Opinion

The Great Debate

Looking to diplomacy with Iran

President Barack Obama has decided to test whether Iranian President Hassan Rouhani’s “charm offensive” is a legitimate effort to reach an agreement on a more constricted and transparent Iranian nuclear program. With this decision, he embarks on the most transformative and important diplomatic initiative of his presidency.

The closest historical analogy is President Richard M. Nixon’s opening to China in 1971. Nixon had recognized a major adversary’s new willingness to change course and he seized the opportunity to further vital U.S. national security interests.

This China analogy, however, has some flaws. Most important, Nixon and his national security adviser Henry A. Kissinger began their quest in secrecy to avoid a divisive public debate that could have scuttled the initiative. Obama’s public commitment to test an opening to Iran, though, will be subjected to fierce scrutiny by domestic and foreign opponents.

But other historic analogies now being suggested do not work at all. The much cited Munich analogy of “appeasement” of Adolf Hitler on the eve of World War Two is absurd, since Iran’s Supreme Leader has neither the stated objective, nor the capability to take over the Middle East. Iran also has no history of military expansionism.

Nor is Rouhani Iran’s version of Mikhail Gorbachev, as some have suggested. Rouhani’s objective is to strengthen Iran’s governing system, not to “restructure” it, after the crippling eight years of the Ahmadinejad regime. He is working for a Supreme Leader who is determined to hold on to power and to strengthen the Islamic Revolution.

from David Rohde:

A new Paul Ryan?

This week, Representative Paul D. Ryan (R-Wi.) may have made himself a leading Republican presidential contender in 2016. By proposing an end to the budget impasse that did not include one word -- Obamacare -- Ryan may have outmaneuvered Senators Rand Paul (R- Ky.) and Ted Cruz (R- Texas).

Multiple proposals are under consideration in Washington. If Ryan's plan becomes the basis for a bipartisan budget agreement, it will boost his standing and be a body blow to the Tea Party.

Ryan is clearly trying to position himself as a fiscal conservative who is serious about addressing the country’s deficit problem -- without destroying the U.S. economy in the process. He is trying to win the support of the moderate Republicans and mainstream business leaders increasingly exasperated by the Tea Party’s flirtation with default.

Helping the victims of American sex trafficking

Friday marks the International Day of the Girl. The United Nations has set aside October 11 to focus on the discrimination and abuse that women and girls suffer throughout the world.

One brutal crime that demands a far more intensive worldwide response is commercial sexual exploitation. This problem is of crisis proportion, and each time it happens it amounts to selling the rape of a child for profit.

This illicit global industry has begun to receive some of the attention its victims desperately require. But a blind spot remains: American girls on American soil.

For Syrians, a no-fly zone of their own

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For two years, the rebels in Al Qusayr held out against the forces of Syrian President Bashar al-Assad. Then in April the regime, supported by fresh fighters from the Lebanese militant group Hezbollah, renewed its attack on the mountain town overlooking the Lebanon border.

But it wasn’t Hezbollah that made the difference. It was the relentless bombardment by Assad’s air force that shattered the rebel defenses — killing 80 opposition fighters and sending the survivors into retreat. Assad’s jets and helicopters, unleashed against rebels and civilians alike in mid-2012, have proved a decisive force in the now 30-month Syrian civil war.

Because of this aerial onslaught, the rebels have begged the United States and its allies in the North American Treaty Organization to enforce a no-fly zone over rebel-held areas concentrated in Syria’s mountainous north. Barring that, opposition leaders have an alternative proposal: Washington and its allies supply rebel fighters with the weapons they need to defend a no-fly zone on their own.

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.

In what sense does the 1974 regime “implicitly” repeal the 1917 regime? To answer, begin with this apocryphal early 20th century statute familiar to some lawyers: This law supposedly imposed a strange, impossible requirement on two train conductors when their trains approach from opposite directions. The conductor of each train was to stop, await the other train’s passage and then continue the journey. If read literally, of course, this statute would leave trains idling indefinitely on the prairies, shutting down the railway. So the law cannot require what the “plain” language seems to suggest — nor would any court rule this way.

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.”

