Free Markets, Free People

Foreign Affairs


Our Watchdog Compliant Media

Good to know that the American press is so ready and capable of holding our elected officials accountable in these trying times:

0952 Jeff McCallister from Time magazine tells the BBC: [Obama's] a rock star, he has a gorgeous wife, he is charismatic, young and vital. It’s echoes of the Kennedys in early 1961. It’s hard for me to imagine even if he doesn’t fix the world economy in a day that this is going to go badly for him in political terms in the US or elsewhere.

Just imagine what he would have said if Time magazine were a biased publication!


China Toughens Stance On Greenhouse Gas Emissions

China has stated it won’t be left holding the financial bag in order to cut greenhouse gas emissions. Calling itself a “poorer” nation, China wants the 7 most developed countries to spend 1% of GDP on helping them and others.

China raised the price of its co-operation in the world’s climate change talks yesterday by calling for developed countries to spend 1 per cent of their domestic product helping poorer nations cut greenhouse gas emissions.

The funding – amounting to more than $300bn (£190bn, €240bn) based on Group of Seven countries – would be spent largely on the transfer of “green” technologies, such as renewable energy, to poorer countries.

Gao Guangsheng, head of the climate change office at the National Reform and Development Commission, the Chinese government’s main planning body, said that even such large funds “might not be enough”.

China’s toughened stance comes weeks ahead of United Nations talks in Poland aimed at forging a successor to the Kyoto protocol, whose main provisions expire in 2012.

China also suggests that to this point, emissions reduction has been mostly talk:

“Climate change policies need a lot of money to be invested, however developed countries have not made any substantive promises about how much they are going to spend on,” said Mr Gao. “And they did not fulfil some of the promises they made in the past very well either.”

Of course a number of reasons relate to why those previous promises haven’t been fulfilled. Most of them relate to economics and the realization that their promises are potentially crippling to their economies. That’s effecting the G20 meeting as we speak:

Fears are mounting that environmental issues could be almost entirely sidelined at tomorrow’s G20 summit in London as leaders of the world’s largest economies resist calls to make clear green commitments as part of the meeting’s closing communiqué.

According to Guardian reports, UK officials are leading a last-ditch effort to have clear environmental commitments incorporated into the global economic recovery package that will back up politicians’ repeated calls for a ” green new deal”.

Gordon Brown has said that the inclusion of a commitment on the environment would be one of the tests of the summit’s success, but he admitted that the negotiations were likely to be tough.

The draft version of the communiqué leaked at the weekend made only a passing reference to climate change and it is thought some nations are resisting more detailed commitments to dedicate a proportion of the global stimulus package to green projects that they fear could provide an excuse for protectionist measures.

There is also reluctance to incorporate climate change commitments that could be seen to step on the toes of the UN’s climate change negotiations, which are continuing this week at a separate conference in Bonn, Germany.

This, of course, is good news. Why?

“Everybody seems to be focusing on short-term recovery and getting long-term regulation of the banks right,” he said. “I haven’t heard anything that suggests green recovery and climate change are a major part of the [G20] agenda.”

That’s because that is the priority – not that anyone should expect the G20 to get any of financial part of it right either. However, the priority does keep them from making commitments that would cripple economic growth. And they, of course, know that – which is why they’re avoiding it and spinning it as a desire not to “step on the toes of the UN’s climate change negotiations”.

But back to China – you’ll enjoy this. It is called “having your cake and eating it too”:

[China's climate ambassador Yu Qingtai]… said that China was willing to make a “due contribution” to curbing emissions, but warned that the country would not see its citizens “left in the dark” as a result of binding emission targets and was within its rights to continue to invest in coal power that allows its economy to grow.

Gotta love the Chinese – they make some of our spin merchants seem like rookies. China will decide what its “due contribution” will be while it builds thousands of coal fired plants. In the meantime, per China, it is up to the rest of the world to do what is necessary to curb emissions because, you know, the poorer nations just aren’t up to it. Su Wei, Chinese delegation chief to the UN climate change talks in Bonn:

Su said the success of the Copenhagen summit lies in whether or not the developed countries would make “substantial arrangements” for transferring climate-friendly technologies to and providing funds for developing countries.

