(for the other 95% of America)

Wednesday, February 23, 2011

What Will Replace Egyptian, Tunisian, Bahraini, Jordanian, Syrian, and Yemeni Tyrants? Democracy, If You Can Keep It

Protests in Tahir Square, Cairo, Egypt

Over the past month, US officials seem to have one central, overarching theme in their message to the people of the Middle East: “we will ambiguously and half-heartedly support your democratic aspirations.” When it is politically easy to support protest movements, like in Iran, we will show our support. When it seems we have no choice, we will do the politically expedient thing and begrudgingly throw our lot behind the people, like in Tunisia and especially Egypt. But when it isn’t politically expedient and some sort of national security or business interest stands in the way, we keep our mouths shut, like in Jordan, Yemen, Syria and Bahrain. While it is frustrating that freedom and democracy take a backseat to oil and counterterrorism, a more serious concern for democracy-enthusiasts is the fragility that these new governments are often built upon.

Consider this statement by political scientist Jack Snyder: “The experiment with democracy in [the Middle East] is just the latest chapter in a turbulent story that begun with the French Revolution.” Now, that was written in 2004 with regards to Iraq, but the basic context of a nascent democracy and rival groups pulling the country into discord can apply to almost any country that has seen unrest over the last month. While nobody disagrees that the French Revolution was a noble cause, or that democracies are essentially good, getting there is often turbulent, violent, and in no way pre-determined.

Snyder continues to say that, “More fundamental, emerging democracies often have nascent political institutions that cannot channel popular demands in constructive directions or credibly enforce compromises among rival groups.” The lack of political institutions alone could be devastating for the new Middle Eastern democracies. NY Times columnist Thomas Friedman wrote yesterday about the lack of development in the Arab region over the last 30 years, which does not bode well for their chances of keeping democracy. “The United Nations’ Arab Human Development Report,” he writes “stated that the Arab world is suffering from three huge deficits — a deficit of education, a deficit of freedom and a deficit of women’s empowerment. A summary of the report in Middle East Quarterly in the Fall of 2002 detailed the key evidence: the gross domestic product of the entire Arab world combined was less than that of Spain. Per capita expenditure on education in Arab countries dropped from 20 percent of that in industrialized countries in 1980 to 10 percent in the mid-1990s. In terms of the number of scientific papers per unit of population, the average output of the Arab world per million inhabitants was roughly 2 percent of that of an industrialized country.” This report reveals that there will be many hindrances to a strong civil society that democracies demand, and in some respects 19th century France was in a more conducive situation for democracy than the 21st century Middle East.

Another hindrance, especially to countries with multi-ethnic societies is that “Countries transitioning to democracy… are more likely than other states to get into international and civil wars. In the last 15 years, wars or large-scale civil violence followed experiments with mass electoral democracy in countries including Armenia, Burundi, Ethiopia, Indonesia, Russia, and the former Yugoslavia. In part, this violence is caused by ethnic groups’ competing demands for national self-determination, often a problem in new, multiethnic democracies” (Snyder again). Americans know all-too-much about how deep sectarian fault lines run in this region, as our war in Iraq nearly exploded in civil war between the outgoing Sunni government and the ingoing Shia government. Even more devastating is the countries ruled by an ethnic or religious minority groups (think Bahrain, Syria, and Jordan). These are also, perhaps not surprisingly, countries that the Obama Administration is publicly treading cautiously with in regards to supporting the democratic movements over the tyrants who suppress them.

No one is rooting for the success of Arab self-determination more than I am, although, if history is any guide, this will be an extremely difficult process -- one in which I will probably be still cheering for in my old age. It reminds me of that Ben Franklin quote, when he responded to a woman asking what kind of government had been decided upon in America, he said “A republic, if you can keep it.” The truth is, nobody knows what the outcome in the newly emerging Arab governments will be. They could be like the French Revolution of 1789, or 1848, or maybe 1879, when the French Republicans finally wrested control of the government from the Monarch. What is clear is that things will never be the same.

Further Reading:

Tuesday, February 8, 2011

White House Backpedals in Support of Democratic Transition in Egypt

Just a week ago, White House Officials made a stunning policy decision to reverse decades of support for brutal dictator and strategic ally, Hosni Mubarak. Many commentators, myself included, were elated that after 30 years of collaborating with the Egyptian government, America might finally cast itself on the right side of history.

But, in a de facto 180-policy reversal, Hilary Clinton and other US officials have begun to backpedal from their initial decision to call for Mubarak’s immediate departure over the last few days. Mrs. Clinton claimed on Sunday that removing Mubarak too hastily would threaten the country’s transition to democracy, since there’s not enough time for the opposition to prepare and for government election policies to be revamped. The White House seems to be getting closer and closer to Frank Wisner’s comments that Mubarak should remain in the picture a while longer, even though officials have distanced themselves from the former diplomat’s remarks.

The sincerity of US statements regarding the future Egyptian government will, unfortunately, only be determined by time. For now, though, the mixed signals from public officials can only cause doubt with regards to whether or not we expressed our support of the Egyptian people because it was politically expedient, or because we truly do stand behind the democratic aspirations of all people (which is what Obama claimed in his State of the Union). Maybe we are beginning to see why that speech was utterly lacking in specifics.

Last weeks remarks were markedly different from this week. I was initially proud of Obama’s speech last Tuesday, when he said, “an orderly transition [in Egypt] must begin now.” And if that wasn’t enough, White House Press Secretary Robert Gibbs the next day clarified that “’now’ started yesterday.” It seemed that the US was truly ready to radically alter our approach to the Middle East and support the idea that the Egyptian people’s future, and the future of all people, should be up to the people themselves.

Perhaps the most conspicuous part of Mrs. Clinton’s speech Sunday was this: “’It’s striking that in Tunisia, Ben Ali, who’d been in power so long, got out of town,’ she said, referring to…the ousted president. ‘He didn’t have the depth of support within the institutions of his government that would have enabled him even to attempt to hang on, so he left.’ Other Arab leaders, she said, believe they can ride out the unrest by taking steps to improve the lives of their people. King Abdullah II of Jordan and President Saleh of Yemen appeared to fit that description. Mrs. Clinton did not say in which category Mr. Mubarak fit.” (Reported by the Washington Post; italics are mine.)

Last week, my reporting was filled with optimism that, not only would Egyptians soon experience democracy, but also that Obama would finally bring the United States onto the right side of history in the Middle East. I received several comments saying that it was naïve thinking since Islamic Fascists would probably hijack the process anyways – which is, admittedly, stupid and devoid of the facts on the ground. But what I realize this week is that I was naïve, but only because I believed the US had the courage to actually live up to the values we profess to uphold. I can now only wait lamely in hope that the US will sincerely press for change, and not just a façade of change.

