U.S. establishes permanent radar site in Israel to watch Iran

JERUSALEM - The Yanks have landed in Israel.

For the first time in the Jewish state's 60-year history, the U.S. has established a permanent military presence here, according to Defense News.

About 120 American troops have arrived in the Negev Desert to set up an early warning radar that will track missiles launched in Iran, the authoritative U.S.-based weekly says in its current issue.

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Russia's Lavrov slams U.S. 'unipolar' policies

Addressing the UN General Assembly, Lavrov said that the U.S.-led war in Iraq had delivered a painful blow to global anti-terrorism measures. He also questioned the NATO-led efforts in Afghanistan to fight Taliban militants.
"The illusion of a unipolar world confused many. For some people, it generated a desire to make an all-in stake on it. In exchange for total loyalty they expected to receive a carte blanche to resolve all their problems by any means," Lavrov said.

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That Foreign Policy Debate We're Not Having

Part of the problem is what it's called. Because foreign policy is not "foreign," it's geopolitics. The underlying essential dynamics of geopolitics deeply affect domestic politics. In the flows of energy and capital and products and people, in our military budget, in our environment, and in flash-point electoral politics. When there is debate, we end up debating symptoms -- illegal immigration from Mexico, a surge in Iraq -- rather than systems.
There's the question of fast-emerging China, which increasingly builds the products we buy, affecting our manufacturing base and balance of trade. And which increasingly finances our debt, giving us the money to buy our oil and making our financial system vulnerable in still more ways than we are grappling with today. At least China is getting some attention. Thanks to its hosting of the Olympics, of course.

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A shattering moment in America's fall from power

Our gaze might be on the markets melting down, but the upheaval we are experiencing is more than a financial crisis, however large. Here is a historic geopolitical shift, in which the balance of power in the world is being altered irrevocably. The era of American global leadership, reaching back to the Second World War, is over.

..How symbolic yesterday that Chinese astronauts take a spacewalk while the US Treasury Secretary is on his knees.


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US ‘will lose financial superpower status’

The US will lose its role as a global financial “superpower” in the wake of the financial crisis, Peer Steinbrück, the German finance minister, said on Thursday, blaming Washington for failing to take the regulatory steps that might have averted the crisis.
“The US will lose its status as the superpower of the world financial system. This world will become multi­polar” with the emergence of stronger, better capitalised centres in Asia and Europe, Mr Steinbrück told the German parliament. “The world will never be the same again.”

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China banks told to halt lending to US banks-SCMP

Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.
The Hong Kong newspaper cited unidentified industry sources as saying the instruction from the China Banking Regulatory Commission (CBRC) applied to interbank lending of all currencies to U.S. banks but not to banks from other countries.

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Russia-South Ossetia border may vanish

The border between Russia and South Ossetia may cease to exist, according to the Russian Prime Minister Vladimir Putin.
He says there are corresponding mechanisms in the recently signed Moscow-Tskhinval agreement on friendship and co-operation.

“As far as integration is concerned, currently it will be enough if we essentially eliminate borders between the Russian Federation and South Ossetia, assisting to restore the republic’s economy, if we give people an opportunity to live quietly and bring up their children, develop their republic and communicate without restrictions, without formalities at the frontier,” Putin said.

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China launches mission for first spacewalk

The Shenzhou 7 spacecraft, China's third manned mission, blasted off atop a Long March 2F rocket shortly after 9 a.m. EDT under clear night skies in northwestern China.
The spacewalk by one of the astronauts is expected to take place either on Friday or Saturday.
Underscoring the mission's heavy political overtones, Chinese President and Communist Party head Hu Jintao was shown live on state television hailing the astronauts at the launch site near the northwestern town of Jiuquan.

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Gazprom, navy in American knight's move

You have to be older than US Secretary of State Condoleezza Rice (born November 14, 1954) to remember the first episodes of the greatest Western ever to be broadcast on US radio and television. That was Have Gun, Will Travel, beginning in 1957.

Over the following six years, in 225 episodes, the pock-marked Richard Boone, dressed in black on horseback and at table, played Paladin, a classically educated, multilingual gentleman who preferred reading poetry to cards and who recommended settling conflicts by negotiation. When that failed, however, he used a hair-trigger Colt revolver, a concealed derringer and a Winchester rifle to dispose of his adversaries.

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Bush chides Russia in UN speech

George W Bush has accused Russia of violating the UN's charter by invading Georgia, in his final speech to the world body as US president.

Mr Bush urged world leaders gathered at UN in New York to "stand united in our support of the people of Georgia".

In a wide-ranging speech, Mr Bush also urged the international community to continue the fight against terrorism.

He also gave an assurance that the US was taking decisive action over the current global economic crisis.

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The American Empire:Too Big to Fail?

He's just not the Bear-Stearns type, and Congress would never shell out a penny before he loses his savings and his home, which – due to the propaganda of Panglossian economics, whereby houses stopped being homes and became investments – amount to pretty much the same thing. The paper-pushers of Wall Street made untold trillions out of a policy that was doomed to fail [.pdf] in advance, and whose critics have long predicted would end in precisely the manner our tale of economic woe is unfolding.


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Pakistan probes mystery of US Marines' steel boxes in Marriott

Pakistani authorities are trying to "solve the riddle" of US Marines and their mysterious steel cases that were shifted to the Marriott Hotel four days before it was razed in the worst terrorist attack in the federal capital, a media report on Tuesday said.

"The authorities want to ascertain if it was a routine exercise or part of some special mission that does not have the approval of the government of Pakistan," The News said.

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Bailouts and a forgotten history

A major reason for the collapse of the Soviet Union was its mistaken Military involvement in Afghanistan. Instead of focusing on its own internal problems, the leaders of the USSR attempted to control Afghanistan and add it to their empire. They failed.


