Americans anxiously watching their 401ks melt away may not have noticed the Obama administration is off to a rocky start in foreign policy, too. We were told often during the campaign that Mr. Obama would repair relationships with foreign governments allegedly damaged by the "cowboy"diplomacy of George W. Bush. But in his first weeks in office, President Obama gratuitously has offended allies, and has made clumsy overtures — contemptuously rebuffed — to adversaries.
Most puzzling has been the back of the hand treatment the president has given to our closest ally.
Most in Britain were ecstatic when Mr. Obama was elected. None more so than Prime Minister Gordon Brown, who hoped proximity to The One would boost his own flagging standing in the polls back home.
It didn't work out that way.
"The murmurs began when President Obama returned to the British embassy the Winston Churchill bust that had been displayed in the Oval Office," wrote Dana Milbank of the Washington Post. "The fears intensified when press secretary Robert Gibbs...demoted the Churchillian phrase 'special relationship' to a mere 'special partnership' across the Atlantic.
"And the alarm bells really went off when Brown's entourage landed at Andrews Air Force Base," Mr. Milbank said. "Obama, breaking with precedent, wouldn't grant the prime minister the customary honor of standing beside him in front of the two nation's flags for the TV cameras."
It got worse. The White House initially cancelled a joint press conference with the prime minister on account of snow. This explanation was unconvincing to Toby Harnden of the London Telegraph, who noted "there are 132 rooms in the White House at least some of which, presumably, are free of snow."
When Mr. Obama did hold a truncated press availability from which most of the British press were excluded, he went right to questions, skipping the usual words of welcome for his guest. The hapless Mr. Brown didn't even get invited to lunch.
The president's "exceptionally rude treatment" of the prime minister will have consequences, predicted British journalist Iain Martin. "We get the point, sunshine. We're just one of many allies and you want fancy new friends. Well, the next time you need something doing, something which impinges on your national security, then try calling the French, the Japanese, or best of all the Germans."
We may need the help the Brits no longer will be so eager to provide sooner rather than later, because Mr. Obama's overtures to our enemies have been rebuffed.
There will be no thaw in relations with the U.S., and no concessions on its nuclear weapons program, Iran's intelligence minister made clear Feb. 1.
In a "secret letter," President Obama told the Russians he would abandon U.S. plans to put anti-ballistic missiles in Poland and the Czech Republic if the Russians would "help" with Iran. On March 3, Russian president Dmitri Medvedev flatly and publicly rejected the deal. Earlier, the Russians pressured Kyrgyzstan to deny us the use of an airbase vital to supplying our troops in Afghanistan, though Kyrgyzstan's president has indicated recently he'd be willing to reconsider if his palm is crossed with enough silver.
Since the Brits and the Canadians are the only others besides us doing any heavy lifting in Afghanistan, the slap to the British seems particularly ill timed. It may have been deliberate. In the first of his autobiographies, Mr. Obama said his grandfather was tortured by the British during the Mau Mau uprising in Kenya in the 1950s. Winston Churchill was prime minister at the time.
If the snub was deliberate, this is remarkably churlish behavior. If it wasn't, it is evidence Mr. Obama is not ready for prime time.
He's not alone. "Hillary Clinton raised eyebrows on her first visit to Europe as secretary of state when she mispronounced her EU counterparts' names and claimed U.S. democracy was older than Europe's," the Reuters news service reported Friday. This is all pretty appalling. How's the "Anybody But Bush" slogan looking. Be careful what you wish for. "The One" and "The world's smartest Woman" - my goodness how 6 weeks have taken their toll on their images. I haven't checked yet, but weren't the oceans supposed to stop rising as well? What date was that particular metric to apply from?
Posted by: Omoter Speaking for Boskone7794 ||
03/10/2009 11:04 ||
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#1
Ok, can't believe I'm doing this, but.....you could argue that ol' Hill was more or less correct when she stated that our democracy is/was older than parts of Europe's.
After all, we've had the same Constitution and system of government for over 230 years. Britain's had theirs longer, I believe, but the rest of the continent.....not so much.
Meant to say that since Britain doesn't have a formal constitution, I'm not sure really what date to use as the start of their current form of government. Magna Carta? The end of the reign of Oliver Cromwell?
But the point still remains, we've been at it for a while longer than most of the Europeans, even though they don't wanna admit it.
#3
It's a dubious democratic tradition given the power of the monarchy through the Victorian era and the fact that the House of Lords is an appointed body to this very day.
Europe's democracy before the dubious E.U.? I give up -- would that be the Third Reich or the Roman Empire?
What you say is true but polite people don't boast of having a bigger, nicer house than the people they are visiting and politeness is a job requirement for a diplomat. That is as in "if you aren't you don't get the job".
