully push back and demand a more reasonable attitude before things get out of hand. That’s particularly urgent since debt-limit deniers and hard-liners alike are getting into the habit of arguing that financial markets care more about spending reductions than any hypothetical default on the debt. Moreover, debt-limit ultras are also playing with fire by systematically eliminating any incentive for the Obama administration or congressional Democrats to make concessions to a credible negotiating partner. Why offer a ransom when the hostage-takers no longer seem to care what you offer? Better to just send in the SWAT team and take your chances.
Meanwhile, the last week offered more news in the shaping of the 2012 Republican presidential nomination field: Mitch Daniels disappointed his Beltway cheerleading squad by deciding against a run; Newt Gingrich imploded his long-shot campaign with a series of disastrous remarks and revelations; and Tim Pawlenty and Herman Cain formally announced candidacies.
Assessments of the impact of Daniels’ non-candidacy vary according to perspective. Some think it will lead Establishment Republicans to make a last-ditch effort to find another savior such as Gov. Chris Christie (R-NJ) or even Jeb Bush. And if that fails, to resign themselves to the existing field and get behind Romney, Pawlenty, or Huntsman (though the last option remains implausible because his path to the nomination remains extremely difficult). Others combine the Daniels and Huckabee withdrawals and suggest the weak field will produce a big opening for a southern Tea Party conservative with deep pockets like Rick Perry. Both Establishment types and fans of a late entry are beginning to burrow away to undermine the credibility of the Iowa Caucuses as the essential starting-point for the real campaign (for the latter camp, it’s in part because competing in Iowa requires competing in the state party Straw Poll that is held this August).
Though the Gingrich implosion has interested the conservative commentariat less than Daniels’ decision–for the good reason that very few observers considered the Newster viable in the first place–its long-term significance should not be underestimated: it proved once again that ideological purity is the preeminent demand of conservatives for GOP presidential candidates. If nothing else, the incident will make it very difficult for other candidates to distance themselves from Paul Ryan’s politically perilous Medicare proposals. But it should also serve as a dashboard idiot light to Mitt Romney warning him that his hopes of being forgiven for his health care heresy may not be terribly realistic.
America has no wasta. Lacking substantive relationships is especially damning in the Arab world, because it is the informal connections, or wasta, which spells the difference between influence and irrelevance. Problem is that while Arabs might eat Cincinnati-style chili at the Dead Sea, teeny-bop to Justin Beiber, and yearn for democracy, there is very little person-to-person connection between America’s consumers of these products and the Arab world’s.
In his 2009 Cairo speech, for example, the president rightly called for a “new beginning” in U.S.-Arab relations. He doubled down late last week, with a speech designed to cement America on the side of the little guy across the region. But without wasta, no matter how well-intended or thought out, President Obama’s vision for the region will flounder.
Capitalizing on the socially networked revolutions and protests, the Millenial generation is the best place to start building wasta. Famously community-oriented, cussedly apolitical, yet relentlessly idealistic, the Millenials understand the importance of inter-connectedness. Eschewing romantic crusades for the nitty-gritty of service, this generation builds a better world one project at a time. To help transform the region, the president should summon his inner Kennedy. Mobilizing the Millenials, Obama could create a new Peace Corps to meet the Arab world’s challenges: The Sharaka (together). The Sharaka would not only deliver developmental aid across the Middle East, it would help mend America’s tattered image, assist in the region’s democratization, and earn Obama some wasta.
I have come to appreciate the need for a Sharaka-like organization from direct experience. Over the past two summers, I have led Millenials on service-learning trips to Madaba, Jordan. Located 20 miles south of Amman, Madaba is famous for its archeological ruins and mosaics. Settled by Christian Bedouins, Madaba now boasts a Muslim majority, largely comprised of Palestinians. Situated in the heart of the city is our home base, the Latin Patriarchate School for Girls. Utilizing the connections our State Department lacks, my school, Gannon University, gained entrée to the region through that most time-worn wasta of the Levant: the Catholic Church.
A Catholic school in a religiously mixed city is hardly representative of the Arab world. Madaba and the Latin Patriarchate School for Girls, however, are the exceptions that prove the rule. Even here, in a relatively affluent and tolerant city, the Arab Spring’s echoes are felt. In a scene reminiscent of Tahir Square, last week scores of Madabans marched peacefully to call for the mayor’s resignation. Moreover, Christian and Muslim, alike, Madabans call for democracy, freedom, and meaningful reform.
