Commentary by Amity Shlaes
-- Every crisis has its heroes. For months now we've all been hearing about Walter Bagehot, whose 19th-century injunction to lend ``freely'' in a panic was cited by the Federal Reserve in its bailouts.
Now another Englishman, John Maynard Keynes, has been pulled on the stage. Keynes taught that spending, especially spending by consumers, is the way out of a slowdown. From last summer's small stimulus checks to the infrastructure projects under consideration by President-elect Barack Obama and congressional Democrats, almost everything the government has done or wants to do is justified by Keynes.
That's problematic. For Keynesian solutions often fail to deliver good or even acceptable results.
The limits start showing up with the tiniest of stimuli, those government checks Americans received in the mail last spring. The idea was that having the cash would cheer up consumers so that they would start shopping again, helping retailers. That in turn would revive wholesalers, shippers, suppliers -- on up the production line.
But that stimulus failed, as the University of Michigan's Joel Slemrod and Matthew Shapiro noted. Interviews with consumers showed that only a fifth said they would spend their cash.
Savings rates tracked by the Bureau of Economic Analysis seemed to confirm that, with personal savings rates rising about the time the checks were mailed. Slemrod and Shapiro weren't surprised. They have spent much of their careers documenting failed stimulus plans. Their study of the effects of the 2001 Bush stimulus was so damning you might think that Washington would never repeat it. But Washington did.
Long View
One reason consumers don't want to spend is that they don't react instantaneously, as Keynes posited they would. They follow, rather, the theory of an economist oft-presented as the anti-hero of the moment, Milton Friedman. Friedman's permanent- income hypothesis said that consumers consider their entire future, and not just their mood, when they shop. If expectations of lifetime earnings drop, then so will spending. That too tracks reality. Many of us are beginning to wonder if we will ever get back the price we paid for our houses.
But what about the larger stimulus plan, the kind President-elect Obama is considering? The idea is to revive Franklin D. Roosevelt's New Deal and create jobs by building new bridges or roads. Obama has also spoken of a kind of corps for the young, which, you get the sense, might be involved in some of these projects. That comes out of the New Deal and FDR's Civilian Conservation Corps.
Keynesians would say such moves will bring the economy to life, creating jobs and replacing crumbling infrastructure.
Point-to-Point
Others would argue that the productivity gains to be had from an infrastructure program also are significant. That's the view of scholar Alexander Field, who studied the New Deal and found that the private sector benefited enormously from its construction projects. After all, when the government supplies a bridge from Point A and Point B, the private trucking company can deliver goods between A and B faster. The project may be public, but its ``spillover'' yields profits too.
The best evidence for the infrastructure spending case comes not from a Democrat but from a Republican: Eisenhower's National Highway System. The rebuttal there is that emphasis on government in the 1950s made the decade a dull one that stifled innovation.
And you also have to ask: What is lost when Washington puts resources into such road projects? One problem is that a stimulus project and an earmark are dangerously similar. Sometimes the government will waste its resources on bridges that truckers won't use -- the new Bridges to Nowhere.
Gloss Job
But the most telling fact about the new rush to spend is that its advocates have insisted on invoking the New Deal. They tend to gloss over the period when the phrase, ``We are all Keynesians now,'' was actually first uttered: the mid-1960s. (Uttered by Friedman, in fact, though he meant only that we all work in the terms of the Keynesian lexicon.)
The Great Society of that period was the ultimate Keynesian experiment, and it didn't work very well. One example is VISTA, the domestic Peace Corps from that period. VISTA had mixed results and has been renamed and reshaped many times since. Its full name, ``Volunteers in Service to America,'' fits perfectly as a description of the youth programs the Obama camp has described.
The leaders of the 1970s and 1980S -- Nixon, Ford, Carter, Reagan and Paul Volcker -- were left to live with the Great Society aftermath. The jobs that Keynes emphasized were AWOL: America became accustomed to high levels of unemployment.
Were they alive, both Bagehot and Keynes would defend themselves. Bagehot, for example, would say that he saw the central bank as the lender of last resort, not the lender of first resort. Keynes would note he operated in a gold-standard world, or tried to, not in our free-float-except-for-China arrangement.
The important thing to recognize is that the record of actions taken in economists' name is mixed. Try this sentence: We're not all Keynesians now.
What Would Real--Rather Than Rhetorical--Change in U.S. Foreign Policy Look Like?
It is hard to overstate the immense occasion that is Barack Hussein Obama’s inauguration as the 44th President of the United States. His name alone stuns, at least as that of a U.S. President, the surname eerily similar to the West’s post 9/11 arch-villain Osama bin Laden, his middle name the very surname of the dethroned Iraqi strongman. Throw in his status as the first African-American U.S. President since inception of the Republic and it is little wonder the whole nation (indeed the world) paused to marvel, not only at the momentous sight of this man taking the oath of office, but also America’s near awe-inspiring ability to re-invent itself.
So there is a sense of profound optimism that real change is afoot, if couched by a subtext of fear given the massive economic challenges facing the incoming Administration. And yet partly because of these very economic challenges—and the consuming efforts that will need to be directed towards alleviating them--one is concerned the scope of change required in the foreign policy realm may not prove quite as dramatic as necessary, perhaps with President Obama not being able to devote as much attention to same as he might otherwise.
Below I list six critical areas for Obama and his foreign policy team’s consideration, that is, if we are to move beyond the merely rhetorical (if inspirational-sounding) change, to the real thing, meaning a truly fresh start for American foreign policy after the profound strategic blunders of the Bush era.
1) Don’t Let Afghanistan Become Your Administration’s Iraq
The Iraq/Afghanistan narrative has become too trite these past years during the seemingly permanent election season. It goes something like there was a “good” war (Afghanistan) and a “bad” one (Iraq). Rapid de-escalation from the Mesopotamian morass is required, not only to hit a strategic ‘re-set’ button of sorts in the center of the Arab Middle East, but also the story has it, to allow for more man-power to be channeled to Afghanistan. While I agree with the former statement, I disagree with the latter one. And yet, too few skeptics in positions of influence question the wisdom of ratcheting up our involvement in Afghanistan (I’ve espied a few individuals like Zbigniew Brzezinski, Jim Webb, perhaps several others).
