Commentary Magazine


Topic: India

What Israel Really Wants from Ties with China and India

Writing in Foreign Affairs last week, Rory Miller made the classic mistake of using accurate facts to jump to an erroneous conclusion. He gleefully pronounced the failure of Israel’s effort to convert burgeoning economic ties with India and China into diplomatic capital, asserting that while Israel had expected these ties to “help secure greater international support” for its positions, in reality, China and India have both maintained staunchly pro-Palestinian policies. But though Miller is right about the Asian powers’ policies, he’s utterly wrong about the diplomatic gains Israel hoped to reap from these relationships.

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Writing in Foreign Affairs last week, Rory Miller made the classic mistake of using accurate facts to jump to an erroneous conclusion. He gleefully pronounced the failure of Israel’s effort to convert burgeoning economic ties with India and China into diplomatic capital, asserting that while Israel had expected these ties to “help secure greater international support” for its positions, in reality, China and India have both maintained staunchly pro-Palestinian policies. But though Miller is right about the Asian powers’ policies, he’s utterly wrong about the diplomatic gains Israel hoped to reap from these relationships.

For instance, Miller makes much of the fact that China still votes against Israel on every conceivable issue at the UN. But you’d have to be an idiot–which most senior Israeli politicians aren’t–to expect it to do otherwise.

Flipping China into the pro-Israel camp might be possible if and when it democratizes, since it’s one of the few countries where public opinion actually leans pro-Israel. Indeed, as the Australian paper Business Spectator noted this month, China was among the few places worldwide where Israel was actually winning the social media war during the summer’s fighting in Gaza. And it certainly makes sense for Israel to cultivate this public support in preparation for the day when democratization occurs. But right now, China remains a Communist dictatorship that sees America as its chief foreign-policy rival. Thus as long as Washington (thankfully) remains Israel’s main patron at the UN, Beijing will naturally take the anti-Israel side–not because it cares so passionately about the Palestinian cause (which, unlike Miller, I don’t believe it does), but because it cares about the anti-American cause.

India, despite growing ties with Washington, also has a long tradition of anti-Americanism, as well as a large Muslim minority. Thus New Delhi was never a likely candidate for UN support, either.

And in fact, Miller doesn’t cite any Israeli politician who actually espoused such unrealistic expectations. He simply assumes, on the basis of vague bromides like Naftali Bennett’s “diplomacy can follow economy,” that they musthave held such expectations.

But in reality, Israel is seeking a very different foreign-policy benefit from its trade ties with India and China–one it has never spelled out explicitly, for very good reason: What it wants is an economic insurance policy against European countries that it still officially labels as allies.

The EU currently accounts for about one-third of Israel’s exports. This constitutes a dangerous vulnerability, because Europe is the one place worldwide where Israel faces a real danger of economic boycotts and sanctions. Granted, few European leaders actually want this; they consider the economic relationship with Israel mutually beneficial. But European leaders are generally far more pro-Israel than their publics, and since European countries are democracies, public opinion matters.

To date, the public’s anti-Israel sentiment has produced only marginal sanctions, like those on Israeli exports from the West Bank (a minuscule percentage of Israel’s total exports). But Israel can’t rule out the possibility that public pressure will eventually produce more stringent sanctions if Jerusalem continues refusing to capitulate to EU demands on the Palestinian issue that are antithetical to its security. In short, Israel could someday face a devastating choice between its economic needs and its security needs–unless it can diversify its trade enough to be able to weather EU sanctions if and when they occur.

And that’s precisely what Israel seeks from China and India, two countries with a history of not allowing policy disagreements to interfere with business: If it can build up its Asian trade enough to reduce its economic dependence on Europe, it will be better placed to withstand European pressure to adopt policies inimical to its survival.

Whether Israel will succeed in this goal remains to be seen. But if it does, that will be a diplomatic gain of unparalleled importance–even if it never wins Chinese or Indian support in a single UN vote.

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Narendra Modi for President!

Narendra Modi, the new prime minister of India, promised in his campaign to clean up the notoriously slovenly ways of the Indian bureaucracy. According to the Washington Posthe is doing exactly that. As the Post explains:

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Narendra Modi, the new prime minister of India, promised in his campaign to clean up the notoriously slovenly ways of the Indian bureaucracy. According to the Washington Posthe is doing exactly that. As the Post explains:

Babudom [“Babu” is the nickname for a member of the upper echelons of the bureaucracy] is now in peril. Modi signaled as much in the early days of his administration, when he summoned about 70 of the government’s top civil servants, gave them his personal cellphone number and e-mail address, and said it was time for work. A circular appeared the next day with what has been called Modi’s “11 Commandments” — orders to clean work spaces, shorten forms, weed out old files and review goals.

When the Home Ministry (roughly the equivalent of the Department of the Interior) cleaned out 150,000 files, they found some that went back to the British Raj. Then they allegedly compiled a list of bureaucrats known to frequent golf courses and stay at five-star hotels and sent it to the prime minister’s office. It seems to be working. About 200 babus were members of the elite Delhi Golf Club. Many have now resigned from the club and others are teeing off at 5:30 a.m. The prime minister is given to calling ministers on their landlines just to make sure they are in their offices.

Barack Obama is totally uninterested in managing the government he heads. That’s why he only finds out about, say, the mess at the Veterans Administration when he reads about it in the papers. But that’s part of the president’s job whether he likes it or not. And Republican presidential hopefuls for 2016 would be well advised to take a leaf from Modi’s playbook. The federal bureaucracy is nowhere near as corrupt, convoluted, rule-ridden, and slothful as the Indian one, which is the gold standard of bureaucratic inertia and dysfunction. But it is corrupt, convoluted, rule-ridden, and slothful enough. The federal government was last fundamentally reorganized in the late 1940s and early 1950s by the Hoover Commissions. The world has changed profoundly in the last sixty years and the government has not. Promising thoroughgoing government reform and reorganization, while riding herd on the bureaucracy, is a winning issue.

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Celebrating American Governance

It is an odd experience to be abroad on the Fourth of July–especially in a place as remote as Nepal. No fireworks, no barbecues (except at the U.S. embassy, presumably), in fact no notice at all of what is to Americans one of the most important holidays on our calendar. It does, however, offer a good chance for some perspective on America, and in particular on the great mystery of American history: How did thirteen tiny colonies on the eastern seaboard expand in less than two centuries to become the richest and most powerful nation in the world?

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It is an odd experience to be abroad on the Fourth of July–especially in a place as remote as Nepal. No fireworks, no barbecues (except at the U.S. embassy, presumably), in fact no notice at all of what is to Americans one of the most important holidays on our calendar. It does, however, offer a good chance for some perspective on America, and in particular on the great mystery of American history: How did thirteen tiny colonies on the eastern seaboard expand in less than two centuries to become the richest and most powerful nation in the world?

There is, it must be admitted, an element of serendipity involved: the (primarily) British immigrants who created the United States of America had the good fortune to arrive in a land of abundant natural resources and little in the way of organized military opposition from other nation-states. As Indian tribes were defeated, the road to the West was opened and America could stretch from sea to shining sea. 

But geography is not destiny. Russia, after all, experienced a similar expansion, in its case to the Wild Wild East, taking control of Central Asia and Siberia. Today Russia has more land and arguably greater natural resources than the U.S., yet it is a nation in inexorable decline, its anemic economy propped up by oil prices, its population in long-term decline.

What made the difference in America’s case? Quite simply, good government. The relatively minimalist government created by the Founders unleashed the animal energies of newly arrived immigrants and set them free to build a mighty economic behemoth in ways that no central planner could possibly have envisioned much less brought into being. The reason other large countries have not enjoyed similar good fortune comes down to governance.

This was a point that was brought home to me during a week of travel in India prior to my arrival in Nepal. India is blessed with a large land area and a massive population of 1.2 billion. Its people are in no way intrinsically inferior to those of the United States–in fact Indian immigrants are some of the most successful people in America. 

And during a journey from Mumbai to New Delhi, most of it overland, I was constantly impressed by how hard Indians work for meager wages. Whether it was newspaper vendors getting up at the crack of dawn in Mumbai or a friendly taxi driver shuttling me all day in his beaten-up Ambassador sedan, the industriousness and intelligence of Indians was never in dispute. So why is it that India’s GDP per capita is $1,500 and America’s is $53,000?

Indians are free to blame the legacy of British colonial rule, yet the United States too was a progeny of the British Empire. Granted, Americans were able to rebel much earlier but that is in large part because of the American colonists’ greater unity as opposed to the divisions of India when the British arrived. Indeed British imperialists created the very concept of “India” which had never existed before, and left it with many valuable legacies from railroads to a civil service and a functioning democracy. You can still see the British legacy in cities such as Mumbai in crumbling buildings built in the early 20th century.

In any case India has been free of British rule for nearly 67 years—long enough for other once-impoverished nations such as South Korea to catapult into the ranks of the world’s wealthiest democracies. It is no secret why India has lagged behind: It has been the victim of terrible governance. For decades it adhered to fashionable socialist nostrums. More recently a succession of governments has tried to implement free-market reforms, only to be stymied by the inexorable bureaucracy. 

Not long ago, the Hong Kong-based Political and Risk Consultancy came out with a survey of bureaucracies in Asia. India ranked as by far the worst of the bunch. Worse than Vietnam. Worse than China. Worse than Indonesia. To say nothing of the top performers, Singapore and Hong Kong—both, coincidentally, also former British colonies. As the Wall Street Journal noted: “The report, which was based on over 2,000 surveys of employed residents and expatriates across Asia, blamed India’s poor infrastructure, widespread corruption and ‘fickle’ regulations for making business a ‘frustrating and expensive’ affair.”

I got a small taste for myself of what Indians have to endure when I applied for a visa at the Indian consulate in New York. The visa officer promised to have everything ready in four or five business days but those days came and went with no way to find out where matters stood—and my flight time drawing near. Only by talking to someone who knew someone was I able to get the visa in time. This is, I imagine, a universal experience in India where the bureaucracy functions so poorly that many people find themselves resorting to favoritism or corruption to get what they are legally entitled to get.

Goodness knows, American government bureaucracy is far from ideal. I get pretty frustrated when I deal with the Post Office. I can only imagine what people are going through trying to enroll in ObamaCare. But for all of the U.S. government’s myriad faults, it is considerably more responsive and accountable and less corrupt and inefficient than most other governments around the world.