The British Empire – at its height – could not control Afghanistan. Now, the USA has involved the E.U and even the U.N. in its Imperial Vendetta – and we watch the Globalised “Free Market” Capitalist System falter. Just in case some of our readers have forgotten the History of the Great Depression after the First World War and the Capitalist world’s solution...



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Russia Won’t Meet With U.S. on Iranian Nuclear

Russia said on Tuesday that it would not participate in a meeting with the United States this week to discuss Iran’s nuclear program, the most significant indication yet of how Russia’s war with Georgia has spoiled relations regarding other security issues.
Russia’s move apparently effectively scuttled the meeting.
The Russian Foreign Ministry issued a biting statement that criticized remarks last week by Secretary of State Condoleezza Rice, who declared that Russia had taken “a dark turn” away from democracy and respect for international norms.

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An Interesting article from Stratfor

By George Friedman
Barack Obama is the Democratic candidate for president. His advisers in foreign policy are generally Democrats. Together they carry with them an institutional memory of the Democratic Party’s approach to foreign policy, and are an expression of the complexity and divisions of that approach. Like the their Republican counterparts, in many ways they are going to be severely constrained as to what they can do both by the nature of the global landscape and American resources. But to some extent, they will also be constrained and defined by the tradition they come from. Understanding that tradition and Obama’s place is useful in understanding what an Obama presidency would look like in foreign affairs.
The most striking thing about the Democratic tradition is that it presided over the beginnings of the three great conflicts that defined the 20th century: Woodrow Wilson and World War I, Franklin Delano Roosevelt and World War II, and Harry S. Truman and the Cold War. (At this level of analysis, we will treat the episodes of the Cold War such as Korea, Vietnam or Grenada as simply subsets of one conflict.) This is most emphatically not to say that had Republicans won the presidency in 1916, 1940 or 1948, U.S. involvement in those wars could have been avoided.

Patterns in Democratic Foreign Policy

But it does give us a framework for considering persistent patterns of Democratic foreign policy. When we look at the conflicts, four things become apparent.
First, in all three conflicts, Democrats postponed the initiation of direct combat as long as possible. In only one, World War I, did Wilson decide to join the war without prior direct attack. Roosevelt maneuvered near war but did not enter the war until after Pearl Harbor. Truman also maneuvered near war but did not get into direct combat until after the North Korean invasion of South Korea. Indeed, even Wilson chose to go to war to protect free passage on the Atlantic. More important, he sought to prevent Germany from defeating the Russians and the Anglo-French alliance and to stop the subsequent German domination of Europe, which appeared possible. In other words, the Democratic approach to war was reactive. All three presidents reacted to events on the surface, while trying to shape them underneath the surface.
Second, all three wars were built around coalitions. The foundation of the three wars was that other nations were at risk and that the United States used a predisposition to resist (Germany in the first two wars, the Soviet Union in the last) as a framework for involvement. The United States under Democrats did not involve itself in war unilaterally. At the same time, the United States under Democrats made certain that the major burdens were shared by allies. Millions died in World War I, but the United States suffered 100,000 dead. In World War II, the United States suffered 500,000 dead in a war where perhaps 50 million soldiers and civilians died. In the Cold War, U.S. losses in direct combat were less than 100,000 while the losses to Chinese, Vietnamese, Koreans and others towered over that toll. The allies had a complex appreciation of the United States. On the one hand, they were grateful for the U.S. presence. On the other hand, they resented the disproportionate amounts of blood and effort shed. Some of the roots of anti-Americanism are to be found in this strategy.
Third, each of these wars ended with a Democratic president attempting to create a system of international institutions designed to limit the recurrence of war without directly transferring sovereignty to those institutions. Wilson championed the League of Nations. Roosevelt the United Nations. Bill Clinton, who presided over most of the post-Cold War world, constantly sought international institutions to validate U.S. actions. Thus, when the United Nations refused to sanction the Kosovo War, he designated NATO as an alternative international organization with the right to approve conflict. Indeed, Clinton championed a range of multilateral organizations during the 1990s, including everything from the International Monetary Fund, the World Bank, the General Agreement on Tariffs and Trade, and later the World Trade Organization. All these presidents were deeply committed to multinational organizations to define permissible and impermissible actions.
And fourth, there is a focus on Europe in the Democratic view of the world. Roosevelt regarded Germany as the primary threat instead of the Pacific theater in World War II. And in spite of two land wars in Asia during the Cold War, the centerpiece of strategy remained NATO and Europe. The specific details have evolved over the last century, but the Democratic Party — and particularly the Democratic foreign policy establishment — historically has viewed Europe as a permanent interest and partner for the United States.
Thus, the main thrust of the Democratic tradition is deeply steeped in fighting wars, but approaches this task with four things in mind:

1. Wars should not begin until the last possible moment and ideally should be initiated by the enemy.
2. Wars must be fought in a coalition with much of the burden borne by partners.
3. The outcome of wars should be an institutional legal framework to manage the peace, with the United States being the most influential force within this multilateral framework.
4. Any such framework must be built on a trans-Atlantic relationship.

