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

Prophetic words they were not. “By God, we’ve kicked the Vietnam syndrome once and for all…The specter of Vietnam has been buried forever in the desert sands of the Arabian Peninsula.”

Thus spoke a euphoric President George H.W.Bush early in March, 1991, shortly after the 100-hour ground war that chased Iraqi forces out of Kuwait, the oil-rich U.S. ally they had invaded and occupied in the summer of 1990.

The specter of Vietnam, far from being buried in the Arabian sands, has risen again as President Barack Obama and his advisers are considering the course of the war in Afghanistan, now in its ninth year, increasingly unpopular, and considered unwinnable even by America’s senior soldiers if it is fought alongside a corrupt government that lacks legitimacy in the eyes of the population.

That the Vietnam syndrome is alive and well is obvious by the proliferation of analyses and commentaries drawing parallels, or dismissing them as nonsense, since Obama declared Afghanistan a war of necessity. (Type “Is Afghanistan Obama’s Vietnam” into the Google search box and you get more than nine million references).

The cover of the latest edition of Newsweek magazine is taken up by an iconic photograph of the Vietnam war, people clambering up a ladder to a U.S. helicopter waiting to evacuate them off the roof of a Saigon building the day before the city fell to communist forces on April 30, 1975. The story inside: what to learn from the lessons of Vietnam.

The answers to that question differ widely and the Vietnam analogy has come up routinely whenever the United States resorted to military action in the past three decades, from Lebanon and Somalia to Bosnia, Kosovo and Iraq.  Obama himself has dismissed the parallel.

“You never step into the same river twice,” he said in October, “and so, Afghanistan is not Vietnam. But the danger of overreach and not having clear goals and not having strong support from the American people, those are all issues I think about all the time.”

Both in scale and geopolitical context the difference between the two conflicts is vast: at the height of its involvement in Vietnam, the United States had more than half a million troops there, fighting both Viet Cong insurgents and North Vietnamese army regulars who could count on aid from China and the Soviet Union.

In Afghanistan, the United States has some 68,000 soldiers, a number that is likely to grow to 100,000 or more (depending on what decision on reinforcement is taken) by the end of Obama’s term. Neither the Taliban insurgents nor al-Qaeda can count on the kind of outside support America’s antagonists in Vietnam commanded. In Vietnam, more than 58,000 soldiers died. The U.S. death toll in Afghanistan stood at 916 in the first week of November.

VIETNAM SYNDROME AND FLAGGING SUPPORT

But there are also parallels, and the Vietnam syndrome the elder President Bush had declared kicked is doubtless one of the reasons why public support for the war in Afghanistan has been declining steadily, despite Obama’s assertion that the American commitment would not be open-ended. The latest poll, by CNN, showed that 58 percent of those questioned were opposed to war.

And the parallels? In the words of Senator John Kerry, a Vietnam veteran who turned into a war critic after his deployment, “Once again, our enemy blends in with the local population and finds sanctuary in a neighboring country. Once again, the danger of being perceived as an occupying force by a war-weary population remains perilous.

“With Afghanistan, as with Vietnam, we have a president facing pressure from the military.”
President Lyndon Johnson, Kerry wrote, failed to stand up to his military commanders when they warned that the U.S. was facing defeat without additional forces - the argument that the U.S. and NATO commander in Afghanistan, General Stanley McChrystal made when he put forward options to Obama, including up to 40,000 more troops.

History does not repeat itself but the similarities between Obama in 2009 and Johnson in 1963 are striking. Both inherited a war that became their own at a time when they were pushing far-reaching and costly domestic reforms. Johnson’s Great Society programs ranged from reducing poverty to improving medical care. Obama’s key project is universal health care.

Most of Johnson’s reforms were enacted in the first two years of his presidency, with Democratic majorities in both houses of Congress. By 1968, the war in Vietnam had eroded his popularity to such an extent that he decided not to run for re-election.

The House of Representatives passed Obama’s health care bill this month, the Senate is expected to vote on its version soon. Polls show Obama’s popularity has been slipping, though his approval rate is still above 50%. Where it will be in a year’s time, halfway through his term when the U.S. goes to the polls for mid-term elections, will partly depend on how the war in Afghanistan is going.

The ghost of Vietnam hangs over the White House.

You can contact the author at Debusmann@Reuters.com.

– George A. Cloutier, a graduate of Harvard Business School, is the founder and CEO of American Management Services, one of the nation’s largest turnaround and management services firms specializing in small and mid-size companies. The opinions of George Cloutier are his own and do not represent those of the United States Conference of Mayors or Partner America. –

President Obama gets an “F” for his small business program. The SBA has guaranteed a paltry 50,000 loans  to the nation’s 29 million small businesses – that’s .0017. Loan volume is down 36 percent from 2008 and 50 percent from 2007. Obama and his advisers have actually done the unimaginable; they have reduced the flow of aid to small businesses in the face of a deep recession. The program’s bank lenders have left $15 billion on the table due to “regulatory problems.” Even an administration plan to provide lending to 70,000 vehicle dealers has no takers and failed.

