Hitchens Blasts Hillary on Bosnia

He really nails her hard in this one. And she really is a monster, just as Ms. Power said. Money:

Were I to be asked if Sen. Clinton has ever lost any sleep over those heaps of casualties, I have the distinct feeling that I could guess the answer. She has no tears for anyone but herself. In the end, and over her strenuous objections, the United States and its allies did rescue our honor and did put an end to Slobodan Milosevic and his state-supported terrorism. Yet instead of preserving a polite reticence about this, or at least an appropriate reserve, Sen. Clinton now has the obscene urge to claim the raped and slaughtered people of Bosnia as if their misery and death were somehow to be credited to her account! Words begin to fail one at this point. Is there no such thing as shame? Is there no decency at last?

The EU Rises

The recent decline of the dollar relative to other currencies now means that the EU has the largest economy in the world.

Not in per capita terms, of course. But in a strict non-normalized comparison, the EU economy is now bigger.

Power Games I

A great interview with Lee Kuan Yew, the "Kissinger of the orient," in which he offers some suggestions for the U.S. and Europe:

In an exclusive interview with United Press International, Singapore's Lee Kuan Yew, long known as the Kissinger of the orient, took the Europeans to task for balking at casualties in Afghanistan. He blamed "short memories" that have forgotten that "America came to rescue them in two world wars," which has rekindled the "appeasement" of the 1930s.

The United States, said this key player in every major Asian event for almost half a century, "should realize Afghanistan cannot succeed as a democracy. You attempted too much. Let the warlords sort it out in such a way you don't try to build a new state. The British tried and failed. Just make clear if they commit aggression again and offer safe haven to Taliban, they will be punished."

Now known as the "minister mentor" of Singapore, who turned a malarial island into a city of skyscrapers that thinks like a great power and is more important to the global economy than most big countries, Lee fears failure in Afghanistan will alter the world balance of power in favor of China and Russia. These two powers "would be faced with a much weakened West in the ongoing global contest."

And his take on China is just as interesting:

If the Chinese leaders stay on their present course, Lee answered, "The peaceful rise of China's power will prevail. They are determined not to challenge any existing power, meaning America, EU, Russia, but just make friends with everybody. Given the rules of the game now that China is in WTO, they can only grow stronger year by year, and within three or four decades, China's GDP will equal America's, their technology will be equal to what was long regarded as the world's only superpower, and their GDP will be larger than America's.

"And all that stems from what they have long studied in details in Taiwan, Hong Kong and Singapore. … They are sending 250,000 students abroad every year, and even though they may lose 60 percent to 70 percent of them to other countries, they don't care because they know many of them will come back eventually. … They want to avoid building a pre-World War II Japan or Germany. Territorial conquest is not necessary as it once was.

"You don't have to be a genius to know that they are producing five times as many engineers and scientists as the Americans. … They are everywhere (in the world) today. Can you be everywhere while focused on Iraq? In the Caribbean you have one Embassy in Barbados that serves six other tiny island countries. The Chinese have an embassy in each place. And that's what you call your front yard."

Taiwan?

"They won't invade," Lee responded, "and try to take over militarily. That would be far too costly for them all over the world. … Can the Chinese land troops in Taiwan and establish and hold and widen a beachhead? The answer is no. Can they conquer Taiwan militarily? Again, no. They can only inflict damage." Today, Lee added, "Taiwan goes to America to get its technology, which then transits to China. If they take back Taiwan, it becomes Chinese without the same freedom of access to U.S. technology and research labs. So why kill the goose that lays the golden eggs?"

The Advantages of Republicanism

And no, I am not referring to the GOP, but rather to the system of government. Arnold Kling says "If the United States had a multi-party parliamentary system with proportional representation, our patchwork of prejudices would likely yield a government comparable to Italy's."

And here's the latest news from Italy:

President Giorgio Napolitano dissolved the Italian Parliament on Wednesday, and the cabinet scheduled national elections for April 13.

Napolitano's move followed the failure of the nation's political factions to agree on a plan to revise Italy's flawed electoral law before a new vote.

"I regret having to call Italians to the vote, without the reform of the electoral law," Napolitano told reporters in Rome.

After his announcement, the cabinet met and decided on the date for the elections.

The current electoral law, passed in 2005, gives disproportionate power to small parties in Parliament, critics say, making stable government nearly impossible.

Bastiat Spins

EU candlemakers want protection. No, really.

If you're confused, see here.