So ultimately the story of America’s success comes down to the very thing we celebrate on July 4 but should more properly celebrate on September 17 (September 17, 1787, was the date the Constitution was signed): the genius of our Founding Fathers. They created a government which has made it possible for the people of the United States to prosper. Other countries around the world are starting to figure out our formula and in some case to better it, but no other nation has been as well ruled for so long. That is why the United States is still perched, however precariously, as the No. 1 power in the world.

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Pakistan’s Anti-Terror Head Fake

You can’t accuse Pakistan’s leaders of not having a sense of humor. It is downright laughable to see the government in Islamabad unveiling a new counter-terrorism strategy, even though, as the Wall Street Journal notes, “There was no indication… that Pakistan would end its sponsorship or tolerance of jihadist groups that are based in Pakistan but focus their attacks on other countries, such as Lashkar-e-Taiba, which was named by the U.S. and India as the perpetrator of the 2008 Mumbai attacks.”

Indeed, Pakistan’s relationship with LeT and its ilk continues to be as close as ever. India has just accused Pakistan of complicity in a cross-border attack in Kashmir that killed five Indian soldiers. In Afghanistan attackers who tried to level the Indian consulate in Jalalabad were undoubtedly linked to Pakistan as well–perhaps to the Haqqani Network, which is one of Islamabad’s most reliable proxies in Afghanistan. The attack failed to achieve its objective but wound up killing nine civilians, mostly children.

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You can’t accuse Pakistan’s leaders of not having a sense of humor. It is downright laughable to see the government in Islamabad unveiling a new counter-terrorism strategy, even though, as the Wall Street Journal notes, “There was no indication… that Pakistan would end its sponsorship or tolerance of jihadist groups that are based in Pakistan but focus their attacks on other countries, such as Lashkar-e-Taiba, which was named by the U.S. and India as the perpetrator of the 2008 Mumbai attacks.”

Indeed, Pakistan’s relationship with LeT and its ilk continues to be as close as ever. India has just accused Pakistan of complicity in a cross-border attack in Kashmir that killed five Indian soldiers. In Afghanistan attackers who tried to level the Indian consulate in Jalalabad were undoubtedly linked to Pakistan as well–perhaps to the Haqqani Network, which is one of Islamabad’s most reliable proxies in Afghanistan. The attack failed to achieve its objective but wound up killing nine civilians, mostly children.

Meanwhile Hafiz Mohammad Saeed, the LeT leader who was the reputed mastermind behind the Mumbai attacks and has a $10 million U.S. bounty on his head, appeared openly in Lahore to lead Eid prayers.

It is not as if the Pakistani security establishment does not know where Saeed is living and working; it simply chooses not to do anything about it. Until the Pakistanis show that they are serious about cracking down on the extremists, any counter-terrorism strategy they announce must be treated as a joke. Except that the joke is on us–the U.S. has provided Pakistan with more than $11 billion in aid since 9/11 and this is what we get in return.

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The Falafel –Tikka Alliance

I have written here before to highlight the work of my colleague Sadanand Dhume, who has also penned this important piece for COMMENTARY a few years back. Dhume’s most recent essay in Tablet, “Coalition of the Nerds” should also be a must-read. Dhume begins:

So, the conspiracy theorists were right: Indians and Israelis really have been plotting world domination. In a 20-day contest in Moscow that ended last week, 42-year-old Chennai native Viswanathan Anand and 43-year-old Israeli Boris Gelfand battled for the 2012 World Chess Championship. Anand, the defending world champion, held off his challenger, but not before being taken to a tie breaker.

Indians and Israelis ought to savor this rare moment of sporting glory. Not to put too fine a point on it, but try to imagine an Indian-Israeli final in any other sport.

Take soccer, the so-called beautiful game. India is ranked a lowly 158th in the world; Israel last qualified for the World Cup in 1970. Or how about the Olympics? In Bejing four years ago, Israel snagged a single bronze … for wind surfing. With one gold (shooting) and a pair of bronzes (wrestling and boxing), India didn’t exactly set the medals table alight either.

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I have written here before to highlight the work of my colleague Sadanand Dhume, who has also penned this important piece for COMMENTARY a few years back. Dhume’s most recent essay in Tablet, “Coalition of the Nerds” should also be a must-read. Dhume begins:

So, the conspiracy theorists were right: Indians and Israelis really have been plotting world domination. In a 20-day contest in Moscow that ended last week, 42-year-old Chennai native Viswanathan Anand and 43-year-old Israeli Boris Gelfand battled for the 2012 World Chess Championship. Anand, the defending world champion, held off his challenger, but not before being taken to a tie breaker.

Indians and Israelis ought to savor this rare moment of sporting glory. Not to put too fine a point on it, but try to imagine an Indian-Israeli final in any other sport.

Take soccer, the so-called beautiful game. India is ranked a lowly 158th in the world; Israel last qualified for the World Cup in 1970. Or how about the Olympics? In Bejing four years ago, Israel snagged a single bronze … for wind surfing. With one gold (shooting) and a pair of bronzes (wrestling and boxing), India didn’t exactly set the medals table alight either.

The whole article is worth reading. Dhume highlights the growing economic ties, as well as the two states’ mutual strategic interests. Both are democracies which battle the scourge of Islamist terrorism, but in which substantial Muslim minorities enjoy greater rights than their co-religionists do in many other countries in which they are the majority.

My own two cents: Colin Rubenstein at the Australia/Israel & Jewish Affairs Council (AIJAC) is right when he argues that for too long, Israeli politicians and diplomats ignored the importance of developing ties with Asia. There was too much hand-wringing in Israel about who let ties with Turkey collapse. Israeli officials’ belief that they might have done something differently was misguided. The simple fact was that Turkey’s Prime Minister Recep Tayyip Erdoğan would stop at nothing to unravel Turkey-Israel ties out of his sheer hatred for the Jewish state. But, rather than grieve at Turkey’s loss, Israel should be celebrating its new partners in Asia, especially those like India with which it shares pluralistic, democratic values.

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Arrest Made in India Attack on Israeli

Indian officials have arrested an Indian journalist freelancing for Iran’s state Islamic Republic News Agency in the assassination attempt on an Israeli diplomat in New Delhi. According to the New York Times report:

The Press Trust of India news agency reported that Mr. [Mohammad] Kazmi, 50, worked for an Iranian news agency in New Delhi. Reuters, citing Mr. Kazmi’s lawyer and family members, said he worked for the Indian state television channel, Doordarshan, and freelanced for Iran’s Islamic Republic News Agency. A police spokesman, Rajan Bhagat, would not comment directly on specific reports but said obliquely that details reported broadly in the Indian press on Wednesday were correct. “This is a very sensitive matter and nothing more can be divulged at this stage,” Officer Bhagat said. Mr. Kazmi has been charged with criminal conspiracy. The Press Trust reported that an investigation showed that Mr. Kazmi had been in touch with a suspect believed to have actually carried out the attack, in which a motorcyclist pulled up in traffic and attached an explosive device to the targeted vehicle. The diplomat’s wife, who was injured along with several others, was apparently en route to the American Embassy School in New Delhi to collect her children.

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Indian officials have arrested an Indian journalist freelancing for Iran’s state Islamic Republic News Agency in the assassination attempt on an Israeli diplomat in New Delhi. According to the New York Times report:

The Press Trust of India news agency reported that Mr. [Mohammad] Kazmi, 50, worked for an Iranian news agency in New Delhi. Reuters, citing Mr. Kazmi’s lawyer and family members, said he worked for the Indian state television channel, Doordarshan, and freelanced for Iran’s Islamic Republic News Agency. A police spokesman, Rajan Bhagat, would not comment directly on specific reports but said obliquely that details reported broadly in the Indian press on Wednesday were correct. “This is a very sensitive matter and nothing more can be divulged at this stage,” Officer Bhagat said. Mr. Kazmi has been charged with criminal conspiracy. The Press Trust reported that an investigation showed that Mr. Kazmi had been in touch with a suspect believed to have actually carried out the attack, in which a motorcyclist pulled up in traffic and attached an explosive device to the targeted vehicle. The diplomat’s wife, who was injured along with several others, was apparently en route to the American Embassy School in New Delhi to collect her children.

The Indians have bent over backward to deny an Iranian link to terrorism. We should not condemn them too hard. After all, their realism is little different from that of the Clinton administration, which sought to bury the linkage between Iran and the Khobar Towers attack back in 1996. In 1997, Clinton went so far as to order a recall to the electronic dissemination of the FBI’s finding and the destruction of any reports which had been printed out. Needless to say, not all were destroyed. Then as now, the truth emerges. It’s time for India to step up and learn the same lesson other democracies—Argentina, Austria, Germany, Great Britain and the United States—have learned. A conciliatory approach toward Iran does not immunize one from Iranian terrorism; it invites it. Furthermore, turning a blind eye toward terrorism conducted against another democracy only erodes sympathy in a country which faces a terrorist threat almost as grave.

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Who is the Biggest Leak in Iran Sanctions?

President Obama, after his ill-conceived outreach to Iran, has yet to learn the lesson each of his predecessors also learned, be they Democrat or Republican: The problem with diplomacy with the Islamic Republic isn’t the American will, but rather the lack of Iranian sincerity.

The Senate, however, has a longer strategic memory and voted 100-0 to impose sanctions and is at least less likely to be taken for fools. These sanctions were successful: The Iranian currency crashed and, in December, a group of 30 parliamentarians in Iran—hardliners all—asked for a closed session to have a serious discussion about the real impact of sanctions. Likewise, the head of the Islamic Revolutionary Guard Corps’ economic wing acknowledged that sanctions have had bite. Bluster remains strong from among Iranian hardliners that sanctions have had no effect, but it is clear they doth protest too much.

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President Obama, after his ill-conceived outreach to Iran, has yet to learn the lesson each of his predecessors also learned, be they Democrat or Republican: The problem with diplomacy with the Islamic Republic isn’t the American will, but rather the lack of Iranian sincerity.

The Senate, however, has a longer strategic memory and voted 100-0 to impose sanctions and is at least less likely to be taken for fools. These sanctions were successful: The Iranian currency crashed and, in December, a group of 30 parliamentarians in Iran—hardliners all—asked for a closed session to have a serious discussion about the real impact of sanctions. Likewise, the head of the Islamic Revolutionary Guard Corps’ economic wing acknowledged that sanctions have had bite. Bluster remains strong from among Iranian hardliners that sanctions have had no effect, but it is clear they doth protest too much.

