The Great Debate UK

from The Great Debate:

Undercounting deaths in Iraq, Afghanistan

Bernd Debusmann- Bernd Debusmann is a Reuters columnist. The opinions expressed are his own -

By most counts, the death toll of U.S. soldiers in America's wars in Iraq and Afghanistan stood at 5,157 in the second week of September. Add at least 1,360 private contractors working for the U.S. and the number tops 6,500.

Contractor deaths and injuries (around 30,000 so far) are rarely reported but they highlight America's steadily growing dependence on private enterprise. It's a dependence some say has slid into incurable addiction. Contractor ranks in Iraq and Afghanistan have swollen to just under a quarter million. They outnumber American troops in Afghanistan and they almost match uniformed soldiers in Iraq.

The present ratio of about one contractor for every uniformed member of the U.S. armed forces is more than double that of every other major conflict in American history, according to the Congressional Budget Office. That means the world's only superpower cannot fight its war nor protect its civilian officials, diplomats and embassies without support from contractors.

"As the military operations in Iraq and Afghanistan have progressed, the military services, defense agencies and other stakeholder agencies...continue to increase their reliance on contractors. Contractors are now literally in the center of the battlefield in unprecedented numbers," according to a report to Congress by the bipartisan Commission on Wartime Contracting in Iraq and Afghanistan.

from The Great Debate:

Here lies the Great American Consumer

jamessaft1.jpg--James Saft is a Reuters columnist. The opinions expressed are his own--

Rest in peace, Great American Consumer. We will not see your like again.

"Cash-for-clunkers" aside, consumers seem bent on actually paying back debt rather than racking it up, a change that if sustained, as it is likely to be, will dampen economic growth not for months but for years, and not just in the U.S.

Outstanding U.S. consumer borrowing fell by a jaw-dropping $21.6 billion in July, according to data released this week by the Federal Reserve, five times more than analysts expected and the second largest monthly drop since the end of World War II.

from The Great Debate:

Energy realism and a green recovery

jay-pryor-- Jay R. Pryor is vice president of business development for Chevron. The views expressed are his own. --

The concept of a "green recovery" is a compelling topic of discussion at the World Economic Forum this week in Dailan, China. It stems from the United Nations Environment Program calling for investment of 1% of global GDP (nearly $750 billion) to promote a sustainable economic recovery.

from The Great Debate:

Worry about bank capital, not bonuses

jamessaft1--James Saft is a Reuters columnist. The opinions expressed are his own.--

The effort to rein in banking bonuses, outrageous as they may be, is akin to banning glue sniffing because you are worried about the effects of intoxication.

There are, as the kids in the alley behind the high school can tell you, other ways of getting high.

from The Great Debate:

Sun software is the tail wagging the dog

Eric Auchard-- Eric Auchard is a Reuters columnist. The opinions expressed are his own --

When Oracle agreed to buy Sun Microsystems for $7.4 billion in April, the headlines made much of the software maker's decision to enter the computer business 30 years late. At less than 10 per cent of sales, Sun's software business seemed an afterthought.

But Sun's software is now center stage after European competition regulators said on Thursday that they would withhold approval for the deal until they finish probing the impact of the Oracle-Sun merger on the database software market. The decision means the transaction faces at least a four-month delay, pushing it into early next year.

from The Great Debate:

Fresh thinking on the war on drugs?

