Archive for April, 2011

Secretary Panetta

29/04/2011

In a move long expected, Dr Robert Gates, secretary of Defence who said he would retire by summer 2011 has had his resignation accepted and will formally leave DoD on 30 June.

President Obama nominated director of the Central Intelligence Agency, Leon Panetta, 72, as the new head of DoD, pending confirmation. At the same time President Obama nominated General David Petraeus as new CIA director. Apparently, “Convincing Panetta to leave the CIA to replace Gates wasn’t easy, the official confirmed. For weeks, Panetta has been rumored to be switching jobs, but sources said he had been skeptical about leaving his current role”, it seems to have been agreed at the last minute with, “Panetta finally agreed to move to the top Pentagon slot during a talk with Obama on Monday [25 April] evening, the senior official said”.

While at the CIA, the report notes that “Petraeus, will cross over from being a user of intelligence to leading the nation’s top collector of strategic information. Petraeus is perhaps America’s most heralded general since former Joint Chiefs Chairman Gen. Colin Powell, who later served as secretary of State”.

It has been noted however that Secretary Panetta would continue with the cuts already being implemented, saying that he “is expected by analysts to be more receptive than Gates to finding funds in the Pentagon’s core $530 billion budget that could be put toward deficit trimming. Gates said earlier this year that the Defense Department needed a minimum of $540 billion in fiscal 2011, about $10 billion more than was ultimately approved by Congress and signed into law by Obama. Panetta has relationships and a public service record that could help him surmount Capitol Hill’s reluctance to cut arms programs, which would mean less jobs in some congressional districts”.

This negation of the common good must be halted, if Panetta can continue with this important work he will deserve much credit.

TRH The Duke and Duchess of Cambridge

29/04/2011

Congratulations to Their Royal Highnesses The Duke and Duchess of Cambridge.

Living in a different world

28/04/2011

Dr Stephen Walt commenting on the situation in Libya, seems to be unable to comprehend the realities of the world in which we live.

He argues that “”Because there are no vital strategic interests at stake in the Libyan situation, outside leaders are reluctant to do whatever it takes to resolve the situation quickly. You don’t hear Obama, Sarkozy, or Cameron declaring that they are going to call up reserves, redeploy forces from other commitments, or launch a direct invasion of Libya itself”.

Firstly, it is obviously in the interest of European nations to intervene for a number of reasons. These are as follows; a Libya at war with itself will only increase the unchecked flow of immigration to Europe, many who oppose the war say it was started for oil but surely not invading would have kept the oil flowing more freely than it is now and finally people were getting killed.

The reason for American invovlement is clear, as the world’s only hyperpower only it truly has the necessary resources to end the war. Yet, with the US elections looming and President Obama running for another term having the US Armed Forces in another war is not what he needs politically. America has rightly let NATO take more of the responsibility, leading to praise.

However, it is becoming more apparent that control must be excerted on events rather than be controlled by them. Dr Walt’s childish suggestion that forces be redployed from elsewhere, or an invasion force proper be assembled should be ignored and are not in keeping with the cuts being made across Europe and belatedly, America.

Walt goes on to say that “there are real limits to what NATO can achieve with airpower alone, this minimalist approach is more likely to produce a costly stalemate in which more Libyans die”. It is incorrect to say that airpower alone cannot achieve certain ends. The 1999 Serbia war, which was also a NATO operation, proved this to be the case.

Admittedly there is a stalemate, which is both frustrating and humilating for the West. This can be ended by the use of a powerful response from all countries in NATO, however, “doing it this way is a lot more expensive”.

Walt’s who says something that is hard to disagree with notes, “you can understand why the intervening powers are tiptoeing their way in, but as noted above, that merely increases the danger that the civil war drags on”.

Full force and the installion of the National Transitional Council  is the only solution.

Stability in Riyadh?

25/04/2011

On the disorder in the Middle East, many are concerned that Saudi Arabia with its strategic position and vast oil reserves is a powderkeg waiting to explode.

