Thursday, October 23, 2003
Treasury Secretary Paul O’NeillJohn W. Snow predicts that there will be two million new jobs before the election. “I would stake my reputation on employment growth happening before Christmas,” Snow said. That forecast flies in the face of every meaningful analysis in both the public and private sectors. You might even call his prediction optimistic… or maybe “irrational”.
But it gets worse. Later in the same interview, he predicts that interest rates would rise, despite the Fed’s insistence that interest rates would stay low for “a considerable period of time.” Yes, it’s always a good idea for the Treasury to second-guess the Fed. Snow apparently got a strongly-worded memo about that: he walked it back the next day.
What is it with the unscripted Treasury Secretaries?
Thursday, October 23, 2003
There are rumors going around that Bush will propose another tax cut next year, which is not coincidentally an election year. Roll Call quotes a “White House insider”, who says that Bush aides hope the new plan with cause “Democrats
The NYT fronts with news that the U.S. Coalition Provisional Authority is going to give up some power in order to attract donors to the cause of Iraqi reconstruction. We’ll leave the “I told you so” work to others.
Instead we’ll focus on the discussion of debt: $120 billion dollars, in addition to “tens of billions” in unpaid war reparations. The NYT says the World Bank and international funds aren’t going to pony up the loans until that debt is settled. We wondered about this just a few days ago. Much of the debt is owed to France, Germany and Russia, who will almost certainly demand a debt payment plan before they begin participating in any reconstruction effort.
It’s possible the the United States will flex its muscle and force a default to prevent these nations from being paid: Iraq accumulated this debt by breaking the UN embargo, after all. On the other hand, a default would damage the already stuttering Iraqi economy, and the United States would be cutting off its nose to spite its face. That makes a default unlikely.
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From the “Do As I Say, Not As I Do” Dept.:
House Aviation panel chairman [John] Mica, scrambling to pass a proposal allowing privatization of some air-traffic control towers, tells Republicans he would exempt those in their states in exchange for votes. “I have a bill to pass,” he says; the proposal is in a larger bill reauthorizing the Federal Aviation Administration. Democrats aren’t given the same offer: “They want to scuttle the bill,” a Mica aide says.
Thanks to WaPo and CalPundit.
Saturday, October 18, 2003
Athens is preparing for the Olympic Games, and it seems to have gotten to their head.
First, the U.S. issues a report claiming that secuity in Athens is bad. Spokesman and (future Iraqi Minister of Information) Christos Protopapas responds: “These scenarios have no relation to reality. We have a perfect plan for the security of the Olympics… There seem to be (foreign) interests that want to pressure us, but we will not cave in. We will organize the safest Olympics.”
Those “foreign interests” must be Spain, Germany, Britain, the United States, Israel, Australia and France, who Greece has asked to consult on the $600 M security operation.
A week later, Culture Minister Evangelos Venizelos told an international conference the $600 million security blueprint for the Olympics was even better than similar plans drawn up by cities and countries faced with bigger threats.
“It is hard to find another city in the Western world that has such extensive security measures like Athens,” Venizelos said.
“Security is based on a new dogma, a holistic dogma and not one based on random checks to deal with any potential problem,” Venizelos said. “The Games will be perfect.”
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A brief, rhetorical question: what will happen to the foreign debt accumulated by Iraq during the sanctions? There are millions of dollars owed to Russia, France and Germany. Why aren’t they staying more engaged in the reconstruction process, since that would ostensibly ensure they get a seat during the debt renegotiation? Why isn’t Washington holding that money over their heads to get more cooperation? With all the talk about the $87 billion we’re spending, why hasn’t there been more coverage on these questions?
Reuters has a fascinating account of North Korean forced labour in Russia. The North Korean government ships labor teams, a holdover from the Soviet era, to Vladivostok where they live in dormitories and work for Russians under the strict supervision of plainclothes DPRK police. North Korea’s compelled to turn out their labor force to gain hard currency. The North Korean labor force is all over it: officials in the DPRK are being bribed for spots on the teams. The piece doesn’t mention it, but there would certainly be consequences to allowing these labor teams to see how a capitalist system works — even if it’s Russia.
After President Bush’s well-publicized speech and weeks of haggling, the United States finally secured a resolution from the UN Security Council on the future of Iraq. The resolution finally passed because everyone agreed to disagree: the U.S. will still run the show, and will transition to an Iraqi-led government “as soon as is practicable.” It contains no timetable, and no commitments of money or troops. Do not let anyone tell you that this is a diplomatic success: the actual positions of the Security Council members has not changed a bit.
The Beeb was good enough to point out that while the Security Council was voting, the U.S. Senate converted $20 billion in reconstruction costs into loans, despite heavy lobbying by the Bush Administration. “It’s very hard for me to go home and explain that we have to give $20 billion to a country sitting on $1 trillion worth of oil,” said Republican Senator Lindsey Graham. More substantive discussion can be found at NewsDay.
This loss is especially stinging for the Administration, and is yet another indication that they are losing control of Congress on this issue.
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I'm the Chief Technology Strategist for the Red Hat US Public Sector group, an open source and free culture advocate, a picky drinker, an amateur aesthete, and a dog enthusiast.
