Tonight at approximately 8 pm EST I will be on Countdown with Keith Olbermann to discuss President Obama's first major overseas trip, the G-20 Economic Summit as well as the NATO Summit -- which will likely focus on the President's newly released Afghanistan/Pakistan strategy.

Then tomorrow morning, I will be participating in a discussion on NPR's acclaimed Diane Rehm Show from 10 am - 11 am EST discussing similar issues. The host will be USA Today Washington Bureau Chief Susan Page.

-- Steve Clemons

Vice President Joe Biden said this week that President Obama had no intention of ending the embargo of Cuba when he attends the Summit of the Americas in mid-April, but as Senator Richard Lugar and his senior staff member, Carl Meacham, outlined in a Senate Foreign Relations Commitee Print on US-Cuba relations, there is a vast amount of "unclenching the fist" that can be accomplished within the structure of the current embargo -- even though I believe that embargo has failed to achieve its objectives for decades and is damaging to American national interests.

Tomorrow -- Tuesday -- Senators Byron Dorgan (D-ND) and Mike Enzi (R-WY) are hosting a media event along with human rights groups as well as business and agricultural representatives to announce the "Freedom to Travel to Cuba Act."

The Washington Post's Karen DeYoung and Shailagh Murray capture the progressive momentum of what may be ahead in US-Cuba relations today. . .despite the momentary chill that Biden's comments caused.

Enzi and Dorgan have introduced the bill along with co-sponsors Senators Christopher Dodd and Richard Lugar. More Senators are joining up -- including John Barrasso (R-WY), Max Baucus (D-MT), Michael Bennet (D-CO), Jeff Bingaman (D-NM), Barbara Boxer (D-CA), Kent Conrad (D-ND), Christopher Dodd (D-CT), Richard Durbin (D-IL), Rusell Feingold (D-WI), Dianne Feinstein (D-CA), Tom Harkin (D-SD), Patrick Leahy (D-VT), Tim Johnson (D-SD), Richard Lugar (R-IN), Jack Reed (D-RI), Benard Sanders (I-VT), and Ron Wyden (D-OR).

The press conference will take place at noon iin Room SVC-203 of the United States Capitol Visitors Center and will also feature Bob Stallman, President, American Farm Bureau Federation; Myron Brilliant, Senior Vice President of International Affairs, U.S. Chamber of Commerce; and Jose Miguel Vivanco, Executive Director, Americas Division, Human Rights Watch.

Congressman William Delahunt will be unveiling a very large list -- larger than what Delahunt's team had in hand last Congress -- on the companion bill in the House of Representatives at a big gathering on Thursday this week (he may drop the list to the press today). I'll have more details on that later.

Unfortunately, I cannot attend tomorrow's meeting -- but hope that other readers, writers, bloggers will -- and report back.

I'll be moderating a meeting in New York on the G-20 London Summit taking place this week, but I am watching these US-Cuba policy developments closely.

-- Steve Clemons

This manatee floated up to the surface in one of the canals in Ft. Lauderdale when I was there a week ago. It was a magnificent creature and stayed with us quite a while -- sort of posing.

Maybe since Spring is upon us, I've been more tuned into nature than normal. For instance, I have been somewhat obsessed with this huge robin trying to build a nest on my front porch -- at the top of a column under the roof's interior edge.

In fact, I just posted this on my twitter update and on facebook:

Steve thinks there must be an economic policy metaphor somewhere in that a robin is trying hard to unsuccessfully build a nest on his front porch.

Perhaps the best reply on Facebook has thus far come from Michele Wucker who heads the World Policy Institute in New York. She wrote:

at the risk of being super wonkish: let's break down the reasons why the nest is not working.

Not enough twigs, string, or other construction materials? materials stolen by competitors? immigration raids on undocumented robin construction workers? unstable location? too easily reached by cats? lack of technical skill by said robin? not enough robins to make a Spring? exploding ARM on nest means not enough capital for building?

The real reason the nest is not taking was lack of foundation. The edge the bird wants to live on is just inadequate. I could try and build out the platform a bit -- but others in this household don't want to make those sorts of loans. In the mean time I have a huge mess of really good bird nesting material all over my porch.

Robert Schlesinger of US News & World report writes:

Humph. I wonder if I could make an economic policy metaphor out of the bird that keeps flying into my office window.

Tony Fleming of InterAction zaps me with:

No, Steve... it's just a sign of spring (and perhaps that you're looking for wonk where no wonk exists.) ;-)

My high school friend Paul D'Anna churlishly offers:

It's systemic risk vs. morale hazard. Do we bail out the little robin and help it build it's nest when we know the little robin shouldn't have ever qualified for the interest-only mortgage loan in the first place? it's a bad choice to begin with. How will the little bird ever learn that it's got to live within it's means? Who signed into legislation these nest building swaps anyway? And what is Steve's cut? The public won't tolerate any more taxpayer funded bonus payouts.

UPI Editor Emeritus and AT Kearney Global Business Policy Council Senior Director Martin Walker writes:

a bird in the nest is worth two on the porch...

That sounds like Walker wants me to build out the platform.

I couldn't take it anymore -- and just put up a smiling yellow rubber duck with sun glasses to encourage the robin to look for opportunity elsewhere.

-- Steve Clemons

Barack Obama is having America up the ante on its investment in rolling back the Taliban and those who follow them in Afghanistan. We are sending more troops and trainers, and are committing to civil reconstruction programs whose outlines are unclear.

But Obama and his advisers should read this bit on Roman General Pompey's efforts to deal with the terrorists of the day at the height (and near end) of the Roman republic.

Pompey gave the pirates he quelled an alternative life -- and I just don't see that yet in the rhetoric or strategic game plan that is unfolding for America's now seven year plus military engagement in Afghanistan.

I first saw this clip on Richard Vague's Delancey Place:

Terror in Rome

In today's excerpt -- terror in Rome. In 67 BC, Pompey, early in a meteoric career as a Ro
man politician and general that includes conquering the East and joining with Caesar in a Triumvirate to rule Rome, is asked to overcome the pirates that have been terrorizing Rome for decades:

"Capture by pirates had recently become something of an occupational hazard for Roman aristocrats. ... However, kidnapping was only a sideline for the pirates. Calculated acts of intimidation ensured that they could extort and rob almost at will, inland as well as at sea. . .

The shadowiness of the pirate's organization, and their diffuse operations, made them a foe unlike any other. 'The pirate is not bound by the rules of war, but is the common enemy of everyone,' Cicero complained. 'There can be no trusting him, no attempt to bind him with mutually agreed treaties.' How could such an adversary be pinned down, let alone eradicated? To make the attempt would be to fight against phantoms. 'It would be an unprecedented war, fought without rules, in a fog'; a war that appeared without promise of an end. . .

"Only once, in 102 BC, had the Romans been provoked into tackling the menace head on. The great orator Marcus Antonius, Cicero's hero, had been dispatched to Cilicia with an army and a fleet. The pirates had quickly fled their strongholds, Antonius had proclaimed a decisive victory, and the Senate had duly awarded him a triumph. But the pirates had merely regrouped on Crete, and they soon returned to their old haunts, as predatory as before. ... Bandits, like their prey, were most likely to be fugitives from the misery of the times, from extortion, warfare, and social breakdown. ...

"The pirate's growing command of the sea enabled them to throttle the shipping lanes. The supply of everything, from slaves to grain, duly dried to a trickle, and Rome began to starve. . .

The grip of famine tightened around Rome. Starving citizens took to the Forum, demanding action on the crises and the appointment of a proconsul to resolve it. ... It was a tribune, in 67 BC, who proposed the people's hero [Pompey] be given a sweeping license to deal with the pirates. ... Pompey was granted an unprecedented force of 500 ships and 120,000 men together with the right to levy more, should he decide that they were needed. ...

"As it proved, to sweep the seas clear of pirates, storm their last stronghold, and end a menace that had been tormenting the Republic for decades took the new proconsul a mere three months. It was a brilliant victory, a triumph for Pompey himself and an eye-opening demonstration of the reserves of force available to Rome.

Even the Romans themselves appear to have been a little stunned. ... Campaigns of terror were containable. Rome remained a superpower.

"Even though Pompey's victory had demonstrated once again that the Republic could pretty much as it pleased, there was none of the savagery that had been traditionally been used to drive that lesson home. In a display of clemency quite as startling as his victory, Pompey not merely refrained from crucifying his captives, but bought them plots of land and helped set them up as farmers.

Brigandage, he had clearly recognized, was bred of rootlessness and social upheaval. For as long as the Republic was held responsible for these conditions, there would continue to be a hatred of Rome. Yet it hardly needs emphasizing that the rehabilitation of criminals was not standard policy. . .

The town where [Pompey] settled them was titled Pompeiopolis: his mercy and munificence were to contribute eternally to the greatness of his name."

-- Tom Holland, Rubicon: The Last Years of the Roman Republic, Anchor Books, Copyright 2003 by Tom Holland, pp. 164-171.

-- Steve Clemons

This is a fascinating session with Financial Times chief economics commentator Martin Wolf and former Clinton administration National Economic Adviser to the President and UC Berkeley Haas Business School Professor of Global Management Laura Tyson.

Martin Wolf's comments that this financial meltdown is just a manifestation of a much larger systemic crisis as well as Laura Tyson's comments on her concerns about permanent "Hoovervilles" in America -- as now exists outside of Sacramento -- as well as other important reflections and commentary make this video a must watch.

-- Steve Clemons

Juan Cole is such a refreshing, extraordinary force attempting to drag Americans toward a more enlightened and constructive understanding of the Muslim world.

I had the privilege this week of hosting Cole for a discussion of his just released book, Engaging the Muslim World.

If you want to have a quick 8 minutes with Juan, the clip above works well. A longer presentation and discussion is here.

More soon.

-- Steve Clemons

At this morning's superb economic event at the New America Foundation and in testimony before the Senate Foreign Relations Committee yesterday, there was a lot of discussion about China's recent proposal to consider a move away from the US dollar and towards the use of a new "super-sovereign reserve currency." The intention according to China's central bank governor, Zhou Xiaochuan, would be to ultimately "create an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run."

I have long argued that US policy-makers must take into account the possibility that at some point in the future the US dollar may not play the same role in global finance that it does today and prepare for that contingency.

Since China's proposal, I have had several conversations with knowledgeable China-hands and economists who argue that the proposal is simply posturing and that the shift away from the US dollar is not likely to happen anytime soon, so why worry? In reply I simply note that in today's parlous economic environment, taking anything for granted would be a grave mistake - especially when the amounts involved are so very, very large.

The US represents less than 5% of the world's population and just over 20% of the world's GDP. And yet, the US dollar represents approximately 64.6% of the world's official currency reserves. The SDRs that China refers to, and which have received increased attention of late, represent a multi-currency basket under the auspices of the IMF. This basket is weighted as follows - 44% US dollar, 34% Euro, 11% Yen and 11% Pound Sterling.

The IMF estimates that, as of the 3rd quarter of 2008, the most recent period for which reports are available, there were $4,358 billion held in official reserves around the world, with an additional $2,536 billion in unofficial or unallocated reserves - for a total of $6,894 billion total foreign exchange holdings. For simplicity sake, let's assume that these unofficial reserves are held in a similar proportion to the official ones.

Simple arithmetic demonstrates the size of the shift that the US dollar could possibly suffer if, at some point in the future, its weight in global reserves were to decline to its SDR weighting. A decline from 64.6% to 44% equals 20.6%. 20.6% of $6,894 billion equals $1,420 billion - or about ten percent of US GDP that would be shifted out of the US dollar to achieve SDR weighting.

To be clear, I am not suggesting that this is imminent or even likely. But some holders of currency reserves, in particular the unofficial, or privately held ones, are in the business of anticipating currency movements and trying to profit from them - or at least not lose out. The short term risk is not that China is about to dump its dollar holdings. Rather, it is the trading floors and fund managers around the world, whose job it is to be ahead of the curve, who may well start to re-weight their holdings on the marginally increased probability that this re-weighting might actually occur in the future. As the numbers above suggest, even a relatively small shift could represent a meaningful shift of capital and resulting impact on the dollar's value.

There are, of course, multiple forces at work in foreign exchange markets and, among the sure-fire ways to lose money in this world are: 1) to play currency markets and 2) to bet against the US and the US dollar. Nevertheless, the fact that this is now likely to be a discussion topic on the agenda for the London Summit, suggests that the US should not take for granted that the US dollar will retain its current role in the world forever. Currencies are traditionally viewed as a reflection of a country's economic strength. The US cannot lose sight of the crucial role that the "exorbitant privilege" to print the world's currency provides and do what it can to ensure that this privilege is not lost. We can't take anything for granted.

-- Douglas Rediker

The New America Foundation is hosting today the first in a series of Bernard L. Schwartz Economic Symposia from 8:45 am - 1:00 pm EST.