Su noted the establishment of three international “mechanisms” is very important among the “substantial arrangements.”

“The first is to set up an international mechanism on climate-friendly technology development and transfer, to eliminate barriers hindering technology transfer, so that developing countries can get access to such technologies,” he said.

“Secondly, we should set up an effective financing mechanism to ensure the developed countries provide adequate funds for developing countries in their bid to cut emissions and fight climate change,” he added.

Thirdly, Su said an “effective supervision mechanism” should beset up to monitor the above-mentioned technology transfer and funding.

Nice. Known as the “you pay, we take” program, this pretty much excuses China (and the rest of the poorer BRIC nations) from doing much of anything. As long as China is convinced that a) enough technology hasn’t been transfered, or b) there hasn’t been enough “effective financing” of the effort, it can c) exempt itself from any cuts while insisting the rest of the developed world stick by its commitments.

Now that is how a master loots your wallet.

~McQ


Quote Of The Day

Australian and acknowledged counter-insurgency expert David Kilcullen answering a question about the Iraqi surge in an interview with the Washington Post:

Our biggest problem during the surge was a hostile American Congress.

Of course the very same people in Congress who were the “biggest problem during the surge” are all about peace, love and getting along together now.

Sow. Reap.


Does This Guy Even Begin To “Get It”?

On April 3-4, President Obama will attend a summit in Strasbourg, France and meet NATO leaders for the first time. One of the promises he made during his campaign for the presidency is he’d improve relations between the US and other countries around the globe. One would assume that means those who we are friendly with as well. Yet since taking office he has managed to humiliate the Brits, piss off the Mexicans (who’ve now applied tariffs on over 2 billion dollars worth of our agricultural exports), see us embarrassed in front of the Russians, and now, treated NATO like a bastard step-child.

On Wednesday afternoon, e-mails circulating between Brussels and Berlin suggesting that, within the course of the day, Washington would name General James N. Mattis as the Supreme Allied Commander in Europe. The commander is in charge of all US troops in Europe as well as NATO deployments, including the ISAF security force in Afghanistan.

Traditionally, the United States appoints the supreme commander and the Europeans pick the NATO secretary general. The decision to appoint Mattis appeared to be a logical one. He has long carried the title “Supreme Allied Commander Transformation.”

In the end, though, Mattis didn’t get the appointment. Instead, Defense Minister Robert Gates announced that Admiral James Stavridis would be nominated for the highly prestigious position. The US Senate and the NATO Council must approve his nomination, but it appears likely he will get through. Gates said Stavridis was “probably one of the best senior military officers” in the US.

In Brussels, though, many felt bluffed. “America treats this like it’s purely an American matter — and they didn’t even give any hints about the appointment,” one NATO employee said. “The conspiratorial manner of the personnel search was almost reminiscent of the way the pope is selected,” Stefani Weiss, a NATO expert at the Bertelsmann Stiftung foundation in Brussels, told SPIEGEL ONLINE.

Not exactly the way NATO should be treated on the eve of a meeting in which it is clear that Obama is going to ask NATO nations to contribute more to the Afghanistan effort. As Ed Morrisey at Hot Air points out:

Democrats accused the Bush administration of “arrogance” in diplomatic efforts, mostly because we chose to bypass the UN and finish the Iraq War with our own coalition of partners. I doubt that Donald Rumsfeld, with all his New/Old Europe talk, would have appointed a Supreme Allied Commander without at least consulting the major partners in NATO. Obama’s decision to do that speaks to his own arrogance and a certain level of disdain for the Western military alliance.

Obama has spoken constantly during the past two years about the critical nature of the fight in Afghanistan, and how the Bush administration allowed themselves to get distracted by Iraq. He also criticized the damage Bush supposedly did to our alliances that hurt the Afghanistan effort. This snub looks a lot more direct and a lot more damaging than anything Bush did.

So, we’ll see what help NATO’s nations decide to offer in early April after this move.