Here’s why it’s not such a no-brainer to march tens of thousands of reinforcements into the wilds of Afghanistan. Counter-terrorism is not nation-building. Retention of counter-terror surgical strike capacities and requisite intelligence-gathering capabilities can be maintained via a modest presence in key cities like Kabul, perhaps too temporarily bases like Bagram as we nonetheless move to phase them out, ‘over the horizon’ forces, drone strikes, a heightened ‘train and equip’ effort for the Afghan Army, and the like. U.S. marines should not be dying to try to de-Talibanize, if we might call it that, remote portions of the Pashtun south of Afghanistan. Why? First off, it’s a losing battle. The presence of foreign troops (like it or not, they are widely viewed as occupiers) only serves to further radicalize local Afghans (have the experiences of the Soviets, and before them, the British—thought us nothing?). Second, al-Qaeda is mostly scattered in parts Pakistan, rather than portions of Afghanistan where Marines are operating. And, even if not, or they move too freely back and forth, query: what was it about the 9/11 hijackers, say, that made it so critical that they’d enjoyed a safe-haven in Afghanistan? Was this safe haven needed to allow some of the hijackers to attend flight school in Florida, say, as former UK diplomat Rory Stewart has quipped? Can one only learn the finer usages of box-cutters—or more ambitious chemical and biological schemes for that matter—in far-away Afghanistan (to the contrary, one might argue it’s much harder in such parts, rather than in more advanced societies with easier access to the relevant technologies etc.)?
In fact, our most worrisome terror threats are probably far afield from Afghanistan, no matter how intellectually consuming and fodder for myriad think-tank ‘studies’ the latest folly-like fantasy of turning Afghanistan into a modern state might be (perhaps we can turn it into a Pakistan, say, albeit even this relatively ‘modest’ goal would require hundreds of thousands of men, tens upon tens of billions dollars—perhaps some TARP funds can be deployed?—as well as decades plus of far too many G.I.s on the ground). Put simply, any rational cost/benefit analysis should have us, not only forging and speedily implementing a responsible exit strategy from Iraq, but also accomplishing the same in Afghanistan. As I’ve said, the realer threats instead persist in Internet cafes and empty store-fronts in portions of the Parisian banlieu, the fringes of East London, and so on.
The alternative Mr. Obama confronts? Doubling-down for the long haul in a counterinsurgency effort all but doomed to failure, this in a country far larger and with more difficult terrain than Iraq, with NATO slowly but likely inexorably being torn asunder as too few other member states—certainly their populations—really believe in the ‘mission’, ultimately. And they are right not too, as we largely accomplished it already when al-Qaeda mostly scattered into parts South Waziristan in neighboring Pakistan, where last I checked no one sane was calling for a sustained nation-building effort, or alternately, an on the ground, years-long, robust counter-insurgency effort.
Special Envoy Richard Holbrooke is an immensely talented negotiator—with few able to cajole, harrumph, corral, threaten, bluster as relentlessly as he. In the context of his new role for Afghanistan and Pakistan matters I would hope that some of that relentless energy is spent—not having us sucked deeper into the Afghan counter-insurgency with Holbrooke thereby also spending precious time with the proverbial cup out for more NATO forces in varied European capitals, but rather, focused on helping stabilize critical parts of each country (say Kabul, Jalalabad, Peshawar and even Islamabad, for instance), while not forgetting to think about high level mediation efforts over Kashmir. A deal between India and Pakistan over that issue—however unimaginable it might seem from where we sit today—would go a long way towards de-radicalizing large swaths of Pakistani opinion, and help allow for a possibly viable rapprochement between New Delhi and Islamabad, while assisting our anti-terror efforts in Pakistan at the same time. A man of Holbrooke’s talents should be focused more on such issues, in my view, rather than spending too much time getting knee-deep with the Generals on a counter-insurgency effort I believe destined to fail.
This being said, we cannot underestimate how our presence--not to mention varied rhetoric and policies emitting from Washington during the Bush years--has helped contribute to an intensification of Taliban efforts, on both sides of the Afghanistan/Pakistan border (see this piece for vivid insights into the gravity of the situation, including how Pakistani Chief of Staff Kiyani is reticent to open up a second anti-Jihadi front in Punjab given he has his hands full in the Northwest Frontier Province, or NWFP, another reason incidentally Holbrooke should not forget the Kashmir issue as part of his mandate), so that I would stress again important cities and key populations centers like Kabul and Peshawar must be better protected, the former by NATO forces for the time being (as we continue to train and equip the Afghan Army), the latter where we should certainly be liaising with the Pakistanis as very closely as possible so as to monitor the efficacy of their efforts in strategic areas like Peshawar. This more limited mandate is at least a more realistic prescription than trying to convert 'hearts and minds' in a protracted counter-insurgency deep in the Pashtun heartlands.
2) De-Mystify Al-Qaeda, It’s Not All That
This young, charismatic new President has a near unique chance to captivate the world, more than any of his predecessors since at least John F. Kennedy. Imagine a major speech in Jakarta showing real sensitivity to the arrayed hundreds of thousands that this new African-American President whose middle name is Hussein understands that the phrase “global war on terrorism” (or ‘war on terror’, which the new President apparently is still employing) sounds far too much like a substitute for a “global war on Islam” to the billion plus Muslim faithful with whom we share this planet. Barack Obama can stand above the herd of typical politicians, and appeal not only to our better angels here at home, but across the world, as a reservoir of genuine good will exists for him to tap.
In this vein, there is no reason, Ahab-like, to get in the trenches obsessing about the GWOT and, in particular, Osama bin Laden. Robert Fisk is often derided in Western circles, but as a journalist with true regional expertise, courage and intensity, few can match him, as most of his fairer critics well realize. Here he is recounting his meeting with bin Laden in his gripping book “The Great War for Civilization”:
“Mr Robert," he began, and he looked around at the other men in combat jackets and soft brown hats who had crowded into the tent. "Mr Robert, one of our brothers had a dream. He dreamed that you came to us one day on a horse, that you had a beard and that you were a spiritual person. You wore a robe like us. This means you are a true Muslim." This was terrifying. It was one of the most fearful moments of my life. I understood Bin Laden's meaning a split second in front of each of his words. Dream. Horse. Beard. Spiritual. Robe. Muslim. The other men in the tent were all nodding and looking at me, some smiling, others silently staring at the Englishman who had appeared in the dream of the "brother." I was appalled. It was both a trap and an invitation, and the most dangerous moment to be among the most dangerous men in the world. I could not reject the "dream" lest I suggest Bin Laden was lying. Yet I could not accept its meaning without myself lying, without suggesting that what was clearly intended of me - that I should accept this "dream" as a prophecy and a divine instruction - might be fulfilled. For this man to trust me, a foreigner, to come to them without prejudice, that was one thing. But to imagine that I would join them in their struggle, that I would become one with them, was beyond any possibility. The coven was waiting for a reply.Was I imagining this? Could this not be just an elaborate, rhetorical way of expressing traditional respect towards a visitor? Was this not merely the attempt of a Muslim to gain an adherent to the faith? Was Bin Laden really trying - let us be frank - to recruit me? I feared he was. And I immediately understood what this might mean. A Westerner, a white man from England, a journalist on a respectable newspaper - not a British convert to Islam of Arab or Asian origin - would be a catch indeed. He would go unsuspected, he could become a government official, join an army, even - as I would contemplate just over four years later - learn to fly an airliner. I had to get out of this, quickly, and I was trying to find an intellectual escape tunnel, working so hard in digging it that my brain was on fire.