The event will feature some of the world's most thoughtful and influential economic policy practitioners and commentators including Bernard Schwartz, George Soros, Laura Tyson, Martin Wolf, Clyde Prestowitz, Desmond Lachman, Tom Gallagher, Steve Coll, Mark Zandi, William Gerrity, Leo Hindery, Richard Vague, Nicholas Lardy. Jeff Madrick, Sherle Schwenninger, and others.

The rules of the global economy are being rewritten. The leaders of the world's most powerful nations will sit down on April 2nd at the G-20 summit to address not only the issues that were pushed from November's failed G-20 meetings but also the problems that have mounted since. The most crucial of which is, what will replace the U.S. consumer as the world's primary engine of growth?

This entire conference will STREAM LIVE here at The Washington Note between approximately 8:30 am and 1:00 pm EST today, Thursday, 26 March 2009.

We hope that you will join us either in person at our NEW OFFICES 1899 L Street - 4th Floor or via the live webcast.

Here is the schedule:

8:45 am
Welcoming Remarks

Steve Coll
President, New America Foundation
Former Managing Editor, Washington Post
Staff Writer, The New Yorker

Bernard L. Schwartz
Chairman, BLS Investments LLC
Former Chairman & CEO, Loral Space & Communications
Board Member, New America Foundation
Co-Author, "An Economic Recovery Program for the Post-Bubble Economy"

conference moderator and provocateur
Steve Clemons
Director, American Strategy Program, New America Foundation
Publisher, The Washington Note

Opening Keynote Discussion: In the Wake of Collapse: What the U.S. Consumer Left Behind
9:00 am

The Hon. Laura D'Andrea Tyson
S. K. and Angela Chan Chair in Global Management and Public Policy, Haas School of Business, U.C. Berkeley
Former National Economic Advisor to President Bill Clinton
Board Member, New America Foundation

Martin Wolf
Chief Economics Commentator and Associate Editor, Financial Times
Author, Fixing Global Finance

10:00 am
Panel Discussion-Conversation: The Search for Domestic Drivers of an Economic Recovery

Mark Zandi
Chief Economist and Co-Founder, Moody's Economy.com
Author, Financial Shock: Global Panic and Government Bailouts

Tom Gallagher
Senior Managing Director, International Strategy and Investment (ISI) Group

Richard Vague
Chairman & CEO, Energy Plus
Founder and Former Chairman & CEO, First USA Bank
Founder and Former CEO, Juniper Financial/Barclays USA

Leo Hindery
Managing Partner, Inter-Media Partners
Former CEO, AT&T Broadband and Yankee Entertainment Sports Network
Chairman, New America Foundation/Smart Globalization Initiative

Jeff Madrick
Director of Policy Research, Schwartz Center for Economic Policy Analysis, The New School
Author, The Case for Big Government

11:00 am
Panel Discussion-Conversation: Can Global Demand Come to the Rescue? What Must We See From the G-20 London Summit?

Sherle R. Schwenninger
Director, Economic Growth Program, New America Foundation
Co-Author, "An Economic Recovery Program for the Post-Bubble Economy"

Desmond Lachman
Resident Fellow, American Enterprise Institute

Clyde V. Prestowitz, Jr.
President and Founder, Economic Strategy Institute
Author, Three Billion New Capitalists: The Great Shift of Wealth and Power to the East

Nicholas Lardy
Senior Fellow, Peterson Institute for International Economics
Co-Author, China's Rise: Challenges and Opportunities

William Gerrity
Chairman & CEO, Gerrity International

12:00 pm
Remarks and Discussion: Undoing Fundamentalism: What Would a Sensible Strategy for Economic Recovery Look Like?

George Soros
Chairman, Soros Fund Management
Chairman, Open Society Institute
Author, Crash of 2008 and What it Means: A New Paradigm for Financial Markets
(new edition released to public-30 March 2009)

Steve Clemons
Director, American Strategy Program, New America Foundation
Publisher, The Washington Note
Closing Thoughts

12:45 pm
Closing Thoughts

Bernard L. Schwartz
Chairman, BLS Investments LLC
Former Chairman & CEO, Loral Space & Communications
Board Member, New America Foundation
Co-Author, "An Economic Recovery Program for the Post-Bubble Economy"

Steve Coll
President, New America Foundation
Former Managing Editor, Washington Post
Staff Writer, The New Yorker
Adjournment

1:00 pm
Adjournment

-- Steve Clemons

Yesterday afternoon, I had the pleasure of hosting Advisor to President Mahmoud Abbas and Palestine Minister for Economic Development Mohammad Shtayyeh in my office to discuss the status of Palestinian Government unity government talks between Fatah and Hamas.

This is a highly unusual and important exchange because Shtayyeh is a solid Fatah party leader -- who in contrast to many of his party colleagues -- wants to achieve a workable unity government that includes Hamas. He believes Hamas wants this too and is working hard to counter what he considers to be a disinformation campaign that Hamas is not interested in coming back into a workable governance situation.

Egypt Intelligence Chief Omar Suleiman has been in Washington this last week sharing details about his efforts to generate a unity government agreement between Fatah and Hamas.

Sources tell me that the US government position on a unity government has not yet fully come together and significant divisions exist between key players on Obama's staff.

The talks between Hamas and Fatah will resume on the 1st of April.

-- Steve Clemons

Juan Cole has just published a new book about America's interaction with the Middle East, called Engaging the Muslim World.

As readers of his blog Informed Comment know, Juan is one of the most knowledgeable and thoughtful American observers of the Middle East and was one of the earliest and most consistent debunkers of neoconservative myths about our role in the Middle East and our so-called "War on Terrorism."

I will be hosting an event with him TODAY at the New America Foundations' NEW OFFICES 1899 L Street, 4th floor today between 12:15 pm and 1:45 pm EST (Now). This event will LIVE STREAM at The Washington Note and will also be broadcast on CSPAN's Book TV.

I hope you can join us either in person or via the webcast.

-- Steve Clemons

I'm not a protectionist type -- but I do believe in smart industrial policy, national commitments to infrastructure, and the promotion of the American jobs base when tax dollars are involved - particularly during the greatest financial meltdown in generations.

And yet, U.S. AID funds -- American taxpayer funds -- that have purchased condoms under a long term contract from a US firm for distribution in Africa are now going to go to a Chinese manufacturer of condoms.

An estimated 300 American jobs may be lost by this offshoring of American government condom purchases.

Does it make any sense at all that during a time when American taxpayers are giving policymakers trust in spending trillions of dollars to kickstart the economy and to "create jobs" that a branch of that same said government is doing something now that is undermining the American jobs base?

I think not. This just isn't smart policy -- sort of like the AIG bonus kerfuffle.

I realize that there are efficiencies in going to China to produce stuff -- and more condoms may mean more resources to send to those who need them in Africa, though many of these condoms are sold at nominal fees to help instill a market based appreciation for their importance.

But this is just the wrong time to be moving any productive capacity abroad, particularly when American taxpayer dollars are being used to finance the offshoring.

Leo Hindery, who served as a Member of the US Government's Commission on Helping to Enhance the Livelihood of People Around the Globe (HELP Commission) and is one of the Democratic Party's few CEOs who think in "stakeholder terms" about labor and business management, will have a piece out in The Nation this week focusing on the "jobs creation deficit" we have today. Hindery not only considers official unemployment but also the unofficial employed and partial employed work base -- and makes a compelling case that we don't need the several million jobs that Obama's team is hoping to create -- we need a plan to generate more than 20 million jobs.

Well, if this move of condom jobs to China goes through, add 300 more to the Obama jobs creation deficit.

-- Steve Clemons

Our "neighbor to the south" is finally receiving some long overdue attention, albeit for undesirable reasons. Mexico's crisis is stealing headlines here in the U.S., a difficult task during an economic crisis. Without a moment to spare, the White House has announced that President Obama is planning a visit to Mexico. In fact, President Felipe Calderon can expect an impressive parade of guests over the next couple of weeks: "Secretary of State Hillary Rodham Clinton will visit Mexico next week, followed by Atty. Gen. Eric H. Holder Jr. and Secretary of Homeland Security Janet Napolitano in early April, and President Obama shortly after that."

The label "failed state" has repeatedly been applied to Mexico. Jorge Castaneda, former Mexican Foreign Minister and fellow at the New America Foundation, recently made the case against this erroneous label, "The government represents the nation abroad, exercises a quasi monopoly on the use of force within its borders, collects taxes and ensures the integrity of its citizens against perils from within and without. By these measures-- indeed by any standard definition of a failed state--Mexico is clearly acquitted." While Mexico's current state may not warrant the exasperating label "failed" it surely deserves more attention and cooperation than the U.S. traditionally offers.

Forty percent of Mexico's citizens survive on less than $2 per day; an unacceptable figure for a nation that shares a 2,000 mile border with the World's richest (and arguably most generous) nation. Policy makers have simply overlooked Mexico time and again. Mexico has been just stable enough to ignore. The FY2009 budget allocates little more than $500million in foreign assistance to Mexico or one-third what we annually offer Egypt. Mexico is our next door neighbor; for the sake of regional stability and national security the United States must invest in Mexico and its leaders. While Mexico is not a failed state, it is facing a crisis the United States cannot afford to ignore. President Felipe Calderon does not lack the will to fight the drug lords and corruption, but the resources. The legitimate economy of Mexico is severely undermined by two shadow economies that are difficult to track and impossible to tax. The drug economy is estimated at $10billion to $50billion and revenue from remittances in 2008 was around $25billion.

In December 2008 the U.S. government committed $400 million to support the Mexican government in their battle with gangs and drug lords. While I appreciate the gesture as a show of support for Calderon, this amount is insufficient to address the crisis that Mexico is now facing. More than a neighborly handout, the U.S. government must shoulder some of the responsibility for stopping this crisis; U.S. consumption is the driving force of the Mexican drug economy. Here's an idea... let's divert the billions of dollars set aside to build the atrocious border fence to strengthening the Mexican government and civil society. An investment in stabilizing our neighbor will do more for regional security than a wall that would only cause greater disparity between the two nations. Mexico's greatest need appears to be police training and better armament, but I would also suggest a substantial investment in civil society. Mexico must be equipped to fight the drug lords; but this is not merely a gunfight, this is political struggle. Mexico needs money for alternative livelihood training, education, strengthening the judicial system and civic engagement. Empowering people is the best way to fight corruption.

Mexico's process of democratization has left a power void that the drug lords happily filled. I see two ways to reclaim power from the drug lords: the state can re-consolidate power into a strong, centralized state relying heavily on the army--which would be a reversal of their recent democratization-- or they must push ahead with the democratization and decentralization process. Which means local governance, with an uncorrupted police force and judicial system supported by civic participation, will prevail. I believe the latter is necessary for Mexico to not only survive the drug war but to thrive as a prosperous, democratic nation.

Presidents Obama and Calderon have much to discuss in their upcoming meeting; my hope is that Obama makes a significant commitment to the people of Mexico. We support you, we respect you, and we want you to succeed.

-- Faith Smith

I will be participating in a discussion today on Warren Olney's excellent "To The Point" that runs on the National Public Radio network all over the country at various times.

Other guests on the show will be David Sirota, Congressman Brad Sherman, and David Rothkopf.

It will be live on KCRW from 3 to 4 pm EST, or 12 noon - 1 pm if you are on Pacific time.

Locally, it will play on WAMU between 10 and 11 pm here in Washington.

For those interested, this is the digital audio file for the show:

The subject today is all the pressure that is being brought down on top of Treasury Secretary Tim Geithner, who Barack Obama stated is facing challenges like no other Treasury Secretary since Alexander Hamilton.

My only somewhat flippant response is that Hamilton was an incredible communicator and writer -- and when challenged would not need Washington's statement of support. Hamilton would spend the weekend writing 20,000 words or so making his case or argument and would do battle with his opponents.

I am hoping that Tim Geithner begins doing that. He seems a bit too much like the Beaver to Bob Rubin's Wally -- and needs to demonstrate that he's thought through the options -- even those proposed by rivals -- and has a better, convincing plan. That's what he needs to do to restore confidence in his leadership.

This article may be referred to during the conversation.

-- Steve Clemons

On Simon Johnson's excellent blog, the Baseline Scenario, this morning, I came across the best idea I have seen to address the toxic asset issue while taking into account the populist sense that the little guy is taking all the pain and getting none of the potential gain.

In short, a reader to Simon's blog suggests that, if the US Government is going to subsidize private capital to entice it with the prospect of outsize returns on these illiquid/toxic assets, then they should not limit these enticements to hedge funds, private equity funds and the investment banks themselves, but rather the government should create an investment vehicle to make these very attractive investment subsidies available to the individual investor. If these assets are, in fact, currently undervalued because of market mechanics, and not their intrinsic value, then let's give everyone the opportunity to buy low and sell high - with the majority of the risk and financing costs borne by the government. If it's good enough for KKR, it should be good enough for everyone.