Democratic Party Fractures

That is one strand of Democratic foreign policy. A second strand emerged in the context of the Vietnam War. That war began under the Kennedy administration and was intensified by Lyndon Baines Johnson, particularly after 1964. The war did not go as expected. As the war progressed, the Democratic Party began to fragment. There were three factions involved in this.
The first faction consisted of foreign policy professionals and politicians who were involved in the early stages of war planning but turned against the war after 1967 when it clearly diverged from plans. The leading political figure of this faction was Robert F. Kennedy, who initially supported the war but eventually turned against it.
The second faction was more definitive. It consisted of people on the left wing of the Democratic Party — and many who went far to the left of the Democrats. This latter group not only turned against the war, it developed a theory of the U.S. role in the war that as a mass movement was unprecedented in the century. The view (it can only be sketched here) maintained that the United States was an inherently imperialist power. Rather than the benign image that Wilson, Roosevelt and Truman had of their actions, this faction reinterpreted American history going back into the 19th century as violent, racist and imperialist (in the most extreme faction’s view). Just as the United States annihilated the Native Americans, the United States was now annihilating the Vietnamese.
A third, more nuanced, faction argued that rather than an attempt to contain Soviet aggression, the Cold War was actually initiated by the United States out of irrational fear of the Soviets and out of imperialist ambitions. They saw the bombing of Hiroshima as a bid to intimidate the Soviet Union rather than an effort to end World War II, and the creation of NATO as having triggered the Cold War.
These three factions thus broke down into Democratic politicians such as RFK and George McGovern (who won the presidential nomination in 1972), radicals in the street who were not really Democrats, and revisionist scholars who for the most part were on the party’s left wing.
Ultimately, the Democratic Party split into two camps. Hubert Humphrey led the first along with Henry Jackson, who rejected the left’s interpretation of the U.S. role in Vietnam and claimed to speak for the Wilson-FDR-Truman strand in Democratic politics. McGovern led the second. His camp largely comprised the party’s left wing, which did not necessarily go as far as the most extreme critics of that tradition but was extremely suspicious of anti-communist ideology, the military and intelligence communities, and increased defense spending. The two camps conducted extended political warfare throughout the 1970s.
The presidency of Jimmy Carter symbolized the tensions. He came to power wanting to move beyond Vietnam, slashing and changing the CIA, controlling defense spending and warning the country of “an excessive fear of Communism.” But following the fall of the Shah of Iran and the Soviet invasion of Afghanistan, he allowed Zbigniew Brzezinski, his national security adviser and now an adviser to Obama, to launch a guerrilla war against the Soviets using Islamist insurgents from across the Muslim world in Afghanistan. Carter moved from concern with anti-Communism to coalition warfare against the Soviets by working with Saudi Arabia, Pakistan and Afghan resistance fighters.
Carter was dealing with the realities of U.S. geopolitics, but the tensions within the Democratic tradition shaped his responses. During the Clinton administration, these internal tensions subsided to a great degree. In large part this was because there was no major war, and the military action that did occur — as in Haiti and Kosovo — was framed as humanitarian actions rather than as the pursuit of national power. That soothed the anti-war Democrats to a great deal, since their perspective was less pacifistic than suspicious of using war to enhance national power.

The Democrats Since 9/11

Since the Democrats have not held the presidency during the last eight years, judging how they might have responded to events is speculative. Statements made while in opposition are not necessarily predictive of what an administration might do. Nevertheless, Obama’s foreign policy outlook was shaped by the last eight years of Democrats struggling with the U.S.-jihadist war.
The Democrats responded to events of the last eight years as they traditionally do when the United States is attacked directly: The party’s anti-war faction contracted and the old Democratic tradition reasserted itself. This was particularly true of the decision to go to war in Afghanistan. Obviously, the war was a response to an attack and, given the mood of the country after 9/11, was an unassailable decision. But it had another set of characteristics that made it attractive to the Democrats. The military action in Afghanistan was taking place in the context of broad international support and within a coalition forming at all levels, from on the ground in Afghanistan to NATO and the United Nations. Second, U.S. motives did not appear to involve national self-interest, like increasing power or getting oil. It was not a war for national advantage, but a war of national self-defense.
The Democrats were much less comfortable with the Iraq war than they were with Afghanistan. The old splits reappeared, with many Democrats voting for the invasion and others against. There were complex and mixed reasons why each Democrat voted the way they did — some strategic, some purely political, some moral. Under the pressure of voting on the war, the historically fragile Democratic consensus broke apart, not so much in conflict as in disarray. One of the most important reasons for this was the sense of isolation from major European powers — particularly the French and Germans, whom the Democrats regarded as fundamental elements of any coalition. Without those countries, the Democrats regarded the United States as diplomatically isolated.
The intraparty conflict came later. As the war went badly, the anti-war movement in the party re-energized itself. They were joined later by many who had formerly voted for the war but were upset by the human and material cost and by the apparent isolation of the United States and so on. Both factions of the Democratic Party had reasons to oppose the Iraq war even while they supported the Afghan war.

