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Monday, September 8, 2008

Credit crisis II, a world financial Armageddon?

Credit crisis II, a world financial Armageddon?

Christopher Laird

Where are we now in the credit crisis, and why isn’t the massive Fed and ECB weekly lending working to loosen interbank lending? Why is the credit crisis not really improving? Where is this going next? We describe what may happen next as Credit Crisis II in this article.

Now that the credit crisis that started in 2007 is a year old, there has been a debate about whether the financial system will recover, or will the Western/world financial system end up like the Japanese financial system after the stock and real estate crashes in the 1990’s. In that case, the Japanese banks more or less carried their tremendous losses for ten years, and Japan entered a mild but painful decade of deflation. To this day, Japan is battling some of the deflationary forces from that time.

The question now becomes, will the Western financial system recover some normalcy, or are things merely going to get worse and the world end up with a financial malaise lasting ten years like Japan’s?

If the second alternative is the case, then the central banks which are merely propping up the financial institutions with their ‘temporary’ lending will find they are taking the losses off the banks hands, taking them on to their balance sheets, and effectively monetizing the losses.

The ECB and the Fed are both hoping to find a way out of having to keep the bad assets they took as collateral. They have lent hugely to financial institutions, taking their bad mortgage bonds, securities, derivatives as collateral. And at the same time, the financial institutions in question are carrying a sum total of $500 billion of losses on their books, the losses they admit so far, while estimates of ongoing losses from these bad assets runs well over $1 trillion. In effect, the Western credit industry is still crippled. Why is it so crippled still?

Either the financial industry earns its way out (will take ten or more years) and drastically pull back credit, or they find enough new investors to pony up new capital infusions, perhaps through stock sales. And new such investors are becoming increasingly hard to find. Hence, the central banks are the only alternative.

A theme now arises where it is becoming apparent that it is impossible to actually purge the escalating losses from the financial system, and that even big public bailouts don’t purge the losses because of interlinkages between stocks, bonds and derivatives. If one class or institution is bailed out, the losses of capital merely move to the other class. And the losses are clearly so huge as of now, that they weigh on the currencies themselves and cause a fall in their exchange rates.

It is estimated that the USTreasury/Fed/FHLB has infused a total of $2 trillion and counting since Aug 07 to the various credit infusions to the US financial system, and that the ECB is in at similar levels. And even after $ 4 trillion worth of infusions over the last year has been thrown out by the Fed and ECB, the world credit/financial system is actually getting worse. What will be the outcomes into 09?

Bankrupt en masse

In effect, this means the Western banks, etc are bankrupt en masse. The only thing propping up the entire Western financial system, and its respective stock markets has been massive ‘temporary’ lending, on an ongoing basis, by the Fed and ECB. Both central banks are beginning to balk at this situation. Even as they are starting to have second thoughts, the Western financial institutions continue to borrow more money than ever on a weekly basis. Why aren’t things loosening up?

Can’t stop or else

And, if the ECB or the Fed stops the emergency infusions, or even admit who the borrowers are, another round of collapsing banks/bank runs ensues as investors flee and pull their money out. In other words, the central banks have no choice but to continue the weekly $30-50 billion or so of infusions each for the Fed and the ECB, or else face a cascade of bank runs around the world.

…And each week the Fed and the ECB are effectively taking on another $30 or $50 billion of the bad assets from the various and sundry financial institutions scattered across the EU and the US. So, week after grueling week, the Fed and the ECB keep adding another $50 to $100 billion of bad assets to their balance sheets, as ‘collateral’ and making ‘temporary’ loans they keep having to roll over and extend the repayment on. Ie, the junk stuff is becoming a permanent resident on the central bank’s balance sheets. If either the Fed or the ECB stop the weekly infusions, quite possibly the entire Western financial system stops dead. And we get a massive world stock crash.

The question now becomes, what happens when these two central banks finally decide they have to let go? You are not going to tell me they are going to keep infusing a combined $50 to $100 billion worth of financial bailouts each week forever? This massive temporary lending certainly has to end at some point.

And even with all this new money every week, the credit system is barely functional anyway right now. And this half dead world credit system is dragging economies downward, as there is less and less and less credit. This is a paltry return for all the bailouts and massive temporary lending.

Probably what is happening is that this is a classic case of a parabolic world credit peak, as more and more money is needed each week merely to keep the bubble from collapsing. And the only ones left to infuse this money are the central banks. No one else is willing to step in. Financial institutions won’t lend to each other, and investors won’t recapitalize the crippled banks. As financial institution’s stocks fall, issuing new stock becomes prohibitively expensive.

Parabolic peak

One could say all that is happening is that all financial institutions in the world don’t really trust each other, and won’t lend to each other. And that an astounding $50 to $100 billion of weekly infusions from the Fed and the ECB is not fixing the situation, and that we are witnessing the final parabolic peak of the world credit bubble that has built up for the 63 years after WW2 ended. That, and the end of the USD and Yen driven credit/asset/finance bubble which ensued from the early 1970’s.

So, before we continue, it might be said that the present development of the credit crisis, from August 07 to now, is Credit Crisis I. And the present state of affairs is that the Fed and the ECB have to infuse a weekly $50-100 billion plus into their respective financial regions merely to prevent a world finance implosion.

I also have noticed that the Credit Crisis I has had a one year periodicity of major new developments, ie that if one major sector had a problem on a given month, that the next year the same sector seems to reinvent a new worse manifestation.

I made a graphic to describe the general situation:

So, when the central banks stop this massive weekly lending, what happens? Massive forced deleveraging and probably world financial Armageddon. This would be Credit Crisis II, or Phase II. We will look into Credit Crisis II in a moment.

This is the conclusion we came to here at PrudentSquirrel, trying to ascertain where we are in the big picture on the Credit Crisis now. It is that the Central Banks are desperately trying to stave off Credit Crisis II, and they are losing, and probably knowing this, they will at some point confer together and pick a time to let the credit system implode, and try to weather the stock/financial crashes that will occur at that time. Likely, some currencies can collapse as well, and a great deal of FX (foreign exchange) chaos and restrictions will ensue for several years after the fatal date.

If it is true, as we suspect, that we are at the peak of a credit/financial bubble that started right after WW2 ended, and it is at a parabolic peak and cannot be sustained, then the world’s central banks already know this too. They probably are trying to decide when to let go…They all don’t have to agree, it only will take one major Central Bank to let go, then the others will be forced to follow.

The central banks in question would be the BOJ, the US Fed and the ECB, and likely the BOC. The Russian central bank is an odd man out and is a wild card, but not as central to the equation. Either all the major central banks listed keep up the same rate of infusions, or the end of the world credit system comes in a week or two after one ‘lets go’.

Now as to the USD strengthening now, and gold’s vexing $100 plus volatility, it just seems best to make any protective moves well ahead of the fatal day. Once the situation gets out of control, Credit Crisis II begins, in a week from that point you will find it hard to make any changes. I view gold’s present volatility as a total side issue, compared to what would happen if all one’s money was tied to the financial system, the USD and so on, and then one’s financial situation was frozen if the central banks decide to let go, and world foreign exchange restrictions are instituted. Gold is still one of the best ways to ride out what may come to pass.



Our present state of affairs in Credit Crisis I

Let’s look at a few examples of why I am saying the world is at a parabolic credit bubble peak, and why the Central banks are finding they have no choice but to keep pumping out $50 plus billion a week of new ‘temporary’ lending, or else face a real financial Armageddon…

The ECB, Spanish banks, and North-South EU dissention

How Spanish banks are creating mortgage securities to get ECB funding is a perfect example of our present financial crisis…and how the ECB seems to have no choice but to continue the short term funding of the entire EU financial system, and it is causing big dissention between the North EU and South.

By Ambrose Evans-Pritchard

Last Updated: 3:06pm BST 21/08/2008



The European Central Bank has issued the clearest warning to date that it cannot serve as a perpetual crutch for lenders caught off-guard by the severity of the credit crunch.

Not Wellink, the Dutch central bank chief and a major figure on the ECB council, said that banks were becoming addicted to the liquidity window in Frankfurt and were putting the authorities in an invidious position.

"There is a limit how long you can do this. There is a point where you take over the market," he told Het Finacieele Dagblad, the Dutch financial daily.

"If we see banks becoming very dependent on central banks, then we must push them to tap other sources of funding," he said.

While he did not name the chief culprits, there are growing concerns about the scale of ECB borrowing by small Spanish lenders and 'cajas' with heavy exposed to the country's property crash. Dutch banks have also been hungry clients at the ECB window.

One ECB source told The Daily Telegraph that over-reliance on the ECB funds has become an increasingly bitter issue at the bank because the policy amounts to a covert bail-out of lenders in southern Europe.

"Nobody dares pinpoint the country involved because as soon as we do it will cause a market reaction and lead to a meltdown for the banks," said the source.

This "soft bail-out" is largely underwritten by German and North European taxpayers, though it is occurring in a surreptitious way. It has become a neuralgic issue for the increasingly tense politics of EMU.

The latest data from the Bank of Spain shows that the country's banks have increased their ECB borrowing to a record €49.6bn (£39bn). A number have been issuing mortgage securities for the sole purpose of drawing funds from Frankfurt.

These banks are heavily reliant on short-term and medium funding from the capital markets. This spigot of credit is now almost entirely closed, making it very hard to roll over loans as they expire.

The ECB has accepted a very wide range of mortgage collateral from the start of the credit crunch. This is a key reason why the eurozone has so far avoided a major crisis along the lines of Bear Stearns or Northern Rock.

While this policy buys time, it leaves the ECB holding large amounts of questionable debt and may be storing up problems for later.

The practice is also skirts legality and risks setting off a political storm. The Maastricht treaty prohibits long-term taxpayer support of this kind for the EMU banking system.

Few officials thought this problem would arise. It was widely presumed that the capital markets would recover quickly, allowing distressed lenders to return to normal sources of funding. Instead, the credit crunch has worsened in Europe…” Bold emphasis is mine

Telegraph.co.uk



Fannie and Freddie rescue dilemma- their stocks and debt are held by other banks

Another perfect example of the impossible state of affairs in the world credit crisis is Fannie/Freddie. And that means that if the Fed/Treasury does a bailout, their stocks collapse in value, and all the other financial institutions take losses on that because they hold lots of Fannie and Freddie stock. Of course the stock is already in the tank, but the issue is still there and shows the interlinkages.

Then there is the question of the Fannie and Freddie bonds out. That is another can of worms, and the Chinese just stated this week that a collapse of Fannie-Freddie could lead to an economic catastrophe – their Central Bank advisor Yu Yongding stated. The Chinese hold hundreds of billions ($376 billion mostly in US agency bonds) of Fannie and Freddie debt and stock.

In many respects, because of all these cross holdings of the Fannie Freddie bonds and stocks by banks everywhere, and by Central Banks, it would seem that the losses cannot really be removed from the financial system – ie purged. If Fannie and Freddie are bailed out, their stocks collapse and those losses now translate to all these other banks and central banks that hold them. It’s virtually a no win situation.