And speaking of Afghanistan, the Obama administration is getting ready to present its strategy for our fight there. One of the first things expressed by Obama is the need for an exit strategy. Naturally that being the first thing mentioned by the new CiC bothers me. Although obviously true, I’m reminded that his “exit strategy” for Iraq was “get out, get out now and that will force the Iraqis to stand up and take charge.” I can’t help but wonder if that’s not going to be something reflected in his “new” Afghanistan strategy.

Then there’s this very strange report:

The US and its European allies are preparing to plant a high-profile figure in the heart of the Kabul government in a direct challenge to the Afghan president, Hamid Karzai, the Guardian has learned.

The creation of a new chief executive or prime ministerial role is aimed at bypassing Karzai. In a further dilution of his power, it is proposed that money be diverted from the Kabul government to the provinces. Many US and European officials have become disillusioned with the extent of the corruption and incompetence in the Karzai government, but most now believe there are no credible alternatives, and predict the Afghan president will win re-election in August.

Now Hamid Karzai may not be the leader of choice in Afghanistan for most of the West, and he may essentially be the “mayor of Kabul” in a real sense. But, like it or not, he is the duly elected president of Afghanistan. What is being talked about here is technically a coup.

The proposal for an alternative chief executive, which originated with the US, is backed by Europeans. “There needs to be a deconcentration of power,” said one senior European official. “We need someone next to Karzai, a sort of chief executive, who can get things done, who will be reliable for us and accountable to the Afghan people.”

Really? And how do these people think those who voted in Karzai will greet such interference in the internal affairs of Afghanistan? Do they suppose this is going to make the fight we have there easier? This is exactly what the Soviets did. Are they freakin’ nuts?

The risk for the US is that the imposition of a technocrat alongside Karzai would be viewed as colonialism, even though that figure would be an Afghan. Karzai declared his intention last week to resist a dilution of his power. Last week he accused an unnamed foreign government of trying to weaken central government in Kabul.

“That is not their job,” the Afghan president said. “Afghanistan will never be a puppet state.”

Can anyone think of a better way to create another class of enemy within the state of Afghanistan than to essentially depose their leader? Can you imagine the propaganda value of such a move to the Taliban who will surely say “we told you so?”

I’m getting a very bad feeling about all of this.

~McQ


Yessiree, That Obama Guy Sure Knows How To Make Friends

Not that I’m particularly upset that he’s managed to re-sour (is that even a word?) relations with Venezuela before he even got to meet with Hugo. But you do remember the promise:

Venezuela’s President Hugo Chavez said on Sunday his U.S. counterpart Barack Obama was at best an “ignoramus” for saying the socialist leader exported terrorism and obstructed progress in Latin America.

“He goes and accuses me of exporting terrorism: the least I can say is that he’s a poor ignoramus; he should read and study a little to understand reality,” said Chavez, who heads a group of left-wing Latin American leaders opposed to the U.S. influence in the region.

Chavez said Obama’s comments had made him change his mind about sending a new ambassador to Washington, after he withdrew the previous envoy in a dispute last year with the Bush administration in which he also expelled the U.S. ambassador to Venezuela.

“When I saw Obama saying what he said, I put the decision back in the drawer; let’s wait and see,” Chavez said on his weekly television show, adding he had wanted to send a new ambassador to improve relations with the United States after the departure of George W. Bush as president.

Apparently during the January interview with Spanish language Univision, Obama said Chavez hindered progress in Latin America and accused him of exporting terrorist activities and supporting Colombian guerrillas. As you might imagine this was not something El Supremo found to be helpful:

“My, what ignorance; the real obstacle to development in Latin America has been the empire that you today preside over,” said Chavez, who is a fierce critic of U.S. foreign policy.

Mark up another victory in that promised attempt to have the world “like us better”. The upcoming Summit of the Americas scheduled for next month ought to be a real circus – both Chavez and Obama will be attending.

Man, am I glad that doofus Bush is out of office.

Hope and change.