Further Reading:

Friday, February 4, 2011

Banks Phase Out Free Checking in Response to Financial Reforms

The era of free checking accounts is officially over, may they rest in peace. Originally started by Washington Mutual in the mid-1990’s and later adopted by major banks in the early 2000’s, banks are now preparing to phase that out, and start charge customers roughly $100 dollars every year in monthly installments to maintain a checking account -- if you don’t regularly have anywhere from $500 to a few thousand dollars, depending on who you bank with.

Claiming that new financial regulations regarding the use of ‘hidden fees’ (credit card payment and overdraft fees) will cost them billions of dollars a year, the new checking account fees will partly make up for the loss. Basically, it is another way banks have managed to put even more strain on their least-profitable customers – the poor, even in the face of growing public scrutiny. But, alas, gone are the days when banks can rake in hundreds of billions of dollars a year by essentially praying on and exploiting the weakest members of our society. Critics called the fees ‘hidden’ because the most successful firms that put these fees into place were the ones that most successfully hide the extra fees from consumers.

The bigger story here is this: a company makes profit by producing a product that will somehow make peoples lives better, and, ipso facto, people will buy the product. GE produces appliances, Apple produces computers, and Tropicana produces juice; people need these things, and they buy them. Right?

But a hidden fee is not a product. Nobody is rushing to the stores because they just really need some hidden fees. There were no ‘innovative’ ideas that would make people’s lives easier or more efficient. It’s just a way banking executives can line their pockets with fat bonuses. The worst part is that the fees predominantly hurt the most vulnerable members of our society, many of which have already stopped using banks altogether, and have resorted to using check cashing stores – which in many ways are even more predatory towards the poor.

The bottom line is that commercial banking should be boring, as Joseph Stiglitz put it. If you want to make multi-million dollar bonuses than you should work for an investment firm or a hedge fund. Or, try this: actually come up with a good idea! The success of any sector should be decided by the benefits to our society. Money, instead of being a means to an end, has become an end in itself.

Further Reading:

Thursday, February 3, 2011

House Republicans Unveil Plans to Boost Greenhouse Gases, Leaving Mandate on Jobs and Economy Behind

Representative Darrell Issa, from California

House Republicans yesterday unveiled draft legislation yesterday that bans the Environmental Protection Agency from regulating greenhouse gases under the Clean Air Act. The legislation, which will easily pass in the House, is another sharp rebuke to the Obama Administration, just days after Representative Darrel Issa reportedly was asked by the Heritage Foundation (a conservative think tank) to attack decades of regulations and consumer protections.

Perhaps the more scary part of this story is that Democratic lawmakers might just go along with it. Already a handful of Senators are supporting plans to impose a two-year moratorium on EPA attempts to, essentially, do its job. It's almost as if Republicans, so intent on proving that government is inefficient, will go to the extraordinarily length of sabotaging efforts to take practical and necessary steps to curb greenhouse gas emissions, just to prove their point.

Daily Kos author Jed Lewison pointed out today that, "Conservatives can claim climate science is a hoax until they go blue in the face, but that won't change the immutable fact that dumping greenhouse gases into the atmosphere traps solar energy."And while he's completely right, there is another reason why conservatives should be going blue in the face -- this bill would also be bad for the economy. In fifty to a hundred years from now, there simply won't be much oil or gas to go around. With the explosion in the use of energy, especially in China and India, it's imperative that we continue to capitalize on the benefits that clean energy will give us now, but more importantly in the future.

China already understands this, and in many respects they are already ahead of us. Reversing decades of energy policy is not only bad environmentally, but economically as well. But I suppose it's not news that Republicans are proposing yet another bill that has nothing to do with their mandate on jobs and the economy.

Further Reading:

Huffington Post: House GOP Readies Severe New Restrictions on EPA
Daily Kos: GOP Unveils Pro Greenhouse Gas Legislation

Health-Care Repeal Fails in Senate, Next Course: Incrementally Defeat Individual Sections of Health Care -- Promising Long, Drawn-Out Debate

We all read yesterday that the Senate struck down the bill to repeal health care reform, which, of course, was not really news. The House vote to strike down job-killing Obamacare was largely a symbolic measure. The real news came out today, which is that after weeks of wrangling about a bill that actually has a negative impact on the economy, House Republicans announced they will dedicate many more weeks and possibly months attempting to incrementally defeat the most unpopular elements of the bill.

Americans are, according to polls (poll analysis), increasingly flocking towards the President as Republicans continue to bungle their mandate to focus on jobs and the economy. Obama’s approval ratings are the highest they’ve been for years, largely due to an increase in support from independents (36% approval rate last July, compared to 48% now). Not only are Republicans over-focusing on the outright repeal of health care, they're also focusing more on ‘family values’ issues like abortion. Just today Republican lawmakers, after massive outcries from women’s groups and days of dragging their feet, finally removed the term “forcible rape” from the antiabortion bill being debated in Congress. Critics argue that rape is by definition forced, as it seemed lawmakers were trying to make some cases of rape except – like in cases where the victim is unconscious.

But back to health care, Senator John Cornyn, Republican of Texas, prepared Americans for a long fight on repealing individual parts of the law, saying “These are the first steps in a long road that will culminate in 2012. We will continue to expose flaws and faults in this legislation… and the courts will continue to review it.” Democrats and Republicans alike are both hoping the Supreme Court will quickly take up the case to put an end to the debate.

Also coincidentally in the news today Virginia’s attorney general announced that he wanted to bypass the lower court system by asking the Supreme Court to consider the constitutionality of the health care law on a more expedited basis. But, historically at least, Democrats have a lot more precedents to point towards in arguing that the health care law is constitutional. As Senator Richard Lugar, Democrat of Illinois, said, “This is not the first major law that’s been challenged in the courts, even challenged successfully in the lower courts.” He then cited the Social Security Act, the Civil Rights Act of 1964, and the Federal Minimum Wage law – all of which were challenged, sometimes successfully in lower courts, and ultimately upheld by the Supreme Court.

Further Reading:

CS Monitor: Health-care repeal fails in Senate
NY Times: VA. to ask supreme court to rule on health law

Does Egypt Need Twitter?

Here's Malcolm Gladwell's take on the importance, or lack of importance, of social networking with regards to the unrest that is transforming the Middle East.