These cross linkages reveal that it is virtually impossible, even with bailouts, to purge the ever growing $500 billion and counting losses of capital from the banking/financial system. The latest numbers being speculated on are the losses will be over $1 trillion (IMF) and $2 trillion or more (Roubini).

Now, maybe $2 trillion doesn’t sound like a lot compared to the entire world economy. The trouble is, that capital is leveraged anywhere from 10 to 50 times by the financial system. Fannie and Freddie have 60 to 1 leverage.

Losing $2 trillion of capital will totally wipe out the entire world financial system for a decade because of the leverage at 60 to 1. Basically, unless those losses can be purged in some way, it has to be earned back over a period of years/decades. That essentially cripples the entire world financial system.

I remember a very well put quote from a banker last Fall 07 about the credit crisis then. (I’m sorry, I don’t remember his name.) He stated “The credit deleveraging will not be denied.” I think that sums things up very well.

It appears that a relentless unwinding of the world credit/finance bubble with many dimensions and twists and turns cannot be avoided, even if the central banks were willing to try. The issue is the cross linkages and the fact that the capital losses in every corner of the world will not and maybe cannot be purged from the financial system, even with big public bailouts. There is possibly no way to do it other than to allow things to just unwind and try to re earn it all back the hard way.

Even if it appeared the central banks could figure out a way to purge the losses from the financial system, and take them on their books, then their currencies are in danger. The capital losses are there – period. The deleveraging of 60 to 1 credit is happening – period. The financial institutions don’t trust each other – period.

The Fannie – Freddie bailout proposals are being discussed in the light that the US government/Treasury can just about double the so called national debt from $9 trillion by possibly adding another $5 plus trillion, as they effectively have to guarantee those GSE bonds. That is now playing into a debate on the US fiscal situation….as if the USD needed another problem.

In short, once again, we see that it appears impossible to purge the effects of so much lost capital to the world financial system. The deleveraging will not be denied. We see this a year after the Credit Crisis I exploded worldwide Aug 07.

End of a huge world bubble

If that is true, then the theory I laid out above, that we are witnessing a peak in a parabolic finance/asset/stock bubble of world proportions, is going to pan out. I think the entire credit crisis can be looked at from that perspective. We are merely witnessing the relentless unwinding of the biggest financial bubble in history. And, ominously, this particular bubble has grown from the end of WW2 to the present. That is one HUGE economic bubble, and this one envelops the entire world. This is not just a bubble in one country’s economy.

The point of emphasizing it’s from the end of WW2 is that we are not talking merely about a banking crisis, or whatever. We are talking about the deleveraging of the greatest economic/finance bubble in history. Once the level of leverage reached 60 to 1, it becomes impossible to stay ahead of the deleveraging, even for central banks. The implications are staggering. Every major economy in the world is involved. The outcomes of deleveraging this monster bubble, represented by the green oval, will be what I term Credit Crisis II. At 60 to 1 leverage, a loss of 1 to 2% wipes out the capital.

Whether it’s the Chinese Central Bank (BOC), the Fed, the ECB, and then all the other world financial institutions of every type, insurance companies, gigantic retirement funds, other banks, you name it, the present losses of capital to the world financial system is pervasive worldwide.

Nobody will escape the wrath of this deleveraging, and that is why I call it Credit Crisis II. Credit Crisis I was only the preliminary round…Credit Crisis II is characterized by the realization that the gigantic losses of capital cannot be purged from the financial system, even with big public bailouts. And that this deleveraging cannot be stopped. There are too many interlinkages. And, without writing a book on this, the next victim when Credit Crisis II unfolds, will be massive world currency instability. This will make any of the banking and currency crises we have seen since WW2 look like child’s play. It is not clear when Credit Crisis II begins but it is threatening already.

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Copyright 2008

Christopher Laird

Editor in Chief

www.PrudentSquirrel.com

http://www.prudentsquirrel.com/breakingnews/25_08_08.htm

Chris Laird is not an investment advisor/professional. This article, and the PrudentSquirrel newsletter and alerts, are general market commentary only. They are not intended as specific advice. You should talk to your own investment professionals for specific advice.

The U.S. 2008 Presidential Election: An Evaluation

The U.S. 2008 Presidential Election: An Evaluation

by Prof. Rodrigue Tremblay

Global Research, September 6, 2008
thenewamericanempire.com/



"Bomb, bomb, bomb Iran."

"The issue of economics is not something I've understood as well as I should.. ... I know a lot less about economics than I do about military and foreign policy issues. I still need to be educated."
“I think that [to be rich] if you are only talking about income, how about $5 million?”

John McCain, 2008 Republican presidential candidate

"Our national leaders are sending them [American soldiers to Iraq] out on a task that is from God. ...That's what we have to make sure that we're praying for, that there is a plan and that plan is God's plan."

Alaska Gov. Sarah Palin (June 2008)

"She's not prepared to be governor. How can she be prepared to be vice president or president? Look at what she's done to this state. What would she do to the nation?” [About Gov. Sarah Palin, McCain's choice for a running mate]

Lyda Green, Republican Alaska State Senate President

“If my guesses are confirmed, then that raises the suspicion that somebody in the U. S. purposefully created this conflict [the August 7-8 Georgia-Russia conflict] with the aim of aggravating the situation and creating an advantage...for one of the candidates in the battle for the post of U.S. president.”

Vladimir Putin, Russian Prime Minister and former President (August 28, 2008)


T
raditionally, American presidential elections get into full gear after Labor Day, once the political conventions have been completed, major speeches made and vice president running mates chosen. It is therefore a good time to make a general assessment of where this year's election stands, what political camp has the momentum (or is losing it) and what good or bad decisions have been made by either of the two major presidential candidates.

1. Let us start with the polls.

Three months ago, in mid June, at the end of the primary season, here was the standing in the polls of the two then presumptive main presidential candidates. The polls at that time showed Democratic candidate Sen. Barack Obama leading his Republican opponent Sen. John McCain by a comfortable margin. This was on the aftermath of Obama's primary victory over Sen. Hillary Clinton. For instance, the USA Today/Gallup typically showed Sen. Obama leading Sen. McCain on the order of 50% to 44%, among likely voters.

In late August, according to the same USA Today/Gallup Poll, Sen. Obama still had a 48%–45% edge over his opponent among likely voters, but a few other polls showed him trailing McCain. A Saturday September 6 Gallup poll showed Obama leading McCain only by 47% to 45%, indicating that the two presidential tickets were statistically neck and neck after the two parties' back-to-back conventions.

It should be mentioned that 10 times out of 12, the presidential ticket ahead after the conventions wins in November. But this year, poll data have to be analyzed in light of a likely negative “Bradley Effect” for the Obama-Biden ticket (see below).

Therefore, the conclusion is clear: This is going to be a close U.S. presidential election, much closer than it should have been expected after eight years of crisis-prone Republican rule. Why is this so?

2. The Attacks on the Persona of the Democratic Candidate

It is generally recognized that if Americans elect Sen. Barack Obama president, it will be considered some sort of a political miracle. This is because Sen. Obama is not your usual American presidential candidate. A junior U.S. senator with little administrative experience, he has to counteract the charge that he is inexperienced and untested. Not that his adversary, Sen. John McCain, has had much more administrative experience, but being younger, it is assumed that Sen. Obama is less experienced. Because of that, his choice of vice-presidential running mate was crucial. This was a test he could not afford to fail (see below).

Sen. Obama is also the first person of African-American ancestry to run as a presidential candidate for one of the two dominant American political parties. This in itself is an historical challenge since he does not fit totally with the image that many Americans have of their president. Indeed, it was said by some observers that some segments of the American public are not completely comfortable with candidate Obama and his convoluted personal history.

More importantly, perhaps, is the fact that Sen. Obama is considered a progressive and on the left of many domestic policy issues. This may be less of a handicap with the average American voter, who has suffered miserably under the rule of far right politicians, than it is with the neoconservative nomenklatura who control the levers of many propaganda machines.

As with previous democratic presidential candidates of the recent past, it should have been expected that the ruling political cartel in the U.S. would be less than enthusiastic in allowing a relatively unknown and thus a somewhat more risky candidate get into the White House. It is obvious that there is a strong coalition of various interests that does not like the prospect of having Senator Obama become President Obama, and they are taking the necessary steps to attempt to deny him a victory.

For that, they have adopted the traditional Republican strategy of “attack and destroy.” The neocon propaganda machine, which controls 90 percent of the American corporate media, has already done an effective job of sabotaging the Obama campaign. Indeed, the mainstream network talking heads, cable paid demagogues and other smear artists have savaged him ferociously with innuendos, half-truths and calumnies in order to distance him from the average voter, whose interests Sen. Obama has espoused.

It is obvious that this powerful propaganda machine is bent on electing a neocon and pro-military-industrial complex candidate, no matter how flawed and unfit that candidate may be, and so far they have used their considerable resources, including those of nonprofit 501(c)4 organizations, to attain that goal. That flawed candidate himself, Sen. John McCain has reached new lows in dirty campaigning, in smears and in political lies, even stooping as low as to accuse Sen. Obama of being responsible for high gas prices, while exonerating as culprits the incumbent Bush-Cheney administration, its ineffective energy policy and its wars of aggression.

3. The Obama Camp's Weak Response

But the Republican “ad hominen” attack strategy was predictable, since they have used it before with success, and the Obama camp should have planned in accordance. It is said that candidate Obama “conceded” the crucial month of August to his adversaries. This is the same month that Democratic presidential candidates Michael Dukakis and John Kerry are also said to have conceded to their attackers during the 1988 and 2004 campaigns. Therefore, the fact that Sen. Obama remained on the defensive and did not strongly counterattack goes a long way in explaining his current lack of political momentum. To win, the Democrats cannot let the corrosive propaganda against them go unanswered, with only sporadic and weak rebuttals, while their opponent's flawed record and character remain largely off screen.

Since this is a mistake made by the Dukakis camp in 1988 and the Kerry camp in 2004, one would think that the Democrats would have learned from these two fiascos. But judging from what happened in August this year, it's obvious that they have not. A question therefore must be raised: Is there an ongoing attempt from within the Democratic Party to sabotage Obama's campaign? When something weird or unexplained happens, one has to ask if there is not a more rational reason that explains it.

4. The Republican Bag of Dirty Tricks

This election has been characterized so far by the McCain camp going deep into the bag of political dirty tricks to destroy the Democratic presidential candidate and derail his campaign. How come the McCain machine has been so amazingly successful in controlling the debate, especially in having foreign affairs and security issues dominate the presidential election campaign, at a time when millions of Americans are losing their homes, when the economy is going through one of the worst financial and banking crisis and is in the midst of an economic slump?

As for the question about the dominance of national security issues, it certainly can be asked whether Sen. Barack Obama has not already been the victim of an astute and wicked “Wag the Dog” scheme. Such a scheme could have been designed by the Bush-Cheney White House to place foreign affairs and security matters front and center at a strategically important time in the U.S. presidential campaign, in the month of August, in order to bolster McCain's campaign and help candidate McCain capitalize on his perceived advantage on such questions.

