Currency Considerations
Posted: November 9, 2010 Filed under: Economic Develpment, Global Financial Crisis, U.S. Economy | Tags: currency wars, G20 meetings, Gold Appreciation, Strong Dollar, Weak Dollar 25 Comments
Here’s a few links to help you follow the currency crisis as the world’s finance ministers move from APEC meetings to the G20 meeting. EconBrowser has a very distinguished economist blogging there with some interesting points on East Asian Exchange Rates and China. Willem Thorbecke is an important researcher in the area so this is an extremely wonky post with a lot of nifty graphs. It basically looks, however, at an important issue. The issue is China’s vast trade surplus which has been used in the past to purchase US Treasury securities and its exchange rate that’s been pegged to the Dollar at varying levels over the years. US Secretary of Treasury, Timothy Geithner, has been discussing this recently and it’s likely to be a central focus at the G20 meetings in Seoul.
The interesting thing about this research is that it shows it’s not just the Chinese currency and its exchange rates, but the entire Far Eastern area and all their currencies that have created the situation. Thorbecke suggests that these are peg to a basket of currencies rather than just the dollar.
These results indicate that if policymakers are concerned about China’s surplus, they need to consider exchange rates throughout East Asia rather than the Chinese exchange rate alone.
The enormous surpluses in processing trade relative to the U.S. generate pressure for nominal exchange rates throughout Asia to appreciate relative to the dollar. If East Asian currencies were to appreciate against the dollar, it would be advantageous if they could appreciate together while maintaining some measure of intra-regional exchange rate stability. By reducing intra-regional exchange rate volatility and the associated uncertainty, this would facilitate the flow of FDI and intermediate goods in Asian production networks. It would also produce a smaller appreciation of real effective exchange rates in East Asian countries since the majority of their trade is intra-regional. Finally, it would overcome the collective action problem that arises as individual countries in the region resist appreciations because they do not want to lose competitiveness relative to neighboring countries.
Ma and McCauley [5] found that during the 2006-2008 period when China managed its exchange rate relative to a basket of currencies and other Asian countries also managed their currencies relative to currency baskets, there was considerable exchange rate stability between the renminbi and other East Asian currencies. Thus, if China again adopts a regime characterized by a multiple-currency, basket-based reference rate with a reasonably wide band, the huge surpluses that East Asia is running against the U.S. in processing trade would cause currencies in the region to appreciate in concert against the U.S. dollar. Market forces could then allocate these appreciations across supply chain countries as a function of the size of their surpluses in processing trade.
China’s finance officials are actually calling for a stable dollar. This article is from Bloomberg.com. It quotes China’s Pension Chief. There’s a consensus that this particular idea won’t fly in the District.
The world needs a stable dollar, Dai Xianglong, chairman of China’s National Council for Social Security Fund and a former head of the nation’s central bank, said today at a forum in Beijing. He spoke two days before a Group of 20 summit aimed at addressing global imbalances in trade and investment flows.
Dai’s proposal follows charges by Chinese officials that the Federal Reserve’s plan to buy $600 billion of Treasuries risks inflating asset bubbles in emerging markets. While Treasury Secretary Timothy F. Geithner said Nov. 6 the U.S. takes its global responsibilities “very seriously,” Fed Chairman Ben S. Bernanke has said his focus must be on the American economy.
The idea “is unlikely to fly given that the U.S. would like to maintain the flexibility of its currrency and the ability to lower its value when it needs to boost exports or inflation, as is the case now,” said Dariusz Kowalczyk, a Hong Kong-based senior economist and strategist at Credit Agricole CIB. “Even a range won’t be acceptable to the U.S.”
Because of all this back and forth, Gold is setting more record highs. This is from Canada’s Globe and Mail.
At the heart of gold’s climb are concerns over the value of currencies amid mounting tension in the runup to the G20 meeting in Seoul, South Korea, this week. The U.S. is pointing its finger at China, pressing for appreciation of the yuan, while many other countries are pointing fingers at the U.S. central bank over a $600-billion bond-buying scheme that roiled the U.S. dollar before it was even announced.
Again, you can see international concerns over the QE2 announced by the U.S. Fed.
There are basically three things that influence someone’s demand for money. The first is their need for money as a transactions vehicle. This means you need money to spend your income for stuff you need and want. The second dimension is a precautionary demand. That is you want something that is a safe store for purchasing power that you do not want to spend right now. This is a place to put your money that can be related to an interest rate, but is frequently just sort’ve your choices between stuffing your savings in a safe place like gold, your mattress or your savings accounting or keeping it in your checking accounting and ignoring it. It could just be cash in your pocket too. The last thing that influences how much money people want to hold has to do with speculation. You can casino bet on money too. The Fed takes all these things into account when it determines how much currency, reserves, bank deposits, and treasuries it wants floating around the world. Every time you see a move to gold, you know that part of it is the desire to protect future earning power by some but it is also a very powerful market for speculation. The dynamics here are complex so don’t be taken in that all this gold buying is just a good thing for gold bugs and a bad thing for people who hold dollars. There is profit to be made in these Currency Wars.