Still, holes remain in sanctions. The biggest two, of course, are Russia and China. The Kremlin believes it has a win-win strategy. On one hand, it can sell Iran billions of dollars in nuclear supplies and weapons systems. On the other hand, if there is a strike that spikes oil production, Putin can laugh himself and his faltering economy to the bank. Unless the White House signals that the entirety of the U.S.-Russian relationship—including many things Russia desires from the United States—depends on Russian flexibility on the Iran issue, Russia is unlikely to budge. After all, as Russian TV recently let slip, Iran’s Supreme Leader is perhaps the Soviet educational system’s greatest alum.

China, of course, cares about its energy security. The Obama administration’s strategy to leverage Saudi influence and force China to choose between Iran and Saudi oil has yet to succeed. Alas, until the Obama administration convinces China the status quo is not an option and failure to reverse Iran’s nuclear trajectory will lead to war and a disruption in China’s energy supply, Beijing is unlikely to budge.

The biggest disappointments, however, have been India and Turkey. India is simply predatory, and Indian bureaucrats do not understand or care that they have a real opportunity to build a meaningful alliance with the United States that will serve them well against both the immediate Pakistani threat and the longer term Chinese threat. Delhi continues to show the world it’s not ready for prime time, as it sacrifices long term interests for a mediocre short-term gain.

That Obama continues to turn a blind eye to Turkey’s double-dealing is diplomatic and strategic malpractice. According to the Turkish press, Turkish banks—with the tacit support of Obama’s personal friend Recep Tayyip Erdogan—have been providing their Iranian counterparts and Iranian businesses with an outlet to avoid sanctions. When Iran develops its nuclear warhead and throws the region into chaos, Turkey will be able to at least claim some credit for Iran’s success. Obama and Secretary of State Clinton like to refer to Turkey as a model; alas, it once again proves itself not an ally, only a model for deceit.

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Israeli Official: “We Have Every Intention of Defending Ourselves”

Following this morning’s attempted terror attacks against Israeli personnel in Georgia and India, Israeli officials said they would respond, though declined to specify further.

“I don’t think that it would be true to say that we are going to sit back and twiddle our thumbs,” Paul Hirschson, deputy spokesman for Israel’s Foreign Ministry, told reporters and others on a late-morning conference call organized by The Israel Project. Hirschson said, as Prime Minister Benjamin Netanyahu and Foreign Minister Avigdor Lieberman have already indicated, “we have every intention of defending ourselves”–the primary obligation, he said, of any sovereign state under attack.

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Following this morning’s attempted terror attacks against Israeli personnel in Georgia and India, Israeli officials said they would respond, though declined to specify further.

“I don’t think that it would be true to say that we are going to sit back and twiddle our thumbs,” Paul Hirschson, deputy spokesman for Israel’s Foreign Ministry, told reporters and others on a late-morning conference call organized by The Israel Project. Hirschson said, as Prime Minister Benjamin Netanyahu and Foreign Minister Avigdor Lieberman have already indicated, “we have every intention of defending ourselves”–the primary obligation, he said, of any sovereign state under attack.

Earlier, Netanyahu pointed the finger at Iran and its terror proxies, though Iran denies any involvement:

Prime Minister Benjamin Netanyahu accused Iran and Hezbollah of being behind Monday’s double terror attack on the Israeli embassies in India and Georgia.

Earlier, an explosion hit an Israeli diplomatic car near the embassy in New Delhi, injuring the wife of a diplomat stationed with the Defense Ministry’s mission in India. In Georgia, an explosive device was found in a Tbilisi embassy employee’s car and was neutralized safely.bi

The coordinated attack is believed to be linked to the fourth anniversary marking the assassination of Hezbollah arch-terrorist Imad Mugniyah.

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Oh, Man, Not Another Sputnik Moment …

I keep a list of historical analogies — derived from years of grading papers — that tell me that the individual using them is (to be polite) more interested in rhetorical impact than historical accuracy. Before last night, the list began with “we need a Marshall Plan for X,” where X usually equals Africa or the Middle East, and ended with “the United States is a young country.” Both are fallacies: the Marshall Plan was a pump-priming program, not an effort to rebuild the infrastructure and remake the culture of half a continent; and while European settlement of North America is fairly recent, the U.S.’s political institutions have a longer continuous existence than those of any other country except, arguably, the United Kingdom.

Now, thanks to President Obama, I’ve got a third analogy to add to the list: “Sputnik moment.” To be fair, I should have added it years ago. The phrase, according to Google, has popped in and out of the news regularly over the past decade, with the president himself beginning to use it last June, in a speech in North Carolina. The analogy has the advantage of being an example of government spending — we now call it “investment,” I am told — that has not been utterly discredited by succeeding events. But that doesn’t make it correct.

First, as my colleague Jim Carafano pointed out back in September, Ike’s response to Sputnik’s launch wasn’t to pull out the checkbook. That was what the Gaither Report called for, but Eisenhower balked: as I noted recently, Ike was no softie on Communism, but he was also concerned by the threat to American liberties “posed not so much by big government as such, but by top-down direction of all kinds. Much of this originated in the federal government, but not at all it: there was also a risk of becoming ‘the captive of a scientific-technological elite.’ ” A striking phrase, especially in light of President Obama’s desire to expand government for the benefit of that elite.

Second, the launch of Sputnik marked a significant new national-security threat posed by a state with a hostile ideology, which we were already confronting around the world. If the USSR could orbit a satellite, it could launch a nuclear missile and vaporize an American city. If Sputnik had been orbited by, say, Britain, it would not have occasioned nearly as much angst. In other words, you can’t have a Sputnik moment absent a hostile superpower to provide the impetus for concern. I would not categorize the U.S.’s relationship with China or, certainly, India, as particularly similar to the one we had with the USSR — and the president went out of his way last night not to criticize foreign regimes (even ones like Iran, which are hostile and have, in fact, orbited a satellite). So where is the drive that will be necessary to sustain this “moment” going to come from? Certainly not from the White House. Read More

I keep a list of historical analogies — derived from years of grading papers — that tell me that the individual using them is (to be polite) more interested in rhetorical impact than historical accuracy. Before last night, the list began with “we need a Marshall Plan for X,” where X usually equals Africa or the Middle East, and ended with “the United States is a young country.” Both are fallacies: the Marshall Plan was a pump-priming program, not an effort to rebuild the infrastructure and remake the culture of half a continent; and while European settlement of North America is fairly recent, the U.S.’s political institutions have a longer continuous existence than those of any other country except, arguably, the United Kingdom.

Now, thanks to President Obama, I’ve got a third analogy to add to the list: “Sputnik moment.” To be fair, I should have added it years ago. The phrase, according to Google, has popped in and out of the news regularly over the past decade, with the president himself beginning to use it last June, in a speech in North Carolina. The analogy has the advantage of being an example of government spending — we now call it “investment,” I am told — that has not been utterly discredited by succeeding events. But that doesn’t make it correct.

First, as my colleague Jim Carafano pointed out back in September, Ike’s response to Sputnik’s launch wasn’t to pull out the checkbook. That was what the Gaither Report called for, but Eisenhower balked: as I noted recently, Ike was no softie on Communism, but he was also concerned by the threat to American liberties “posed not so much by big government as such, but by top-down direction of all kinds. Much of this originated in the federal government, but not at all it: there was also a risk of becoming ‘the captive of a scientific-technological elite.’ ” A striking phrase, especially in light of President Obama’s desire to expand government for the benefit of that elite.

Second, the launch of Sputnik marked a significant new national-security threat posed by a state with a hostile ideology, which we were already confronting around the world. If the USSR could orbit a satellite, it could launch a nuclear missile and vaporize an American city. If Sputnik had been orbited by, say, Britain, it would not have occasioned nearly as much angst. In other words, you can’t have a Sputnik moment absent a hostile superpower to provide the impetus for concern. I would not categorize the U.S.’s relationship with China or, certainly, India, as particularly similar to the one we had with the USSR — and the president went out of his way last night not to criticize foreign regimes (even ones like Iran, which are hostile and have, in fact, orbited a satellite). So where is the drive that will be necessary to sustain this “moment” going to come from? Certainly not from the White House.

Third, and most basically, I sometimes get the sense that the left doesn’t realize that 1890-2010 has already happened. A rule of life is that you can only do things for the first time once. We’ve tried the Progressive, administrative state, and have been trying it for years: its deficiencies are not going to be fixed by pretending in an “Ah ha!” moment that what we need is more administration. We’ve been trying Keynesianism almost continuously since the 1940s and even before the recession were at levels of government spending that Keynes experienced only during World War II: the idea that Keynes offers some sort of untried miracle cure is, to be nice about it, a fantasy. Since 1970, as Andrew Coulson points out, federal spending adjusted for inflation has increased by 190 percent, with no gains in reading, math, or science scores to show for it. None of these ideas are new. On the contrary: they are very, very old.

Leaving all this aside, I have to ask — does the proclamation of a new “Sputnik moment” work even as rhetoric? It certainly leaves me cold. The reason for that is, partly, because it’s not great history. But, more fundamentally, it’s because it’s so obviously instrumental. The president wants to look like he’s cutting the budget but also wants to spend more money. So he grabs at the NASA argument, the Sputnik analogy, the Internet analogy, and anything else that comes to hand. Rhetoric that’s shaped by this kind of desperation comes across as insincere. It might be more effective for the president to simply state his belief that we need to spend more money on education. He’d be wrong on the merits, but at least he wouldn’t be compounding the error with dubious grab-bag analogies.

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Chipping Away at Global Security

Abe Greenwald unerringly fingers the new U.S.-Chinese nuclear-security center, announced by President Obama today, as a problematic idea. The proposed “Center of Excellence” (a 1990s-speak expression from the “reinventing government” era) will reportedly be opened to other countries in Asia, in the hope that “China can use its influence to improve nuclear security in the region.” A review of the other countries in the region suggests that this is, frankly, just silly. Russia, India, Pakistan, Japan, South Korea: these countries, whether nuclear armed or merely users of nuclear power, are hardly candidates for having their practices squared away by a “center of excellence” in China.

On the other hand, a nuclear-security center in China could well be opened to North Korea, Iran, Burma, or a host of Arab, Latin American, or sub-Saharan African nations, all in the name of engagement and responsibility. Besides giving China greater access to U.S. information, the joint venture will make China the potential middleman for technology transfers superior to those Russia can offer.

