The World is Facing the First Truly Global Economic Crisis

Image by World Economic Forum via Flickr

GlobalResearch.ca
Prime Minister Vladimir Putin's speech at the opening ceremony of the World Economic Forum Davos, Switzerland January 28, 2009
Good afternoon, colleagues, ladies and gentlemen,
I would like to thank the forum's organisers for this opportunity to share my thoughts on global economic developments and to share our plans and proposals.
The world is now facing the first truly global economic crisis, which is continuing to develop at an unprecedented pace.
The current situation is often compared to the Great Depression of the late 1920s and the early 1930s. True, there are some similarities. However, there are also some basic differences. The crisis has affected everyone at this time of globalisation. Regardless of their political or economic system, all nations have found themselves in the same boat.
There is a certain concept, called the perfect storm, which denotes a situation when Nature's forces converge in one point of the ocean and increase their destructive potential many times over. It appears that the present-day crisis resembles such a perfect storm.
Responsible and knowledgeable people must prepare for it. Nevertheless, it always flares up unexpectedly.
The current situation is no exception either. Although the crisis was simply hanging in the air, the majority strove to get their share of the pie, be it one dollar or a billion, and did not want to notice the rising wave.
In the last few months, virtually every speech on this subject started with criticism of the United States. But I will do nothing of the kind.
I just want to remind you that, just a year ago, American delegates speaking from this rostrum emphasised the US economy's fundamental stability and its cloudless prospects. Today, investment banks, the pride of Wall Street, have virtually ceased to exist. In just 12 months, they have posted losses exceeding the profits they made in the last 25 years. This example alone reflects the real situation better than any criticism.
The time for enlightenment has come. We must calmly, and without gloating, assess the root causes of this situation and try to peek into the future.
In our opinion, the crisis was brought about by a combination of several factors.
The existing financial system has failed. Substandard regulation has contributed to the crisis, failing to duly heed tremendous risks. Add to this colossal disproportions that have accumulated over the last few years. This primarily concerns disproportions between the scale of financial operations and the fundamental value of assets, as well as those between the increased burden on international loans and the sources of their collateral.
The entire economic growth system, where one regional centre prints money without respite and consumes material wealth, while another regional centre manufactures inexpensive goods and saves money printed by other governments, has suffered a major setback.
I would like to add that this system has left entire regions, including Europe, on the outskirts of global economic processes and has prevented them from adopting key economic and financial decisions. Moreover, generated prosperity was distributed extremely unevenly among various population strata. This applies to differences between social strata in certain countries, including highly developed ones. And it equally applies to gaps between countries and regions. A considerable share of the world's population still cannot afford comfortable housing, education and quality health care. Even a global recovery posted in the last few years has failed to radically change this situation. And, finally, this crisis was brought about by excessive expectations. Corporate appetites with regard to constantly growing demand swelled unjustifiably. The race between stock market indices and capitalisation began to overshadow rising labour productivity and real-life corporate effectiveness.
Unfortunately, excessive expectations were not only typical of the business community. They set the pace for rapidly growing personal consumption standards, primarily in the industrial world. We must openly admit that such growth was not backed by a real potential. This amounted to unearned wealth, a loan that will have to be repaid by future generations.
This pyramid of expectations would have collapsed sooner or later. In fact, this is happening right before our eyes.
Esteemed colleagues,
One is sorely tempted to make simple and popular decisions in times of crisis. However, we could face far greater complications if we merely treat the symptoms of the disease.
Naturally, all national governments and business leaders must take resolute actions. Nevertheless, it is important to avoid making decisions, even in such force majeure circumstances, that we will regret in the future.
This is why I would first like to mention specific measures which should be avoided and which will not be implemented by Russia. We must not revert to isolationism and unrestrained economic egotism. The leaders of the world's largest economies agreed during the November 2008 G20 summit not to create barriers hindering global trade and capital flows. Russia shares these principles. Although additional protectionism will prove inevitable during the crisis, all of us must display a sense of proportion. Excessive intervention in economic activity and blind faith in the state's omnipotence is another possible mistake. True, the state's increased role in times of crisis is a natural reaction to market setbacks. Instead of streamlining market mechanisms, some are tempted to expand state economic intervention to the greatest possible extent. The concentration of surplus assets in the hands of the state is a negative aspect of anti-crisis measures in virtually every nation. In the 20th century, the Soviet Union made the state's role absolute. In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly. I am sure nobody wants to see it repeated. Nor should we turn a blind eye to the fact that the spirit of free enterprise, including the principle of personal responsibility of businesspeople, investors and shareholders for their decisions, is being eroded in the last few months. There is no reason to believe that we can achieve better results by shifting responsibility onto the state. And one more point: anti-crisis measures should not escalate into financial populism and a refusal to implement responsible macroeconomic policies. The unjustified swelling of the budgetary deficit and the accumulation of public debts are just as destructive as adventurous stock-jobbing.
Ladies and gentlemen,
Unfortunately, we have so far failed to comprehend the true scale of the ongoing crisis. But one thing is obvious: the extent of the recession and its scale will largely depend on specific high-precision measures, due to be charted by governments and business communities and on our coordinated and professional efforts. In our opinion, we must first atone for the past and open our cards, so to speak. This means we must assess the real situation and write off all hopeless debts and "bad" assets. True, this will be an extremely painful and unpleasant process. Far from everyone can accept such measures, fearing for their capitalisation, bonuses or reputation. However, we would "conserve" and prolong the crisis, unless we clean up our balance sheets. I believe financial authorities must work out the required mechanism for writing off debts that corresponds to today's needs. Second. Apart from cleaning up our balance sheets, it is high time we got rid of virtual money, exaggerated reports and dubious ratings. We must not harbour any illusions while assessing the state of the global economy and the real corporate standing, even if such assessments are made by major auditors and analysts.
In effect, our proposal implies that the audit, accounting and ratings system reform must be based on a reversion to the fundamental asset value concept. In other words, assessments of each individual business must be based on its ability to generate added value, rather than on subjective concepts. In our opinion, the economy of the future must become an economy of real values. How to achieve this is not so clear-cut. Let us think about it together.
Third. Excessive dependence on a single reserve currency is dangerous for the global economy. Consequently, it would be sensible to encourage the objective process of creating several strong reserve currencies in the future. It is high time we launched a detailed discussion of methods to facilitate a smooth and irreversible switchover to the new model.
Fourth. Most nations convert their international reserves into foreign currencies and must therefore be convinced that they are reliable. Those issuing reserve and accounting currencies are objectively interested in their use by other states. This highlights mutual interests and interdependence. Consequently, it is important that reserve currency issuers must implement more open monetary policies. Moreover, these nations must pledge to abide by internationally recognised rules of macroeconomic and financial discipline. In our opinion, this demand is not excessive. At the same time, the global financial system is not the only element in need of reforms. We are facing a much broader range of problems. This means that a system based on cooperation between several major centres must replace the obsolete unipolar world concept. We must strengthen the system of global regulators based on international law and a system of multilateral agreements in order to prevent chaos and unpredictability in such a multipolar world. Consequently, it is very important that we reassess the role of leading international organisations and institutions.
I am convinced that we can build a more equitable and efficient global economic system. But it is impossible to create a detailed plan at this event today.
It is clear, however, that every nation must have guaranteed access to vital resources, new technology and development sources. What we need is guarantees that could minimise risks of recurring crises. Naturally, we must continue to discuss all these issues, including at the G20 meeting in London, which will take place in April.
