Freeloading their way out of crisis

The president of the European Central Bank (ECB) said Europe doesn't need to boost spending more in order to triumph over the global financial crisis. This puts the ECB in line with most European governments and squarely at odds with the U.S. over the approach needed to combat this worldwide emergency. In fact Mirek Topolanek, the prime minister of the Czech Republic and current president of the European Union called the U.S. emphasis on fiscal stimulus “the way to hell”.

Now while there is much to be critical of in the Obama administration’s response to the economic crisis, at least they are trying. Europe, on the other hand, has essentially declared that the crisis will solve itself in due course and wants to sit back and watch. Germany and France, in particular, appear to be looking for a free ride off the U.S. (and many would say “what’s new”?). Knowing that their economies are almost entirely export driven, you don’t need to be Einstein to understand how Germany and France will be big winners if the U.S. stimulus package works – without them having lifted a finger to help. This is a most grotesque and selfish form of protectionism whereby Germany and France keep their national debt stress-free and stave off the possibility of high inflation while sitting back and allowing other countries to suck up the pain and do the hard work. Sadly, the obvious response to such selfishness is more protectionist policies; which is no solution at all.

This should be an interesting G20 summit meeting next week – which would be a change for the better as well.

Stimulus: Create an International Emergency Response Force

President Obama's New Deal has paved the way for a $787 billion economic stimulus package. The goals include: improving infrastructure, investing in energy projects and providing financial relief for families via tax cuts and increased government benefits. These are admirable domestic goals and should be pursued, but there are also international pursuits that would achieve the goal of stimulating the US economy while at the same time saving thousands, if not millions of lives and also demonstrating a true leadership role against protectionism in the process. I am proposing the raising, training and sustaining of a truly international emergency response force, open to citizens of all nations.

The creation and maintenance of such a force is badly needed on both humanitarian and economic grounds in order to provide effective, prevention based response to genocide, ethnic cleansing, crimes against humanity and natural disasters. Such a force, funded principally by the US, might need to operate under the umbrella of the United Nations, but must not be constrained by the existing veto arrangements that prevail in the Security Council and that make that body so ineffectual.

The force would comprise not only military personnel, but also administrators, police and medical teams. With the bulk of funding coming from the US, raising, training and sustaining such a force could achieve similar positive results in terms of stimulating the US economy, as did World War II - which most historians agree had a more concrete impact on the economy than Franklin D. Roosevelt's New Deal in the1930s.

Such a force, operating within an appropriately crafted mandate, would not only save countless lives, but according to the Carnegie Commission on Preventing Deadly Conflict, would have saved the international community nearly $130 billion of the $200 billion it spent on managing conflicts in the 1990s by focusing on conflict prevention or early intervention rather than post conflict reconstruction.

Obama officials dragging the President down

Investors and Wall St are making clear their contempt for Mr. Obama's $1.2 trillion bailout of banks. The Dow is down 15% since inauguration day and although it is reasonable to claim this economic crisis was inherited; the markets are now dropping further every time an Obama official makes a public statement. Inheritance can't be blamed for that.

The gang of egg-heads that President Obama has surrounded himself with are showing all the measured resolve of a deer in the headlights; and the nation is starting to panic. Mr. Obama's first seven weeks in office have been substantially eclipsed by a series of awkward and unfortunate blunders - which sadly has put his well publicized poise and prestige to the test. Only seven weeks in...and already there is widespread talk about him being unable to walk the walk and being a single termer. The disorganized and undeserving Republicans must be rubbing their hands with glee.

First came the stimulus package, which should have been a clearly focused parcel of initiatives aimed at only one thing - combating the economic meltdown. But instead what we got was a bloated potato sack full or earmarked programs which will surely be the shame of House Democrats for a long time to come.

Next came Mrs. Clinton's gaff burdened trip through Europe. If we believe that the rate at which a politician matures is directly proportional to the embarrassment they can tolerate, then Mrs. Clinton is maturing nicely - leaving behind a string of fumbled Russian translations, mispronounced names, incorrect historical assertions, and diplomatic faux pas. The foreign policy-watching public are definitely nervous.

Then comes Mr. Geithner and Mr. Orszag onto the scene. These two youthful looking economic whiz kids instilled about as much confidence in me as they did in Wall St, with their timid half-measures to restructure debt-laden banks and their discerningly unstated descriptions of how these measures will lead to economic recovery.