Administration “experts” allocated less than 1 percent of the stimulus bill to small business. It’s mind-boggling that Washington ignores the biggest economic sector in the country employing 60 million people, producing 50 percent of GDP, and creating 70 percent of new jobs.

In the past several weeks, I have had the honor to lead events for small businesses in 15 cities (including Philadelphia,  Kansas City, Missouri and Baton Rouge, Louisiana) directly engaging with 2500 small business owners (employers only). Ninety-five percent of these business owners feel the administration’s stimulus plan and program has badly mistreated small businesses compared to Wall Street and Detroit.

On October 21st, President Obama announced a second stimulus for small business. His new plan must have been a political speech since it lacked specifics as to how many businesses would be helped, how much money would be allocated and distributed, and when the money would actually start flowing.

Recently, the House passed a bill that purports to offer $40 billion to small businesses. The banks, having left billions of dollars on the table, astoundingly were selected again as the prime source of lending.

The bill mentions authorizing the SBA as a lender of “last resort” if certain loans are not funded by the banks, with a complicated process yet to be determined. No amount of authorization is mentioned and the process to achieve “last resort” status has no definition or timeframe. Much of the lending purported in the $40 billion will be achieved by raising the limit on certain types of loans; this way more money can be loaned to fewer businesses providing political cover for Congress and the president.

Here’s a program the president should mandate.

Create a $50 billion pool for direct loans. Mandate that it should be working within 60 days. Make sure everyone understands that you need to go down the “risk curve” just as the administration did for Wall Street and Detroit.

Select a George Patton-like leader to organize a 24-7 program starting now.

Let’s move small business from the “kid’s table” to the Cabinet. Create a full Cabinet post for small business and entrepreneurship.

Let’s get some real accountability on the success of these programs into the public domain. Your administration should publish a weekly report with the number of loans made, the banks providing the loans, the amounts of those loans and where the banks are located. It’s time to hold the bureaucrats’ feet to the fire.

Energize the SBA’s current outreach and guarantee program. The SBA Administrator should be on the road 5 days a week promoting the “Get-A-Loan” program across the country with the SBA’s public relations operatives to promote it. SBA employee and office hours should be reconfigured to include after hours and Saturday hours when small business owner have the time to apply and discuss lending. Make sure the participating banks are present. Telemarketing centers should be set up to contact small businesses directly to discuss new lending programs since most are simply not aware. A large number of SBA employees should be put on cold calling programs to introduce lending programs to small businesses. Have “Get-A-Loan” days twice a week with open houses. Forget direct mail, fancy brochures, and ill-attended conferences that usually write only a few loans if that. Forget websites directed toward emergency preparedness and focus on more immediate loan priorities.  Make sure that calls looking for help do not disappear into voicemail hell.

On October 10, 2008, you stated, “Main Street needs relief and you need it now.” It’s time to stop sending breadcrumbs and deliver the beef.

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

Message to Israelis disgruntled with President Barack Obama’s Middle East policies: you’ve got used to U.S. presidents pouring affection on you. Forget that. Obama is not “a lovey-dovey kind of guy”.

That assessment came from an old Middle East hand, former U.S. ambassador to Israel Martin Indyk, in an exchange in the closing minutes of the inaugural national conference of J Street, a new pro-Israel lobby for the liberal majority of American Jews (78 percent voted for Obama) who do not feel represented by traditional pro-Israel advocacy groups, chief of them the American Israel Public Affairs Committee (AIPAC).

The conference, in the words of J Street executive director Jeremy Ben-Ami, marked “the birth of a movement, a coming-out party for those who want to widen the tent and are not stuck in the mindset that because we are pro-Israel, we must be anti- somebody else”.

Now director of the foreign policy program at the Brookings Institution, a Washington think tank, Indyk was on a panel entitled “Why Two States? Why Now?” He responded to a question from the audience on the advisability of American presidents getting personally involved in Middle East peace-making. They shouldn’t get involved in procedural detail, he said, but for Obama it would be “really important” to go to Israel. Why?

His approval rating, according to Israeli polls, hovers around five percent, a sharp contrast to the 88 percent drawn by George W. Bush, a man thoroughly disliked almost everywhere else. The majority of Israelis think Obama is pro-Palestinian and see his visits to Egypt and Saudi Arabia as evidence that he wants to distance himself from Israel and curry favour with the Arabs. Unless he can dispel that public perception, the Israeli government is unlikely to make concessions.

Without major concessions, both from the Israelis and the Palestinians, there is no chance that Obama will succeed where other American presidents have failed. As far as concessions from Israel are concerned, J Street expects to help the Obama administration convince Congress that questioning Israeli policies is not tantamount to being anti-Israel.

Thanks largely to the enormous influence of AIPAC, which calls itself “America’s pro-Israel lobby,” criticism of Israel has been rare in Congress; debate of U.S. policies towards the largest recipient of U.S. economic and military aid even rarer. In a controversial 2006 essay, two prominent political scientists, John Mearsheimer and Stephen Walt, concluded that AIPAC had a “stranglehold” on Congress.