Indeed, the curious international crisis that McCain's personal friend Mikhail Saakashvili, President of Georgia, created from scratch at the outset of the 2008 Olympic Games, during the night of August 7-8 (a period when Sen. Obama was taking a holiday in Hawaii) has all the appearances of a “Wag the Dog” operation.

Ever since Western countries supported the break-away of the territory of Kosovo from Serbia in February 2008, and created a precedent to be applied elsewhere, Georgia's President Saakashvili knew perfectly well that Russia was prepared to react to any provocation in South Ossetia. Why then did the hothead Saakashvili go ahead and provoke Russia by bombing and invading S. Ossetia? And with American and Israeli “advisers” on the ground, in Georgia, we can rest assured that Saakashvili would never have sent Georgian tanks to South Ossetia without receiving some form of go-ahead signal from Washington. An ominous sign was the presence of a top national security aide to Vice President Dick Cheney in Georgia (Joseph R. Wood), just before the latter country's August 7-8 attack on South Ossetia. Therefore, we can be certain that there was a direct link between the Georgian government and the Dick Cheney White House while George W. Bush was at the Beijing Olympics.

Many consider that the hairy Georgian, Washington-backed plan to attack Russian soldiers in S. Ossetia was “beyond comprehension”. But was it? Was it intended, from Georgia's point of view, to draw the United States into a newly created de facto conflict with Russia, even thinking that the Georgian army could successfully occupy S. Ossetia with Russian soldiers stationed there, as some observers believed initially, or —was it not also, and this is more logical, part of a plan designed to boost Sen. John McCain's campaign for the American presidency, at a time when he was badly trailing in the polls? It is permitted, indeed, to suspect that the office of Vice President Cheney could have been interested in provoking a dispute with Russia over NATO, in order to shift the political debate in the U.S. away from the economy and more towards the issue of national security and international affairs.

The fact that the Georgian military incursions into S. Ossetia were followed with ready-made declarations by candidate McCain (“We are all Georgians”) in the aftermath of this provoked and gratuitous crisis points to a possibly more cynical political scenario. —It is said that when something looks like a duck, walks like a duck and goes “Quack! Quack!” like a duck, there is a good chance that it's a duck. At the very least, this is a hypothesis which deserves to be investigated with all the available clues. It is also a hypothesis that has received support from Russian President Vladimir Putin.

And you can rest assured that if the Bush-Cheney White House were to launch a gratuitous attack against Iran in the coming weeks, it would also be done with the current presidential election in mind. That's why there is always the fear that a miscalculation could lead to World War III.

5. An Assessment of the Republican Candidate

As compared to Sen. Barack Obama, it would seem obvious that Sen. John McCain would be a ticking time bomb as president. The man is an old style militarist who confesses that he doesn't know anything about economics ("I still need to be educated").

These are the worst attributes one would like to see in a leader at this time of economic and financial stress, and with costly lingering wars in far away Iraq and Afghanistan draining the public budget. Indeed, if we study his pronouncements, all indicate that Sen. McCain would be a trigger-happy “roll-the-dice” president. He would be an interventionist president, who would gleefully start new wars, while his willingness to reinstitute the military draft would wreck havoc with thousands of families. That message does not seem to have been effectively conveyed to the American electorate. Why?

6. The Choice of Vice Presidential Candidates

On Saturday August 23, Sen. Barack Obama announced that he had chosen as running mate an old-timer senator. Indeed, Sen. Joe Biden (D. Del), the Democratic Vice President nominee, is an insider and a master of Washington politics, having been in the U.S. Senate some 35 years. A lawyer and an international affairs specialist, Sen. Biden is undoubtedly as qualified to be president as anyone can be.

But, the choice has the effect of somewhat negating Obama's central promise of a fundamental change in government. Moreover, since Sen. Biden supported the neocon-inspired October 2002 “Iraq War Resolution”, his selection removed, to a large extent, the rationale for those opposed to the Iraq war to work extra hard on behalf of the Democratic ticket.

Let's keep in mind that one of Obama's most serious and effective charges against Sen. Hillary Clinton during the primaries was the fact that, from the start, he had shown “better judgment” than her in opposing the Iraq War. It has become much more difficult to make this charge against Sen. McCain, now that Sen. Biden is at his side. Also, on foreign policy, Sen. Obama wants to draw down American troops in Iraq at the same time that he proposes a military “surge” in Afghanistan, by sending two more American brigades into that ravaged country, and even possibly into Pakistan. All this blurs Sen. Obama's overall message and his pretense that he represented the hope for a fundamental change in American foreign policy.

Therefore, Sen. Obama's Vice Presidential choice, while not a bad choice, was certainly a conservative one. It could reinforce the idea, in the minds of some younger voters, that when it comes to American foreign policy there is really a single bipartisan and right wing pro-war party in Washington. This image is in contradiction to that projected earlier by Sen. Barack Obama when he was running for the Democratic nomination.

Indeed, many of his supporters may have trouble understanding how Sen. Obama could present himself as an anti-Establishment and an anti-war presidential candidate and then turn around and choose an Establishment and pro-war Vice Presidential candidate who has had a long and close association with the pro-war AIPAC organization. The rationale, of course, was that an insider senator such as Sen. Biden would help an Obama administration deal with Congress ...once elected. But before governing, one has to win the election. And on this score, it is questionable whether the chosen running mate was the best choice to unite a badly divided party between the Obama camp and the Clinton camp.

To close the gap and introduce energy into the Democratic party, Sen. Obama could have called on former Vice President Al Gore and brought him into the campaign. It is understandable that a young senator could have been afraid that such a high profile Democratic running mate might cast a shadow upon himself. But a decision in this direction would have electrified the Democratic Convention and gone a long way toward uniting the party.

Of course, the other obvious choice that could have united the Democratic Party would have been for Sen. Obama to swallow his pride and overcome his inferiority complex and choose as a running mate Sen. Hillary Clinton (D. NY), an adversary who received nearly as much support (18 million primary votes) as himself within the party. Indeed, Sen. Clinton could have helped the Democratic ticket win a strong majority of the crucial female vote, especially the vote of older white women, since it is widely acknowledged that Sen. Obama is not going to win the white male vote.

In 1960, for example, Sen. John F. Kennedy was less than personally enamored with Sen. Lyndon B. Johnson of Texas, but he needed to win that southern state to win the election. He overcame his personal feelings, and thanks to winning Texas, Kennedy won the election and became president. Therefore, in the end, it can be said that Sen. Obama has decided not to be audacious but to play it safe in his choice of a vice presidential running mate.

—The contrary can be said of Sen. McCain. In a cynical and blatantly calculated political move, John McCain announced on Friday, August 29, that he had chosen a relatively unknown and a relatively inexperienced woman, 44-year-old Sarah Palin, a former Miss Alaska beauty contest finalist in 1984 and a former sports reporter. This was reminiscent of George H. Bush who, in 1988, chose an obscure senator named Dan Quayle, then 41, to be his running mate. In the case of Ms. Palin, she is the former mayor of a small town and the recently elected Governor of Alaska, and has not an ounce of experience in world affairs. This is a good example of the dumbing-down of American politics where anything can be said (“She has foreign affairs experience because she lives in a state next to Russia”), done or sold, for expediency.

Therefore, since according to Sen. McCain himself he has no competence in economics or finance, one could have expected that he would have chosen someone better prepared in this crucial area. A candidate who fits the requirements would have been former Massachusetts Governor Mitt Romney, who has considerable business and executive experience. Instead, Sen. McCain chose a woman who has no background in economics or finance. Why? Essentially, because in the USA, religion trumps economics anytime. And, that's the problem.

7. A Republican Ticket as the Religious Far Right Likes It

In fact, what attracted candidate McCain to Sarah Palin was her far right religious credentials, being a fervent Pentecostal Christian who is anti-abortion (even for rape and incest victims), pro-state-imposed-death penalty, anti-sexual education, anti-same-sex marriage, anti-environment, pro-creationism, pro-censorship, pro-gun ownership, and pro-war. More to the right than that, and one falls over the cliff!

To get the evangelical vote, evangelical leaders had to be wooed. For the religious far right leaders, indeed, such as James Dobson, president of the Focus on the Family movement, the only issue that really matters is for them to take absolute control of the U.S. Supreme Court in order to impose their far right domestic cultural agenda. They particularly want the Court to repeal the 1973 decision of Roe v. Wade that gave American women control over their own body. Any politician who can help them achieve this goal is bound to receive their support, whatever his or her qualifications.

That is why Dobson declared upon learning that their favorite candidate had been selected, "I would pull that lever" [for John McCain – Sarah Palin],” after he had said earlier that he “cannot and will not vote for Senator John McCain.”

In 2004, the Dobson religious far right machine put its considerable media power (7 million American radio listeners) behind the disastrous Bush – Cheney ticket for a second term. And it won. In 2008, if the flawed and controversial McCain – Palin ticket were to win, it would be due in a large measure to the same religious far right support. People outside the United States must know such things if they are to understand American politics.

But was not Sen. McCain playing crass politics and demonstrating again a lack of judgment with such a surprising choice as a running mate? Indeed, if he had placed the welfare of his country first, would he have chosen such an inexperienced person to be a heartbeat away from the presidency, to be commander-in-chief, especially considering that he is himself already 72 years old and that, if elected, he would be the oldest American president ever inaugurated? [N.B.: Sen. John McCain's father (70) and grandfather (61) both died suddenly of heart attacks.]

The truth is that the American religious far right had its doubts about candidate McCain and was about to sit the election out. Something had to be improvised to get the religious far right aboard. —And Ms. Palin fit the bill. Her far right credentials were bound to “energize” a strategic part of the Republican base. That was the calculation.

Of course, there was also the hope of killing two birds with one stone by attracting some inattentive pro-Hillary Clinton Democrats and Independent women who could have felt somewhat snubbed by Obama's choice of Sen. Joe Biden as his running mate. But considering how far right politically Ms. Palin is, it is dubious that many Democratic or Independent leaning American women are going to fall in the trap that the McCain camp has opened for them.

While it is true that the campaign that Sen. Hillary Clinton ran gave legitimacy to the possibility of a woman as president, this does not apply to any woman. Not to a woman because she is a woman. She has to be qualified for the job. In fact, the choice of Ms. Sarah Palin as his running mate and his sell-out to the far right may have been a major blunder on Sen. McCain's part, because such a rash and impulsive decision puts his judgment in doubt.

Overall, religion continues to be the most politically divisive factor in the United States. Gallup found, for example, that nearly two thirds (65%) of highly religious American white voters would vote Republican, no matter what their interests in other issues are. They are one-issue voters and their political behavior explains to a large extent why relatively poor people and those of the middle class in the U. S. continue to vote for far right policies which mainly profit the rich. And that one single issue is an unhealthy desire to infuse religious dogma into the law of the land, no matter what the U.S. Constitution says about the division between Church and State and the requirement not to have a religious litmus test for any public office [Article 6, clause 3 of the U.S. Constitution says: ... “no religious Test shall ever be required as a Qualification to any Office or public Trust under the United States.”]. The constitution says one thing, but the churches say another. That explains why candidate McCain felt obliged to pander to the American religious right movement.