After teaching English in the Catholic schools, my students and I spend the afternoon at the Sharaka Center for Democracy. Intended as a community hub to inculcate democratic practices, Sharaka connects us to Madaba’s Muslim community. Eager to learn English, children and professionals flock to Sharaka to learn a world language and engage with Americans.
In serving thousands of hours over the past two summers, my students not only have earned the wasta our State Department lacks, they have been changed. Unlike their peers, who harbor deep anti-Muslim and anti-Arab sentiments, these Millenials are friends with hundreds of Muslim and Christian Arabs. They understand Arabs needs a partner, not a hegemon. Presidential speeches matter and American leadership remain crucial, but the path to influence, in the Arab world, begins with befriending our Arab brothers and sisters.
President Obama made the cardinal mistake yesterday of stepping on his own message. His “winds of change” speech was supposed to formalize an historic shift in U.S. policy toward the Middle East. Instead, Obama managed to put the spotlight on the one thing in the region that seems impervious to change: the Israeli-Palestinian conflict.
Grabbing the headlines were a set of new principles Obama introduced late in his speech for reframing stalled peace negotiations. His call for Israel to withdraw to its pre-1967 borders drew a swift rebuke from Prime Minister Benjamin Netanyahu, with whom Obama meets today at the White House. Merits aside, the controversy over this oddly-timed change in U.S. policy has overshadowed the new doctrine the president meant to announce to the world: America henceforth will back reform and democracy in the region.
Conservatives predictably have hailed this as no change at all, merely a restatement of George W. Bush’s “freedom agenda” for the Middle East. But there’s a crucial difference: the impetus for economic and political change in the region is now coming from the ground up – from its long-suffering people, not from Washington. In fact, by defusing tensions between the United States and the Muslim world, Obama probably made it easier for indigenous movements seeking freedom and democracy to arise in the region.
The Arab revolt is widely seen as legitimate because it is not, in fact, an American project. Obama made clear in his speech that Washington is catching up to events in the Middle East, not leading them.
It’s odd that no one in the White House thought to apply the same lesson to the Israeli-Palestinian issue. If the parties to the conflict aren’t themselves motivated to make peace, no amount of outside pressure from the United States, nor any set of innovative “parameters” for negotiations imported from Washington will break the deadlock.
Unfortunately, the flap over Obama’s apparent revision of long-standing U.S. policy toward the conflict reinforces the myth – fostered by Arab dictators and the many U.S. Middle East experts who have invested their careers in peace processing – that Israeli occupation of Arab lands is the region’s core “problem.” Yet the region’s long-suffering people are writing a new narrative that focuses not on Israel, but on the corrupt and despotic rulers who have smothered their aspirations for individual dignity, economic opportunity, and self-determination.
In aligning U.S. policy with these aspirations, Obama ended the bankrupt policy of propping up friendly autocrats. He also restored the missing “d” in his strategic trinity of defense, diplomacy and development – democracy.
The president reaffirmed his view that Muammar Qaddafi must go, and he had suitably harsh words for Iran’s clerical dictatorship, which is intensifying its repression to keep an increasingly restive society under wraps. For consistency’s sake, Obama insisted that pro-U.S. rulers in Yemen and Bahrain share power and respect minority rights, respectively. These, however, are easy cases – too easy. Obama said not a word about the difficult problem of managing U.S. relations with Saudi Arabia, which for good reason feels deeply threatened by the uprisings sweeping the region.
Obama also struck a jarringly false note in urging Syrian dictator Bashar al-Assad to “lead the transition, or get out of the way.” This formulation reflects the weirdly persistent illusion among U.S. policy makers that Assad, who inherited his dictatorship, can somehow be transformed into an agent of democratic reform. In many ways, Assad is worse than his father. He turned Syria into a prime transit point for suicide terrorists en route to kill Americans and civilians in Iraq; he has subverted democracy in Lebanon and funneled arms to Hezbollah and Hamas; and, he has made Syria a virtual satrap of Iran. The administration has announced sanctions on Assad and other Syrian leaders responsible for the bloody crack-down on demonstrators, but America’s interests clearly lie with regime change in Damascus.