Right now, the world is going through a massive economic re-balancing. The old idea that China will sell us stuff — while lending us the money to buy it — is unwinding.
In fact Ben Bernanke has declared a currency war on China’s undervalued RMB. Good ol’ Ben says we can make the dollar cheaper than the Chinese yuan, and he aims to prove it.
The Fed recently proclaimed its desire to create and buy $600 billion in U.S. Bonds. “The FOMC intends to buy an additional $600 billion of longer-term Treasury securities by mid-2011 and will continue to reinvest repayments of principal on its holdings of securities, as it has been doing since August,” said Bernanke.
Ben is taking this approach because it works right up until it doesn’t.
It worked after the past five bubbles popped, and it looks to be working this time.
When Ben floated the idea of a $600 billion cash infusion, stock prices rose and long-term interest rates fell in anticipation.
I know some of you will point out that the RMB is pegged to the dollar, and therefore the dollar can’t fall… But it does cause an inflation problem in China, which is a de facto re-balance.
According to Bloomberg, “Over the past five years the real-estate prices have tripled. And as property makes up a third of living costs on average, this alone means the real yuan value has doubled.”
Chinese Commerce Minister Chen Deming said as much in an interview on October 26th: “Uncontrolled” issuance of dollars is “bringing China the shock of imported inflation.”
Look for more information on this and what it means to you as we move through the Seoul meetings of the G20. This could mean some major relative price changes between what you see in prices now on goods coming in from China and what you will see in the future. This means that major retailers–like Walmart–that rely on cheap Chinese and Far East Asian goods may have some surprises come down the pike. Because Walmart is “America’s store”, it will likely effect the buying power of all U.S. households.
Tuesday Reads
Posted: November 9, 2010 Filed under: morning reads, New Orleans 42 CommentsGood Morning!
I spent the evening at Spotted Cat chatting up my Saints and jass lovin’ Uncle Lionel Baptiste and Doctor Daughter and her Doctor significant other who has never known what it means to miss New Orleans until now. The cool fall weather is delightful and I’m remembering why I just absolutely love my hood. Uncle Lionel was talkin’ bout sendin’ off Bunchy still and I was asking about sending off the late great Walter Payton. You can see both Uncle Lionel and Walter on that last link. I wanted to take Doctor Daughter to see my friend Mikki do her retro Japanese jazz thing on Frenchman at Yuki’s last night but missed it ’cause I spent way too much time with Uncle Lionel. I’m thinking it’s about time I get a regular gig since Jindal’s destroyed higher education in Louisiana. I can always gig and I can always teach piano. I also own a little tiny bit of the upper ninth ward and I want to keep it as long as I can.
My favorite Uncle Lionel story is when he was sitting next to me on the piano bench at Vaughn’s right after Katrina and I was playing away. Some tourist came up and said to him that no one plays like that ‘cept down here with that twinkle in the eye that meant I did not come with that extra appendage and such. That’s always a reference to some or other attributes that I do not possess if you get my drift. My uncle Lionel looked up to him, straight up, and told him that his ears might work but his eyeballs were a bit distracted by trifflin’ things. ‘Nuf said.
Let’s get to the news out side my beloved ninth ward after I treat you with something from the HBO series Treme. Oh, and I promise that this week on a Treat link I will give up some secrets for cajun/creole delights.
As the man says, “that moment can’t happen in New York”.
Speaking of interesting developments, the congressional black caucus still hasn’t figured out what to do with a tea party candidate that qualifies for the club. This should be one of those Kodak Moments.
The Congressional Black Caucus (CBC) is staying silent about a Tea Party Republican’s bid to join the group.
Rep.-elect Allen West (R-Fla.) indicated last week he intends to join the CBC to challenge the group’s “monolithic voice.”
“I plan on joining, I’m not gonna ask for permission or whatever, I’m gonna find out when they meet and I will be a member of the Congressional Black Caucus,” West, one of two black Republicans elected to Congress last Tuesday, told WOR radio. “I meet all of the criteria, and it’s so important that we break down this monolithic voice that continues to talk about victimization and dependency in the black community.
“We’ve got to turn this thing around, and I think it’s time for some different voices to be in that body politic.”
Here’s Bloomberg’s take on the Potus trip to Indonesia.
“We see in Indonesia the intersection of a lot of key American interests,” Ben Rhodes, Obama’s deputy national security adviser, said. The partnership “is very important to the future of American interests in Asia and the world.”