Since economic studies show that when Democrats were in the White House, lower-income American families experienced slightly faster income growth than higher-income families, and that the reverse was true when Republicans were in control, one would expect the Democrats to be favorite in this year of economic hardship. That is if people vote rationally their economic interests rather than voting along religious lines.

8. The “Bradley Effect” cannot be underestimated

Because of the nature of the Democratic nominee, it would be imprudent to dismiss the possibility of a strong “Bradley effect.” To the contrary, a Pew Research Center poll taken during mid-August could indicate that this is going to be the case. For instance, a majority of McCain supporters (53%) rejected candidate Obama overwhelmingly and found nothing positive about him, while many Obama supporters are able to say something positive about candidate McCain. To me, this smells like a somewhat racist stand on the part of many American voters who are attracted to candidate McCain. They simply cannot stomach the idea of having a black person as their president.

This is a political fact that Obama's advisers have to deal with. Come November, indeed, the Obama-Biden ticket will have to be 2 or 3 percentage points ahead of the Republican ticket to counteract the expected “Bradley effect” in order to win.

Thus, one can wonder if their strategy of putting the emphasis on an “Obama: The Celebrity” campaign, rather than on an “issues-based” campaign is really what the situation would require. In other words, is it a good idea to turn the 2008 election into a popularity contest between Sen. Obama and Sen. McCain?

The reality is that Sen. Obama is also a candidate who has a high profile and outspoken wife who is certainly not your typical self-effacing American first lady (at least, before the election!). This may unduly reinforce the “celebrity” tone of the Democratic campaign. On the same level, it can be disputed whether the idea of having the Democratic candidate accept the nomination of his party before an imposing crowd of 75,000 at the Denver Broncos' football Invesco Field Stadium, Mount Olympus-Parthenon-style, was the greatest. This has also reinforced the “celebrity” message. —It is too early to know if that was the wrong message at the wrong time. The answer will be delivered on November 4.

9. Obama the Good One vs. McCain the Nasty One?

Finally, on the character issue, I have the feeling that there is some appearance of a lack of moral fortitude on the part of Candidate Obama. Some may have the impression that Sen. Obama is not his own man. That he says and does what others tell him to say and do and that this may explain his occasional flip-flops. This image, even if unfair and untrue, can be dangerous in politics because voters sometime value character above everything else in a candidate to public office.

On the other hand, even though John McCain has often been referred to ever since his high school days by those who know him well as John “McNasty”, the Democrats seem incapable of conveying this information about McCain's character flaws to the public. If they do not do it themselves, they surely cannot rely on the neocon corporate media to do it in their place! So far, Obama's advisers have been pulling their punches. They keep repeating that “You have to be careful about attacking McCain." Well, the McCain camp has no such restraint in attacking Sen. Obama. They did exactly the same thing to Sen. John Kerry in 2004. In American politics, nice guys have the habit of finishing last.

10. Conclusion

The 2008 American presidential election is a most unusual and interesting election, and it will be studied intensively in the coming years. My preliminary assessment is that this is still a presidential election for the Democrats to lose, but they may lose it, at least at the strategic presidential level.

Of course, the Democrats have not yet lost the 2008 presidential election, far from it, but they must quickly regain the momentum and take control of the political agenda by reorienting their strategy and tactics. As President John Kennedy once said, “an error is not a mistake unless you refuse to correct it.”

For strategy, for instance, they would be wise to place less emphasis on the persona of Sen. Obama and his wife and more on issues. They must demonstrate to the American electorate that they are better prepared to tackle them, while their adversaries are likely to make matters worse.

Are Americans better off today than eight years ago? By most measures, they are not. It should be no surprise that Americans are eager for a change in leadership, especially as it is related to their number one preoccupation, the economy. If they were to vote for four more years of the same, it would only be by default. How could it be otherwise with the incumbent Republican George W. Bush having the highest disapproval rating (69%) ever of any American president?

Amazingly, however, the Democrats seem to have some problem zeroing in on a slogan. Perhaps they could adopt a slogan such as: “For a Better and More Prosperous America”. —I may be wrong, but I think that's what a majority of Americans want.

Rodrigue Tremblay is professor emeritus of economics at the University of Montreal and can be reached at rodrigue.tremblay@yahoo.com

He is the author of the book 'The New American Empire'

Visit his blog site at: www.thenewamericanempire.com/blog.

Author's Website: www.thenewamericanempire.com/

Check Dr. Tremblay's coming book "The Code for Global Ethics" at: www.TheCodeForGlobalEthics.com/



Rodrigue Tremblay is a frequent contributor to Global Research. Global Research Articles by Rodrigue Tremblay

The Most Important Election Since 1980 - Conrad Black, National Post

The Most Important Election Since 1980 - Conrad Black, National Post

http://comments.realclearpolitics.com/read/42323/178706.html

Russia: A Partner and an Adversary - Bernard-Henri Levy, New Republic

Russia: A Partner and an Adversary - Bernard-Henri Levy, New Republic

http://comments.realclearpolitics.com/read/42323/178722.html

Building a Security Framework for a Nuclear Tehran - David Kay, Washington Post

Building a Security Framework for a Nuclear Tehran - David Kay, Washington Post

http://comments.realclearpolitics.com/read/42323/178707.html

Sunday, September 7, 2008

Charting the world of tomorrow Patrick Seale

Monday, 08 September 2008 - 08 Ramadan 1429 H

Charting the world of tomorrow
Patrick Seale
Vast changes are taking place in the world's geo-political landscape. Events this past month have cast a sharp light on these changes, which are impinging on almost every corner of the planet.

China and Russia have given remarkable demonstrations of national resurgence. The Beijing Olympics and Russia's punishment of Georgia are not isolated phenomena but are, in both cases, the reward of long years of hard national endeavour.

China has proved – in spectacular fashion – that it has thoroughly remade itself in the three decades since the murderous madness of Mao's Cultural Revolution, while Russia, in turn, has hauled itself back into the great power league after the physical dismemberment, financial collapse and national humiliation that followed the collapse of Communism.

Both countries have evidently managed to harness the fierce national pride and loyalty of the great majority of their citizens, which is an essential ingredient for national renewal.

After the amazing television pictures from Beijing, who today would dare challenge China's millions of disciplined men and women? And, after the swift crushing of Georgia's U.S. and Israeli-trained army, who could doubt Russia's determination to restore its influence over its 'near abroad', as well as firm control over the transport to Europe of Russian and Central Asian oil and gas? The revival of Chinese and Russian power – both economic and military –has long been evident, but it had not been fully absorbed into Western strategic thinking. Now it can no longer be ignored.

NATO, a Western relic of the Cold War, needs to rethink its role and even to consider whether its continued existence does more harm than good. It has suffered –or is suffering – a double defeat: in Afghanistan (where it has been sucked into an unwinnable war against a tribal enemy, and should pull out before taking further losses) and in the Caucasus (where, foolishly and unnecessarily, it provoked Russia by seeking to expand its membership to Russia's very borders.)

Most members of the European Union know this. But Europe's dilemma is acute. It depends vitally on an energy partnership with Russia – which supplies 40 % of the gas Europe consumes – but, at the same time, it wants to remain in close alliance with the United States (in spite of the widely-shared distaste for George W Bush and his Administration.) It is not easy for a Union of 27 members – of very different interests and orientation – to arrive at a common policy, a difficulty which accounts for Europe's relative lack of political weight. But the EU is, on the whole, a rich man's club, less concerned to play a great- power game than to protect its peace and prosperity from the problems and conflicts of the world outside its borders.
Changes in the world's geo-political landscape are of far greater importance to the United States, still the reigning superpower in spite of the body-blows it has suffered from President George W Bush's monumental errors and from the emergence of powerful rivals.

However, America's democratic genius is its ability to change course and to re-invent itself – even when it finds itself on the very brink of catastrophe. This is what Barack Obama, the Democratic candidate for the Presidency, has understood and why millions of Americans have rallied to his banner.
If Barack Obama were to win the election next November, major changes in U.S. foreign policy can be expected. The United States will involve itself resolutely – and as a real 'honest broker' this time – in Arab-Israeli peace-making; it will withdraw militarily from Iraq but will help that country's rebuilt itself after the devastation of war; it will engage in a global dialogue with Iran, offering it security guarantees and recognition of its regional role in exchange for abandoning its nuclear weapons ambitions; more generally, it will drop Bush's 'Global War on Terrorism' and seek to build bridges of confidence and cooperation with the Muslim world.

Obama's foreign policy advisers seem to have grasped that the uncritical U.S-Israeli alliance of the Bush years has been bad for both sides and needs correction. It has served to drag the U.S. into war with Iraq, into hostility with Iran, and into a dangerous confrontation with much of Arab and Muslim opinion. It has also emboldened Israel to wage war on its neighbours, rather than make peace with them, and has encouraged Israeli hard-liners to believe that, with American backing, their small country can subdue the whole region militarily, and continue its territorial expansion at the Palestinians' expense.

These are grave mistakes because the Arab world is not what it was in 1948, 1967, 1973 or even a decade ago. Profound changes are taking place – in economic development, in education, in diversification away from oil, in armament – as important in their way as those which have transformed China and Russia.
Resistance movements to Israel have also arisen – like Hezbollah and Hamas, deeply rooted among the people – that cannot easily be defeated. In a word, it is more than time for Israel to rethink its security doctrines and settle with its neighbours.

Any visitor to the Gulf or Saudi Arabia – the Arab world's power-houses – cannot fail to be impressed by the spectacular development of the last thirty years – and by the grandiose plans for expansion in the next thirty. The International Monetary Fund gives the following GDP figures for 2007: Israel $162bn; the United Arab Emirates – one of the fastest growing economies in the world –$192bn; Saudi Arabia $376bn. These figures alone should cause Israel and its backers to reflect.

Obama's one mistake so far in his foreign policy ideas is to want to pour more US military resources into fighting the Taliban, not only in Afghanistan but also in Pakistan's North West Frontier Province, where Osama Bin Laden and his colleagues are thought to be hiding. There can be no military solution to the Afghan problem. A tribal society, deeply attached to its traditions and religion, will not accept to have a Western model of society imposed on it by force, and will fight to the death to prevent it.

The world's geo-political landscape is still dotted with potential flashpoints – in Kashmir, in Kirkuk, in Gaza and the West Bank, in the Caucasus, and in the troubled border region between Afghanistan and Pakistan, to name only a few – but the potential for radical change in the leadership and foreign policy of the United States in 2009 is probably the best news to look forward to as this year draws to a close.