Our decisions should match the present-day situation and heed the requirements of a new post-crisis world.
The global economy could face trite energy-resource shortages and the threat of thwarted future growth while overcoming the crisis. Three years ago, at a summit of the Group of Eight, we raised the issue of global energy security. We called for the shared responsibility of suppliers, consumers and transit countries. I think it is time to launch truly effective mechanisms ensuring such responsibility.
The only way to ensure truly global energy security is to form interdependence, including a swap of assets, without any discrimination or dual standards. It is such interdependence that generates real mutual responsibility.
Unfortunately, the existing Energy Charter has failed to become a working instrument able to regulate emerging problems.
I propose we start laying down a new international legal framework for energy security. Implementation of our initiative could play a political role comparable to the treaty establishing the European Coal and Steel Community. That is to say, consumers and producers would finally be bound into a real single energy partnership based on clear-cut legal foundations.
Every one of us realises that sharp and unpredictable fluctuations of energy prices are a colossal destabilising factor in the global economy. Today's landslide fall of prices will lead to a growth in the consumption of resources.
On the one hand, investments in energy saving and alternative sources of energy will be curtailed. On the other, less money will be invested in oil production, which will result in its inevitable downturn. Which, in the final analysis, will escalate into another fit of uncontrolled price growth and a new crisis.
It is necessary to return to a balanced price based on an equilibrium between supply and demand, to strip pricing of a speculative element generated by many derivative financial instruments.
To guarantee the transit of energy resources remains a challenge. There are two ways of tackling it, and both must be used. The first is to go over to generally recognised market principles of fixing tariffs on transit services. They can be recorded in international legal documents. The second is to develop and diversify the routes of energy transportation. We have been working long and hard along these lines. In the past few years alone, we have implemented such projects as the Yamal-Europe and Blue Stream gas pipelines. Experience has proved their urgency and relevance. I am convinced that such projects as South Stream and North Stream are equally needed for Europe's energy security. Their total estimated capacity is something like 85 billion cubic meters of gas a year. Gazprom, together with its partners - Shell, Mitsui and Mitsubishi - will soon launch capacities for liquefying and transporting natural gas produced in the Sakhalin area. And that is also Russia's contribution to global energy security. We are developing the infrastructure of our oil pipelines. The first section of the Baltic Pipeline System (BPS) has already been completed. BPS-1 supplies up to 75 million tonnes of oil a year. It does this direct to consumers - via our ports on the Baltic Sea. Transit risks are completely eliminated in this way. Work is currently under way to design and build BPS-2 (its throughput capacity is 50 million tonnes of oil a year. We intend to build transport infrastructure in all directions. The first stage of the pipeline system Eastern Siberia - Pacific Ocean is in the final stage. Its terminal point will be a new oil port in Kozmina Bay and an oil refinery in the Vladivostok area. In the future a gas pipeline will be laid parallel to the oil pipeline, towards the Pacific and China. Addressing you here today, I cannot but mention the effects of the global crisis on the Russian economy. We have also been seriously affected.
However, unlike many other countries, we have accumulated large reserves. They expand our possibilities for confidently passing through the period of global instability.
The crisis has made the problems we had more evident. They concern the excessive emphasis on raw materials in exports and the economy in general and a weak financial market. The need to develop a number of fundamental market institutions, above all of a competitive environment, has become more acute.
We were aware of these problems and sought to address them gradually. The crisis is only making us move more actively towards the declared priorities, without changing the strategy itself, which is to effect a qualitative renewal of Russia in the next 10 to 12 years.
Our anti-crisis policy is aimed at supporting domestic demand, providing social guarantees for the population, and creating new jobs. Like many countries, we have reduced production taxes, leaving money in the economy. We have optimised state spending.
But, I repeat, along with measures of prompt response, we are also working to create a platform for post-crisis development.
We are convinced that those who will create attractive conditions for global investment already now and will be able to preserve and strengthen sources of strategically meaningful resources will become leaders of the restoration of the global economy.
This is why among our priorities we have the creation of a favourable business environment and development of competition; the establishment of a stable loan system resting on sufficient internal resources; and implementation of transport and other infrastructure projects.
Russia is already one of the major exporters of a number of food commodities. And our contribution to ensuring global food security will only increase.
We are also going to actively develop the innovation sectors of the economy. Above all, those in which Russia has a competitive edge - space, nuclear energy, aviation. In these areas, we are already actively establishing cooperative ties with other countries. A promising area for joint efforts could be the sphere of energy saving.
We see higher energy efficiency as one of the key factors for energy security and future development.
We will continue reforms in our energy industry. Adoption of a new system of internal pricing based on economically justified tariffs.
This is important, including for encouraging energy saving. We will continue our policy of openness to foreign investments.
I believe that the 21st century economy is an economy of people not of factories. The intellectual factor has become increasingly important in the economy. That is why we are planning to focus on providing additional opportunities for people to realise their potential.
We are already a highly educated nation. But we need for Russian citizens to obtain the highest quality and most up-to-date education, and such professional skills that will be widely in demand in today's world. Therefore, we will be pro-active in promoting educational programmes in leading specialities.
We will expand student exchange programmes, arrange training for our students at the leading foreign colleges and universities and with the most advanced companies. We will also create such conditions that the best researchers and professors - regardless of their citizenship - will want to come and work in Russia.
History has given Russia a unique chance. Events urgently require that we reorganise our economy and update our social sphere. We do not intend to pass up this chance. Our country must emerge from the crisis renewed, stronger and more competitive.
Separately, I would like to comment on problems that go beyond the purely economic agenda, but nevertheless are very topical in present-day conditions. Unfortunately, we are increasingly hearing the argument that the build-up of military spending could solve today's social and economic problems. The logic is simple enough. Additional military allocations create new jobs. At a glance, this sounds like a good way of fighting the crisis and unemployment. This policy might even be quite effective in the short term. But in the longer run, militarisation won't solve the problem but will rather quell it temporarily. What it will do is squeeze huge financial and other resources from the economy instead of finding better and wiser uses for them.
My conviction is that reasonable restraint in military spending, especially coupled with efforts to enhance global stability and security, will certainly bring significant economic dividends. I hope that this viewpoint will eventually dominate globally. On our part, we are geared to intensive work on discussing further disarmament.
I would like to draw your attention to the fact that the economic crisis could aggravate the current negative trends in global politics. The world has lately come to face an unheard-of surge of violence and other aggressive actions, such as Georgia's adventurous sortie in the Caucasus, recent terrorist attacks in India, and escalation of violence in Gaza Strip. Although not apparently linked directly, these developments still have common features.
First of all, I am referring to the existing international organisations' inability to provide any constructive solutions to regional conflicts, or any effective proposals for interethnic and interstate settlement. Multilateral political mechanisms have proved as ineffective as global financial and economic regulators. Frankly speaking, we all know that provoking military and political instability, regional and other conflicts is a helpful means of distracting the public from growing social and economic problems. Such attempts cannot be ruled out, unfortunately.
To prevent this scenario, we need to improve the system of international relations, making it more effective, safe and stable. There are a lot of important issues on the global agenda in which most countries have shared interests. These include anti-crisis policies, joint efforts to reform international financial institutions, to improve regulatory mechanisms, ensure energy security and mitigate the global food crisis, which is an extremely pressing issue today.
Russia is willing to contribute to dealing with international priority issues. We expect all our partners in Europe, Asia and America, including the new US administration, to show interest in further constructive cooperation in dealing with all these issues and more. We wish the new team success.
Related articles by Zemanta