The idea for the center was reportedly suggested by Hu Jintao at Obama’s nuclear-security summit in April. The center of excellence is perfectly emblematic of the bureaucratic-engagement style of security policy that Team Obama likes to call “smart power.” The nuclear accord with China is supposed to mirror the one we have had with Russia for some years — but its superficial similarities on paper are overwhelmed by the profound differences in circumstances. Proliferation, not a superpower standoff, is the main security problem today. The past 40 years should have taught us that there is no nation — none — whose motivation to prevent dangerous nuclear proliferation is of the same order as ours. If there is any such nation, it certainly isn’t China.

But the Obama administration has a big appetite for paper activism in foreign policy, regardless of the consequences. The Center of Excellence in China has been announced on the heels of last week’s vote in the Russian Duma to advance the New START treaty to its third and final reading, which should assure ratification. The problem with this good-news story is that the Duma, like the U.S. Senate, has attached its own understandings to the instrument of ratification — and the Russians’ understandings directly contradict those of the U.S. Senate. The Senate specifies that New START does not constrain any U.S. missile-defense plans or any U.S. use of strategic delivery platforms for non-nuclear warheads. The Duma understands the opposite, characterizing its legislative understandings as a restoration of the treaty’s original, intended meaning.

On such shoals, “agreements” founder. New START represents no benefit to national security if neither side interprets the treaty to mean the same thing. (At NRO today, Keith B. Payne has another reason why it’s not a boon to U.S. security.) But, like the nuclear-security center in China, New START will have consequences. Treaties and nuclear-security centers shouldn’t be agreed to as if they are items on a peppy “good ideas” checklist. Team Obama too often comes off like a student seminar putting on a mock inter-agency working group. In the real world, poorly conceived joint ventures turn into throbbing security toothaches with alarming frequency.

Abe Greenwald unerringly fingers the new U.S.-Chinese nuclear-security center, announced by President Obama today, as a problematic idea. The proposed “Center of Excellence” (a 1990s-speak expression from the “reinventing government” era) will reportedly be opened to other countries in Asia, in the hope that “China can use its influence to improve nuclear security in the region.” A review of the other countries in the region suggests that this is, frankly, just silly. Russia, India, Pakistan, Japan, South Korea: these countries, whether nuclear armed or merely users of nuclear power, are hardly candidates for having their practices squared away by a “center of excellence” in China.

On the other hand, a nuclear-security center in China could well be opened to North Korea, Iran, Burma, or a host of Arab, Latin American, or sub-Saharan African nations, all in the name of engagement and responsibility. Besides giving China greater access to U.S. information, the joint venture will make China the potential middleman for technology transfers superior to those Russia can offer.

The idea for the center was reportedly suggested by Hu Jintao at Obama’s nuclear-security summit in April. The center of excellence is perfectly emblematic of the bureaucratic-engagement style of security policy that Team Obama likes to call “smart power.” The nuclear accord with China is supposed to mirror the one we have had with Russia for some years — but its superficial similarities on paper are overwhelmed by the profound differences in circumstances. Proliferation, not a superpower standoff, is the main security problem today. The past 40 years should have taught us that there is no nation — none — whose motivation to prevent dangerous nuclear proliferation is of the same order as ours. If there is any such nation, it certainly isn’t China.

But the Obama administration has a big appetite for paper activism in foreign policy, regardless of the consequences. The Center of Excellence in China has been announced on the heels of last week’s vote in the Russian Duma to advance the New START treaty to its third and final reading, which should assure ratification. The problem with this good-news story is that the Duma, like the U.S. Senate, has attached its own understandings to the instrument of ratification — and the Russians’ understandings directly contradict those of the U.S. Senate. The Senate specifies that New START does not constrain any U.S. missile-defense plans or any U.S. use of strategic delivery platforms for non-nuclear warheads. The Duma understands the opposite, characterizing its legislative understandings as a restoration of the treaty’s original, intended meaning.

On such shoals, “agreements” founder. New START represents no benefit to national security if neither side interprets the treaty to mean the same thing. (At NRO today, Keith B. Payne has another reason why it’s not a boon to U.S. security.) But, like the nuclear-security center in China, New START will have consequences. Treaties and nuclear-security centers shouldn’t be agreed to as if they are items on a peppy “good ideas” checklist. Team Obama too often comes off like a student seminar putting on a mock inter-agency working group. In the real world, poorly conceived joint ventures turn into throbbing security toothaches with alarming frequency.

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Saber-Rattling: The New Normal

Americans will have to get used to something in the coming years: we are not necessarily the main audience for foreign saber-rattling. When China unveiled its new “stealth” fighter last week, American defense experts were quick to point out that because its design is clunky and primitive, the U.S. need not be overly concerned about this minor triumph. But we would be wrong to imagine the Chinese don’t know that. From their perspective, demonstrating that they have already built a stealth aircraft is more important than impressing American analysts with its characteristics.

The reason for that is simple: an arms-and-power race has been emerging in the Eastern hemisphere — and it’s centered on Asia. The U.S. has had stealth aircraft for years. But Russia announced the prototype test of its first stealth fighter in January 2010, and Japan is pursuing an indigenously designed stealth fighter as well. The Japanese effort has accelerated with the U.S. rejection of Tokyo’s offer to buy the F-22 Raptor. (Secretary Gates reiterated his stance on that in Japan on Wednesday.) India, meanwhile, took delivery this week of its first homegrown fighter jet, billed as the world’s lightest supersonic jet.

There are too many such developments to mention in a brief post for general readers; the fielding of new fighter jets is merely one category. Beyond arms buildups, another category is defense agreements with political, balance-of-power implications, such as the pact now in prospect between South Korea and Japan, or Russia’s cooperation agreements with Vietnam. In a separate category are the territorial disputes heating up between Russia, China, and Japan. Additional factors include the predatory competition between Russia and China for fossil-fuel resources, as well as their competition for clients in the Middle East, Africa, and Latin America.

The timing of the Chinese fighter’s first test flight, which coincided with Bob Gates’s visit, was obviously intentional. China wants to reach a U.S. audience with these signals — but not solely a U.S. audience. The theme that Chinese negotiation is backed by thoroughly modern force is intended as much for Asian consumption as for American. And regardless of the intended audience, there is no better “straight man” for that theme than the U.S. secretary of defense.

Falling behind the neighbors has historically had dreadful consequences for Asian nations; since 1945, even our enemies in the region have relied on America’s power and network of alliances to preserve stability. But the principles we have traditionally acted on in defense of that stability are increasingly in question. The Asian nations are already shifting from a posture of maneuvering around the U.S. to one of maneuvering around each other. Not everything is “about” us; American thinking needs to adjust to that emerging reality. But everything will affect us. If we are unwilling to maintain the order we have built over the past 70-odd years, we will have to learn again the ways of a world that operates without effective American leadership.

Americans will have to get used to something in the coming years: we are not necessarily the main audience for foreign saber-rattling. When China unveiled its new “stealth” fighter last week, American defense experts were quick to point out that because its design is clunky and primitive, the U.S. need not be overly concerned about this minor triumph. But we would be wrong to imagine the Chinese don’t know that. From their perspective, demonstrating that they have already built a stealth aircraft is more important than impressing American analysts with its characteristics.

The reason for that is simple: an arms-and-power race has been emerging in the Eastern hemisphere — and it’s centered on Asia. The U.S. has had stealth aircraft for years. But Russia announced the prototype test of its first stealth fighter in January 2010, and Japan is pursuing an indigenously designed stealth fighter as well. The Japanese effort has accelerated with the U.S. rejection of Tokyo’s offer to buy the F-22 Raptor. (Secretary Gates reiterated his stance on that in Japan on Wednesday.) India, meanwhile, took delivery this week of its first homegrown fighter jet, billed as the world’s lightest supersonic jet.

There are too many such developments to mention in a brief post for general readers; the fielding of new fighter jets is merely one category. Beyond arms buildups, another category is defense agreements with political, balance-of-power implications, such as the pact now in prospect between South Korea and Japan, or Russia’s cooperation agreements with Vietnam. In a separate category are the territorial disputes heating up between Russia, China, and Japan. Additional factors include the predatory competition between Russia and China for fossil-fuel resources, as well as their competition for clients in the Middle East, Africa, and Latin America.

The timing of the Chinese fighter’s first test flight, which coincided with Bob Gates’s visit, was obviously intentional. China wants to reach a U.S. audience with these signals — but not solely a U.S. audience. The theme that Chinese negotiation is backed by thoroughly modern force is intended as much for Asian consumption as for American. And regardless of the intended audience, there is no better “straight man” for that theme than the U.S. secretary of defense.

Falling behind the neighbors has historically had dreadful consequences for Asian nations; since 1945, even our enemies in the region have relied on America’s power and network of alliances to preserve stability. But the principles we have traditionally acted on in defense of that stability are increasingly in question. The Asian nations are already shifting from a posture of maneuvering around the U.S. to one of maneuvering around each other. Not everything is “about” us; American thinking needs to adjust to that emerging reality. But everything will affect us. If we are unwilling to maintain the order we have built over the past 70-odd years, we will have to learn again the ways of a world that operates without effective American leadership.

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India’s New Position on UNSC Seen as Test for Permanent Membership

Of the five new countries just joining the UN Security Council as non-permanent members, India will definitely be the one to keep an eye on for the next two years:

After a gap of 19 years, India today formally took its place in the UN Security Council as a new non-permanent member for a two-year term, a position from which it is expected to push its agenda for UN reform.

Along with India, Germany, South Africa, Columbia and Portugal too took their places at the powerful 15-member body of the United Nations.

President Obama recently came out in support of India’s bid for permanent membership on the council, and U.S. officials are sure to be watching closely to see how the country handles itself during the next two years.

“It has new meaning now that President Obama has signaled his support for India’s candidacy as a permanent member of the council,” Lisa Curtis, a senior research fellow at the Heritage Foundation, told me. “It’s kind of a test case. A lot of U.S. officials will be watching closely. That makes it a bit more notable than it was in the past.”

One of the tests will be how closely India’s votes hew to U.S. security interests. “Traditionally, India has not voted with the U.S. on the UN,” said Curtis. “The next two years will be significant in indicating how India will likely act as a permanent member of the UN.”