"Sheikh Osama," I began, even before I had decided on my next words. "Sheikh Osama, I am not a Muslim." There was silence in the tent. "I am a journalist." No one could dispute that. "And the job of a journalist is to tell the truth." No one would want to dispute that. "And that is what I intend to do in my life - to tell the truth." Bin Laden was watching me like a hawk. And he understood. I was declining the offer. In front of his men, it was now Bin Laden's turn to withdraw, to cover his retreat gracefully. "If you tell the truth, that means you are a good Muslim," he said. The men in the tent in their combat jackets and beards all nodded at this sagacity. Bin Laden smiled. I was saved. As the old cliché goes, I "breathed again". No deal.
Perhaps it was out of the need to curtail this episode, to cover his embarrassment at this little failure, that Bin Laden suddenly and melodramatically noticed the school satchel lying beside my camera and the Lebanese newspapers partially visible inside. He seized upon them. He must read them at once. And in front of us all, he clambered across the tent with the papers in his hand to where the paraffin lamp was hissing in the corner. And there, for half an hour, ignoring almost all of us, he read his way through the Arabic press, sometimes summoning the Egyptian to read an article, at others showing a paper to one of the other gunmen in the tent. Was this really, I began to wonder, the centre of "world terror"? Listening to the spokesman at the US State Department, reading the editorials in The New York Times or The Washington Post, I might have been forgiven for believing that Bin Laden ran his "terror network" from a state-of-the-art bunker of computers and digitalised battle plans, flicking a switch to instruct his followers to assault another Western target. But this man seemed divorced from the outside world. Did he not have a radio? A television? [my emphasis]
Doesn’t bin Laden feel, well, small? And remember, this is in 1997, before the largest international man-hunt in history—still fumbled, alas—was in motion. Osama is probably even more desperate for news clipping these days, I’d think. Obama should keep him small and getting smaller, which is to say, not dignify him with any specialness (this is not to say U.S. forces should still not energetically be searching for him, but we should not elevate this mission to some special level of import in our public discourse, for instance, Ambassador Holbrooke should make very clear his Afghanistan-Pakistan mandate goes far beyond ‘bringing to justice’, to use an oft-used phrase, UBL). He has become yesterday’s man, even if he is alive (which I’m not certain he is), one can well imagine him barely cognizant of the events of the day, perhaps until weeks or months later, a vanishing specter we should not dignify with too great attention.
All this said, let us agree with the new President who said during his inaugural speech: “(f)or those who seek to advance their aims by inducing terror . . . we say to you now that our spirit is stronger and cannot be broken; you cannot outlast us, and we will defeat you.” There is no doubt the perils we face on the terror front remain very real, and surely the intelligence briefings Obama has already been receiving during the transition period and now in office bear this out to some degree, but I am asking for some perspective, and that we not put Osama bin Laden on the same pedestal as we’ve done these past years, if understandably originally, emerging from the trauma of 9/11.
Beyond this, I am also suggesting that we re-order our national priorities so that, to be sure, combating extremism (in whatever manifestations) remains front and center, but that the sine qua non of U.S. foreign policy not be carried forward or advertised as part and parcel of the ‘global war on terror’. There are too many other threats to confront, and it is overly convenient to rebrand al-Qaeda’s brand of terrorism as the new ‘ism to replace communism and fascism as decades long center-piece of this country’s entire national security apparatus, which to my mind would prove too much of a distraction from the many other pressing challenges which confront us as well.
3) Resuscitate the Middle East Peace Process, But For Real This Time
The Middle East Peace Process, or lack thereof, seems everyone’s favorite topic, whipping-horse, perennial bugaboo—almost always approached with too much emotion and too little reason—by whomever is chiming in with their (usually grossly biased) views regarding same. Indeed, have we not all become tired of the various theories and clichés: ‘The Road to Jerusalem Runs Through Baghdad’, or is that the ‘The Road to Jerusalem Runs Through Teheran’, or perhaps Damascus, and so on? The platitudes and agenda-ridden sloganeering fatigues, with some wanting to prioritize neo-con like militarism via threats of regime change in Iran (and Syria), and others stressing that the Arab-Israeli conflict—were it to be solved—would serve as some region-wide panacea, so that Pavlovian-like ‘peace-processing’ is needed, nothing more, damn the intentions of the ‘bad guys’ on the ground (while I of course sympathize much more with the latter view, I am only pointing out that there are various other critical challenges that wouldn’t disappear the day after even a comprehensive Arab-Israeli peace deal were inked, to include Iraq, Iran, Kashmir, and more).
What is nonetheless clear, however, as much as some would like to wish it away, is that the Arab-Israeli conflict acts as a toxin materially hampering forward progress in the wider region—while radicalizing tens of thousands, such as Mohamed Atta, to take one prominent example. Meantime the outgoing Bush Administration’s obsession (born of insecurity) to follow ‘ABC’ (“Anything But [Bill] Clinton”, e.g. no robust peace-making), isolate Arafat, forsake more of an ‘honest-broker’ role—while simultaneously airily obsessing about ‘free’ elections—all helped usher in Hamas’ rise to greater power in Palestine, with such radicalization further fanned by the war in Iraq.
All this, of course, hasn’t helped much. The result, the pitiable Annapolis process or not, is very clear to most if not all sober-eyed observers, which is to say, parts of the region are in flames or grappling now with Grozny-like misery, American leadership is at a depressing nadir (the French, Qataris, Turks, Egyptians and others have been vying to fill the vacuum, but none have any real influence where it counts—Tel Aviv—so that their efforts can only prove ultimately ineffective, and too often annoyingly poseur-like, frankly, particularly a recent spate of mostly feckless European interventions), the peace process in tatters and thoroughly moribund given this abject neglect, meantime the blood of far too many civilians needlessly lost in the recent conflicts in Lebanon and Gaza, Israel still without peace, of course, with her reputation near an all-time low internationally after the Gaza onslaught, and on and on.
(And so where were these United States these past 8 years, one asks? Mostly a bystander, with our former Secretary of State Condoleezza Rice something of a Lilliputian in search of a legacy, uttering recently in a Washington Post exit interview “(t)here would have been no 1701 without me” (about the grossly belated Lebanon Resolution at the UNSC) or still, about Iraq, breathlessly relaying as if to showcase its democratic bona fides that Iraq even “declared Christmas a national holiday”. The mind still reels, now eight years into this horror show of massive incompetence masquerading as moral righteousness and ‘transformationalist’ diplomacy, or whatever its been called).