The lack of  popular disorder  has lead many to comment that “fact has led some pundits to the conclusion that the kingdom has only temporarily muffled the latent discontent of its people and that ultimately the domino of dissatisfaction and regime change will fall in Riyadh” . Yet in an article for Foreign Policy, one Saudi commentator writes that the monarchy is stronger than many outsiders think.
He cites how “strong record of fiscal responsibility. Revenues from energy exports and the more than $500 billion in foreign reserves (the third-largest in the world) amassed during King Abdullah’s rule have been tapped to fund development projects that benefit the kingdom’s surging population”.

He continues saying “King Abdullah recently announced a financial amelioration package, which had been in development since December 2010, to coincide with his return from abroad. These include $29.5 billion in extra expenditures that will benefit the poor, aid the unemployed, provide housing assistance, and support a real estate fund and bank of credit”. What he fails to mention however is the fact that this was announced with protests across the Arab world just beginning and with the royal family facing a crisis of leadership .Yet this overlooks, even ignores, the fact that fact that many, if not most, of the people involved in the protests and uprisings demand greater participation in the political process. This is evidently lacking in the kingdom. 
He adds that “the Saudi government has made considerable investments in internal security to root out al Qaeda from the kingdom; domestic safety and stability have been a key pillar of support from the general population”. Admittedly he does make the valid point that “no Arab country possesses a culture so rooted in change-resistant conservatism, which is in many ways derived from the kingdom’s unique role in Islam and the Arab world”, yet it is highly questionable whether this is enough to stop at least protests, if not full revolution.

He argues that “Salafism, the conservative strain of Islam practiced in Saudi Arabia, forbids opposition to earthly rulers, which is why Islamist reform movements led by radical clerics are also small and fragmented”. The author makes the point that there is increasing nationalism in Saudi Arabia with diminishing attachment to tribe. While Salafism and a strong security state are necessary for order, they may not be enough, with an increasing disconnect becoming apparent between the increasingly frail, elderly rulers, and the young and general populace who are more open to change.

Even allowing for the fact that this is official propaganda, which is highly likely, the House of Saud faces huge challenges, which if they do struggle to contain, will overwhelm them.

Mr Low Key

22/04/2011

In an interesting article, Dr Tim Lynch argues that President Obama’s bid for re-election is low key.

Lynch says that “One would have to go back to JFK in 1960 to find an analogue for the enthusiasm of 2008”, he mentions how “Obama has not transformed the American presidency into an unstoppable tool of political, social, and economic transformation. His domestic agenda hinged on two things: ‘Obamacare’ and jobs.”

Lynch describes the health care reforms as “a highly circumscribed piece of legislation that disappointed his base but was sufficiently ambitious to invite inevitable legal challenge”. Regarding jobs, Lynch says that “Obama will run hard on the link between his enormous economic stimulus and the recent fall in the number of Americans out of work (from 10.1 percent in October 2009 to 8.8 last month)”, however it is uncertain whether this will be enough to presude the ever growing number of independents to vote for him.

Lynch says that his inability to introduce real change, coupled with the fact that this “time round, Obama is running not against the Bush record but on his own. Where once he could condemn now he must defend”.

Just because President Obama has not charged into the election does not mean that eventual victory is not his. Much depends on who the GOP nominate, with evidence of touted candidate, Donald Trump’s ignorance on show recently by demanding GOP support, because he is more wealthy than Mitt Romney and demonstrating a total lack on knowledge on global economic issues will have independents otherwise cool on Obama running to vote for him.

The only option

20/04/2011

Economists Joseph Stiglitz and Michael Cragg have recently argued that Ireland’s IMF and ECB backed economic plan is “doomed to failure”.

They argue that Ireland allowed itself to be duped by “false economic doctrines advocating unfettered markets”. They note that the new government can still save the Irish economy, and indeed Ireland itself, “but has failed thus far to address the underlying problems.” Yet it should be borne in mind that the new government’s economic policies are exactly the same as those of the hated Fianna Fail government with new faces delivering old policies.

They note that “in more optimistic scenarios, Ireland’s debt to GDP ratio is expected to soar to 125 per cent in 2013, up from 25 per cent in 2007”. This they say with stifle whatever little growth is in the Irish economy as it is. They pull no punches when they say that “the EU recipe for recovery is more of the same: to meet the deficit reduction targets, more austerity – which in turn means still lower growth and still higher unemployment.” They argue, correctly that “It is the system of incentives that underlies the success of a market economy” with the implication being that those that lose money are aware of this and should not be recompensated for the losses they make on their investments.

