American Strategy

ASP in the News | May 19-21

Ian McAllister — Thu, 22 May 2008 14:47:00 -0400

The Santiago Times (05/22) quotes Parag Khanna on America's declining global power.
International Press Service (05/21) cites Daniel Levy's analysis of the Middle East peace process.
Yahoo News (05/19) quotes Steve Clemons on McCain's strategy to discredit Obama.
The Washington Post (05/18) features Parag Khanna discussing The Post-American World, by Fareed Zakaria.
Arab American News (05/16) quotes Daniel Levy on the need for Israeli withdrawal from Palestinian territories.

LIVE: David Miliband Speaking Today at ASP

Patrick Doherty — Wed, 21 May 2008 13:29:00 -0400

Don't miss UK Foreign Secretary David Miliband today speaking today with Steve Clemons, director of the American Strategy Program at the New America Foundation. Miliband will be addressing a gathering of the Transatlantic Network 2020, an outstanding and diverse group of 25-35 year olds working hard to rebuild the spirit of partnership that served the peoples of the North Atlantic so well during the Cold War.

His topic? How can the West re-engage the world in a dialogue on democracy and civil society?

The event starts at 10:30 am.

Video clips hosted by Ustream

Kohn and Others on Credit Crisis

Sam Sherraden — Tue, 20 May 2008 15:08:00 -0400

Federal Reserve Vice Chairman Donald Kohn says conditions in the credit markets are improving. Equities prices have rallied, spreads on high-grade corporate bonds have fallen considerably, and firms have not had trouble raising funds in credit markets. These positive signs are the result of the Fed's efforts to boost liquidity, ability of financial institutions to raise capital, and better than expected economic data.

Despite some positive signs, credit conditions are not optimal. Many investors remain skeptical of credit quality and the securitization market of mortgages has fallen dramatically. Because the market for securitized loans has deteriorated, banks cannot bundle and sell loans and other assets. As credit conditions deteriorate and the risk of default increases, financial institutions have had to de-leverage their balance sheets.

Snapshot asks, are credit markets improving or have we only begun to see a drawn out process of de-leveraging?

Federal Reserve Bank of New York - May You Live in Interesting Times: The Sequel
Don Kohn - May 20th Speech
Financial Times - Fears of Prolonged Credit Crisis Hit Wall Street

ASP in the News May 16-19

Faith Smith — Mon, 19 May 2008 14:55:00 -0400

CNN (5/16) cites Peter Bergen's expert opinion on Sen. McCain's terrorism policy.
Charlie Rose (5/15) conversed with Parag Khanna about the decline of US dominance over global affairs.

Trans-Atlantic Inflation Fears

Sam Sherraden — Mon, 19 May 2008 14:39:00 -0400

Food and energy prices are rising and inputs for producers grow more expensive by the day, putting enormous pressure on central bankers to keep inflation low. This is pressure is particularly acute for Mervyn King and Jean Claude Trichet, the heads of the Bank of England and European Central Bank, who promise their governments to keep inflation around 2%. With no sign of a break in energy prices, the Bernanke Fed has also been warned by former Fed Chairman Paul Volker to keep inflation low. Volker said last week that there is a resemblance between today and the 1970s and that the Fed already introduced enough liquidity into the market.

Snapshot asks, are central bankers recklessly abandoning their inflation targets?

Martin Wolf - Britain Must not cut loose its anchor
Financial Times - Higher inflation stems from official neglect
Paul Volker - Act now to avoid inflation
Janet Yellen Federal Reserve Bank of San Francisco - Combination of Risks

ASP In the News | May 14-16

Ian McAllister — Fri, 16 May 2008 17:20:00 -0400

New York Times (05/16) cites Jeffrey Lewis on the danger of quake damage to Chinese nuclear facilities
Afrik.com (05/16) quotes Steve Clemons on the future of the McCain-Obama race.
The New Republic (05/15) cites Steve Clemons on McCain's efforts to purge unsavory campaign connections.
Time (05/15) mentions Daniel Levy in a discussion of Hamas' influence in the U.S. presidential election.
International Herald Tribune (05/14) features Daniel Levy analyzing the prospects for Middle East peace.
Inter Press Service (05/14) quotes Flynt Leverett on the internal politics of Lebanon.
Globe and Mail (05/10) reviews Parag Khanna's work on geopolitical dynamics in the Second World.

ASP In the News | May 12-14

Ian McAllister — Wed, 14 May 2008 16:33:00 -0400

The Associated Press (05/ 13) quotes Daniel Levy on the state of the Middle East peace process.
Foreign Policy in Focus (05/12) cites William Hartung on lessons learned in the Iraq War.
The New York Observer (05/12) mentions Parag Khanna in a discussion of the state of US hegemony.
World Politics Review (05/12) cites Flynt Leverett on China-US tensions.
US News (05/09) quotes Steve Clemons on Hillary Clinton's fading political future.

Consumer Spending Sending Mixed Signals for U.S. Economy

Ian McAllister — Wed, 14 May 2008 15:23:00 -0400

A 0.2% overall decline in April retail sales masked divergent patterns in U.S. consumer spending. While auto spending decreased by 2.8%, spending on non-auto goods actually rose by 0.5%, a larger than expected increase. With consumer spending accounting for over 70% of the U.S. economy, some see this resiliency as a sign the economy may be closer to recovery than previously thought. Others say it's a statistical blip and expect continued contraction throughout 2008 as gas prices and inflation increase.