As Egypt is One Step Closer Towards Democracy, Western Officials Fear Favorable Outcome for Muslim Brotherhood

As Egypt seems to get closer and closer to a transition to democracy every day, many commentators are deploring the growing role Islamist Parties, specifically the Muslim Brotherhood, may play in the newly formed government. In essence, commentators are stuck in the bind of supporting a democratic process, but not the outcome of that process. We just cannot have our cake and eat it too.

The Bush Administration also grappled with this paradox as it fought wars in Iraq and Afghanistan to establish democracies there, yet at the same time condemned the democratic election of Hamas in Palestine, Hezbollah in Lebanon, and the Muslim Brotherhood in 2005. We basically seem to have a policy of supporting free societies just up to the point where the we find the people elected don’t really seem to jive well with the status quo balance of power in the Middle East.

The presence of the Muslim Brotherhood in Egypt’s unrest and the recent majority Hezbollah gained in Lebanon has reignited this debate. There are, to be fair, serious concerns about balancing an Islamist Party with democracy, the biggest being the establishment of Shariah Law versus an independent judiciary. Islam is the only organized religion with its own set of judicial laws that run directly counter to Western notions of freedom and liberty. But Americans don’t seem to have a problem of continuing their precious support for Saudi Arabia, which is probably the biggest hotbed of Anti-Western and anti-Jewish sentiment in the region. So why the disconnect?

So what if Egyptians want to elect an Islamist Party? Why should we stop Egyptians from doing what they want? Is it not their country? If they want to be a theocratic state (which seems highly unlikely), then let them! If they want to wear Hawaiian shirts on Friday, then why not? If they want to wear their underwear on their heads, why not? Aren’t they a ‘free people’ now? Egypt should be for Egyptians.

If President Obama truly wants to stand with the democratic aspirations of all people, like he said in his State of the Union, he will simply have to accept the fact that the outcome may not be favorable to the US. We have for many years purchased stability at the cost of democracy, and we should recognize that we simply cannot have it both ways anymore. President Obama should take steps towards recognizing democratically elected Hamas and Hezbollah, and also towards bringing the Muslim Brotherhood into the newly formed Egyptian government. In order for these groups to shed their fundamentalist nature, they will have to eventually come out of the shadows – and we should do everything we can to facilitate that process.

There are, of course, many risks that we take in supporting the democratic process, but there are arguably even more risks that we have seen unravel over the past week from hedging our bets against the democratic aspirations of the Arab people.

Wednesday, February 2, 2011

Al Jazeera in Tunisia and Egypt: the Next Radio Free Europe?

Al Jazeera English’s ratings from the past weekend have the American media abuzz about the Qatar-based network’s increasing popularity. The LA Times called it the media sensation’s “CNN moment’ (whose popularity catapulted after their Gulf War coverage), and reported it may even result in the channel becoming part of a premium cable package here in the US. Huffington Post author Tom Watson wrote today “let’s hope it spreads to our sets like democracy activism through the Middle East.” Out of the network’s four million viewers last weekend, 1.6 million of them were American.

Yet despite the importance Al Jazeera plays in offering Americans a chance to re-connect with events happening on the other side of the world, it plays an even more prominent and historically important role in the Middle East as it capitalizes on the lack of unfettered journalism in the region. Especially during the Tunisian uprising a few weeks ago and the current Egyptian unrest, dissidents there must have access to information outside of the state-dominated news agencies, which have a strong bias towards the regimes that fund them.

The importance of the freedom of information that alternative news sources can provide has many precedents in history, but perhaps the most recent and most tangible to Western observers is the role that Radio Free Europe played in the Velvet Revolution in Czechoslovakia, “where the free flow of information [was also] banned by government authorities or not fully developed (link).” Much like the Egyptian unrest, it was critical that Czechs could be fully informed in order to fully partake in the protests that led to the transition to democracy. Czech Ambassador Zderek Lycka recounts, “how did a demonstration start? Always with information from radio stations The Voice of America or Radio Free Europe about time and place (link).”

Mr. Krichen, the anchor on Al Jazeera English, told the New York Times “I think we should be careful – I mean we shouldn’t think that our role is to release the Arab people from oppression… But I think we should also be careful not to avoid any popular movement. We should have our eyes open to capture any event that could be the start of the end of any dictator in the Arab world.”

Further Reading:

Tea Party Influence Present in Highest State and Federal Courts

Judge Roger Vinson

Judge Roger Vinson, of Federal District Court in Penasacola, Florida, released a 78-page legal opinon on the ruling to strike down health care reform on Monday. But while the outcome of the ruling is not surprising, what is drawing a lot of attention is what seems to be a deliberate nod to a political movement and perhaps an instance of political bias by one of the state's highest court judges. "It is difficult to imagine," the opinion read, "that the nation which began, at least in part, as the result of opposition to a British mandate giving the East India Company a monopoly and imposing a nominal tax on all tea sold in America would have set out to create a government with the power to force people to buy tea in the first place." Some commentators are even referring to the document as the 'Tea Party Manifesto." It is unclear so far how much damage this will do to the chances of health care repeal getting admitted to the Supreme Court, and that, in turn, depends on how much bad press the opinion gets.

But this is not the first time Americans have heard of radical Tea Party members peddling influence with the some of the most prestigious courts in America. Just last week it was reported that Supreme Court Justice Antonin Scalia spoke on Capitol Hill in a closed-door session with a group of conservative lawmakers. While it is proper for justices to interact with Congress, like any other job it requires an obligation on the judges part to at least act like they are being impartial. Jonathan Turley wrote an op-ed piece in the Washington Post Sunday about this, saying that "If justices come to personify political movements, the law appears to be merely an extension of the personalities -- and the politics -- of the bench."

Also recently in the news Virginia Thomas, Supreme Court Clarence Thomas's wife, has for decades worked for and received money from conservative think-tanks and political groups, but Justice Thomas has not reportedly made public where the money is coming from. Mrs. Thomas is the founder and head of a 501(c)(4) nonprofit group called Liberty Central, and because of the 501(C)(4) status she does not have to publicly disclose any of the contributors. But, the New York Times reported, "A federal law requires justices to recuse themselves in an number of circumstances where real or perceived conflicts of interest could arise, including in cases where their spouses could have a financial interest. But the decision to step aside is up to each justice; there is no appeal from the nation's highest court."

While Judge Vinson's ruling may not be taken up by the Supreme Court and very well could soon be invalidated, there are still serious questions remaining about the ability of justices who serve in state and federal courts to dissociate themselves with political groups when deciding upon matters that are to be influenced by the law, and only the law. How did we even get ourselves into this pathetic state of affairs?