~McQ


Iran, Hezbollah and the Americas

Iran isn’t just fomenting unrest in its home region, it has found a new area to spread the revolution and fund it:

Iran is increasing its activity in Latin America and the Caribbean, including actions aimed at supporting the Lebanese militant group Hezbollah, a top U.S. military commander said on Tuesday.

Navy Admiral James Stavridis, who oversees U.S. military interests in the region as head of U.S. Southern Command, also said Hezbollah was linked to drug-trafficking in Colombia.

“We have seen… an increase in a wide level of activity by the Iranian government in this region,” Stavridis told the Senate Armed Services Committee.

“That is a concern principally because of the connections between the government of Iran, which is a state sponsor of terrorism, and Hezbollah,” he said.

The U.S. State Department lists the Lebanese-based political and military movement as a terrorist organization.

Stavridis said Hezbollah activities in South America have been concentrated particularly in the border region between Brazil, Paraguay and Argentina, but also in Colombia.

“We have been seeing in Colombia a direct connection between Hezbollah activity and narco-trafficking activity,” the commander added, without providing specifics.

Of course, one of Iran’s NBFs in the area is Venezuelan strongman Hugo Chavez. And he’s not the only one as reported by Todd Bensman:

But with the exception of my own coverage, there’s been hardly a peep about the fact that Iranian President Mahmoud Ahmadinejad planted the Iranian flag so far north in Nicaragua as soon as the time-tested American nemesis Daniel Ortega took office in January 2007. In fact, Ahmadinejad considered Ortega’s ascension so important that he was in Nicaragua to attend the inauguration. Within months, Iran was promising hundreds of millions in economic projects — and quickly set up a diplomatic mission in a tony Managua neighborhood where it could all supposedly be coordinated. Now Iran is extending its reach even further north, right into Mexico City with equally under-covered proposals to vastly expand tenuous ties to America’s immediate southern neighbor.

Hey, we mess around in Iraq and Afghanistan, they mess around in Mexico. Of course all we have to do talk to them and we can straighten this all out, right?


Russia: The New Military and The New Currency

Russia is our friend. Don’t believe it? Well let’s look at a couple of things.

Just as the US starts talking about cutting defense spending and axing weapons systems and programs, what are our friends in Russia doing?

President Dmitry Medvedev on Tuesday announced a “large-scale” rearmament and renewal of Russia’s nuclear arsenal, accusing NATO of pushing ahead with expansion near Russian borders.

Meeting defence chiefs in Moscow, Medvedev said he was determined to implement reforms to streamline Russia’s bloated military and stressed Moscow continued to face several security threats needing robust defense capacity.

“From 2011, a large-scale rearmament of the army and navy will begin,” Medvedev said.

He called for a renewal of Russia’s nuclear weapons arsenal and added that NATO was pursuing a drive to expand the alliance’s physical presence near Russia’s borders.

“Analysis of the military-political situation in the world shows that a serious conflict potential remains in some regions,” Medvedev said.

So, new nukes and large-scale rearmament in the face of US defense cuts. As the article asks “reset” or new Cold War?

And then, just to really upset the apple cart, how about a new currency?

The Kremlin published its priorities Monday for an upcoming meeting of the G20, calling for the creation of a supranational reserve currency to be issued by international institutions as part of a reform of the global financial system.

The International Monetary Fund should investigate the possible creation of a new reserve currency, widening the list of reserve currencies or using its already existing Special Drawing Rights, or SDRs, as a “superreserve currency accepted by the whole of the international community,” the Kremlin said in a statement issued on its web site.

The SDR is an international reserve asset, created by the IMF in 1969 to supplement the existing official reserves of member countries.

The Kremlin has persistently criticized the dollar’s status as the dominant global reserve currency and has lowered its own dollar holdings in the last few years. Both President Dmitry Medvedev and Prime Minister Vladimir Putin have repeatedly called for the ruble to be used as a regional reserve currency, although the idea has received little support outside of Russia.

Now there’s not much “there” there as it pertains to this initiative, but it another indicator, among many, that the “Joe Biden Challenge” is alive and well and Russia is in the running to bring it to fruition.