As China’s economic and diplomatic clout grows, Obama has made a priority of engaging other Asian nations, particularly the 10 countries that make up the Association of Southeast Asian Nations. With a population of about 600 million, Southeast Asia was America’s fifth-largest trading partner and the fourth- biggest market for U.S. goods last year.
The Times of India has an interesting bit about Obama’s visit there. You can find it here.
Speaking at a town hall meeting in Mumbai, he said, “I do think that one of the challenges that we are going face in the US, at a time when we are still recovering from the financial crisis is, how do we respond to some of the challenges of globalisation? The fact of the matter is that for most of my lifetime and I’ll turn 50 next year – the US was such an enormously dominant economic power, we were such a large market, our industry, our technology, our manufacturing was so significant that we always met the rest of the world economically on our terms. And now because of the incredible rise of India and China and Brazil and other countries, the US remains the largest economy and the largest market, but there is real competition.”“This will keep America on its toes. America is going to have to compete. There is going to be a tug-of-war within the US between those who see globalisation as a threat and those who accept we live in a open integrated world, which has challenges and opportunities.”
The US leader disagreed with those who saw globalisation as unmitigated evil. But while acknowledging that the Chindia factor had made the world flatter, he said protectionist impulses in US will get stronger if people don’t see trade bringing in gains for them.
“If the American people feel that trade is just a one-way street where everybody is selling to the enormous US market but we can never sell what we make anywhere else, then the people of the US will start thinking that this is a bad deal for us and it could end up leading to a more protectionist instinct in both parties, not just among Democrats but also Republicans. So, that we have to guard against,” he said.
Labor demand has been growing in the United States, reflected in a modest increase in private payroll employment this year and a more substantial increase in private-sector job vacancies over the past 12 months. Despite these signs of improvement, the unemployment rate has declined only slightly. Some analysts have raised the specter of a fundamental mismatch between the supply of labor in terms of workers’ skills and demand for labor in terms of employers’ skill requirements. Such a mismatch between available workers and available jobs could increase the level of structural unemployment. To the extent that structural unemployment is actually rising, the phenomenon poses a dilemma for policymakers. It cannot be ameliorated through conventional monetary and fiscal policy. And it implies an increase in the lowest unemployment rate associated with stable inflation, often identified by the acronym NAIRU, which stands for the non-accelerating inflation rate of unemployment.
It’s true that things aren’t as bad as they were during the worst of the Depression. But that’s not saying much. And as in the 1930s, every proposal to do something to improve the situation is met with a firestorm of opposition and criticism. As a result, by the time the actual policy emerges, it’s watered down to such an extent that it’s almost guaranteed to fail.
We’ve already seen this happen with fiscal policy: fearing opposition in Congress, the Obama administration offered an inadequate plan, only to see the plan weakened further in the Senate. In the end, the small rise in federal spending was effectively offset by cuts at the state and local level, so that there was no real stimulus to the economy.
Now the same thing is happening to monetary policy.
The case for a more expansionary policy by the Fed is overwhelming. Unemployment is disastrously high, while U.S. inflation data over the past few years almost perfectly match the early stages of Japan’s relentless slide into corrosive deflation.
Unfortunately, conventional monetary policy is no longer available: the short-term interest rates the Fed normally targets are already close to zero. So the Fed is shifting from its usual policy of buying only short-term debt, and is now buying long-term debt — a policy generally referred to as “quantitative easing.” (Why? Don’t ask.)
There’s nothing outlandish about this action. As Mr. Bernanke tried to explain Saturday, “This is just monetary policy,” adding, “It will work or not work in much the same way that ordinary, more conventional, familiar monetary policy works.”
Yet the Pain Caucus — my term for those who have opposed every effort to break out of our economic trap — is going wild.
What’s on your blogging and reading list today?
I am Elephant, hear me roar
Posted: November 8, 2010 Filed under: Elections, Populism | Tags: Nancy Pelosi, party problems, Republican party split 24 Comments
There are two competing narratives coming out of the Republican Party today. One is from former President Bush who is all agush about the Tea Party. The other is from elephant establishmentarians who are now saying that Sarah Palin and her Tea Party compatriots cost the Republican Party the U.S. Senate. The Democratic party may be in shambles, but the GOP is in the middle of its own little civil war. As these intraparty factions fight, are we possibly seeing the potential for some kind of third party movement or break?
Politico has the Dubya story which stems from a Sean Hannity interview that will be viewable on Fox tonight should you care to see it. I don’t, but hey to each their own.
Former President George W. Bush says the tea party movement is a sign that “democracy works in America.”
In an interview with Fox News’s Sean Hannity set to air Monday night, Bush heralds the grass-roots conservative movement as a “good thing” for the American political system.
“I see democracy working,” Bush said. “People are expressing a level of frustration or concern, and they’re getting involved in the process. And the truth of the matter is, democracy works in America.”