If we mean to cause real change then, we need to book-end this sorry chapter, and quickly. President Obama must immediately move to inject competence and strength into the uppermost reaches of American diplomacy, while also changing the substance and tone of America’s Middle East policy, not least, by recognizing the needs of both sides, to help restore our reputation as ‘honest broker’, rather than, in David Aaron’s Miller’s words, too often acting as “Israel’s lawyer.” (While Miller’s op-ed title might sound somewhat inflammatory to some, it is really anything but. Miller was merely calling for more pragmatic, even-handed handling of important negotiations, hardly controversial or incendiary fare, at least if one is sober-minded and interested in results-oriented diplomacy).
In this vein, I believe it a very positive signal that George Mitchell has been appointed special Middle East envoy (apparently with responsibility mainly for the Palestinian-Israeli brief, but also the Israeli-Syrian and Lebanese-Israeli tracks, all of which will doubtless demand much dialogue with the Egyptians and Saudis as well, in particular). I would recommend that Mr. Mitchell appoint a deputy (Dan Kurtzer, for example, a former U.S. Ambassador to Israel) bringing additional energy and more direct on the ground experience, to complement Mr. Mitchell’s gravitas, negotiating skills, and disciplined legal temperament, while also not being shy to fully use the Assistant Secretary for Near Eastern Affairs as well (to include the many talented and dedicated professionals in that Bureau).
And once the immediate, and inevitable, crisis management clean-up of the recent wreckage in Gaza is accomplished (first we need to help, if through proxies, mediate schisms as between Hamas and the PA, as well as more directly liaise with differing Israeli factions set to squabble mightily during the impending political silly-season there, where we may well end up dealing with the re-emergence of Prime Minister Netanyahu after the elections), thereafter the Taba precedent should be speedily used as launching pad, of sorts, with additionally other bold strokes considered, like asking the Israelis to free Marwan Barghouti, so as to help restore Fatah as credible counter-party to Hamas, and thereafter lead the negotiations on behalf of Palestine with the Israelis. Only a leader with charisma can close a deal of such magnitude and controversy, and Abu Mazen doesn’t have what it takes, particularly after Israel’s latest operation, given these grim (if woefully predictable) tidings.
In short it is high time to cease the hapless by-standing (pre-Annapolis), or alternately, the empty spectacle (Annapolis), and instead roll up our sleeves and get to the hard work of forging a comprehensive Arab-Israeli peace without a moment’s delay, and with relentless energy (without getting bogged down necessarily in a months long series of anti-smuggling discussions with the Egyptians, in large part a waste of time given factors such as these, rather than focusing on the larger strategic picture). Such hard toil can and likely will pay-off (see Camp David, Madrid, Oslo, etc), but only if all instruments of American national power are used, and focus, intelligence and intensity are brought to bear consistently from the Presidential level on down, with pressure applied even-handedly to get to the (so elusive, but not impossible) goal-line. This, and follow-through, so that gains (as Madrid and Oslo) are not then frittered away. As I said, all things being equal, the appointment of George Mitchell alone is a strong start by the President and his Secretary of State, but the effort will need to be all hands on deck, hard-charging and even-handed (that phrase again), with bold ‘out-of-the-box’ strokes employed on occasion.
4) Iran: A New Paradigm, Moving Beyond “Carrots & Sticks”
It has become conventional wisdom to predict that the greatest (or at least most immediate) major foreign policy challenge awaiting the new President is that presented by the Islamic Republic of Iran. This is mostly of course because of the reasonably marked progress Iran is making on its nuclear program (though not quite as expedited as some would have it) and on this basis indeed makes sense as a major priority (though like General Abizaid and others of similar ilk have said, I am not persuaded we might not have to accept that the Iranians will ultimately either possess or have the capability to expeditiously produce nuclear weapons, so that aside from focusing solely on preventing same thought should also be devoted to how best to integrate such a capability into the regional security architecture, ideally without setting off an arms race including possibly the Saudis, Turks and Egyptians, and where a pledged U.S. security deterrent could play a strong role).
Obama has already made very clear he is keen to employ a new approach with the Iranians, and with some pull-back unfortunately having been signaled here and there (ironically, resulting from his campaign when then opponent Hillary Clinton took a more hawkish stance forcing Obama to retrench some) this nonetheless apparently still includes the prospect of direct negotiations without preconditions (leading up to Presidential level). Related and perhaps towards this end, I’d like to recommend this excellent article which has several key points, including: 1) don’t rush it (a major diplomatic push might well profit from waiting until after the impending Iranian elections), 2) link Iran negotiations to additional tracks beyond the nuclear issue to include Iraq and Afghanistan (each of where Iran can possibly be of some assistance to us where mutual interests converge, areas demanding fulsome dialogue and inquiry), and 3) employ a new tone in our discussions with Teheran.
I would add the following too. Additional tracks should be considered as well, meaning beyond the nuclear, Afghanistan and Iraq tracks, for instance, Iran’s role in supporting Hamas and Hezbollah. This track should not be included merely to scold and berate, however, but also to see if there is room for maneuver and collaboration (even if very limited) with the Iranians on the Arab-Israeli front (say liaison with Damascus-based elements of Hamas on new modalities for Hamas’ behavior in Gaza). Worth noting, a set-back on one track (say, Iraq, but more likely, the nuclear issue), should not result in freezing discussions on Afghanistan or the Middle East. Instead, an approach should be taken whereby dialogue is pushed ahead on all fronts as very much as possible—not necessarily to reach some likely chimerical ‘grand bargain’—but to better understand each parties’ ultimate red-lines, must-haves, etc. with regard to each individual track, thus facilitating making better informed strategic decisions regarding the overarching U.S.-Iranian relationship once a genuinely multi-faceted, good faith dialogue on all these issues has been sufficiently advanced.
Related, Secretary of State Clinton will need to give serious thought to whom will handle aspects of this dialogue, for instance, George Mitchell would seem the logical candidate to interface on Iranian issues as they related to Arab-Israeli peace, and Dick Holbrooke with regard to Afghanistan (as Iran is opposed to the Taliban and other Sunni extremists so can possibly be constructive there). And while I have heard rumors that a special Iran envoy might be appointed as well, we risk having too many envoys for one wider region, I fear, so that perhaps Secretary Clinton might take-up the Iran issue personally, as aided by appropriate Foggy Bottom and/or extant Special Envoy back-up, as necessary (frankly I’m tempted to have seen Holbrooke given the Iran mandate too, but then Iraq is left a bit off-kilter in neither of the two announced envoys bailiwick, so we will likely need to monitor how Clinton fills out the bench and better gauge logical responsibilities going forward).