• In Davos, Russia and China Blame Capitalists for Crisis (nytimes.com)
• Russian prime minister Vladimir Putin calls for end of dollar stranglehold (telegraph.co.uk)
• China: Cautiously Optimistic on Economy (abcnews.go.com)
• Bill Clinton Jokes About Putin, Backs Obama (abcnews.go.com)

The World is Facing the First Truly Global Economic Crisis

Image by World Economic Forum via Flickr

GlobalResearch.ca
Prime Minister Vladimir Putin's speech at the opening ceremony of the World Economic Forum Davos, Switzerland January 28, 2009
Good afternoon, colleagues, ladies and gentlemen,
I would like to thank the forum's organisers for this opportunity to share my thoughts on global economic developments and to share our plans and proposals.
The world is now facing the first truly global economic crisis, which is continuing to develop at an unprecedented pace.
The current situation is often compared to the Great Depression of the late 1920s and the early 1930s. True, there are some similarities. However, there are also some basic differences. The crisis has affected everyone at this time of globalisation. Regardless of their political or economic system, all nations have found themselves in the same boat.
There is a certain concept, called the perfect storm, which denotes a situation when Nature's forces converge in one point of the ocean and increase their destructive potential many times over. It appears that the present-day crisis resembles such a perfect storm.
Responsible and knowledgeable people must prepare for it. Nevertheless, it always flares up unexpectedly.
The current situation is no exception either. Although the crisis was simply hanging in the air, the majority strove to get their share of the pie, be it one dollar or a billion, and did not want to notice the rising wave.
In the last few months, virtually every speech on this subject started with criticism of the United States. But I will do nothing of the kind.
I just want to remind you that, just a year ago, American delegates speaking from this rostrum emphasised the US economy's fundamental stability and its cloudless prospects. Today, investment banks, the pride of Wall Street, have virtually ceased to exist. In just 12 months, they have posted losses exceeding the profits they made in the last 25 years. This example alone reflects the real situation better than any criticism.
The time for enlightenment has come. We must calmly, and without gloating, assess the root causes of this situation and try to peek into the future.
In our opinion, the crisis was brought about by a combination of several factors.
The existing financial system has failed. Substandard regulation has contributed to the crisis, failing to duly heed tremendous risks. Add to this colossal disproportions that have accumulated over the last few years. This primarily concerns disproportions between the scale of financial operations and the fundamental value of assets, as well as those between the increased burden on international loans and the sources of their collateral.
The entire economic growth system, where one regional centre prints money without respite and consumes material wealth, while another regional centre manufactures inexpensive goods and saves money printed by other governments, has suffered a major setback.
I would like to add that this system has left entire regions, including Europe, on the outskirts of global economic processes and has prevented them from adopting key economic and financial decisions. Moreover, generated prosperity was distributed extremely unevenly among various population strata. This applies to differences between social strata in certain countries, including highly developed ones. And it equally applies to gaps between countries and regions. A considerable share of the world's population still cannot afford comfortable housing, education and quality health care. Even a global recovery posted in the last few years has failed to radically change this situation. And, finally, this crisis was brought about by excessive expectations. Corporate appetites with regard to constantly growing demand swelled unjustifiably. The race between stock market indices and capitalisation began to overshadow rising labour productivity and real-life corporate effectiveness.
Unfortunately, excessive expectations were not only typical of the business community. They set the pace for rapidly growing personal consumption standards, primarily in the industrial world. We must openly admit that such growth was not backed by a real potential. This amounted to unearned wealth, a loan that will have to be repaid by future generations.
This pyramid of expectations would have collapsed sooner or later. In fact, this is happening right before our eyes.
Esteemed colleagues,
One is sorely tempted to make simple and popular decisions in times of crisis. However, we could face far greater complications if we merely treat the symptoms of the disease.
Naturally, all national governments and business leaders must take resolute actions. Nevertheless, it is important to avoid making decisions, even in such force majeure circumstances, that we will regret in the future.
This is why I would first like to mention specific measures which should be avoided and which will not be implemented by Russia. We must not revert to isolationism and unrestrained economic egotism. The leaders of the world's largest economies agreed during the November 2008 G20 summit not to create barriers hindering global trade and capital flows. Russia shares these principles. Although additional protectionism will prove inevitable during the crisis, all of us must display a sense of proportion. Excessive intervention in economic activity and blind faith in the state's omnipotence is another possible mistake. True, the state's increased role in times of crisis is a natural reaction to market setbacks. Instead of streamlining market mechanisms, some are tempted to expand state economic intervention to the greatest possible extent. The concentration of surplus assets in the hands of the state is a negative aspect of anti-crisis measures in virtually every nation. In the 20th century, the Soviet Union made the state's role absolute. In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly. I am sure nobody wants to see it repeated. Nor should we turn a blind eye to the fact that the spirit of free enterprise, including the principle of personal responsibility of businesspeople, investors and shareholders for their decisions, is being eroded in the last few months. There is no reason to believe that we can achieve better results by shifting responsibility onto the state. And one more point: anti-crisis measures should not escalate into financial populism and a refusal to implement responsible macroeconomic policies. The unjustified swelling of the budgetary deficit and the accumulation of public debts are just as destructive as adventurous stock-jobbing.
Ladies and gentlemen,
Unfortunately, we have so far failed to comprehend the true scale of the ongoing crisis. But one thing is obvious: the extent of the recession and its scale will largely depend on specific high-precision measures, due to be charted by governments and business communities and on our coordinated and professional efforts. In our opinion, we must first atone for the past and open our cards, so to speak. This means we must assess the real situation and write off all hopeless debts and "bad" assets. True, this will be an extremely painful and unpleasant process. Far from everyone can accept such measures, fearing for their capitalisation, bonuses or reputation. However, we would "conserve" and prolong the crisis, unless we clean up our balance sheets. I believe financial authorities must work out the required mechanism for writing off debts that corresponds to today's needs. Second. Apart from cleaning up our balance sheets, it is high time we got rid of virtual money, exaggerated reports and dubious ratings. We must not harbour any illusions while assessing the state of the global economy and the real corporate standing, even if such assessments are made by major auditors and analysts.
In effect, our proposal implies that the audit, accounting and ratings system reform must be based on a reversion to the fundamental asset value concept. In other words, assessments of each individual business must be based on its ability to generate added value, rather than on subjective concepts. In our opinion, the economy of the future must become an economy of real values. How to achieve this is not so clear-cut. Let us think about it together.
Third. Excessive dependence on a single reserve currency is dangerous for the global economy. Consequently, it would be sensible to encourage the objective process of creating several strong reserve currencies in the future. It is high time we launched a detailed discussion of methods to facilitate a smooth and irreversible switchover to the new model.
Fourth. Most nations convert their international reserves into foreign currencies and must therefore be convinced that they are reliable. Those issuing reserve and accounting currencies are objectively interested in their use by other states. This highlights mutual interests and interdependence. Consequently, it is important that reserve currency issuers must implement more open monetary policies. Moreover, these nations must pledge to abide by internationally recognised rules of macroeconomic and financial discipline. In our opinion, this demand is not excessive. At the same time, the global financial system is not the only element in need of reforms. We are facing a much broader range of problems. This means that a system based on cooperation between several major centres must replace the obsolete unipolar world concept. We must strengthen the system of global regulators based on international law and a system of multilateral agreements in order to prevent chaos and unpredictability in such a multipolar world. Consequently, it is very important that we reassess the role of leading international organisations and institutions.
I am convinced that we can build a more equitable and efficient global economic system. But it is impossible to create a detailed plan at this event today.
It is clear, however, that every nation must have guaranteed access to vital resources, new technology and development sources. What we need is guarantees that could minimise risks of recurring crises. Naturally, we must continue to discuss all these issues, including at the G20 meeting in London, which will take place in April.
