US Default looms large as Politicians squabble

I turned on Meet the Press at 8am Pacific time this morning to see one of the Gang of Six declaring that he would not agree to severe cuts in spending so long as President Obama insisted on raising taxes for the wealthy. I had to shake my head and clear my thoughts as my brain started to focus on what I was hearing.

The Guardian leader that has appeared in the UK publication’s Monday morning edition (see graphic) makes clear the fears others in the world have for the consequences for the world economy if the US defaults on its debts.

The song that came to my mind was “The Lunatics have taken over the Asylum”. And by this I don’t mean only republicans but politicians in general and the asylum that is Washington DC right now.

As a recent US Citizen I view these events partly through the eyes of a Brit. I’m 54 years a Brit and only 2 an American.

America is in relative decline as the worlds strongest nation. China is growing in both absolute and relative terms. The failure to decide on an approach to paying off the national debt is merely a symptom of the American political class failing in the game of world leadership. Petty domestic squabbles dominate debate even as major global events unfold. The thought that best sums up the future of the global economy, and with it humanity, under the leadership of these politicians is “Oh Shit!”.

Here’s hoping somebody reads this and remembers the world scale consequences of the failure of American leadership. It isn’t about the Congress or about the White House. Its about the whole world and the rest of this century as the world copes with America’s decline as the unchallenged global leader.

Rebooting a nation – not impossible it seems!

The news of Barak Obama’s election victory, inevitable as it has seemed for weeks, if not for months, has barely sunk in. Commentators as diverse as George Bush and The Reverend Jessie Jackson are agreed about one thing – Americans (and I am now one) should be proud of themselves for electing an African-American as leader of the USA. It is historical. It is a proud moment for the people of the USA and shows they are looking to the future with optimism, not the past with cynicism.

But the significance of Obama’s victory goes far beyond what it means for the position of African-Americans in society, or for what it means for the rest of American society, significant as those things are. His victory brings to an end an era that began with Ronald Reagan, remained largely unchanged during the Bush senior and Clinton years, and has been relied on entirely under George W Bush. That is an era in which fear of internal and external enemies, or of cultural difference dominated the political discourse and atomized and paralyzed the American electorate. These were the years in which there was thought to be a Conservative majority, albeit a silent one. An era in which big bold optimistic ideas were frowned upon. An era in which the population as a whole was given the role of passive agent, living our lives, safe in the knowledge that we were protected by an all-powerful government.

America has been re-booted, with a new operating system. The past was a PC, Obama is a Mac. He is clever, attractive, well put together, desirable, optimistic, and many other good things. Above all else he is wanted – by Americans, by foreigners, by the world as a whole it seems. And he has unleashed and become a focus for the power of the people. Americans now officially care and are prepared to put their money where their mouth is. Optimism is Wired – Fear is Tired.

Obama’s movement has unleashed a bottoms up openness. The People can no longer be seen as a passive, fear-focused, manageable mob whose only job is to show up to vote every 4 years for the fear-monger in chief. The future will not look like the past. It will be better. There will be more thinking, more doing, more optimism and more real politics.

So… before I get too carried away I will end this piece by saying – YES! What a great feeling this is! At last we have an operating system that won’t keep crashing. It looks good. It feels good. I want it. And better still, it is crowd sourced!

My prediction for the general election

I used the USA Today vote tracker today. Here’s where I came out in my predictions.

I hope I’m close 🙂

Having said that Obama is clearly the “lesser of 2 evils”. I don’t agree with a lot of what he says. Particularly his belief that the US should send more troops to Afghanistan and Pakistan.

I just prefer him to McCain.

Economic Crisis, Financial Crisis, Debt Crisis? Is USA Inc finished?

You know the old saying – Bulls make money, Bears make money and Pigs get slaughtered.

Well, take a look at this graph from the World Bank:

It seems like Iceland is Pig number 1. Look at who is number 2!

The chart is measuring domestic credit as a % of GDP, or the extent to which the nation as a whole is leveraged. These are 2005 numbers and significantly understate the current numbers, which in the US have been reported as being at 435%. That means for every real $ in circulation there is $4.35 in credit.

I’m not saying that USA Inc. could go bankrupt, like Iceland. But, the nation whose currency provides the basis on which world trade happens is clearly at a crossroads. As a Brit, we learned about this in history – the end of empire and all that.

If the current crisis is significant in the future it may be because it is the time when the world realized that it no longer has a leader. In the case of Britain that happened in the 1870s. It took two world wars and the great depression for the world to get to a new equilibrium. I hope this time it is less painful, and happens more rapidly.

From the BBC

Kofi Annan’s comments yesterday have created a fuss. The BBC reports:

Authorities in the UK, Australia, Poland, Bulgaria and Japan also rebuffed Mr Annan’s claims.

Australian Prime Minister John Howard described the UN as a “paralysed” body and said it was incapable of dealing with international crises.

Clearly both Annan and Howard are right, but the UN’s paralysis is a symptom of a new era in US foreign policy – to “go it alone” against targets determined alone. Prediction: This era will be more unstable than that between 1914 and 1945 if it is allowed to develop.

UN Chief says Iraq war was illegal!

Iraq war was Illegal and breached UN charter, says Annan.