#5
Agreed, JFM. On the other hand, given that she was in Brussels at the time I can't help but feel that it was a welcome rebuke to EU condescension and posturing towards the US.
#6
Hillary was wrong for the simple reason that the United States of America is not a democracy. We are a constitutional republic. If she means we are free and have elected governments and rule of law then okay. But there is a big political difference between a democracy and a form of government such as ours.
Posted by: Jack is Back! ||
03/10/2009 13:31 Comments ||
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#7
Had Clinton said "Republic" instead of "democracy" the comment would have been more accurate. However, in either case it was a condescending remark and was understood as such. (Personally, I'm more embarrassed by the schoolgirl "reset button" stunt, which would have been stupid even if it hadn't been screwed up).
The bigger issue is the administration's emphasis on "change", "fresh start", "reset", etc. Successful foreign policy requires consistency. The administration is telegraphing to our friends that they cannot count on us, and to our enemies that our principals are flexible.
It would have been right for Bolton or Rice to say that given how much abuse the United Staes and the Bush administration had got from the Euros. But this isn't Obama's policy so the answer is that Hillary just gaffed and seems not to be suitable for the job.
#9
Just to be clear, I'm only defending the accuracy of her statement.
I'm appalled that she went and said what she did, as I am appalled by the Obamas going out of their way to demonstrate their total lack of class during the Gordon Brown visit.
#10
DoDo - to the extent that Bambi has any principles, they're definitely flexible.
JFM - none of the idiots in charge right now is suitable for the job.
The only joy I get from all this is thinking about the buyer's remorse people around the world who demanded we elect Bambi must be feeling that we stupidly did elect this clown, and with him his Clown Posse. At least we won't be suffering alone.... >:-(
Posted by: Barbara Skolaut ||
03/10/2009 13:44 Comments ||
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#11
<<< Meant to say that since Britain doesn't have a formal constitution, I'm not sure really what date to use as the start of their current form of government. Magna Carta? The end of the reign of Oliver Cromwell? >>>
It is a moving feast but the genesis of the current form was probably the 1832 Reform Act which had to address the issue of the massive movement in population as a consequence of the Industrial Revolution. Manchester has 250k population but only 1 parliamentary representative whereas south of London there were "rotten boroughs" with only a handful of voters and a seat in parliament.
In addition the House of Lords was never responsible. Not even now. But its powers as a House of Review have been continually limited until the most recent changes by Blair which gutted much of the tradition. Lloyd George helped as well early in the 20th Century.
The Magna Carta preserved the rights of property owners. The interregnum resulted in a more limited monarchy on the subsequent ascension which actually saved it relative to the fate of monarchies and principalities on the Continent in later centuries.
#13
But there is a big political difference between a democracy and a form of government such as ours.
Which will be amply demonstrated when the California Supreme Court overrules the Prop 8 vote demonstrated that we indeed have a ruling class. We have the facade of representative government which has forsaken representing anything but special interests.
#14
IMNSHO - Proc 2K - the CASP will affirm it, but grant status to those wed in the interim, thereby pissing off everybody (nota bene: I support Civil Unions, but don't call it "marriage")
Posted by: Frank G ||
03/10/2009 21:51 Comments ||
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On Thursday, The Wall Street Journal published a letter from 17 U.S. ambassadors defending the appointment of Charles Freeman to chair the National Intelligence Council. The same day, the leaders of the 1989 protests that led to the massacre at Beijing's Tiananmen Square wrote Barack Obama "to convey our intense dismay at your selection" of Mr. Freeman.
If moral weight could be measured on a zero to 100 scale, the signatories of the latter letter, some of whom spent years in Chinese jails, would probably find themselves in the upper 90s. Where Mr. Freeman and his defenders stand on this scale is something readers can decide for themselves.
So what do Chinese democracy activists have against Mr. Freeman, a former U.S. ambassador to Saudi Arabia? As it turns out, they are all, apparently, part-and-parcel of the Israel Lobby.
In a recent article about Mr. Freeman's nomination in the Huffington Post, M.J. Rosenberg of the left-wing Israel Policy Forum writes that "Everyone involved in the anti-Freeman effort are staunch allies of the lobby." Of course: Only the most fervid Likudnik mandarins could object to Mr. Freeman's 2006 characterization of Mao Zedong as a man who, for all his flaws, had a "brilliance of . . . personality [that] illuminated the farthest corners of his country and inspired many would-be revolutionaries and romantics beyond it." It also takes a Shanghai Zionist to demur from Mr. Freeman's characterization of the Chinese leadership's response to the "mob scene" at Tiananmen as "a monument to overly cautious behavior on the part of the leadership."...
Posted by: Mike ||
03/10/2009 06:43 ||
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Pity Barack Obama's economic advisers. The blogs are now demanding their scalps, and Treasury Secretary Tim Geithner and his colleagues face a nasty dilemma: There are no solutions to the banking crisis without extraordinary political and financial risks. Thus, they have adopted a three-pronged approach, delay, delay, delay, in the hope that somebody comes up with a breakthrough.