It’s too early to tell whether this will change, now that there is another lobby that calls itself pro-Israel but does not shy away from questioning Israeli policies. J Street reacted to last December’s Israeli attack on Gaza by criticising Hamas for raining rockets on Israeli civilians and Israel for punishing 1.5 million Gazans for the actions of extremists.

OUT OF TOUCH?
That stand drew furious responses both from the political right and the center. Rabbi Eric Yoffie, the president of the Union of Reform Judaism, the largest Jewish religious organisation in America, called J Street’s position “morally deficient” and “profoundly out of touch with Jewish sentiment”.

On the right, the Gaza statement transformed J Street into an anti-Israeli, pro-Hamas organisation. One right-wing blogger called the group’s conference, in the last week of October, an “anti-Israel hate fest”.

(J Street, by the way, takes its name from a gap in the Washington street grid. There’s an I Street and a K Street, home to most lobby firms in the capital, but no J Street. Missing street, missing voice).

Despite his disagreement with J Street over Gaza, Yoffie attended the conference and took part in a debate over what it means to be pro-Israel. There was agreement on a theme that ran through much of the meeting –  Jewish settlements in the heart of the West Bank make it impossible to establish a Palestinian state. Time is running out for a two-state solution. The alternative is worse.

That would be living together in one country in which Jews would be outnumbered (Palestinian birth rates are higher) and faced with the choice of abandoning democracy by exerting apartheid-style minority rule or giving up the idea of Israel as a homeland for all Jews.

The establishment of a Palestinian state alongside Israel, a cornerstone of the Obama administration’s Middle East policy, has been reluctantly embraced by Israeli Prime Minister Benjamin Netanyahu but prospects look very bleak for soon resuming the peace talks that stalled last December.

Still, the mood at J Street was upbeat. One of the reasons: an attendance that convincingly ended arguments whether there was an appetite for a left-wing organisation that shuns the reflexive Israel-right-or-wrong attitude of the established lobbies.

“We planned for 1,000 delegates and when I first mentioned this figure, my staff thought I needed psychiatric treatment,” Ben-Ami said. “We got 1,500.” The under-estimate made for conference rooms so tightly packed that many delegates had to sit on floors and debates were frequently simulcast to spillover rooms.

A second reason for high spirits: Obama’s decision to send his National Security Advisor, James Jones, to make the keynote speech. It broke no new ground but ended with a promise that the Obama administration would be represented at all future J Street conferences.

What better sign that the neophyte group has arrived as a serious participant in the foreign policy debate?

(You can contact the author at Debusmann@reuters.com)

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

Words of wisdom from an American leader: “The United States must be humble and must be proud and confident of our values but humble in how we treat nations that are figuring out how to chart their own course.

“If we are an arrogant nation, they’ll view us that way but if we are a humble nation, they’ll respect us.”

President Barack Obama, the newly-minted winner of the Nobel Peace Prize, speaking about U.S. engagement with the rest of the world, including anti-American leaders? No, the exhortation for superpower humbleness came from George W. Bush when he was running for president in 2000.

Whether this was campaign rhetoric or conviction will never be known but if it was the latter, it ended eight months into Bush’s first term.

The word “humble” disappeared from Washington’s political lexicon after the Sept. 11, 2001 mass murders in New York and Washington and during the rest of Bush’s eight-year presidency, the United States came to be seen, in large parts of the world, as the epitome of superpower arrogance.

“Humble” is back in fashion. Nine months into his first term, Obama told the United Nations General Assembly he was “humbled by the responsibility that the American people have placed upon me” and determined to meet the challenge of collective action. Three weeks later, he stood in the White House Rose Garden to say he was “deeply humbled” by the Nobel Committee’s decision to give him the Peace Prize.

But like his predecessor, who was resented in much of the world, Obama is running into foreign policy problems as resistant to humility and the collective action the president often conjures as they were resistant to Bush’s unilateral approach. Does Obama’s rock star-like celebrity help?

So far, not really. In Germany, for example, 93 percent of those polled in a survey by the Pew Global Attitudes Project said they had confidence the U.S. president would do the right thing in world affairs. Would that translate into more German troops for the war in Afghanistan which is unpopular in Germany? Not likely.

In his speech to the United Nations, Obama pointed out that American unilateral actions had fed “an almost reflexive anti-Americanism, which too often has served as an excuse for collective inaction.” While anti-Americanism may be on the wane in many parts of the world, there is no sign of a corresponding increase of support for U.S. foreign policy on key issues.

Nor is there evidence of a wholesale decline in the tendency of a good number of U.S. political figures to assume that people from other countries think like Americans. That has been a perennial problem in America’s dealings with the world. It was the reason, for example, why the Bush administration was so surprised by the resounding 2006 electoral victory of Hamas, the Islamist group shunned as terrorists by most of the West, in Gaza.

CONTRADICTION IN TERMS?

More recently, that’s why some in Washington were taken aback by the angry reaction in Pakistan to a bill passed in Congress this month that tripled U.S. assistance over the next five years. It was meant as part of an effort to build a new relationship with Pakistan, whose cooperation Washington needs to fight Taliban and al Qaeda elements along the border with Afghanistan.