India has taken some hawkish stances recently, tightening its economic sanctions on Iran and indicating that it will focus on terrorism issues during its two-year stint on the UNSC. The country is also in the running to head up one of the two terrorism committees. With this new influence, Curtis said that India is expected to lobby for restrictions on Pakistani terror groups and work to continue sanctions against al-Qaeda and the Taliban in Afghanistan.

But even with Obama’s support, India’s bid for permanent membership still looks like a long shot. There are obviously risks to increasing the number of permanent members on the council, said Curtis, and new additions could dilute the U.S.’s agenda and vote against our initiatives.

India will certainly have to prove itself before there is any serious discussion about giving it a permanent position, but there’s no doubt that it would be an enormous benefit to have a reliable ally in the region on the council.

Of the five new countries just joining the UN Security Council as non-permanent members, India will definitely be the one to keep an eye on for the next two years:

After a gap of 19 years, India today formally took its place in the UN Security Council as a new non-permanent member for a two-year term, a position from which it is expected to push its agenda for UN reform.

Along with India, Germany, South Africa, Columbia and Portugal too took their places at the powerful 15-member body of the United Nations.

President Obama recently came out in support of India’s bid for permanent membership on the council, and U.S. officials are sure to be watching closely to see how the country handles itself during the next two years.

“It has new meaning now that President Obama has signaled his support for India’s candidacy as a permanent member of the council,” Lisa Curtis, a senior research fellow at the Heritage Foundation, told me. “It’s kind of a test case. A lot of U.S. officials will be watching closely. That makes it a bit more notable than it was in the past.”

One of the tests will be how closely India’s votes hew to U.S. security interests. “Traditionally, India has not voted with the U.S. on the UN,” said Curtis. “The next two years will be significant in indicating how India will likely act as a permanent member of the UN.”

India has taken some hawkish stances recently, tightening its economic sanctions on Iran and indicating that it will focus on terrorism issues during its two-year stint on the UNSC. The country is also in the running to head up one of the two terrorism committees. With this new influence, Curtis said that India is expected to lobby for restrictions on Pakistani terror groups and work to continue sanctions against al-Qaeda and the Taliban in Afghanistan.

But even with Obama’s support, India’s bid for permanent membership still looks like a long shot. There are obviously risks to increasing the number of permanent members on the council, said Curtis, and new additions could dilute the U.S.’s agenda and vote against our initiatives.

India will certainly have to prove itself before there is any serious discussion about giving it a permanent position, but there’s no doubt that it would be an enormous benefit to have a reliable ally in the region on the council.

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Obama Rebounds in December After Devastating November

President Obama has had a heckuva December, especially considering how dismal his November was. Just a month after suffering a midterm-election drubbing, he has bounced back with a renewal of the Bush tax cuts, repeal of Don’t Ask, Don’t Tell, and now ratification of New START. Oh, and he also issued his AfPak review, which endorsed the counterinsurgency plan being implemented by General Petraeus.

It is hard to imagine a more skillful triangulation, offering something to both the right (tax cuts, toughness on the war effort) and the left (letting gays serve openly, passing an arms-control treaty). Actually, I’m not sure how left-wing even his liberal achievements are, since a number of conservatives (myself included) endorsed DADT repeal and New START passage. Considering that he is probably the most liberal occupant of the Oval Office, he has done a surprisingly good job of moving to the center, as witnessed by the Republican votes he has managed to garner on DADT and New START — votes that were notably absent when he rammed his health-care bill through Congress.

The biggest challenge for the president in the 684 days remaining until the 2012 election is to address the two biggest threats to our long-term well-being: the ballooning national debt and the anemic pace of economic growth. He needs to work with the GOP Congress to cut spending, which will alienate his Democratic base; the economy will, I assume, rebound more or less on its own barring any more onerous regulatory or tax bills from Washington.

As for foreign policy, his biggest challenges are to make sure that the military campaign in Afghanistan progresses and that Iraq does not regress. He has caught an extraordinarily lucky break thanks to the Stuxnet virus, probably engineered by the Israelis, which seems to have set the Iranian program back another year or two. That means it’s very unlikely that Iran will go nuclear before the 2012 election — a calamity for which Obama would shoulder the blame. The biggest threat he faces is an unexpected crisis: e.g., war on the Korean peninsula or between India and Pakistan or a devastating terrorist strike on the American homeland as a result of a security breakdown. Barring such a calamity, and notwithstanding his weak poll numbers, I’d say he is looking like a prohibitively strong candidate for re-election — especially because there is not an obvious candidate of stature in the Republican ranks.

But of course, it’s still early. It is salutary to recall that in December 1990, George H.W. Bush had considerably higher poll numbers than Obama has today — 61 percent for Bush vs. 46 percent for Obama.

President Obama has had a heckuva December, especially considering how dismal his November was. Just a month after suffering a midterm-election drubbing, he has bounced back with a renewal of the Bush tax cuts, repeal of Don’t Ask, Don’t Tell, and now ratification of New START. Oh, and he also issued his AfPak review, which endorsed the counterinsurgency plan being implemented by General Petraeus.

It is hard to imagine a more skillful triangulation, offering something to both the right (tax cuts, toughness on the war effort) and the left (letting gays serve openly, passing an arms-control treaty). Actually, I’m not sure how left-wing even his liberal achievements are, since a number of conservatives (myself included) endorsed DADT repeal and New START passage. Considering that he is probably the most liberal occupant of the Oval Office, he has done a surprisingly good job of moving to the center, as witnessed by the Republican votes he has managed to garner on DADT and New START — votes that were notably absent when he rammed his health-care bill through Congress.

The biggest challenge for the president in the 684 days remaining until the 2012 election is to address the two biggest threats to our long-term well-being: the ballooning national debt and the anemic pace of economic growth. He needs to work with the GOP Congress to cut spending, which will alienate his Democratic base; the economy will, I assume, rebound more or less on its own barring any more onerous regulatory or tax bills from Washington.

As for foreign policy, his biggest challenges are to make sure that the military campaign in Afghanistan progresses and that Iraq does not regress. He has caught an extraordinarily lucky break thanks to the Stuxnet virus, probably engineered by the Israelis, which seems to have set the Iranian program back another year or two. That means it’s very unlikely that Iran will go nuclear before the 2012 election — a calamity for which Obama would shoulder the blame. The biggest threat he faces is an unexpected crisis: e.g., war on the Korean peninsula or between India and Pakistan or a devastating terrorist strike on the American homeland as a result of a security breakdown. Barring such a calamity, and notwithstanding his weak poll numbers, I’d say he is looking like a prohibitively strong candidate for re-election — especially because there is not an obvious candidate of stature in the Republican ranks.

But of course, it’s still early. It is salutary to recall that in December 1990, George H.W. Bush had considerably higher poll numbers than Obama has today — 61 percent for Bush vs. 46 percent for Obama.

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RE: A Bad Deal All Around

Jennifer and Evelyn, between them, have covered pretty comprehensively the problems with latest settlement-freeze deal. I note, however, that the generally left-leaning Economist picked up on the aspect of the deal that concerns me the most and isn’t getting a lot of attention. Jennifer alludes to it with this passage:

And as for the promise to veto UN resolutions attacking Israel or declaring a Palestinian state, why should Israel have to give anything to Obama for simply adhering to past U.S. policy? My Israel guru remarks, “This shows the Obama mentality that we veto as a difficult favor for Israel, rather than out of principle.”

The Economist is blunter: “Is America bribing Bibi or blackmailing him?” One problem with the Obama administration’s action is that it can so easily be read as blackmail. It’s basic diplomatic competence to avoid creating such implications if they are unintended.

Independent of nations or circumstances, the U.S. posture should, on principle, oppose the peremptory creation of new nations against the will of UN member states. Making this principle conditional, for transient bargaining purposes, is a grave strategic error. A number of our own allies have ethnic-nationalist insurgencies, border disputes, or both – nations like Spain, Greece, Turkey, and Japan. Russia, China, and India have them as well. They are able to deal with their problems as ongoing but relatively minor nuisances largely because the momentum of global expectations is with the principles of national sovereignty and order.

The Obama deal offered to Israel contains too broad a hint that America’s commitment to those principles might be conditional. Perhaps Team Obama sees Israel as a case so special that nothing done in relation to it has meaning for the principles of international relations. But the rest of the world’s nations don’t share that view – nor do their insurgencies or their respective border antagonists. What they see is the trend of actions by the United States. This is a destabilizing move and a very ill-advised one.

Jennifer and Evelyn, between them, have covered pretty comprehensively the problems with latest settlement-freeze deal. I note, however, that the generally left-leaning Economist picked up on the aspect of the deal that concerns me the most and isn’t getting a lot of attention. Jennifer alludes to it with this passage:

And as for the promise to veto UN resolutions attacking Israel or declaring a Palestinian state, why should Israel have to give anything to Obama for simply adhering to past U.S. policy? My Israel guru remarks, “This shows the Obama mentality that we veto as a difficult favor for Israel, rather than out of principle.”

The Economist is blunter: “Is America bribing Bibi or blackmailing him?” One problem with the Obama administration’s action is that it can so easily be read as blackmail. It’s basic diplomatic competence to avoid creating such implications if they are unintended.

Independent of nations or circumstances, the U.S. posture should, on principle, oppose the peremptory creation of new nations against the will of UN member states. Making this principle conditional, for transient bargaining purposes, is a grave strategic error. A number of our own allies have ethnic-nationalist insurgencies, border disputes, or both – nations like Spain, Greece, Turkey, and Japan. Russia, China, and India have them as well. They are able to deal with their problems as ongoing but relatively minor nuisances largely because the momentum of global expectations is with the principles of national sovereignty and order.

The Obama deal offered to Israel contains too broad a hint that America’s commitment to those principles might be conditional. Perhaps Team Obama sees Israel as a case so special that nothing done in relation to it has meaning for the principles of international relations. But the rest of the world’s nations don’t share that view – nor do their insurgencies or their respective border antagonists. What they see is the trend of actions by the United States. This is a destabilizing move and a very ill-advised one.

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RE: Fed’s Plan to Rev Up Printing Press Gets Thumbs Down

The overwhelmingly negative response to the Fed decision to print up $600B to buy bonds is intensifying as Russia and China joined European nations in slamming the move. This report explains:

Mr. Obama returned fire in the growing confrontation over trade and currencies Monday in a joint news conference with Indian Prime Minister Manmohan Singh, taking the unusual step of publicly backing the Fed’s decision to buy $600 billion in U.S. Treasury bonds—a move that has come under withering international criticism for weakening the U.S. dollar.