Further Reading:

NY Times: Justice Scalia to Speak to Tea Party...
NY Times: Activism of Thomas's Wife Could Raise Judicial Issues
NY Times: Tea Party Shadows Health Care Ruling
Huffington Post: Florida Judge Rules Health Care Reform Unconstitutional

2012 Roadmap to Obama Victory: Compete in Historically Republican South

Obama's Chief Political Advisor, David Axelrod

In a bold effort to define the roadmap to victory, the DNC announced yesterday that Charlotte, North Carolina will be the site of the Democratic National Convention in 2012. North Carolina, along with Virginia, went Democratic in the last election for the first time since Jimmy Carter, and basically since leftist politicians passed the Civil Rights Act. But thanks to more robust economies, more social and racial diversity, and large voter turnout among blacks, some Southern states are once again turning into political battlegrounds. David Axelrod highlighted the importance of states like North Carolina on Monday, saying “[T]he mistake we make in this town is often to sit on the back of the truck and look at what just happened and extrapolate from it and assume that the next election is going to be just like the last one."

But as Democrats are working to be more competitive in historically Republican regions, the electoral map is beginning to reflecting that. The Midwest was another region that voted more democratic in 2008 than in had over the past decade, where Obama carried states like Indiana, Ohio, and Iowa (all of which went for George Bush in 2004). But Obama’s team is, at least for now, paying less attention to this region since the revival of the auto industry is proving to be essential to these states economic recoveries. Obama is right to think he can win in those states without too much extra attention, with success stories like the GM revival to point towards. Just a week ago GM sold more vehicles in China than the US for the first time, showing it can be a successful global competitor. Dana Rouse, chairman of the United Automobile Workers, told the New York Times “Less than two years ago, we didn’t even know if we were going to have a company,” in response to the Ford Motor Company announcing their decision to add 7,000 jobs to their plants in Flint, Michigan by 2012.

Not only is it a shrewd choice to choose North Carolina to remain competitive in that state, but Democrats should aggressively take on the rest of the Southern states as well. This is, in essence, Howard Dean’s 50-state strategy in 2006 of competing in every single state no matter how uncompetitive it seems.

Many people are still critical of trying to win states like South Carolina and Georgia. Huffington Post Author Howards Fineman wrote yesterday “the interior border states are trending Republican. West Virginia, Kentucky and Missouri used to be competitive. They no longer really are.” But although it’s true that these states have historically gone Republican, we cannot deny that Democrats have made dramatic gains in the South over the last two elections. Dems lost Virginia in 2004 by 10%, but won by 6% in 2008. They lost NC by 10% in 2004, but won in 2008. Even states where Obama still lost in 2008 have seen many more people vote democrat than in the last few decades. Dems lost Georgia by 20% in 2004, but lost by only 5% in 2008. They lost SC by 20% in 2004, and 10% in 2008. They lost West Virginia by 23% in 2004, but lost by 13% in 2008. The gains are subtle but undeniably there, and by choosing North Carolina as the first major stop on the President's roadmap, Obama is making a very bold move to take on Republicans right at the core of their base. 

And it may just work.

Further Reading:

                           Axelrod Outlines the 2012 Map

Tuesday, February 1, 2011

Iraqi Government Follows in US Footsteps: Secret Detention Facilities, Torture, and Indefinite Detention

Iraqi Prime Minister Nouri al-Maliki

Human Rights Watch uncovered information today that indicted the Army's 56th Brigade and counter terrorism service, both under the direction of Prime Minister Maliki, of operating secret detention facilities and using torture on detainees right in the heart of Baghdad. "Revelations of secret jails in the heart of Baghdad completely undermine the Iraqi government's promises to respect the rule of law," said Joe Stork, deputy Middle East director at Human Rights Watch. Perhaps the saddest part of this story is that the only country who could exercise any influence in Iraq is the United States, and we of course use all of these detention tactics that run counter to international law, and run counter to any sense of moral dignity in general.

Further Reading:

Human Rights Watch: Secret Jail Uncovered in Baghdad
Washington Post: Human Rights Watch: Maliki's secret forces abusing detainees at secret sites
CS Monitor: Secret prison in Iraq raises fresh concerns over torture

Mubarak Agrees to Step Down Eventually - Protesters Say Too Little, Too Late

effigy of Mubarak (photo credit: Victoria Hazou/AP)

In the face of the largest protest in Egypt yet (several hundred thousand people gathered at Tahir Square in Cairo alone) and increasing lack of support from Mubarak's biggest beneficiary, the United States, the president agreed not to run in the elections next fall. In his lackluster remarks, the aging dictator actually claimed at one point that he was going to retire soon anyway, saying "In all sincerity, regardless of the current circumstances, I never intended to be a candidate for another term."

In all sincerity my foot.

Mubarak's concessions are too little, too late, and it's far from certain that the protesters intend to renounce their demands of immediate resignation. It seems like everyday there is a desperate, last-ditch effort by the Egyptian government to disperse the protests. On Wednesday and Thursday the police in Cairo tried to break up the protests through violence -- it didn't work. Friday the regime tried to intimidate the demonstrators with the military presence throughout the city -- it didn't work. Over the weekend the regime tried to incite unrest by using plainclothes police officers to start looting and encourage others to join in the 'mob mentality' -- it didn't work. Also over the weekend Mubarak made an effort to instill fear in the crowds by flying US made helicopters and fighter jets low over the ground, and guess what -- it didn't work.

Protesters have demanded that Mubarak step down by Friday. At the rate of the Egyptian President's current failures to quell the unrest, they could very well have their wish.

Further Reading:
NY Times: Mubarak Says He Won't Run....
Huffington Post: Mubarak Tells Egypt He Will Not Seek Re-election

Jordan Gives in to Protester’s Demands of Reform – US Should Help Ensure This Reform Takes Place

King Abdullah II of Jordan

As the wave of popular protest throughout the Middle East seems to be reaching its crest, King Abdullah II of Jordan is attempting to capitulate to demonstrator’s concerns before Egyptian-like protests erupt in his country as well. Today the king fired Prime Minister Samir Rifai and replaced him with former general and ambassador Marouf al-Bakhit in an effort to bolster more support for his monarchic regime. The new Prime Minister is widely seen as untainted by corruption, and also an American ally because of his work in crafting a peace agreement with Israel, giving it an air of legitimacy to two key constituents.

Mr. Bakhit’s first task as the new PM is to “[take] steps to start a political reform process… [To] bolster democracy [and] nation building that opens the scope for broad accomplishment to all dear sons of our country and secure them the safe and dignified life they deserve,” states the official announcement of transition. The New York Times reported, “Reactions among protest leaders were cautiously positive. Nahed Hattar, a leftist activist, said in a telephone interview that he considered the change a good move but that he wanted to see the government program before rendering a judgment.” Indeed Jordanians should ask themselves why King Abdullah, like President Mubarak, would bring about democratic reforms that would spell an end to his rule. But, at least for now, the people of Jordan are only calling for economic reform and more government accountability.