Last, on Iran, we must not forget to employ a new tone in our conversations with the Iranians, something I’d advocated in the cyber-pages of this blog quite a while back
here, quoting the Iranian Ambassador to the UN about his displeasure about the usage of ‘carrots and sticks’ verbiage to describe Washington’s approach to Iran.
As the Ambassador put it:
If you deal with the other side as less than a human society, then don’t expect to have multiple outcomes. What I’m saying is that in Western terminology, concepts are used that would infuriate the other sides. Even the terminologies used by the United States in the liberal realist tradition—such as “carrot and stick”—are not meant for humans, but rather for donkeys. In studies of Orientalism, the Eastern part of the world is dealt with as an object rather than as serious, real human societies with longer, older civilizations with concerns and needs that have to be dealt with. [emphasis added]
It was therefore very gratifying to finally see prominent commentators like Pickering and Luers (full disclosure, I am acquainted and a fan of both men) making the same point in the pages of the NYRB:
A new policy also requires a new tone. Iran is a proud nation with roots in a centuries-old civilization; its insistence on being treated with mutual respect is not empty rhetoric. Continued denunciation of the regime will likely produce greater intransigence, especially as Iran enters its presidential campaign. Iranians bristle at the use of the phrase "carrots and sticks," which they associate with the treatment of donkeys and which in any case suggests that they can be either bought off or beaten into submission. More generally, the US government would do well to follow a first principle of diplomacy—when you want to change a bad situation, start by shutting up.
Not only Secretary Clinton, but the new President himself (who has used the ‘carrots and sticks’ phraseology, I believe, and in connection with Iran) might well profit from thinking through these subtleties of approach, perhaps with some luck paying real heed to them. It could make a difference towards getting to a break-through with the Iranians, at least certainly cannot hurt.
5) A New Approach to Russia?
Another area begging for real change in American foreign policy is our relationship with Russia. To start off strongly on a different foot, I would suggest a dramatic opening to the Russians whereby we signal we are contemplating revisiting so-called missile defense shield arrangements—at least to some extent and degree—in Poland and the Czech Republic (where we are moving along with interceptors and a radar station, respectively). Meantime my views on the Georgian fiasco are decently known in the blogosphere (see, in close chronological order, here, here and here), and I would suggest we not prioritize rushing, say, Ukrainian and/or Georgian NATO Membership Actions Plans, highly controversial given historic Russian interests in Crimea and the Caucasus.
There are critical issues where the Russians could be of significant assistance to us (notably nuclear proliferation issues, to include Iran, among many others) and nothing would be more effective to this end than signaling to the Russians that we are not simply hell-bent on extending some fictitious Pax Americana to the outskirts of Moscow and St. Petersburg via ‘encirclement’ on their southern underbelly (Georgia), and/or to their West (the missile defense issue in Eastern Europe)—which, like it or not, far too many in Moscow believe--rather than helping foster a high-level strategic dialogue with the Russians on these issues (having moved to put these particularly controversial issues on the table to signal our seriousness of intent about trying to forge a re-fashioned relationship).
Regardless, let us think seriously for a moment. Who really believes the Iranians, as if in some re-do of Islamic hordes charging the Gates of Vienna, are set to perpetrate missile strikes against Europe? And while it is true the Shahab-3 missiles have a range of some 1200 or so miles (enough to reach Bulgaria or Greece, say) do we really believe they are keen to attack Athens, Bucharest or Sophia? Or indeed if they roll out a Shahab-4 with longer-range in coming years, that Vienna or Berlin will suddenly be in their sights? Why would the Iranians do this? Please let us not pretend in ribald fashion because they are but ‘mad Mullahs’ or some such, with a collective suicide wish. As I said, this is farcical, and displays an ignorance of the complexities of Iranian statesmanship and the behavior of the Iranian nation-state.
Given this back-drop, we therefore might forgive the Russians not believing us that the true rationale for the contemplated missile shield system is really about Iran—or some other to be concocted Middle Eastern rogue hell-bent on lobbing missiles into central Europe--rather than as is more likely another 'legacy' containment tool aimed at Moscow. (Nor does it help, indeed it adds rather a good dollop of insult to injury, that such anti-missile shields are to be based in former Warsaw Pact nations under Soviet dominion not so long ago.)
Put simply, and at minimum, you would hope the incoming team would at least review both NATO enlargement and Eastern European missile shields anew for sense and impact on relations with Russia, as we have a major moment of opportunity with Moscow to re-fashion the relationship occasioned by the new American Administration having assumed power.
6) Guantanamo, Torture, and Looking Ahead Rather Than Backwards
Last but not least, real change would also mean shuttering Guantanamo and declaring unequivocally and without any ambiguity that the United States will no longer torture. It appears both goals are being followed by the new President, for which he should be lauded (though a more explicit statement that Army Field Manual interrogation practices will wholly apply also to the CIA might not be unwarranted). And while it would have been a more dramatic flourish to close Guantanamo within the first 100 days of his new Administration, it is understandable that there are several complexities and challenges to accomplishing same, some of which Matthew Waxman touches on here. This said all best efforts must be made to close Guantanamo within the first year of the new Administration, so that at least when the new decade is ushered in this gross stain on America’s repute will be no more. Indeed, and as has been vividly pointed out (hat tip:
Glenn Greenwald), this is Obama’s penitentiary now, alas, every day it remains open still.
But I write here, mostly, to broach Obama’s seeming unwillingness to prioritize analyzing whether war crimes or other illegal acts were undertaken by the prior Administration. First, a confession, Obama is a better man than this writer. His ability not to nurse grudges, his poise, his persistent optimism—we have seen it often already now. And second, he has said that Eric Holder will be the “people’s lawyer”, and certainly hasn’t indicated there will be a white-wash, and that whatever relevant evidence will be diligently analyzed. And yet, the emphasis has strongly been to move forward rather than look backwards, and while I understand the temptation of same, even some might argue, the wisdom (a perceived auto de fe could poison Obama’s attempts to position himself as a sunny Reagan of the center-left and there are myriad critical items on his agenda he doubtless thinks might be of even greater import than these war crime investigations, perhaps at least to the lives of ordinary Americans struggling without adequate access to health care, with jobs being lost by the hundreds of thousands, and the rest of a long laundry list of pressing issues). Still, however, there was something about the contempt shown by certain actors in the prior Administration (I am thinking less about Bush, whom I’ll confess I felt tinges of muted sympathy for as he hugged Obama with sincerity and wished him the best at the inaugural, in fairness too, he handled the transition reasonably well, and perhaps worth noting, the crimes committed were more often the acts of the real evil-doers who took advantage of his profound historical and constitutional ignorance) meaning men like David Addington, John Yoo, Dick Cheney, and Donald Rumsfeld, among others. We must at least ask that Eric Holder be allowed to do a ‘deep-dive’ into this dossier, and share his unfiltered findings with the American people, to the extent possible, so collectively we might better gauge the best way forward at the time. Let’s recall, after all, human beings died under American custody due to torture, quite a few of them, and this is therefore a tremendously grave matter, among other reasons too, meriting the most serious attention by the incoming Administration.