The idea by this individual (known by his initials "PK") is set forth as follows:

"If Geithner's taxpayer subsidized toxic public/private plan goes forward, I think it would be fair if the federal government allow non-institutional investors to participate via a no-fee investment vehicle. I think if Americans had the option of investing in this program (without having to pay the egregious fees to the investment advisors/PE shops), it would be much easier to swallow since they would at least get the same deal the sharks are getting. There is probably more money on the sideline with individual investors than all these institutional investors. Maybe they could set up some ETF equivalent for it. I think the willingness of the administration to do such a thing would tell us a lot about whose for whose interest they are really looking out."

Bravo. This may be the best idea I have heard through the entire financial crisis. It truly aligns the interests of the individual investor (who has suffered mightily over the past year) with those of the government, big investors and all participants in the global financial system.

As the writer suggests, let's see if this gets any traction - it will be a great indicator of whose interests are actually being taken into account here.

-- Douglas Rediker

This post was written anonymously by a former investment banker.

As a former investment banker, I know that my views on the taxation of bonuses will be immediately suspect. So let me start by stating unequivocally that many on Wall Street and in the global financial services sector have acted in an indefensible manner. Many still don't "get it." Without government funds most, if not all, of the major players, would be out of business today. Those that argue to the contrary are being disingenuous.

Had the government and the Fed not made huge amounts of capital available last autumn, the entire financial system would have collapsed and they would all have been decimated - regardless of how strong their balance sheets or how hedged they were. When all of your counter-parties go under, there's no such thing as an effective hedge. That's what Hank Paulson was talking about in September when he warned of global financial collapse.

By providing capital both directly and through the Federal Reserve, the US Government (and other governments as well) kept the world's financial sector afloat. Moreover, the government provided access to funds on terms that were highly favorable to the banks. (For example, it's hard to argue that the government got a great deal when, in the case of Citi, whose total market cap today stands at around $14 billion, the Fed and Treasury provided over $300 billion in guarantees and $45 billion of equity - and in return they got roughly a one-third ownership stake in the company.)

For any banker or trader who believes that they were entitled to their seven figure bonus this past year, I recommend that they speak to their former peers at Lehman Brothers and consider what their year end bonus would have looked like had the government not stepped in. The alternative scenario ought to have made everyone in finance stand up and recognize that this is no longer "business as usual." But it didn't. Many continued to act like they were Masters of the universe - instead of Masters of the black hole they had, in fact, created.

Having said that, I think that the current backlash against AIG, and by extension, the entire financial sector, is very dangerous and could cause enormous damage well beyond the wallets of the bonus recipients in question. This past week's move by the House to impose a 90% tax on bonuses will, I fear, be looked upon in the future as a tragic error that raised the level of political risk in the US to a new level.

Continue reading this article

-- Ben Katcher

Regrettably, the Obama administration seems to be fumbling the ball on an economic policy course that restores confidence in the American economy on both the optics level and also on a substantive front that reorganizes the "social contract" and design of the real economy in the U.S.

Obama, in his 'loyalty' to his current economic team and the mistakes they are making is the antithesis of Abraham Lincoln. Obama may have tried to mimic Lincoln's "team of rivals" approach to politics -- but he needs to read the chapters on the number of generals Lincoln fired during the Civil War to finally get things moved forward.

Obama may need to fire a number of his economic generals who have been trying to restore Wall Street to what it once was -- not boldly and critically reorganize the financial sector in a way that the dysfunctional behavior that characterized its bubble success is dismantled and reshaped.

Civil society should not wait quietly while Obama's team continues to fumble -- and while its key economic policy chiefs play "point the finger" at their colleagues behind the scenes. It's time for serious discussion about what needs to be done. . .and we need better benchmarks than we have for applauding, critiquing, and simply measuring the policy steps the administration is taking.

Paul Krugman, James Galbraith, Joseph Stiglitz, Robert Reich, Robert Kuttner and others have been invaluable commentators and truth-tellers on the macro and micro dimensions of the economic policy steps and missteps the Obama team has been making.

Under the auspices of the New America Foundation Economic Growth Program, Next Social Contract Initiative, and Smart Globalization Initiative -- my colleagues and I are organizing a set of economic policy forums that are going to raise questions about our economic policy course.

The first "Bernard L. Schwartz Economic Policy Symposium" will take place in Washington at the New America Foundation offices on Thursday, 26 March 2009. Attendance information is here.

Financier and former Loral CEO Bernard Schwartz has been trying to push the administration and Congress to realize that there are different kinds of deficits the nation has to struggle with -- and the most important in his mind is leaving an "infrastruture deficit" to the next generation. He will be helping to open this important conference.

Philanthropist and investor George Soros will also be speaking -- and has been pushing a five point plan for the Obama team to consider. His new book is about to appear -- but a short primer piece of his recently appeared on Huffington Post and outlined five key points of an economic recovery plan that the Obama team has flubbed up on for the most part:

1. A fiscal stimulus package

2. A thorough overhaul of the mortgage system

3. Recapitalization of the banking system

4. An innovative energy policy

5. Reform of the international financial system

Former National Economic Adviser to President Clinton, Laura D'Andrea Tyson, will also be engaging in a discussion with Chief Economics Commentator and Associate Editor of the Financial Times Martin Wolf. Wolf, who recently authored the book Fixing Global Finance thinks that there is very little that can be done at present time to respond to the collapse of consumption by American consumers that have been the essential driver of global growth. Tyson has been very focused on the question of what America needs to do to rewire a "new social contract" with middle class American workers who have been left behind by the patterns of economic growth in the past.

I have been suggesting for some time that "Tysonomics" -- which recognizes a need for government prioritizing of certain strategic sectors and of regulation -- is very different than the Rubinomics that dominated the Clinton administration (even when Laura Tyson worked for it) and which arguably were at the root of much of the deregulatory, neoliberal mania that helped hatch the economic disaster the nation and world find themselves in today.

Others in this conference will be Mark Zandi, Chief Economist and Co-Founder, Moody's Economy.com as well as author of Financial Shock: Global Panic and Government Bailouts -- How We Got Here and What Must Be Done to Fix It; Tom Gallagher, Senior Managing Director, International Strategy and Investment (ISI) Group; Richard Vague, Chairman and CEO, Energy Plus and Founder and Former Chairman & CEO, First USA Bank; Leo Hindery, Managing Partner, Inter-Media Partners and former CEO, AT&T Broadband Network as well as Former CEO, Yankee Entertainment and Sports Network -- who has been writing recently on the "Obama job creation deficit"; Jeff Madrick, Director of Policy Research, Schwartz Center for Economic Policy Analysis, The New School and author most recently of The Case for Big Government.

Also. . .Sherle R. Schwenninger, Director, Economic Growth Program, New America Foundation; William Gerrity, Chairman and CEO, Gerrity International; Clyde V. Prestowitz, Jr., President and Founder, Economic Strategy Institute; Nicholas Lardy who recently co-authored China's Rise: Challenges and Opportunities and is Senior Fellow, Peterson Institute for International Economics; and finally one of the most prescient forecasters of today's major economic crisis -- Desmond Lachman, Resident Fellow, American Enterprise Institute.

I will be moderating the meeting along with my colleague Sherle Schwenninger and New America Foundation President and New Yorker staff writer Steve Coll.

Bernard Schwartz. . .George Soros. . .Laura Tyson. . .Martin Wolf. . .Clyde Prestowitz. . .Desmond Lachman. . .Tom Gallagher. . .Steve Coll. . .Mark Zandi. . .William Gerrity. . .Leo Hindery. . .Richard Vague. . .Nicholas Lardy. . .Jeff Madrick. . .Sherle Schwenninger. . .and others make up quite a line up for a great meeting.

For those who are deeply interested in these issues, I should note that George Soros' revised book (in paperback) will be released next week on March 30th and is titled The Crash of 2008 and What it Means: The New Paradigm for Financial Markets. Soros will also have a major economic policy critique/op-ed in tomorrow's (Monday, 23 March) Financial Times and another economic policy op-ed in Tuesday's (24 March) Wall Street Journal. Leo Hindery will have a front cover featured article on the Obama administration's job creation deficit in the April 1 edition of The Nation which should be online early this next week.

This entire conference will STREAM LIVE on this blog, The Washington Note between approximately 8:30 am and 1:00 pm EST on Thursday, 26 March 2009.

If you would like to attend, RSVP information is here.

The purpose we have in organizing this meeting is to try and position some of the key issues that should be considered at the London G-20 meeting and to begin to emphasize that the fumbling on economic policy needs to stop.

It's time to begin organizing a Team B economic policy effort -- even if it is organized by a network of concerned civil society leaders.

-- Steve Clemons

This is a guest post by New America Foundation/Economic Growth Program policy director Michael Lind. Lind recently authored for Salon, "Obama's Timid Liberalism".

Infrastructure investment and other themes related to the question, "What Will Replace the American Consumer?" will be discussed at the 1st Bernard L. Schwartz Economic Symposium at the New America Foundation next Thursday, 26 March -- which is designed to be both an experts program primer for those preparing for the London-hosted G-20 Summit on the 2nd or April.

INFRASTRUCTURE IS BACK

For a generation, infrastructure has been the unwanted stepchild of American politics, neglected alike by conservatives determined to cut back on public investment and liberals focused on expanding the safety net.

But even before the economy collapsed, there was growing recognition of the need not only to fund long-deferred maintenance of America's crumbling roads, bridges and water lines, but also to invest in transforming America's infrastructure to make it smart, by incorporating computer technology, and green, by facilitating a shift to low-carbon energy sources.

What is needed is nothing less than a new American System, like Henry Clay's and Abraham Lincoln's program for investment in railroads or Franklin Roosevelt's and Dwight Eisenhower's federal programs for electrification and highway transportation.

Much of the credit for raising public awareness of this issue goes to Governors Ed Rendell, Arnold Schwarzenegger and New York Mayor Michael Bloomberg and their new coalition, Building America's Future.

The good news is that the recent stimulus bill included significant funding for infrastructure. But stimulus spending at best can be only a down payment on much larger and more prolonged public investment. The American Society of Civil Engineers (ASCE), in its 2009 report card on American infrastructure, estimates that $2.2 trillion is needed over a five-year period; if stimulus-related spending is included, then more than a trillion dollars is still necessary. But it's not enough for the money to be spent; it must be spent wisely. Our present system treats infrastructure spending as pork to be doled out by members of Congress on the basis of political rather than technical considerations.

The solution is to create a national infrastructure bank.

Like the European investment bank and many state economic development banks, the national infrastructure bank would leverage private investment on the basis of a capital base provided initially by the federal government.

This would accomplish two things. First, using government funds as a catalyst for private money would enable far more investment than government funding alone, while permitting the government to retain more control of infrastructure assets than in the rival "public-private partnership" approach of leasing tolled highways to corporations. Second, decisions about funding energy, transportation and communications projects would be removed from congressional pork-barrel politics and entrusted to a nonpartisan agency accountable to our elected officials as a whole but not to individual members of Congress.

President Obama's budget includes funding for a small-scale National Infrastructure and Reinvestment Bank, but the case for something far more larger and effective has been made by many leading experts, including Bernard Schwartz and Sherle Schwenninger, John C. Whitehead and Felix Rohatyn -- the author of an important new book, Bold Endeavors: How Our Government Built America, and Why It Must Rebuild Now.

The new consensus in favor of infrastructure is fragile and could be threatened in the years ahead by demands to slash the deficits driven by today's emergency by cutting productive as well as unnecessary spending.

It is all the more important to emphasize the importance of infrastructure investment as a catalyst for the productive economy that the U.S. must have if it is to grow its way out of its fiscal hole sooner rather than later.

-- Michael Lind

On CNN's State of the Union show, John King just missed the key zinger statement made by Council of Economic Advisers Chair Christina Romer.

Romer refused to get into the issue of how the Obama administration shoved Senate Finance Committee Chairman Christopher Dodd to "reluctantly remove" a provision that would disallow bonuses from firms that received federal relief -- and didn't want to get into how on one day Summers defended the bonuses when the next day Obama said they stank.

But what really showed Christina Romer's course -- and that of the administration at the moment -- was her line that:

We need them [meaning banks and financial institutions] to lend like crazy. . .

WRONG. This kind of statement is a manifestation of the fantasy that the U.S. economy can bounce back to the kind of turbo-charged, quick growth consumption economy we once had -- that depends upon consumers devouring goods far beyond their ability to pay for them and depends equally on financial institutions making decisions that are out of line with dependable returns.

"Lending like crazy" is exactly what helped trigger the global financial crisis -- and reflating those trends would be a major mistake if that is what the Obama administration is pushing.

Obama admitted a misstep in referencing the "Special Olympics" in his Jay Leno chatter about his poor bowling performance. Christina Romer's encouragement of "lending like crazy" is a far worse reference that should be immediately addressed and withdrawn by Romer and the White House economic team.

-- Steve Clemons

I really wish I had been invited to the annual Gridiron Dinner -- but wasn't.