Despite such qualms, Obama’s speech at last has aligned America’s values with its long-run interests in the political and economic modernization of the wider Middle East. It’s a shame, though, that this strategic pivot has been obscured by a perplexing and ill-timed attempt to resuscitate Israeli-Palestinian peace negotiations.
The following is an anonymous piece by an economist at an international financial institution. The views expressed here are solely those of the author.
Despite what politicians across the political spectrum will scream at you, the United States’ screwed up finances haven’t yet reached the level of an existential debt crisis.
To be clear, America must get its fiscal house in order, and ongoing debates and collaboration across the legislative and executive branches are important to righting America’s budgetary ship over the next few years. But let us dispel the notion that unduly draconian debt-reduction measures–that only touch the discretionary budget no less–must be enacted yesterday. Big picture reform of entitlement spending, increasing federal revenue, and scrutinizing the Pentagon’s budget must, and will, happen. However, the shrill, mostly right-wing political calls to cast ideologically-motivated yet relatively tiny budget cuts as the solution to a spending emergency will not solve the debt crisis and could create a culture that chokes off needed investment in critical areas. As any CEO will tell you, a certain level of borrowing to fund strategic investment is a critical component to reaping higher future returns. The same is true of public borrowing to support America’s long-term economic growth.
Here are three unique reasons why the U.S. continues to be in a position to borrow:
(1) Liquid financial markets and the reserve characteristics of the U.S. dollar create a nearly inexhaustible supply of creditors for our public debt. In plain English, this means that U.S. dollar assets are the safest global investment and savings vehicle and are easily accessible, keeping the federal government’s cost of borrowing relatively low (i.e., the US can harness global, not just national savings).
(2) Confidence in our monetary system to keep a lid on inflation will preserve U.S. Treasuries as desirable assets. Fear of inflation stoked by printing money to finance deficits is a primary fear of investors and not concern for the U.S. due to an independent Federal Reserve. The Fed appears to be aware and prepared for potential inflationary risks, and its track record, through several business cycles, has been praiseworthy as inflation, measured by the consumer price index, averaged 3.1 percent between 1982 and 2011.
(3) We are saving more domestically and could replace external demand for US dollar assets. A surprisingly large percentage of U.S. Treasuries remained in the hands of U.S. residents as of December 2010, and with the household savings rate doubling since its trough in 2005, the capacity to fund our public liabilities domestically will improve.
Long-term economic growth constraints erode debt sustainability in the US
The resulting ongoing and outlandishly panicked fiscal debate ignores a critical measurement of the nation’s economic health: our long-term economic growth potential. Not only is it a source of wealth and power, it is a major component of assessing our level of sustainable debt. Nominal economic growth – a function of increases to our stock of labor and capital — reflects a nation’s capacity to repay debt. When it is faster than the growth of new net borrowing then there is no problem. In other words, if your family’s income is growing faster than the amount you are borrowing, then your indebtedness is declining – a good thing! This is the dual assessment employed by international investors and rating agencies.
Borrowing to fund investment is critical to fostering future economic growth. By ignoring crucial investments in the nation’s stock of capital and labor, our politicians are mortgaging our future. Investment in public infrastructure, education, and immigration reform foster more rapid growth as they increase our stock of capital and labor, expanding economic capacity and productivity. By failing to be cognizant of the basic investment needs to maintain and expand our growth potential, our political leaders are just making political hay.
Hence, the fiscal debate on the Hill, which ignores economic growth potential, could ironically contribute to long-term market insecurity by raising our interest costs, and possibly lead to a greater debt crisis. What’s needed is a balanced approach, one that puts our long-term fiscal policy on a sustainable path through a combination of controlled spending, entitlement reform, revenue increases and with a contribution from the Pentagon, while committing to invest in our future.
Here are three critical areas of investment where the United States is failing to maximize growth potential by under-investing in capital stock and labor:
Public infrastructure: The United States’ capital stock is suffering from decades of neglect, increasing the cost of doing business and decreasing our competitiveness. The 2009 American Society of Civil Engineers infrastructure report card gave us a grade of “D”. Compared to some of our competitors — who are investing in high-speed rail, clean energy production, and smart grids – we may appear to be standing still. For example, Europe invests 5 percent of GDP in infrastructure while the United States spends less than 2.4 percent.