Gold topped $1,400 an ounce on fears of inflation as investors voted thumbs down on Ben Bernanke’s plan. And the number of critics is growing, leaving the U.S. isolated:

Germany’s criticism echoes that from other countries, including Brazil and Japan, which have complained about potential spillover from the Fed’s action. Printing more dollars, or cutting U.S. interest rates, tends to weaken the dollar and makes U.S. exports more attractive. The accompanying rise in the value of other countries’ currencies tends to damp their exports and can fuel inflation or asset bubbles, as emerging-market officials note. U.S. officials maintain the Fed’s action is about stimulating domestic demand, and that a weaker dollar is a consequence, not an objective.

On Monday, China’s Vice Finance Minister Zhu Guangyao said the U.S. isn’t living up to its responsibility as an issuer of a global reserve currency. …

The top economic aide to Russian President Dmitry Medvedev said Russia will insist at the G-20 summit that the Fed consult with other countries ahead of major policy decisions.

Luxembourg Prime Minister Jean-Claude Juncker, who is chairman of the euro-zone finance ministers, also weighed in on the Fed move, saying: “I don’t think it’s a good decision. You’re fighting debt with more debt.”

These concerns are entirely justified. Moreover, one can’t help but appreciate the irony: the “cowboy” George W. Bush was lambasted for “going it alone” and making the U.S. a pariah in the world. But worldwide resentment over the U.S. is surging as Obama is forced to lamely defend his moves as “pro-growth” (which speaks volumes about the administration’s economic illiteracy, for not even his defenders would claim that currency devaluation=growth). We hear that the “blunt criticism of U.S. policy is in large part payback for a longstanding stance by Washington policy makers that the American economy should serve as a model for others. The heated rhetoric also stems from fears that the U.S. may be looking for a back-door way to set exchange-rate policy in a way that favors the U.S.”

Combined with the incessant shin-kicking of our allies (e.g., Eastern Europe, Israel, Honduras, Britain), this latest move certainly strengthens Obama’s critics here and abroad. They contend that through a combination of ill-conceived policies and rank incompetence, Obama is rendering the U.S. less influential and less respected, which is increasing instability in the world. All and all, it is a textbook example of the perils of deploying liberal statism at home and shrinking America’s stature overseas. Unfortunately, this is not a graduate course at Harvard or a symposium at the New America Foundation. It is all too real, and unless we arrest the panoply of bad policies, America and its allies will be poorer and less safe. We already are.

The overwhelmingly negative response to the Fed decision to print up $600B to buy bonds is intensifying as Russia and China joined European nations in slamming the move. This report explains:

Mr. Obama returned fire in the growing confrontation over trade and currencies Monday in a joint news conference with Indian Prime Minister Manmohan Singh, taking the unusual step of publicly backing the Fed’s decision to buy $600 billion in U.S. Treasury bonds—a move that has come under withering international criticism for weakening the U.S. dollar.

Gold topped $1,400 an ounce on fears of inflation as investors voted thumbs down on Ben Bernanke’s plan. And the number of critics is growing, leaving the U.S. isolated:

Germany’s criticism echoes that from other countries, including Brazil and Japan, which have complained about potential spillover from the Fed’s action. Printing more dollars, or cutting U.S. interest rates, tends to weaken the dollar and makes U.S. exports more attractive. The accompanying rise in the value of other countries’ currencies tends to damp their exports and can fuel inflation or asset bubbles, as emerging-market officials note. U.S. officials maintain the Fed’s action is about stimulating domestic demand, and that a weaker dollar is a consequence, not an objective.

On Monday, China’s Vice Finance Minister Zhu Guangyao said the U.S. isn’t living up to its responsibility as an issuer of a global reserve currency. …

The top economic aide to Russian President Dmitry Medvedev said Russia will insist at the G-20 summit that the Fed consult with other countries ahead of major policy decisions.

Luxembourg Prime Minister Jean-Claude Juncker, who is chairman of the euro-zone finance ministers, also weighed in on the Fed move, saying: “I don’t think it’s a good decision. You’re fighting debt with more debt.”

These concerns are entirely justified. Moreover, one can’t help but appreciate the irony: the “cowboy” George W. Bush was lambasted for “going it alone” and making the U.S. a pariah in the world. But worldwide resentment over the U.S. is surging as Obama is forced to lamely defend his moves as “pro-growth” (which speaks volumes about the administration’s economic illiteracy, for not even his defenders would claim that currency devaluation=growth). We hear that the “blunt criticism of U.S. policy is in large part payback for a longstanding stance by Washington policy makers that the American economy should serve as a model for others. The heated rhetoric also stems from fears that the U.S. may be looking for a back-door way to set exchange-rate policy in a way that favors the U.S.”

Combined with the incessant shin-kicking of our allies (e.g., Eastern Europe, Israel, Honduras, Britain), this latest move certainly strengthens Obama’s critics here and abroad. They contend that through a combination of ill-conceived policies and rank incompetence, Obama is rendering the U.S. less influential and less respected, which is increasing instability in the world. All and all, it is a textbook example of the perils of deploying liberal statism at home and shrinking America’s stature overseas. Unfortunately, this is not a graduate course at Harvard or a symposium at the New America Foundation. It is all too real, and unless we arrest the panoply of bad policies, America and its allies will be poorer and less safe. We already are.

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Obama Starts to Pay Attention to India

During his first two years in office, Barack Obama has not done much to nurture the burgeoning U.S.-India alliance, which was one of the most important initiatives fostered by his predecessor. Many Indians have felt snubbed by Obama, as Tunku Varadarajan points out in this Daily Beast article.

Now, thankfully, Obama appears determined to make up for lost time. In his speech to the Indian parliament, he made a suitably dramatic gesture, calling for India to be granted a permanent seat on the UN Security Council. That is unlikely to happen anytime soon, because other nations are also determined to get a coveted seat — South Africa and Brazil among them. But it’s a good thing to call for because it is an emotional issue for India and an area where we can back Indian ambitions at no harm to ourselves.

I hope that Obama’s interest in India will not wane after his trip is over. As many commentators have argued (see, for example, Dan Twining’s article calling for an Indo-American Century), the U.S.-India alliance could be of pivotal importance in the 21st century. It is a natural alignment not only of strategic interests (both the U.S. and India worry about the spread of militant Islam and the rise of China) but also of ideals, since both countries are liberal democracies. That is something that George W. Bush recognized early on, and that Obama is now starting to grasp. Like all other important American alliances, it is a bipartisan relationship that can and should be nurtured regardless of which party is in power in Washington.

During his first two years in office, Barack Obama has not done much to nurture the burgeoning U.S.-India alliance, which was one of the most important initiatives fostered by his predecessor. Many Indians have felt snubbed by Obama, as Tunku Varadarajan points out in this Daily Beast article.

Now, thankfully, Obama appears determined to make up for lost time. In his speech to the Indian parliament, he made a suitably dramatic gesture, calling for India to be granted a permanent seat on the UN Security Council. That is unlikely to happen anytime soon, because other nations are also determined to get a coveted seat — South Africa and Brazil among them. But it’s a good thing to call for because it is an emotional issue for India and an area where we can back Indian ambitions at no harm to ourselves.

I hope that Obama’s interest in India will not wane after his trip is over. As many commentators have argued (see, for example, Dan Twining’s article calling for an Indo-American Century), the U.S.-India alliance could be of pivotal importance in the 21st century. It is a natural alignment not only of strategic interests (both the U.S. and India worry about the spread of militant Islam and the rise of China) but also of ideals, since both countries are liberal democracies. That is something that George W. Bush recognized early on, and that Obama is now starting to grasp. Like all other important American alliances, it is a bipartisan relationship that can and should be nurtured regardless of which party is in power in Washington.

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Flotsam and Jetsam

A nightmare for Mitt Romney. “Minnesota Gov. Tim Pawlenty, a possible presidential candidate in 2012, called for repeal of healthcare legislation during a television interview Sunday morning. ‘I think Obamacare is one of the worst pieces of legislation passed in the modern history of the country,’ Pawlenty said on CNN’s State of the Union.”

A smart position for Republicans on the Fed buying up $600B in bonds. Rep. Paul Ryan: “It’s a big mistake, in my opinion. Look, we have Congress doing tax and spend, borrow and spend. Now we have the Federal Reserve doing print and spend. If this quantitative easing, which is basically monetizing your debt — I think the upsides are very low. We already have very loose monetary policy, very, very low interest rates. This is going to give us an inflation problem in the future. It’s going to give us an interest rate problem in the future. It is destabilizing investment horizons. The Federal Reserve should be focused on sound and honest money, not on trying to micromanage the economy.” (You can see why a lot of conservatives hope he runs in 2012.)

A succinct analysis of Nancy Pelosi’s staying on as minority leader. “It doesn’t matter whether she’ll be good or merely bad or spectacularly bad. What matters is, you lose 65 seats, you resign. Period. There should not be a question.”

A nervous Democrat: Al Hunt on Pelosi’s decision to stick around: “What that seems to ignore are the millions of voters in places like South Bend, Indiana, or Charlotte, North Carolina, who supported President Barack Obama, are disappointed and anxious today and hope for constructive change. The congressional Democrats’ response: It’s business as usual. The message is ‘we’re going to keep doing exactly what we were doing’ before the party ‘got crushed,’ said Representative Jason Altmire, a Pennsylvania Democrat who won his re-election contest 51 percent to 49 percent.” Yes, Republicans are “delighted.”

A rising star. “A young, charismatic Cuban-American with an appealing personal story, [Marco] Rubio took 49 percent of the vote Tuesday, a remarkable total in a three-way race. Exit polls showed he captured 55 percent of the Hispanic vote. As a vice presidential candidate, Rubio could make the nation’s largest swing state even more of a tossup and force Obama’s political team to consider a road map back to the White House without it. National Democrats were watching him long before Tuesday, hoping in vain that he would lose and his potential would be stifled.”

Already a conservative star. ” New Jersey Gov. Chris Christie irked NBC’s David Gregory — and probably won over more conservatives weary of the media in the process — by suggesting on “Meet the Press” that the host was acting as an advocate for Democrats in the way he spoke about taxes. Christie, a Republican known for his tell-it-like-it-is attitude, disagreed with Gregory’s characterization of the looming battle in Congress over the Bush years tax rate as ‘tax cuts.’”