Understanding Obama’s Foreign Policy

It is in light of this distinction that we can begin to understand Obama’s foreign policy. On Aug. 1, Obama said the following: “It is time to turn the page. When I am President, we will wage the war that has to be won, with a comprehensive strategy with five elements: getting out of Iraq and on to the right battlefield in Afghanistan and Pakistan; developing the capabilities and partnerships we need to take out the terrorists and the world’s most deadly weapons; engaging the world to dry up support for terror and extremism; restoring our values; and securing a more resilient homeland.”
Obama’s view of the Iraq war is that it should not have been fought in the first place, and that the current success in the war does not justify it or its cost. In this part, he speaks to the anti-war tradition in the party. He adds that Afghanistan and Pakistan are the correct battlefields, since this is where the attack emanated from. It should be noted that on several occasions Obama has pointed to Pakistan as part of the Afghan problem, and has indicated a willingness to intervene there if needed while demanding Pakistani cooperation. Moreover, Obama emphasizes the need for partnerships — for example, coalition partners — rather than unilateral action in Afghanistan and globally.
Responding to attack rather than pre-emptive attack, coalition warfare and multinational postwar solutions are central to Obama’s policy in the Islamic world. He therefore straddles the divide within the Democratic Party. He opposes the war in Iraq as pre-emptive, unilateral and outside the bounds of international organizations while endorsing the Afghan war and promising to expand it.
Obama’s problem would be applying these principles to the emerging landscape. He shaped his foreign policy preferences when the essential choices remained within the Islamic world — between dealing with Iraq and Afghanistan simultaneously versus focusing on Afghanistan primarily. After the Russian invasion of Georgia, Obama would face a more complex set of choices between the Islamic world and dealing with the Russian challenge.
Obama’s position on Georgia tracked with traditional Democratic approaches:
“Georgia’s economic recovery is an urgent strategic priority that demands the focused attention of the United States and our allies. That is why Senator Biden and I have called for $1 billion in reconstruction assistance to help the people of Georgia in this time of great trial. I also welcome NATO’s decision to establish a NATO-Georgia Commission and applaud the new French and German initiatives to continue work on these issues within the EU. The Bush administration should call for a U.S.-EU-Georgia summit in September that focuses on strategies for preserving Georgia’s territorial integrity and advancing its economic recovery.”
Obama avoided militaristic rhetoric and focused on multinational approaches to dealing with the problem, particularly via NATO and the European Union. In this and in Afghanistan, he has returned to a Democratic fundamental: the centrality of the U.S.-European relationship. In this sense, it is not accidental that he took a preconvention trip to Europe. It was both natural and a signal to the Democratic foreign policy establishment that he understands the pivotal position of Europe.
This view on multilateralism and NATO is summed up in a critical statement by Obama in a position paper:
“Today it’s become fashionable to disparage the United Nations, the World Bank, and other international organizations. In fact, reform of these bodies is urgently needed if they are to keep pace with the fast-moving threats we face. Such real reform will not come, however, by dismissing the value of these institutions, or by bullying other countries to ratify changes we have drafted in isolation. Real reform will come because we convince others that they too have a stake in change — that such reforms will make their world, and not just ours, more secure.
“Our alliances also require constant management and revision if they are to remain effective and relevant. For example, over the last 15 years, NATO has made tremendous strides in transforming from a Cold War security structure to a dynamic partnership for peace.
“Today, NATO’s challenge in Afghanistan has become a test case, in the words of Dick Lugar, of whether the alliance can ‘overcome the growing discrepancy between NATO’s expanding missions and its lagging capabilities.’”

Obama’s European Problem

The last paragraph represents the key challenge to Obama’s foreign policy, and where his first challenge would come from. Obama wants a coalition with Europe and wants Europe to strengthen itself. But Europe is deeply divided, and averse to increasing its defense spending or substantially increasing its military participation in coalition warfare. Obama’s multilateralism and Europeanism will quickly encounter the realities of Europe.
This would immediately affect his jihadist policy. At this point, Obama’s plan for a 16-month drawdown from Iraq is quite moderate, and the idea of focusing on Afghanistan and Pakistan is a continuation of Bush administration policy. But his challenge would be to increase NATO involvement. There is neither the will nor the capability to substantially increase Europe’s NATO participation in Afghanistan.
This problem would be even more difficult in dealing with Russia. Europe has no objection in principle to the Afghan war; it merely lacks the resources to substantially increase its presence there. But in the case of Russia, there is no European consensus. The Germans are dependent on the Russians for energy and do not want to risk that relationship; the French are more vocal but lack military capability, though they have made efforts to increase their commitment to Afghanistan. Obama says he wants to rely on multilateral agencies to address the Russian situation. That is possible diplomatically, but if the Russians press the issue further, as we expect, a stronger response will be needed. NATO will be unlikely to provide that response.
Obama would therefore face the problem of shifting the focus to Afghanistan and the added problem of balancing between an Islamic focus and a Russian focus. This will be a general problem of U.S. diplomacy. But Obama as a Democrat would have a more complex problem. Averse to unilateral actions and focused on Europe, Obama would face his first crisis in dealing with the limited support Europe can provide.
That will pose serious problems in both Afghanistan and Russia, which Obama would have to deal with. There is a hint in his thoughts on this when he says, “And as we strengthen NATO, we should also seek to build new alliances and relationships in other regions important to our interests in the 21st century.” The test would be whether these new coalitions will differ from, and be more effective than, the coalition of the willing.
Obama would face similar issues in dealing with the Iranians. His approach is to create a coalition to confront the Iranians and force them to abandon their nuclear program. He has been clear that he opposes that program, although less clear on other aspects of Iranian foreign policy. But again, his solution is to use a coalition to control Iran. That coalition disintegrated to a large extent after Russia and China both indicated that they had no interest in sanctions.
But the coalition Obama plans to rely on will have to be dramatically revived by unknown means, or an alternative coalition must be created, or the United States will have to deal with Afghanistan and Pakistan unilaterally. This reality places a tremendous strain on the core principles of Democratic foreign policy. To reconcile the tensions, he would have to rapidly come to an understanding with the Europeans in NATO on expanding their military forces. Since reaching out to the Europeans would be among his first steps, his first test would come early.
The Europeans would probably balk, and, if not, they would demand that the United States expand its defense spending as well. Obama has shown no inclination toward doing this. In October 2007, he said the following on defense: “I will cut tens of billions of dollars in wasteful spending. I will cut investments in unproven missile defense systems. I will not weaponize space. I will slow our development of future combat systems, and I will institute an independent defense priorities board to ensure that the quadrennial defense review is not used to justify unnecessary spending.”