Some people saw me sitting near the tux and white tie'd National Portrait Gallery Director Emeritus Marc Pachter yesterday late afternoon at a brilliantly irreverant and stimulating evening at the Gallery featuring film and culture cult leader John Waters sharing his views on another artistic cult leader (that's what John Waters called him) Cy Twombly. Pachter was seriously dudded up and I was in jeans. I knew he was Gridiron bound.

I mentioned on my Twitter and Facebook accounts that I had been working hard during the day to get an advance copy of Joe Biden's jokes but had failed so had hoped to have an agent in the room texting me the jokes. Marc Pachter was going to be that secret agent but think his batteries died.

Soooo, courtesy of Politico's Mike Allen, here are some of Joe Biden's wonderful zingers. Obama was preparing for his "second coming at Easter" apparently and was the first President since Grover Cleveland to stiff the DC elite journalist crowd.

Come to think of it, we should start an elite blogger dinner and put the Gridiron out of business. . .hmm, that could be a great idea.

From Mike Allen's "Playbook":

VICE PRESIDENT BIDEN KILLS AT GRIDIRON: "Axelrod really wanted me to do this on teleprompter -- but I told him I'm much better when I wing it. ... I know these evenings run long, so I'm going to be brief. Talk about the audacity of hope. ... President Obama does send his greetings, though. He can't be here tonight -- because he's busy getting ready for Easter. (Whisper) He thinks it's about him.

"I know that no president has missed his first Gridiron since Grover Cleveland. Of course, President Cleveland really did have better things to do on a Saturday night. When he was in the White House -- he was married to a 21 year old woman. ... I understand these are dark days for the newspaper business, but I hate it when people say that newspapers are obsolete. That's totally untrue. I know from firsthand experience. I recently got a puppy, and you can't housebreak a puppy on the Internet.

"Now let's see: we have a Republican speaker who was born in Austria, and tonight's Democratic speaker was born in Canada. Folks, this is Lou Dobbs' worst nightmare. ... We are now two months into the Obama-Biden administration and the President and I have become extremely close. To give you an idea of how close we are, he told me that next year -- maybe, just maybe -- he's going to give me his blackberry email address. ... But the Obama Administration really is a good team. I am the experienced veteran. Rahm can be an enforcer. And Tim Geithner is always there when you need to borrow money. And no questions asked.

"You know, I never realized just how much power Dick Cheney had until my first day on the job. I walked into my office, and you know how the outgoing president always leaves the incoming president a note in his desk? I opened my drawer and Dick Cheney had left me Barack Obama's birth certificate. ... I now realize that we have to be extra careful when we annunciate new policy ideas to make sure they don't look like they're personally motivated. For example, the other day there were a whole bunch of stories about the President's hair going gray; the next day there's a story about a Vice President who's trying to grow new hair, and then the day after that, the two of us come out in favor of stem cell research. That looked bad.

"I'd like to address some of the things I said: Like when I said that 'JOBS' is a three-letter word. I did say that. But I didn't mean it literally. It's like how, right now, most people think AIG is a four-letter word. ... Or when I announced our stimulus package website, I was asked how you get to it: All I said was I didn't know the website number. What I really meant to say was, 'Ted Stevens didn't tell me what tube the website is in.'"

More later on the serious front. . .seriously.

-- Steve Clemons

The C.V. Starr Center for the Study of the American Experience at Washington College, of which I'm a board member, and the National Portrait Gallery are sponsoring an afternoon discussion today with filmmaker John Waters.

Waters will reflect on Cy Twombly's "Letter of Resignation."

I'm going to be there -- and while on my way there (and back) am thinking about Barack Obama's greetings to Iran and Ayatollah Khamenei's response back. I don't want to offer a simple salute to Obama for the positive and constructive tone of his greetings.

More needs to be said -- but it will be posted later.

Enjoy the first days of Spring.

-- Steve Clemons

The Washington Times' omnipresent Potus Notes political and foreign policy blogger Jon Ward did a very nice write-up of some parts of a "blogger breakfast session" that I hosted this morning with Mark Schmitt, editor of The American Prospect. This morning's topic focused on the state of Israel/Palestine "stuff" and broader Middle East dynamics and featured New America Foundation/Middle East Task Force co-directors Daniel Levy and Amjad Atallah.

This is a slice from Jon Ward's good report:

[Daniel] Levy, a former Israeli government policy adviser, talked about Israel's new foreign minister, Avigdor Lieberman, a hardliner's hardliner on issues regarding compromise with the Palestinians.

Levy said that with Lieberman's success in last month's elections, which gave him the leverage to gain the foreign minister post in Prime Minister-designate Benjamin Netanyahu's governing coalition, it's "very difficult to pretend ... it's business as usual" in Israel.

"Lieberman chose to run a campaign of overt ugly pretty much no holds barred racism against Israeli's arab citizens," Levy said.

Lieberman received popular support from Israelis, he said, because "48 years of occupation has a brutalizing effect on a society."

Lieberman, however, "sees himself as a future israeli leader," Levy said, and is currently on a charm offensive to soften his image abroad. One obstacle to his ascent to prime minister, Levy said, is a perception among Israelis that "this former bouncer, which is what he is, thug, will never be accepted in the world."

"He needs to show to Israelis, the world will accept me, the world will love me," Levy said.

U.S. officials, meanwhile, need to meet with Israeli Arabs to send a message that they do not agree with mistreatment of this 20 percent minority, Levy said.

Atallah, who has advised the Palestinian Authority on peace negotiations, said that Israel will not work toward a two-state solution unless the Obama administration pressures them to do so, especially under the new government.

"We've made it easy for Israel to continue doing things it shouldn't do," Attallah said.

For example, he said, the U.S. has in the past made statements of disapproval about Israeli settlements that the Israelis have not taken seriously because the U.S. has not inflicted consequences for Israel's continued construction of settlements in Palestinian territories.

"That's an incentive for them to continue building settlements," Attalah said.

There was a lot more to the discussion as well -- particularly more on the possibility of the Ehud Barak-led Labor Party joining Netanyahu's government which would leave Tzipi Livni as the de facto head of the Israeli peace movement.

Maybe Netanyahu will give Barack Obama some tips on his approach to a "team of rivals."

-- Steve Clemons

MSNBC's Rachel Maddow invited former State Department Chief of Staff Lawrence Wilkerson on to her show last night to discuss his recent blog post on The Washington Note titled "Some Truths About Guantanamo Bay".

Thanks to Rachel Maddow for highlighting this issue both about the abhorrent behavior of Cheney and his team with regard to Guantanamo detainees but also for pointing a spotlight at Cheney's continuing fear-mongering. And congrats to Lawrence Wilkerson for the reception that his piece has received.

-- Steve Clemons

Darwin the Alligator lives in the lagoon under my friend Kate Brown's deck in Hilton Head.

Lovely.

-- Steve Clemons

Armenian President Serzh Sargsian and Turkish Prime Minister Recep Tayyip Erdogan at Davos.

The Los Angeles Times reported yesterday that the administration is reconsidering President Obama's campaign promise to declare that the Armenians were victims of a genocide during the collapse of the Ottoman Empire nearly one hundred years ago.

Also yesterday, the House of Representatives introduced H. Res 252, which declares the killings genocide.

To understand these recent announcements, it is important to understand the underlying politics.

To paraphrase Brent Scowcroft, the issue of whether to declare the killings genocide is not a foreign policy issue, but a domestic political issue. Similar to our policies toward Israel and Cuba, a well-mobilized and well-funded minority - in this case led by the Armenian National Committee of America and the Armenian Assembly of America - wields disproportionate influence.

President Obama's decision to "postpone" his genocide declaration should not come as a surprise. Former Presidents George W. Bush and Clinton each also refrained from using the word as president after pledging to do so as candidates.

The reason for this is simple.

A genocide declaration would be deeply harmful to our relationship with Turkey, a relationship that has already suffered in recent years - due primarily to disagreements about the Iraq war, but also because of Turkey's increasingly independent foreign policy and prominent regional role under the moderately Islamist Justice and Development Party (AKP) that assumed power in 2002.

Washington needs Turkish cooperation on a wide range of issues - Iraq, Afghanistan, energy security, and Iran to name a few - and is in no position to alienate the Turks.

Those who doubt the likely severity of the Turkish response should note the uproar that the "I apologize" campaign - an initiative by Turkish intellectuals and journalists to apologize for the "Great Massacre" of Armenians - has caused.

Furthermore, this year there is another, perhaps even more compelling reason to leave history to the historians.

Turkey and Armenia are closer to normalizing relations than at any point since Turkey closed the border in 1993. But a genocide declaration by Washington would likely undo more than a year of diplomatic progress.

As part of the ongoing dialogue between Ankara and Yerevan, Turkish officials have offered to compose a joint commission of historians to determine whether a genocide occurred or not - and Armenian president Serzh Sargsian has left the door open to this possibility.

If Turkey and Armenia can let the historians decide, then so too should the United States.

As Sameer Lalwani has written on this blog, we have skeletons in our own past - including what might be considered the genocide of Native Americans and more than 75 years of racial slavery.

Supporters of the resolution tend to make arguments like Scott Paul's (from October 2007) - "that setting an example by doing the right thing might build some goodwill and encourage others to behave similarly, which would advance our interests in the long run."

While I agree that setting examples that lead to genuine norm creation and that raise the global moral bar are important, it would make more sense for us to confront our own historical memory than to meddle in the historical memories of others.

We also need to abide by the Geneva Conventions, outlaw torture, and honor civil liberties. Those are the kinds of examples that we need to set.

-- Ben Katcher

You may have seen that Carlos Lozada of the Washington Post highlighted "The Autonomy Rule" as a new conceptualization of American foreign policy framing in his "Big Ideas" column on Sunday.

While the authors, Charles Kupchan and Adam Mount, don't like the way I characterize their important piece which just appeared in the journal Democracy, I think they strike a hard blow both against Robert Kagan's "Absolutists vs. Liberals" thesis and against G. John Ikenberry and Daniel Deudney's view that China and other ascending powers will live long and happily in the global liberal order constructed by the United States.

Kupchan, I think, has conceptualized a new brand of Global 21st Century Nixonianism -- and this may very well be the direction the country needs to go.

The Washington Times' Eli Lake and Truman National Security Project Director Rachel Kleinfeld will respond to Kupchan's and Mount's thesis.

The event will take place TODAY at the New America Foundation's NEW OFFICES at 1899 L Street, 4th Floor today between 12:00 noon and 1:45 pm - and will LIVE STREAM here at The Washington Note.

-- Steve Clemons

Lawrence B. Wilkerson was chief of staff to Secretary of State Colin Powell and is chairman of the New America Foundation/U.S.-Cuba 21st Century Policy Initiative.

There are several dimensions to the debate over the U.S. prison facilities at Guantanamo Bay, Cuba that the media have largely missed and, thus, of which the American people are almost completely unaware. For that matter, few within the government who were not directly involved are aware either.

The first of these is the utter incompetence of the battlefield vetting in Afghanistan during the early stages of the U.S. operations there. Simply stated, no meaningful attempt at discrimination was made in-country by competent officials, civilian or military, as to who we were transporting to Cuba for detention and interrogation.

This was a factor of having too few troops in the combat zone, of the troops and civilians who were there having too few people trained and skilled in such vetting, and of the incredible pressure coming down from Secretary of Defense Donald Rumsfeld and others to "just get the bastards to the interrogators".

It did not help that poor U.S. policies such as bounty-hunting, a weak understanding of cultural tendencies, and an utter disregard for the fundamentals of jurisprudence prevailed as well (no blame in the latter realm should accrue to combat soldiers as this it not their bailiwick anyway).

The second dimension that is largely unreported is that several in the U.S. leadership became aware of this lack of proper vetting very early on and, thus, of the reality that many of the detainees were innocent of any substantial wrongdoing, had little intelligence value, and should be immediately released.

But to have admitted this reality would have been a black mark on their leadership from virtually day one of the so-called Global War on Terror and these leaders already had black marks enough: the dead in a field in Pennsylvania, in the ashes of the Pentagon, and in the ruins of the World Trade Towers. They were not about to admit to their further errors at Guantanamo Bay. Better to claim that everyone there was a hardcore terrorist, was of enduring intelligence value, and would return to jihad if released. I am very sorry to say that I believe there were uniformed military who aided and abetted these falsehoods, even at the highest levels of our armed forces.

The third basically unknown dimension is how hard Secretary of State Colin Powell and his deputy Richard Armitage labored to ameliorate the GITMO situation from almost day one.

For example, Ambassador Pierre Prosper, the U.S. envoy for war crimes issues, was under a barrage of questions and directions almost daily from Powell or Armitage to repatriate every detainee who could be repatriated.

This was quite a few of them, including Uighurs from China and, incredulously, citizens of the United Kingdom ("incredulously" because few doubted the capacity of the UK to detain and manage terrorists). Standing resolutely in Ambassador Prosper's path was Secretary of Defense Rumsfeld who would have none of it. Rumsfeld was staunchly backed by the Vice President of the United States, Richard Cheney. Moreover, the fact that among the detainees was a 13 year-old boy and a man over 90, did not seem to faze either man, initially at least.