And who will put their hand up to claim responsibility for advising Mr. Obama on matters of protocol associated with the ill-fated visit of British Prime Minister Gordon Brown. What a clumsy fiasco that was - with all the pomp and ceremony of an unexpected visit from your mother-in-law. Alliances have been tested for less.

Let me finish by stating this is not an Obama beat-up; and criticizing the performance of the Administration should not be misconstrued as such; but if Mr. Obama doesn't get his staff performing like professional politicians they will be his undoing. And looking at who is waiting in the wings to take his place fills me with little enough confidence to genuinely wish Mr. Obama well!!

Ten good reasons to legalize illegal drugs

Current policies related to the war on drugs have proved to be a complete failure. What we see happening in Mexico is a manifestation of those failed policies. The UN Office on Drugs and Crime admit that the global production of cocaine and opium is unchanged from a decade ago and Cannabis usage and production has risen markedly. Here are ten good reasons why legalizing currently illegal drugs would be a more effective way to bring the war on drugs to a satisfactory conclusion:

1. Legalizing currently illegal drugs would allow the government to tax and regulate the drug trade. The US alone spends approximately $40 billion each year trying to prevent the supply of drugs – unsuccessfully.

2. Legalizing currently illegal drugs would destroy the interests of organized crime in the business and reduce the current woeful death toll associated with organized crime’s role in the illegal drug trade.

3. Legalizing currently illegal drugs would make them safer and less prone to contaminations.

4. Legalizing currently illegal drugs would allow the opportunity to deal with addicts properly. Addicts are currently treated as a law and order problem problem, whereas they should be treated as a public-health problem.

5. Legalizing currently illegal drugs would bring to a halt the practice of making criminals out of otherwise law abiding citizens, who experiment with drugs or who use such drugs occasionally (such as the current President of the United States who admits to having experimented with illegal drugs).

6. Legalizing currently illegal drugs would ease the burden on over-stretched prison systems. Each year, just in the USA alone, more than 1.5 million citizens are arrested and approximately 500,000 are jailed due to a zero tolerance of illegal drugs.

7. Legalizing currently illegal drugs would allow the government to use funds raised by taxation – as well as the many billions that would be saved by not making drug a law enforcement responsibility - to educate and treat addiction.

8. Legalizing currently illegal drugs would allow the establishment of a pricing structure that balanced the objectives of reducing consumption and discouraging black markets and crime (and other social disorders) that sustain the current illegal trade.

9. Legalizing currently illegal drugs would not necessarily mean more people would use hard drugs. The success in cutting down the use of tobacco in developed countries, where it is similarly taxed and regulated, is testimony to the hopeful possibilities that exist. Even if we concede that some increase in the use of these drug is likely, in my view more people would gain from the improved treatment conditions and education than would suffer.

10. Legalizing currently illegal drugs would release the state from its self imposed mandate of policing individual enjoyments. Many illegal drugs are very dangerous; but most are not – and used only occasionally for social enjoyment (just as alcohol and tobacco are).

Could U.S. Taxpayers be funding Hamas??

How in the hell can the U.S. government pledge $900 million to Gaza and believe that no money will go to Hamas? Unfortunately for the needy people of Gaza, $900 million isn't much in geopolitical aid terms, but just as fortunately for the tax payers of the United States that also restricts the amount of useful funds that will find its way into Hamas' hands.

Hillary Clinton's visit to the Middle East only served to reinforce what I have alluded to previously, i.e. that there is precious little difference between the foreign policy of President George W. Bush and Mr. Barack Obama. At least if there is any difference, it wasn't made obvious as a consequence of Mrs Clinton's latest visit. Clinton's visit really was just a distraction - more unkindly it could have been termed a boondoggle...it was intended for show....it was intended to pave a way for the allocation of more money (which may not actually eventuate)...and to be "seen to be there" thus avoiding criticism of not being engaged in the Middle East "problem".

There can be no doubt that the hurdles to be overcome in obtaining peace in the Middle East are enormous; especially now with Mr. Netanyahu likely to head the Israeli government - but if the Administration of Mr. Obama has any ideas up its sleeve, they weren't apparent as a result of Mrs. Clinton's latest foray.

