Liberal Realism

Hillaroius comment on the US foreign policy on Pakistan

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NYT: The Israeli Lobby infiltrated two spies in US Government

According to an article from the New York Times, 4/21/09: "One of the leading House Democrats on intelligence matters was overheard on telephone calls intercepted by the National Security Agency agreeing to seek lenient treatment from the Bush administration for two pro-Israel lobbyists who were under investigation for espionage, current and former government officials say.

The lawmaker, Representative Jane Harman of California, became the ranking Democrat on the House Intelligence Committee after the 2002 election and had ambitions to be its chairwoman when the party gained control of the House in 2006. One official who has seen transcripts of several wiretapped calls said she appeared to agree to intercede in exchange for help in persuading party leaders to give her the powerful post.

One of the very few members of Congress with broad access to the most sensitive intelligence information, including aspects of the Bush administration's wiretapping that were disclosed in December 2005, Ms. Harman was inadvertently swept up by N.S.A. eavesdroppers who were listening in on conversations during an investigation, three current or former senior officials said. It is not clear exactly when the wiretaps occurred; they were first reported by Congressional Quarterly on its Web site…

MORE….

Pax China in South American: The Dragon v. Uncle Sam

China is doing exactly what the US government did during the WWI and afterwards, when European powers were too busy with political and economic struggle to take care of their interest in South America. (The story is really clearly told in Frieden's Global Capitalism). The US investing and lending money in the region, and they ended up fulfilling their long planned goal of being the most politically influent nation in the hemisphere. Is you check history, money is literally power. Pax Americana really begun after WWII, when the US became the financial center of the world and everybody own money to US government and/or bankers. That is why I consider really relevant this article from the NYT, which states that:

• "In recent weeks, China has been negotiating deals to double a development fund in Venezuela to $12 billion, lend Ecuador at least $1 billion to build an hydroelectric plant, provide Argentina with access to more than $10 billion in Chinese currency and lend Brazil's national oil company $10 billion. The deals largely focus on China locking in natural resources like oil for years to come."
• "China's trade with Latin America has grown quickly this decade, making it the region's second largest trading partner after the United States. But the size and scope of these loans point to a deeper engagement with Latin America at a time when the Obama administration is starting to address the erosion of Washington's influence in the hemisphere…."
• "Despite forging ties to Venezuela and extending loans to other nations that have chafed at Washington's clout, Beijing has bolstered its presence without bombast, perhaps out of an awareness that its relationship with the United States is still of paramount importance. But this deference may not last."
• "This is China playing the long game," said Gregory Chin, a political scientist at York University in Toronto. "If this ultimately translates into political influence, then that is how the game is played."

WAPO: The Lobbrycracy, exposed

 

In a remarkable illustration of the power of lobbying in Washington, a study released last week found that a single tax break in 2004 earned companies $220 for every dollar they spent on the issue -- a 22,000 percent rate of return on their investment.

More….

The Economist: Pentagon 2.0

A daring punt

Apr 8th 2009 
From The Economist print edition

Robert Gates changes the Pentagon's priorities

MORE men at the expense of machines; more drones rather than top-end fighter jets and future bombers; more helicopters for combat troops rather than a replacement for the presidential chopper; more coastal vessels and fewer aircraft-carriers; better cyberdefences, but scaled-back missile defences and laser weapons. In short, the new American defence budget would spend more on today's wars in Iraq and Afghanistan and less to stave off future threats from China or Russia.

The proposals have delighted those who think America will fight irregular "small wars" for the foreseeable future, and horrified those who believe it must be ready to fight big conventional ones. John McCain thinks the 2010 budget is "a major step in the right direction". But a fellow Republican senator, James Inhofe of Oklahoma, muttered of "disarming America".

That is stretching the point. With a defence budget request of $534 billion next year (a 4% increase on this year), plus $130 billion for the wars in Iraq and Afghanistan, the Obama administration is hardly cutting defence. But the priorities outlined on April 6th have the fervour of a new administration determined to do things differently—except that the man at the top is the man who ran the Pentagon in the last Bush years, Robert Gates.

How to explain the transformation in "Gates 2.0" as some pundits now call the defence secretary? To begin with, Mr Gates has spent the past two years trying to avert military failure, first in Iraq and now in Afghanistan, rather than taking on powerful constituencies over contracts for expensive equipment. He has given notice for nearly a year that the Pentagon's spending priorities would have to change to support its new emphasis on counter-insurgency. Moreover, the financial crisis means that America will not be able to spend more to equip itself both for small wars and for big ones. Mr Gates says the budget is "one of those rare chances to match virtue to necessity, to critically and ruthlessly separate appetites from real requirements". See article

 

The end of the “military industrial complex”?.....naaaa don’t think so

Interesting article from the Economist, march 21/09, called In the Line of Fire:

EXPERIENCE suggests that shares in defence companies can offer a safe haven for investors during periods of economic turbulence. During the previous two recessions, American defence shares outperformed the market. That is not surprising: more than any other industry, defence is a client of government. And governments set military budgets according to their involvement in wars and their perception of external threats—neither of which has much connection with the business cycle.

