by Alex Evans | Dec 30, 2008 | Global system, North America
Last weekend’s FT Magazine had this excellent look back at the year – 2009, that is – from Niall Ferguson. The whole thing’s worth a read (especially on finance), but the section on the US government has the ring of authenticity to it:
Obama had set out to construct an administration in which his rivals and allies were equally represented. But his rivals were a good deal more experienced than his allies. The result was an administration that talked like Barack Obama but thought like Bill Clinton. The Clinton-era veterans, not least Secretary of State Hillary Clinton, had vivid memories of the bond-market volatility that had plagued them in 1993 (prompting campaign manager James Carville to say that, if there was such a thing as reincarnation, he wanted to come back as the bond market). Terrified at the swelling size of the deficit, they urged Obama to defer any expenditure that was not specifically targeted on ending the financial crisis.
In fact, though, Ferguson is remarkably upbeat about prospects for the US economy in 09. He continues:
Yet the world had changed since the early 1990s. Despite the fears of the still-influential former Treasury secretary Robert Rubin, investors around the world were more than happy to buy new issues of US Treasuries, no matter how voluminous. Contrary to conventional wisdom, the quadrupling of the deficit did not lead to falling bond prices and rising yields. Instead, the flight to quality and the deflationary pressures unleashed by the crisis around the world drove long-term yields downwards. They remained at close to 3 per cent all year.
Nor was there a dollar rout, as many had feared. The foreign appetite for the US currency withstood the Fed’s money-printing antics, and the trade weighted exchange rate actually appreciated during 2009.
Here was the irony at the heart of the crisis. In all kinds of ways, the Great Repression had “Made in America” stamped all over it. Yet its effects were more severe in the rest of the world than in the US. And, as a consequence, the US managed to retain its “safe haven” status. The worse things got in Europe, in Japan and in emerging markets, the more readily investors bought Treasuries and held dollars.
While we’re on the subject of Prof Ferguson, if you haven’t been watching his six part Channel 4 series The Ascent of Money (a tie-in with his new book), then you’ve been missing out: below is the first ten minutes or so of episode 1. If you’re UK based then all of the episodes are free to download on 4OD; if you’re elsewhere and have the patience, then all of the episodes appear to be up on YouTube if you hunt around.
[youtube:http://uk.youtube.com/watch?v=uyMZhkITPWE]
by Charlie Edwards | Dec 29, 2008 | Global Dashboard, Global system
- Mexico: The world’s leading narco state will, unnoticed, dissolve into total chaos destabilising the surrounding region.
- Middle East: February elections in Israel will see Binyamin Netanyahu being voted in while President Mahmoud Ahmadinejad will be voted out in Iranian elections in June.
- Asia: H5N1 will return with a vengeance.
- Bosnia: A growing culture clash between conservative Islam and the country’s avowed secularism will result in an increase in violence in the country.
- Africa: Robert Mugabe will be assassinated.
- UK: There will be no election in 2009.
- Turkey: Prime Minister Recep Tayyip Erdogan will abandon further attempts to join the European Union and instead turn East and focus on regional diplomacy.
- Iraq: Elections will be relatively peaceful in much of the country.
- Somalia: The US or France will be drawn into a short, intense ground war in the South West of the country.
- Afghanistan: In May Britain will increase the number of troops in the country. In October a European deal with the Obama administration will see France, Germany and Italy do the same.
* I will happily blog when these predictions are proven wrong.
by Daniel Korski | Dec 9, 2008 | Conflict and security, Cooperation and coherence, Europe and Central Asia, Global Dashboard, Influence and networks, North America
Following Barack Obama’s election, the intellectual market has filled up with policy papers about how the U.S and Europe can cooperate on substantive issues like China, Russia, CT, climate change etc. But little time has been devoted to the way in which the EU and the U.S cooperate, that is, the institutions of the trans-Atlantic relationship.
NATO will continue to have an important role in the Euro-Atlantic community, but the North Atlantic Alliance is no longer the place where Americans or Europeans go to talk about big strategic questions. This is true not only for non-military topics such as the global financial crisis or climate change, but also for classic foreign policy problems.
In this paper I — and two other colleagues — have tried to lay out what kind of new institutions could boost U.S-EU cooperation. Recommendations include:
- That the President of the United States be invited once a year to the European Council
- Back-to-back EU and NATO summits
- That the US Secretary of State join the GAERC twice a year
- That American Cabinet officials be invited to European Commission meetings from time to time
- That US/PSC discussions be held alternately in Brussels and Washington.
- “Double-hatting” the EU Head of Delegation in Washington as an EU Special Representative
- Establishing a small European Legislatures Liaison Office in Congress, comprising representatives from the EP and national legislatures, as well as setting up Congress/EP task forces on key issues like Afghanistan/Pakistan and climate change.
- Setting-up a US-EU Conflict Prevention Task Force, with a permanent secretariat housed in Brussels.
- Establishing a NATO/EU School for Conflict, Post-Conflict and Stabilisation to provide training for deploying personnel
New transatlantic institutions cannot in themselves help the EU develop policies or come up with a better way of thinking strategically about foreign policy issues; but at a time of considerable transatlantic policy convergence, the absence of a solid framework for US-EU discussion will see both sides miss out on a valuable opportunity for cooperation on shared challenges.
by Daniel Korski | Dec 8, 2008 | Conflict and security, Cooperation and coherence, Economics and development, South Asia
A year ago when I was helping prepare Lord Ashdown for his (ultimately aborted) Afghan appointment, I wrote to a senior U.S official with my concerns about the security situation in Kabul. “Security”, I wrote “has deteriorated in once-safe areas like the capital Kabul”. This, I argued, would damage the already weak Karzai government, particularly as the Afghan authorities were scheduled to take control of the city’s security. To deal with this problem, I proposed a cross-departmental Kabul Security Plan akin to the Bagdad Security Plan, which the U.S introduced as part of the “surge”.
The two countries face different kinds of insurgencies. In Iraq, unless the U.S secured Baghdad the insurgency could not be defeated. In Afghanistan, even if Kabul is safe and prosperous the insurgency may still win. The Red Army held most of Afghanistan’s major cities but were still defeated by a largely rural insurgency. However, if the U.S coalition cannot hold Kabul and keep it safe from violent crime whilst building it up, there is going to be little hope for others parts of the country. I also lobbied for the EU to take a special role in the city, arguing in a memo for Javier Solana’s staff and later an article:
Renewed support for the city’s reconstruction is needed; the EU has experience in city reconstruction from the EU Administration in Mostar. It should offer the Afghan government a cross-disciplinary team, led by an experienced European city administrator, to help adjust existing political, military and reconstruction plans for, and international support to, Kabul’s stabilization and reconstruction
The reply I got from the U.S official to my original suggestion was curt: “Don’t you think you need to leave that sort of issue to someone with the word “general” in front of their name”. Annoyed, I wrote back quoting French World War I premier Georges Clemenceau that war is too important to leave to generals.
Now, after a year of waiting and a continuous worsening of the security situation both in the capital city and surrounding areas, the U.S has woken up to the problem. The New York Times reports that “most of the additional American troops arriving in Afghanistan early next year will be deployed near the capital, Kabul, American military commanders here say, in a measure of how precarious the war effort has become.”
Better late than never, I guess. But the failure to nip problems in the bud, face uncomfortable problems head-on coupled with a continued unwillingness to stray off talking points is what has undone the U.S-led effort and what the Obama administration must change if it hopes to change dynamics in Afghanistan.