Our decisions should match the present-day situation and heed the requirements of a new post-crisis world.
The global economy could face trite energy-resource shortages and the threat of thwarted future growth while overcoming the crisis. Three years ago, at a summit of the Group of Eight, we raised the issue of global energy security. We called for the shared responsibility of suppliers, consumers and transit countries. I think it is time to launch truly effective mechanisms ensuring such responsibility.
The only way to ensure truly global energy security is to form interdependence, including a swap of assets, without any discrimination or dual standards. It is such interdependence that generates real mutual responsibility.
Unfortunately, the existing Energy Charter has failed to become a working instrument able to regulate emerging problems.
I propose we start laying down a new international legal framework for energy security. Implementation of our initiative could play a political role comparable to the treaty establishing the European Coal and Steel Community. That is to say, consumers and producers would finally be bound into a real single energy partnership based on clear-cut legal foundations.
Every one of us realises that sharp and unpredictable fluctuations of energy prices are a colossal destabilising factor in the global economy. Today's landslide fall of prices will lead to a growth in the consumption of resources.
On the one hand, investments in energy saving and alternative sources of energy will be curtailed. On the other, less money will be invested in oil production, which will result in its inevitable downturn. Which, in the final analysis, will escalate into another fit of uncontrolled price growth and a new crisis.
It is necessary to return to a balanced price based on an equilibrium between supply and demand, to strip pricing of a speculative element generated by many derivative financial instruments.
To guarantee the transit of energy resources remains a challenge. There are two ways of tackling it, and both must be used. The first is to go over to generally recognised market principles of fixing tariffs on transit services. They can be recorded in international legal documents. The second is to develop and diversify the routes of energy transportation. We have been working long and hard along these lines. In the past few years alone, we have implemented such projects as the Yamal-Europe and Blue Stream gas pipelines. Experience has proved their urgency and relevance. I am convinced that such projects as South Stream and North Stream are equally needed for Europe's energy security. Their total estimated capacity is something like 85 billion cubic meters of gas a year. Gazprom, together with its partners - Shell, Mitsui and Mitsubishi - will soon launch capacities for liquefying and transporting natural gas produced in the Sakhalin area. And that is also Russia's contribution to global energy security. We are developing the infrastructure of our oil pipelines. The first section of the Baltic Pipeline System (BPS) has already been completed. BPS-1 supplies up to 75 million tonnes of oil a year. It does this direct to consumers - via our ports on the Baltic Sea. Transit risks are completely eliminated in this way. Work is currently under way to design and build BPS-2 (its throughput capacity is 50 million tonnes of oil a year. We intend to build transport infrastructure in all directions. The first stage of the pipeline system Eastern Siberia - Pacific Ocean is in the final stage. Its terminal point will be a new oil port in Kozmina Bay and an oil refinery in the Vladivostok area. In the future a gas pipeline will be laid parallel to the oil pipeline, towards the Pacific and China. Addressing you here today, I cannot but mention the effects of the global crisis on the Russian economy. We have also been seriously affected.
However, unlike many other countries, we have accumulated large reserves. They expand our possibilities for confidently passing through the period of global instability.
The crisis has made the problems we had more evident. They concern the excessive emphasis on raw materials in exports and the economy in general and a weak financial market. The need to develop a number of fundamental market institutions, above all of a competitive environment, has become more acute.
We were aware of these problems and sought to address them gradually. The crisis is only making us move more actively towards the declared priorities, without changing the strategy itself, which is to effect a qualitative renewal of Russia in the next 10 to 12 years.
Our anti-crisis policy is aimed at supporting domestic demand, providing social guarantees for the population, and creating new jobs. Like many countries, we have reduced production taxes, leaving money in the economy. We have optimised state spending.
But, I repeat, along with measures of prompt response, we are also working to create a platform for post-crisis development.
We are convinced that those who will create attractive conditions for global investment already now and will be able to preserve and strengthen sources of strategically meaningful resources will become leaders of the restoration of the global economy.
This is why among our priorities we have the creation of a favourable business environment and development of competition; the establishment of a stable loan system resting on sufficient internal resources; and implementation of transport and other infrastructure projects.
Russia is already one of the major exporters of a number of food commodities. And our contribution to ensuring global food security will only increase.
We are also going to actively develop the innovation sectors of the economy. Above all, those in which Russia has a competitive edge - space, nuclear energy, aviation. In these areas, we are already actively establishing cooperative ties with other countries. A promising area for joint efforts could be the sphere of energy saving.
We see higher energy efficiency as one of the key factors for energy security and future development.
We will continue reforms in our energy industry. Adoption of a new system of internal pricing based on economically justified tariffs.
This is important, including for encouraging energy saving. We will continue our policy of openness to foreign investments.
I believe that the 21st century economy is an economy of people not of factories. The intellectual factor has become increasingly important in the economy. That is why we are planning to focus on providing additional opportunities for people to realise their potential.
We are already a highly educated nation. But we need for Russian citizens to obtain the highest quality and most up-to-date education, and such professional skills that will be widely in demand in today's world. Therefore, we will be pro-active in promoting educational programmes in leading specialities.
We will expand student exchange programmes, arrange training for our students at the leading foreign colleges and universities and with the most advanced companies. We will also create such conditions that the best researchers and professors - regardless of their citizenship - will want to come and work in Russia.
History has given Russia a unique chance. Events urgently require that we reorganise our economy and update our social sphere. We do not intend to pass up this chance. Our country must emerge from the crisis renewed, stronger and more competitive.
Separately, I would like to comment on problems that go beyond the purely economic agenda, but nevertheless are very topical in present-day conditions. Unfortunately, we are increasingly hearing the argument that the build-up of military spending could solve today's social and economic problems. The logic is simple enough. Additional military allocations create new jobs. At a glance, this sounds like a good way of fighting the crisis and unemployment. This policy might even be quite effective in the short term. But in the longer run, militarisation won't solve the problem but will rather quell it temporarily. What it will do is squeeze huge financial and other resources from the economy instead of finding better and wiser uses for them.
My conviction is that reasonable restraint in military spending, especially coupled with efforts to enhance global stability and security, will certainly bring significant economic dividends. I hope that this viewpoint will eventually dominate globally. On our part, we are geared to intensive work on discussing further disarmament.
I would like to draw your attention to the fact that the economic crisis could aggravate the current negative trends in global politics. The world has lately come to face an unheard-of surge of violence and other aggressive actions, such as Georgia's adventurous sortie in the Caucasus, recent terrorist attacks in India, and escalation of violence in Gaza Strip. Although not apparently linked directly, these developments still have common features.
First of all, I am referring to the existing international organisations' inability to provide any constructive solutions to regional conflicts, or any effective proposals for interethnic and interstate settlement. Multilateral political mechanisms have proved as ineffective as global financial and economic regulators. Frankly speaking, we all know that provoking military and political instability, regional and other conflicts is a helpful means of distracting the public from growing social and economic problems. Such attempts cannot be ruled out, unfortunately.
To prevent this scenario, we need to improve the system of international relations, making it more effective, safe and stable. There are a lot of important issues on the global agenda in which most countries have shared interests. These include anti-crisis policies, joint efforts to reform international financial institutions, to improve regulatory mechanisms, ensure energy security and mitigate the global food crisis, which is an extremely pressing issue today.
Russia is willing to contribute to dealing with international priority issues. We expect all our partners in Europe, Asia and America, including the new US administration, to show interest in further constructive cooperation in dealing with all these issues and more. We wish the new team success.
Related articles by Zemanta