But in this downturn, something different is going on. So far this year the S&P 500 index has fallen by 14%, but defence shares have fallen by 22%. The cloud hanging over the industry is the gloomy conviction that after eight years of George Bush, during which the Pentagon's budget more than doubled to $666 billion, Barack Obama is determined to change things.

The reduction in spending is not exactly imminent. The budget for 2010, which will be announced next month, was largely set by the outgoing administration and will be close to 2009's $654 billion. Because of the winding down of operations in Iraq, the Office of Management and Budget currently expects a 4% increase in base funding over 2009—not exactly short rations. It is what will happen in the subsequent years that is worrying the industry.

He has not gone into specifics, but in the past few weeks Mr Obama has given glimpses of his thinking. At a White House fiscal-responsibility summit on February 23rd, he singled out the project to produce a new presidential helicopter as "an example of the procurement process gone amok", and assured his former rival, John McCain, that curbing procurement excesses was one his most urgent priorities. The next day, in a speech to Congress, Mr Obama promised to "reform our defence budget so that we're not paying for Cold War-era weapons systems we don't use."

On March 4th he went further. Citing a recent report from the Government Accountability Office (GAO), which found that 95 big weapons contracts were over budget by a total of $295 billion, he contrasted projects "designed to keep the American people safe" with those "designed to make a defence contractor rich."

Adding congressional firepower to the president's statement of intent is a bill introduced in February by Carl Levin, the chairman of the Senate Armed Services Committee, and Mr McCain, the committee's senior Republican. Its aim is to force the Pentagon to get tough with military contractors that fail to deliver the goods.

It seems clear that Mr Obama is willing to scale back or scrap projects that are of decreasing relevance to America's 21st-century security requirements, or have become embarrassing money pits. The VH-71 programme to replace the helicopters used to carry presidents around certainly falls into the embarrassing category. Lockheed Martin and its partner Augusta Westland, a subsidiary of Italy's Finmeccanica, are on course to supply 28 helicopters at a cost to taxpayers of $13.2 billion.

But more important are the really big-ticket items that are likely to face much tougher scrutiny under the new regime. The air force would like a second batch of F-22 fighters to add to the 187 it will already have by 2011. But after spending more than $62 billion so far on the Lockheed Martin/Boeing plane, spectacularly capable though it is, Mr Obama and Congress may decide that enough is enough. The F-35 Joint Strike Fighter is another programme that looks vulnerable. The GAO said this month that the total investment to acquire 2,456 planes and support them in service will exceed $1 trillion.

The GAO and the Pentagon are also at odds over the army's $159 billion Future Combat Systems (FCS) project, led by Boeing and SAIC, a systems integrator. The GAO reckons FCS is running about $21 billion over budget, and said last week that the programme had "spent about 60% of its development funds, even though the most expensive activities remain to be done before the production decision". Nobody would be surprised if Mr Obama opted for a cheaper, later and less ambitious version of FCS. The same applies to missile defence, only more so—Mr Obama is a declared sceptic about the whole idea.

Defence firms still have some attractions for investors. As Noah Poponak of Goldman Sachs points out, most have strong balance-sheets and cashflow, and the geopolitical landscape is no less threatening. And shares of European defence firms have not been hit as hard as those in America. Having largely missed out on Mr Bush's party, they are facing less of a hangover now. But with a military budget almost as big as the rest of the world's combined, even quite small changes in American defence spending have big consequences for the industry. Military spending moves in long cycles. After ten fat years, some lean ones are in store.

The world changed after 9-11(specially in terms of profits for the military industry)

Jagdish Bhagwati on the Doha Round, Susan and the "last mile"

So, every now and then your hear something interesting, here is Bhagwati explaining what really happens on the last Conference of WTO members. This is for those of you who swallowed the lies told by Susan Schwab:

"Essentially, America was making an offer to cap her trade-distorting subsidies at $14.5 billion which, in fact, exceeded its current payout, which is likely to be $9 billion or less. America has 2 million farmers. India, which has nearly two-thirds of its population in the rural sector, has small subsistence farmers. Faced with competition from subsidized, often large farms, India's reaction has been exactly like that in the United States where nothing works up politicians and lobbyists more than the often-imagined, not even real, allegation that foreigners are subsidizing their products "unfairly." So, just as America, fearful of competition from China, introduced an unprecedented product-specific safeguard in its bilateral agreement of November 1999 and a special textile safeguard during the transition to freer trade in textiles, India wanted a Special Safeguard Mechanism. It was, however, excessive and unacceptable to America, which had virtually pioneered the practice.