There are many other issues that would similarly present opportunities for real change and that I’d be keen to broach, but time and space constraints counsel ending here, rather than discussing Iraq (where a responsible draw-down needs to be implemented and the Baker-Hamilton report dusted off, as political issues will become increasingly important and problematic to its future, requiring major diplomatic efforts by ourselves and other interested parties), the far too ignored relationship with Latin America, particularly Brazil and Mexico, better managing an economic dialogue with China, a still rocky situation with North Korea, and putting Trans-Atlantic relations on a better footing, but to close, I would suggest a real departure point from the Bush Administration could well profit from some of the above recommendations, if only at least consideration of them, as they relate to Afghanistan, international terrorism, the Arab-Israeli peace process, Iran, Russia, and the legacy of the prior Administration’s torture policy.
NB: I should perhaps add a last word on Secretary of State Clinton, who after all, will be the person day-to-day charged with the managing of U.S. foreign policy for the new Administration. While I haven't necessarily been one of her biggest fans (I supported Obama during the primaries), and truth be told would have preferred another Secretary of State (like Gideon Rachman quipped a few months back, I would have preferred someone more "dull" for the job, not least after all the fevered missteps of the Bush Administration, and am a tad discomforted too that there is a seeming 'celebrification' of the Secretary of State slot these past years), one nonetheless cannot help admiring her sharp mind, strong work ethic and--accompanied by heavyweights like Mitchell and Holbrooke (and with Obama hopefully steering her away from stereotypical notions of 'toughness' and 'hawkishness' when inappropriate, see, for instance, Madeline Albright and "cojones")--she could well prove a superb leader at Foggy Bottom, and we might wish her only the very best as she embarks on this challenging new chapter in her career.
Well, at least this is a bureaucratic battle worth having
Well, at least this is a bureaucratic battle worth having
Noam Scheiber reports on a battle a-brewin' within the Obama administration:
Foggy Bottom has spent the last month hinting at its designs on economic policy, which would presumably come at the expense of Treasury. The latest indications are that Hillary's first target may be the U.S.-China relationship, which Geithner's immediate predecessor, Hank Paulson, spearheaded in the Bush administration. Publicly, Treasury officials welcome a more active role for State. Privately, they say parting with Paulson's brainchild, the Strategic Economic Dialogue, is highly unlikely, noting Geithner's longstanding experience in the region. Let the border skirmishes begin.
On the one hand, this kind of turf war clearly needs to get settled in short order.
On the other hand, in a perverse kind of way, it's not a bad battle to have. Despite all the foreign policy heavyweights in the administration, China is kind of like the orphaned child looking through the window. Since Obama took office, I think it's safe to say that they haven't been feeling the love.
I normally abhor a big bureaucratic battle royale, but in this case it might be good for the Chinese to know that they're wanted.
Question to readers (and Laura Rozen and Megan Carpentier): who wins? Given the status quo -- in which Treasury controls the SED -- my money is on Geithner.
The foreign twist to complaints about the stimulus
As I've said before, in recent months there is a danger of creeping protectionism getting in the way of countries enacting expansionary fiscal policies (and the bill that passed the House only reinforces this danger, by the way)
In the past few days at Davos, others have voiced this concern, but with a twist. Rather than complaining about the underprovision of a fiscal boost, some are complaining that the Americans are hogging all the expansionary plans. First, there's Russia:
A senior adviser to Dmitry Medvedev, Russia’s president, has sharply criticised the scale of the new US administration’s economic rescue package and projected budget deficit, saying it would suck up liquidity from other global markets.
“What is discouraging is [President Barack] Obama’s statement that he is going to run a $1 trillion deficit for years to come. For us, that means that all the free liquidity in the world will run into American Treasury bills,” said Igor Yurgens, who heads a think-tank advising Mr Medvedev. “That liquidity will not be available in other parts of the world. For us, it will be worse.”
Mr Yurgens said the policy was akin to the “beggar thy neighbour” protectionist policies of the 1930s. “Of course [Mr Obama] expects the Chinese or Russians to buy US Treasury bills. That is pretty selfish and philosophically it is protectionism.”
He's not the only one making this complaint. The NYT's Nelson Schwartz has a good chronicle of these concerns:
Few people attending the World Economic Forum question the need to kick-start America’s economy, the world’s largest, with a package that could reach $1 trillion over two years. But the long-term fallout from increased borrowing by the federal government, and its potential to drive up inflation and interest rates around the world, seems to getting more attention here than in Washington.
“The U.S. needs to show some proof they have a plan to get out of the fiscal problem,” said Ernesto Zedillo, the former Mexican president who helped steer his country through a financial crisis in 1994. “We, as developing countries, need to know we won’t be crowded out of the capital markets, which is already happening.”....
“Even before Obama walked through the White House door, there were plans for $1 trillion of new debt,” said Niall Ferguson, a Harvard historian who has studied borrowing and its impact on national power. He now estimates that some $2.2 trillion in new government debt will be issued this year, assuming the stimulus plan is approved.
“You either crowd out other borrowers or you print money,” Mr. Ferguson added. “There is no way you can have $2.2 trillion in borrowing without influencing interest rates or inflation in the long-term.”
Meh. To be generous, these complaints are not completely without foundation. They are a little odd, however. If the United States does not engage in greater stimulus, then other countries are going to have to pick up the slack, or this recession will last a long time. Indeed, count me in the Martin Wolf/Brad Setser camp of those who would love to see other countries -- *cough* China, *cough* -- starting to boost their own consumption as a means for igniting global growth, because that would also help to redress the macroeconomic imbalances that are at the heart of the current predicament.
To date, however, the efforts by most of these other countries have been underwhelming. [What about China?--ed. Their stimulus has targeted investment rather than personal consumption, so yes, them too.] If I were Obama, I wouldn't trust other countries to provide the locomotive power necessary to get the global economy moving again. So I don't see how they can blame the United States for doing what they are choosing not to do.
Tax on Hope Chills Next Generation of Investors: Amity Shlaes
Commentary by Amity Shlaes
- To a lot of investors, 2009 looks like twilight at the bottom of the ski run. Ahead is the icy walk down to the parking lot and the challenge of maneuvering the car out of the resort without crushing someone’s fender.