The bill contained language on conditions tied to the tripled aid that were seen by many Pakistanis as a humiliating violation of national sovereignty and an affront to dignity, an issue particularly sensitive in Pakistan, which is one of the few countries apparently immune to Obama’s charm. (The Pew survey’s favorability rating for the United States showed a drop from 19 percent in 2008 to a dismal 16 percent in 2009).

What seemed perfectly legitimate to lawmakers in Washington — no disbursement of aid unless Pakistan demonstrated a “sustained commitment” to crack down on terrorism — was seen as an insult by the Pakistanis. Which raises the question whether a humble superpower is a contradiction in terms.

Or whether humility will impress the leaders Obama has to deal with if he wants to succeed where Bush and other presidents failed - get North Korea and Iran to drop their nuclear ambitions, persuade Israel and the Palestinians to end their conflict, defang international terrorists and last but not least, achieve his dream of a nuclear-free world.

On that, he sounded a somber note when he commented on his Nobel Peace Prize: maybe not “in my lifetime.” Sobering detail: Obama is 48.

(You can contact the author at Debusmann@reuters.com)

– James Pethokoukis is a Reuters columnist. The views expressed are his own –

The state of the dollar probably hasn’t been a first-tier political issue in the United States since, say, the presidential election of 1896. Back then, it manifested as whether or not America would stay on the gold standard or switch to a bimetallic one. (The William Jennings Bryan “cross of gold” speech and all that.)

The aftershocks of the global financial crisis may now be propelling the dollar back to the political forefront. The greenback’s continuing slide makes it a handy metric that neatly encapsulates America’s current economic troubles and possible long-term decline. House Republicans for instance, have been using the weaker dollar as a weapon in their attacks on the Bernanke-led Federal Reserve.

For more evidence of the dollar’s return to political salience, look no further than the Facebook page of Sarah Palin. The 2008 GOP vice presidential nominee — and possible 2012 presidential candidate — has shown a knack for identifying hot-button political issues, such as the purported “death panels” she claims to have found in Democratic healthcare reform plans. In a recent Facebook posting, Palin expressed deep concern over the dollar’s “continued viability as an international reserve currency” in light of huge U.S. budget deficits.

She might be onto something here, politically and economically. A recent Rasmussen poll, for instance, found that 88 percent of Americans say the dollar should remain the dominant global currency. Now, the average voter may not fully understand the subtleties of international finance nor appreciate exactly how a dominant dollar has benefited the U.S. economy. But they sure think a weaker dollar is a sign of a weaker America.

And that’s the political problem for the Obama administration. Its benign neglect of the dollar is another example of an economic policy — along with TARP and the $787 billion stimulus — that the White House thinks is helping the economy, but many Americans find wrongheaded.

In his New York Times column today, Paul Krugman makes the usual case for a weaker dollar: It helps U.S. exporters and is a necessary part of a global economic rebalancing. And there is some truth in that, particularly the idea that Rising Asia will result in a less-dominant dollar.

But Krugman too easily dismisses the idea that the dollar’s decline could tumble out of control. Former Clinton economic officials such as Robert Rubin and Roger Altman have been making the case that investor concern about budget deficits could lead them to abandon the dollar. As Altman argued in a Financial Times op-ed piece today: “The dismal deficit outlook poses a huge longer-term threat.

Indeed, it is just a matter of time before global financial markets reject this fiscal trajectory. That could lead to a punishing dollar crisis.”

Now many Democrats and liberals, like Krugman, don’t want to hear such talk, fearing a rerun of the Clinton era when the progressive policy agenda was sacrificed on the altar of budgetary rectitude.

But that is a tremendous political and economic gamble, one that may result in taunting Republican cries of “Who lost the dollar?”

– Neal Kimberley is an FX market analyst for Reuters. The opinions expressed are his own –

Twenty-four years ago, major nations called for depreciation of the dollar to rebalance the global economy. Now, as another effort at rebalancing looms, the dollar will again bear the brunt — though officials will try to ensure its fall is less dramatic this time.

That’s the implication of President Barack Obama’s announcement this week that he will push world leaders for a new global “framework” in which the United States would cut its huge trade and budget deficits.

Agreeing on this framework would be politically difficult, since it would require policy changes by many countries — China, for example, would probably have to rein in its explosive export-led growth.

But as the euro’s climb to a new one-year high versus the dollar this morning shows, markets are starting to think the rebalancing process may start as soon as this week’s Pittsburgh summit of leaders from the Group of 20 nations.

The Plaza Accord of 1985 called for “orderly appreciation of the main non-dollar currencies against the dollar”; it was followed by central banks’ coordinated intervention to ensure that happened.

This time, with the world shakily emerging from a financial crisis, policymakers are likely to try to manage the dollar’s drop in a more low-key fashion.

They are unlikely to issue an explicit call for the dollar to fall. In fact, the U.S. Treasury may continue proclaiming its “strong dollar policy” in an attempt to keep the markets calm.