Their indictment of what had been happening in the world before the crash involved, “those who seemed to believe in markets, started to rewrite the rules in the midst of the crisis. They argued for the socialising of losses, while the gains had been privatised. Such a system of ersatz capitalism is doomed to failure, and is fundamentally corrupt and inequitable”.

As always part of the blame lies the the incompent and moronic government that “governed” during these years, who are now fittingly reduced to 20 seats in the 166 seat parliament.

They go on  to say that “the IMF, ECB and Government must come to terms with imposing losses on the international lenders whose loose lending policies played a central role in the current crisis.  Debt restructuring [default] is neither easy nor costless; but the costs are far less than the alternative”.

Ireland may not default first, it looks like Greece may beat Ireland to it.

Regulation or destruction

18/04/2011

The interim Independent Commission on Banking report was published last week.  The full report is to be published in September, however this interim report recommends that: retail deposit banks should be separately capitalised, with a minimum 10% equity cushion; the State owned Lloyds Banking Group should ‘substantially’ increase asset disposals and large banks should hold a minimum of 10% equity and probably a lot more.

It was reported that the commission did not advocate “a break-up of the banks. But experts said that its demands that lenders provide additional protection for their retail customer base will require big changes”. It was said that “current accounts and mortgages should be ‘ring-fenced’ from other units to ensure they are able to function in the event of a failure”. Many were disappointed with the interim report that the proposals did not go far enough to split retail and investment banking sufficiently. Instead the commission proposed a firewall. Also what is noteworthy is the fact that the report suggested that banks should have 10% capital on hand at any given time. While this is up from the 7% proposed by Basel III , however even the Bank of England suggest that capital requirements should be between “16 percent to 19 percent”. This however would rebound on the banks customers with higher charges however.

The commission’s report if it was too tough “would drive the banks away from the UK”. The problem with this is twofold. Firstly it assumes that America and other countries want these banks, and secondly it essentially tries to blackmail governments into changing policy. However, some have challenged this argument head on saying that “Top bankers want us to believe the answer is yes. The global economy cannot function without big banks, they say:gigantism provides synergies, efficiencies and benefits of scale”.

The writer goes on to obliterate this myth, saying “Even if financial conglomerates could provide services a bit more efficiently than smaller banks – which they can’t – are the marginal advantages worth holding the whole system hostage to a few super-sized players whose failures would be catastrophic? Go down this road and you end up in a toxic dump with the capacity to wipe out entire economies – as Ireland has discovered. Irish banks weren’t too big to fail, they were too costly to save”. Yet, these valid arguments have a downside to the common bank customer as well.

There is however some political consequences with some in the coalition government likely wanting the report to go farther while others think it goes too far. The strain is in addition to the “next month’s local elections, which see the parties contesting thousands of council seats, and the referendum on moving to the Alternative Votes (AV) system at general elections”.

So the question is regulation or destruction?

Exceptional America?

15/04/2011

In an interesting blog post Dr Stephen Walt discusses American belief in their exceptionalism. What is notable is that this belief crosses party lines, with both President Clinton and Secretary Albright being credited with the phrase “indispensable nation” with Presidents Regan and Bush 43 citing it numerous times.

American exceptionalism is best encapsulated in the belief that America is the New Jerusalem, or in the famous 1630 speech by John Winthrop, “a city on a hill“. This belief comes from the notion that England had during the Protectorate that it was especially blessed by God. When the Mayflower landed the Pilgrims transferred this belief with them.

Walt says that it is  “another stick that conservatives are using to beat up President Obama, because he supposedly doesn’t think we’re all that unique”. As Walt rightly says, “the idea that any state is truly ‘exceptional’ is sharply at odds with a realist view of international politics”.

Indeed as Walt argues, basic realist dogma states that “domestic politics sometimes matters and that there are important differences between different great powers (and different leaders), the most important difference between states is their relative power”. The result is that no state is “either uniquely virtuous or immune to folly”.