Even the gloomiest among us can take comfort in knowing that there is one group for whom 2009 is all early morning and fresh powder. That group is young investors, especially the truly young -- 18, 19, 20. They have no losses to straighten out. They can pick up real estate at prices unseen for years. They can collect stocks at prices inaccessible to their forerunners.
All they have to do is bend their knees and keep their skis straight and it will be compound, compound, compound all the way down the mountain.
Or would be, but for a levy discussed mostly in the personal-finance columns. It is the Kiddie Tax.
The tax applies to so-called unearned income, from dividends, investments and capital gains. Back in the 1990s and the early part of this decade, children under 14 who had such income paid taxes at the parental rate. Teenagers or college students, however, were taxed at a much lower rate.
In recent years -- even as it lowered capital-gains rates for modest earners -- Congress moved to subject more to the parental-level Kiddie Tax. First, lawmakers raised to 18 the age at which young investors could escape their parents’ rate. Then they raised the cap again, so that, in the 2008 tax year, full- time students who made more than $1,800 in investment income and are under age 24 also had to pay at their parents’ rate.
Parking Money
To avoid this penalty and break free of the family tax rate, young people must ensure that the majority of their income is “earned” -- that is, it comes from a salary. Or they must pass up full-time school.
The motivation of the tax writers is obvious. Parking money with kids to get a better rate is a time-honored American tradition. Since tax rates will doubtless rise in coming years, such parking is only going to become more attractive. Capitol Hill staffers reckoned that the Kiddie Tax could haul in $2 billion over 10 years.
The Kiddie Tax also fits the zeitgeist, and perfectly. The stereotype of offspring with investment income was pretty ugly even before every American knew the name “Madoff.” (Such teen moguls were viewed in the same category with snowboarders who hog the train with their showy 360s. Off the slope with them!)
Finally, there’s the argument that the tax applies to such a small crowd that it’s a mere pebble in the economic path.
Stifling Entrepreneurs
In fact, the Kiddie Tax is more than a pebble. After all, infant rentiers are not the only young people at issue here. There are also entrepreneurs pursuing higher education, reasonably enough. Some may be future Madoffs or Jeff Skillings but also may turn into the next Bill Gates, Michael Steinhardt, Bruce Kovner or Warren Buffett.
These young people are better equipped than just about anyone in society to take big risks for big rewards. And at this moment they really are standing on the mountaintop of their career, looking down, trying to decide whether to follow a path labeled “law,” one labeled “construction engineering,” or the least predictable one, labeled “finance.”
To them, the Kiddie Tax says: this perilous finance route is not worth it. If you take a regular job in the dining hall, you’ll pay lower rates. Or if you invest just a little, you’ll pay low rates, too. So why endure the extra penalty of 30 percent, 40 percent, or even 50 percent marginal tax rates? Go for the law, or be a salary man, or just stay at home and be the lazy guy your father already thinks you are.
Royal Brush-Off
And escape the opprobrium of the rest. After all, everyone from the Queen of England on down these days is trashing that third path. In her list of Honours this week, Her Highness is said to be pointedly omitting the stars of the City of London. The message is clear: in 2009 only selfish people go into finance.
That argument is wrong. To grow again, the economy requires more than stimuli; it needs innovation. Very few people in a wage job come up with an innovation. You need the engineers and the finance hotshots. And only innovation leads to the sort of productivity gains that can help the economy recovery solidly.
So the Kiddie Tax isn’t just a tax on stocks. It’s a tax on hope, one that kills fun. After all, it is when people play that they happen on some of their most monetizable insights.
What distinguishes a Bunny Slope economy from a Black Diamond economy is that, in the latter, minds are allowed to be “venturesome,” the quality captured by economist Amar Bhide in his new book. To remain a Black Diamond, the U.S. economy needs young investors -- venturesome ones. Their run is our run, as well.
Rescues and Stimulus
I'm going to belabor the obvious here. I hate to do it, but somebody needs to and nobody else is:
*Calling something a stimulus package doesn't make it one. This one doesn't come close. Read it here.
*If you are headed in the wrong direction, speed is not your friend. Neither is size.
*The rescue of financial institutions is more urgent than a stimulus package and less expensive to taxpayers.
*Illiquid assets can be purchased, held, and later resold, possibly at a profit, while money spent is money gone. One is "investment;" the other is spending.
*Money spent with borrowed money raises future interest costs to future taxpayers.
*Rescue investing by the Fed and Treasury probably provide more stimulus than stimulus spending helps the financial system.
*You don't have to have a stimulus package to get stimulus. The recession is triggering automatic stabilizers - more spending and lower tax payments. The budget deficit is growing rapidly without a stimulus bill.
*Since the beginning of September, Fed operations have speeded up the growth of bank reserves and money. As velocity normalizes, much stimulus will be unleashed. The trick will be winding it down.
*Tax-rate cuts would result in immediate reductions in withholding and impact the economy faster while letting the public allocate their own funds.
*"Buy American" provisions are crazy. Has anyone heard of Smoot-Hawley? Do we not understand retaliation?
*Did someone say Davis-Bacon would apply to construction contracts? The best I can say about it is that it's well named.
*This is no time to poke a stick in our biggest international creditor's eye.
*What some people are calling "manipulation" used to be the official policy of the U.S. and other countries under Bretton Woods.
*I see that while we were focused on these issues, the trial lawyers just got a whole new playing field - equal pay.
$3 Trillion Gov't Overdose Must Be Stopped
$3 Trillion Gov't Overdose Must Be Stopped
Last week's House tally on the Democratic stimulus package, where not a single Republican voted in favor, was another shot across the bow for this incredibly unmanageable $900 billion behemoth of a program that truly will not stimulate the economy.
Sure, the Democrats won on a party-line count. But Team Obama is now regrouping in the face of mounting criticism of this package.
GOP economist Martin Feldstein revoked his prior support of a stimulus plan in Wednesday's Washington Post.
"In its current form," Feldstein wrote, "(The plan) does too little to raise national spending and employment. It would be better for the Senate to delay legislation for a month, or even two, if that's what it takes to produce a much better bill. We cannot afford an $800 billion mistake."
Clinton economic adviser Alice Rivlin made the same point in testimony before the House Budget Committee. Her message: Divide up the package and slow down the process.
And Sen. Richard Shelby told CNBC that Washington should "shelve the stimulus package" and instead attack the banking and credit problem first — probably with a government-sponsored bad bank that would relieve financial institutions from their toxic-asset problem. Mr. Shelby believes the credit crunch remains the biggest obstacle to economic recovery.
Later in the day when I interviewed Senate Republican leader Mitch McConnell, he agreed with Shelby that the stimulus plan should be shelved.
For the first time — as far as I know — McConnell pledged to vote no on the package. Instead he wants larger tax cuts and smaller spending. McConnell might be willing to change his mind if the package changes, but he told me he didn't expect that to happen.