The US should aggressively work with their Jordanian counterparts to ensure this reform takes place. If we have learned anything from Egypt and Tunisia it is that ‘our dictators’ in the region are clearly not as stable as we thought. We should continue to use the leverage of military aid to tell these dictators, and perhaps more importantly their generals, that they must proceed with reforms if they expect our financial support, like we have done in Egypt. President Obama was right in his State of the Union to say that “The United States of America supports the democratic aspirations of all people,” but he should follow up on that by taking concrete actions, before the momentum is lost.

Further Reading:

Monday, January 31, 2011

Clinton Finally Uses the D-word, Democracy -- Will Mubarak Take Heed?

Secretary of State Hilary Clinton resisted calls to explicitly tell Mubarak to step down when she was on a handful of morning talk shows on Sunday, but she did for the first time in the official US response to the Egyptian unrest use the d-word, democracy. Ms. Clinton said on CNN “Both existing and any new members of any government [must] take concrete steps toward democratic and economic reform,” and highlighted the carefully calibrated “transition” wording that is now being used with regards to an end-game scenario in Egypt.

As the situation on the ground has been rapidly changing over the past few days, so too has the language that Western officials have used to show their support, or lack of it, of the aging dictator. Obama made vague mentions of support for ‘democratic aspirations’ in his State of the Union which coincided with the first few days of the unrest. The gaffe-prone Biden said on Friday that Mubarak was actually not a dictator. Now the administration seems to have adopted a new stance, stemming from the continued unrest over the weekend, which depicts an increasingly weak and fragile government. Indeed many nations all over the world are calling for some sort of democratic transition, but refraining from calling for Mubarak to step down.

Fears that a radical movement could fill the vacuum of power that Mubarak’s absence would bring reverberate throughout many foreign official's concerns of a regime change in Egypt. Many commentators are suggesting that the protests could be hijacked by fundamentalists, and would result in another Iran-like theocratic state.

While we should fear the radicalization of the presently secular protests, we should even more so fear deeper alienating the democratic process by imposing our influence over what should be a matter decided upon by Egyptians. Not Americans, not Britons, not Israelis or Chinese, but by the Egyptian people alone. Not to mention the fact that the protests seem to be largely secular anyway and that the most prominent Islamist group, the Muslim Brotherhood, has agreed to take a backseat in the forming of a new government. But US support of any one person or candidate is much more a burden than a help. The popularity of the United States is still quite low because of increasing belligerence in the region over the last decade, and if we do decide to back any one candidate over another then we will only be pushing moderate Egyptians towards radical solutions.

While US restraint on publicly stating Mubarak should step down is frustrating, especially considering we’re the country with the most leverage in Egypt given the aid we give, no other countries are calling for the dictator to step down either. No European country is saying that, nor China, nor India, or Japan either. In some respects this tact has already achieved perhaps game changing results. The New York Times reported that the "EU Institute for Security Studies said Mubarak’s regime was ‘beyond the point of reforming.’ The appointment of Omar Suleiman as vice president ‘indicates that the army, probably prodded by the U.S. administration, has accepted that Mubarak must leave.’”

Consider this statement made by British Prime Minister David Cameron: “There needs to be a proper, orderly transition to a more democratic situation, where there are greater rights, greater freedoms, better rule of law…It is very important that, whether it is President Obama or me, we are not saying who should run this country or that country.” We would do well to heed his advice and continue to limit our involvement to calling for general reform and continuing to use the military aid we give as leverage. Indeed it seems that these actions have already reaped handsome rewards.

Further Reading:

Saturday, January 29, 2011

Stunning Video Footage Shows Egyptian Military Protecting Demonstrators From Police

I wanted to post this raw footage from Cairo this morning, one day after the most violent protests in recent history. What you are watching is a group of Egyptian policemen attempting to clear a street which leads to Tahir Square, a major protest site over the past few days. The police subsequently fired shotguns into the air and the Egyptian police moved tanks in front of the rock-wielding protesters to shield them from the line of fire. If there is an onslaught of violence between the police, who are currently guarding the presidential palace, and the military, who show signs of increasingly strained relations with dictator Hosni Mubarak, we could very well see some sort of revolution take place within the next few days.

Obama May be Forced To Take a Stand on Same-Sex Marriage

Over the past two years, President Obama has managed to avoid a political showdown regarding same-sex marriage, but two pending federal lawsuits are now threatening this fragile balancing act. To date, executive officials have been upholding the Defense of Marriage Act (which denies federal recognition of same-sex marriage) by citing their duty to defend Acts of Congress. In general, the Obama Administration has previously been able to downplay 'family value' issues in the last two elections, which normally tend to get a lot of conservative voters to the polls. More attention has been put on the economy and jobs in the aftermath of the 2008 financial crisis.

Democratic legislators across the country have also been grappling with LGBT (lesbian, gay, bisexual, transsexual) issues concerning marriage over the past decade. California voters passed the infamous Prop 8 Law in 2008, which denied same-sex couples the short-lived right to marry -- 173 days to be exact. But Governor Arnold Schwarzenegger and Attorney General Jerry Brown refused to defend the prop in court, which basically ended up nullifying the voter-passed initiative. The Obama Administration is essentially facing the same dissonance between its responsibility to defend the law of the land, or force the federal courts to prove why there has to be a separate set of laws for the gay community.

The New York Times reported today that "Some conservatives have accused the administration of throwing the fight by not invoking other arguments, like morality. And in particular, lawmakers' primary focus in 1996," (when DOMA passed), "was 'encouraging responsible procreation and child-rearing....' [but] other cases disavowed that rationale, noting that infertile heterosexuals may marry and citing studies that children raised by same-sex parents are as likely to be well-adjusted as those raised by heterosexuals."

Not only should Obama ask himself whether certain individuals' moral beliefs should be imposed onto everybody else -- which they shouldn't -- but he should also ask himself whether or not he learned anything at Harvard Law School. I find it hard to balance the fact that our president studied constitutional law at the most prestigious university in the world, and also thinks that gay people should have a 'separate' institution of marriage called civil-union, 'but equal' in that it affords them all the same rights. How can he square this rationale when everything history teaches us tells us different?

The Obama Administration has until March 11 to decide whether or not to defend DOMA. The United States is indeed exceptional, and as the president noted in the SOTU, we were the first country in history to be founded on an idea -- that all men are created equal, and possess the inalienable right to life, liberty, and the pursuit of happiness. I hope our administration makes the decision to live up to these firmly held values.