Educating our future workforce: Sadly, our secondary education system compares poorly internationally and, while our universities are the envy of the world, we manifest an artificial brain-drain as we expel U.S.-educated, non-citizens to the benefit of our international competitors. Our education system is one of the most expensive but yields only average results. According to the OECD, the United States spent 7.6 percent of GDP on all levels of education in 2007, almost 2 percentage points above the OECD average, but secondary and tertiary completion rates remained below the average of other advanced countries.
Immigration: Immigration reform can and should be viewed through this economic lens – we must create a reliable system of immigration to expand our future labor pool, increase economic growth, and produce the resources we need to help finance unfunded public liabilities.
Our political class will continue to yell at one another on CNN and Fox, but keep in mind that all spending is not the same, and that there are sound economic arguments to support crucial investment in these discreet areas for the long-term economic health of the country.
PPI President Will Marshall is featured today in Democracy Digest on President Obama’s Middle East speech. Please click this link to read the entire article:
The Arab revolt is history’s unanticipated gift to President Obama. It enables him to move beyond a desultory flirtation with “realism” and to realign U.S. policy toward the Middle East with liberal values that do turn out, after all, to be as attractive to Arabs as they are to Americans.
It’s true that Obama comes late to the region’s dance of democracy. It’s also true that Washington’s embrace of the popular uprisings hasn’t been utterly consistent. But such cavils pale beside the important fact that, however hesitantly and belatedly, Obama is abrogating America’s Faustian bargain with Arab tyrants.
In the short-term, this break with the sterile politics of “stability” could confront U.S. policy makers with complications and some nasty, unintended consequences. Over the long haul, however, reinforcing homegrown demands for economic opportunity, free expression and political pluralism is the best antidote to the region’s endemic misgovernance and convulsive political violence.
General Chen Bingde, head of the general staff of China’s People Liberation Army (PLA), has confirmed that his country is constructing its first aircraft carrier, an ex-Soviet Varyag set to begin sea trials next year. Spy-masters in Washington and London have been monitoring the ship’s progress for some time, but Gen. Chen’s comments are the first public commentary on its existence. Purchased from a Ukrainian shipyard in 2002 for $20million by a Macau-based company, the original contract stipulated that the vessel could not be used for military purposes. The buyer claimed the ship would be converted into a floating amusement park, complete with a hotel and casino. Whoops.
Whether U.S. Presidents succeed or fail often depends on a big factor beyond their control: the timing of the business cycle. Lucky Presidents – Ronald Reagan, George W. Bush – experienced downturns early in their first term, leaving plenty of time for an economic rebound to lift them to reelection.
Last week 
Ryan’s budget as president, even though he intends to present his own “ideas”), you might think the 
Football, they say, is a game of inches. So too, is Middle East peace making — both figuratively, and in some cases quite literally. President Obama was reminded of that last week when his comments about terms of reference for future Israel-Palestinian peace negotiations provoked a significant public debate, and in some cases, a furious reaction.
In recent weeks Mitt Romney has been seeking to bolster his claim to be the mainstream establishment candidate capable of beating Barack Obama in the general election. It’s a logical enough claim for any candidate to seek to make, except that his most compelling argument has had more to do with dollars than ideas.
Republicans are crying foul over Democrats’ resort to “Mediscare” tactics to win an open House seat in New York. Democrats are chortling because they think the GOP’s heretofore unstoppable austerity offensive may have met its Stalingrad.
Americans, conditioned by harsh experience to expect nothing but trouble from the Middle East, have been thrilled and inspired by the Arab Spring. But now a practical question looms: Just how far are we prepared to go to help these rebellions succeed?
It’s happened so quickly that its significance may have been obscured, but one of the biggest recent developments in Wingnut World has been the rapid devolution of conservative opinion on the pending debt limit crisis–from demands for hard-line negotiations to outright rejection of negotiations at all, often supplemented by claims that the government doesn’t need new debt authority anyway.
President Obama made the cardinal mistake yesterday of stepping on his own message. His “winds of change” speech was supposed to formalize an historic shift in U.S. policy toward the Middle East. Instead, Obama managed to put the spotlight on the one thing in the region that seems impervious to change: the Israeli-Palestinian conflict.
Despite what politicians across the political spectrum will scream at you, the United States’ screwed up finances haven’t yet reached the level of an existential debt crisis.