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Iran’s Fantasy: A Renewed Cold War between "Infidels" Russia and America By Walid Phares

Iran’s Fantasy: A Renewed Cold War between "Infidels" Russia and America
By Walid Phares

Following is a short commentary I wrote about the Iranian regime strategic opportunity to dodge the international sanctions and the rise of its own opposition, seized through the ongoing tensions between the Russian Federation and NATO. The main point in this article is the Khomeinist Strategic thinking as it pushes hard to widen these international tentions and take advantage of the possibilities of a return of a kind of a Cold war. Evidently Counter Terrorism experts in the US and across the Atlantic have different views on the crisis with Russia and how to address it. But in view of the opportunity given to Iran and other Jihadists, the new East-West tensions may have to be addressed with this reality in mind. Following is my commentary, initially posted in the Cutting Edge News today

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Iran’s Fantasy: A Renewed Cold War between "Infidels" Russia and America

Walid Phares

The post-Soviet world has never been closer to what we knew as the Cold War than right now. Iran is pleased. We should all be concerned. New proxy conflicts may soon emerge.

The starkest reminder of the new chill came after Russian forces recently executed a military operation inside South Ossetia in Georgia. Ostensibly, the Georgian incursion was to bring back constitutional order. But Russia’s massive reaction has their forces entrenched just miles away from Tbilisi, Georgia’s capital.
Recent statements by Russian and Western leaders, the flights of long range Russian bombers across international skies, and the cruising of Russian battleships on the high seas are all images from the past months. But they are also a chilling reminder of what were four dangerous decades of the past century.

Moscow and NATO still stockpile thousands of nuclear heads. So any significant confrontation between the two camps is potentially lethal to the planet even though the ICBMs are no longer pre-targeted at major cities around the world. Targeting can change. Dangers emanating from these tensions—Cold War or not—are real and must be addressed seriously by the leaderships at the White House and the Kremlin.

Almost two decades after the fall of the Berlin Wall and the Democratic Revolution against Communist dictatorship in the Soviet Union, neither the United States nor Russia has any interest in reviving this tumultuous past. First there is no ideological component for such a conflict. The Communist Party does not rule Moscow, and the USSR exists no more. Both powers are capitalist and both are super armed, even if not technically equal. Their arsenals can finish humanity in a few hours. Second, even if the governmental elite in the Russian Federation seem to act in an authoritarian manner and gesticulate in a pre-1990 mindset, the Russian people and especially the youth are not too excited about a war with the West, particularly with America. All sociological data and observation from Russia’s current popular mood and culture does not show a high support for the return to a Cold war, even if President Medvedev and Prime Minister Putin proffer tough words toward the United States and its allies.

Yes, Russia will be determined to play hardball in situations involving the future of Russian-speaking or pro-Russian Slavic populations around its borders. But it is hard to see a come-back of Russian forces to areas where populations would resist them, such as Poland. The mood of the local peoples is more deterring to Moscow than any U.S. or European measures, and that is the real insurance against a Soviet reenactment in Europe. Currently, Russia cannot replay the role of military occupier of alien populations even if many experts and think tanks in the West claim otherwise. Hence, the kind of Cold War which may resurface, or is already showing its hallmarks, is about regions remote from the old Iron Curtain.

That brings us to the greater Middle East and parts of Africa with some, but limited, possibilities in Latin America. It is this type of Russo-American tension and proxy conflict that pleases many rogue regimes and forces in those parts of the world. For sure, one among these excited players is undoubtedly the Iranian regime.

Indeed, Ayatollah Khamenei and President Ahmadinejad have been mobilizing all resources possible, as early as 2005, to break Iran’s isolation since the pressures mounted seriously on the Pasdaran-dominated country. From Tehran’s perspective, cataclysmic geopolitical changes have been taking place in its neighborhood since the events of Sept 11. NATO has deployed in Afghanistan, a US-led Coalition has seized Iraq and American Task Forces have been cruising in the Persian Gulf. Iran’s Mullahs are feeling strategically encircled at a time when more sectors of the Iranian society are shifting to the opposition: Additionally, in 2005, two major allies of the Ayatollahs have been put under pressure: First, Assad’s Baathist regime, which was indicted in the assassination of former Lebanese Prime Minister Hariri; and second, Hezbollah which was singled out by UN Security Council Resolution 1559 to surrender its weapons. Add to these pressures a mounting UN request for stopping the military nuclear program of Iran. If you were the men of the regime in Tehran, only a miracle or some sort of massive change in international relations can get you out of this pit. And indeed that salvation shift came in the form of Russo-American tensions.

In fact, only a nation holding veto power at the Security Council and strong enough to accompany its threats with action on the ground is able to save the Khamenei elite from complete isolation. And that giant is, as we see, an angry Russian leadership. The Iranian regime read very well the slowly faltering relations between the entourage of Putin and Bush despite the apparently good personal relations between the two leaders.

Throughout the 1990s under Yeltsin and immediately after 9/11 under Putin, Russo-American partnership against Terrorism seemed to discourage the Jihadists worldwide—both Salafists, that is, the Sunni Islamists, and the Khomeinists. Both Iranian camps hoped for an “infidel-versus-infidel” confrontation that would save the day. Jihadi ideologues such as Sheikh Yussuf Qaradawi, al Jazeera’s major doctrinal figure and master inspiration for the Muslim Brotherhood networks often lamented that today’s Kuffar (infidels) seem to be united against the Umma (the Islamic nation). Iranian-backed thinkers also hinted at the deadlock in international context. Sheikh Mohammed Fadlallah, Hezbollah’s ideological mentor repeatedly indicated that as long as Moscow and Washington were not at odds, it was difficult for the Jihadi forces to achieve a critical change in the balance of power in the region.

In Iran, strategic planners knew all too well that even though it was the United States which threatened the regime’s ambitions, it was in fact the passive entente between the old foes of the Cold War that allowed Americans to come so close to Iran’s borders. Hence, in order to reverse the Western advance in the Middle East and, more importantly, in order to escape a democratic revolution against the regional tyrannies, the Russo-American entente would have to crumble. Therefore, the current escalation into what looks like—but is not exactly— a return to the Cold war is a “gift from heaven” to the Iranian regime. For even if these tensions do not climax into a full fledge comeback to the post-WWII era, they will and have already allowed Khamenei and Ahmadinejad to break loose from the containment and isolation processes. Here is how.

In the past years after 9/11, Russia worked cooperatively with the West to pressure Iran and its allies in the region at the UN Security Council with the passing of UNSCR 1559 and its subsequent resolutions regarding Syria and Lebanon. Moscow still walked with the international community in pressuring Tehran to cooperate on the nuclear crisis. But in the last few years, Russian-Iranian, and to a lesser degree Russian-Syrian, cooperation began to grow and the attitude of the Kremlin towards U.S. policies in the region became more and more rigid.

Historians and maybe contemporary experts in Russian-Western relationships will sooner rather than later explain why the cordial relations rapidly deteriorated. Scores of Cold War and hard-core partisans in the West claim the politico-military establishment in Russia never really changed from the old Soviet Union to the current Russian Federation. But anti-Western Communists are today on the margins of politics in Russia. Who then is pushing for tensions and to achieve what goals? There is plenty of cash in Moscow and oil is providing unprecedented revenues. Critics of Moscow accuse the old Russian nationalism of provoking a non-Marxist return to the empire. The argument is valid, but Russian youth are more into rock, travel and job search than into chauvinism. So what is it that pushed the Russian bear to roar and show its anger over the secessionist provinces in Georgia after a decade and a half of status quo in the Caucuses? Is it the anti-missiles shield to be deployed in Eastern Europe? Is it the treatment of Russia by American diplomacy which, according to Moscow, acts unilaterally and ignores the second greatest power on Earth as U.S. forces roam the planet? Is it the stretching of NATO around the old Soviet borders? Or is it a combination of all of the above complicated by a slow process of democratization in an ex-superpower which is witnessing a sudden flood of cash revenues? It may be all of that.

Unfortunately, this transformation was certainly missed in Western capitals. Russia was too important to let slip back into enmity. Washington and Brussels should have seen the signals of frustrations much earlier and acted accordingly. In the couple years following the Jihadi onslaught of September 11, a window of opportunity was open wide. Bush and Putin were very comfortable with each other. Russians suffered from terrorism in their capital and in Beslan as much as the Spaniards and the British did in their capital cities. As suggested in a whole chapter of my most recent book, The Confrontation, the US and the West should have jumped immediately at this opportunity and brought Russia by all means to a world alliance against Jihadi terrorism. This convergence with Russia against the Terror forces should have been a priority for NATO, but apparently it didn’t happen.

Worse, a reverse policy was applied by Western foreign policies. In the Balkans, where ethnic conflict can explode the delicate balances, a straw broke the back of the Russian-Western equation. Neglecting Russian concerns over Kosovo’s separation from Serbia, Euro-American chanceries slapped the bear in the face while their troops were fighting the most lethal enemy of the international community in Afghanistan, Iraq and at home. From that day on, Russia was on its own looking for its own Kosovo, and the rest of the story is now being played in the Caucuses and more specifically in Georgia.

Ironically, it was the West that wanted to please the Organization of Islamic Conference (OIC) by rushing the Kosovo process without a real reconciliation with Serbia, Russia’s cousin. The move led to the alienation of the Russians and didn’t extract a massive Muslim support to the United States. Ironically, this is where Iran seized the opportunity.

Using all its energies and clout, the Iranian regime blocked the Arab League and the OIC from siding overwhelmingly with the West while Tehran further invited the Russians to exercise a counter balance in the region. Maneuvering admirably, Iran acted swiftly on the ground as the Russian-Western crisis was mounting. As soon as Moscow expressed its open anger about Kosovo last winter, the Ayatollah understood that from that day on Putin would not grant his green light for any UN action against Iran, Syria, and Hezbollah. In May, the Iranian-backed militia took over Beirut and the United States didn’t lift a finger. A new balance of power was now acting to the advantage of Tehran.

An angry Russia is naturally in the interest of Iran’s regime. A Russia that clashes with US allies in the Balkans is a magnificent gift to the Syro-Iranian axis in the region. A return to the Cold War, any form of Cold war, is a fantasy that would break the isolation of Tehran and allow the Islamist power to achieve even more victories.

Evidently, it is not in the long-term interest of today’s Russia, regardless of the plans of Medvedev and Putin, to see Jihadi regimes like the Ayatollah’s undermining international order and taking advantage of Russian-Western tensions. Iran is building a powerful third force in the world, bringing together Islamist Salafists and Khomeinists. Hezbollah is operating in Sudan and has ties to Sunnis radicals. The movements constructed by the Ayatollah in parallel to the Wahabis can eventually reach deep inside Russia and could be threatening to the Russian population in a disproportionate way with a supposed Western threat. Hence, the Russian-Iranian alliance is, first, against the nature of what Russia’s society wishes to accomplish and, second, will cause harm to democracies.

But one must expect that Tehran and its axis will attempt to exploit the crisis between both infidel powers as much as possible. This is an opportunity, perhaps the last chance, for the totalitarian regime in Iran to survive the rise of democracy in the region. Indeed, not only Iran but other authoritarian circles in the region are happy about the return of a Cold War of any temperature.