The fourth unknown is the ad hoc intelligence philosophy that was developed to justify keeping many of these people, called the mosaic philosophy. Simply stated, this philosophy held that it did not matter if a detainee were innocent. Indeed, because he lived in Afghanistan and was captured on or near the battle area, he must know something of importance (this general philosophy, in an even cruder form, prevailed in Iraq as well, helping to produce the nightmare at Abu Ghraib). All that was necessary was to extract everything possible from him and others like him, assemble it all in a computer program, and then look for cross-connections and serendipitous incidentals--in short, to have sufficient information about a village, a region, or a group of individuals, that dots could be connected and terrorists or their plots could be identified.

Continue reading this article

-- Ben Katcher

Katherine Tiedemann is a program associate at the New America Foundation/American Strategy Program.

I have to push back on Ben Katcher's previous post on several points.

First of all, there are indeed preliminary estimates of how much continued operations in Afghanistan will cost: COIN expert David Kilcullen, certainly not part of the same camp as Boot and the Kagans, pegged the figure for 30,000 extra troops at an extra $2 billion per month on top of the $20 billion we already spend there. Considering President Obama okayed sending only 17,000 additional troops to Afghanistan, the cost will be less than Kilcullen's estimate. No small change, to be sure, but considering estimates of the cost of the Iraq war range from some $650 billion up to $3 trillion (or $3,000 billion, as my colleague Doug Rediker would say), the Afghan war is still considerably smaller in scale than its behemoth Iraqi counterpart, and therefore commitment in Afghanistan is not necessarily mutually exclusive with addressing the United States' other national security concerns.

Beyond that detail, the dangers of leaving Afghanistan altogether are great. With Pakistan pushing militants across the border into Afghanistan, security conditions in Afghanistan declining dramatically, and predictions for rising violence in 2009, it is naive to think simply because there are competing priorities on the world's stage that the United States can turn its attention and resources from this strategically critical region.

President Obama has seemingly embraced the Af-Pak struggle as "his" war, much like the Iraq War was President Bush's main foreign policy focus. Now is no time to turn our heads from the conflict, just as the United States appears poised to devote the resources to the country that the Bush administration should have.

And so while it is important, as Ben says, to insist on cost estimates and a strategic rationale, we cannot risk allowing the Taliban and al Qaeda safe haven to return to Afghanistan and Pakistan's wild border regions.

Focusing on economic development and reconstruction aid also must not be left by the wayside any longer. In addition to working with Afghan security forces to bolster stability in the country, the United States should press for security-led reconstruction in Afghanistan; for example, securing the Kabul to Kandahar road and completing construction on the Kajaki Dam in the south (as Peter Bergen described in testimony earlier this month.)

It would be a shame to pull out now, just when the war torn, battered country is at long last getting some more of the resources it so desperately needs.

-- Katherine Tiedemann

A quick follow up to my last post on Afghanistan.

Frederick Kagan penned an op-ed in the Los Angeles Times in October 2007 called "Spend Whatever It Takes to Win the War on Terror."

Unless his views have changed over the past year and a half, Kagan seems to think that the "war on terror" - defined as the wars in Iraq and Afghanistan - must be "won" no matter the cost.

This kind of Bush-era strategic laziness has got to go. Containing international terrorism needs to be recast as a high priority among several in our national security strategy, rather than George W. Bush's "defining ideological struggle of the 21st century" or Senator McCain's phrase, "transcendent challenge."

Those of us who question whether throwing more troops, money, and political capital into Afghanistan makes sense need to point out the opportunity costs of an escalation and we need to challenge folks like Frederick Kagan and others to explain how much their plan will cost and why it is worth spending our limited resources in Afghanistan instead of addressing our other interests at home and around the globe.

-- Ben Katcher

It has slightly bothered me that the Brookings Institution's Hamilton Project grabbed some Hamilton branding for ideas that were anything but.

The Hamilton Project's early objectives were to promote a variant of neoliberal economic policy -- free and fast trade, fiscal conservatism and budget hawkishness, and a rejection of national economic strategies that would maximize American worker and producer interests over the interests of other states.

The real Alexander Hamilton who was the key conceptualizer and organizer of the American government and who laid the foundation of the nation's strong financial architecture believed in promoting manufacturing via tariffs; promulgated the expansion of credit as long as integrity, credibility and confidence were maintained; and was America's most sophisticated and essential economic nationalist.

But whereas our immediate past Secretary of the Treasury Hank Paulson and another Secretary of the Treasury during a Democratic White House Robert Rubin made hundreds of millions of dollars flitting between private sector responsibilities and objectives and government roles, Hamilton -- even in his private life -- studiously avoided financial conflicts of interest.

Hamilton believed in banks and finance and built, wrote the corporate charter for and co-founded the Bank of New York -- the first firm in the new nation whose stock was traded on the New York Stock Exchange.

But to avoid the appearance of conflict, Pulitzer Prize winning author Ron Chernow reports that Hamilton -- who was at the time of the Bank of New York's founding in 1784 a private lawyer -- "held in his own name only a single share of the bank that was long to be associated with his memory."

Rubin is a mega-share/mega-option guy. Hank Paulson too.

And while Tom Daschle and Nancy Killifer have been castigated for errors in tax reporting and essentially barred from serving their government, a deeper, more profound structural corruption has fixed itself in the superstructures of government that is drawing almost no attention.

While many are criticizing the gross and wrong AIG taxpayer-funded bonuses of senior executives, the truth is that that kind of corruption is relatively small time -- even at $165 million -- and was predictable. The outrage expressed by Obama, Lawrence Summers and Tim Geithner must be feigned -- or they don't know what they are doing in the positions they have acquired.

But what is serious is that Goldman Sachs executives seem to have lied or at best seriously misled the media and public during the early stages of the AIG financial crisis stating that their firm did not have significant exposure to AIG's collapsing financial position.

But after AIG published its roster of financial distributions, Goldman Sachs comes in on the top of the list at $12.9 billiion.

Treasury Secretary Paulson and former Treasury Secretary Bob Rubin both served as top executives at Goldman Sachs -- and in the end, they wouldn't let Goldman collapse despite allowing Lehman Brothers to die.

Rubin and Paulson have had major conflicts of interest that make Tim Geithner's tax manipulations while an IMF employee look pathetically insignficant. Tom Daschle's rides in a town car, Killifer's failure to pay taxes on domestic help, and others who have avoided government because of the very high hurdles Obama has set for those who join his team simply pale in comparison to what we have learned about Bob Rubin's ties to Citibank, Goldman and the Treasury; Hank Paulson to both Treasury and Goldman -- and which have implications as well for their chief acolytes Lawrence Summers and Timothy Geithner.

AIG and Goldman both lied about their positions last September. And Hank Paulson and other major financial elites involved in the AIG bailout knew it also.

That is the story we should be following -- but few are paying attention.

And we should remember that the great economic genius of the early United States, Alexander Hamilton -- the man who hatched the great Bank of New York -- possessed just 'one share' of that bank.

We should be re-reading about Alexander Hamilton's life and deeds. Soon it is easy to see how he would have been fairly disgusted by those who have recently held his position and pretended to carry on his brand of national interest public service.

-- Steve Clemons

Kirby Dick, the Academy Award nominated film director for This Film Is Not Yet Rated, will soon be releasing a new film on the hypocrisy of in-the-closet gay politicians and the lengths Washington will go to help protect them even as they vote and legislate against equal rights and protections for gay and lesbian Americans.

The new film, Outrage will be released on May 8th but will be featured in the Tribeca Film Festival between April 22nd and May 3rd.

I haven't seen the film but understand that it is powerful and pulls ajar doors that some key Republican political personalities are trying to keep jammed shut. Gay activist, blogger, and gay Republican outing-machine Mike Rogers -- who nailed Senator Larry Craig (so to speak) -- features pretty heavily in the film, and I've been told today that yours truly appears in it as well.

Something for your calendars.

-- Steve Clemons

Many thanks to friends and fellow bloggers at TWN for covering for me this last week as I was away traveling and offline.

I am back in Miami today -- heading back to Washington, DC this morning. More soon.

-- Steve Clemons

(Photo credit: Army.mil's photostream)

Max Boot, Frederick Kagan, and Kimberly Kagan argue in today's New York Times that we cannot afford to "lose" Afghanistan and suggest a number of tactical changes to our operations there.

Their argument contains three major flaws.

First, the authors fail to place the war in Afghanistan in the context of the United States' overall national security strategy. Strategy is about priorities and trade offs. Pouring more troops, money, and political capital into Afghanistan means fewer resources to pursue our other national security objectives across the globe.

Dennis Blair, Obama's director of national intelligence, recently told Congress that the global economic crisis has overtaken international terrorism as the greatest threat to our national security interests. But the authors fail to even try to argue why Afghanistan should be a higher priority than our other challenges.

Also, an honest assessment of whether a prolonged nation-building project in Afghanistan in in our interests must make some educated guess about the endeavor's costs. The authors do not offer any estimates as to their proposal's financial costs or duration.

Second, the authors' mischaracterize their opponents' arguments. They assert that "some claim we have no interest in making Afghanistan a functioning state." But everyone would love for Afghanistan to become a functioning state; the question is whether we can make that happen through a prolonged military occupation.

Third, they claim that "the odds of success are much better than they were" in Iraq before the "surge." The authors (whose piece is titled "How to Surge the Taliban") seem to take for granted that our strategy in Iraq for the past two years has been effective. But the "surge" failed to achieve its strategic objective: political reconciliation in Baghdad.

Meanwhile, on the opposite page Council on Foreign Relations President Emeritus Leslie Gelb suggests that we withdraw our troops over a period of three years while providing military and economic assistance to fight terrorism.

I am not in a position to evaluate the details of Gelb's plan, but I like that it acknowledges the regional nature of the problem, recognizes the limits of our power, and places the war in Afghanistan within a broad strategic framework.

Here is the key graph:

I don't know whether the power extrication strategy sketched out here would be less or more risky than our present course. But trying to eliminate the Taliban and Qaeda threat in Afghanistan is unattainable, while finding a way to live with, contain and deter the Taliban is an achievable goal. After all, we don't insist on eliminating terrorist threats from Somalia, Yemen and Pakistan. Furthermore, this strategy of containing and deterring is far better suited to American power than the current approach of counterinsurgency and nation-building.

-- Ben Katcher

(Photo Credit: United States State Department)

Meri Lugo is a research intern at the New America Foundation/American Strategy Program.

When Secretary of State Hillary Clinton met with her Russian counterpart Sergei Lavrov last week, the prospect of negotiating a bilateral arms control agreement to replace the 1991 START treaty, was reportedly high on the list of discussion topics.

Admirably, Clinton announced that the two countries would have a START follow-on before the treaty's expiration in December 2009. That might be pushing it--especially if the new agreement is done right. But first, some background.

START is the most detailed and extensive strategic arms control treaty agreement ever signed between the United States and Russia, limiting both countries' strategic delivery vehicles, and by extension, the nuclear warheads attributed to such systems. Known for its complicated "counting rules," (what "counts" as a warhead) it also limits the deployment and movement of delivery vehicles and requires extensive exchange of information.

Neither country wants to extend START in its current form. Some of the strict verification protocol, officials believe, is unnecessarily time consuming and costly. Constructed for Cold War adversaries, Lavrov recently called the treaty "obsolete."

One reason why a START follow-on is crucial is its relationship to another arms control treaty, SORT. Also known as the Moscow Treaty, SORT limits "operationally deployed warheads," to between 1,700 and 2,200, and allows Russia and the U.S. to interpret the definition of such warheads as they choose.

A mere two pages, SORT has no independent verification measures. Instead, it relies on the START protocol to give it teeth, meaning that in December 2009, when the START treaty expires, so do all of its accompanying verification and inspection protocols that buttress SORT.

But the chances of reaching a new arms control agreement in the next nine months are slim. Negotiating START took the better part of a decade, and President Obama has yet to even appoint a negotiator.

If negotiations remain incomplete by December 2009, a good interim solution would be to simply extend the verification and compliance measures of START. Though cumbersome, such measures are necessary to buttress SORT while the START follow-on (which would deal with the exact limits on warheads and delivery vehicles) is being finalized. President Obama expressed his support for this type of extension in his September 2008 Q & A with Arms Control Today.

The ideal follow-on to START would encompass the best of both existing treaties - cutting warheads beyond SORT numbers and limiting non-deployed warheads and delivery systems.

These comprehensive limits would fall under a robust and transparent verification system, a la START. But this will be tough. The very reason SORT can require deep cuts is its ambiguity. Calling for numbers below SORT with strict START counting rules would force the U.S. to make some tough decisions about its nuclear force structure.

