Saturday, February 18, 2006

Shot Gun Approach

In his Post column “Quell Quailgate” dated February 17, 2006 Charles Krauthammer writes, “Something happened involving the vice president that was interesting and unusual but of no great significance beyond that.” I wish the rest of us could be as sanguine about this infamous shooting incident. Mr. Krauthammer concludes wistfully that “Cheney got a judgment call wrong” and that’s all there was to it.

However, Mr. Krauthammer must recall that this is the same vice president, who assured us three days prior to the start of the war that “we will be greeted as liberators” in Iraq. Over two years later, despite a still-raging insurgency in Iraq, Vice President Cheney famously declared it was “in the last throes”. One wonders how many more such Cheney judgment calls it will take, before other conservatives “get religion” as Peggy Noonan did a couple of days ago. Ms Noonan concluded in her Wall Street Journal op-ed column that
Mr. Bush may feel in time that he has reason to want to put in a new vice president”.

Meanwhile on the liberal side of town Eugene Robinson erred only slightly, when he wrote in his Post column on Tuesday that “out-of-control is the way this whole administration operates: Ready, fire, aim.” I believe that it’s actually been more like: Fire, aim, not ready! We can’t forget that the Bush Administration took a shot gun approach into Iraq as well – in the misguided belief that their “shock and awe” strategy did not require a need to “aim”. Three years later, the Bush Administration has discovered that the American public is “not ready” for what they are now calling a “long war” in Iraq.

In fact, this friendly fire, shot gun approach has proven to be a metaphor for the Bush Administration’s handling of major domestic crises as well. Senior citizens have been peppered by a confusing array of options with the Administration’s new prescription drug plan – it’s apparent now that no one was ready for it. The hodge-podge of the Administration’s post-Katrina efforts included cash payments, hotel stays, extensions, evictions, vacant trailer lots, etc. – yet, almost six months later, New Orleans is still a mess and the new hurricane season is barely four months away.

Finally, a word about the vice president’s judgment in selecting Fox News to tell his side of the shooting story – Mr. Cheney was responsible for sending our soldiers into a war where they were hardly greeted as liberators, Mr. Cheney even shot a dear friend in the face, yet Mr. Cheney lacks the chutzpah to host a more open national press conference? With their record of warrantless surveillance, a Pravda-like reliance on Fox News, and a never-ending “war on terror” deteriorating into a modern day crusade – I am tempted to conclude with a Woodwardian warning “be afraid, be very afraid”. But instead, I can only hope that this “friendly fire” incident is a wake-up call to the larger American public. We can no longer be duped by this Administration’s trump card – crying wolf on "national security" whenever it’s convenient to mask its larger failings – that shot gun approach is only for the birds!

Saturday, February 11, 2006

The Other Side of US Economic Policy

The Bush Administration keeps touting the strength of the US economy, which in 2005 saw annual GDP growth of 3.5% and a 15% hike in federal revenues over 2004 to a record $2.15 trillion. In today’s Washington Post, Paul Blustein’s “Trade Gap Hits Record For 4th Year In a Row” tells only a part of the other side of this story – at what cost has this “economic success” been achieved?

The US trade deficit almost doubled from $370 billion in 2000 to $725 billion in 2005, while the national debt increased 44% from $5.7 trillion to $8.2 trillion during the same period. The US personal savings rate was -0.5% in 2005, which means that Americans spent more than they earned after taxes – this is the first time that this has happened since the Great Depression. According to the Chicago Tribune, “The savings rate has been negative for an entire year only twice before, in 1932 and 1933.” So not only is our government living beyond its means, now “we the people” are doing so too!

Meanwhile China continues to eat our lunch on the economic front. Recently the Canadian Broadcasting Corporation reported, “China's economy grew by a red-hot 9.9 per cent in 2005, the Chinese government announced Wednesday – enough to overtake Britain as the fourth biggest economy in the world, after the U.S., Japan, and Germany.” However, as the CBC noted, “Exports surged 28.4 per cent to $878 billion and helped to lead China to record a trade surplus of almost $118 billion.” To make matters worse, Mr. Blustein points out in today’s Post article, “the mounting U.S. deficit with China, which rose 24.5 percent to $201.6 billion last year, the biggest gap the United States has ever posted with a single country.”

If only that were all we had to worry about – Peter S. Goodman of The Washington Post had warned last month that China’s “foreign currency reserves swelled by more than one-third last year to a record $819 billion”. Mr. Goodman also notes that “Traditionally, China has sunk three-fourths of its reserves into U.S.-dollar-denominated investments, such as U.S. Treasury bills.” Is there any doubt as to how easy it has become for China to adversely impact US monetary policy? Never mind, how increasingly difficult it has become for the US to convince China to allow its currency to float!

Finally, we have all heard of the saying, “Like father, like son”. In the geopolitical context, this can be interpreted to mean, “Like nation, like people”. The day after Mr. Goodman’s story appeared in the Post, the Chinese Embassy in the US put out a news release stating “The country had a record 14 trillion yuan (US$1.7 trillion) in personal savings by the end of 2005”.

Candidate Bush had campaigned in 2000 that he would treat China as a “strategic competitor” and not as a “strategic partner” – which is the way he claimed then that President Clinton had dealt with China throughout his presidency. Ironically, President Bush’s own economic policy has now pretty much tied up his hands and severely limited his options in effecting any dramatic change in the overall nature of our relationship with China. It’s the other side of US economic policy that the Bush Administration never talks about!