Such a reality should compel Western democracies to create more focused international strategies. Political transformations within Russia are tough and complex, but the United States and Europe have the ability to be assertive regarding the defense of their small allies, like Georgia, while redirecting Russian muscles to confront a common enemy, Jihadi terrorism. Obviously, such a talent needs visionaries both in Washington and in Brussels. Unfortunately, the developments of the past year shows that Iran’s regime was able to outmaneuver the West, escape isolation and watch with immense pleasure infidel powers at each other’s throats.

*******

Dr. Walid Phares is the Director of the Future of Terrorism Project at the Foundation for the Defense of Democracies, a visiting scholar at the European Foundation for Democracy and the author of The Confrontation: Winning the War against Future Jihad.

« Close It
September 1, 2008 08:55 PM Link
http://counterterrorismblog.org/2008/09/irans_fantasy_a_renewed_cold_w.php

The General's Dilemma David Petraeus, the pressures of politics, and the road out of Iraq. by Steve Coll

http://www.newyorker.com/reporting/2008/09/08/080908fa_fact_coll

The New Yorker
A Reporter at Large
The General's Dilemma
David Petraeus, the pressures of politics, and the road out of Iraq.
by Steve Coll September 8, 2008

Saturday, September 6, 2008

The Resentment Strategy By PAUL KRUGMAN

The New York Times


September 5, 2008
Op-Ed Columnist
The Resentment Strategy
By PAUL KRUGMAN

Can the super-rich former governor of Massachusetts — the son of a Fortune 500 C.E.O. who made a vast fortune in the leveraged-buyout business — really keep a straight face while denouncing "Eastern elites"?

Can the former mayor of New York City, a man who, as USA Today put it, "marched in gay pride parades, dressed up in drag and lived temporarily with a gay couple and their Shih Tzu" — that was between his second and third marriages — really get away with saying that Barack Obama doesn't think small towns are sufficiently "cosmopolitan"?

Can the vice-presidential candidate of a party that has controlled the White House, Congress or both for 26 of the past 28 years, a party that, Borg-like, assimilated much of the D.C. lobbying industry into itself — until Congress changed hands, high-paying lobbying jobs were reserved for loyal Republicans — really portray herself as running against the "Washington elite"?

Yes, they can.

On Tuesday, He Who Must Not Be Named — Mitt Romney mentioned him just once, Rudy Giuliani and Sarah Palin not at all — gave a video address to the Republican National Convention. John McCain, promised President Bush, would stand up to the "angry left." That's no doubt true. But don't be fooled either by Mr. McCain's long-ago reputation as a maverick or by Ms. Palin's appealing persona: the Republican Party, now more than ever, is firmly in the hands of the angry right, which has always been much bigger, much more influential and much angrier than its counterpart on the other side.

What's the source of all that anger?

Some of it, of course, is driven by cultural and religious conflict: fundamentalist Christians are sincerely dismayed by Roe v. Wade and evolution in the curriculum. What struck me as I watched the convention speeches, however, is how much of the anger on the right is based not on the claim that Democrats have done bad things, but on the perception — generally based on no evidence whatsoever — that Democrats look down their noses at regular people.

Thus Mr. Giuliani asserted that Wasilla, Alaska, isn't "flashy enough" for Mr. Obama, who never said any such thing. And Ms. Palin asserted that Democrats "look down" on small-town mayors — again, without any evidence.

What the G.O.P. is selling, in other words, is the pure politics of resentment; you're supposed to vote Republican to stick it to an elite that thinks it's better than you. Or to put it another way, the G.O.P. is still the party of Nixon.

One of the key insights in "Nixonland," the new book by the historian Rick Perlstein, is that Nixon's political strategy throughout his career was inspired by his college experience, in which he got himself elected student body president by exploiting his classmates' resentment against the Franklins, the school's elite social club. There's a direct line from that student election to Spiro Agnew's attacks on the "nattering nabobs of negativism" as "an effete corps of impudent snobs," and from there to the peculiar cult of personality that not long ago surrounded George W. Bush — a cult that celebrated his anti-intellectualism and made much of the supposed fact that the "misunderestimated" C-average student had proved himself smarter than all the fancy-pants experts.

And when Mr. Bush turned out not to be that smart after all, and his presidency crashed and burned, the angry right — the raging rajas of resentment? — became, if anything, even angrier. Humiliation will do that.

Can Mr. McCain and Ms. Palin really ride Nixonian resentment into an upset election victory in what should be an overwhelmingly Democratic year? The answer is a definite maybe.

By selecting Barack Obama as their nominee, the Democrats may have given Republicans an opening: the very qualities that inspire many fervent Obama supporters — the candidate's high-flown eloquence, his coolness factor — have also laid him open to a Nixonian backlash. Unlike many observers, I wasn't surprised at the effectiveness of the McCain "celebrity" ad. It didn't make much sense intellectually, but it skillfully exploited the resentment some voters feel toward Mr. Obama's star quality.

That said, the experience of the years since 2000 — the memory of what happened to working Americans when faux-populist Republicans controlled the government — is still fairly fresh in voters' minds. Furthermore, while Democrats' supposed contempt for ordinary people is mainly a figment of Republican imagination, the G.O.P. really is the Gramm Old Party — it really does believe that the economy is just fine, and the fact that most Americans disagree just shows that we're a nation of whiners.

But the Democrats can't afford to be complacent. Resentment, no matter how contrived, is a powerful force, and it's one that Republicans are very, very good at exploiting.

Geopolitical Diary: The Deafening Silence on Iran

Geopolitical Diary: The Deafening Silence on Iran
Stratfor Today »--September 5, 2008
Geopolitical Diary Graphic — FINAL
U.S. Secretary of State Condoleezza Rice, visiting Libya, said on Thursday that Iran and North Korea should emulate Libya's example. What she meant by that was, like Libya, they should reach an accommodation with the United States while abandoning policies that the United States opposes.
That seems like a fairly uninteresting statement, except for the fact that Iran was mentioned. We have heard nothing from the Bush administration on Iran since before the war in Georgia — although a State Department official told us on Thursday that the last official statement was issued by the U.S. Treasury on Aug. 12. Certainly, the constant barrage of comments by the Bush administration on the Iranian threat has decreased dramatically. Frankly, while there might have been passing mentions, the administration appears to have simply dropped the subject.
The silence is, of course, enormously significant. Prior to Aug. 8, the focus of the United Stat es was on Iran. Washington was warning Iran that the deadline for delivering an answer on freezing nuclear development had passed, and the United States was now going to ask its partners in dealing with Iran — the permanent members of the U.N. Security Council plus Germany — to impose sanctions. Obviously, Russia was part of that group and, equally obviously, it was in no mood to work with the United States on placing sanctions. The Russians have said that they do not see sanctions in general as a desirable strategy. With the Russians out of the picture, the sanctions won't work anyway. You can't have a dam with a section missing.
That made the negotiations and the sanctions strategy moot. What strikes us as extraordinary is that the Bush administration has not returned to discussing Iran and posing new strategy or making new threats. The administration simply has acted as if a major confrontation with Iran had not been under way just prior to the Russo-Georgian war and, indeed, has acted as if Iran was not a major issue, which it obviously was and continues to be. The American media have not been particularly aggressive in demanding that the administration explain the relative silence on Iran, and the administration has not raised it.
All this becomes more interesting with confirmation that an anti-Iranian group — Mujahideen-e-Khalq (MeK) — had been ordered by the Iraqi government to leave Iraq, amid accusations that it had been involved with al Qaeda. The MeK has been a major issue between Iran and the United States. The Iranian position has been that while the Americans demand that Iran pull its support for Hezbollah, the United States is itself supporting an anti-Iranian terrorist group. The reports appear to be true, since supporters of the MeK demonstrated in the United States on Thursday protesting the expulsion from Iraq.
It is unlikely that the Iraqis decided to take this action unilaterally; the United States had to have supported it. It is understandable why Washington would not want its fingerprints on this, since the MeK has been a longtime ally, and this change of policy would leave other longtime allies nervous. Still, it is happening. And that means that the Americans have given in to a long-standing demand of the Iranians.
There are rumors that the United States and Iran have signed a document concerning the MeK — which is something we find hard to believe, and the sources aren't great. We have also received a report from a pretty good source who is in a position to know that a meeting is scheduled between U.S. Vice President Dick Cheney and unnamed Iranian officials at Italy's Lake Como later this week. We are not saying that we know that a meeting is taking place; we are saying only that we have heard rumors about this meeting. But there are many such rumors in the region at the moment. It should be noted that there are such rum ors whenever a senior American and Iranian official are within 50 miles of each other.
Given that, we still note three things. First, the United States has gone silent on Iran for the first time in a very long time. Second, the United States engineered or did not prevent the expulsion of the MeK from Iraq — which is a substantial concession to Iran. Third, unlike Syria, Iran has not sent its leaders to Moscow since the end of the war with Georgia and has been fairly subdued on the matter.
As we have said, one geopolitical option for the United States now is a deal with Iran. We do not know whether one is in the works, but we know this: The rhetoric from Washington on Iran has quieted since the Russo-Georgian war and has stayed quiet. And the United States has made a major concession to Iran this week.
The media have lost interest in Iran, but it is hard to believe the Bush administration has.
Yet the rhetoric has shifted. We do not think the United States is on the brink of attacking Iran. If the Americans were planning an attack on Iran, the last thing they would do is pull the MeK back. So something is up.

Maliki drops the mask

Maliki drops the mask
With his tough stance on US withdrawal, Sunni militias and the Kurds Iraq's leader risks doom

What's up with Nouri al-Maliki? As security anxieties subside in this slowly calming city, political speculation has rarely been so intense. First, it was Maliki's demand that all US troops leave Iraq by the end of 2011. Then came signs that his government wants to undermine the Sunni tribal militias, known as the Awakening councils, on whom the Americans have relied to defeat al-Qaida in Iraq. Now there are moves to take on the powerful Kurdish peshmerga troops and push them out of disputed areas in the strategic central province of Diyala.

Why is the prime minister doing this? Is "the puppet breaking his strings", as one Arab newspaper put it? Or is the more appropriate metaphor "dropping the mask"? Those who knew Maliki in exile in Syria during Saddam Hussein's time now recall that he opposed the US-led invasion. His Daawa party did not attend the eve-of-invasion conference of US- and UK-supported exiles in London, and he opposed the party's decision six months later to join the hand-picked "governing council" set up by the first occupation overlord, Paul Bremer.

Maliki's new line has discomforted the Americans. Some officials put on a brave face, saying it is a sign of Iraqi confidence in their own sovereignty, a development that, of course, they support as proof that the Bush administration's strategy of rebuilding a proud country is succeeding. Others say it reflects overconfidence, even hubris, as Iraq is a long way from being able to survive without US military protection.