Here's the problem: Today's true market value of the U.S. banks' toxic assets (that ugly stuff that needs to be removed from bank balance sheets before the economy can recover) amounts to between 5 and 30 cents on the dollar. To remain solvent, however, the banks say they need a valuation of 50 to 60 cents on the dollar. Translation: as much as another $2 trillion taxpayer bailout.
That kind of expensive solution could send the president's approval rating into a nose dive. Consider: $2 trillion is about two-thirds of the tax revenue the federal government collects each year.
The logical alternative -- talk show hosts' solution du jour -- is to temporarily restructure or nationalize the banks and leave taxpayers alone. Remove the toxic assets, replace management and cut the too-big-to-fail financial dinosaurs into smaller, nimbler entities. Then reprivatize these smaller banks and let the recovery begin.
Oh, if it were that simple. I suspect Obama's advisers would like nothing more than to dismantle an irresponsible firm such as Citigroup. They are afraid to do so, for one reason: All the big banks are connected to a potentially lethal web of paper insurance instruments called credit default swaps. These paper derivatives have become our financial system's new master.
The theory holds that dismantling a big bank could unravel this paper market, with catastrophic global financial consequences. Or not. Nobody knows, because the market for these unregulated financial derivatives, amounting potentially to over $40 trillion (by comparison, global gross domestic product is now not much more than $60 trillion), is the financial equivalent of uncharted waters.
Geithner has reason to be terrified. He was part of the Henry Paulson-led team that underestimated the devastating global-contagion effect of the collapse of Lehman Brothers. Geithner won't make the mistake of underestimation again.
Geithner also knows that the mood in Congress has changed. Were a global financial brush fire to break out as a result of bank restructuring or nationalization, today's populist Congress might just let it burn. Congressional anger is likely to intensify when policymakers realize that credit default swaps demand a stream of premium payments like a life insurance policy, not just a payment due at termination. And recent signs indicate that firms such as Citigroup, in recycling their taxpayer bailout funding, may have helped other financial firms, including some in Europe, meet these payment obligations.
In addition, Geithner worries that because the troubled insurance giant American International Group (AIG) is a conduit for the banks' use of credit default swaps, a collapse of AIG (as an unintended consequence of dismantling the big banks) could be catastrophic. AIG's more than 300 million terrified holders of insurance-related investments and pension funds, who have investments totaling $20 trillion (U.S. GDP is $14 trillion), could suddenly rush for redemptions -- the equivalent of a run on a bank. Geithner would face a worldwide insurance collapse to accompany his global banking collapse.
Or again, maybe not. Nobody knows.
Here's another likely Geithner fear -- that Congress forces the banks' bondholders to take a hit. So far, only stockholders have lost out because of the banking crisis. One reason for the fragility in the credit default swap market of late is that markets fear that bank bondholders, who today are protected even before U.S. taxpayers, could soon see their status change. The worry is that if even bondholders are put at risk, U.S. and foreign investors alike would stop financing all corporate America. The administration says that won't happen, but market participants believe (probably correctly) that this White House can't control Congress.
So our Treasury secretary has no choice but to talk of bank stress-testing and other tactics to buy time before the big bank bailout. Notice that the president's budget already contains a contingency fund of up to $750 billion for a future bank bailout -- a politically shrewd number that roughly matches the size of the Paulson bailout. The true cost is likely to be two or three times as much, unless some last-minute intellectual breakthrough -- a tax holiday for derivatives? -- arises.
The Obama team needs to remember that we got into this mess because of a lack of financial transparency. It's time to tell the American people what the stock market already knows: that the path to recovery will probably be expensive and politically unpopular, perhaps explosively so. This dire situation could take us all down, which is why Obama should name a proven, world-class problem-solver who is not from Wall Street as his bank workout czar. James Baker, the former Republican secretary of state and Treasury secretary, comes to mind. Other possibilities: former Democratic senators Bill Bradley or George Mitchell. Perhaps the White House should name a team.
In the end, at least one thing is certain: Our present position is unsustainable. The longer we delay fixing the banks, the faster the economy deleverages, the more credit dries up, the further the stock market falls, the higher the ultimate bank bailout price tag for the American taxpayer, and the more we risk falling into a financial black hole from which escape could take decades.
David M. Smick is a global financial strategist and the author, most recently, of "The World Is Curved: Hidden Dangers to the Global Economy." Unbelievably, this whole problem emanated from Congress exempting the CDS market from the gambling provisions which enabled 2 parties with no interest in either side of the debt being able to make a bet on the fate of a creditor. It was always insane. Normally insurance requires a party to an insurance policy to have an insurable interest. If this basic rule of insurance had been maintained this would never have occurred. Just another example of Congress doing something they didn't understand and the rule of unintended consequences rearing its ugly head. Most people won't read this or try to understand it. So we will do it again at some time in the future. Its suicide bombing by another name.