Further Reading:
NY Times: Lawsuits on Same-Sex Marriage May Force Administration to Take a Stand

Egyptian Military is Siding With Demonstrators

Today marks the fifth day of the Egyptian uprising, and dictator Hosni Mubarak seems to be running out of options to quell the unrest. We all saw the pictures of the tumult from Friday, when the feared police attempted to violently disperse the thousands of people who took to the streets. The police used tear gas canisters, batons, rocks, water cannons, and in some cases even open fired on protesters as violence quickly escalated out of control.

But the riot police seemed to have largely failed to restore peace, and may have even fueled more anger towards the regime. Even as cell phone and internet services were cutoff and curfews were put in place, Egyptians are united like never before, setting fire to Mubarak’s ruling party headquarters, looting the Interior Ministry and state television headquarters, and setting fire to about half a dozen police stations and cars as well.

The feared police have now withdrawn from the streets to take positions around the Presidential Palace, as Mubarak tries a change of tact and has ordered the military to restore calm to the streets of Cairo. This is pretty much the last option the aging dictator has, and many see it as the last barrier between Egypt and democracy. But, two things remain unclear. One is what orders Mubarak will give the army, or has given the army with regards to the level of force that is acceptable to disperse the protests. But, more importantly, it remains unclear how the soldiers will respond to their orders, if they do respond at all.

It’s about 7:00 PM in Egypt right now, and so far the army hasn’t used violence to enforce the 4 PM curfew. News agencies are reporting many instances where the military appears to support the protesters more than the officials they are taking orders from. A soldier in Cairo reportedly addressed Egyptians with a bullhorn saying, “The army and the people will purify the country.” There was an announcement earlier Saturday saying that anybody out after curfew would be arrested, but the military is doing nothing to move the protesters out of the streets, and in some cases soldiers reportedly “smiled and shook hands with protesters and invited them up onto their tanks,” reported the Washington Post.

While the restraint could mean the military has sided with the protesters, it could also represent a new tactic by Mubarak. As the violent methods of suppression the police used largely fueled more unrest, the military is holding back on using force perhaps so protests will wither away as there doesn’t seem much to fight back against. It could also mean that Mubarak has lost control of the military, and if that’s the case then this drama will probably unravel quicker then we know it.

Further Reading:
NY Times: Egypt Protests Continue as Military Stands By

Washington Post: Cairo falls into near anarchy; army warns it will treat protesters as criminals

Friday, January 28, 2011

US Economy Shows Robust Growth -- But Who Will Take Credit, Obama or GOP?

The Commerce Department released a report today showing the US Economy sped up it's growth rate in the last quarter of 2010 to 3.2%, up from 2.6%. As Americans felt comfortable buying again during the holiday season, and businesses are increasing funding for equipment and software, economists are hoping these numbers will be coupled with investments in new workers as well.

The real story, however, will be unraveling over the next few days. And that is, who will take credit for the strong growth rate? President Obama obviously has reason to claim his policies have turned the economy around, with hundreds of pieces of legislation promoting growth to prove his point. But, I would not at all be surprised if Republicans claim the growth is due to a boost in confidence from consumers and businesses, stemming from their recent victory in November.

I hope to bring more updates on this, as it could get really juicy.

Further Reading:
NY Times: U.S. Economy Grew at 3.2% Rate in the 4th Quarter

Live Blogging Updates on Egyptian Protests Turned Violent

As I'm sure a lot of you have noticed that Egypt is dominating the news. Events are happening so quickly there it is getting hard to keep up with. Here are a couple websites that have been updating the news from the region pretty frequently. Dan Murphy, staff writer for the Christian Science Monitor, has been updating this page every 20 minutes or so all day which is very helpful. Andrew Sullivan's "The Daily Dish" has also done a good job with providing commentary pretty frequently, and the Huffington Post has been providing both news and commentary updates fairly regularly.

Hawaiian Legislators Put Birther’s Claims to Rest – Obama is Not Kenyan

forged Kenyan birth certificate that circulated the conservative blogosphere

I can’t believe this is news, but Hawaiian legislators have taken steps today to ensure skeptics that President Obama was not, in fact, born in Kenya. We all remember the incredulous McCain supporters, unable to just admit that they lost. Perhaps my favorite claim was that our president is a Muslim, and even maybe a sleeper terrorist cell (?) – and with a name like that, how could it not be true? Representative Rida Labanilla, the bill’s main sponsor, said, “All these people are still doubting it because they don’t want the birth certificate from Obama. They want it from our state office.” The state is currently unable to release the records because of strong constitutional privacy protections.

But, putting these ridiculous claims to rest was only one motivating factor behind the measure. If passed, anybody will be able to acquire Obama’s birth certificate for a fee of $100. One of the main reasons the new legislation is being considered is actually to offset the time lost by state employees who frequently receive phone calls and emails from people who believe Obama was not born in the US. Hawaii is currently facing a budget deficit exceeding $800 million, and if they can make money putting these idiot's claims to rest, then fine. But that does imply that birthers follow some kind of reasonable logic, and I’m not convinced they do yet.

Further Reading:

Thursday, January 27, 2011

Obama Voices Support for Tunisia in SOTU, But What About Egypt?

The civil unrest in Egypt has sent U.S. officials scrambling to explain our democracy promotion efforts in the Middle East. Under scrutiny is the policy of massive military and economic aid to brutal dictators, while at the same time claiming to advocate for political and economic reform.

President Obama, in his State of the Union address subtlety expressed support for democratic efforts in Egypt, saying “Tonight, let us be clear: The United States of America stands with the people of Tunisia, and supports the democratic aspirations of all people." Hilary Clinton especially, being in charge of the State Department, has been making speeches expressing support for reform in the region. The United States, she said, “have consistently raised with the Egyptian government, over many years, as well as other governments in the region, the need for reform and greater openness and participation in order to provide a better life, a better future, for the people.”

But actions speak louder than words. And when we don’t put any teeth behind these words it makes our efforts seem half-hearted and meaningless. Dictator Hosni Mubarak has been the recipient of billions of billions of military and economic aid, and that gives the US a lot of leverage over the Egyptian President. Simply asking a dictator to enforce political reforms that would essentially bring about his demise, and expecting change is just plain dumb. We owe it to ourselves, as a country founded on the idea of democracy and liberty, and to Egyptians to spend that money wisely and put conditions on aid. Without using our leverage, and possibly adding some sticks into the equation if we don’t see reform, saying that we support Egypt is a totally empty statement. If Obama is serious when he says he’ll stand with democratic movements, he should put his money where is mouth is.