Russia, Afghanistan and Defense Spending

In this, Obama is reaching toward the anti-war faction in his party, which regards military expenditures with distrust. He focused on advanced war-fighting systems, but did not propose cutting spending on counterinsurgency. But the dilemma is that in dealing with both insurgency and the Russians, Obama would come under pressure to do what he doesn’t want to do — namely, increase U.S. defense spending on advanced systems.
Obama has been portrayed as radical. That is far from the case. He is well within a century-long tradition of the Democratic Party, with an element of loyalty to the anti-war faction. But that element is an undertone to his policy, not its core. The core of his policy would be coalition building and a focus on European allies, as well as the use of multilateral institutions and the avoidance of pre-emptive war. There is nothing radical or even new in these principles. His discomfort with military spending is the only thing that might link him to the party’s left wing.
The problem he would face is the shifting international landscape, which would make it difficult to implement some of his policies. First, the tremendous diversity of international challenges would make holding the defense budget in check difficult. Second, and more important, is the difficulty of coalition building and multilateral action with the Europeans. Obama thus lacks both the force and the coalition to carry out his missions. He therefore would have no choice but to deal with the Russians while confronting the Afghan/Pakistani question even if he withdrew more quickly than he says he would from Iraq.
The make-or-break moment for Obama will come early, when he confronts the Europeans. If he can persuade them to take concerted action, including increased defense spending, then much of his foreign policy rapidly falls into place, even if it is at the price of increasing U.S. defense spending. If the Europeans cannot come together (or be brought together) decisively, however, then he will have to improvise.
Obama would be the first Democrat in this century to take office inheriting a major war. Inheriting an ongoing war is perhaps the most difficult thing for a president to deal with. Its realities are already fixed and the penalties for defeat or compromise already defined. The war in Afghanistan has already been defined by U.S. President George W. Bush’s approach. Rewriting it will be enormously difficult, particularly when rewriting it depends on ending unilateralism and moving toward full coalition warfare when coalition partners are wary.
Obama’s problems are compounded by the fact that he does not only have to deal with an inherited war, but also a resurgent Russia. And he wants to depend on the same coalition for both. That will be enormously challenging for him, testing his diplomatic skills as well as geopolitical realities. As with all presidents, what he plans to do and what he would do are two different things. But it seems to us that his presidency would be defined by whether he can change the course of U.S.-European relations not by accepting European terms but by persuading them to accommodate U.S. interests.
An Obama presidency would not turn on this. There is no evidence that he lacks the ability to shift with reality — that he lacks Machiavellian virtue. But it still will be the first and critical test, one handed to him by the complex tensions of Democratic traditions and by a war he did not start.
Tell Stratfor what you think

Medvedev: Russia Won't Be Isolated

Stepping up a war of words with Washington, President Dmitry Medvedev said Friday that Russia would not be pushed into isolation and accused NATO of provoking last month's conflict in Georgia.

His comments came after U.S. Secretary of State Condoleezza Rice warned Russia that its policies have put it on a path to isolation and called on the West to stand up to Russian aggression following its invasion of Georgia. 


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Wealthy countries 'allowing corruption to go unchecked'

Wealthy industrialised countries including the UK are allowing overseas bribery to go unchecked through insufficient regulation of their private sectors, an anti-corruption group warned today.

The latest Transparency International Corruption Perceptions Index said the poorest countries still had the highest levels of corruption.

However, it added that the data casts a "critical light on government commitment [in wealthy countries] to rein in the questionable methods of their companies in acquiring and managing overseas business, in addition to domestic concerns about issues such as the role of money in politics".

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Lessons America Can't Teach Us Now

American capitalism could still teach the rest of the world a few lessons - but it's increasingly teaching us what never to do if you are a country loyal to a free-market economy.
For instance:

Never nationalize a troubled insurance company, especially two days after the Treasury and the FED say that no more taxpayer money will be used to rescue bankrupt financial companies.

As a government, never interfere to rescue and sell a failed investment bank and then decide several months later not to do the same for other failed investment banks. Applying that kind of double standard for the same species of financial creature signals to the market that monetary authorities are making up the rules as they go along. That lack of a strategic or systemic view takes a toll on market confidence.

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Financial crisis: Default by the US government is no longer unthinkable

So, here we are - the start of a new world order. After the tumultuous events of the last fortnight, the global economic landscape will never look the same again.

Power has tangibly shifted - away from the United States and the Western world generally, and towards the fast-growing giants of the East. That's been happening for some years now.

But September 2008 marks the moment when the scale of our excesses, the extent of our debts and the moral bankruptcy of our financial regulatory system finally began to be truly exposed.

I say began to be exposed. Back in March, Standard and Poor's, the US ratings agency, estimated some $285bn (£156bn) of mortgage-backed securities would eventually be written-off by the global banking sector. On Friday, almost unnoticed amid the panic, that forecast was upped to $378bn.

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Rough Week, But America's Era Goes On – Part I & II