No one in the G20 wants to risk a freefall of the dollar that could disrupt global trade as it recovers from recession. And in contrast to the 1980s, developing nations such as China are now challenging the dollar’s long-term role as the world’s top reserve currency.

The dollar’s premier status helps the United States to obtain foreign capital and in order to keep that access, Washington is likely to encourage central banks around the world to continue holding dollars. This would require slow depreciation of the currency rather than a panicky slide.

So unless policymakers completely lose control of the forex markets — which cannot entirely be ruled out — the dollar’s slide is likely to be slower and smaller than it was after the Plaza Accord, when the currency sank about 50 percent versus the yen between Sept. 22, 1985 and the end of 1987.

The overall direction of the dollar does not look in doubt, however. Top presidential adviser Lawrence Summers has said he wants a U.S. economy that is “more export-oriented and less consumption-oriented”.

A lower dollar is a logical tool to achieve that goal, and letting the currency weaken would probably be faster and easier than most other big policy steps to reshape the U.S. economy, such as tax changes and health reform.

The International Monetary Fund, which is advising G20 nations on economy policy, is hinting heavily at the need for currency realignment.

In a report released this week, it said “current policies and the assumed constellation of exchange rates may not be sufficient for the needed rebalancing of demand.”

It added that policy reforms by the world’s big economies to restore growth “would be more effective if accompanied by a real effective renminbi appreciation, offset by euro and dollar depreciation”.

An international understanding on dollar depreciation may well not be reached in Pittsburgh. A French official said last Friday that Pittsburgh would merely set the stage for future talks on foreign exchange rates.

“At this stage there will not be currency discussions, but the framework that we hope to put in place…is a way of discussing later the question of exchange rates,” said the official, who declined to be named.

But giving China and other developing countries more power in the IMF and the World Bank could be part of an informal quid pro quo in which China quietly undertook to resume appreciating the yuan against the dollar.

The rise of the euro as high as $1.4821, breaking the December 2008 peak of $1.4719, is a technical signal that the market thinks the dollar is increasingly vulnerable.

For many traders, the break suggests a good chance of a rise to at least the psychologically important level of $1.50 in coming weeks or months.

The European Central Bank might seek to limit speculation against the dollar by expressing concern about such a move. But the market does not appear to worry that the ECB could actually intervene to support the dollar.

When the European Union’s Economic and Monetary Affairs Commissioner Joaquin Almunia said last week that excessive appreciation of the euro could hurt Europe’s economy, the euro fell back only marginally and briefly.

The market knows that even at levels just above $1.5000, the euro would remain well below its all-time high against the dollar of $1.6038, hit in July 2008.

And any rise of the euro against the dollar in the current circumstances would probably be seen by policymakers as the result of general dollar weakness, not excessive euro strength. When euro/dollar reached its July 2008 peak, euro/yen hit a similar high; now, euro/yen is a full 35 yen lower.

The Japanese may also be willing to see their currency strengthen. Before new Finance Minister Hirohisa Fujii took office this month, he said a strong yen was generally good as it boosted the purchasing power of Japanese.

Fujii subsequently backed away from that comment, but speculation will remain that after sweeping to power last month, the Democratic Party of Japan may try to shift the country away from its reliance on exports and its opposition to yen strength.

In the context of a G20 drive to rebalance the global economy, this could easily cause the market to think the yen should be trading stronger than 90 to the dollar.

After just six weeks as NATO secretary-general, Anders Fogh Rasmussen has his first crisis. The alliance may be slowly bleeding in an intractable war in Afghanistan, but the immediate cause is the U.S. administration's decision to shelve a planned missile shield due to have been built in Poland and the Czech Republic.

The shield, energetically promoted by former President George W. Bush, was designed to intercept a small number of missiles fired by Iran or some other "rogue state". But Russia saw it as a threat to its own nuclear deterrent and NATO's new east European members saw it as a useful deterrent against Russian bullying, by putting U.S. strategic assets on their soil.

President Barack Obama's decision to drop plans to install it on Polish and Czech territory leaves those former Soviet satellites feeling betrayed -- because they expended political capital to win parliamentary support -- and more exposed to a resurgent Russia, especially after its use of force against Georgia last year.

Obama's move is clearly part of a warming of U.S. relations with Moscow from which Washington hopes to gain help in return on supply routes to Afghanistan, pressure on Iran to rein in its nuclear programme, and an agreement on radical cuts in nuclear arsenals. But this "reset" of U.S.-Russian relations has only exacerbated the rift within NATO over Russia.

The three Baltic states and Poland were particularly critical of NATO's low-key response to Moscow's military action in Georgia. Some said the refusal of west European allies led by Germany and France to agree at a NATO summit last year to putting Georgia and Ukraine on a path to NATO membership emboldened the Kremlin to act. President Dimitry Medvedev's harsh attack on Ukraine's leader in an open letter last month fanned their fears of Russian bullying of its neighbours.

East European officials cite Moscow's playing with the gas taps and trade disputes, and its apparent determination to keep its Black Sea fleet in the Crimean port of Odessa Sevastopol beyond a 2017 deadline agreed with Ukraine as part of a strategy of tension intended to reverse the "colour revolutions" in Kiev and Tbilisi, and bring other former Soviet republics to heel.