Bernd Debusmann- Bernd Debusmann is a Reuters columnist. The opinions expressed are his own -There are times when silence can be as eloquent as words. Take the case of Washington's reaction to announcements, in quick succession, from Mexico and Argentina of changes in their drug policies that run counter to America's own rigidly prohibitionist federal laws. No U.S. expressions of dismay or alarm.Contrast that with three years ago, when Mexico was close to enacting timid reforms almost identical to those that became effective on August 21. In 2006, shouts of shock and horror from the administration of George W. Bush reached such a pitch that the then Mexican president, Vicente Fox, abruptly vetoed a bill his own party had written and he had supported.What has changed? Was it a matter of something happening in August, when most of official Washington is on holiday? Or was it a sign of greater American readiness to rethink a war on drugs that has, in almost four decades, failed to curb production and stifle consumption of illicit drugs? And that despite law enforcement efforts that resulted in an average of around 4,700 arrests for drug offences every single day since the beginning of the millennium. (Just under 40 percent of those arrests are for possession of marijuana).Or was it a matter of more countries realising that, as drug reform advocate Ethan Nadelmann puts it, "looking to the United States as a role model for drug control is like looking to apartheid-era South Africa for how to deal with race." Nadelmann heads the Drug Policy Alliance, one of several groups lobbying for reform of U.S. drug policies.Under the Mexican law that took effect in August, it is legal to possess small, precisely specified amounts, for personal use, of  marijuana, heroin, opium, cocaine, methamphetamine and LSD. In Argentina, the Supreme Court declared unconstitutional criminal sanctions for the possession of small quantities of marijuana for personal use. The ruling opened the door to legislation similar to Mexico's.Brazil decriminalised drug possession in 2006; Ecuador is likely to follow suit this year. In much of Europe, drug use (as opposed to drug trafficking) is treated as an administrative offence rather than a criminal act. America's hard-line approach has helped to make the United States the country with the world's largest prison population.Advocates of more flexible policies say they feel the winds of change beginning to rise in the administration of  Barack Obama, a president who has admitted that in his youth, he smoked marijuana frequently and used "a little blow"(of cocaine) when he could afford it. But hopes for a break from long-standing orthodoxy might be premature, even though a recent Zogby poll showed 52 percent support for treating marijuana as a legal, taxed and regulated drug.AMSTERDAM'S SCHIZOPHRENIC PRAGMATISM "As regards to legalization, it is not in the president's vocabulary and it is not in mine," Obama's drug czar, former Seattle police chief Gil Kerlikowske said in July. "Marijuana is dangerous and has no medicinal benefits."Oddly, he made the statement in California, where an estimated 250,000 people can legally buy marijuana with a letter of recommendation from their physician. The drug is used for a variety of illnesses, from chronic pain to insomnia and depression. There is extensive academic literature on the medical benefits of marijuana.Medical opinion, however, conflicts with the congressionally-mandated job description Kerlikowske inherited when he took up the post. It says that the director of the Office of National Drug Policy, the White House group in charge of drug war strategy, must "oppose any attempt to legalize the use of a substance listed in schedule I of section 202 of the Controlled Substances Act."Schedule I of the act, which took force in 1970 during the administration of Richard Nixon, the president who formally declared "war on drugs", places marijuana alongside powerfully addictive drugs such as heroin. The wrong-headed classification matches that of an international treaty, the 1961 United Nations Single Convention of Narcotics Drugs. The convention is a major obstacle for signatory countries that want to legalize drugs.No country has actually done that. Even the Netherlands, the Mecca of marijuana aficionados, operates on a system best described as schizophrenic pragmatism. Amsterdam's "coffee shops" are allowed to have 500 grams of marijuana on the premises and sell no more than 5 grams per person to people over 18. The runners who re-supply the shops routinely carry more than the legal quantity and violate the law. So do importers.While the failure of the drug war and the prohibitionist ideology that drives it have been analysed in great detail in scores of sober assessments by academics and government commissions, there have been few studies of the "how to" of legalization. What, for example, would happen to the criminal mafias that are now running a violent illicit business with a turnover estimated at more than $300 billion a year?Some drug traffickers would switch to other criminal activities and it is realistic to expect increases in such areas as cyber crime and extortion, according to Steve Rolles, Head of Research of the Transform Drug Policy Foundation, a British think tank. "But the big picture will undoubtedly show a significant net fall in overall criminal activity in the longer term," he said in an interview. "Getting rid of illegal drug markets is about reducing opportunities for crime."Rolles is author of the optimistically titled "After the war on drugs: Blueprint for Regulation," a book scheduled for publication in November and meant to kickstart a debate on what he sees as something of a blank slate - the specifics of regulation for currently illegal drugs.On a global scale, nothing much can happen unless there are changes in the world's largest and most lucrative market for drugs, the United States. If they happen, they won't happen fast. "I see this as a multi-generational effort, with incremental changes," said Nadelmann, who has been involved in drug policy since he taught at Princeton University in the late 1980s. "But for the first time, I feel I have the wind in my back and not in my face."(You can contact the author at Debusmann@Reuters.com)

from The Great Debate:

China stock jitters look overdone

WeiGucrop.jpg-- Wei Gu is a Reuters columnist. The opinions expressed are her own --

Just as Chinese stocks often rise without fundamental support, they are now tanking even though companies just had a better-than-expected earnings season.

Fears about a policy shift towards tighter liquidity are blamed for the 22 percent decline in the Shanghai market from its August peak. But those fears are largely overblown. Beijing might be talking about boosting domestic consumption, but structural reforms take time and there is little the authorities can do other than continuing to reinflate the economy in the short run.

from The Great Debate:

Obama’s Afghan war – a race against time

Bernd Debusmann(Bernd Debusmann is a Reuters columnist. The opinions expressed are his own)

By making the war in Afghanistan his own, declaring it a war of necessity and sending more troops, President Barack Obama has entered a race against time. The outcome is far from certain.

To win it, the new strategy being put into place has to show convincing results before public disenchantment with the war saps Obama's credibility and throws question marks over his judgment. Already, according to public opinion polls in August, a majority of Americans say the war is not worth fighting. Almost two thirds think the United States will eventually withdraw without winning.

from The Great Debate:

A brief, but welcome recovery in housing

jamessaft1.jpg(James Saft is a Reuters columnist. The opinions expressed are his own)

Activity in the U.S. housing market has bottomed - a huge plus for the economy - but a recovery in prices will not be sustained and the threat from real estate to bank capital remains acute.

We are over the worst, but only because of massive official support, support that will soon ebb. That could lead to a relapse, especially among more expensive houses, but nothing along the lines of what we have suffered so far.

from The Great Debate:

China’s bailout of Taiwan is good for the region

wei-gu.jpg-- Wei Gu is a Reuters columnist. The opinions expressed are her own --

If market performance is anything to go by, Taiwan is the biggest beneficiary of China's economic stimulus.

Because of Taiwan's heavy dependence on exports to Western consumers, it was assumed there was little Beijing could do about its downturn. But Beijing has gone out of its way to take care of the recession-hit island. This year, it sent several procurement missions to Taiwan to buy billions of dollars of goods, even though Taiwan's trade surplus with China is already approaching as much as a fifth of its economy.

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