Nice articles I found on GPB

Rough Week, But America's Era Goes On – Part I

Does Wall Street's meltdown presage the end of the American century? ~~~ http://www.washingtonpost.com/wp-dyn/content/article/2008/09/19/AR2008091902804_pf.html ~~~ Many commentators have warned that the past week's financial mayhem signaled a major political setback for the United States as well as an economic one. "Why should the rest of the world ever again take seriously the American free-market model after this debacle?" a leading British journalist asked me [Niall Ferguson] last Thursday. This crisis, he argued, was to economics what the Iraq war was to U.S. foreign policy: a fatal blow to the credibility of American claims to global primacy. ~~~ We are living through the end of a phenomenon that Moritz Schularick of Berlin's Free University and I christened "Chimerica." In this view, the most important thing to understand about the world economy over the past 10 years has been the relationship between China and America. If you think of it as one economy called Chimerica, that relationship accounts for around 13 percent of the world's land surface, a quarter of its population, about a third of its gross domestic product and somewhere more than half of global economic growth in the past six years. ~~~ For a time, this symbiotic relationship seemed almost perfect: One half did the saving, and the other half did the spending. Comparing net national savings as a proportion of gross national income, U.S. savings declined from more than 5 percent in the mid-1990s to virtually zero by 2005, while Chinese savings surged from less than 30 percent to nearly 45 percent in the same time frame. This divergence in savings allowed a tremendous explosion of debt in the United States, because the Asian "savings glut" made it much cheaper for households to borrow money. Meanwhile, cheap Chinese labor helped hold down inflation. … Energy exporters in the Middle East and elsewhere also found themselves running surpluses and recycling petrodollars to the Anglosphere and its satellites. But Chimerica was the real engine of the world economy. ~~~ In essence, the rest of the world's savings had helped inflate a real estate bubble in the United States. Easy money was (as is nearly always the case in asset bubbles) accompanied by lax lending standards and downright fraud. Euphoria eventually gave way to distress and then to panic. ~~~ What are the geopolitical implications of all this? One possibility is that the "great reconvergence" between East and West is speeding up. If you go back to the very first report that Goldman Sachs produced about the "BRICs economies" (Brazil, Russia, India and China), China was projected to overtake the United States in gross domestic product in 2040. But in more recent reports, that has been brought forward to 2027. Maybe it will be even sooner. For one inevitable consequence of the credit crunch is that the United States will grow more slowly for the foreseeable future -- at closer to 1 or 2 percent per year, rather than the 3 or 4 percent it has grown used to. By contrast, China's semi-planned economy can comfortably maintain growth of 8 percent or more per year, propelled forward by state-led investment in infrastructure and growing consumer demand. Because net exports are no longer the key driver of China's growth, an American sneeze need not necessarily cause an Asian cold.

Rough Week, But America's Era Goes On – Part II

The days when the dollar was the sole international reserve currency may also be coming to an end. Reserve currencies do not last forever, as the British pound makes clear. Once upon a time, sterling was the world's No. 1 currency, the unit of account in which most financial transactions were done. It died a long, lingering death, sliding from $4.86 in 1930 to very near par with the dollar at the pound's nadir in the early 1980s. The principal reason were the huge debts that Britain had run up to fight the world wars. The second reason was slower growth: Britain's economy was the underperformer of the developed world in the postwar decades, right down to the early 1980s. ~~~ If the main fiscal consequence of the credit crunch is a huge increase in the liabilities of the federal government -- already substantially increased by the nationalization of Fannie Mae and Freddie Mac -- the United States could find itself in a similar situation. The dollar could follow the pound into the category of former reserve currencies. And the United States would lose the convenient facility of being able to borrow from foreigners at low interest rates in its own currency. ~~~ With China decoupled from the United States -- relying less on exports to America, caring less about the yuan's peg to the dollar -- the end of Chimerica seems nigh. And with the end of Chimerica, the balance of global power is bound to shift. No longer so committed to the Sino-American friendship established back in 1972, China can explore other spheres of global influence, from the Shanghai Cooperation Organization that groups together China, Russia and four Central Asian nations to China's own nascent empire in commodity-rich Africa. ~~~ But commentators should always hesitate before they prophesy the decline and fall of the United States. America has come through disastrous financial crises before -- not just the Great Depression but also the Great Stagflation of the 1970s -- and emerged with its geopolitical position enhanced. Such crises, bad as they are at home, always have worse effects on America's rivals. ~~~ The same is proving to be true today. According to the Morgan Stanley Capital International index, the U.S. stock market is down around 18 percent to date this year. The equivalent figure for China is 48 percent, and for Russia -- the worst affected of the world's emerging markets -- it is 55 percent. These figures are not very good advertisements for the more regulated, state-led economic models favored in Beijing and Moscow. ~~~ Moreover, because investors continue to regard the U.S. government's debt as a "safe haven" in uncertain times, the latest phase of the financial crisis has seen the dollar rally, rather than sag further. ~~~ Of course, this could yet prove to be the safe haven's last gasp, especially if U.S. authorities are unable to avert a fresh wave of bank failures in the days ahead. Nevertheless, the caveat is clear. The hubris of recent years has certainly been followed by a terrible financial nemesis. But it is much too early to conclude that the American century is over. Like so much else made in the United States, this nemesis is proving an all-too-successful export. ~~~ nfergus@fas.harvard.edu ~~~ Niall Ferguson is a professor of history at Harvard University. His latest book, "The Ascent of Money: A Financial History of the World," will be published in November. 

New world order could have devastating implications for Western nations

In due course, it will topple governments and lead to a permanent transfer of
economic and political power from Europe and America to the emergent and, in some
cases, such as China, semi-barbarous economies in the East.
I know I will be accused of being unnecessarily apocalyptic and irresponsibly
negative, but I believe that the greatest mistake we can now make is to
downplay the seriousness of the situation and bury our heads in the sand.

The seismic events which have seen the near-destruction of the investment banking sector and the collapse of insurance giant AIG are on the scale of the Great Crash of 1929.

That was such a disaster because it created conditions for the emergence of fascism in continental Europe and then World War II.

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China accuses US of financial WMD

China's official People’s Daily warned on Wednesday that the US had set off a "financial tsunami" by allowing Wall Street lenders to trade in subprime debts and unstable financial derivatives.

In response to market turmoil, China's central bank cut interest rates for the first time in six years, from 5.85% to 5.31% signalling Beijing's intent to maintain economic growth and employment. 


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Dreadful Simplicity of War Mongers

After all none of the present crop of European leaders have had time to study much history, and all of them made their way upwards in their party ranks because of their skill and knowledge of domestic affairs. They have had little or no preparation for the affairs of the world.

On the Russian, Georgian and Ukrainian side one can make the same argument. Ignorance reigns so history can be repeated. World War I was the most important geopolitically of the last century. After 43 years of unbroken peace in Europe, the continent slipped into war with barely a diplomatic thought. The issues were there, whether or not Austrian power could prevail in Italy, the degree of influence Russia was allowed to enjoy in the Ottoman Empire, the balance of power between Prussia and Austria in Germany and that between Prussia and France across Europe. But Europe had managed these tensions for four decades until an assassin’s bullet murdered Archduke Ferdinand of Austria, and leaders across Europe lost their perspective.