All that makes it a particularly awkward moment for Rasmussen to deliver his inaugural keynote speech on NATO-Russia relations on Friday in Brussels. The former Danish prime minister has put a few noses out of joint in his first weeks by making clear he intends to run NATO in a more results-oriented way, leaving less room and time for ambassadors in the North Atlantic Council to debate any idea to a standstill. He has set strict time-limits on council meetings, streamlined flabby agendas and outsourced the drafting of a new Strategic Concept to a group of 12 experts led by former U.S. Secretary of State Madeleine Albright, on which not all allies are represented.

His personal management style and high media profile (monthly news conferences, a blog and Twitter chatter) has sharpened the traditional Kabuki dance in which a new boss and the old board flex their muscles at each other in mutual suspicion, insiders say. It is the first time a former prime minister, used to running a government and to talking to fellow national leaders, has been picked for the job. Previous secretaries-general were former defence or foreign ministers, more accustomed to being servants of the member nations.

Both camps within NATO (which privately brand each other the "Friends of Russia", and the "Cold Warriors") will be watching every word of Rasmussen's Russia speech to ensure he does not depart from alliance policy. The fact is that NATO has been unable to agree on an overall policy towards Russia since the 1990s, when it declared that Moscow was no longer an adversary.

Rasmussen hopes to launch NATO's own modest "reset" of ties with Russia, offering closer cooperation on Afghanistan, a joint threat assessment and work on non-proliferation of nuclear weapons. NATO officials have received assurances that Moscow will respond positively and breathe new life into the NATO-Russia Council.

None of that will assuage NATO's east European members, who are likely to press harder now for practical steps to give credibility to the alliance's Article V mutual defence commitment. That could involve drafting military plans to reinforce the Baltic republics and Poland, and holding joint military exercises on those countries' territory. The French and Germans have resisted such ideas in the past as unnecessarily provocative to Moscow. If NATO cannot agree to such moves, the United States may have to do more on its own to compensate its jilted friends.

(note: corrects Odessa to Sevastopol in 6th paragraph)

(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.

There are similar feelings in Britain, which fields the second-largest contingent of combat troops in Afghanistan after the United States. A poll published in London this week showed that 69 percent of those questioned thought British troops should not be fighting in Afghanistan.

In the United States, almost inevitably in a country that never forgot the trauma of the only war it ever lost, 36 years ago, pundits are conjuring up the ghost of Vietnam. A lengthy analysis in the New York Times wondered whether Obama was fated to be another Lyndon B. Johnson, the president who kept escalating the Vietnam war.

The war in Afghanistan is drawing into its ninth year and chances are it will still be going badly when Obama is gearing up for his campaign for re-election in 2012. According to a study by the RAND institute, a think tank working for the military, counter-insurgency campaigns won by the government have averaged 14 years.

“The insurgent wins if he does not lose,” according to the U.S. Army’s counter-insurgency manual, “while the counterinsurgent loses if he does not win. Insurgents are strengthened by the common perception that a few casualties or a few years will cause the United States to abandon (the effort).” A key to winning: “firm political will and extreme patience.”

Patience is not an American virtue. The first call for Obama to set a “flexible timetable” for the withdrawal of American troops came this month, from Senator Russell Feingold, a Democrat and member of the Senate Foreign Relations Committee. Not exactly a reflection of firm political will and extreme patience.

In Afghanistan, the Taliban insurgents not only have been winning by not losing, they have actually been gaining ground. In the words of the top U.S. military officer, Joint Chiefs of Staff Chairman Mike Mullen, the situation in Afghanistan “is serious and is deteriorating.”

What does that mean? According to Anthony Cordesman of the Center for Strategic and International Studies, the Taliban have expanded their area of influence from 30 of Afghanistan’s 364 districts in 2003 to some 160 districts by the end of 2008. But, says Cordesman, a widely-respected authority on military affairs, “the military dimension is only part of the story.”

CORRUPTION AND INCOMPETENCE

The other part is a corrupt, incompetent government and an equally corrupt and inefficient system of disbursing international aid. In his war-of-necessity speech, Obama obliquely referred to that aspect of the Afghan war by saying it could not be won by military force alone. “We also need … development and good governance.”

Both have been in very short supply. “The Afghan government lost legitimacy over the past five years,” says Bruce Riedel of the Brookings Institution, a Washington think tank. Whether, and how quickly, it can regain it is open to doubt, no matter who emerges as the winner of the August 20 election in which President Hamid Karzai was running for a second five-year term. (Full results are due on September 3. Both Karzai’s camp and his main challenger, former foreign minister Abdullah Abdullah, have claimed victory on the basis of partial results.)

The extent of corruption and the lack of good governance are reflected by two international gauges - the Failed States Index compiled by the The Fund for Peace and Foreign Policy magazine and the annual Corruption Perceptions Index issued by Transparency International, a Berlin-based watchdog group. Afghanistan ranks 7th on the failed states list and 176th (out of 180) on the corruption scale.