How could such a strict agreement be implemented? One option for reduction (included in START) is "downloading," or removing a number of warheads from ballistic missiles. To prevent the U.S. from simply "uploading" the warheads once again, START rules require a "replacement platform" for the downloaded missile if more than two warheads are removed.

This provision ensures that reductions are permanent. The modification, however, is expensive. The cost of replacing the front ends of hundreds of missiles to meet a new treaty's limit would be astronomical. Another option is to eliminate some of the delivery vehicles themselves, perhaps phasing out one third of the "nuclear triad" (bombers, ICBMs and SLBMs).

Another hurdle to quick negotiations is the thorny issue of missile defense. Though there seems to be some genuine progress in diffusing the standoff over the proposed missile interceptors in Poland and radar in the Czech Republic, Lavrov has made plain that Russia views missile defense as inextricably linked to a START follow-on.

Negotiating an entirely new treaty in the next nine months is a tall order, and a lot is riding on this new agreement. Many arms control advocates, as well as international organizations and countries around the world, are hopeful that President Obama will set a new direction in arms control and nonproliferation policy.

Negotiating a comprehensive and ambitious arms control reduction treaty would indicate to the rest of the world that the U.S. and Russia are honoring their NPT responsibilities under Article VI to work toward eventual disarmament "in good faith." It could also foment increased international goodwill and cooperation in non-proliferation policy, especially regarding Iran.

-- Meri Lugo

Katherine Tiedemann is a program associate at the New America Foundation.

Last night I attended an event sponsored by Young Professionals in Foreign Policy featuring Admiral Michael Mullen, the Chairman of the Joint Chiefs of Staff (apologies for the poor picture quality--the iPhone camera is still woefully lacking).

The conference room was packed, and you could hear a pin drop when Admiral Mullen entered the room. He touched on many different topics, but I want to highlight what he said were his three main priorities. They are, in order, as follows:

1. "Broader turmoil" in the Middle East. Admiral Mullen correctly stated that the whirlpool of problems in the Middle East, from wars in Afghanistan and Iraq and volatility in Pakistan to a weak relationship with Iran and Hamas and Hizbullah gaining power and legitimacy presents the "most unstable and daunting challenge that we have as a country."

His main concern with Afghanistan is the "lack of governance" at every level, and he agreed with his colleague Michael Maples, head of the Defense Intelligence Agency, of the crucial need to grow the Afghan National Army (widely trusted by the Afghan people) and the Afghan National Police (plagued by corruption and inefficiency) beyond their current sizes of around 80,000 Afghans each.

I agree with Admiral Mullen that "it's not about Afghanistan - it's about Pakistan and Afghanistan" together. The regional dimensions of Pakistan's relationships with both India and Afghanistan are integral to understanding the Pakistani culture and people and crucial to tackling the myriad of problems facing Pakistan today.

2. "Health of the force." Admiral Mullen's second priority when he took on the chairmanship of the Joint Chiefs was bolstering the "brilliant, resilient, but stressed" American armed forces, who are currently not getting enough time at home while facing a growing threat abroad. The next 24 months are "fragile," according to Admiral Mullen, with respect to meeting all the mission requirements tasked to the US military.

3. The rest of the world. I think it's sad, but understandable, that the entire "rest of the world" is both third down on Admiral Mullen's priority list and broadly lumped together. The Admiral's recent trips to Brazil, Peru, Chile, Colombia, and Mexico are commendable, but a few country visits aren't enough to show Latin and Central America that we are serious about engaging in partnerships and dealing with shared challenges like the financial crisis, which Admiral Mullen pointed to as his "overarching concern."

As a side note, the Admiral told us that he doesn't think President Calderon is "getting enough credit" for taking on the dangerous drug cartels in Mexico (more than 1,000 have been killed in drug-related violence in January of this year alone, and Mexican drug-trafficking organizations have a presence in some 230 US cities.)

On the topic of Iran, Admiral Mullen asserted, "I believe Iran is on the path to nuclear weapons," but he is in "wait and see mode" regarding what the nature of the relationship will be with President Obama. Critically, he frowned that "Iran is in the middle of a lot more that is negative than positive."

At the same time, Mullen noted that "Even at the darkest of times with the Soviet Union, we were talking," evidently disapproving of the US's 30-year lack of diplomatic relations with Iran.

Obviously you can't have everything be your number one priority, and generally speaking, I agree with the Admiral's ordering. It's unfortunate that the broader Middle East remains the dominant foreign policy issue on the Chairman of the Joint Chiefs of Staff's agenda, but hopefully as President Obama receives the results of his strategic reviews in Pakistan and Afghanistan and the drawdown of troops from Iraq continues, we will see some changes implemented for the better that will allow the United States to focus on other areas of the world that deserve our attention.

-- Katherine Tiedemann

I haven't had time yet to digest the Obama administration's "relaxation" of restrictions in US-Cuba relations. I'm on a boat -- and sailing in the vicinity of Cuba tomorrow, though in Curacao today.

But I will say that the Obama team needs to prepare for an onslaught of frustration and anger regarding anything that designates certain "ethnic categories" of Americans.

Relaxing Cuban-American travel is discriminatory against other Americans. We have had too much law and too many norms that didn't permit some classes of Americans access to. . .hmm. . .let's say the White House and many other positions and opportunities.

Communist governments often tell their citizens where and when they can go somewhere.

An American government only soils its own reputation by trying to restrict the travel of US citizens -- in a way not dissimilar than what the Soviets did, or the Chinese government used to do, or even the Cuban government today.

Obama needs to show the "courage of his convictions" and stand up for American democratic values with regard to US citizens. Restricting travel for any US citizens as payoff to a cabal that run a political machine in Miami is a gross violation of the social contract American citizens have with their government.

Even the George W. Bush administration for the first three years of its tenure allowed non-tourist people-to-people travel and exchange. Engagement works and would benefit American interests in the region. From what I can tell, Obama does not even go back to the status quo under the last Bush administration. That's a shame, and it's wrong.

Opening opportunities for "Cuban-Americans" as opposed to other "Americans" is something one can hardly imagine a man like Barack Obama doing.

It's wrong. He should fix this immediately. Or expect a wave of dissent about the racism and discrimination that Obama is apparently upholding in these "relaxation" moves.

-- Steve Clemons

This is a guest post by Amjad Atallah, co-director of the New America Foundation/Middle East Task Force.

Charles (Chas) Freeman withdrew his candidacy yesterday for the post of chairman of the National Intelligence Council.

This development sets up a worrying trend that will need to be reversed at the highest levels of government.

David Rothkopf over at Foreign Policy put it best:

Further, those who celebrate keeping out Freeman or any others whose views do not align with theirs or who feared his associations would do well to remember that the same kind of criteria can be applied by other groups. The result is not a government of people without conflicts of interest or troubling ties, rather it is a government full of people whose conflicts and ties are with groups powerful enough to protect them.

Chris Nelson in the Nelson Report was unsparing in his assessment as well:

If it turns out the White House pulled the plug on Freeman because of political pressure ... shame on it. If it turns out Blair didn't have the guts to stick with his guy ... shame on him. If it turns out Freeman just couldn't stomach any more lies from Capitol Hill and the established media, not to mention the blogs, shame on us all.

I have posted below the full text of Freeman's letter to friends just after the announcement of his withdrawal.

You will by now have seen the statement by Director of National Intelligence Dennis Blair reporting that I have withdrawn my previous acceptance of his invitation to chair the National Intelligence Council.

I have concluded that the barrage of libelous distortions of my record would not cease upon my entry into office. The effort to smear me and to destroy my credibility would instead continue. I do not believe the National Intelligence Council could function effectively while its chair was under constant attack by unscrupulous people with a passionate attachment to the views of a political faction in a foreign country. I agreed to chair the NIC to strengthen it and protect it against politicization, not to introduce it to efforts by a special interest group to assert control over it through a protracted political campaign.

As those who know me are well aware, I have greatly enjoyed life since retiring from government. Nothing was further from my mind than a return to public service. When Admiral Blair asked me to chair the NIC I responded that I understood he was "asking me to give my freedom of speech, my leisure, the greater part of my income, subject myself to the mental colonoscopy of a polygraph, and resume a daily commute to a job with long working hours and a daily ration of political abuse." I added that I wondered "whether there wasn't some sort of downside to this offer." I was mindful that no one is indispensable; I am not an exception. It took weeks of reflection for me to conclude that, given the unprecedentedly challenging circumstances in which our country now finds itself abroad and at home, I had no choice but accept the call to return to public service. I thereupon resigned from all positions that I had held and all activities in which I was engaged. I now look forward to returning to private life, freed of all previous obligations.

I am not so immodest as to believe that this controversy was about me rather than issues of public policy. These issues had little to do with the NIC and were not at the heart of what I hoped to contribute to the quality of analysis available to President Obama and his administration. Still, I am saddened by what the controversy and the manner in which the public vitriol of those who devoted themselves to sustaining it have revealed about the state of our civil society. It is apparent that we Americans cannot any longer conduct a serious public discussion or exercise independent judgment about matters of great importance to our country as well as to our allies and friends.

The libels on me and their easily traceable email trails show conclusively that there is a powerful lobby determined to prevent any view other than its own from being aired, still less to factor in American understanding of trends and events in the Middle East. The tactics of the Israel Lobby plumb the depths of dishonor and indecency and include character assassination, selective misquotation, the willful distortion of the record, the fabrication of falsehoods, and an utter disregard for the truth. The aim of this Lobby is control of the policy process through the exercise of a veto over the appointment of people who dispute the wisdom of its views, the substitution of political correctness for analysis, and the exclusion of any and all options for decision by Americans and our government other than those that it favors.

There is a special irony in having been accused of improper regard for the opinions of foreign governments and societies by a group so clearly intent on enforcing adherence to the policies of a foreign government - in this case, the government of Israel. I believe that the inability of the American public to discuss, or the government to consider, any option for US policies in the Middle East opposed by the ruling faction in Israeli politics has allowed that faction to adopt and sustain policies that ultimately threaten the existence of the state of Israel. It is not permitted for anyone in the United States to say so. This is not just a tragedy for Israelis and their neighbors in the Middle East; it is doing widening damage to the national security of the United States.

The outrageous agitation that followed the leak of my pending appointment will be seen by many to raise serious questions about whether the Obama administration will be able to make its own decisions about the Middle East and related issues. I regret that my willingness to serve the new administration has ended by casting doubt on its ability to consider, let alone decide what policies might best serve the interests of the United States rather than those of a Lobby intent on enforcing the will and interests of a foreign government.

In the court of public opinion, unlike a court of law, one is guilty until proven innocent. The speeches from which quotations have been lifted from their context are available for anyone interested in the truth to read. The injustice of the accusations made against me has been obvious to those with open minds. Those who have sought to impugn my character are uninterested in any rebuttal that I or anyone else might make.

Still, for the record: I have never sought to be paid or accepted payment from any foreign government, including Saudi Arabia or China, for any service, nor have I ever spoken on behalf of a foreign government, its interests, or its policies. I have never lobbied any branch of our government for any cause, foreign or domestic. I am my own man, no one else's, and with my return to private life, I will once again - to my pleasure - serve no master other than myself. I will continue to speak out as I choose on issues of concern to me and other Americans.

I retain my respect and confidence in President Obama and DNI Blair. Our country now faces terrible challenges abroad as well as at home. Like all patriotic Americans, I continue to pray that our president can successfully lead us in surmounting them. "

-- Amjad Atallah

(Photo credit: Eric Molly's photostream)

President Obama's decision to reopen negotiations with the Syrians is about much more than bilateral relations between the two countries. Syria's cooperation is integral to initiating game-changing policies toward Iran and to achieving progress on the Israeli-Palestinian track.

As someone who knows little about Syrian politics and history, I have been consulting analysis from a variety of sources in order to understand Syria's role in the region and what negotiations might be able to accomplish.

I have compiled a list of some of the best commentary I have found below. I tried to include a variety of perspectives.

• In the Israel Journal of Foreign Affairs, New America Foundation/Middle East Task Force Director Daniel Levy supports American engagement with Syria and asserts that there is "strongly emerging support in the Israeli security establishment" for a deal with Syria - including Golan withdrawal - because of the strategic benefits that a deal would provide with regard to Iran, Hamas, and Hizbullah.
• In Haaretz, Aluf Benn provides a thorough history of Israeli-Syrian relations and past attempts at reconciliation between those two countries.
• Over at Syria Comment, Joshua Landis reminds us of the deep mistrust that persists between Syrian and American officials and argues that successful negotiations hinge on whether American officials can separate their own interests from Israel's.
• In Foreign Affairs, Richard Haass and Martin Indyk place the prospect of a rapprochement in the context of a broader Middle East strategy.
• In the Wall Street Journal, Georgetown Historian Michael Oren provides a detailed history of the Syrian-American bilateral relationship.
• In Newsweek, Council on Foreign Relations President Richard Haass emphasizes the benefits that Damascus can provide on the Israeli-Palestinian track.
• In the National Interest, Amitai Etzioni explains why he is skeptical that a deal with the Syrians is likely to lead to significant progress with the Iranians.