Either way, playing the nationalist card has huge potential consequences in Iraq. With provincial and parliamentary elections expected next year, it will sharpen the struggle for dominance in the Shia community. It is designed to undercut the appeal of the radical cleric Moqtada al-Sadr, a consistent opponent of the occupation who is re-profiling his movement on the lines of Lebanon's Hizbullah. Its Mahdi army militia will be slimmed into a group of experienced resistance fighters, kept in reserve for action against US troops rather than to fight Iraqi Sunnis, while the rest of the movement goes into communal politics.

Posing as the nationalist who managed to get the US to accept a timetable for withdrawal (the tense negotiations could yet founder) allows Maliki to distance himself from his main Shia allies in government, the Islamic Supreme Council of Iraq (ISCI), seen as keen backers of the occupation. It also diverts attention from the chronic power cuts and other economic troubles. Every government has to fight on its record in office, but, by turning himself into a patriotic Iraqi hero, Maliki may sidestep this. Some observers suggest he may even go to the elections on a "prime minister's list", to redefine himself as no longer a Shia or a political Islamist, so as to win support from Iraq's secular and non-sectarian urban middle class. But there are uncomfortable echoes here of the effort by Ayad Allawi, the prime minister appointed by the US in 2004, to project himself in the December 2005 elections as a strong man. His vote total fell a long way below his expectations.

But if Maliki wants to present a new image as a man who stands up to the Americans, why does he choose this moment to go after Sunnis and Kurds? The principle of disarming all militias, and not just those of his Shia rivals, such as Sadr, may be laudable but the timing is highly risky and threatens to overload the circuits. Going after the Sunnis and Kurds may fail, dooming Maliki to defeat. Many Sunnis already believe he is a tool of the Iranians. Now they say his sudden anti-Americanism is no proof of Iraqi patriotism, but just shows he is a tool of Tehran. The Iranians want the US out of Iraq, not only in order to undermine US credibility in the region. They interpret Washington's support for the Awakening councils as a tilt towards the Sunnis and an effort to re-balance Iraqi politics from the Shia dominance of the early post-invasion period.

Maliki's tough stance towards the US could doom him personally. The US toppled his predecessor, Ibrahim Jaaferi, and, even though US power in Iraq has declined since then, it may find a way to remove Maliki too. It would not demand that the prime minister go, as it did in 2006, but could undermine his parliamentary majority. The US has alternative candidates, including the ambitious vice-president, Adel Abdel Mahdi, and the Sunni defence minister, Abdul Qader al-Obeidi, who told the New York Times in January that US troops would be needed for another 10 years.

Whatever his motives, Maliki's move has certainly shaken up Iraqi politics and forced the issue of a clear US departure timetable on to the agenda. The Iraqi prime minister has put Bush and McCain on to the back foot, and given help to Obama. Whether Maliki or Bush blinks first remains to be seen.



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Geopolitical Diary: The Deafening Silence on Iran

Geopolitical Diary: The Deafening Silence on Iran
Stratfor Today »--September 5, 2008
Geopolitical Diary Graphic — FINAL
U.S. Secretary of State Condoleezza Rice, visiting Libya, said on Thursday that Iran and North Korea should emulate Libya's example. What she meant by that was, like Libya, they should reach an accommodation with the United States while abandoning policies that the United States opposes.
That seems like a fairly uninteresting statement, except for the fact that Iran was mentioned. We have heard nothing from the Bush administration on Iran since before the war in Georgia — although a State Department official told us on Thursday that the last official statement was issued by the U.S. Treasury on Aug. 12. Certainly, the constant barrage of comments by the Bush administration on the Iranian threat has decreased dramatically. Frankly, while there might have been passing mentions, the administration appears to have simply dropped the subject.
The silence is, of course, enormously significant. Prior to Aug. 8, the focus of the United Stat es was on Iran. Washington was warning Iran that the deadline for delivering an answer on freezing nuclear development had passed, and the United States was now going to ask its partners in dealing with Iran — the permanent members of the U.N. Security Council plus Germany — to impose sanctions. Obviously, Russia was part of that group and, equally obviously, it was in no mood to work with the United States on placing sanctions. The Russians have said that they do not see sanctions in general as a desirable strategy. With the Russians out of the picture, the sanctions won't work anyway. You can't have a dam with a section missing.
That made the negotiations and the sanctions strategy moot. What strikes us as extraordinary is that the Bush administration has not returned to discussing Iran and posing new strategy or making new threats. The administration simply has acted as if a major confrontation with Iran had not been under way just prior to the Russo-Georgian war and, indeed, has acted as if Iran was not a major issue, which it obviously was and continues to be. The American media have not been particularly aggressive in demanding that the administration explain the relative silence on Iran, and the administration has not raised it.
All this becomes more interesting with confirmation that an anti-Iranian group — Mujahideen-e-Khalq (MeK) — had been ordered by the Iraqi government to leave Iraq, amid accusations that it had been involved with al Qaeda. The MeK has been a major issue between Iran and the United States. The Iranian position has been that while the Americans demand that Iran pull its support for Hezbollah, the United States is itself supporting an anti-Iranian terrorist group. The reports appear to be true, since supporters of the MeK demonstrated in the United States on Thursday protesting the expulsion from Iraq.
It is unlikely that the Iraqis decided to take this action unilaterally; the United States had to have supported it. It is understandable why Washington would not want its fingerprints on this, since the MeK has been a longtime ally, and this change of policy would leave other longtime allies nervous. Still, it is happening. And that means that the Americans have given in to a long-standing demand of the Iranians.
There are rumors that the United States and Iran have signed a document concerning the MeK — which is something we find hard to believe, and the sources aren't great. We have also received a report from a pretty good source who is in a position to know that a meeting is scheduled between U.S. Vice President Dick Cheney and unnamed Iranian officials at Italy's Lake Como later this week. We are not saying that we know that a meeting is taking place; we are saying only that we have heard rumors about this meeting. But there are many such rumors in the region at the moment. It should be noted that there are such rum ors whenever a senior American and Iranian official are within 50 miles of each other.
Given that, we still note three things. First, the United States has gone silent on Iran for the first time in a very long time. Second, the United States engineered or did not prevent the expulsion of the MeK from Iraq — which is a substantial concession to Iran. Third, unlike Syria, Iran has not sent its leaders to Moscow since the end of the war with Georgia and has been fairly subdued on the matter.
As we have said, one geopolitical option for the United States now is a deal with Iran. We do not know whether one is in the works, but we know this: The rhetoric from Washington on Iran has quieted since the Russo-Georgian war and has stayed quiet. And the United States has made a major concession to Iran this week.
The media have lost interest in Iran, but it is hard to believe the Bush administration has.
Yet the rhetoric has shifted. We do not think the United States is on the brink of attacking Iran. If the Americans were planning an attack on Iran, the last thing they would do is pull the MeK back. So something is up.

The Cold War Reversed

The Cold War Reversed

William Pfaff

Paris, September 8, 2008 – There is much current talk about a new cold war, or a new configuration of nations, a new power balance (or imbalance). There is something in this; it's a consequence of the crisis produced by Georgia's foolhardy and tragic attack on South Ossetia and upon the Russian soldiers stationed there. This upset standard thinking about the U.S. and about Putin's Russia

(Parenthetically, there is no longer dispute as to Mikheil Saakashvili's responsibility for launching the attack, presumably in the mistaken belief that Georgia's pending NATO candidature would either deter Russian retaliation, or force the United States and NATO to support his adventure. He was wrong on both counts. See the devastating report by C.J. Chivers and Thom Shanker in the September 3 New York Times.)

What is being ignored in discussion of new power balances and revived cold war is the reason why international relations have fundamentally changed since the collapse of the Soviet Union.

The cold war was ideological struggle. It obviously involved power confrontations, the Warsaw Pact versus NATO, the presumed Soviet military threat to Western Europe, the Korean war – and of course the nuclear threat.

But what was behind it was Marxist-Leninist, and later Maoist, ideology.
These were doctrinally expansionist. They said that capitalism was in its final stages, the class war between workers and industrial-capitalism and imperialism approaching its culminating crisis, and Communism on the march towards inevitable victory.

You can question to what extent leaders in Moscow and Beijing really believed this. They had to act as if they believed it. Millions of Communists in the West and an unknowable number in the U.S.S.R. and China really did believe it. The ideology was the only source of legitimacy and power for the Soviet and Chinese Communist parties and governments.

They had to seem ever on the march, expanding – or seeming to expand – because they had to make people believe that they were revolutionary regimes which sooner or later, by the scientifically determined dialectical progression of history, were guaranteed to produce victory, a New Dawn, the Great Day, The Victory of the East, and millenarian rule by workers and peasants, and the "progressive intellectuals" allied with them.

The United States and its allies were in the struggle for classical geopolitical and strategic reasons. They had interests to defend. They were defending the new democratic postwar order in Western Europe. Harry Truman, Dean Acheson, Clement Attlee, Ernest Bevin, George Kennan, and the leading American and Allied diplomatic figures of the time, were not ideologues. They were all in the classical sense of the term, conservatives, defending the democratic order.


It is true that during the period when John Foster Dulles was American secretary of state, the United States itself caught a bad case of the ideological fevers. Dulles was a prominent churchman, a Presbyterian Elder, as well as an international lawyer, and as John Lukacs writes in his history of the Cold War, brought "the distressingly puritanical and at times even pharisaic inclination to see in the world struggle a national personification of good versus evil." The fever unfortunately became a chronic condition, with as yet no cure.

Thus today the situation is the reverse of 1948-1950. Russia is not an ideological power. It has no doctrine to sell. Its preoccupations are prosperity and power. Vladimir Putin has no wish to subvert and rule the United States or Europe. He just doesn't want NATO's candidates biting his ankles. He wants level-headed governments on his borders who don't make trouble for Russia. But that is perfectly, if regrettably, normal.

The United States has been invading troublesome Caribbean and
Central American neighbors since the mid-19th century. It was what the U.S. Marine Corps did for a living – Cuba, Haiti, the Dominican Republic. Ronald Reagan absurdly invaded Granada, officially to save American students from dangerous Cuban airport laborers. The senior George Bush invaded Panama to seize President Manuel Noriega, a former employee of the CIA. It has never been explained what those two invasions were really about. There were (widely publicized) clandestine operations in Nicaragua and El Salvador. All this has been taken for granted as the Monroe Doctrine at work.

China is no longer an ideological power. Chinese Communism has been intellectually dead for two decades. The Party is kept going with all its congresses and assemblies because that furnishes the only justification China's leaders have for why they are in power. China's actual politics function through Party co-option, favoritism and power struggle. This one day will probably end in a major crisis, as I have said before in this space.

China is not an expanding power. It wants Taiwan, various "lost" islands in the China Seas; it demands recognition that Tibet is Chinese. But all this is traditional. It certainly is not promoting Communism abroad.

Today the world's only expansionist ideological power is the United States, aggressively pushing everywhere, persuading, promoting, and even invading countries for "democracy." It wants to make everyone democratic "like us," which in the end means to do as we want them to do. The ideology is meant to be generous, but it is a generosity devoted to the control of energy resources, raw materials, trade, and finance.