Mixed Economic News

The U.S. economy is really... weird right now. The underlying economic news is pretty great: the economy expanded 4.9% in the last quarter, which is the highest rate in four years. This 4.9% growth rate isn't sustainable -- indeed, it is nearly twice the maximum level of sustained growth as estimated by the Fed -- but it is still encouraging.

And yet. The housing "crisis" is worsening, and will continue to worsen, probably through 2008. Credit markets are still very tight, so the Fed will still feel pressure to loosen monetary policy. But there are still some inflationary concerns in the real economy despite deflationary concerns in the financial markets. It's possible, if unlikely, that we could hit stagflation.

So, things are weird. Unfortunately for the rest of the world, these concerns aren't limited to the U.S. It had been thought that, since growth rates have improved in parts of W. Europe (e.g. Germany), and since Japan is finally showing some signs of life, the rest of the world had decoupled from U.S. But that might not be the case. Megan McArdle sums up thusly:

Germany and Japan may be growing, but they're extremely dependent on exports, which means they won't serve as the markets that fuel growth in the rest of the world. That, for too long, has been America's job. Now that we're ready for retirement, it seems we forgot to train our replacement.

The state of the German Economy

Megan McArdle contradicts Dean Baker, and makes the case that Germany isn't doing all that well, relative to the U.S. Countering Baker is a dangerous game, but I think she is right. The future could look much worse for Germany, but it could also look much better.

Multilateralism? What Multilateralism?

Dani Rodrik calls the efficacy and legitimacy of the IMF into question, calling it a tool of the U.S.:

Mark Thoma brings up IMF' new policy of surveillance on exchange-rate policies and quotes from a piece by IMF Managing Director Rodrigo de Rato on the subject. He refers to an earlier post of mine and encourages me to return to the topic as I had promised.

I will do that at some point, but for the moment let me just point to the obvious hypocrisy at work here. Rato writes:

This reform represents a victory for multilateralism that demonstrates ownership of how Fund surveillance will be strengthened and members' willingness to live up to their responsibilities in the process.

A victory for multilateralism? He has got to be kidding. The new policy was instituted at the behest of the United States, with the express purpose of bringing pressure on the Chinese.

And when the IMF staff took "multilateralism" seriously and reported its view that the dollar was overvalued, they were told to mind their own business and not to meddle with U.S. policies. So while we shall see plenty of reports coming out of the IMF on the undervalued Remninbi, don't expect anything on the dollar soon.

This in the face of the Obama/Clinton legislation to put tariffs on China unless they allow the value of the RMB to rise. The logical shortcomings of U.S. policy is astounding. After all, imagine the U.S. reaction is the E.U. threatened sanctions unless we allowed the value of the dollar to further depreciate. The difference, of course, is that the dollar is a major international reserve currency, so depreciation could more severely hurt holders of dollars, and those are not limited to citizens of the U.S. (tho they certainly include citizens of the U.S., particularly those who get more value from imports than exports). But it's even worse for us, because the Chinese hold a lot of U.S. debt. If the value of the RMB rises relative to the dollar, then servicing that debt becomes more expensive for us. So Obama and Clinton are essentially begging China to increase our debt burden and increase our costs of living, or else they are threatening to do it for them. Remarkably stupid.

The IMF needs independence to be productive and credible. The U.S. needs a consistent policy to maintain credibility. The Chinese are looking at us and wondering what the hell we're thinking.

The New Anglo-American Relations

Brown and Bush project a united front, but it's difficult to believe that U.S./U.K. relations will be as cozy as they have been since Blair took office and allied himself with Clinton and Bush. The war in Iraq certainly took their toll on Blair, and Brown seems prepared to not make the same mistake. At the same time, he recognizes the need to stay close to the U.S. As the global power dynamics shift from Old Europe (U.K., France, Germany) to New Asia (China, India) in the coming decades, the U.K. will have to stay close to the U.S. to maintain any significant global influence. The U.S. needs the U.K. as an ally in Europe, as the Old World becomes more and more resentful of the U.S.'s hegemony. A few interesting things from the article:

Mr. Brown, who has eschewed the use of the phrase “war on terrorism,” nonetheless hailed Mr. Bush’s leadership in his campaign against terrorism. “In this century, it has fallen to America to take center stage,” he wrote. “And let me acknowledge the debt the world owes to the United States for its leadership in this struggle.”

This is an important point which is often lost in the discussion over Iraq. Only the U.S. has the global military capabilities to truly fight terrorist organizations and control rogue states. And the U.K. (and perhaps France and Germany) face a much stronger terrorist threat than we do. If we decide to just let everyone fend for themselves, it could happen at the detriment of the U.K. and Europe.