This is not an environment that lends itself to swift solutions. There are powerful vested interests in maintaining what Cordesman calls a dishonest system of power-brokering and corruption. Jean MacKenzie, a Kabul-based reporter, said in a recent guest column for Reuters that foreign assistance coming into Afghanistan was one of the richest sources of funding for the Taliban.

“It is the open secret no one wants to talk about … Virtually every major project includes a healthy cut for the insurgents,” MacKenzie wrote. “International donors, primarily the United States, are to a large extent financing their own enemy.”

Until recently, most experts thought that the Taliban was financed largely from taxes the insurgents levied on the production of opium, the raw material for heroin. Richard Holbrooke, Obama’s special envoy for Afghanistan and Pakistan, said last year (when he was not in government service) that “breaking the narco-state in Afghanistan is essential or all else will fail.”

He no longer thinks that the insurgency is mostly funded by the opium trade. Instead, he says that the volume of money flowing into the Taliban coffers from sympathizers in Gulf states and elsewhere exceeds that of the drug trade.

“Obama inherited a disaster,” according to Riedel, “a war which has been under-funded and under-resourced for six of the past seven years.”  And what would happen if the Obama’s war of necessity went wrong and the United States pulled out of Afghanistan? In the Muslim world, it would be seen as “a triumph on a par with the withdrawal of Soviet forces” from Afghanistan after their disastrous nine-year war and occupation.

Not to mention the impact it would have on Obama’s political standing.

(You can contact the author at Debusmann@reuters.com)

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

New York’s billionaire mayor, Michael Bloomberg, is stepping in where President Barack Obama fears to tread — confronting America’s powerful gun lobby. In the country that holds a commanding global lead in civilian gun ownership, it promises to be a hard fight.

No matter how it goes, America’s position at the top of the list of gun-owning nations looks secure. Up to 280 million guns are estimated to be in private hands and the arsenal is growing year by year. On a guns-per-capita basis, the United States (90 guns per 100 residents) is way ahead of second-ranked Yemen (61 per 100), according to the authoritative Small Arms Survey issued by the Graduate Institute of International Studies in Geneva.

Obama has been a sore disappointment for advocates of tighter gun controls, and a boon to gun manufacturers and dealers. Predictions that his administration would swiftly work towards greater restrictions helped spark a huge run on firearms after his election. The National Rifle Association (NRA), the country’s biggest gun lobby, said its members reported widespread shortages of ammunition.

Supply and demand are back in balance and those who rushed to stock up need not have feared an Obama assault on gun ownership. The president has shown no eagerness for stepping into the political minefield of gun legislation. On the contrary. Obama rowed back in haste after his attorney general, Eric Holder, prompted alarm among gun lovers by saying he wanted to reinstate a ban on assault weapons that was allowed to lapse under the Bush administration.

There are no signs either that Obama intends to fulfil campaign pledges on other hot-button gun legislation issues such as closing the so-called gun show loophole that allows private citizen-to-citizen sales without background checks, or the Tiahrt amendment, which limits disclosing information on the sale of guns used in crimes.

Josh Sugarmann, head of the Washington-based Violence Policy Center, a group advocating tighter controls, describes Obama’s attitude so far as “deeply disheartening” and says the president broke campaign promises on gun legislation.

Why? History provides an explanation: the last time the United States had a Democratic president, Bill Clinton, and Democrats controlled both houses of Congress, the party aggressively pushed gun control legislation and suffered crushing defeats at the polls, in part thanks to opposition stirred by the NRA. The Republicans took control of Congress in 1994 and held it until 2006.

Enter mayor Michael Bloomberg in New York, a city where he is popular and guns are not. In 2006, Bloomberg and Boston Mayor Thomas Menino formed Mayors Against Illegal Guns (MAIG), a group that wants to make it more difficult for criminals to get their hands on guns. MAIG’s growth has been explosive: from 15 in 2006 to 250 in 2007 to 451 now.

BATTLE OF GIANTS

That makes, as a headline in the Washington Post put it, for “a battle of goliaths” pitting Bloomberg and his group against the NRA, whose four million members tend to see restrictions such as unregulated sales from private citizens (through the gun show loophole) as an assault on the U.S. constitution’s second amendment.

It says: “A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.” Exactly what that means (arms for militia members? for individuals?) was one of the most passionately disputed legal questions in the United States for decades until the Supreme Court last year ruled that it gave individual Americans the right to bear arms. The court also allowed for some restrictions on gun ownership.

In July, the U.S. Senate defeated a measure, introduced by a Republican Senator, John Thune, that would have allowed licensed gun owners to carry hidden, loaded weapons from states with weak gun laws to states with tough ones. The proposal failed largely because of energetic lobbying by Bloomberg’s mayors. It was a rare setback for the NRA and Bloomberg made clear he would remain on the offensive.

“If you want to beat the NRA,” he said on a television show this week, “you have to go out and get your message out. And it costs money to do that … You know, the NRA doesn’t spend that much money. If you look at what the real numbers are, I think that we can pull together here and raise enough money.”