• In Davos, Russia and China Blame Capitalists for Crisis (nytimes.com)
• Russian prime minister Vladimir Putin calls for end of dollar stranglehold (telegraph.co.uk)
• China: Cautiously Optimistic on Economy (abcnews.go.com)
• Bill Clinton Jokes About Putin, Backs Obama (abcnews.go.com)

Analysis: US, Israel could coax Hamas to moderate

Image via Wikipedia

The Associated Press

Postwar Gaza could become a test of President Barack Obama's inauguration speech offer to hard-liners to "extend a hand if you are willing to unclench your fist."
The extended hand would be open borders and international reconstruction money for Hamas-ruled Gaza. The unclenched fist would be the Islamic militants holding their fire against Israel and giving their moderate Fatah rivals a foothold in the coastal strip.
After an Israeli offensive that killed nearly 1,300 Palestinians and left much of Gaza in ruins, the new U.S. administration and a soon-to-be new Israeli government have a chance to forge a fresh strategy toward Hamas.
The war appears to have shaken up Mideast politics and the international community could leverage Gaza's postwar reality to boost moderates in the region, taking advantage of the fact that Hamas desperately needs help following the Israeli onslaught.
That could mean giving Hamas what it most wants -- an open border with Egypt -- as long as Fatah and international monitors control it. Any such deal would also require providing assurances to Israel that Hamas will stop smuggling weapons over the Egyptian border.
Extending Hamas a hand runs the risk of cementing the militants' power in Gaza. But a deal with strings attached could chip away at Hamas' stranglehold on the territory, which has been the main impediment to U.S.-backed Israeli-Palestinian peace talks.
Hamas, which has been holding victory rallies in Gaza despite suffering enormous losses from Israel's assault, is not about to suddenly recognize the Jewish state or join the peace talks between Israel and the moderate Palestinian leadership in the West Bank.
But the war proved Hamas is not a monolith. Divisions emerged between the group's Syria-based leadership, which opposed a cease-fire, and those inside Gaza who felt the bloodletting had to stop.
Hamas appears to have evolved since the days when it regularly invited youngsters to strap on bombs and blow themselves up inside Israel. Today, after violently seizing control of Gaza in June 2007, the group seems as interested in successful governance as attacking Israel.
Many Israelis believe Hamas' decision to fire rockets at Israel at the end of a six-month truce -- a decision that sparked the latest war -- was based solely on the group's hatred of Zionists. But the reality is more complicated.
Hamas was deeply disappointed the original truce did not bring a deal to reopen the borders of Gaza, which Israel and Egypt have blockaded since Hamas seized power. The closure destroyed almost all private enterprise in the territory of 1.4 million people, exacerbating misery in a place where 80 percent of the people need U.N. food handouts to survive.
Gazans found themselves without cement to build new apartments or make gravestones for the dead. Ninety percent of the territory's 3,600 factories shut down because of a lack of spare parts and raw materials.
And Israel's military offensive inflicted an estimated $2 billion in damage.
Rebuilding would seem impossible under the current border regime.
"Nobody in his right state of mind can talk about reconstruction in Gaza with the crossings continuing to be ... closed," Palestinian Prime Minister Salam Fayyad said in the West Bank this week.
Since trade links between Israel and Gaza are unlikely as long as Hamas remains sworn to Israel's destruction, efforts to ease the blockade are concentrating on opening the border with Egypt.
Fayyad made an urgent plea for reconciliation between Fatah and Hamas, saying the alternative is a permanent rift that will destroy Palestinians' dreams for a state of their own.
Current international proposals for a durable Gaza truce envision allowing Fatah back into Gaza to help monitor a reopened crossing into Egypt, an outcome that could be a first step toward moderates regaining a foothold in Gaza.
Hamas leaders have been defiant since a tentative cease-fire took hold Sunday, But Hamas spokesman Fawzi Barhoum made a point of not rejecting Obama's inaugural overture.
Israel remains Hamas' enemy, he said. "That does not mean we cannot open a new page with the whole world, including the new elected American administration if they support the Palestinian people's just rights."
To be sure, no truce deal will be possible unless Israel is assured Hamas will stop firing rockets at Israel and smuggling increasingly lethal weapons across the Gaza-Egypt border.
Israel has scheduled an election Feb. 10 and none of the top candidates for prime minister has shown any willingness to rethink the position on Hamas. And the front-runner is hawkish former Prime Minister Benjamin Netanyahu, who has made clear he favors sticks over carrots when it comes to Hamas.

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Analysis: US, Israel could coax Hamas to moderate

Image via Wikipedia

The Associated Press

Postwar Gaza could become a test of President Barack Obama's inauguration speech offer to hard-liners to "extend a hand if you are willing to unclench your fist."
The extended hand would be open borders and international reconstruction money for Hamas-ruled Gaza. The unclenched fist would be the Islamic militants holding their fire against Israel and giving their moderate Fatah rivals a foothold in the coastal strip.
After an Israeli offensive that killed nearly 1,300 Palestinians and left much of Gaza in ruins, the new U.S. administration and a soon-to-be new Israeli government have a chance to forge a fresh strategy toward Hamas.
The war appears to have shaken up Mideast politics and the international community could leverage Gaza's postwar reality to boost moderates in the region, taking advantage of the fact that Hamas desperately needs help following the Israeli onslaught.
That could mean giving Hamas what it most wants -- an open border with Egypt -- as long as Fatah and international monitors control it. Any such deal would also require providing assurances to Israel that Hamas will stop smuggling weapons over the Egyptian border.
Extending Hamas a hand runs the risk of cementing the militants' power in Gaza. But a deal with strings attached could chip away at Hamas' stranglehold on the territory, which has been the main impediment to U.S.-backed Israeli-Palestinian peace talks.
Hamas, which has been holding victory rallies in Gaza despite suffering enormous losses from Israel's assault, is not about to suddenly recognize the Jewish state or join the peace talks between Israel and the moderate Palestinian leadership in the West Bank.
But the war proved Hamas is not a monolith. Divisions emerged between the group's Syria-based leadership, which opposed a cease-fire, and those inside Gaza who felt the bloodletting had to stop.
Hamas appears to have evolved since the days when it regularly invited youngsters to strap on bombs and blow themselves up inside Israel. Today, after violently seizing control of Gaza in June 2007, the group seems as interested in successful governance as attacking Israel.
Many Israelis believe Hamas' decision to fire rockets at Israel at the end of a six-month truce -- a decision that sparked the latest war -- was based solely on the group's hatred of Zionists. But the reality is more complicated.
Hamas was deeply disappointed the original truce did not bring a deal to reopen the borders of Gaza, which Israel and Egypt have blockaded since Hamas seized power. The closure destroyed almost all private enterprise in the territory of 1.4 million people, exacerbating misery in a place where 80 percent of the people need U.N. food handouts to survive.
Gazans found themselves without cement to build new apartments or make gravestones for the dead. Ninety percent of the territory's 3,600 factories shut down because of a lack of spare parts and raw materials.
And Israel's military offensive inflicted an estimated $2 billion in damage.
Rebuilding would seem impossible under the current border regime.
"Nobody in his right state of mind can talk about reconstruction in Gaza with the crossings continuing to be ... closed," Palestinian Prime Minister Salam Fayyad said in the West Bank this week.
Since trade links between Israel and Gaza are unlikely as long as Hamas remains sworn to Israel's destruction, efforts to ease the blockade are concentrating on opening the border with Egypt.
Fayyad made an urgent plea for reconciliation between Fatah and Hamas, saying the alternative is a permanent rift that will destroy Palestinians' dreams for a state of their own.
Current international proposals for a durable Gaza truce envision allowing Fatah back into Gaza to help monitor a reopened crossing into Egypt, an outcome that could be a first step toward moderates regaining a foothold in Gaza.
Hamas leaders have been defiant since a tentative cease-fire took hold Sunday, But Hamas spokesman Fawzi Barhoum made a point of not rejecting Obama's inaugural overture.
Israel remains Hamas' enemy, he said. "That does not mean we cannot open a new page with the whole world, including the new elected American administration if they support the Palestinian people's just rights."
To be sure, no truce deal will be possible unless Israel is assured Hamas will stop firing rockets at Israel and smuggling increasingly lethal weapons across the Gaza-Egypt border.
Israel has scheduled an election Feb. 10 and none of the top candidates for prime minister has shown any willingness to rethink the position on Hamas. And the front-runner is hawkish former Prime Minister Benjamin Netanyahu, who has made clear he favors sticks over carrots when it comes to Hamas.

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Obama: Amaze us!

Image by BL1961 via Flickr

Global Research
By Michael Carmichael
planetarymovement.com

As Barack Obama approaches the helm of the American ship of state, he is facing many challenges.
Just as she was being born at the dawn of her journey into history, the American nation is poised on the brink of a new beginning. In those revolutionary times, America faced a roiling sea of danger, uncertainty and trepidation. Today, after more than two centuries of venture, America moves forward beyond and away from the final and most tragic acts of the second Bush presidency.
The American journey has been filled with triumph and tragedy. Triumph over the bonds of colonialism transformed into the tragedy of slavery, Manifest Destiny and the genocide of Native Americans followed by Civil War. Abolition began to right the wrongs of slavery, but America careened forward into the excesses of the Gilded Age and the arrogance of her Imperialist Presidency that extended her empire to the islands of the Pacific Ocean and the Caribbean Sea.
The Roosevelts expanded the American vision to encompass economic justice, environmental preservation and the duty to deliver peace beyond our borders. At the same time, American philosophers advocated the virtue of selfishness, the goodness of greed and the siren song of supply side trickle down economic miracles, while Martin Luther King, Jr. marched to the beat of a different drummer to demand the fulfillment of civil rights for our black brothers and sisters.
In an ancient scenario, the culture of greed infiltrated the American defense establishment and commandeered the ship of state to instigate conflicts and to impose its will by force. American power came into conflict with competing ideologies promising a better and more just society through cooperation rather than competition. For more than three-quarters of a century, America has moved forward toward its promise of freedom for all her people: freedom of speech; freedom of religion; freedom from want and freedom from fear.
FDRAs Barack Obama approaches the dais to take his oath of office, he is focused on delivering the four freedoms to all Americans. Each of FDR's four freedoms is in danger in America today. Freedom of speech was curtailed in pursuit of solidarity against the Axis of Evil in the War on Terror. Freedom of religion is under threat as Muslims are treated like criminals and terrorists. Freedom from want is on its deathbed, for millions of Americans have been expelled from their homes, banished from their workplaces and shunned by their employers. Freedom from fear has vanished, as Americans are convulsed in a paroxysm of panic apprehensive about their financial security and in fear for their very lives.
Barack Obama faces an insurmountable Himalaya of fear. In its face, Obama brings a message of hope for change. Obama erases fear with the promise of hope. Now he must turn to the people of America and deliver the four freedoms they have been promised.
Obama faces anxiety over the economy. While there are differences of opinion about what must be done and what must not be done, Obama has few choices. Obama's errant predecessor capitulated to the demands of his capitalist coterie for massive federal bailouts of financial institutions. With the bloated banking system now in bankruptcy, the calls for government regulation from Wall Street and the Federal Reserve will herald the beginning of state capitalism, a propagandistic oxymoron for a socialized banking system. While the incomes of financiers, bankers and others will shrivel, the confidence of the American people will be restored. The new American banking system will resemble a vast public utility, where salaries are strictly limited and profits are regulated.
But, the American people fear for their very lives today. Faced with the rapacious appetite for corporate profit that no population of any other industrialized nation faces, Americans spend more than twice what citizens of other democracies spend for their healthcare. In order to restore the freedom from fear, Obama must deliver a better system for healthcare that will be nothing less than revolutionary for it must delete the profitability of illness, injury and disease from the national vocabulary. The people of America are suffering through a stupefying crescendo of ghoulish greed that is pervasive thoughout the healthcare industry. Obama believes that healthcare is a human right that government must deliver to a free people to ensure that they do not experience fears for their own lives.
statue of liberty dark and direBut, Americans fear for more than their financial futures and their health, they fear for their very existence under threat from those who would destroy the fabric of our society - the terrorists. Bush launched his War on Terror to galvanize political support for a Gotterdammerung of Islamist terrorists. In the process, Bush triggered a massive avalanche of fear within America that has led to two immoral and counterproductive wars in Asia. America's standing in the world has been toppled from the top of a tall column. For the world at large, the Statue of Liberty has lost all meaning. America's prestige has morphed into a global loathing of the stars and stripes. In 2008, America has become the most feared and hated nation on earth.
Like no other president before him, Obama faces a global challenge to America's faltering leadership. To address the global challenge, Obama must replace opprobrium with trust and restore equilibrium with peace. American Muslims must be freed from the burdens of ostracism, stereotyping and the prison of Guantanamo. But, the closure of Guantanamo will be only the first step. The American prison population has inflated beyond all sense of reason. Alone among all other nations, America imprisons one out of every one hundred of its citizens. For shame, more American prisoners are from the black and tan minorities rather than from the white majority. The American prison-industrial complex has transformed the land of the free into a police state where minorities are incarcerated for misdemeanors while whites go free for felonies. Obama must right this terrible wrong that tarnishes America's luster in the eyes of the world.
Even more importantly, Obama must forge a new foreign policy that does not genuflect to the Pentagon and resort to military interventions and wars to enforce American power by the simplsitic application of force -- for force has failed America in Korea, Vietnam, Afghanistan and Iraq. In the Information Age, hard power is indeed outmoded, outdated, obsolete and counterproductive. Soft power is now the only instrument available for forging ahead on the global seas of commerce, ecology and culture.
camp david accords bwObama's global challenges are manifold, but none more difficult than in the Middle East. In recent days, hard power inflicted pain and destruction in the Arab-Israeli conflict. America's involvement in the Middle East has not delivered peace or security of the freedom from fear to the peoples of the Middle East. Since the Camp David Accords and the Oslo Agreement, the Middle East has devolved into conflict and crisis. Under George W. Bush, American policy made the insufferable situation worse by launching the wars in Iraq and Afghanistan and unwise favoritism in the Arab-Israeli conflict. Nowhere does Obama face a more difficult challenge than in the Middle East, but in challenge therein resides opportunity - a unique opportunity to redefine America's vision in the eyes of the world.
On Wednesday, the 21st of January 2009, Barack Obama will enter the Oval Office where he will wield the power of the American nation. On that date, the world will judge him for the priorities he engages from the very outset of his presidency.
While he has promised America that he will order the cessation of torture, the withdrawal from Iraq, the final phase of the war in Afghanistan and the restructuring of American involvement with the Arab-Israeli conflict, Obama's global reputation will be cast in the flames of the forge.
In that moment and in the others rapidly to come, we shall learn the extent and the tenor of the change Obama will bring - not only to America but to the tiny planet where he will be the most powerful leader in world history, a leader for all peoples - for better or worse -- and it is indeed quite difficult to imagine how he might be worse than George W. Bush.
obama bwPresident Obama, the time is now ripe. Bring on all the changes you have promised from sea to shining sea and from nation unto nation - you must now bring peace unto all the nations of the earth. We, Americans who summoned and supported you are waiting; the nations are gazing intently upon you. Amaze us.
Disclaimer: The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Centre for Research on Globalization. The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible or liable for any inaccurate or incorrect statements contained in this article.
To become a Member of Global Research
The CRG grants permission to cross-post original Global Research articles on community internet sites as long as the text & title are not modified. The source and the author's copyright must be displayed. For publication of Global Research articles in print or other forms including commercial internet sites, contact: crgeditor@yahoo.com
www.globalresearch.ca contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of "fair use" in an effort to advance a better understanding of political, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than "fair use" you must request permission from the copyright owner.
For media inquiries: crgeditor@yahoo.com
© Copyright Michael Carmichael, planetarymovement.com, 2009
The url address of this article is: www.globalresearch.ca/PrintArticle.php?articleId=11908
© Copyright 2005-2007 GlobalResearch.ca
Web site engine by Polygraphx Multimedia © Copyright 2005-2007

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Obama: Amaze us!

Image by BL1961 via Flickr

Global Research
By Michael Carmichael
planetarymovement.com

As Barack Obama approaches the helm of the American ship of state, he is facing many challenges.
Just as she was being born at the dawn of her journey into history, the American nation is poised on the brink of a new beginning. In those revolutionary times, America faced a roiling sea of danger, uncertainty and trepidation. Today, after more than two centuries of venture, America moves forward beyond and away from the final and most tragic acts of the second Bush presidency.
The American journey has been filled with triumph and tragedy. Triumph over the bonds of colonialism transformed into the tragedy of slavery, Manifest Destiny and the genocide of Native Americans followed by Civil War. Abolition began to right the wrongs of slavery, but America careened forward into the excesses of the Gilded Age and the arrogance of her Imperialist Presidency that extended her empire to the islands of the Pacific Ocean and the Caribbean Sea.
The Roosevelts expanded the American vision to encompass economic justice, environmental preservation and the duty to deliver peace beyond our borders. At the same time, American philosophers advocated the virtue of selfishness, the goodness of greed and the siren song of supply side trickle down economic miracles, while Martin Luther King, Jr. marched to the beat of a different drummer to demand the fulfillment of civil rights for our black brothers and sisters.
In an ancient scenario, the culture of greed infiltrated the American defense establishment and commandeered the ship of state to instigate conflicts and to impose its will by force. American power came into conflict with competing ideologies promising a better and more just society through cooperation rather than competition. For more than three-quarters of a century, America has moved forward toward its promise of freedom for all her people: freedom of speech; freedom of religion; freedom from want and freedom from fear.
FDRAs Barack Obama approaches the dais to take his oath of office, he is focused on delivering the four freedoms to all Americans. Each of FDR's four freedoms is in danger in America today. Freedom of speech was curtailed in pursuit of solidarity against the Axis of Evil in the War on Terror. Freedom of religion is under threat as Muslims are treated like criminals and terrorists. Freedom from want is on its deathbed, for millions of Americans have been expelled from their homes, banished from their workplaces and shunned by their employers. Freedom from fear has vanished, as Americans are convulsed in a paroxysm of panic apprehensive about their financial security and in fear for their very lives.
Barack Obama faces an insurmountable Himalaya of fear. In its face, Obama brings a message of hope for change. Obama erases fear with the promise of hope. Now he must turn to the people of America and deliver the four freedoms they have been promised.
Obama faces anxiety over the economy. While there are differences of opinion about what must be done and what must not be done, Obama has few choices. Obama's errant predecessor capitulated to the demands of his capitalist coterie for massive federal bailouts of financial institutions. With the bloated banking system now in bankruptcy, the calls for government regulation from Wall Street and the Federal Reserve will herald the beginning of state capitalism, a propagandistic oxymoron for a socialized banking system. While the incomes of financiers, bankers and others will shrivel, the confidence of the American people will be restored. The new American banking system will resemble a vast public utility, where salaries are strictly limited and profits are regulated.
But, the American people fear for their very lives today. Faced with the rapacious appetite for corporate profit that no population of any other industrialized nation faces, Americans spend more than twice what citizens of other democracies spend for their healthcare. In order to restore the freedom from fear, Obama must deliver a better system for healthcare that will be nothing less than revolutionary for it must delete the profitability of illness, injury and disease from the national vocabulary. The people of America are suffering through a stupefying crescendo of ghoulish greed that is pervasive thoughout the healthcare industry. Obama believes that healthcare is a human right that government must deliver to a free people to ensure that they do not experience fears for their own lives.
statue of liberty dark and direBut, Americans fear for more than their financial futures and their health, they fear for their very existence under threat from those who would destroy the fabric of our society - the terrorists. Bush launched his War on Terror to galvanize political support for a Gotterdammerung of Islamist terrorists. In the process, Bush triggered a massive avalanche of fear within America that has led to two immoral and counterproductive wars in Asia. America's standing in the world has been toppled from the top of a tall column. For the world at large, the Statue of Liberty has lost all meaning. America's prestige has morphed into a global loathing of the stars and stripes. In 2008, America has become the most feared and hated nation on earth.
Like no other president before him, Obama faces a global challenge to America's faltering leadership. To address the global challenge, Obama must replace opprobrium with trust and restore equilibrium with peace. American Muslims must be freed from the burdens of ostracism, stereotyping and the prison of Guantanamo. But, the closure of Guantanamo will be only the first step. The American prison population has inflated beyond all sense of reason. Alone among all other nations, America imprisons one out of every one hundred of its citizens. For shame, more American prisoners are from the black and tan minorities rather than from the white majority. The American prison-industrial complex has transformed the land of the free into a police state where minorities are incarcerated for misdemeanors while whites go free for felonies. Obama must right this terrible wrong that tarnishes America's luster in the eyes of the world.
Even more importantly, Obama must forge a new foreign policy that does not genuflect to the Pentagon and resort to military interventions and wars to enforce American power by the simplsitic application of force -- for force has failed America in Korea, Vietnam, Afghanistan and Iraq. In the Information Age, hard power is indeed outmoded, outdated, obsolete and counterproductive. Soft power is now the only instrument available for forging ahead on the global seas of commerce, ecology and culture.
camp david accords bwObama's global challenges are manifold, but none more difficult than in the Middle East. In recent days, hard power inflicted pain and destruction in the Arab-Israeli conflict. America's involvement in the Middle East has not delivered peace or security of the freedom from fear to the peoples of the Middle East. Since the Camp David Accords and the Oslo Agreement, the Middle East has devolved into conflict and crisis. Under George W. Bush, American policy made the insufferable situation worse by launching the wars in Iraq and Afghanistan and unwise favoritism in the Arab-Israeli conflict. Nowhere does Obama face a more difficult challenge than in the Middle East, but in challenge therein resides opportunity - a unique opportunity to redefine America's vision in the eyes of the world.
On Wednesday, the 21st of January 2009, Barack Obama will enter the Oval Office where he will wield the power of the American nation. On that date, the world will judge him for the priorities he engages from the very outset of his presidency.
While he has promised America that he will order the cessation of torture, the withdrawal from Iraq, the final phase of the war in Afghanistan and the restructuring of American involvement with the Arab-Israeli conflict, Obama's global reputation will be cast in the flames of the forge.
In that moment and in the others rapidly to come, we shall learn the extent and the tenor of the change Obama will bring - not only to America but to the tiny planet where he will be the most powerful leader in world history, a leader for all peoples - for better or worse -- and it is indeed quite difficult to imagine how he might be worse than George W. Bush.
obama bwPresident Obama, the time is now ripe. Bring on all the changes you have promised from sea to shining sea and from nation unto nation - you must now bring peace unto all the nations of the earth. We, Americans who summoned and supported you are waiting; the nations are gazing intently upon you. Amaze us.
Disclaimer: The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Centre for Research on Globalization. The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible or liable for any inaccurate or incorrect statements contained in this article.
To become a Member of Global Research
The CRG grants permission to cross-post original Global Research articles on community internet sites as long as the text & title are not modified. The source and the author's copyright must be displayed. For publication of Global Research articles in print or other forms including commercial internet sites, contact: crgeditor@yahoo.com
www.globalresearch.ca contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of "fair use" in an effort to advance a better understanding of political, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than "fair use" you must request permission from the copyright owner.
For media inquiries: crgeditor@yahoo.com
© Copyright Michael Carmichael, planetarymovement.com, 2009
The url address of this article is: www.globalresearch.ca/PrintArticle.php?articleId=11908
© Copyright 2005-2007 GlobalResearch.ca
Web site engine by Polygraphx Multimedia © Copyright 2005-2007

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Progressive Revolution: We Can't Afford to Play Small-Ball and Tip-Toe Around Right-Wingers Anymore

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Alternet.org

The following is an excerpt from chapter 8 of Mike Lux's new book, "The Progressive Revolution: How the Best in America Came to Be" (Wiley, 2009). In this text, Lux argues that a "culture of caution" dominates Democratic politics in the modern era: "When you try something big and fail, even if the failure is due in great part to your own timidity, you only become more cautious. The failure of health-care reform made President Clinton more cautious, and he started playing small ball." As Obama's inauguration approaches, progressives and Democrats in Washington need to overcome their fears of proposing bold policies and stand up for the kind of America they believe in.
When Barack Obama based much of his 2008 Presidential campaign on the theme of hope, he certainly wasn't the first candidate to make that pitch. And when John McCain, George W. Bush, and Dick Cheney, during the years since 9/11, preached fear and more fear and nothing but fear, they weren't the first to do that, either. The entire history of American political debate can, in some sense, be described as the argument between the hope of progressives for a better future vs. the fear of conservatives who want to protect the way things are now.
In recent decades, neither party has been able to get a toehold as an enduring political majority. The Republicans' problem has been that they aggressively overreach, and then their rather extreme policy prescriptions just don't work. We get wars with no exit plans, side tax cuts that result in gigantic deficits, and voluntary goals for industry that never result in anything tangible happening.
For Democrats, the problem has been the opposite. They have been so beaten down by the conservative attack machine that they have allowed themselves to get into the habit of being cautious. When in power, they have had decent policy ideas that have produced pretty good results, but the results aren't substantial enough to make permanent changes or get voters excited about what Democrats are trying to accomplish. Since the tumultuous change decade of the 1960s and the ugly backlash that followed it, Democrats have often been too scared to think big about progressive change, and it has hurt them. ...
Fear and Conservatism
Fear has been a staple of every generation of conservatives .... Fear of the democratic mob. Fear of the freed slave. Fear of the liberated woman destroying the traditional family. Fear of freethinkers destroying religion. Fear of communism. Fear of gays and lesbians. Fear of hippies, "free love," and the drug culture. Fear of the immigrant. In a bizarre twist, Social Darwinism gave us fear of the weak, and in the modern version of Social Darwinism, Reagan gave us fear of the poor on welfare. Post-9/11, you can now add in the ever-potent fear of terrorism. Sadly, while some of those fears have faded with the passage of history, many remain with us, still powerful.
Many conservatives still fear feminism, sometimes to a hilarious degree. Here is one of my all-time favorite quotes, from the inimitable Pat Robertson: "[Feminism] is about a socialist, anti-family political movement that encourages women to leave their husbands, kill their children, practice witchcraft, destroy capitalism and become lesbians."
I had no idea feminism was so comprehensive, but there you have it. Of course, many men who are threatened by strong women aren't quite so hysterical, but like threatened people everywhere, they love to mock. Rush Limbaugh, who coined the feminazi, has this definition of feminism: "Feminism was established so as to allow unattractive women easier access to the mainstream of society."
The prospect of empowered women isn't the only fear that conservatives have carried throughout the years of our nation's existence. They have always feared free thinking, which opens the door to a range of ideas and beliefs. The notion that their children might be exposed to any ideas or scientific theories that are different from what is being taught at home, as exemplified by the battles that are fought daily about public education, still scares conservatives a great deal. Read articles from any local newspaper about the nature of their resistance-to the teaching of evolution, the discussion of global warming, the assignment of certain books by English teachers, and so on-and you will see parents who are terrified that their own children might learn a way of thinking contrary to their own.
Fears of communism and welfare have faded somewhat in the last twenty years because of the fall of the Soviet Union and the passage of welfare reform, but they have been quickly replaced by conservatives' finding new things to scare voters with. Terrorism and immigrants have become the new hot-button excuses for pushing the political fear button. Or maybe I should amend that: terrorism, at least, is relatively new as a major fear for voters because until 9/11, people knew it could be a problem but didn't worry about it much. After 9/11, it became the biggest thing Americans were scared of. Immigration, on the other hand, is a very old fear that conservatives have been exploiting with renewed vigor in recent years.
In the early days of the United States, immigrants were generally quite welcome because the country had an ever expanding need for new workers, farmers, and pioneers to go out west. But by the 1850s, as more poor and working-class Irish journeyed across the Atlantic to settle here, the combination of anti-poor and anti-Catholic bigotry stirred up the vicious anti-immigrant movement called, appropriately enough, the Know-Nothings (the name came from the fact that their leaders swore an oath of secrecy about being involved in the movement, so that if asked about it, they said they knew nothing).
To join the organization of the original Know-Nothing movement, the Order of the Star-Spangled Banner, you had to be white and male, be born in the United States, and not only be Protestant but have no family connection whatsoever to Catholicism. The Know-Nothing political party, called the American Party, won nine gubernatorial seats and controlled at least one branch of the legislature in six states during the mid-1850s. It ran former president Millard Fillmore as its presidential candidate in the 1856 election, and he received about a quarter of the votes. But the movement quickly faded because the slavery issue soon overwhelmed everything else.
Throughout the late 1800s, another conservative period in U.S. history, immigration was regularly featured in the American political debate. Concerns about Chinese immigrants in California and Irish immigrants in the east were a constant refrain in the arguments against voting rights and civil rights. Sadly, even the populist movement was tainted by anti-immigrant rhetoric, as well as by its alliance with southern segregationists.
The Chinese Exclusion Act was the first major restriction on immigration. Passed in 1882, it prohibited most immigration from Asia and took away the right of Chinese immigrants to become citizens. However, it was after World War I that anti-immigrant zeal truly reached its peak. Fearing a wave of postwar refugees and gripped by the conservative frenzy of the times, Congress passed legislation, in 1921 and 1924, that restricted immigration. The Emergency Quota Act of 1921 limited European immigration to 3 percent of the total population of each European nationality living in the United States as of 1910. The Immigration Act of 1924 went much further, limiting European immigration to 2 percent of each nationality living in the United States as of 1890.
Just as conservatives do today, back then they also used people's fear of immigrants to attack other progressive ideas and legislation. Congressional opponents of the 14th and 15th amendments, for example, worried that immigrants would take advantage of these new voting rights. In the 1920s and earlier, immigrant bashers were anxious about what kinds of communists, socialists, and anarchists might be coming over to contaminate our population.
For example, a San Francisco newspaper, the Daily American printed the following editorial in April 1881:
Steamships are vomiting forth rotten cargoes of a thousand Chinese fortnightly, smitten and cursed with the plague of small-pox, and with other deadly plagues. The one-hundred thousand Chinese on this coast today, without family ties, with no elements of a prosperous immigration, the bronze locusts from Asia, plague-bearing[,] are eating out the substance which rightly belongs to the patrimony of the people.The single Chinese immigrant does, in this sense, usurp the place of a family. Trades and industries languish. The evils of Chinese immigration are upon us full force, aggregated by obstructions which originated with politicians who care more for some petty interest of party (the democratic party) than for the great and vital interests of the country.
If you think that was then and things have progressed, here are a couple of quotes from the current leadership of the anti immigration movement. The first comes from Congressman Virgil Goode of Virginia, who gained notoriety when he criticized Keith Ellison's choice to be sworn in using a copy of the Koran, rather than the Bible. Good warned his constituents, "If American citizens don't wake up and adopt the Virgil Goode position on immigration, there will likely be many more Muslims elected to office." He also had this to say about Hispanic immigration: "My message to them is, not in two weeks, not in two months, not in two years, never! We must be clear that we will not surrender America and we will not turn the United States over to the invaders from south of the border."
Another anti-immigration leader, Joseph Turner -- a staff member of the most powerful anti-immigration lobbying group, Federation for American Immigration Reform (FAIR) -- recently said this in a letter to anti-immigration contributors: "Our enemies are bloodied and beaten. We cannot relent. Our boot is on their throat and we must have the willingness to crush their "throat" so that we can put our enemy down for good. The sovereignty of our nation and the future of our culture and civilization are at stake. The United States culture is man's salvation. If we perish, man perishes."
These statements were made in 2006 and 2007, not in some long-ago debate when social conventions and attitudes were different. And they were not the ravings of marginal crazies or rabid talk-show hosts; they were made by a senior member of the Republican caucus in Congress and by a leader of one of the biggest organizations working on the anti-immigration side of the aisle.
These are legitimate issues to debate in terms of immigration policy. Having better border security is a good thing, and we should be worried about corporations that try to exploit immigrant labor. But we can work those issues through and create a legitimate path to citizenship for immigrants without resorting to the fearmongering of the right wing.
Just as stopping the spread of totalitarian communism and keeping us safe from Soviet aggression during the Cold War were important objectives, today we need to deal with the real threat of terrorism. Many thoughtful suggestions, such as those generated by the Hart-Rudman commission and the 9/11 Commission, have been put forward. Important issues like securing the uranium from old Soviet weapons sites and keeping it away from the hands of terrorists, as well as safeguarding our own country's nuclear and chemical facilities to a greater degree, ought to be priorities for the U.S. government. What is fundamentally wrong, though, is turning the fear of terrorism into a political football, as Bush, Cheney, and other right-wingers have done.
Here's George W. Bush in 2004: "The Democrat approach in Iraq comes down to this: The terrorists win and America loses. That's what's at stake in this election."
And Dick Cheney: "If we make the wrong choice, then the danger is that we'll get hit again-that we'll be hit in a way that will be devastating from the standpoint of the United States."
Comparing a politician to Joe McCarthy is pretty strong stuff, but I find it hard to avoid the comparison when we live in a time when government officials spout the rhetoric I've just quoted. Using fear to justify virtually everything you want to do-from torture to absurd levels of government secrecy, to a war with no exit plan, to no-bid contracts for your biggest contributors, to violating the law and the constitution with warrantless wiretapping-is fundamentally wrong. Just as John Dean said that the Bush administration scandals have been the worst since Watergate, I'd be inclined to argue that Bush's and the Republicans' fearmongering over terrorism has been worse than McCarthy's fearmongering over Communism. ...
On my blog, OpenLeft.com, I have written about the timidity of Democrats in terms of both policy and politics. I call it the "culture of caution," a name I thought of in 2005 when my Democratic friends on Capitol Hill began to talk about the Republicans' culture of corruption. I liked that phrase and used it a lot myself in attacking the Republicans in 2005 and 2006, but I also thought, well, that is their problem, while ours is a culture of caution. ...
The Culture of Caution
In the culture of caution that dominates Democratic politics in the modern era, when you try something big and fail, even if the failure is due in great part to your own timidity, you only become more cautious. The failure of health-care reform made President Clinton more cautious, and he started playing small ball. President Clinton famously advocated support for things like school uniforms and agreed to support bad Republican bills on welfare reform and telecommunications reform. Clinton deserves credit for standing up to Republicans in the 1995 budget showdown, a decision that was the most important factor in his winning re-election, and for the other achievements I mentioned previously. For the most part, however, his last six years in office were a time of very modest policy ideas.
The culture of caution hurt the Democrats' political strategy as well. When the Lewinsky scandal and the impeachment fight with the Republicans reared their ugly heads in 1998, I was working for the progressive group People for the American Way. We got heavily involved in opposing the impeachment and worked alongside the activists who eventually started MoveOn.org. We ran ads saying that it was time for the country to stop worrying about a sex scandal and "move on." Many Democratic politicians were horrified at those ads, convinced that by mentioning the issue we would just remind voters of what they didn't like about Clinton. We were asked by the party committees and the top members of Congress to pull them, but our focus groups had convinced us that we were right and should stand out ground. The message worked so well that candidates running in competitive races started to use the message in the ads, and, eventually, even the party committees did as well. Democrats picked up five seats in the 1998 elections and thereby stunned the pundits of conventional wisdom, who had widely predicted Democratic losses of thirty seats or more in Congress. It was the best showing for the party of a president in his sixth year in office in history since 1822, when James Monroe essentially had no opposition party. But Democrats would likely have won control of Congress if the Democratic establishment had not been so cautious for so long about facing the impeachment issue.
When Bush took over and exhibited an aggressive form of ideological partisanship never before seen in modern history, Democrats sometimes stood up to him, but all too frequently, they rolled over. This was especially true on national security and civil liberties issues after 9/11.
In 2002, when the authorization vote on the Iraq War came up, I was told in confidence by a top aide to Dick Gephardt that if Democrats would cut a deal with Bush on the war, the issue would go away and Democrats would win the 2002 election on domestic issues. That same cycle, I was told by a top pollster for the party committees that Democrats should just avoid talking about national security altogether because it wasn't our strongest issue.
Of course, this strategy didn't work out so well, as Democrats went down to an ugly defeat in the 2002 election, where security issues dominated. In fact, Gephardt's strategy of cutting a deal with Bush was a political disaster. Progressive antiwar Democrats were divided and discouraged, and the Republicans attacked the Democrats just as hard as they would have otherwise on national security. The deal also played out poorly in the 2004 elections because John Kerry could never quite explain why he had voted for the war, even though he later said that he opposed it.
The most aggravating thing about the Democratic culture of caution is how strong it is, even when the aggressive approaches are working. Too many Democrats remained cautious despite their win in 2006 using heavily populist and antiwar campaigns, and even when Bush's approval ratings and credibility had gone down the tubes. In 2007 and 2008, Democrats caved multiple times on war-related votes and on civil liberties; they lived in fear that a president with a 30 percent approval rating would call them soft on terrorism.
Although I regret that the Democrats haven't stood up to Bush more on security and civil liberties issues, and I think they could have easily survived politically if they had, there is at least a stronger argument for being politically careful on those issues -- voters are really scared of terrorism, and the message for Democrats on security issues is complicated. On domestic policy, though, Democrats have also failed to be strong advocates of dramatic new initiatives. The minimum wage and ethics initiatives they passed were solid achievements; forcing Bush to veto S-CHIP has been a worthy political fight to engage in, as was compelling him to veto legislation to withdraw troops from Iraq. The compromise energy bill that the Democrats passed and got Bush to sign had some respectable policy initiatives in it although it also had some poor ideas. But Democrats have failed to provoke major battles with Bush and the Republicans to illustrate how important their policy differences are.
Mike Lux is the author of The Progressive Revolution: How the Best in America Came to Be (Wiley, 2009), and is the co-founder and President of Progressive Strategies. Since starting the company, Mike has launched a number of important projects, including American Family Voices, an issue advocacy group working on pocketbook issues for American families; and the Progressive Donor Network, which works to coordinate a network of individual donors, issue advocacy groups, and top flight political consultants and strategists.
© 2009 Wiley All rights reserved.
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