Without this tragic mistake of statecraft, owing more to insouciance than malevolence,  there would not have been the massive carnage of 1914-18. There would have been no Great Depression, no rise of Hitler, no consolidation of the autocracy of Stalin, no World War II, no unilateral development of the nuclear bomb, and no Cold War.

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Pakistani tribal chiefs threaten to join Taliban

A controversial new US tactic to mount counter-terrorist operations inside Pakistan has met with fresh hostility, it emerged yesterday, as Pakistani tribesmen representing half a million people vowed to switch sides and join the Taliban if Washington does not stop cross-border attacks by its forces from Afghanistan.
Reacting to American missile attacks in north Waziristan last week, which followed an unprecedented cross-border ground assault earlier this month, tribal chiefs from the area called an emergency meeting on Saturday.

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Leading historian issues warning of a new cold war

"I believe that Russia's prime minister Vladimir Putin is about to have his Molotov-Ribbentrop moment," said Ferguson, referring to the pre-second world war non-aggression pact between Nazi Germany and Soviet Russia. "He's going to realise that Moscow and Beijing can have a new and meaningful partnership."
Ferguson also warned that the West had to sit up and take notice of the Shanghai Co-operation Organisation. The SCO was officially founded in 2001 as a counterpart to Nato and the European Union. Aside from China and Russia its members are Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.
Ferguson said that the SCO had sneaked "under the radar" of the West, and its activities should be carefully monitored.

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Russia and Turkey tango in the Black Sea

Amid the flurry of diplomatic activity in Moscow last week over the Caucasus, Foreign Minister Sergei Lavrov took time off for an exceptionally important mission to Turkey, which might prove a turning point in the security and stability of the vast region that the two powers historically shared.

Indeed, Russian diplomacy is swiftly moving even as the troops have begun returning from Georgia to their barracks. Moscow is weaving a complicated new web of regional alliances, drawing deeply into Russia's collective historical memory as a power in the Caucasus and the Black Sea

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Iran to hold three-day war games

TEHRAN (Reuters) - Iran's armed forces will begin three days of war games on Monday involving anti-aircraft defense systems, Iranian media said on Sunday.
The exercises will be held amid persistent speculation about a possible U.S. or Israeli strike on Iran's nuclear facilities, which the West and Israel say are part of a clandestine bid to build atomic bombs, despite Tehran's denials.
The ISNA news agency said both Iran's Revolutionary Guards and its regular army would take part in the drills.

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Unilateral Declaration of War

The exact moment in history marking the last gasp of the American Empire will likely be debated by historians for years. But there is little doubt that August 7, 2008 will be viewed as a turning point in that history.
Georgia’s invasion of South Ossetia, followed by Russia’s predictable response, may have faded from the US media spotlight, but it is on the front pages of much of the international press - and for good reason.
On August 26, Moscow issued an extraordinary warning to the West. "If NATO suddenly takes military actions against Abkhazia and South Ossetia, acting solely in support of Tbilisi, this will mean a declaration of war on Russia," said Russian Ambassador Dmitry Rogozin. Russia has also made it clear that it would consider any military assistance to Georgia an act of war.


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Vladimir Putin on Russian Energy Policy(Dissertation before becoming President)

Could Russia contribute to America’s energy security? In the wake of the Yukos affair, doubts have been raised about the country’s business climate, growing government intervention in key sectors of the economy, and Russia’s reliability as a partner in strategic economic sectors. Given the high stakes involved, it is imperative to read Russia “right.” With the world’s largest deposits of natural gas and third-largest proven reserves of oil, Russia has the potential to make a major contribution to global supplies. Unfortunately, at a time when attention should be focused on an accurate evaluation of the extent of Russia’s reserves and the challenges of getting Russian oil and gas to world markets, many discussions still focus on political risk.

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Old Article(2006):The New American Cold War

Two reactions to this article were particularly noteworthy when it first appeared in The Nation almost exactly one year ago. Judging by activity on the magazine's website and by responses sent to me personally, it was very widely read and discussed both in the United States and in Russia, where it was quickly translated on a Russian-language site. And, unlike most Russian commentators, almost every American specialist who reacted to the article, directly or indirectly, adamantly disputed my thesis that US-Russian relations had deteriorated so badly they should now be understood as a new cold war--or possibly as a continuation of the old one.

Developments during the last year have amply confirmed that thesis. Several examples could be cited, but two should be enough.

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The Bush Administration Checkmated in Georgia

It's now hard to remember that, when the Bush administration arrived in office in 2000, its hardcore members were all old Cold Warriors who hadn't given up the ghost. If the Soviet Union no longer existed, they were still quite intent on rolling back what was left of it, stripping off Russia's "near abroad," encircling it militarily, and linking various of its former Eastern European satellites and socialist republics to NATO, as well as further penetrating and, after 2001, deploying troops to the oil-rich former SSRs of Central Asia.

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Moscow Wins a Major Victory on Pipelines

Vienna, September 5 – With Iran’s declaration that it opposes the construction of any undersea pipelines in the Caspian on "ecological grounds" and thus will block any delimitation of the seabed that allows for them and Baku’s decision not to back the West’s push NABUCCO project, Moscow can claim its first major political victory from its invasion of Georgia.

These actions mean that the Russian government will now have full and uncontested control over pipelines between the Caspian basin and the West which pass through Russian territory and will be able either directly or through its clients like the PKK to disrupt the only routes such as Baku-Tbilisi-Ceyhan that bypass the Russian Federation.