Despite these promises, and despite longstanding requirements of administrative law, the Obama administration is making significant regulatory decisions behind closed doors — without transparency or public involvement. Yet these new regulations could have enormous impact on Americans for generations to come.

A 14th Amendment for all centuries

During the 1980s, a colorful Washington figure used to stand in Lafayette Square near the White House holding a sign: “Arrest Me. I Question the Validity of the Public Debt. Repeal Section 4, Fourteenth Amendment to the U.S. Constitution.” That section reads: “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” As far as I know, the whimsical “protester” was never arrested; he wasn’t breaking any law. Congressional Republicans, if they force the United States into default on its debt, will be.

Even most journalists and policy wonks hadn’t heard of Section 4 until recently. But with a default on “the public debt” increasingly possible, many now find the subject gripping. What if the House Republican majority decides that they are just too angry to authorize repayment of the debt? They’d be violating the Constitution — but what would happen to the country, and to them?

During the debt-ceiling crisis of 2011, a number of scholars, including me, suggested that President Obama could end the standoff by proclaiming that Section 4 required him, as part of his duty to “take care that the laws be faithfully executed,” to set aside the debt ceiling and borrow enough money to fund payments on the debt. Obama later said his lawyers told him that was “not a winning argument.” This time around, White House Press Secretary Jay Carney has already said that “this administration does not believe that the 14th Amendment gives the power to the president to ignore the debt ceiling.”

Why airline mergers are inevitable

The American Airlines/US Airways merger talks are on hold due to the ongoing antitrust trial led by the Department of Justice. The D.O.J. is concerned, from the perspective of protecting consumers’ interests, that the resulting airline would have too much market power in many of its locations. Though this is true (assuming nothing about the airlines’ business was changed and no assets were divested), the underlying issues are broader than that.

This is an inevitable story of consolidation and creative destruction and the cyclicality of the two. This proposed merger — or one like it – will happen. It’s just a matter of time. But let’s compare an American Airlines/US Airways pairing with two, comparable, big-headline mergers.

Back in 2012, the music industry consolidated from four big players to three as EMI was split up. Its music business went to Vivendi’s Universal Music Group and its publishing business to Sony/ATV. In this deal, similar concerns of market power led the European Commission to stipulate that Universal had to sell a third of EMI’s assets. And that deal went through.

from The Great Debate UK:

Science’s innovators are to be prized

--Juha Ylä-Jääski (D.Tech.) is President and CEO of Technology Academy Finland. The opinions expressed are his own.--

The 2013 Nobel season is once again gorging on a Grand Cru vintage of scientific achievement. Today, the Nobel Prize for Chemistry was awarded to three scientists, Levitt, Karplus and Warshel, whose multinational collaboration laid the foundation for the computer models crucial for most advances in chemistry today. Yesterday, Peter Higgs and Francois Englert won the Nobel Prize for physics for conceiving the so-called "God particle" which explains why the Universe has mass. Another trio were recognised on Monday when the Nobel Prize in physiology or medicine was awarded to Rothman, Schekman and Südhof for solving the mystery of how the cell transports crucial cargo.

The Nobel Prize once stood alone commanding the attention of the world’s media.  Though it remains pre-eminent, as shown by the media hordes that have descended on Oslo, the trophy cabinet of international prizes has been stuffed full in recent years. There is the brand new Queen Elizabeth Prize for Engineering in the UK, the AM Turing Award, the Abel Prize, the Asahi and the Kyoto prize. The Russian billionaire Yuri Milner recently endowed the Fundamental Physics Prize by offering $3 million to each winner – three times the prize money given out by the Nobel Foundation. Perhaps most star-studded of all is the Breakthrough Prize in Life Sciences  - a joint enterprise by tech superstars including Sergey Brin, co-founder of Google and Mark Zuckerberg, founder of Facebook.

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.

But at heart, this is not a debt problem. It is an accounting problem. The Treasury Department issues U.S. debt, and lots of it. So you would think that America is deeply indebted to its bondholders. Yet increasingly, it is the U.S. monetary authority, the Federal Reserve, and not private investors, who buys this debt.

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