The central problem therefore arose from the fact that the U.S. offer on trade-distorting subsidies was too low, prompting an unacceptable Indian demand for an over-cautious SSM. Evidently the solution lies in America capping the distorting subsidies at a minimum of the current payouts: nothing prevents it from spending more instead on non-distorting subsidies which do not affect output (and hence trade) but which are given, for instance, for environmental improvements and for raising poultry and cattle in an ethically-acceptable fashion. In return, India could surely agree to a serious downscaling of the SSM.
This solution is not politically impossible. It requires America to move away further from distorting subsidies, and substituting them with non-distorting subsidies, a move that is surely possible even in a presidential-election year since total farm support can be maintained while its composition changes in a pro-trade direction..." Check the complete article at Brooking Institution.

Politico.com: Ron Paul on war, inmigration, army...

This is the only guy who deserved to win the Republican nomination. Hear what he says about the preemptive war...

Recommended piece from New Yorker: Conflict of Interest

I really encourage people who is interested on interest group politics in US this article from New Yorker: Conflict of Interests, Does the wrangling of interest groups corrupt politics -or constitute it? It is a critic of two books on the problem of interest groups. The first, “The Process of Government: A Study of Social Pressures,” by Arthur Fisher Bentley, is the one that interest the most. Nicholas Lemann makes very ineteresting suggestion and reflections while critizising it.

My favorite part is:

Just before the table of contents in “The Process of Government,” on a page all alone, is the avowal “This book is an attempt to fashion a tool.” A century later, the tool that Arthur Bentley was attempting to fashion retains its utility, and not merely for understanding the American political system. (Those who believed in 2003 that Iraqi politics was best understood as a struggle between democracy and dictatorship, rather than as a struggle among groups, could have learned from him.) Bentley may have pressed his arguments too far, but, given our tendency to dismiss interest groups as the serpents in the political Eden that the Founders created, “The Process of Government” serves as an indispensable corrective.

When the reputation of Bentley’s masterpiece was at its peak, it was not just because he had fashioned a useful tool, of course; it was because many people saw pluralism as being not only accurate but attractive. To regain that perspective today requires an even greater undoing of deeply ingrained habits of thought. Pluralism, in the tradition of Bentley, requires that one see one’s own political passions, and those of such unimpeachable actors as winners of the Nobel Peace Prize and members of the Concord Coalition, as representing something other than the promptings of pure justice. That does not come naturally. One has to see that sincere talk of the public interest and the general good can be dangerous tools in the hands of people one disagrees with, if not in one’s own. (If you’re a liberal, reread President Bush’s second inaugural address, a grandiose exercise in public-interest rhetoric meant to lay the groundwork for waging the war on terror and privatizing Social Security.) One has to get over the habit of assuming that “interests,” and, worse, lobbying and corruption, are the province only of one’s political opponents, and not one’s allies. Pluralism means dialling down the moral stature that we attach to universalist arguments, and dialling up the moral stature of particularism.

Still, the pluralist vision does admit an element of justice. In any political system that gives people the freedom to organize and vote—and even, historically, in many systems that don’t—the logic of pluralism explains why those who do the hard, quotidian precinct work of politics will generally have more influence than those whose political participation is confined to writing, thinking, filing lawsuits, writing regulations, and spending money on media buys. In Bentley’s scheme, that’s all interest-group activity, but of the weaker “talk” (instead of the stronger “organization”) variety. Throughout American history, political organizing has been the means that outsiders—immigrants, farmers, African-Americans in the Reconstruction South, and, more recently, netroots activists on the left and evangelicals on the right—use to gain advantage against the more talk-oriented élites, who regard their political aims as corruption or special pleading. On the last page of “The Wrecking Crew,” Frank finally mentions what, from a pluralist perspective, would be the first order of business if you believe as passionately as he does that business-controlled conservative lobbyists are running Washington into the ground: organizing a political opposition. To be truly effective, though, such an opposition would have to muster its own army of Washington lobbyists. It’s tempting to think that just over the horizon lies a procedural reform that will lead to the lasting triumph of what looks to you like good government. But the truth is that the only way to defeat one set of interests is with another set of interests.