I hope that you find these articles valuable.

-- Ben Katcher

Thanks to my fellow TWN posters for covering the blog while I am on a vacation out of the United States.

I have stopped in Haiti, sailed by Cuba -- where I really wanted to stop -- and am in the Dominican Republic today.

I just got word that Chas Freeman has resigned as Chairman of the National Intelligence Council, yielding to the attacks on him. This is unfortunate news as it is going to yield a new, long-running battle over what "patriotism" to US national interests means. Is loyalty to Israeli preferences and interests a litmus test for a political appointment?

This will be a big battle and while Freeman has been the first big victim in this struggle for the soul of American foreign policy, I suspect that there will be a slew of similar battles ahead and any Congressman or Senator who regularly puts Israel's interests before American interests could be in for some rough times.

More later -- back to learning what colonialism and slavery did to these islands.

-- Steve Clemons

The London Summit takes place on April 2nd. While this will mark Barack Obama's first global summit as president of the United States, the meeting hasn't received much attention in the US - in sharp contrast to much of the rest of the world, which is highly focused on the event and collectively hopeful that it will result in some dramatic fix for the global economic crisis.

This meeting was scheduled back in November, 2008 as a follow up to the Washington meeting of the G-20. At that time, President Obama had just been elected, the Bush Administration was packing its boxes and the thinking was that quirks of the US electoral calendar prevented any real US-led initiatives from being considered. So, in spite of calls in the run up to that event for a "new Bretton Woods", the failure to deliver on such high expectations was largely forgiven by those who put their hopes on the next meeting, by which point President Obama would certainly have the situation well in hand.

By scheduling another meeting for April, the thinking was that the new administration would be in place, and the working groups established in November could provide background assessments and analysis so that the world would be ready to embrace new thinking and bold solutions. Well, that time is upon us. Sadly, the "shameful" (Paul Volcker's words - not mine) situation at Treasury, where almost none of Secretary Geithner's senior political positions have been filled, means that it appears unlikely that last November's high expectations for bold action will be met.

What I fear most is the drip, drip, drip of incremental fixes when something more structural may be needed. Some of the world's most brilliant financial and policy minds have all written that we need big, new initiatives to take on the financial crisis. Business as usual just isn't enough. Martin Wolf, Nouriel Roubini, Simon Johnson, George Soros... the list goes on. They have all looked beyond the trees and seen the global financial forest and have suggested the need for a structural re-think about how our banking and non-banking financial system works. Whether this makes it to the London Summit agenda remains to be seen.

I still hope that the summit will be a place where bold action by the US and other attendees is announced. However, I worry that the summit will, in the end, fail to announce the tangible steps that the global financial system needs and that world markets are looking for.

In particular, I am focused on the working groups established for this summit which have been tasked with exploring a re-think of how the global financial sector operates.

I don't know what these groups will propose, but I am hopeful that they call for a deeper exploration of how "risk" is integrated into the global financial system. Risk is the cornerstone of Anglo-Saxon style capitalism, but how it is treated is one of the most misunderstood aspects of what is at the very core of needed reforms.

As governments play an increasingly large role in the global financial system, I believe that it is imperative that those proposing reforms consider the fundamental differences between those who approach risk as lawyers, politicians and policy-makers, to whom, in general, risk is something to be avoided and/or mitigated and those in the financial sector who believe that risk is something to be valued and managed. That distinction is of enormous consequence. Any proposals to reform the global financial system must take into account these fundamentally different approaches to risk.

This may ultimately result in a bifurcated financial system in which the more risk averse are drawn to a more traditional utility banking model (remember the phrase "boring bankers"?), and where the systemic nature of the banking sector makes them worthy of government intervention and taxpayer support. Those entities that seek to take on more sophisticated financial sector activities, wherein risk is valued and managed, would be excluded from the utility banking sector and would fall into a non-bank financial services sector. As proposed in the G-30 report led by Paul Volcker earlier this year, there are a number of different proposals to ensure that this sector is regulated on a globally coordinated basis to ensure that innovation is not destroyed but so that systemic threats are kept under control.

The agenda for the London Summit is long and expectations need to be managed. But financial markets have a notoriously short attention span - and the political process both in Washington and internationally doesn't easily operate on a similar time frame. I hope that the US steps up and takes bold leadership at the April summit and that tangible steps to re-shape the global financial system are announced at that time - steps that provide comfort to those around the world, many of whom both resent the US for exporting an economic model that has caused so much dislocation and are also hopeful that we can lead the way out.

-- Douglas Rediker

(Photo credit: G.hostbuster's photostream)

Following the Russia-Ukraine gas disagreement last December, European leaders promised to diversify their natural gas supply away from Russia in order to prevent politically motivated shortages in the future.

German President Angela Merkel said that Russia's actions would have consequences and European Commission Chief Jose Manuel Barroso called the crisis "unacceptable."

Recent events, however, suggest that Russia will continue to divide and conquer European gas markets in a way similar to how toxic financial products continue to threaten Europe's financial markets in the absence of a coordinated policy response.

The centerpiece of Europe's diversification strategy is the proposed Nabucco pipeline. Nearly everyone (except Russia) supports the project in principle, but the details are proving difficult to sort out.

According to Flynt Leverett, Director of the New America Foundation/Geopolitics of Energy Initiative, "All of the structural obstacles that made Nabucco difficult before the Russia-Ukraine dispute remain."

As I explained in my last post on this subject, the first problem with Nabucco is the question of how to fill the pipeline. While Azerbaijan claims that it can fill the pipeline itself, the country produced a total of 23bn cubic meters of gas last year, and Nabucco needs 31bn cubic meters to operate at full capacity. Turkmenistan remains under long-term contracts with Russia, and Iranian gas remains subject to American and European sanctions.

But the bigger structural issue at play is that the wealthy, western European countries are in a better position and therefore have different interests than their eastern European counterparts. This is analogous to the western Europeans' refusal to bail out eastern European banks.

Countries like Italy, France and especially Germany possess the diplomatic and economic weight to play geopolitical hardball with the Russians. Therefore, these "old European" countries are more concerned with their reliance on transit countries like Ukraine and the Baltic states than they are with their dependence on Russian gas.

That partially explains why these countries oppose EU financing for Nabucco and are pursuing Nord Stream and South Stream, both of which would bring Russian gas to western Europe while bypassing the former Soviet states.

Similarly, Turkey's objective with regard to Nabucco is to become an energy hub that brings gas westward to Europe. It makes little difference to Turkey where the gas comes from. In fact, Turkish officials recently suggested that Nabucco should be filled by pumping Russian gas into the Turkish section of the pipeline!

Clearly, this is not what the project's architects had in mind.

It appears that the energy security game - like economic recovery - is mostly every country for itself. And unless that changes, Russia will continue to play European countries off of each other to maximize its strategic benefits.

-- Ben Katcher

(Photo Credit: Chand Khan, Agence France Presse--Getty Images)

Katherine Tiedemann is a Program Associate at the New America Foundation.

The lead in Jane Perlez and Pir Zubair Shah's important piece in the New York Times yesterday is troubling: "After a six-month campaign, the Pakistani military is claiming victory over the Taliban in Bajaur, a northern sliver of the tribal areas, saying the militants have suffered heavy losses and have been pushed over the border into Afghanistan."

It is the latter part that is worrisome; it reflects a lack of recognition on the side of the Pakistani military that simply pushing the militants over the border into Afghanistan is not going to solve Pakistan's Islamist problem.

Pakistan's army has been struggling against the Taliban and assorted Islamist militants for a long time now - some 120,000 Pakistani troops are currently on the border (half in the FATA/NWFP), and yet about three quarters of Pakistan's 63 suicide attacks in 2008 occurred in the tribal areas and the North West Frontier Province, while there were more than 1,000 terrorist attacks in the NWFP alone last year (data courtesy of the Pakistan Institute for Peace Studies).

British foreign secretary David Miliband stated recently what is fast becoming trite conventional wisdom in the Af-Pak morass: that Pakistan's internal militants present a "mortal threat" to the state of Pakistan.

This is exemplified by the fact that the Pakistani government essentially granted the Taliban sole control over the Swat Valley, allowing the militants to implement Sharia law--an alternate universe's take on land-for-peace.

I'm skeptical of the efficacy of this approach--12 Taliban militants have already been released into Swat, and while no alleged "prominent" Taliban were among the freed, it is not a good sign that it has been less than one month since the truce was announced and Pakistan's government is already buckling.

I'm also wary of claims that Bajaur is fully under the control of the Pakistani government and that the Taliban has really been uprooted - one way to tell whether true progress has been made is whether or not the some 300,000 Bajaur refugees and 200,000 Swat valley refugees displaced by the conflict return home. I will be keeping an eye on that in the coming months.

President Obama is on to something with his statement to the Times this weekend that "At the heart of a new Afghanistan policy is a going to be a smarter Pakistan policy. As long as you've got safe havens in these border regions that the Pakistan government can't control or reach, in effective ways, we're going to continue to see vulnerability on the Afghan side of the border."

Richard Holbrooke's appointment as special envoy to Pakistan and Afghanistan is an acknowledgment by the Obama administration that there really is no other way to reach any kind of sustainable political and security equilibrium aside from dealing with Afghanistan and Pakistan as a package deal.

Further highlighting the necessity of an integrated approach to battling militancy in the region is the fact that some 80 to 90% of American supplies to Afghanistan flow through Pakistan, and these supply chains have been the new punching bag of Taliban militants in recent months.

The Pakistani government must understand that merely transplanting the militants from one side of the Durand Line to the other is no way to create a safe and stable region.

-- Katherine Tiedemann

This is a guest post by regular TWN contributor Richard Vague. Vague is the Founding Chairman and former CEO of First USA Bank. He is also the former CEO of Barclays US/Juniper Financial Services. He publishes the eclectic blog, DelanceyPlace.com.

Delaying the bank recapitalization is delaying the recovery

Are bondholders standing in the way?

Completion. On a date certain. Soon.

As regards the recapitalization of banks, that's what is needed before a recovery can ever start to gain traction, and before the stock market can truly stabilize.

There are three primary things that need to occur to turn the U.S. economy around: 1) appropriate easing of the money supply; 2) recapitalization of the banks; and 3) productive stimulus--and we further need to coordinate these activities internationally and resist the temptation to impede business activity with either rhetoric or items reminiscent of the Depression-era Smoot-Hawley Act.

The first of these three is being done--a widely under-reported fact and a lesson learned indelibly from the Great Depression when the nascent Fed disastrously contracted the money supply by 25%. And a stimulus package has been enacted, albeit a messy and clumsy one. But the Treasury continues to dither on the subject of recapitalization, with no clear and comprehensive plan, and no date certain for its completion. And this is the biggest sin committed in these early days of the new administration, its consequence stares at us from the financial pages every day, and we have too many so-called 'zombie banks' instead of banks with the muscle to aide in our nation's economic recovery.

The reason recapitalization is so pivotal is that banks scrambling to regain capital adequacy are not able to provide proper credit support to thousands upon thousands of their business customers, forcing many of these businesses--including the creditworthy among them--to contract or fail. Bank recapitalization, therefore, can be seen as the greatest job preservation and creation tool we have.

And as the nine thousand bank failures of the Great Depression demonstrated, an anemic banking system exacerbates the depth and duration of an economic crisis.

There are a several plans out there that would work well enough and can achieve recapitalization without nationalization, including the ones articulated by George Soros in the forthcoming The Crash of 2008 and What it Means, or Max Holmes in his New York Times Op-Ed "Good Bank, Bad Bank; Good Plan, Better Plan," to name just two of many.

While they have differences, these plans have in common that they effectively take all bad loans off the banks' primary balance sheet, force the stockholders to take the losses in line ahead of the government, include the bank's bondholders in the equation, enable banks to take in new private capital, and result in banks that are private, "investable," and ready to help their customers.

These plans do not require that existing management or the boards remain wholly intact. These plans keep the 'moral hazard' safeguard intact.

Instead of pursuing any plan of this type, the Treasury has been doing a little of this and a little of that, with its primary tactic being to put a few tens of billions of dollars into banks that have hundreds of billions of dollars of problems, a strategy has no hope of delivering a healed banking system anytime soon.

And thus the recovery is delayed. Banks where the problem is not fully addressed cannot meaningfully expand their customer lending support--even if Congress tries to require it of them.

Why has the Treasury avoided this type of plan when so many are calling for it? Some have speculated that it is the magnitude of the problem that has prevented Geithner, et. al., from this type of solution--that a full recapitalization would require trillions of dollars beyond what has already been spent, would frighten both the markets and the politicians, and would be politically unachievable.

(As an aside--we question all the extra time being spent on so-called bank "stress tests." Ensuring bank capital adequacy under stress is the raison d'etre of our bank regulators. If there are not models already in place to quickly assess a bank's capital adequacy under a variety of stress scenarios--especially after last September--what have our regulators been doing?)