Bloomberg has spent almost $3 million of his own money (Forbes estimates his personal fortune at $16 billion) on the mayor’s group. The NRA’s annual budget is around $200 million.

For Wayne LaPierre, the NRA’s Executive Vice President and CEO, talk about money is beside the point. “Bloomberg is clearly out of step with the majority of Americans,” he said in an interview. “Our membership has been increasing by 40,000 to 50,000 a month since the middle of last year. We hope to reach five million before too long.”

LaPierre is confident that the NRA will prevail in future legislative wrangling, not least because “there has been a sea change in the center of the Democratic Party.” Ironically, the vote that defeated the Thune amendment gives backing to that view. The bill required 60 votes to pass. It fell short by two. Of the 58 votes in favor, 20 were from Democrats. (Editing by Kieran Murray)

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

Barack Obama’s star may be fading slightly at home but it is still so bright in Europe that  he outshines the leaders of Germany and France in their own  countries, according to a poll that shows a remarkable global  shift in attitudes towards the U.S. since he took office.

The question is: does it matter?

First, the statistics. The latest Pew Global Attitudes  Project, a widely-respected survey that has tracked  anti-Americanism around the world since 2002, polled 26,397  people in 25 nations in May and June and found that the image of  the United States had improved in all but one (Israel),  reflecting, it said, “global confidence in Barack Obama.”

The most dramatic before-and-after-Obama change, from 2008 to 2009, was noted in Britain, France, Germany and Spain. In Germany, 93 percent of those polled expressed confidence in the U.S. president’s leadership compared with 75 percent for German  chancellor Angela Merkel. In France, the score was 91 percent  for Obama and 53 percent for Nicolas Sarkozy.

In 2008, just 31 percent of Germans saw the U.S. in a favourable light. This year: 64 percent. In France, the favourability rating jumped from 42 percent to 75 percent, in Britain from 53 percent to 69 percent and in Spain from 33 percent to 58 percent. In short, “old Europe,” as former defence secretary Donald Rumsfeld used to call it, is head-over-heels in love with Obama.

The reason for this, and the general improvement in the American image, depends on who does the explaining. For former Secretary of State Madeleine Albright, who co-chairs the board of the Pew project, it is a mixture of “admiration for Obama and  respect for the country that elected him.” Albright is a Democrat.

Former Senator John Danforth, the other co-chairman of the project, says Obama love stems from “telling people what they want to hear” and apologizing for past American actions. In his view neither Obama’s popularity abroad nor a better U.S. image have resulted in concrete actions. Danforth is a Republican.

He and others making that argument underrate the importance of public opinion in international relations but they do have a point: Take Obama’s call on NATO nations to provide more troops  for Afghanistan, for example. 63 percent of the Germans polled are opposed to that, along with 62 percent of French, 51 percent of Britons, and 50 percent of Spaniards.

Similarly, Europeans showered praise on Obama’s decision to close the Guantanamo prison but while the European Union has agreed in principle to meet American requests to take some of  the prisoners, there has been no rush to do so.

CAN NICE GUYS WIN?

So, is this a lesson that nice guys don’t win on the foreign policy front? The gap between Obama’s ratings and those of George W. Bush could hardly be bigger. A median of 71 percent in the 2009 survey expressed confidence that Obama will do the right thing in world affairs. Bush last year drew a paltry 17 percent.

Obama has only been in office for six months and he has achieved more in polishing America’s image than a succession of public diplomacy czars who for years attempted to sell Bush’s foreign policies in a more attractive package, much like trying to market the same corn flakes in a new box. Or shining a car to  a high polish and trying to sell it - without an engine.

It didn’t work and failed to stop a relentless slide in America’s international standing from the high of almost universal sympathy for the country immediately after the September 11, 2001, attacks on New York and Washington.  (Memorable post-attack headline in the French daily Le Monde:  “We are all Americans”)

Now there’s a new honeymoon but concrete results of what some call Obamamania may remain elusive in Europe, where it runs strongest, and even more in places where his charisma, brilliant  speeches and brilliant smile have made less of an impression. In Turkey and Pakistan, both countries of key importance for U.S.  foreign policy, negative views of America did not change with  the election of Obama.

If history can serve as a guide, a president’s popularity abroad has limited effect.

The French celebrated John F. Kennedy and his wife Jackie  like rock stars when they visited Paris in 1961 but that did  nothing to make President Charles de Gaulle less inclined to act  as a rival to his American counterpart.

Returning to the question of how much a better image matters, Andrew Kohut, the president of the Pew Research Center,  has part of the answer: “The views of the U.S. are being driven much more by personal confidence in Obama than by opinions about  his specific policies.”

One of these policies, his decision to step up the war in  Afghanistan, which could eventually play as big a role in the  Obama presidency as the Iraq war played in Bush’s, is viewed  with disapproval in most of the countries in the survey.

In the end, it will be the policies that count, not affection for a charismatic leader with a compelling only-in-America life story. Or, as a 19th century European politician, Britain’s Lord Palmerston, put it: nations don’t have eternal friends, they just have interests.

(You can contact the author at Debusmann@Reuters.com)