Obama will be changed by Iraq more than Iraq will be changed by Obama

Barack Obama's commitment to draw down the U.S. troop presence in Iraq reminds me of that wonderful quote from Mr. Churchill - "In wartime, truth is so precious that she should always be attended by a bodyguard of lies". Not that I believe Mr Obama is lying necessarily, but he has certainly hedged his bets well by letting the people know of his assurance to retain a sufficient force in Iraq to ensure stability beyond his 16 month deadline. Anybody interested in obtaining a clearer understanding of exactly what this means is fighting an uphill battle however. Mr Obama says "combat troops out in 16 months"...Mr Robert Gates on the other hand, briefing Congress in January of this year, stated that troops will be required in Iraq "for many years to come". General Raymond T. Odierno (Commanding General in Iraq) has also publicly stated that he expects troop levels in Iraq to still be in the order of 30,000-35,000 in the 2015. What is one to believe?

Putting aside the need for Mr. Obama to live up to his campaign promises, I believe Mr. Gates' and General Odierno's assessments are significantly closer to reality than Mr. Obama would wish to acknowledge. Getting troops out of Iraq "responsibly" will be no easy task. The troop reductions that happened to date have been the easy ones; taking U.S. troops from only those areas where the residual security risks remain low. Starting now, and going into 2010, the residual security risks in areas affected by troop withdrawals will increase markedly - hence the Generals want the drawdown to be slower than members of the public have been led to expect - and certainly want more troops staying behind than Mr. Obama has in mind presently. And rightly or wrongly, I think the Generals are right.

At the tactical level, which is the only level where the success of the troop "surge" is evident, the presence of troops is literally the only thing standing between order and chaos, and in several cases between life and death. At the strategic level (where the surge has had no impact), the potential regional conflicts stemming from a total U.S. withdrawal are too dreadful to seriously contemplate. The Turks (who are members of NATO) will not stand by and allow Kurdistan to become independent, Iran - who already enjoys more influence in Iraq than even the U.S. does - will fall over itself to fill the lingering power gap in a manner that best suits its own interests, and consequent to Iran's rise to power, the Arabs will undoubtedly contrive to protect the Sunni population. These regional conflicts may still become a reality even with a reduced number of U.S. troops present; but they are almost a certainty with none.

To end with another quote, this time from Thomas E. Ricks authoritative book on the inside story of the Iraq war, The Gamble..."the events for which the Iraq war will be remembered by us and by the world have not yet happened."

US now officially an oligarchy

$1.2 trillion bank bailout. $75 billion mortgage bailout. $787 billion stimulus spending plan. This is classic big government tactics on an unprecedented scale, but those who are putting this plan to bed are experimenting. That's all it is, a grand experiment by a few amateurs. President Obama himself has told us "We've never seen anything like this since the Great Depression." Therefore, nobody in the workforce at the moment has any personal experience of such matters.

If you believe, as most experts do, that the crisis we are experiencing has its roots in irresponsible spending and the unwise creation of debt, then do you really believe that more spending on this scale, with the resultant record level of national debt, can possibly be the answer?

More important than that however, is that these policies are being designed and executed by the very oligarchs that created this problem in the first place. Yes, that's right...I said oligarchs. Oligarchy is that form of government wherein power is exercised not by the people, but a very few powerful individuals who have the wherewithal to control the purse-strings of government and influence the shape of government policy. These spending bills have created a new form of government for the United States of America - an Oligarchy. It may come as a surprise to many however, to know that our powerful new oligarchs aren't politicians; they are the CEO's of the big banks. This is no emotional rhetoric either - it is a fact recognized by Simon Johnson, former Chief Economist of the International Monetary Fund.

Now lets explore a little deeper. How has it come to pass that these banks have so quickly convinced taxpayers to part with a whopping $1.2 trillion dollars to fix their mistakes and solve their problems? Its not hard to work out when you realize that Geithner's chief of staff was a principal lobbyist of Goldman Sachs, the new deputy secretary of state was a CEO of Citigroup, the new assistant to the President and deputy national security advisor for International Economic Affairs is a former Citigroup CFO, and even one his deputies also came from Citigroup and yet another new member of the president's Economic Recovery Advisory Board comes from UBS, which is being investigated for shady tax evasion deals on behalf of its wealthier clients. Is it unreasonable to assume that these guys don't have any conflicts of interest??. In fact I'm certain they have only one interest, and it isn't yours or mine. It's the interests of the financial industry.

Oh, and don't expect too much from the overseers at the House Financial Services Committee either. Two weeks ago, eight top bank CEOs were brought in to testify before that committee of Congress, and guess what...it has now been revealed publicly that almost every member of that Committee had received contributions from those banks during the previous year. Now it is clear how those CEO's felt invincible enough and arrogant enough to proceed with massive bonus payments we saw at the end of last year. What a rotten mess...and its got nowhere to go but down.