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Triangulating an Asian conflict

One of the more predictable turns during any US presidential election year is the sheer speed with which issues of longer-term strategic importance are quietly subsumed by a global media fed a steady diet of soap-operatic drama on the candidates, their spouses, born and unborn children and so on. By no means am I throwing stones while sitting in a glass house though; this is more of an introspective comment on the realities of the supply and demand for newsworthy discussions.

In 2000, it was all about the drama about the election battle between George W Bush and Al Gore, not to mention the post-election vote-capturing behavior of the US Supreme Court. Never mind that the US economy had slipped into a recession following the bursting of the dot.com bubble or that al-Qaeda was quietly.

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Pak stops overland oil supplies to US-led troops in Afghan

Islamabad, Sept 06: To mark its protest against the continuing cross-border raids by the US-led forces from Afghan soil, Pakistan on Saturday said it was suspending overland oil supplies to the coalition troops in the war-ravaged country.

Defence Minister Chaudhry Ahmed Mukhtar said the decision to stop the supplies had been made because the attacks by the US-led forces from Afghanistan had continued despite protests by Pakistan.

"We've already taken action today. We've stopped the supply of oil and this would tell how serious we are to the International Security Assistance Force," Mukhtar said outside parliament.

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Pakistan reserves right to retaliate in future: Gen Tariq

“Pakistan reserves the right to appropriately retaliate in future,” General Tariq told German Defence Minister Franz Josef Jung who called on him at the Joint Staff Headquarters. Condemning the attack by US forces at Angoor Ada, the CJCSC said such cross-border strikes would alienate locals. General Tariq said that Afghanistan was levelling allegations against Pakistan to cover its failures.

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US attack inside Pakistan threatens dangerous new war

A ground assault by US Special Forces troops on a Pakistani village on Wednesday threatens to expand the escalating Afghanistan war into its neighbour. Pakistan is already confronting a virtual civil war in its tribal border regions as the country’s military, under pressure from Washington, seeks to crush Islamist militias supporting the anti-occupation insurgency inside Afghanistan.

The attack, which left up to 20 civilians dead, marks a definite escalation of US operations inside Pakistan. While US Predator drones and war planes have been used previously to bomb targets, Wednesday’s raid was the first clear case of an assault by American ground troops inside Pakistani territory. The White House and Pentagon have refused to comment on the incident but various unnamed US officials have acknowledged to the media that the raid took place and indicated that there could be more to come.

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Kremlin-watchers warn of direct U.S.-Russia clash

_ American warships are deploying in and near Georgian ports, carrying humanitarian aid. Russian Prime Minister Vladimir Putin has suggested that they're also bringing military aid to the defeated Georgian army. On Friday, the USS Mount Whitney, the command ship for the U.S. Navy's 6th Fleet, docked in Poti, Georgia, not far from Russian outposts on shore.
_ Russian warships have been sent to the coast of nearby Abkhazia, a breakaway province of Georgia now occupied by Russian troops and recognized as an independent state by Moscow. In the relatively close proximity in which the Russian and American ships operate there and elsewhere in the Black Sea, one misunderstanding could create an international incident.
"We remember very well the Tonkin Gulf incident" in which untrue reports of North Vietnamese ships firing on U.S. ships started the Vietnam War, said Sergei Markov, a Duma member who's also with United Russia.
Markov, who's close to the Kremlin, accused the Bush administration of playing "a very dirty and bloody game" in which it was intentionally provoking Russia to create the appearance of a new cold war to help McCain's hawkish presidential campaign and further U.S. attempts to hem in Russian power.

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Tehran exploits US-Russian tensions

"When the US invaded Iraq, it didn't do so to improve Iran's power position in the region, but that was the result," noted Gary Sick, an Iran expert at Columbia University who served on the National Security Council staff of former presidents Gerald Ford, Jimmy Carter and Ronald Reagan. "That wasn't the purpose of the Russian invasion of Georgia either, but it, too, may be the result."

So far, Tehran's response to the Georgia crisis has been measured. Despite calls by some right-wing voices to side with Moscow, according to Farideh Farhi, an Iran expert at the Woodrow Wilson International Center for Scholars in Washington, the government, including President Mahmud Ahmadinejad, has expressed disapproval of the Russian action, particularly its recognition of the independence of Abkhazia and South Ossetia from Georgia.

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Whether anyone admits it or not, Hamas appears to have won

The signs of Hamas' victory can be seen all over. From the success of the siege-breaking peace boats to the partial opening of the Rafah crossing with Egypt and the serious talks Hamas leaders are holding with Egyptian and Jordanian intelligence chiefs.

Part of the reason for Hamas' success is the fact that the region and the world have little choice but to accept the reality that emerged in February 2006 and that Hamas in June 2007, with its takeover of Gaza, served notice that it was not going away.

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Cheney to rally U.S. allies in Russia's backyard

As Cheney headed into a region Russia sees as its backyard, the Kremlin renewed its rhetorical attacks on Washington, accusing it of helping trigger the conflict by backing a pro-Western Georgian government bent on aggression.
Azerbaijan and Georgia are links in the chain of a Western-backed energy corridor that bypasses Russia, but which the West fears could be in jeopardy after the Kremlin last month sent troops and tanks deep into Georgian territory when Tbilisi tried to retake the separatist region of South Ossetia by force.

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U.S. plans to give Georgia $1 billion in aid

WASHINGTON (Reuters) - The United States on Wednesday announced at least $1 billion in aid to help ally Georgia rebuild after its war with Russia, but U.S. officials said it was too soon to consider military assistance.
Secretary of State Condoleezza Rice unveiled the plan to help reconstruct Georgia's economy and infrastructure that were destroyed by the Russian military as it crushed Georgia's attempt to regain control of the separatist enclave of South Ossetia.

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