Walt says the “difference between the United States and virtually all other countries is that the United States has been unusually secure for much of its history, and very powerful for six decades or more”. This explains much of America’s actions coupled with belief in its own exceptionalism.

Walt concludes, as has been stated here before, America’s “role on the world stage has been positive one, and other governments (or leaders) might have acted in far worse ways had they been in a similar position of primacy”.

What is vital for Europeans to understand is that Americans see themselves as exceptional, even though the arguments against it are strong, it is important to understand this belief even if Europeans don’t believe it to be true.

More of the same, thankfully

13/04/2011

When it comes to national security people generally do what works. As has been stated before  here and here  when it comes to national security there is general agreement from both parties.

This has again been witnessed when President Obama “ordered that military commission trials be resumed at Guantánamo Bay”.  The report states that the “move represents a defeat for Obama, who pledged to close the terrorist detention facility in Cuba within one year of taking office”.  This however should be expected as the optimism and naivity of the administration quickly gave way to cold hard reality. President Obama has carried on with the decision taken by the Bush administration because it works.

Apparently “Obama ‘remains committed’ to closing the Guantánamo camp, but the president’s decision to direct Gates to rescind his suspension of new charges by military commissions signals it is unlikely prisoners will be successfully transferred anytime soon”.

Interestingly, “Obama by executive order created a periodic review process for detainees who cannot be tried or released because they represent a continued threat to national security. Under the newly reformed military commission process, detainees would be able to retain a voluntary lawyer or hire private counsel.”

The Administration says it still wants to close the facility, we should all be thankful that it sense has prevailed.

Louis XIV, alive and well in Brussels

12/04/2011

The EU, as detached, greedy and irrelevant as ever.

The problem of Syria

12/04/2011

There is rightly increasing focus on Syria in the context of the Arab revolutions. President Bashar al-Assad who inherited the presidency from his father in 1999, supports Hizbollah who in turn have close links to Iran. Hizbollah are a constant block for the peaceful solution to the Israel-Palestinian war along with other factors of course.

The country was profiled recently and has a rich and diverse history with “majority of the population are Sunni Muslims but there are Shia Alawite, Druze and Ismaili minorities, the first having run Syria since Hafez al-Assad seized power”. While the Christians there are “Maronite, Greek Catholic, Greek Orthodox, Gregorian Armenian and Syrian Catholic churches. In the village of Maalula, Arabic has only recently replaced Aramaic, which was spoken by Christ, as the language of communication”.

Crucially the “demographic, religious and historical kaleidoscope which is modern Syria makes it very difficult to judge what will be the outcome of the present crisis” it is especially the case when one notes that, “Syria requires careful handling. Its potential as a partner for peace with Israel, which still occupies the Golan Heights, its support for terrorist organisations such as Hizbollah, Hamas and Islamic Jihad, and its inability to stop interfering in the affairs of Lebanon make it a crucial player in the Middle East”.

While in an article for Foreign Policy, Patrick Seale argues that “If the regime fails to tame this domestic unrest, Syria’s external influence will inevitably be enfeebled, with dramatic repercussions across the Middle East”. The town where it all began, Daraa, Seale notes “has suffered from drought and neglect by the government in Damascus. The heavy hand of the ruling Baath party was particularly resented. Because it lies on the border with Jordan, and therefore in a security zone, all land sales required the security services’ approval, a slow and often costly business”. In other words reasonable demands that the current regime has not been able to meet. It is highly doubtful that such protests would have taken place years ago or if they had they would result in anything. It is only in the context of the revolutions that has changed everything.

After the protesters who fired on, “Damascus blamed Israeli provocateurs, rebel forces, and shady foreign agents for the bloodshed — anyone but its own forces”. President Assad has “has released some political prisoners and pledged to end the state of emergency in force since 1963. A government spokeswoman has hinted that coming reforms will include greater freedom for the press and the right to form political parties”. It is highly doubtful that this is result in stability, instead it will probably have the opposite effect.

It is however not simple, “with its two principal allies, the Islamic Republic of Iran and the Lebanese Shiite resistance movement Hezbollah, Syria is viewed with great hostility by Israel and with wary suspicion by the United States” he states that “now that Syria has been weakened by internal problems, the viability of the entire axis is in danger”. It is not impossible that Israel will attempt to use the unrest in Syria to its advantage, Israel must uses caution however if it overplay’s its hand the result could be even worse for it and the United States.   