“It’s a good thing for the country,” he added. “It inspires me to know that our democracy still functions. What would be terrible is if people were frustrated and they didn’t do anything.”
Bush is not a popular figure among many tea party supporters, who criticize his decision to bail out some of the country’s largest banks in the fall of 2008.
Still, the former president said he welcomed the movement, pointing to tea party involvement in Republican Sen. Scott Brown’s special election win in Massachusetts as the point when things began to turn around for the GOP.
The Hill has the party establishment line on Palin and her Tea Partying rogues. This sounds like dueling sound bites to
me.
Former Alaska Gov. Sarah Palin (R) cost the GOP control of the Senate, a powerful House Republican said.
Rep. Spencer Bachus (Ala.) said that Tea Party-backed candidates endorsed by Palin underperformed against their Democratic rivals, costing the GOP key pickup opportunities.
“The Senate would be Republican today except for states [in which Palin endorsed candidates] like Christine O’Donnell in Delaware,” Bachus said at a local Chamber of Commerce event last week, the Shelby County Reporter wrote Sunday. “Sarah Palin cost us control of the Senate.”
Bachus is one of the most visible Republicans to criticize Palin, a Tea Party icon, for her political activities during the election season. Some Republicans have privately groused that Tea Party-backed candidates who were not electable prevented the GOP from taking control of the upper chamber.
The Alabama congressman noted that candidates backed by the Tea Party fared well in the House but “didn’t do well at all” in Senate races.
This narrative is almost as strange as the competing ones coming from the Democratic Party over Nancy Pelosi and her future leadership position. The Hill has an interesting statement from Congress Critter James Clyburn on Pelosi and the elections. Blue dawgs are planning on a challenge to Pelosi.
Outgoing Speaker Nancy Pelosi’s (D-Calif.) leadership had “nothing to do” with Democrats’ losses in last week’s election, the No. 3 House Democrat said Monday.
Majority Whip James Clyburn (D-S.C.) blamed the poorly-performing economy for the party’s electoral drubbing, which saw them lose around 60 seats in the House, along with their control of the majority.
“It has everything to do with an environment that we found ourselves in that had nothing to do with Nancy Pelosi or the people that we had on the field,” Clyburn said on MSNBC’s “Morning Joe.”
“We’re very introspective about this, and we are having discussions as to how we should go forward,” the South Carolina Democrat explained. “And I think that my party feels that this had nothing to do with Nancy Pelosi’s leadership. It had everything to do with an economy that was close to collapse.
While, the NYT Op-Ed page is basically calling for Congress Critter Pelosi’s head.
Ms. Pelosi announced on Friday that she would seek the post of House minority leader. That job is not a good match for her abilities in maneuvering legislation and trading votes, since Democrats will no longer be passing bills in the House. What they need is what Ms. Pelosi has been unable to provide: a clear and convincing voice to help Americans understand that Democratic policies are not bankrupting the country, advancing socialism or destroying freedom.
If Ms. Pelosi had been a more persuasive communicator, she could have batted away the ludicrous caricature of her painted by Republicans across the country as some kind of fur-hatted commissar jamming her diktats down the public’s throat. Both Ms. Pelosi and Harry Reid, the Senate majority leader, are inside players who seem to visibly shrink on camera when defending their policies, rarely connecting with the skeptical independent voters who raged so loudly on Tuesday.
It seems like there are fractures in both parties that stem from the behavior of the inner party sanctums that don’t seem to feel any need to change their ways or their power brokers. How much establishment ‘shellacking’ will it take for them both to look at the polls and realize no one likes them?
If ever there was a time for some one to step up with a voice of sanity and reason, now would be it. And I don’t mean Jon Stewart over at Comedy Central either. I still find the idea of a third party an appealing pox and check on both their houses. Anything would be better than the current zoo.
Monday Reads
Posted: November 8, 2010 Filed under: morning reads | Tags: Drone Wars, Keith Olbermann, Obama 60 minutes interview, rewriting econoimc history 59 Comments
Good Morning!!
I was celebrating my youngest daughter’s 21st birthday last night with the other daughter and her boyfriend in Baton Rouge. I missed the 60 Minutes interview with the President but FDL put the transcript and video up here. Does this worry any one but Jane Hamsher–who is responsible for the bolding–and me? This quote is from President Obama.
Well, it’ll be interesting to see how it evolves. We have a long tradition in this country of a desire for limited government, the suspicion of the federal government, of a concern that government spends too much money. You know? I mean, that’s as American as apple pie. And although, you know, there’s a new label to this, I mean those sentiments are ones that a lot of people support and give voice to. Including a lot of Democrats.