Snapshot asks, will high gas prices and weak auto sales further drag down consumers in 2008?

Financial Times - US retail data show signs of resilience
Wall Street Journal - Weak Recession? Not So Fast, Say Some
Haver - U.S. Retail Sales Fell, Non-auto sales firmer
Reuters - Bullish ex-auto U.S. retail sales cheer dollar

China's Earthquake: Tragedy, Test

Patrick Doherty — Mon, 12 May 2008 18:48:00 -0400

Today's news that Sichuan Province suffered an earthquake measuring 7.9 is not welcome news. Any region of the world would suffer significant loss of life after a tremblor of that degree and I fear the early numbers of casualties will only increase. Our sympathies go out to the Chinese victims and their families.

The strategic question is, what impact will the quake have on China going forward? Politically, the Chinese Government is under pressure to show they learned the lesson of this year's winter snowstorms that paralyzed the nation and demonstrated organizational weakness. If they don't demonstrate improved preparedness and effective rescue operations, the central government in Beijing will be weakened as the provincial governments adapt to deal with the anxiety of a massive population moving inexorably into closer, more interdependent quarters. New America Foundation out-going chairman, James Fallows, writing from Beijing, begins to examine the PR response of Beijing. I've attached it below.

If the loss of life is grave, however, the pressure to reform will extend beyond preparedness to prevention. This is what happened as far back as the great fire of London in 1666 and as recently as the Kobe earthquake a decade ago. The McKinsey Global Institute's recent report on China talks about China's cities holding 1 billion people by 2030. Prevention will mean the adoption of stricter building code standards and increased code enforcement, slowing down the engine of Chinese growth--which has so far had a decidedly dubious record in terms of public and environmental safety.

Hopefully, the numbers of people hurt by this tragedy will be few. But developing countries, even ones as big and sophisticated as China, generally trade off consumer and public safety for speed and profit.

***Update--5/13***

It looks like my fears have been born out. This morning's reports say at least 12,000 are feared dead and 18,000 more unaccounted for in the city of Mianzhu. This is the worst natural disaster in China for three decades. This is definitely a test for Beijing, much bigger than the winter snows. Let us hope it does not come near the 1976 earthquake when at least 240,000 people perished when the city of Tangshan collapsed in an earthquake of similar magnitude, which had its own grave political aftershocks.

Will the Hu/Wen government use the crisis to call for a new era of urban planning as McKinsey recommends? The Bush administration was unable to muster the will to use the devastation of Hurricane Katrina to deal with our own urban vulnerabilities. Hopefully the Chinese will see the opportunity to not only prevent future loss of life, but also to give the Bush administration a lesson in long-term disaster mitigation.

Earthquake coverage on Chinese TV

12 May 2008 11:20 am

Most of the channels on the (state controlled) CCTV are running the normal game shows, Olympic warmups (especially torch-relay updates), teen music shows, etc. But the CCTV-1 news channel is having all-out coverage of the earthquake in Sichuan province. Brief cultural notes:

- The coverage included a long segment of premier Wen Jiabao reading a speech about his deep concern for the people of Sichuan, from aboard an airplane en route to the disaster scene. Background: after the country was paralyzed by unexpected snow storms in February, the leadership was criticized for a Katrina-like slowness in dealing with the problem. Prominent coverage now of the main officials responding immediately to this disaster.

- News channels from Taiwan, which we are watching in alternation with the mainland coverage on CCTV, have extensive video footage from Chengdu, estimates of casualties, etc. So far no on-scene video footage that I've seen on CCTV-1, and no casualty figures. (The state news agency, Xinhua, is saying that 7600 people, or more, may have died.) Channel-surfing, we see that the German, Japanese, and Korean networks are also running Chengdu footage. It could have been on CCTV when I wasn't watching, but it's certainly not featured. CCTV is mainly running telephone interviews with correspondents in Sichuan and talking-head analyses in the studio. Possible background: controlling coverage within China until being sure exactly how the story should be presented. (Update: just saw a 20-second video clip from Chengdu on CCTV.)

- To help place this disaster: it is in almost exactly the same area I described in this article about the Wolong Panda Reserve, northwest of Chengdu, and this slide show about the reserve. A long, twisty road from Chengdu to Wolong, which had been undergoing years of reconstruction, passes right through the earthquake area. I assume it could be a long time before it is restored to even its perilous previous condition.

Good luck to all in Sichuan, including Dr. Tang Chunxiang and his colleagues in Wolong.

ASP In the News | May 08-12

Faith Smith — Mon, 12 May 2008 16:20:00 -0400

World Politics Review (5/12) cites Flynt Leverett on China's rising influence in the Middle East.
Toronto Star (5/11) discusses Steve Coll's book and the West's obsession with Osama Bin Laden.
Democracy Arsenal (5/9) quotes Ghaith al-Omari on U.S. and Israeli options for engaging Hamas.
TPM Cafe (5/7) Daniel Levy writes about Israel's stubborn commitment to roadblocks and checkpoints.