Understatement of the Week

China expresses some … um … “concern” about whether or not it will ever see its money back:

The Chinese prime minister, Wen Jiabao, expressed unusually blunt concern on Friday about the safety of China’s $1 trillion investment in American government debt, the world’s largest such holding, and urged the Obama administration to provide assurances that the securities would maintain their value in the face of a global financial crisis.

"How much chance China get repaid?"

How much chance China get repaid?\


Speaking ahead of a meeting of finance ministers and bankers this weekend in London to lay the groundwork for next month’s G20 summit, Mr. Wen said he was “worried” about China’s holdings of United States Treasury bonds and other debt, and that China was watching economic developments in the United States closely.

“President Obama and his new government have adopted a series of measures to deal with the financial crisis. We have expectations as to the effects of these measures,” Mr. Wen said. “We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.”

Just a little? There’s an old saying to the effect of “if you owe the bank $1 Million, then the bank owns you; if you owe the bank $1 Trillion, then you own the bank.” China’s feeling pretty nervous because it knows it can’t sell its holdings except at a tremendous loss — both from the normal discount expected, and from the fact that it is by far the largest mover in the market (e.g. what do you think would happen to Microsoft stock if Bill Gates started selling off?) — and it doesn’t see a whole lot coming out of Washington to instill confidence.

But there’s no need to fret PM Jiabao! Unnamed economists are here to save the day:

While economists dismissed the possibility of the United States defaulting on its obligations, they said China could face steep losses in the event of a sharp rise in United States interest rates or a plunge in the value of the dollar.

Whew! That was close. Nothing but a little market risk to worry about there, Jiabao. Default? Pffft … never gonna happen.

Back in the land called “reality” however, default is plays a bigger part since, aside from reneging on the debt, there are only three other ways for the government to pay for its spending binge: higher taxes, printing more money, or borrowing. Higher taxes impedes growth and leads to less revenue. Printing money leads to hyper-inflation. So, even though those two choices will be used to a certain extent, further borrowing is the only viable alternative to default. But who’s going to lend to us?

Maybe China?

The bulk of China’s investment in the United States consists of bonds issued by the Treasury and government-sponsored enterprises and purchased by the State Administration of Foreign Exchange, which is part of the People’s Bank of China … much of the Treasury debt China purchased in recent years carries a low interest rate, and would plunge in value if interest rates were to rise sharply in the United States. Some financial experts have warned that measures taken to combat the financial crisis — running large budget deficits and expanding the money supply — may eventually create price inflation, which would lead to higher interest rates.

This puts the Chinese government in a difficult position. The smaller the United States stimulus, the less its borrowing, which could help prevent interest rates from rising. But less government spending in the United States could also mean a slower recovery for the American economy and reduced American demand for Chinese goods.

It may just be the case that China’s best option is to support its investment by propping up its best customer with yet more loans. Unfortunately, that means that Washington will have little incentive to slow down spending (since it owns the bank). The nasty little cycle of borrowing > spending > inflation > rising interest rates > falling dollar, will continue necessitating even more borrowing. China, in turn, will have serious questions about the value of its investment, and the US will start having serious discussions about declaring a default.

In short, China’s not just “worried” about the current fiscal mess. It’s crapping its collectivist shorts.


How Do You Spell “Chutzpa” in Korean?

Because the Secretary General has it – and demonstrates again why we ought to let the Third World Debating Club on the Hudson find a new home:

A day after his White House meeting with President Barack Obama, U.N. Secretary-General Ban Ki-moon called the United States a “deadbeat” donor to the world body while making the made the rounds on Capitol Hill.

[...]

“He used the word ‘deadbeat’ when it came to characterizing the United States. I take great umbrage (over) that,” Ileana Ros-Lehtinen, the panel’s senior Republican, said after an hour-long, closed-door meeting. “We certainly contribute a whole lot of U.S. taxpayer dollars to that organization. We do not deserve such a phrase.

Interviewed after the session, Ban said he had wanted to draw attention to the fact that the U.S. agrees to pay 22 percent of the U.N.’s $4.86 billion operating budget, but is perennially late with its dues — and now is about $1 billion behind on its payments.
That figure is “soon to be $1.6 billion,” Ban emphasized. Asked if he’d used the word ‘deadbeat’ during the meeting, he replied, “Yes, I did — I did,” then laughed mischievously.