History is in the making in the Middle East, and we should be sure we’re on the right side of it.

Potter Over Bailey

Well, once again we made it through that time of year when the halls are decked with holly, the five golden bells are pealing, and the elves are waxing the skids so Santa can cruise through the skies, dispensing gifts to all the good little girls and boys. That means it was also time for a thousand re-runs of It’s A Wonderful Life, the Frank Capra film that manages to pull off a Yuletide hat trick by combining capitalism, communalism, and Hollywood hokum to save the day in small town Americana. Only this year it seemed that there was something smudgy around the edges of this particular charm. Americans have come to understand that instead of rescuing Jimmy Stewart’s George Bailey, we have rescued Lionel Barrymore’s Mr. Potter, the epitome of greed who drips venom instead of Christmas cheer.

How did it come to this? Rather than bail out the millions who are suffering foreclosures we bailed out those who perpetrated the fraud that led to the foreclosures. Rather than helping the needy and indigent, we are helping the coddled at the highest ends of the income bracket. Rather then reaching out a helping hand to the homeless, we have reached out a helping hand to those with multiple homes, sometimes so many that, like John McCain, they have lost count of how many they own.

We have been told by the wise sages of the economy that we had to rescue capitalism, that Wall Street would have imploded if we had not lent it a cool trillion, that those receiving taxpayer funds were deeply sorry about their financial transgressions, and that the mistakes of the past would be rectified once the money was handed over.

But doesn’t it seem a little odd that hardly any of the bullish free-marketers have acknowledged that something went drastically wrong with their foolproof system? Isn’t it true that those who most earnestly believe in the power and glory of the private sector to solve any and every problem are still acting as if the public has no right to meddle in their affairs?

Consider the following quotation from FDR inscribed on the Roosevelt Monument in Washington, D.C: “The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little." We seemed to have flipped this credo over during the last thirty years, continually succumbing to an odd urge to ensure that the rich get richer and the poor poorer. We have waged wars while cutting taxes, an untenable economic feat completely unprecedented in its degree of foolhardiness. That such profligacy would lead to huge deficits is hardly shocking; what’s shocking is that it was done in the first place. As President Clinton once admitted, the only sacrifice the wealthy were asked to make for the war effort was to open up envelopes with their tax refunds stuck inside.

Meanwhile, the middle class is crumbling and the poor are being blissfully ignored, just as their numbers increase to startling proportions. According to the U.S. Census Bureau, the poverty rate for children under 18 rose from 19.0 percent to 20.7 percent in 2009, while the total number of people living in poverty stood at 43.6 million, the largest number in the 51 years that such an estimate has been published by the Bureau. Yet the poor have no funds to pour into the coffers of our politicians so, while they may be pitied, nothing is done to ameliorate their condition.

Bank profits are soaring. According to the Federal Deposit Insurance Corporation, net income for banks went from $3.2.billion during the first nine months of 2009 to $53.6 billion in 2010. During the same period, millions of Americans lost their homes through foreclosure. Potter is gleeful. And we seem intent on giving him even more. Meanwhile, George Bailey seems to have disappeared. Or maybe he fled, having realized that America is no place for him, not with its citizens intent on rewarding Potter over and over again while sending his borrowers out into the cold.

Tea Party Mandate to Cut Spending Makes Exception for Defense

2010 US Budget

Incoming Tea Party representatives were elected on a wave of concern with government spending, but the elephant in the room (which is defense spending), is causing most newly elected Republicans to just simply look the other way. I posted the above graph just to prove the point that if any congressman is serious about reducing our “crushing burden of debt,” as Mr. Ryan called it in his response to the State of the Union address, you simply cannot ignore the defense budget. But, incoming representatives are finding that there is much more nuance to governing than their mantra to ‘cut, cut, cut.’

But this is just another of the many emerging struggles within the Republican Party about what direction to go in (Poll Analysis: Is the Tea Party Digging Their Own Grave?). The ‘party of no’ passed a repeal of health care reform last week, but immediately began backpedaling. Mr. Ryan went so far as to announce Republicans would now be coming out with their own health care plan as they recognize the unpopularity of the repeal. Tea Party representatives campaigned on repealing entitlements like Social Security and Medicare to reign in spending, but now that they’re in power, it seems like these unpopular stances will also take a back seat, as Mr. Ryan conveniently left these ideas out of his response as well.

The same thing is happening with defense spending. For all their fervor to come to Washington to set the country’s finances straight, Republicans are now split on whether or not to cut defense spending. Looking at what newly elected Tea Party candidates said during the campaign and what the say now, you’ll notice a divide. Representative Vicky Hartzler, a freshman from Missouri, was backed by Sarah Palin and said her main priority was to reign in spending. But, when it comes to spending for the Pentagon all of a sudden Ms. Hartzler has had a change of mind. Her district has two large military bases and is home to the B-2 Stealth Bomber and the unmanned Predator Drones. Representative Scott Rigell, a freshman from Virginia, signed onto the Tea Party platform of cutting spending, but when asked about Secretary of Defense Robert Gate’s plan to do just that, he said “The abruptness of the decision is concerning me.” Mr. Rigell now represents a district that is economically dependent on military funding.

I really don’t say this often, but I’ve got a gift for freshman representatives who act so concerned about the budget: the much beloved founders probably wouldn’t have supported a 550 billion dollar defense budget either! In fact, the founders didn’t support any kind of defense budget. Not until the early 19th century did America have a navy, let alone an army. President Thomas Jefferson finally convinced Congress to create a navy to fight off the Barbary Coast pirates in 1801. Since the tea party seems to be interested in what the founders would have to say of our present-day state of affairs, shouldn’t that extend to the nation’s defense as well?

It seems that freshman Republicans are finding that governing is not quite as easy as just saying yes, or no; there is much more gray than black or white. Will there be room for nuance in the ‘party of no?’ We’ll just have to wait and see.

Further Reading:
NY Times: G.O.P. Splits Over Plans to Cut Defense Budget

Wednesday, January 26, 2011

Obama's Speech: Lot's of Promise, Little Substance

Before I delve into any commentary on the President’s State of the Union Speech, I just want to post two lists I’ve made. One is a Democratic wish list of proposals Obama made to energize the left, and another list is a Republican wish list of proposals offered as an olive branch to the right.

Democrat Wish List

·      Encouraging American innovation (biomedical research, information technology, and green technology funding)
·      Increased education funding
·      Address Immigration
·      Rebuilding America (infrastructure spending, including trains, wireless coverage, roads, airports, construction, etc)
·      Take away oil companies’ tax breaks to use for environmental technology research
·      Bring the troops home from Afghanistan by July of this year.