And so, the test is gonna be what happens over the next several years, when it’s not just an abstraction, but we have to start making serious choices. I’ve got a deficit commission that I’ve put forward that is gonna be releasing recommendations for how we can start reducing the deficit. And I don’t know yet what they’re gonna say, but I do know what the federal budget looks like. And if you eliminate all the earmarks. If you eliminate all the foreign aid. If you eliminate all the waste and abuse that people, you know, talk about eliminating — you’re still confronted with a fact that the vast majority of the federal budget are things that people really think are important. Like Social Security and Medicare and defense.
And so, you then have to start making some tough decisions about how do we pay for those things that we think are important? And you know, we’re not gonna be able to balance the budget just by slashing the National Parks budget, even if you didn’t think that was a proper function of government. We’re not gonna be able to balance the budget by, you know, eliminating the National Weather Service.
I mean, we’re gonna have to, you know, tackle some big issues like entitlements that, you know, when you listen to the Tea Party or you listen to Republican candidates they promise we’re not gonna touch.
What’s on the table now? The War in Afghanistan or our social security? What does the President mean when he says “entitlements”? I don’t know about you, but I’ve been working since I was 15 and I’ve paid for those ‘benefits’! I don’t want them handed over to Wall Street or shot into space as a spy satellite instead.
You may have heard already that Olbermann will be back on the air tomorrow. Was it really his ‘questionable’ political donations that forced the suspension? Here’s an interesting twist from Alternet: ‘If Olbermann’s Donations Are Bad, What About GE’s?’
If supporting politicians with money is a threat to journalistic independence, we should consider the contributions of NBC, and at NBC’s parent company General Electric.According to the Center for Responsive Politics, GE made over $2 million in political contributions in the 2010 election cycle (most coming from the company’s political action committee). The top recipient was Republican Senate candidate Rob Portman from Ohio. The company has also spent $32 million on lobbying this year, and contributed over $1 million to the successful “No on 24” campaign against a California ballot initiative aimed at eliminating tax loopholes for major corporations (New York Times, 11/1/10).Comcast, the cable company currently looking to buy NBC, has dramatically increased its political giving, much of it to lawmakers who support the proposed merger (Bloomberg, 10/19/10). And while Fox News parent News Corp’s $1 million donation to the Republican Governors Association caused a stir, GE had “given $245,000 to the Democratic governors and $205,000 to the Republican governors since last year,” reported the Washington Post (8/18/10).
Olbermann’s donations are in some ways comparable to fellow MSNBC host Joe Scarborough’s $4,200 contribution to Republican candidate Derrick Kitts in 2006 (MSNBC.com, 7/15/07). When that was uncovered, though, NBC dismissed this as a problem, since Scarborough “hosts an opinion program and is not a news reporter.” Olbermann, of course, is also an opinion journalist–but MSNBC seems to hold him to a different standard.
Okay, good question, if it’s okay for Scarborough why isn’t it okay for Olbermann? I frankly can’t stand either and don’t watch them, but NBC really messed up with this one.
Mike Kimel at Angry Bear has a some what wonky economic post up today, but it’s worth looking at because it debunks the conservative argument that the Great Depression was solved by war expenditures during WW2 and every thing was just hunky dory after that. You may recall the bizarre op-ed in WAPO last week by David Broder suggesting that starting a war with Iran would jump start our economy. Interestingly enough it’s called Very bad economic Theory. Good to see some one tackle yet another canard spread by right wing hopealogues looking for to replace real economic analysis with voodoo doodoo. There’s links also to this paper which is really odd. It’s a working paper from David Henderson at George Mason University and it’s probably going to stay a working paper just about every where except maybe the AEI or the Club for Growth. Kimel rips the paper to shreds and does so with some really, nifty graphs!
Finally, it is worth noting – some of the commentators to Tyler Cowen’s post also seemed to incorrectly believe that there was a post WW2 boom, though they tended to attribute that non-existent boom to the fact that the US came out of WW2 intact and went out building up other participants of the war. The fact that there are a variety of incorrect views about what happened in the past is not important. The fact that people believe in things that are demonstrably (and easily demonstrable, at that) not true is vital and unfortunate. As Michael Kanell and I point out in Presimetrics, theorizing based on incorrect facts leads to very poor theory, poor theory leads to abysmal policies, and abysmal policies lead to very unfortunate outcomes that negatively impact the lives of all of us.
US News & World Report–which is no longer being offered in a print edition–has an interesting op ed up by Mort Zuckerman: ‘America’s Love Affair With Obama Is Over;The administration is running out of time to lower unemployment and fix the economy’.
The last two years have exposed to the public the risk that came with voting an inexperienced politician into office at a time when there was a crisis in America’s economy, as the nation contended with a financial freeze, a painful recession, and two wars. The Democrats were simply not aggressive enough or focused enough in confronting the profound economic crisis represented by millions of ordinary Americans whose main concern was the lack of jobs.
Jobs have long represented the stairway to upward mobility in America, and the anxiety over joblessness became the dominant concern at a time when financial security based on home equity and pensions was dramatically eroding. No great speech is going to change the fundamental fact that millions of people are either jobless or underemployed at a time when only a quarter of the American population describes the job market as good.
Why did Obama put his health plan so far ahead of the economy? To do what the Clintons couldn’t? His rush to do it sparked a broad resistance that has only spread since the bill was passed. The public sensed that healthcare was a victory for Obama, and maybe for the Democrats, but not for the country—and contrary to Democratic hopes, public support for the measure has continued to drop to as low as 34 percent in some polls. A significant majority, some 58 percent, now wish to repeal the entire bill, according to likely voters questioned in a late October poll by Rasmussen.
Let’s see, who have we heard this all from before?
WAPO reports that the U.S. is deploying drones in Yemen now. Are we going to open a third front in the wars in the Middle East now? How much do those things cost? Is this yet another example of a sneaking into a skirmish that becomes a war?
The United States has deployed Predator drones to hunt for al-Qaeda operatives in Yemen for the first time in years but has not fired missiles from the unmanned aircraft because it lacks solid intelligence on the insurgents’ whereabouts, senior U.S. officials said.
The use of the drones is part of a campaign against an al-Qaeda branch that has claimed responsibility for near-miss attacks on U.S. targets that could have had catastrophic results, including the recent plot to place parcels packed with explosives on cargo planes.
U.S. officials said the Predators have been patrolling the skies over Yemen for several months in search of leaders and operatives of the group al-Qaeda in the Arabian Peninsula, or AQAP. After withstanding a flurry of attacks involving Yemeni forces and U.S. cruise missiles earlier this year, AQAP’s leaders “went to ground,” a senior Obama administration official said.
The use of U.S. drones in Yemen underscores the deep U.S. reliance on what has become a signature weapon against al-Qaeda and other terrorist groups.
I think there is probably some things weird in there to say about Biden’s wars and Drone Wars but I can’t seem to do it right now. All I know is that I’m tired of watching my tax dollars being spent on drones for sale. Can we buy a few levees and electric grid up grades in the US while we’re at all this? Maybe they could clean up the Gulf of Mexico? Keep funding Head Start? Repave a few bumpy interstate highways?
[MABlue here]
I’m among those who have seen it, but here is the entire interview of President Obama on 60 Minutes. What are your impressions?
Many Democrats are afraid Obama still doesn’t get “it”.
Assessing midterm losses, Democrats ask whether Obama’s White House fully grasped voters’ fears
President Obama‘s failure to channel the anxieties of ordinary voters has shaken the faith that many Democrats once had in his political gifts and his team’s political skill.
In his own assessments of what went wrong, the president has lamented his inability to persuade voters on the merits of what he has done, and blamed the failure on his preoccupation with a full plate of crises.
But a broad sample of Democratic officeholders and strategists said in interviews that the disconnect goes far deeper than that.
Paul Krugman is not happy with QE2. He thinks we didn’t learn anything from a watered down stimulus. [Kat,do we have a problem of multiple personality disorder here? Ben Bernanke, pre-eminent scholar of the Great Depression vs Ben Bernanke, Fed Chair]
Doing It Again
[A]s in the 1930s, every proposal to do something to improve the situation is met with a firestorm of opposition and criticism. As a result, by the time the actual policy emerges, it’s watered down to such an extent that it’s almost guaranteed to fail.
We’ve already seen this happen with fiscal policy: fearing opposition in Congress, the Obama administration offered an inadequate plan, only to see the plan weakened further in the Senate. In the end, the small rise in federal spending was effectively offset by cuts at the state and local level, so that there was no real stimulus to the economy.
Now the same thing is happening to monetary policy.
Oh! And Sarah Palin is unhappy with Ben Bernanke for doing “quantitative easing” at all. She says he should do like Reagan… Or something.
Palin to Bernanke: ‘Cease and Desist’
We shouldn’t be playing around with inflation. It’s not for nothing Reagan called it “as violent as a mugger, as frightening as an armed robber, and as deadly as a hit man.” The Fed’s pump priming addiction has got our small businesses running scared, and our allies worried. The German finance minister called the Fed’s proposals “clueless.” When Germany, a country that knows a thing or two about the dangers of inflation, warns us to think again, maybe it’s time for Chairman Bernanke to cease and desist. We don’t want temporary, artificial economic growth bought at the expense of permanently higher inflation which will erode the value of our incomes and our savings. We want a stable dollar combined with real economic reform. It’s the only way we can get our economy back on the right track
Mmmkay!!!!
The age of austerity is coming with a vengeance.
Now in Power, G.O.P. Vows Cuts in State Budgets
Republicans who have taken over state capitols across the country are promising to respond to crippling budget deficits with an array of cuts, among them proposals to reduce public workers’ benefits in Wisconsin, scale back social services in Maine and sell off state liquor stores in Pennsylvania, endangering the jobs of thousands of state workers.
India’s Prime Minister Manmohan Singh says India is not stealing US Jobs
India on Monday asserted that it was not in the business of stealing American jobs, even as US President Barack Obama said that deals with India to create 50,000 jobs back home were aimed at assuaging citizens’ fears.
“India is not in the business of stealing jobs from the US… outsourcing (work to India) has helped improve the productive capacity and productivity of America,” prime minister Manmohan Singh said at a joint press conference with visiting US President Barack Obama at Hyderabad House here.
For Heaven’s sake! Can this guy/gal make up his/her mind already?
A very peculiar engagement: Charles had a sex change… then hated being Samantha so became a man again. Now he’s getting married
Born Sam Hashimi, the businessman and divorced father-of-two had a sex-change operation in 1987 to turn him into glamorous interior designer Samantha Kane.
He spent £100,000 on cosmetic operations and tooth veneers to create the ‘ultimate male fantasy’ and was so convincing as a woman he had no trouble attracting men, and was briefly engaged to a wealthy landowner.
Then, in 2004, after seven years of living as a woman, he decided he’d made a horrible mistake; the result -he believes now -of a breakdown following the acrimonious end of his 12-year marriage and estrangement from his children.
What’s on your Reading and Blogging list today?
Indonesia Embraces Progress
Posted: November 7, 2010 Filed under: Human Rights, just because, Women's Rights | Tags: Indonesia, Obama Visit, Women's Rights 18 CommentsI wanted to highlight some good stuff today because it seems like the headlines have been pretty depressing recently. As you
know, I love to read about women’s organizations around the world and learn about other cultures. I’ve mentioned that my research has a lot to do with developing nations and why some develop rapidly and others languish. Indonesia is one of the countries I follow closely.
It used to be thought that every economic development problem could be solved by just putting more technology in place in a country or adding more physical capital or infrastructure. That is important at some level, but given the same amount of technology and infrastructure, some nations will develop a healthy economy and society while others will still have serious issues.
The major factor that’s highlighted in development policies today is a country’s institutions; specifically their soundness and openness. The most important are institutions that support the judicial and political system. These institutions must protect private property, not allow the rich and powerful to abuse the poor, and they must be fair and translucent. (Problems we have now here.) Given that, other solid related institutions will spring up. These would include educational institutions. If these are in place, financial and economic institutions that bring a country into the modern world will germinate and deepen. Indonesia is a good place to demonstrate that it’s many things in a country’s culture than can cause it to oppress its women, its minorities, and its poor and a good government can make a difference in many people’s lives. It’s also on our radar today because of the pending Presidential visit.
One of the bright spots in the ASEAN region is Indonesia. It is a beacon for many reasons but high among them is that it’s a model of Democratic Islam. This is from Project Syndicate.
The visit by “Barry Obama,” the Indonesian nickname for the former resident and current United States president, to Jakarta is intended, as much as anything, to celebrate the achievements of the largest Muslim-majority country in the world. In the 12 years since its transition to democracy, Indonesia has regularly held local and national elections, developed a functioning free market, and strengthened its culture of tolerance towards the country’s Christian, Hindu, Buddhist, and Chinese minorities.
Of the ten members of the Association of Southeast Asian Nations, only Indonesia has a “free” rating from Freedom House. The largely Catholic Philippines, Buddhist Thailand, and Confucian Singapore lag behind Indonesia in providing basic democratic rights to their people. American policymakers have therefore looked to Indonesia as a model for the rest of the Muslim world. But what lessons are to be learned from Indonesian democracy?
The most important lesson is that Islamic organizations can provide the backbone of a tolerant civil society. Muhammadiyah and Nahdlatul Ulama (NU), mass Islamic institutions with more than 30 million and 40 million members, respectively, operate more than 10,000 schools and hundreds of hospitals, as well as run youth organizations and support women’s movements. Both have connections to political parties, most of which have consistently spoken out for democracy and against an Islamic state.
Women in Indonesia are the majority workers for the garment industry and work very long hours for very low pay. There is also a problem with human trafficking. The government has been responsive to calls to stop the exploitation of women and children. Here’s one unique program via the BBC. It seems women-only train cars were introduced on government run public transportation to stop women from being sexually harassed and grabbed during their commutes to work. This reminds me of the pink taxis initiatives that I’ve blogged on before. However, the pink taxis are a private effort and not public.
Women-only train carriages have been launched in the Indonesian capital, Jakarta, in an attempt to prevent sexual harassment on public transport.
The state-run train operator is running two new carriages for its female passengers on one busy commuter route.
The service has been introduced after a series of complaints of sexual harassment from women who travel on Jakarta’s trains and buses.
There are ongoing programs to stop the sexual exploitation of women, but the garment worker’s are still experiencing problems with enforcement of labor laws. Developing countries are frequently trapped between the need for cash from new industry and the need to protect their people. Another bright spot about Indonesia is that there is no significant gender gap in early or secondary education. Girls and boys attend school in the same proportions.
As with other parts of the world–including our own–some policy makers in the rural areas still view girls in a poor light. Last month, one lawmaker tried propose a law to subject girls to a “Virginity Test’. Indonesia’s Women’s Affairs Ministry rejected the proposal outright as a violation of human rights. Other members of the legislature were also outraged and dismissed the proposal. It looks like there are attempts to instill Jane Crow Laws every where.
Many Indonesian women and girls, especially those from poor and marginalised communities, struggle to achieve reproductive health in the face of discriminatory laws, policies and practices, a new report by Amnesty International says.
Left Without a Choice describes how government restrictions and discriminatory traditions threaten the lives of many Indonesian woman and girls by putting reproductive health services beyond their reach.
“The Indonesian government has pledged to enhance gender equality, but many Indonesian women still struggle for fair and equal treatment”, said Salil Shetty, Amnesty International’s Secretary General. “A combination of unchallenged social attitudes, unfair laws and stereotyped gender roles often relegate women to second-class status.”
Amnesty International research shows how discriminatory practices and problematic laws are restricting access to contraception for unmarried women and girls, and allowing early marriage for girls younger than 16. The law also requires a woman to get her husband’s consent to access certain contraception methods, or an abortion in the event that her life is at risk. Amnesty International also found that health workers frequently deny the full range of legally available contraceptive services to unmarried or childless married women.
Even though the government has taken steps for better protection for women victim of violence, it is failing to ensure that survivors of rape can access health information and services. Although abortion is legally available to women and girls who become pregnant as a result of rape, this fact is not well known, even amongst health workers, and victims of rape can face significant obstacles to accessing safe abortion services.
Indonesia also demonstrates how Islam can provide support for women’s rights. Among the activist community in Jakarta, the most successful organizations are those that draw support from the women’s wings of Muhammadiyah and NU: Muslimat, Fatayat, and Aisyiyah. The former head of Fatayat, Maria Ulfah Anshor, has made sophisticated arguments grounded in fiqh for women’s access to reproductive rights. And, thanks to a partnership between the state and Islamic scholars stretching back 40 years, Indonesia has one of the most successful family-planning programs in the developing world.
Ironically, the US has done as much to block the efforts of Indonesia’s women’s-rights activists as it has to support them. Former President George W. Bush’s restrictions on funding for health programs that used condoms or other forms of contraception meant that Islamic organizations receiving any funding from the US Agency for International Development were unable to publish material promoting safe-sex and family planning.
This could be, and often was, highly counter-productive. In one particularly absurd case, a group of Muslim feminists who wrote a book promoting women’s rights based on Koranic exegesis had to publish their work in secret, because it included arguments for women’s reproductive rights and a small percentage of the group’s funding came from a foundation that had received money from USAID.
The fact that Islamic organizations have benefited women may also help explain Indonesian women’s political success. The parliament is 18% female (a slightly higher percentage than in the US Congress), and a woman, Megawati Sukarnoputri, was the country’s fourth president. Leading organizations like Umar, Fatayat, and Muslimat provide a corrective to the widespread view that Sharia necessarily impedes women.
Indeed, Indonesian women have shown how Sharia can provide a tool for combating misogynist policies. For example, the head of Islamic affairs in the Ministry of Religion, Nasaruddin Umar, is a self-described Islamic feminist who has published sophisticated critiques of gender bias in Koranic exegesis
Just a short time ago, ABC announced that the Presidential trip may be canceled because of eruptions by Mount Merapi that has been causing ash clouds and dangerous flying conditions near Jakarta. This would be a shame if this happens because bringing attention to developing nations is important and a U.S. Presidential visit can accomplish that. Usually, TV programs and newspapers will provide interest pieces about the country and its needs as well as the NGOs that service its people. There has been a history of military juntas in the country and there are still rebel forces that would like to put a damper on the country’s nascent democracy. Other nations’ need to help stop any potential violent attacks on Indonesia’s democratic government. There is also need for further international support as the country responds to the Mount Merapi Disaster.
Focus on Indonesia is important also because of its successes and its needs. Other countries in ASEAN–like Vietnam–have similar issues and can benefit from increased focus on the area. When the US does positive things for the region, the region responds positively. SOS Hillary Clinton visited Indonesia in 2009. Details about her trip are documented here.
I hope you’ll take the time to read about Indonesia and watch any public interest stories that come up on the country. It’s one of the developing nations that gives development economists a lot of hope. It’s also important to support our the rights of women and children through out the world.
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