The ultimate deadbeat institution which can, unsurprisingly, find more ways to waste money than the US government, calls the country that pays 22% of its cost and host to the parasites that represent their backwater potentates the “deadbeat” ?

Ban certainly demonstrates a lot of respect for the country and the new administration doesn’t he?  So far this new relationship with the world is going swimmingly, as the UK can attest.

But there’s a glimmer of hope apparently. Ban has given Obama some budget advice:

Obama seeks a 9.5 percent increase in international affairs spending, which Yeo said would be enough to cover not only next year’s U.S. dues to the U.N., but also $1 billion in arrears.

Amazing. And we’ll end up handing it all over, just watch.

~McQ


Charles Freeman And The Obama Administration – What Is Going On? (UPDATE)

What is going on with the Charles Freeman nomination, and is it an indicator of a overwhelmed administration losing control?  Who, exactly, is in charge there?

Frankly, approaching 45 days into this administration, the transition process, at least as it pertains to critical nominations, has been an unmitigated disaster.  But it is the Freeman nomination which begs the question “who is in charge”.  Charles Freeman has been nominated for the chairmanship of the National Intelligence Council (NIC), the organization in charge of preparing our most sensitive intelligence estimates.

Obama’s Director of National Intelligence Dennis C. Blair apparently never ran the nomination by the White House.  That means Freeman has never been formally vetted.  Now this may all fall back on Blair, but you have to wonder what sort of guidance or lack thereof provided him with the belief that this was the way things worked?

More importantly, why did Blair decide Freeman was the man for the job?   A former ambassador under George H. W. Bush,  to Saudi Arabia and senior envoy to China, Freeman is seen by many as having very serious conflicts of interest which were apparently ignored.    Freeman was also a board member the China National Offshore Oil Corp (CNOOC) owned in majority by the Chinese government and other Chinese government agencies. And there are other financial ties which are suspect. Freeman is president of the nonprofit educational organization Middle East Policy Council (MEPC), which paid him $87,000 in 2006, and received at least $1 million from a Saudi prince. You can read about the ramifications of those connections here.

But its not just who Freeman has been connected with, but some of the statements he’s made that make one wonder about his objectivity and, frankly, his moral and ideological foundation.  This is a person who remarked that the Chinese government had shown too much “restraint” when putting down the Tiananmen Square protests in 1989. And in testimony before the 9/11 Commission, he advocated the use of a national identity card.  After all the wide-spread panic from the left concerning the Bush years and the claim that he was leading us down the path to totalitarianism, this seems like the type of person the left would really find unacceptable for a position.

Then there is the Congressional side of the question.  Jennifer Rubin asks:

Does Diane Feinstein think Freeman is an acceptable pick? It is interesting to note how lacking in — what’s the word? ah yes — “oversight” the government is now that Congress and the White House are controlled by the same party. Imagine if George W. Bush had nominated someone whose earnings depended on the largess of the House of Saud or who advocated crushing Chinese dissidents — indeed faster than the Chinese government.

And she further asks, is this the type of person who will give the administration “the “unpoliticized” advice they are looking for?”

Given what we know, I’d say no.  However, this nomination is just one more in what can only be characerized as a shambles – Commerce, HHS, Treasury, questions about his housing czar and nominees for other Treasury posts jumping ship – that is the nomination process.  

This points to a very inexperienced administration learning on the job in one of the more turbulent times in our history. That is not a good thing, folks, but exactly what was predicted given his lack of a resume. We’ve now seen the result of a campaign based on vacuous slogans. A campaign that was part demonization of the opposition and part beauty pageant. A campaign in which few focused on what the responsibilities of the office entailed and whether the candidate had the qualifications to fulfill them. We’re now “enjoying” what that brings.

UPDATE: Politico reports that Charles Freeman has withdrawn his nomination. Heh … that’s the fastest reaction I’ve ever had to one of my posts.

~McQ

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