Republican Wish List

·      Less government regulation of financial markets
·      Reform specific parts of health care reform
·      Reform medical malpractice laws
·      Reduce the deficit by freezing annual spending for 5 years (Obama also mentioned cutting Medicare and Medicaid)

Now, granted, it’s been all over the media for the past few days that Obama’s speech would turn to the center, with one eye on the 2012 elections. But what I was surprised at was at his uncomfortably overt way of doing this. Looking at the lists above, it almost seems like they were made by two separate candidates. Sure there were the lofty remarks, the patriotic rhetoric, the call to set aside our differences and work together to achieve a more perfect union.

What threw me off was this laundry list of totally paradoxical policies. How in the world do we increase spending for education, for infrastructure, for green energy, and at the same time freeze annual spending for 5 years? The answer can be found in the paradoxical beliefs of the American people. Americans overwhelmingly support spending cuts over tax increases, when given the choice. But, when asked about what exactly we would cut out of our budget, Americans are hesitant, and Obama danced along that fine line of “investing” in America’s future, but also not cutting any programs that Americans feel attached too to pay for it.

While Obama made a pot shot at Republicans who are vying for the number one contender’s seat for a chance at the Presidency, saying “At stake right now is not who wins the next election, because didn’t we just have an election?” It was very hard to explain what Obama’s speech was if not a campaign speech; it was very light on policy proposals, and heavy on the rhetoric.  The New York Times deftly noted, “The president who once emphasized the problems he had inherited from his predecessor was instead looking forward and making the case that the nation had a long last emerged from economic crisis.” Perhaps a possible campaign slogan for 2012: There’s still hope!

I have to say even if it was not my favorite campaign speech, especially as a liberal voter, after watching the two Republican responses I was pleasantly surprised by the State of the Union's superiority. I’ll have more on those speeches later today.

Further Reading:

Tuesday, January 25, 2011

US Government is Main Culprit in Financial Meltdown, Inquiry Concludes

Inquiry Commission Chairman, Phil Angelides

A damning inquiry into the 2008 financial crisis released today is essentially a broad indictment of Wall Street and our government that supposedly regulates the financial markets. But, perhaps most damning of all, is the fact there was absolutely no bi-partisan support on the 10-member commission, foreshadowing the fact that while reform may be necessary to avoid another major financial catastrophe, reform will probably be shelved until the next time the issue is brought to the public’s attention. Like, for example, if there is another recession or depression.

One of the most striking things in the report is not the moral ineptitude, or greed of the financial institutions, but the fact that the very institutions designed to regulate Wall Street nurtured this excessive risk-taking culture. In large part we have simply reaped what we have sewn. The Fed, which is supposed to regulate Wall Street, has basically been a revolving door for financial executives for decades, and the chairman Alan Greenspan (until 2006) didn’t even believe in regulation.

While President Bush’s administration is criticized for failing to recognize a crisis was at hand, and then failing to provide a consistent response, President Clinton has also come under heavy fire. The deregulation of derivatives in 2000 under Clinton is called “a key turning point in the march toward the financial crisis.” In addition, the Glass-Steagall Act of 1933 (I hope you don’t have to get out your history book to see the irony in the date) was also repealed under Clinton, which played a huge role in the creation of companies that were, and still are, ‘too big to fail.’

In the conclusion of the report, the panel notes, “The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done… If we accept this notion, it will happen again.” But, given the complete lack of enthusiasm for financial reform in the new House of Representatives, nothing could very well be done. I find it extremely frustrating that for all Republican’s talk of ‘free enterprise’ and less government intervention, these very ideas have led to companies who cannot fail – something so inherently contradictory to the idea of a free market. To add to that, less oversight has led to one of the biggest government interventions in history.

I’m not really sure what’s more disgusting, Republican hypocrites, or two-faced Democrats.

Further Reading:
NY Times: Financial Meltdown Was 'Avoidable,' Inquiry Concludes

Massive Protests Rock Egypt

Tens of thousands of Egyptians took to the streets today to protest against the government, led by dictator Hosni Mubarak for the last 30 years. Three people died in the civil unrest, including one soldier and two protesters.

Revolutions tend to come in waves, and it's hard not to draw a link from the unrest to the protests that rocked Tunisia before its leaders fled. At least six people have set themselves on fire in Egypt, in imitation of Tunisian dissident Mohamed Bouazizi. The government has since gone to the extraordinary length of forbidding gas stations to sell to people who are not in cars.

Many of the marchers captured the clashes with cellphone cameras, like these:

Further Reading:

NY Times: Broad Protests Across Egypt Focus Fury On Mubarak 



Facing Austerity Measures, British Economy Contracts

At a time when Americans are debating how best to reduce the deficit, we would do well to take a look at how Britain is grappling with the same problem of cutting mounting deficits. It was reported today that the British economy contracted by 0.5% in the fourth quarter of 2010, after projections showed the GDP would grow by 0.5%. The figures coming out should raise a lot of questions about how effective drastic spending cuts are for a sluggish economy. But, the British are only experiencing the onset of the austerity measures, as more of the cuts are being implemented this year.

I can’t help thinking this is one of those, ‘I told you so’ moments. Some government officials are actually attempting to find scapegoats for the shrinking economic numbers, the most popular one being the weather. Wait, what? So the economy would have been booming if it hadn’t been for that darned weather? To be fair, freezing temperatures in Britain forced some workers to stay home, but can’t these ‘brilliant’ economists account for probably the single most predictable event – the changing of seasons? Apparently not.

Americans should be looking for reactions from House Republicans, as they proposed very similar cuts to our own government last week. The thinking goes that as public expenditures are cut, the private sector will fill in the vacuum. But the private sector has shown extreme weariness in filling in that vacuum, even though GDP figures have been inching up since 2009. Today’s report should leave us even more skeptical of the belief that the private sector will save the day.

Some economists, like Paul Krugman and Joseph Stiglitz, have warned us that if we don’t invest enough money in growth-oriented government services (transportation, construction, manufacturing, utilities, research, etc) then we could very well see a double-dip recession. If the sluggish figures being churned out of the Britain are in fact not due to the weather, and are the beginnings of another recession, then they will likely be far worse off at the end of the next quarter as more cuts are to be implemented.

Other economists are skeptical about the new numbers coming out, though. Andrew Goodwin, an economic advisor at Ernst & Young, told the NY Times today “We really do find it difficult to believe that the economy is really weak as these figures suggest.” Ernst & Young is currently being sued by the state of New York for helping Lehman Brothers cover up its demise before it collapsed in 2008.

Further Reading: