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from Ian Bremmer:

End the foreign policy shutdown

Ever since the government shutdown began, various federal departments have been forced to furlough nonessential personnel. The specter of the United States’ first default in history has become a bargaining chip for American politicians. That has rankled the international community, and it only compounds the backlash we’ve seen recently in response to Obama’s flip-flopping on a Syria strike and the NSA surveillance revelations. It’s clear that international consternation is not enough of an incentive for the United States to change its behavior. As I wrote recently in this column, foreign policy simply isn’t a priority for the Obama administration.

Buffeted by the shutdown crisis and leery of the coming debt ceiling fight, Barack Obama canceled his trip to Asia last week, where he would have attended the Asia-Pacific Economic Cooperation conference. Obama sent John Kerry in his stead to shake hands, dress in funny outfits, and engage in all the other usual hallmarks of a foreign convention of leaders. Obama was right to think that had he attended himself, the optics wouldn’t have worked in his favor. He would have looked distant and overly-casual to the crises at home if he were in Bali glad-handing with foreign leaders. But the point is not whether Obama made the right decision to cancel -- he did -- but whether he made the best decision possible. He could have done more, which we’ll get to in a bit. But instead of thinking creatively, the administration checked down to the obvious decision and simply sent Kerry.

What’s at stake at the APEC conference? The validity of America’s “pivot to Asia,” a hallmark of the administration’s first term, and a strategy that was beginning to succeed in the region. As the New York Times wrote earlier this week, without the U.S. at the APEC conference, it’s China’s stage. And that’s a problem when the United States is in the middle of trying to negotiate and complete the Trans-Pacific Partnership (TPP). The TPP is the most important trade agreement on the world agenda right now; should all the countries in discussions join, its members would constitute almost 40 percent of world GDP -- a coalition of more than a dozen of the most important Pacific powers. The deal would liberalize trade, foster more market access for U.S. firms in the region, and serve a deeper geopolitical purpose: it would give the U.S. a larger stake in regional stability. In other words, the agreement would put American skin in the game and confirm the Asia pivot, as likeminded countries try to hedge against the rise of a Chinese-led system that is not in accordance with their norms and standards.

The TPP is an agreement that pointedly excludes China (at least at first; it incentivizes China to make economic changes over the longer-term that align it with free market thinking in order to gain entry). But it’s tough to negotiate a U.S.-led trade deal when America’s president RSVP’s “No” and China’s leader Xi Jinping is running the show. I’ve spoken to senior officials in Indonesia who expressed personal disappointment with Obama’s no-show as well as their concerns about TPP closure. Other regional players are echoing these sentiments.

from The Great Debate:

The budget is its own ‘debt ceiling’

It could be that President Barack Obama and the Republican House of Representatives will again be able to avert fiscal and financial chaos through a short-term, ad hoc agreement on government funding and the “debt ceiling” limit. This would be good news for the world and its markets.

Going forward, however, we should repeal the 1917 Liberty Bond Act -- the source of the “debt ceiling” regime that everyone’s talking about. This was effectively superseded by today’s budget regime, enacted under the Congressional Budget and Impoundment Control Act of 1974. Making this explicit by repealing the 1917 “debt limit” regime is preferable to leaving things merely implicit as they are now.

from The Great Debate:

Antisocial genesis of the social cost of carbon

The day after his 2009 inauguration, President Barack Obama committed to “creating an unprecedented level of openness in government.”

He vowed to build on “transparency [that] promotes accountability by providing the public with information about what the government is doing,” “participation [that] allows members of the public to contribute ideas and expertise,” and “collaboration [that] actively engages Americans in the work of their government.”

from The Great Debate:

Ending the debt limit crisis: Dear Ben Bernanke

Warren Buffett calls the debt ceiling a “nuclear weapon, too horrible to use.” Obama administration official Jason Furman says the consequence of a default on U.S. government debt is “too terrible to think about.” When asked about a default, Wells Fargo strategist James Kochan simply commented, “Holy cripes.”

With this crisis, America is risking financial Armageddon. The default of Lehman Brothers on its $613 billion of debt ignited a chain reaction in the financial system, nearly destroying the U.S. economy. A default by the U.S. government on $17 trillion of debt -- debt that has been considered the safest in the world -- could be far worse.

from Ian Bremmer:

In pursuit of American humility

This week, as Washington navel-gazed its way into a shutdown, its actions didn’t go unnoticed abroad. In Turkey, Recep Tayyip Erdogan, the Prime Minister of Turkey, took the opportunity to gloat about the U.S.’s refusal to pay its federal workers, many of whom are on furlough because of the shutdown. “We are now witnessing the crisis in the U.S. We have never been a government that could not pay its personnel,” Erdogan said.

This is how America’s dysfunction at home is undermining its credibility abroad. The latest development: Obama’s desire to maintain laser focus on the Republicans for political gain has prompted him to cancel a pivotal trip to Asia to attend an Asia-Pacific Economic Cooperation meeting. But it’s not just the shutdown: it is a series of issues over the past decade, chief among them the financial crisis. For decades the U.S. had been espousing the virtues of free market capitalism, urging other countries to adopt the model. America’s exceptional economic success, the thinking went, allowed it to give advice about how other countries should build their own economies.

from The Great Debate:

Why this shutdown isn’t like 1995

The political battlefield of the current government shutdown looks a lot like the last big shutdown of 1995. But major changes within the Republican Party in Congress -- a weaker leadership, the demise of moderates and two decades of gerrymandering -- could make this year’s endgame far harder.

Then as now, a rebellious Republican Congress used a budget bill to set up a deliberate confrontation with a Democratic president over spending priorities. GOP militants and radicals in the House – today’s wing nuts -- bet that gridlock, disarray and the embarrassment of a shutdown would force the White House to give in.

from The Great Debate:

Forging ahead with free trade

The recent focus on what divides world leaders, from Syria to the euro zone, has obscured the significant agreements reached at the Group of 20 meeting in St. Petersburg earlier this month. One of the most important was support for free trade and opposition to protectionism.

We can now build on this momentum, as well as other trade liberalization efforts, to achieve meaningful progress at the World Trade Organization ministerial meeting in Bali in December.

from David Rohde:

The key stumbling blocks U.S. and Iran face

A historic phone call Friday between the presidents of the United States and Iran could mark the end of 34 years of enmity.

Or it could be another missed opportunity.

In the weeks ahead, clear signs will emerge whether a diplomatic breakthrough is possible. Here are several key areas that could determine success or failure:

from The Great Debate:

Ted Cruz: Blackmailer

On October 28, Senator Ted Cruz (R-Tex.) and his supporters may wish to commemorate the feast day of Saint Jude. Jude is the patron saint of hopeless causes. Because if ever there was a hopeless cause, it is killing the Affordable Care Act.

Fighting for hopeless causes is not uncommon in politics. Think of the nearly two centuries it took to abolish slavery and segregation in the United States. Fighting for a hopeless cause can raise public consciousness about an issue and advance the career of the advocate.

from The Great Debate:

For U.S.-Iran, it’s all in the timing

Four years after President Barack Obama famously extended his hand of friendship to Iran, Tehran finally seems willing to unclench its fist. The most decisive geopolitical handshake of this decade may take place today at the United Nations.

Iran's new president Hassan Rouhani and Obama may have this encounter at the luncheon of U.N. Secretary General Ban Ki-moon Tuesday or in the U.N building’s corridors.

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