Posted by: Omoter Speaking for Boskone7794 ||
03/10/2009 08:33 ||
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#1
You're right OSofB, I don't really understand what is going on but I suspect I am not alone. I do know that BHO and Geithner have that "Deer in the Headlight" look. And they keep saying "It's all Bush's fault".
#2
Here's the problem: Today's true market value of the U.S. banks' toxic assets (that ugly stuff that needs to be removed from bank balance sheets before the economy can recover) amounts to between 5 and 30 cents on the dollar. To remain solvent, however, the banks say they need a valuation of 50 to 60 cents on the dollar. Translation: as much as another $2 trillion taxpayer bailout.
Then absorb the banks that are insolvent into the reconstituted First Bank of the United States. Limit it for twenty years. Why in the blazes should the citizens be stuck with the institutions insolvency bill but get nothing really in return [except more campaign contributions into the usual suspects coffers]. We take all or nothing.
You have two cows. The demand for milk plummets. You come up with a plan to get people drinking again. You have another drink. And another ... and console yourself with the fact that in the long run even our children's children will turn to drink in times of crisis ...
#4
My solution would be to declare all credit default swaps fraudulant. Tell anyone who bought one that the have to sue the issuer of the swap to recover. Watch AIG dwindle to nothing. Send issuers to jail.
Make sure every Wall St. trader sees these guys do a perp walk.
Posted by: Frozen Al ||
03/10/2009 11:43 Comments ||
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#5
Someone help me here, maybe the weather change has my head cloudy - but when an organization absorbs another does it not also absorb its liabilities? That is, if the banks were nationalized then the taxpayer would absorb the toxic asset and still end up footing the bill?
#7
<<< but when an organization absorbs another does it not also absorb its liabilities? >>>
No unless it takes specific action in the form of a novation. The liability stays with the legal entity which undertook it in the same way that the asset remains in the target. On acquisition ordinarily the acquirer would simply manage the wind down and/or inject capital after settling the liabilities. A sort of informal Chapter 11. But if insufficient DD is done on the way in, the acquirer might find they have bought a dog rather than something they can manage. BOA did this with ML hence the need to get more capital from the Treasury under the threat that they would not proceed with the transaction. But there has to be residual value in the first place otherwise the deal will never get done. That is why LEH went under. No-one wanted it and there wasn't enough the Treasury could legally do at the time to put lipstick on the pig.
#8
That is, if the banks were nationalized then the taxpayer would absorb the toxic asset and still end up footing the bill?
The bailouts are being arranged were we the people pick up the toxics off the banks books, but the banks keeps operating independently with its books cleansed and garnering profits to 'restart' the economy. So we're going to get stuck with the bad anyway. We might as well get the good as well.
#10
That thought has occurred to me, Trader. It's awfully paranoid but sometimes I wonder...What gets me is the timing...the way it all went to hell right before the election and all the donks started screaming it's Bush's fault.
#11
After all, I don't believe the donks ever really gave a damn about Iraq either. They were delighted to use it as a club to beat Bush but I don't believe the likes of Obama, Kennedy and Pelosi ever gave a rat's ass about the troops. I think they wanted defeat in Iraq because it would embarrass Bush. Now, if they would stoop that low they wouldn't have any qualms about wrecking the country's banks either if they thought they could use it for political advantage.
#12
Do you really want the banks nationalized? Remember, the federal government can't even run a whorehouse for a profit. When they took over the Mustang Ranch in Nevada, they eventually had to close it. As someone said, if you can't sell sex to drunken truckers, how the hell can you run any business?
Posted by: Rambler in Virginia ||
03/10/2009 19:07 Comments ||
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#13
Do you really want the banks nationalized?
If they've failed already, really what's the difference. At least it cuts out the expense of middlemen. As to the quip about the government running stuff, I believe we've just seen one element of the government rebuild an entire country nearly from ground up while fighting a war. And those who did it, did it with on the job training since no one had 'written a book' on how to do it in a half century.
#14
the federal government can't even run a whorehouse for a profit. Are you implying that the banksters have been better at ruinning their businesses than the feds?
#15
The bank already is nationalized if you bought share on it. They just forgot the part where you root out corruption and congress shys away from it on purpose.
#1
Yes, but who would be so vulgar as to worry about a trillion dollars here or there when something really important, like funding ACORN, is at stake.
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Rantburg.com and borderlandbeat.com correspondent and author Chris Covert presents his first non-fiction work detailing
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Rantburg was assembled from recycled algorithms in the United States of America. No
trees were destroyed in the production of this weblog. We did hurt some, though. Sorry.