And in what may prove to be the biggest stimulus-package hurdle of all, news reports suggest that Team Obama is contemplating as much as $2 trillion in TARP additions to rescue the banking system in one form or another. That would be $2 trillion on top of the nearly $1 trillion stimulus package.
Government spending, deficits and debt creation of this magnitude are simply unheard of. So the added TARP money will surely imperil the entire stimulus package as taxpayers around the country begin to digest the enormity of these proposed government actions.
Financing of this type would not only destroy the U.S. fiscal position for years to come, it could destroy the dollar in the process.
What's more, the likelihood of massive tax increases — which at some point will become front and center in this gargantuan funding operation — would doom the economy for decades.
By the way, Scott Rasmussen's latest poll shows that already — before the new TARP money is included — public support for the humongous stimulus package has dropped to 42%.
It remains to be seen whether Republicans can in fact stop the stimulus package, but that certainly would be a very good idea. The long-run financial consequences will certainly force higher future tax rates — a prosperity killer feared by Arthur Laffer.
And while all the social spending gets baked into the long-run budget baseline, the short-run implications of the plan have little economic-growth potential.
Meanwhile, there's no shortage of alternative tax proposals that would truly re-ignite the economy.
Former Ronald Reagan and George W. Bush economist Larry Lindsey criticized the Democrat package in Wednesday's Wall Street Journal, describing it as "heavily weighted toward direct government spending, transfers to state and local governments, and tax changes that have virtually no effect on marginal tax rates."
Instead, Lindsey proposes a big payroll tax cut that would slice three points off the rate for both employer and employee.
Rush Limbaugh also made an appearance in the Journal. He has a clever idea to give Obama 54% of the $900 billion package — equating that amount to the new president's electoral majority — while 46%, which was John McCain's electoral tally, would go to a plan that would halve the U.S. corporate tax rate and provide a capital-gains tax holiday for one year, after which the investment tax would drop to 10%.
It was Sen. McCain on Fox News a week ago Sunday who started the stimulus revolt when he said he couldn't support the package and called for less spending along with a large corporate tax cut.
Over in the House, Republican leaders John Boehner and Eric Cantor have successfully launched an opposition drumbeat by attacking congressional Democrats rather than directly hitting President Obama.
Now all eyes will turn to Republican Senate leader Mitch McConnell to see if he can keep up this drumbeat.
Will common-sense Americans really support a massive overdose of government run amok? I seriously doubt it. This whole story has to be completely rethought.
Rise of anti-Semitic incidents in Latin America troubling
Rise of anti-Semitic incidents in Latin America troubling
BY ANDRES OPPENHEIMER
There is a rise in anti-Semitic incidents in Latin America in the aftermath of the Israeli-Palestinian conflict in Gaza -- and the most troublesome part of it is that it's often fueled by racist propaganda in state-sponsored media.
Granted, there have long been isolated incidents of anti-Semitism in Latin America, much like in other parts of the world. But now, after Venezuelan President Hugo Chávez's self-proclaimed ''strategic alliance'' with Iran's openly anti-Jewish government, there is a visible increase in anti-Semitic propaganda in Venezuelan-financed regional media.
It is feeding anti-Semitic sentiment throughout the region. In Argentina, President Cristina Fernández de Kirchner's populist government felt obliged to condemn anti-Jewish incidents on Wednesday, after well-known political activist Luis D'Elia -- a former Kirchner official who is close to the government and close to Chávez -- led rallies against Israel where participants held signs equating Nazi swastikas with Jewish stars of David.
Earlier in the week, a small group of anti-Israel protesters gathered in front of a hotel owned by prominent Jewish businessman Eduardo Elsztain and shouted insults.
''He was harassed simply because he is Jewish,'' the Simon Wiesenthal Center's Latin American director, Sergio Widder, told me in a telephone call from Argentina. ``This sets a dangerous precedent. Unless the government puts limits to this, tomorrow they will harass any other Jewish person.''
Justice Minister Anibal Fernandez said Wednesday that he has ordered an investigation into the incident, adding that it was ''a crazy thing'' and ``unacceptable.''
In Brazil, a Jan. 5 statement by the Workers' Party, the political party founded by President Luiz Inácio Lula da Silva, claimed that Israel's attack on Gaza to stop Hamas terrorists from firing rockets against Israeli territory was ``a typical Nazi practice.''
The statement made no mention of the thousands of rockets fired by Hamas into Israel in recent years, or the terrorist group's official position calling for the annihilation of Israel.
But nowhere in Latin America is anti-Semitism as much of a problem as in Venezuela, Jewish organizations say.
''We are seeing expressions of anti-Semitism in several countries in the region, but most of them come from marginal groups,'' Dina Siegel Vann, head of the New York-based American Jewish Committee's Latin American affairs, told me on Wednesday. ``But Venezuela is the only county with a systematic campaign sponsored by the state.''
Venezuelan officials deny any anti-Semitic bias, saying that Chávez signed a November 2008 statement with the presidents of Argentina and Brazil condemning religious intolerance, ``in particular anti-Semitism and anti-Islamism.''
But Chávez, who expelled the Israeli ambassador after Israel's incursion into the Gaza Strip, singled out the Jewish community when referring to the Gaza conflict in a Jan. 6 interview with Venezuela's state-run VTV television network.
''Let's hope that the Venezuelan Jewish community will declare itself against this barbarity. Do it!,'' Chávez told VTV, as quoted by the Spanish news agency EFE. ``Don't Jews repudiate the Holocaust? And this is precisely what we're witnessing.''
Chávez-backed regional media carry anti-Semitic -- and not just anti-Israel -- stories almost daily.
On Jan. 22, a story by Emilio Silva on www.aporrea.org called for ''publicly denouncing, with their first and last names, members of powerful Jewish groups with a presence in Venezuela.'' It also called for ``publicly demanding that any Jew on any street, commercial center or public square, take a position shouting slogans in support of Palestine and against the abortion-like state of Israel.''
As I'm writing this, a quick look at the website of Telesur, the Venezuela-based regional television network owned by the governments of Venezuela, Argentina, Bolivia, Cuba, Ecuador, Nicaragua and Paraguay, shows me a story entitled ''Gaza's Ruins,'' which accuses Israel ''and the world's Jews'' of failing to denounce alleged atrocities by Israeli troops and ''Jewish planes'' in Gaza.
My opinion: I don't dispute critics' right to accuse Israel of using excessive force in Gaza, even though I think both sides should be blamed for the tragic conflict there. But bringing the ''world's Jews'' -- or, for that matter, the ''Islamic world'' -- into the equation of what should be treated as a national-territorial rather than religious conflict, is nothing but blatant racism, of the sort that has helped create the climate for some of humanity's
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