A liberal dilettante. That’s the gist of the New York Times‘s assessment of Obama’s Gandhi fetish. “‘The impression on the Indian side is every time you meet him, he talks about Gandhi,’ said Shekhar Gupta, editor of The Indian Express, a leading English-language newspaper, adding that the repeated references struck some officials as platitudinous.” Moreover, India has moved on. “If anything, India’s rise as a global power seems likely to distance it even further from Gandhi. India is inching toward a tighter military relationship with the United States, once distrusted as an imperialist power, even as the Americans are fighting a war in nearby Afghanistan. India also has an urbanizing consumer-driven economy and a growing middle class that indulges itself in cars, apartments and other goods. It is this economic progress that underpins India’s rising geopolitical clout and its attractiveness to the United States as a global partner.”

A nightmare for Mitt Romney. “Minnesota Gov. Tim Pawlenty, a possible presidential candidate in 2012, called for repeal of healthcare legislation during a television interview Sunday morning. ‘I think Obamacare is one of the worst pieces of legislation passed in the modern history of the country,’ Pawlenty said on CNN’s State of the Union.”

A smart position for Republicans on the Fed buying up $600B in bonds. Rep. Paul Ryan: “It’s a big mistake, in my opinion. Look, we have Congress doing tax and spend, borrow and spend. Now we have the Federal Reserve doing print and spend. If this quantitative easing, which is basically monetizing your debt — I think the upsides are very low. We already have very loose monetary policy, very, very low interest rates. This is going to give us an inflation problem in the future. It’s going to give us an interest rate problem in the future. It is destabilizing investment horizons. The Federal Reserve should be focused on sound and honest money, not on trying to micromanage the economy.” (You can see why a lot of conservatives hope he runs in 2012.)

A succinct analysis of Nancy Pelosi’s staying on as minority leader. “It doesn’t matter whether she’ll be good or merely bad or spectacularly bad. What matters is, you lose 65 seats, you resign. Period. There should not be a question.”

A nervous Democrat: Al Hunt on Pelosi’s decision to stick around: “What that seems to ignore are the millions of voters in places like South Bend, Indiana, or Charlotte, North Carolina, who supported President Barack Obama, are disappointed and anxious today and hope for constructive change. The congressional Democrats’ response: It’s business as usual. The message is ‘we’re going to keep doing exactly what we were doing’ before the party ‘got crushed,’ said Representative Jason Altmire, a Pennsylvania Democrat who won his re-election contest 51 percent to 49 percent.” Yes, Republicans are “delighted.”

A rising star. “A young, charismatic Cuban-American with an appealing personal story, [Marco] Rubio took 49 percent of the vote Tuesday, a remarkable total in a three-way race. Exit polls showed he captured 55 percent of the Hispanic vote. As a vice presidential candidate, Rubio could make the nation’s largest swing state even more of a tossup and force Obama’s political team to consider a road map back to the White House without it. National Democrats were watching him long before Tuesday, hoping in vain that he would lose and his potential would be stifled.”

Already a conservative star. ” New Jersey Gov. Chris Christie irked NBC’s David Gregory — and probably won over more conservatives weary of the media in the process — by suggesting on “Meet the Press” that the host was acting as an advocate for Democrats in the way he spoke about taxes. Christie, a Republican known for his tell-it-like-it-is attitude, disagreed with Gregory’s characterization of the looming battle in Congress over the Bush years tax rate as ‘tax cuts.’”

A liberal dilettante. That’s the gist of the New York Times‘s assessment of Obama’s Gandhi fetish. “‘The impression on the Indian side is every time you meet him, he talks about Gandhi,’ said Shekhar Gupta, editor of The Indian Express, a leading English-language newspaper, adding that the repeated references struck some officials as platitudinous.” Moreover, India has moved on. “If anything, India’s rise as a global power seems likely to distance it even further from Gandhi. India is inching toward a tighter military relationship with the United States, once distrusted as an imperialist power, even as the Americans are fighting a war in nearby Afghanistan. India also has an urbanizing consumer-driven economy and a growing middle class that indulges itself in cars, apartments and other goods. It is this economic progress that underpins India’s rising geopolitical clout and its attractiveness to the United States as a global partner.”

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NATO Death Watch

Secretary-General Anders Fogh Rasmussen, in an interview with the New York Times this week, declined to name Iran as a missile threat to the NATO alliance. He spoke instead of “more than 30 countries in the world” having missile technology, with some of them able to hit targets in allied territory. This strange formulation implicates Britain, France, the United States, Russia, India, China, and Israel — if Rasmussen is talking about the countries that can already hit NATO targets with medium-range or longer missiles. (Pakistan can probably also hit Turkey with its newest Ghauri-class missile.)

But the Turkish press, writing up the Times interview, was clear on Rasmussen’s meaning. Undeceived by the politically absurd reference to “30 countries,” Today’s Zaman put it bluntly: “Rasmussen declines to name Iran as threat in missile shield plans.”

This isn’t really Rasmussen’s fault. According to the New York Times, it’s a NATO negotiating posture:

…President Obama and the Europeans are offering yet another round of talks to the Iranians, to get them to stop enriching uranium, and Turkey does not want the missile system to be seen as aimed at Tehran, so it is diplomatically impolite to mention Iran.

If we’re now at the point where it is “impolite” to mention one of the most significant threats NATO faces, we are in a stage of complacent denial for which I’m not sure there is even a name.

Turkey’s reluctance to see Iran identified as a threat should not silence the North Atlantic Council or the other allies — but it has. This is the clearest possible signal that political unity is over for the alliance: NATO can no longer handle the truth. Turkey’s objections, moreover, can’t govern our bargaining position without compromising it. Silence on the Iranian missile threat amounts to tacitly conceding Iran’s argument that its programs are not a threat. If Iran is right about that, then nothing the West is asking of Iran justifies sanctions or the use of force.

It was precisely by naming and objecting to the policies of the Soviet Union that U.S. presidents — Truman, Nixon, and Reagan in particular — obtained concessions from Moscow during the Cold War. The more explicit and obstinate we were, the more we got. We are apparently about to deal away any hope of such an effective posture with Iran. The upcoming NATO summit in Lisbon is not a business-as-usual gathering: Russia is being invited to the table for the first time, and NATO’s missile-defense strategy is to be the primary topic. The act of not declaring Iran’s missile (and nuclear) programs to be a threat to the allies will put the West, for the foreseeable future, at a permanent disadvantage in negotiations with Tehran.

The picture is growing clearer that NATO can’t retain its current alliance list and also operate from a common will to defend itself. To some extent, this shift has been building for a while, but the response favored by the Obama administration is the wrong one: letting an alliance that would fail a stress test be transformed against America’s interests. NATO, to which we have long provided most of the military spending, and now provide most of the forces and the political will, cannot be transformed in this manner without becoming an entangling alliance. That process has begun.

Secretary-General Anders Fogh Rasmussen, in an interview with the New York Times this week, declined to name Iran as a missile threat to the NATO alliance. He spoke instead of “more than 30 countries in the world” having missile technology, with some of them able to hit targets in allied territory. This strange formulation implicates Britain, France, the United States, Russia, India, China, and Israel — if Rasmussen is talking about the countries that can already hit NATO targets with medium-range or longer missiles. (Pakistan can probably also hit Turkey with its newest Ghauri-class missile.)

But the Turkish press, writing up the Times interview, was clear on Rasmussen’s meaning. Undeceived by the politically absurd reference to “30 countries,” Today’s Zaman put it bluntly: “Rasmussen declines to name Iran as threat in missile shield plans.”

This isn’t really Rasmussen’s fault. According to the New York Times, it’s a NATO negotiating posture:

…President Obama and the Europeans are offering yet another round of talks to the Iranians, to get them to stop enriching uranium, and Turkey does not want the missile system to be seen as aimed at Tehran, so it is diplomatically impolite to mention Iran.

If we’re now at the point where it is “impolite” to mention one of the most significant threats NATO faces, we are in a stage of complacent denial for which I’m not sure there is even a name.

Turkey’s reluctance to see Iran identified as a threat should not silence the North Atlantic Council or the other allies — but it has. This is the clearest possible signal that political unity is over for the alliance: NATO can no longer handle the truth. Turkey’s objections, moreover, can’t govern our bargaining position without compromising it. Silence on the Iranian missile threat amounts to tacitly conceding Iran’s argument that its programs are not a threat. If Iran is right about that, then nothing the West is asking of Iran justifies sanctions or the use of force.

It was precisely by naming and objecting to the policies of the Soviet Union that U.S. presidents — Truman, Nixon, and Reagan in particular — obtained concessions from Moscow during the Cold War. The more explicit and obstinate we were, the more we got. We are apparently about to deal away any hope of such an effective posture with Iran. The upcoming NATO summit in Lisbon is not a business-as-usual gathering: Russia is being invited to the table for the first time, and NATO’s missile-defense strategy is to be the primary topic. The act of not declaring Iran’s missile (and nuclear) programs to be a threat to the allies will put the West, for the foreseeable future, at a permanent disadvantage in negotiations with Tehran.

The picture is growing clearer that NATO can’t retain its current alliance list and also operate from a common will to defend itself. To some extent, this shift has been building for a while, but the response favored by the Obama administration is the wrong one: letting an alliance that would fail a stress test be transformed against America’s interests. NATO, to which we have long provided most of the military spending, and now provide most of the forces and the political will, cannot be transformed in this manner without becoming an entangling alliance. That process has begun.

Read Less

Helicopter Ben Is at It Again

Ben Bernanke is nicknamed “Helicopter Ben” for his propensity to dump dollars into the economy — the equivalent of dropping greenbacks out of a helicopter. He’s at it again, in yet another attempt to add liquidity to an economy already soaked with cash. The Wall Street Journal explains:

The Federal Reserve, in a dramatic effort to rev up a “disappointingly slow” economic recovery, said it will buy $600 billion of U.S. government bonds over the next eight months to drive down interest rates and encourage more borrowing and growth.

Many outside the Fed, and some inside, see the move as a “Hail Mary” pass by Fed Chairman Ben Bernanke. He embraced highly unconventional policies during the financial crisis to ward off a financial-system collapse. But a year and a half later, he confronts an economy hobbled by high unemployment, a gridlocked political system and the threat of a Japan-like period of deflation, or a debilitating fall in consumer prices.