This makes the U.S. the expanding and aggressive nation in the world today, the one with a "global ideology," with military power to back it up. This frightens people. When the power doesn't work as intended, as in the Caucasus, it makes other people frightened, the ones who have bet on the U.S. to advance their own agendas. That is what is changing the geopolitical map.

© Copyright 2008 by Tribune Media Services International. All Rights Reserved.
This article comes from William PFAFF
http://www.williampfaff.com

The URL for this article is:
http://www.williampfaff.com/article.php?storyid=340

China still on-side with Russia

China still on-side with Russia

The West is engaged in a premature celebration of the death of the China-Russia relationship following Beijing's perceived lack of support for Moscow's intervention in Georgia. This is a misreading of China's evolution to normal ties with Russia after going though "honeymoon" and "divorce" periods over the past 60 years. It is the West that should be worried about its confrontational policies with Russia. - Yu Bin (Sep 5, '08)

http://www.atimes.com/atimes/China/JI06Ad01.html

Thursday, September 4, 2008

Democratic Dominoes: A Guest Post

NEW YORK TIMES

9/4/08

Democratic Dominoes: A Guest Post

Peter Leeson

Since the dawn of the cold war, a "democratic domino theory" has helped motivate important U.S. foreign policy decisions. Dwight D. Eisenhower summarized this theory, which he called "the falling domino principle," in 1954:

You have a row of dominoes set up, you knock over the first one, and what will happen to the last one is the certainty that it will go over very quickly. So you could have a beginning of a disintegration that would have the most profound influences.

Eisenhower was talking about communist dominoes. Since him, however, other U.S. policymakers have invoked the same basic logic — only with democratic instead of communist dominoes — and thus virtuous effects where a "first domino" falls.

Most recently, some policymakers have pointed to the possibility of a democratic domino effect in the Middle East as a reason for America's continued presence in Iraq. According to George W. Bush, for instance, "The establishment of a free Iraq at the heart of the Middle East will be a watershed event in the global democratic revolution."

In a recent paper, co-author Andrea Dean and I investigate whether democratic dominoes like the ones American foreign policy posits actually exist and, if they do, how "hard" they fall.

Does democracy really spread between countries? If so, how much? We find that democratic dominoes do in fact exist, but they fall significantly "lighter" than foreign policy applications of this principle pretend.

Countries only "catch" about 11 percent of their geographic neighbors' average changes in democracy; the modesty of this spread rate is consistent over time. Our analysis extends back to 1850, but 150-plus years ago, like today, changes in countries' democracies were only mildly contagious.

Our study isn't focused on the impact of U.S. intervention on democracy abroad. But if our estimates are in the ballpark, they have potentially sobering implications for attempts to democratize the world through intervention. Even if U.S. intervention succeeds in improving democracy in a key country it occupies, the democracy-enhancing "spillovers" of the intervention are likely to be minimal.

Democratic dominoes don't have the "oomph" to democratize entire regions. Most of an intervention's benefits for democracy, where there are any at all, are likely to remain local.

Bill Easterly and two of his colleagues have a provocative working paper that looks specifically at foreign intervention's influence on democracy abroad. What they find is even more damning for domino-inspired interventions.

According to their work, which examines interventions in the cold war period, U.S. interventions decreased democracy by 33 percent in countries where America intervened (so did Soviet interventions). Christopher Coyne's important book examines the reasons for this failure and provides evidence that foreign intervention's democracy-reducing outcome isn't limited to the cold war context.

If U.S. interventions fail to enhance democracy in the countries where they take place, pro-democracy spillovers obviously cannot spread throughout the greater regions these countries are part of. If the evidence from past attempts is any indicator, the prospect of using falling dominoes to democratize the globe looks pretty dim.

Peter Leeson, the BB&T Professor for the Study of Capitalism at George Mason University and author of the forthcoming book "The Invisible Hook: The Hidden Economics of Pirates," blogged here earlier this week about U.F.O.'s and Bigfoot. This is his second of three posts.

Neoconservatism Lives

Readers who believe that the neo-conservatives have folded their tent may wish to look at Joshua Muravchik's article "The Future is Neo-Con." in the current issue of National Interest. Link is http://www.aei.org/publications/pubID.28559/pub_detail.asp

White House Careful on Cutting Ties with Moscow

White House Careful on Cutting Ties with Moscow
Nicholas Kralev and Bill Gertz, The Washington Times The Bush administration has ordered a review of U.S. defense cooperation programs with Russia but is not about to draw up "mindless lists" of penalties that could alienate the Russian people while leaving Moscow's troops in Georgia, U.S. officials said Tuesday.

http://washingtontimes.com/news/2008/sep/03/white-house-treads-carefully-on-cutting-ties-with-/

SKorea says NKorea restoring nuclear complex

SKorea says NKorea restoring nuclear complex

http://www.iht.com/articles/ap/2008/09/04/asia/AS-Koreas-Nuclear.php

Last Chance: Nuclear Suppliers Group Sharon Squassoni, Proliferation Analysis

Last Chance: Nuclear Suppliers Group Sharon Squassoni, Proliferation Analysis

This week, a group of forty-five countries has the last chance to prevent a deal which threatens to cause serious and long-lasting damage to the world's nuclear nonproliferation regime.

In a special meeting on August 1, the 35 representatives of the International Atomic Energy Agency's Board of Governors gathered in Vienna for the first of several meetings designed to push through nuclear trade with India before the end of the Bush administration and the Singh government. Several countries reportedly objected to elements of a new safeguards agreement designed to open some of India's nuclear facilities to international inspection.

* Minding the Gaps: U.S. & India Views on Nuclear Cooperation
* Text of Revised U.S. NSG Proposal on India

http://www.carnegieendowment.org/publications/index.cfm?fa=view&id=20448&prog=zgp&proj=znpp

Neither respected nor feared By Geoffrey Wheatcroft

International Herald Tribune

Neither respected nor feared
By Geoffrey Wheatcroft

Thursday, September 4, 2008

http://www.iht.com/articles/2008/09/03/opinion/edwheatcroft.php

BATH, England:

In an exalted phrase, the keynote speaker at the Republican convention reviewed the record of the administration, and asked, "When have we rested more secure in friendship with all mankind?" That wasn't in St. Paul, where the Republicans are gathered this week, but at the 1904 Republican convention in Chicago, when the speaker was Elihu Root, a past Secretary of War and future Secretary of State.



His words were sonorous then, and they are haunting now. They will not be repeated this year, because they could not be. A senior American politician might have said something similar in 1920, or 1945 or 1960. But no Republican now - and no Democrat - could utter Root's words without inviting utter derision.



Today there might be a more bitter question: When has America rested less secure in friendship with all mankind?



And that explains the intense interest which this year's presidential election has inspired beyond the shores of the United States. It's not just Obamania - there's no point in denying that Senator Barack Obama is the man most people outside the United States would like to win - but he was one of three potential candidates until Senator Hillary Clinton conceded defeat who were all fascinating simply in personal terms: a septuagenarian war hero, a woman, a black man.



The election absorbs us in Europe - and others in Africa and Asia - because we can see that a general crisis spreading around the globe is directly linked to the follies and failures of American policy. In his new book, "The Much Too Promised Land," about the Israeli-Palestinian conflict, in which he used to be engaged as a State Department official, Aaron David Miller puts it with lapidary succinctness.



Having stumbled for eight years under the Clinton administration over how to make peace in the Middle East, and then for eight years under the administration of George Bush the Younger over how to make war there, the United States finds itself "trapped in a region which it cannot fix and it cannot abandon." Still more to the point, throughout that region, for all of her seeming might, America is "not liked, not feared and not respected."



And not only in the Middle East. The theme of these past years has been American arrogance followed by American incompetence leading to American impotence.



From one side of the world to the other the story is the same, whether it's Vladimir Putin being told by Bush to leave Georgia, or Israel being told by Condoleezza Rice to desist from building more settlements on the West Bank, or China being told by Washington to behave better in Tibet, or even the European Union being told by any number of American politicians and pundits to accelerate Turkish membership.



All these American strictures are vaguely listened to. And then, as the late George Brown (a sometime British foreign secretary who shared Bush's verbal infelicity) might have said, the rest of the world treats them with a complete ignoral. After all, they come from a supposed hyperpower which in practice is neither respected not feared.



That is a direct consequence of what Washington has done. President Theodore Roosevelt said that America should speak softly and carry a big stick. President George W. Bush speaks loudly and waves a small stick. Stalin and Khrushchev had limits placed on their actions by awareness of what America might do if those limits were overstepped. Putin can do exactly what he likes in Georgia, since he knows that Washington is powerless to stop him.



One stock response from the bedraggled and diminished band of Bush supporters is that to say that all this is no more than "anti-Americanism." Prejudice against, and resentment of, America is indeed far from an imaginary phenomenon, in Europe or elsewhere, on right as well as left, and for generations past.



But today that stock response quite misses the point. Martin Wolf of the Financial Times (himself no radical extremist) has said very truly that attitudes toward America that were not long ago confined to the hard left in Europe are now found across the political spectrum. "Nous sommes tous Américains," the Monde bravely exclaimed after Sept. 11; seven years later it would be an exaggeration to say "We are all anti-Americans now," but not a wild one.



In any case, the whole-hearted enemy of America is the one who ought to be delighted by the eclipse of American prestige, and drink a toast to the Bush administration for bringing it about. It's those of us who believe that the United States needs to be constructively engaged in the world, and respected by it, who have most cause for dismay.



When Tony Blair said in early 2002 that he was worried about a drift towards American unilateralism, and that he wanted to "keep the United States in the international order," the diagnosis wasn't stupid. What was utterly preposterous was his subsequent reasoning that, in order to achieve this, he had to give unconditional support to every American action, above all the Iraq war a year later. As a result, the United States soon stood further still outside the international order, while in the end American power was gravely weakened.



No one who has followed the election campaign can be confident that there will truly be a new beginning in the new year. Electioneering puts reason and restraint at a discount and invites boastful bluster. John McCain's "we are all Georgians" is a fine example and obviously empty rhetoric. Even he ought to have worked out by now that his fellow-Americans, "Georgians" or otherwise, are not going to fight for South Ossetia, and Putin knows it.



Obama took an almost more damaging misstep when he said that "Jerusalem will remain the capital of Israel, and it must remain undivided" - something not even Bush has said. If taken literally, his words would mean an end to any imaginable settlement of that bitter and intractable dispute - and they raise once again questions about the fitness of the United States for world leadership, under any president.



Whoever wins in November should pause and take stock. The United States has rarely faced greater challenges with the domestic economy but still more in international affairs. Why does America enjoy so little friendship with all mankind? And is there nothing at all that can be done to restore her standing?



Geoffrey Wheatcroft's books include "Le Tour: A History of the Tour de France 1903-2007," "The Strange Death of Tory England" and "Yo, Blair!"