Too little too late I fear. The UN is now irrelevant. This is a bad fact for the US and the UK who now need it to help them in post-war Iraq, but that’s really just too bad. The UN has been revealed as a powerless talking shop. The world we are moving into is far more dangerous, and the UN’s decline is a symptom of that. Not since those dangerous episodes during the 20th century has the human race been subject to so dangerous trends. Nations are not pretending to cooperate with each other, they are pursuing unrestrained self-interest. For now, with the US clearly the most powerful nation on earth, this mainly has consequences for those the Bush administration chooses to target. But as China, France, Russia and Germany [sometimes together] begin to develop a coherent opposition to US actions the future may be more ugly.

“All the people I had shared my shelter with were dead!”

An amazing piece of journalism and a compelling story of the reality of Iraq.


The day after US helicopters killed many civilians – purportedly to save a Bradley fighting vehicle from being exposed to “the enemy” an eye witness, a British journalist from The Guardian, tells what happened.

It’s amazing to me that the Democratic nominee for President is being so craven in his support for a continued military presence in Iraq and an absolute failure in providing any opposition to the neocons (for that is who runs US Foreign policy today). The truth is that Iraq provides every argument you need to undermine the idea that a US led colonialism would be a good and stabilising force in the world.

Right now the Middle East is as unstable as I can remember – and I was 50 on August 27th, so I can remember a lot.

I can’t vote in the US election – I’m a Green Card holder, not a citizen. But if I could I would find it hard to vote for Kerry. He is a Bush in Kerry clothing as far as I can see. And the clothing ain’t that clever a disguise.

Russia Too!


Also from the Times of London

Click Here

Putin taunts Blair: Is Saddam sitting in a bunker ready to blow the whole place up with WMD?

From Rosemary Bennett and Robin Shepherd in Moscow

PRESIDENT Putin scuppered Tony Blair’s efforts to repair Anglo-Russian relations after the Iraq war by challenging him and President Bush to uncover weapons of mass destruction to justify the conflict.

The Prime Minister suffered a second blow from the anti-war axis when France and Germany backed plans for a European defence force independent of Nato.

At a summit in Brussels, France, Germany, Belgium and Luxembourg agreed to set up a “multinational force HQ for non-Nato operations”. British officials said they were baffled by the move, and Mr Blair made clear his opposition to any initiative that would undermine the alliance.

Speaking at the end of what was supposed to be a fence-mending meeting with Mr Blair in Moscow, Mr Putin mocked the coalition’s failure to find any biological or nuclear weapons. He said UN oil sanctions should not be lifted until they came to light.

Mr Putin reminded the grim-faced Prime Minister that the only reason he went to war was to eliminate the danger posed by Saddam’s weapons programme.

“Two weeks later they still have not been found,” he told a press conference. “The question is, where is Saddam Hussein? Where are those weapons of mass destruction, if they were ever in existence? Is Saddam Hussein in a bunker sitting on cases containing weapons of mass destruction, preparing to blow the whole place up?”

Mr Putin said that the international community had to draw a line under the row over war in Iraq by allowing UN weapons inspectors back in.

Mr Putin insisted that the UN Oil-For-Food programme, of which Russia is a prime beneficiary, should be renewed instead of lifting sanctions completely. The US and Britain are seeking a rapid end to the oil sanctions to help to finance Iraq’s reconstruction.

Mr Putin also questioned Mr Blair’s vision of a new strategic alliance between the US, Europe and Russia, saying it would not work if the White House made all the decisions.

Mr Putin launched his surprise attack after talks in the presidential residence just outside Moscow.

Mr Blair had hoped to use the one-day trip to persuade Mr Putin to join forces with America and Britain and heal divisions over Iraq. He said on Monday that failure to form a new strategic alliance could result in two rival camps emerging, reviving the tensions and divisions of the Cold War era.

After listening to Mr Putin’s attack, he admitted that the past few months had been very difficult but said the international community had to find a way forward. “The stand-off of the last few months is in no one’s interest — not Europe’s, not Britain’s and not Russia’s,” he said.

He said it was possible to create a two-way process where the US would listen to concerns on the Middle East peace process, global poverty and development while other countries helped the US with its War on Terror and weapons of mass destruction.

He said that the first crucial test for the international community was to agree on a role for the UN in post-conflict Iraq.

Mr Blair appeared shaken by Mr Putin’s tirade. At one point he interrupted his interpreter to make the point that the bickering had to stop: “The kind of stand-off we’ve had in the last few months, in the end, is in no one’s interests.  That is why we need to find a way through. To make that partnership real,” he said.

Diplomats said the meeting appeared to have achieved so little they wondered why the two leaders had met in the first place. “They got nowhere and only showed just how far apart they are,” one said.

This was the second successive summit at which Mr Putin had publicly embarrassed Mr Blair. Last October, when they met at Mr Putin’s official dacha outside Moscow, he dismissed a Downing Street dossier on Iraq’s weapons of mass destruction as propaganda. Downing Street sources said Mr Blair was angered by his advisers’ failure to warn him about how strongly Mr Putin felt about Iraq.

Analysts say that Russia has been let off relatively lightly by the United States because of its pivotal role in the War on Terror, its massive oil reserves and its huge nuclear arsenal.