On the flip: the U.K. faces more exposure to domestic Islamic terrorist threats than the U.S. does, but that also gives them more opportunities to gain intelligence on global networks which threaten Western democracies. The U.S.'s opportunities are essentially limited to Iraq and Afghanistan, and those gains have (obviously) been limited. Indeed, we might be making the situation worse for ourselves in those places. Keeping Europe on our side in the struggle against terrorism is essential, and the U.K. is uniquely positioned to do that.

Elsewhere:

But even the opinion article pointed up subtle differences, for instance with Mr. Brown referring to the acts of such groups as Al Qaeda as “a crime,” and citing the importance of law enforcement in combating terrorists.

During the 2004 presidential race, Mr. Bush and his re-election campaign had leveled harsh criticism against his Democratic opponent, Senator John Kerry of Massachusetts, for referring to law enforcement action against terrorism, saying it proved Mr. Kerry did not view the threat seriously. Mr. Bush usually refers to terrorist attacks as acts of war.

Asked today whether Mr. Brown’s approach to terrorist groups represented an underlying difference of philosophy, Mr. Bush said it did not and acknowledged that law enforcement tools are part of the fight against terrorism.

This is the biggest wedge between the U.S. and the rest of the Western democracies. They (rightly) view terrorist actions as international criminal activity, like drug smuggling or arms sales. Obviously, if a specific foreign nation directly subsidizes such criminal actions, then they may be treated as acts of war (e.g. Afghanistan). But to the extent that these actions are being conducted by individual, multinational, private groups, they should be treated as crimes rather than acts of war. This is a fundamental philosophical difference between Europe and the U.S. They view Gitmo and the suspension of Habeas Corpus and the denial of Geneva protections as ridiculous abuses of power, and they are right. Bush views them as necessary (and, supposedly, temporary) actions in a time of indefinite war. Bush's thinking is fundamentally flawed, for a number of reasons which I won't bother going into during this post. Needless to say, he comes across as an authoritarian, and Europe likes nothing less than that. They learned their lessons w/r/t executive abuses of power in the 20th century. That, along with the chip on their shoulder which comes from being second-rate powers now, will preclude them from buying whatever America is selling without asking questions.

The next U.S. president will an immediate opportunity to ingratiate him/herself with the rest of the world: He can formally apologize for Abu Ghraib, close Gitmo and send everyone there to an international tribunal or trials in their own countries, present legislation to Congress to revoke the Military Commissions Act, proclaim that the use of "enhanced interrogation techniques" ended with the Bush administration, and reinstate the Writ of Habeas Corpus. Hillary Clinton won't do any of these. Neither will Giuliani or Romney. McCain might do a few. Obama is probably the best chance for a severe straightening of our legal system w/r/t detainees. In the linked article, Bush said that the U.S. and U.K. remain strong allies because "We have common interests throughout the world, but it’s an important relationship primarily because we think the same: We believe in freedom and justice as fundamentals in life." The rest of the world isn't buying it for obvious reasons. The next U.S. president will have the chance to change that perception.

The Importance of the French; or, How Europe Gets a Bad Rap from the American Right

I've been casually, but with great interest, following the French presidential election. Their system seemingly allows as many candidates to run as desire to run in a primary election (but only one from a single political party). It's a different system from ours, but not-illogical: if no one candidate receives at least 50%+1 of the vote, then the top two square-off in a run-off election. The usual result is that two candidates from opposite ends of the political spectrum meet in the final round, but both are sufficiently moderate to appeal to large swaths of the general population.

In France, the two final candidates are Ms. Segolene Royal - an extreme populist, who finds no shame in promising everything to everyone - and Mr. Nicholas Sarkozy - who is pro-market/pro-growth and nervous about immigration. sort of the typical right/left split.

the interesting thing is that, at this point, Mr. Sarkozy looks likely to win. Europe has long had a reputation in the States as being far more liberal than us, and they've earned that honor. but the times may be changing. the election of "Iron Frau" Angela Merkel in 2000 - so named in tribute to Maggie Thatcher - was one of the first signifiers of what may be a burgeoning trend. The resurrection of the U.K. Tories (a.k.a. Conservative & Unionist Party) in the form of neoliberal David Cameron, who also looks like to take back the British government from Blair's Labour group, is another. In 2008, the three most powerful European countries may have right-wing(ish) governments while the U.S. seems sure to have a left-leaning Congress and Democratic President.

It would be ironic to see the American right genuflecting towards their European counter-parts, hoping to mimic their success in the U.S. Perhaps "freedom fries" would get their proper name back.