In other words, the Fed will print money and buy up bonds, thereby pushing up the cost of bonds (supply and demand at work) and pushing down their yield. “The Fed hopes that will result in lower interest rates for homeowners, consumers and businesses, which in turn will encourage more of them to borrow, spend and invest. The Fed figures it will also drive investors into stocks, corporate bonds and other riskier investments offering higher returns.”

Well, gosh, if it was that easy, why not print a trillion dollars or three? Well, the scheme, as you might imagine, has its risks.

The first, of course, is inflation. The Fed says not to worry, because the economy is limp. There is “so much spare capacity in the economy—including an unemployment rate at 9.6%, a real-estate landscape littered with more than 14 million unoccupied homes, and manufacturers operating with 28% of their productive capacity going unused.” Umm. But that suggests that the problem isn’t lack of liquidity (the banks are sitting on piles of cash). Moreover, the Fed will eventually, as they say, need to take the punch bowl away from the party — that is, jack up interest rates to shut off inflation as the economy gathers steam.

By the way, have you noticed commodity prices going up? Oh, yes:

An inflationary tide is beginning to ripple through America’s supermarkets and restaurants, threatening to end the tamest year of food pricing in nearly two decades.

Prices of staples including milk, beef, coffee, cocoa and sugar have risen sharply in recent months. And food makers and retailers including McDonald’s Corp., Kellogg Co. and Kroger Co. have begun to signal that they’ll try to make consumers shoulder more of the higher costs for ingredients.

The problem will get worse. As we flood the economy with dollars, we devalue our currency, making the price of imported goods, including oil — have you noticed pump prices lately? — more expensive. It has already begun, in fact. “Crude oil futures shot higher on Thursday on the back of a weaker dollar following the Federal Reserve’s decision to inject $600 billion into the U.S. economy.” That’s what happens when you drive the value of the dollar downward.

The risk of creating new speculative bubbles is real, and our trading partners are none too pleased about the Fed’s move. (“U.S. trading partners, particularly in the developing world, openly worry that the Fed’s money pumping is creating inflation in their own economies and a risk of asset-price bubbles. … In recent weeks, China, India, Australia and others have pushed their own interest rates higher to tamp down inflation forces.”)

You can understand why some regard this as a “Hail Mary.” Maybe it will work, maybe not. And maybe it will make things worse. But in the meantime, the most obvious  steps — reducing the cost of capital and labor, lessening the regulatory burden on employers, and getting our fiscal house in order — go unaddressed. On that front, the new Congress and the president should get cracking. Betting on Helicopter Ben to rescue the economy is the riskiest proposition of them all.

Ben Bernanke is nicknamed “Helicopter Ben” for his propensity to dump dollars into the economy — the equivalent of dropping greenbacks out of a helicopter. He’s at it again, in yet another attempt to add liquidity to an economy already soaked with cash. The Wall Street Journal explains:

The Federal Reserve, in a dramatic effort to rev up a “disappointingly slow” economic recovery, said it will buy $600 billion of U.S. government bonds over the next eight months to drive down interest rates and encourage more borrowing and growth.

Many outside the Fed, and some inside, see the move as a “Hail Mary” pass by Fed Chairman Ben Bernanke. He embraced highly unconventional policies during the financial crisis to ward off a financial-system collapse. But a year and a half later, he confronts an economy hobbled by high unemployment, a gridlocked political system and the threat of a Japan-like period of deflation, or a debilitating fall in consumer prices.

In other words, the Fed will print money and buy up bonds, thereby pushing up the cost of bonds (supply and demand at work) and pushing down their yield. “The Fed hopes that will result in lower interest rates for homeowners, consumers and businesses, which in turn will encourage more of them to borrow, spend and invest. The Fed figures it will also drive investors into stocks, corporate bonds and other riskier investments offering higher returns.”

Well, gosh, if it was that easy, why not print a trillion dollars or three? Well, the scheme, as you might imagine, has its risks.

The first, of course, is inflation. The Fed says not to worry, because the economy is limp. There is “so much spare capacity in the economy—including an unemployment rate at 9.6%, a real-estate landscape littered with more than 14 million unoccupied homes, and manufacturers operating with 28% of their productive capacity going unused.” Umm. But that suggests that the problem isn’t lack of liquidity (the banks are sitting on piles of cash). Moreover, the Fed will eventually, as they say, need to take the punch bowl away from the party — that is, jack up interest rates to shut off inflation as the economy gathers steam.

By the way, have you noticed commodity prices going up? Oh, yes:

An inflationary tide is beginning to ripple through America’s supermarkets and restaurants, threatening to end the tamest year of food pricing in nearly two decades.

Prices of staples including milk, beef, coffee, cocoa and sugar have risen sharply in recent months. And food makers and retailers including McDonald’s Corp., Kellogg Co. and Kroger Co. have begun to signal that they’ll try to make consumers shoulder more of the higher costs for ingredients.

The problem will get worse. As we flood the economy with dollars, we devalue our currency, making the price of imported goods, including oil — have you noticed pump prices lately? — more expensive. It has already begun, in fact. “Crude oil futures shot higher on Thursday on the back of a weaker dollar following the Federal Reserve’s decision to inject $600 billion into the U.S. economy.” That’s what happens when you drive the value of the dollar downward.

The risk of creating new speculative bubbles is real, and our trading partners are none too pleased about the Fed’s move. (“U.S. trading partners, particularly in the developing world, openly worry that the Fed’s money pumping is creating inflation in their own economies and a risk of asset-price bubbles. … In recent weeks, China, India, Australia and others have pushed their own interest rates higher to tamp down inflation forces.”)

You can understand why some regard this as a “Hail Mary.” Maybe it will work, maybe not. And maybe it will make things worse. But in the meantime, the most obvious  steps — reducing the cost of capital and labor, lessening the regulatory burden on employers, and getting our fiscal house in order — go unaddressed. On that front, the new Congress and the president should get cracking. Betting on Helicopter Ben to rescue the economy is the riskiest proposition of them all.

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“Imperial Presidency,” Huh?

It’s fun to tally up the pieces of the convoy President Obama will bring with him to India on Saturday. But there is, of course, nothing wrong with the president traveling abroad in this fashion. Here’s one report on the preparations:

Communications set-up and nuclear button and majority of the White House staff will be in India accompanying the President on this three-day visit that will cover Mumbai and Delhi.

He will also be protected by a fleet of 34 warships, including an aircraft carrier, which will patrol the sea lanes off the Mumbai coast during his two-day stay there beginning Saturday. The measure has been taken as Mumbai attack in 2008 took place from the sea. …

Two jets, armed with advanced communication and security systems, and a fleet of over 40 cars will be part of Obama’s convoy.

Around 800 rooms have been booked for the President and his entourage in Taj Hotel and Hyatt.

The President will have a security ring of American elite Secret Service, which are tasked to guard the President, along with National Security Guards (NSG) and personnel from central paramilitary forces and local police in Mumbai and Delhi.

If the president were not well protected when visiting a city struck by armed terrorists two years earlier, we’d first have something to complain about.  Yet, reading this account put me in mind of someone who has warned against such a robust American demonstration of security abroad. In his 2008 book, The Post-American World, one of Obama’s biggest fans, Fareed Zakaria, complained about George W. Bush’s overseas visits. “President Bush’s foreign trips seem designed to require as little contact as possible with the countries he visits,” Zakaria wrote. “He is usually accompanied by two thousand or so Americans, as well as several airplanes, helicopters, and cars.” Lamenting the “Imperial Presidency,” Zakaria approvingly quoted former European minister for external affairs Chris Patten:

Attending any conference abroad, American cabinet officers arrive with the sort of entourage that would have done Darius proud. Hotels are commandeered; cities brought to a halt; innocent bystanders are barged into corners by thick-necked men with bits of plastic hanging out of their ears. It is not a spectacle that wins hearts and minds.

“Apart from the resentment that the imperial style produces, the aloof attitude means that American officials don’t benefit from the experience and expertise of foreigner,” Zakaria commented. I await his scathing condemnation of Obama’s gross escalation of an already arrogant and self-defeating practice. And in Zakaria’s hometown, no less.

Man, when Bush was president, you could write a book about anything.

It’s fun to tally up the pieces of the convoy President Obama will bring with him to India on Saturday. But there is, of course, nothing wrong with the president traveling abroad in this fashion. Here’s one report on the preparations:

Communications set-up and nuclear button and majority of the White House staff will be in India accompanying the President on this three-day visit that will cover Mumbai and Delhi.

He will also be protected by a fleet of 34 warships, including an aircraft carrier, which will patrol the sea lanes off the Mumbai coast during his two-day stay there beginning Saturday. The measure has been taken as Mumbai attack in 2008 took place from the sea. …

Two jets, armed with advanced communication and security systems, and a fleet of over 40 cars will be part of Obama’s convoy.

Around 800 rooms have been booked for the President and his entourage in Taj Hotel and Hyatt.

The President will have a security ring of American elite Secret Service, which are tasked to guard the President, along with National Security Guards (NSG) and personnel from central paramilitary forces and local police in Mumbai and Delhi.

If the president were not well protected when visiting a city struck by armed terrorists two years earlier, we’d first have something to complain about.  Yet, reading this account put me in mind of someone who has warned against such a robust American demonstration of security abroad. In his 2008 book, The Post-American World, one of Obama’s biggest fans, Fareed Zakaria, complained about George W. Bush’s overseas visits. “President Bush’s foreign trips seem designed to require as little contact as possible with the countries he visits,” Zakaria wrote. “He is usually accompanied by two thousand or so Americans, as well as several airplanes, helicopters, and cars.” Lamenting the “Imperial Presidency,” Zakaria approvingly quoted former European minister for external affairs Chris Patten:

Attending any conference abroad, American cabinet officers arrive with the sort of entourage that would have done Darius proud. Hotels are commandeered; cities brought to a halt; innocent bystanders are barged into corners by thick-necked men with bits of plastic hanging out of their ears. It is not a spectacle that wins hearts and minds.

“Apart from the resentment that the imperial style produces, the aloof attitude means that American officials don’t benefit from the experience and expertise of foreigner,” Zakaria commented. I await his scathing condemnation of Obama’s gross escalation of an already arrogant and self-defeating practice. And in Zakaria’s hometown, no less.

Man, when Bush was president, you could write a book about anything.

Read Less




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