The disorder is Syria however Seale argues is already having complications as “uprisings may have already deepened the sectarian divide in Lebanon, raising once more the specter of civil war and making more difficult the task of forming a new government”.

The best the can be hoped for is gradual reform with the setting up proper a democractic society over  number of months, or preferably years, the worst he says is that “blood-thirsty sectarian demons risk being unleashed, and the entire region could be consumed in an orgy of violence”.

Take note

09/04/2011

So as the Libya intervention rumbles on seemingly toward stalemate with the coalition unable to unseat Gaddafi the problems of Saudi Arabia remain vital to the economic stability of the West.

It has been commented on, and indeed is a basic tenet of realism, especially in the Middle East during the current disorder that “When politically expedient, Washington will help to push you out of power”. He continues saying that US policy has changed due to the disorder and as a result of this “petro-realpolitik must change because one can no longer be sure that the Emir sitting confidently before you will be there next year, or even next week”.

The two sides have been summarised thus, “the Saudis have played a highly constructive role on behalf of U.S. economic and political interests around the world, but the truth is that there simply is not much support in the United States for families that treat their nation’s wealth as a personal treasure trove. From the Saudi side, why should one go out of one’s way for a superpower that so rapidly discards its friends?”. What he is refering to is the Saudi intervention in Bahrain, which continues to this day despite which Bahraini society and institutions carry on as normal, albeit under a cloud of uncertainty. 

The future regetabbly is even more unclear “the United States is now viewed with quite a bit of suspicion among the world’s petro-autocrats. It will be more difficult to establish quids-pro-quo of security for oil, which could strengthen China’s hand.” Which is something that will only end up benefiting the Chinese.

Help or hindrance?

09/04/2011

While Pope John Paul II and Benedict XVI refuse to discuss the issue of married priests, Christoph Cardinal Schönborn, begs to differ. Having this debte can only help the Church.

To be continued

06/04/2011

The euro crisis rumbles on. The Portugese government collapsed recently after the parliament refused to take European Union supported austerity measures. This itself is a sign of how little trust even EU member states put in the how the European Central Bank’s ability to manage the crisis and find a solution. It is also a sign of the lack of legitimacy the EU has in a crisis where authority needs to be asserted. It is also a sign of the unwillingness of many in Europe and the Western world generally to see a drop in living standards even though it is beyond the control of even the most powerful government’s in the world.

Now Portugal is going to have to take a bailout and following the past trends of the Greek and Irish bond yields, the rate of interest they pay on the money they borrow, will soar. The irony is however that these yields soar after they take the bailout money. It was reported that Portugal’s “budget deficit stood at the equivalent of 8.6pc of its gross domestic product (GDP) for 2010, missing the government’s 7.3pc target by more than a percentage point”. The Protugese government openly criticised the ECB with Lisbon blaming “the size of the deficit on a change in the calculation methods at Eurostat, the European statistical agency, which meant the figure had to reflect nationalised bank losses and the state of public transport companies. Politicians have complained the alterations were ‘like changing the score after the match is over'”.

Meanwhile in Ireland, it was reported that the government there would be putting in an extra €24 billion of capital to fix its banks bringing to €70 billion that amount that the small nation has, with loans, pumped in to attempt to bring the economy back to life.  Yet it is difficult to see where the country can go from here. It has been reported that Ireland “At more than 800pc of the country’s GDP, the staggering liabilities left for Irish taxpayers to pick up in the wake of an ill-advised decision in October 2008 to backstop all the banks’ debts and deposits proved too large to handle” resulting in the IMF taking over the nation’s finances and national humilation. The report notes how with “€146bn of outstanding liabilities to the central payments system, the Central Bank of Ireland has borrowed 50pc more from the intra-eurosystem than second-placed Portugal”.

Now understandably, questions are being asked of the euro. With the only real options for the members of the common currency either radical integration, which is wholly unpalatable to many member states, or dissolution of the eurozone itself.

Even worse after German Chancellor Dr Angela Merkel lost in regional elections, largely on the basis of nuclear power her “room for manoeuvre – not just on nuclear, but on Europe and just about everything else – has been severely compromised”. It has been argued forcefully that as a result of this she will be reduced to “defending and pursuing the majority German view; on Europe, that means no transfer union, no European bonds and no further expansion of the bailout fund”. He notes that “monetary union is fast approaching the outer limits of the politically possible”.

As has been stated here above he argues that “austerity that the absence of a transfer union imposes on the periphery is also testing democratic acceptability to destruction”, perhaps destruction is too strong a word but serve strain nonetheless. He says that default has been openly discussed in eurozone summits but even “Countries that default, even in a planned and agreed manner, pay for their sins in higher interest rates for years, sometimes decades, to come. And because the European banking system is so heavily intertwined, default by one country will require banking recapitalisations in others”.

The crisis continues.

“No way”?

04/04/2011

With President Obama formally launching his 2012 bid for the White House, GOP stategist Dick Morris has said that he is unable to see how President Obama can get re-elected.

Morris says that “combination of high oil and gasoline prices, rising food costs, higher health insurance premiums and the likelihood of future inflation has jarred consumer confidence” will all contribute to Obama failing to get re-elected. He adds that “Unemployment remained persistently high, economic growth was largely stagnant and partisan bickering resumed. The confidence level on Feb. 11 dropped to 84.5”.

While there is no getting away from the truth of all this it would be a foolish for the GOP to dismiss Obama now. Remeber the Dems dismissed Reagan as a B-list movie actor and look what happened to them. Certainly the economy is crucial to President Obama’s hopes for 2012 but the fact that there are only two GOP candidates who have declared formally means the GOP has a lot to do before Inauguration Day 2013.  In addition they have the Palin problem, who will rally 25% of GOP supporters but have independents running back to the Dems.

Of course all this would change if the GOP party could just chose two sensible candidates like Daniels/Portman, but the likelihood of that happening in this climate is slim.

Another Eastern vacancy

03/04/2011

It was reported on 1 April that  Varkey Cardinal Vithayathil, C.SS.R. died aged 83. Cardinal Vithayathil was major-archbishop of Ernakulam–Angamaly and therefore head of Syro-Malabar Catholic Church which originates in Kerala, India. In the interim Bosco Puthur will serve as the administrator.

Following Eastern practice, Rome has little say in the selection of a new major archbishop. As was witnessed with the election of a new patriarch and then the election and then confirmation of the new major archbishop of the Ukrianian Greek Catholic Church. 

The bishops of the church will meet over the coming weeks for an an electoral synod to elect a new leader.

Yesterday marked the sixth anniversary of the death of John Paul II who is to be controversially beatified on 1 May most likely by Benedict XVI personally.

“‘Trying to fix something that’s not broken”

01/04/2011

At a Catholic school in New Orleans recently a demonstration took place but not like one that would be expected.

Apparently, “more than 500 students, parents and other supporters of the 7th Ward institution’s use of corporal punishment marched this morning on an Archdiocese of New Orleans office to deliver a message to Archbishop Gregory Aymond, who has called on school officials to abandon the 60-year disciplinary practice”. Interestingly Archbishop Aymond is accused of “‘trying to fix something that’s not broken, and he’s going about it in the wrong way,’ Jacob Washington, student body president at St. Augustine, said”. It also shows that many in society, as has been stated here before, see less and less of a distinction and thus more of an “equality” between children and adults. This is partly casued by the worst excesses of the French Revolution which have been glorified unquestioningly in many parts of society. This can only end badly, both for children and society as a whole.

It is fascinting to see the students themselves support the use of corporal punishment in schools. It has, in many parts of the world, been taken too far and used excessively. However, used infrequently, it can be a tool that teaches pupils that bad behaviour has consequences. When so many children are  not brought up properly due to a lack of discipline the society begins to break down. The correct use of discipline and under the right circumstances can lead to this, over time, being corrected. It would then not be unreasonable to assume that this would filter out through society for the betterment of all.

This would mean that people would be much more aware of the fact that actions have consequences which must be faced up to. It should serve as a reminder to us all.