Yet others have pointed out that if losses go against not just existing shareholders, but bondholders as well, the remaining problem will be manageable even with greater-than-expected stress, and the recapitalization could proceed quickly.

These observers speculate that it is the community of bondholders that have undue influence with Geithner and Summers, and are the reason a Soros-type solution is not being pursued. And the government's existing preferred stock investments complicate this further still.

If so, it's a tragedy--and an impediment to the economic turnaround we so desperately need.

In the type of plan we would prefer, a date is set, a valuation process (however imperfect) is established, banks have until that date to put their bad loans into a bad bank (or 'side pocket' in Soros's case) guaranteed by the government, and new private capital is raised coincident with that activity (or as soon as feasible thereafter with the government either bridging the interim in some manner). The banks are then ready to be part of the solution rather than part of the problem.

-- Richard Vague

I am in Miami for a couple of days and this beautiful pic was taken from my balcony yesterday evening.

I have been discussing US-Cuba relations with quite a number of Cuban-Americans who live here. I have been telling them about the work that Senator Richard Lugar and his Latin America senior policy advisor Carl Meacham have recently done.

A couple of big surprises. Most want the embargo to end and are indifferent to the political issues that have kept a failed embargo in place for so long.

Secondly, many want to be entrepreneurs in a restarted US-Cuba relationship.

The other nice surprise is that when I put the issue of a relaxation of travel for Cuban-Americans to move back and forth from the US to Cuba, about half of them have the same reaction I do. Why should we create "categories of Americans"? They think we should not be excluding other Americans when legislating about relaxation of travel.

Very surprising -- and very refreshing.

-- Steve Clemons

Editor's Note: For the next week, I will be posting intermittently. Probably brief stuff. Others in the TWN network will be adding quite a bit of content as I get recharged on a vacation. I hope all of you have a great week -- and encourage you to read TWN, participate in discussion, stand your ground -- but stay civil. All the best to all my readers.

-- Steve Clemons

In an impulsive backlash against the warrants issued by the ICC this week, Sudanese President al-Bashir halted the work of 13 relief organizations operating in his country, leaving, "1.1 million people without food, 1.5 million without medical care and more than one million without drinking water." (Reuters) Sudan is a failed state; the government is unable or unwilling to provide for the basic needs of its people. For many Sudanese the relief agencies are their only source of protection and provisions; millions of Sudanese are now in an extremely vulnerable state. Al-Bashir's move is the latest in a long list of setbacks for non-governmental relief agencies. The last decade has also seen a drastic rise in attacks on aid workers as they find themselves in increasingly dangerous situations.

To carry out their relief mission, agencies must now deal with threatened authoritarian leaders, as in Sudan, or ideological battles, as in Afghanistan. In the post-9/11 world they are more often working in battlefields, amidst active fighting and conflict. Attacks on aid workers in Somalia and Afghanistan have become so prominent, agencies are pulling workers out of these areas. (NYT) Zimbabwe, Myanmar, and Somalia are just a few of the countries to ban or restrict the work of relief agencies in recent years. Rare is the autocrat who welcomes outside meddling--even in the form of humanitarian aid.

Foreign Aid workers are on the front lines in the global fight against famine, poverty, inequality, and disease. The world is a better place for the work of the Red Cross, Medecins sans Frontieres, Save the Children, and the thousands of other charities providing food, medicine, and education to those who would otherwise go without. Only a decade ago aid workers were relatively safe working in conflict-ridden areas, at the least, they weren't specifically targeted for violence as is currently the case. Now an aid worker in Sudan, Somalia, or Afghanistan is almost as likely to be attacked as military personnel. The increasingly turbulent environments in which aid workers operate is creating an existential crisis for Relief agencies.

We live in a world of "constant conflict" and those seeking to deliver humanitarian relief must adjust their mission and mode of operation to reflect this. How will they move forward? Some agencies have responded by beefing up security by hiring private security contractors to protect their operations. This could result in an escalation of attacks on aid workers as the distinction between military and civilians working in the field disappears. Some agencies have withdrawn from conflict areas; an option which runs counter to their core mission: aiding the world's most vulnerable citizens. This also leaves a significant void in the sphere of foreign aid.

Most likely this void would be filled by the UN, which has many more constraints on its operations than the private aid organizations, or worse, the military becomes the new face of relief work. AFRICOM, commonly referred to as the Peace Corp with guns, is a prime example of this. While AFRICOM may have its merits and supporters, there are strong objections (LAT) to this becoming the model moving forward. If teachers, doctors, and agriculture specialists are armed, the peaceful civilians-helping-civilians message of relief work will be compromised or lost altogether. According to the development network InterAction, "the military's involvement in emergency relief, stabilization and reconstruction can be deeply problematic because of its security focus and lack of specialized expertise."

The world, especially the developing world, needs private relief organizations to survive and thrive despite the political and violent attacks they are currently facing. They tend to be more nimble, timely, and have less political hang-ups than any other present alternative. It will be interesting to see how they adjust their operations without diluting their mission.

-- Faith Smith

This is a guest post for The Washington Note by CSIS Freeman Chair in China Studies Charles Freeman. The entry first appeared on Freeman's facebook page. Freeman previously served as assistant U.S. trade representative (USTR) for China affairs.

Like many of Washington's political families, the Freeman family is politically divided with Chas Freeman, the elder, having worked hard to undermine George W. Bush's wrong-headed direction in foreign policy while his son was working for that same President. Zbigniew Brzezinski sons Ian and Mark are also passionate defenders of their respectively opposite political courses. Their sister Mika recently recounted a story of a Christmas holiday torn to shreds by a political scuffle between Ian and Mark, who is rumored to be be on his way to serve as America's next Ambassador to Poland.

These views are entirely those of Charles Freeman, particularly the last line, as I always prefer civil debate to nose-punching, but I understand where the younger Freeman is coming from -- Steve Clemons

Note to Peretz, Chait and Kirchick: It's Clobberin' Time!

My father, Chas Freeman, was recently appointed to chair the National Intelligence Council, an important but not political position that operates as editor-in-chief of "big think" analysis of foreign policy for the President.

A cabal of ideological hardliners has orchestrated a remarkable, self-referential smear campaign against my Dad's appointment, dragging Congress and the political process into this non-political sphere. They are wrong to do it, and not just because my Dad is involved.

Let me say that I have had my disagreements with my father over the years.

I am a lifelong Republican. My Dad's politics are less easily defined (and his decision to join the Obama administration is the most damning thing I can say about him). I toiled in the boiler rooms of the George W. Bush administration at a time when my Dad was organizing a mutiny of former statesmen and military men to warn that the President was about to ground the ship of state.

We have argued over China policy, Middle East policy and every other conceivable policy: my Dad's a born arguer and a born contrarian. He likes to challenge established viewpoints and conventional wisdom. I'm more likely to guard my flank against political attack.

So the attack by groups interested in issues about which he's been impolitic in the past doesn't particularly surprise him (or me). My Dad has been vocal on the dangers of established maxims about blind faith (in Israel) and blind antagonism (with China). That will get you in trouble quick, and it has, if you have any political sensibility.

The problem with - and the great virtue of - my Dad is that he has no political sensibility at all.

Things none of us would say while we watch our flanks, he says flippantly. He jabs at Congressional perfidies and at established wisdoms and has punched the odd sacred cow in the face. But he's seriously smart.

As the smartest person I know said about my Dad: "oh, he's scary smart." He's a curmudgeon with a stiletto for a mind. He has the capacity to force the intelligence community to begin asking the questions that need to be asked, as opposed to the questions that they think will generate the answers that best suit the political framework that may have generated the question. Just the kind of person who should be asking the big questions about intelligence.

His appointment is being challenged these days by a small cabal of folks that believe first and foremost in the importance of allegiance to Israel as a core U.S. priority. Putting aside my natural instinct as a son to want to punch some of these guys in the face for some of the things they are saying about my father, for heaven's sake, I'm more deeply angry about the lack of guile some of these people have.

Steve Rosen (what do you say about someone on indictment for espionage calling someone else un-American (ANSWER: chutzpah!), Jon Chait (who has scaled new lows); someone who used to be someone in Soviet studies named Gabriel Schoenfeld; the unpleasant Marty Peretz; and the usual lurid commentators from the comic book approach to international affairs (the nasty, narrow, dogmatic children from NRO and their ilk (although I'm glad you changed your mind about marching for Pride in Jerusalem, Jamie). Goodness!

I do think it's perfectly acceptable to be more loyal to Israel, even as an American citizen. But I also think that should disqualify you from any serious discussion about American interests in the Middle East.

In fact, I'm in lock step with my Dad on this one: there are no cases, from a U.S. official's standpoint, in which another country's interests should trump those of the United States. That there is any serious debate - and I do think people like Congressman Kirk of Illinois are serious - on this issue is a sure sign that something is rotten.

My Dad is a royal pain in the butt, but I love him. Why this pack of arfing lapdogs have chosen him as a target is clear: he's been a longtime thorn in the butt of the Israel first-ers. Never mind that he'd be a killer NIC chair for genuine American interests.

My Dad and I are going to continue to argue.

We'll do it, respectfully though.

Wish that could be said about his detractors. They are low-lives. And if you're among them and by chance read this: I still want to punch you in the face. You'd deserve it, you schmucks.

-- Charles Freeman

Editor's Note: I should also add that I can't tell whether Charles is critiquing Jamie Kirchick for not being supportive of a Pride parade in Jerusalem, or for being supportive of it. Just to be clear about my own views, I strongly support gay rights efforts in Israel and believe that Jamie Kirchick does as well.

I have since learned since publishing this editor's note that Charles Freeman genuinely admires Jamie Kirchick for his support of the gay pride parade in Israel. Freeman had the view that at one point in Jamie Kirchick's writing about such gay pride events, Kirchick was ambivalent about such events but then became strongly supportive of them. Just an elaboration that helps explain the context of the comment above. -- Steve Clemons

In England, home of the English language, the word "trillion" is rarely used. Instead, the phrase "a thousand billion" is used instead. I recommend that the US follows suit. It is not that I am an anglophile, but rather that I believe we have reached the point where the number "one trillion" simply fails to capture just how big it (and the financial crisis that causes us to use this number on a regular basis) really is.

A thousand billion is, I think, a far better means to express just how big this number really is. After all, the famous phrase allegedly uttered by Senator Everett Dirksen about "a billion here and a billion there and sooner or later you're talkin' about real money" was his way of expressing the same concept - about a number that is one thousand times smaller than the trillion dollar number that is increasingly being used to express our current predicament.

Try this out - Economist Nouriel Roubini, who correctly forecast the scale of the current crisis, recently estimated that total losses on loans made by US financial firms and the fall in market value of the assets they are holding will be about $3.6 trillion, with US banks and broker-dealers exposed to about half that amount - or $1.8 trillion.

Based on his calculations, approximately another $1.4 trillion will be needed to restore banks to the level of capital they had before the crisis. Are you still sitting down? You shouldn't be. These are enormous numbers that imply enormous problems. But the size of these figures is just not easily internalized by our brains.

Now see if this makes a difference - the total market capitalization of Citi, is now around $5 billion, while that of Bank of America is around $15 billion and Morgan Stanley is around $19 billion. The total fall in value of assets held by the US banking sector is around $3,600 billion creating a hole of about $1,400 billion. See what I mean.

As we increasingly read about TARP, stimulus, rescue packages and the rest, it is important to constantly remind ourselves that each trillion is actually a thousand billion dollars. Or, if you want to really put it in perspective, each trillion is a million million dollars (1,000,000 x $1,000,000).

I am sure that mathematicians and psychologists could explain why the numbers do what they do and the brain does what it does, but what is important to me is that we not lose sight of the size and scale of the world's current economic and financial woes. The numbers are big - really big. So big that I simply don't think that the word "trillion" does it justice.

So I, for one, will no longer use the word "trillion" but rather will revert to the "thousand billion." It's my tiny contribution to fostering a better understanding of the size and scale of the current problems confronting us all.

-- Douglas Rediker

Today at 12:45 pm, I will be hosting an event in the US House of Representatives on the subject of "Congressioal Views on US Approaches to Gaza."

Regrettably, we can't stream the program live because of logistical challenges with the room we are in, but I will posting a digital file of the event later here at TWN. The public is invited to attend. The room is 2253 Rayburn House Office Building Washington, DC, and an RSVP page is here.

Joining me today will be the Honorable Keith Ellison (D-MN) and a new member of the House International Relations Committee as well as the Honorable Brian Baird (D-WA) who is a Member of the House Science & Techology Committee. New America Foundation/Middle East Task Force Director Daniel Levy will be responding to their comments.

Congressmen Ellison and Baird recently traveled to Gaza recently and were profoundly disturbed by the logistical impediments to providing humanitarian relief and support to innocents caught in the conflict between Hamas and Israel.

Congressman Baird issued this statement. Rep. Keith Ellison posted these video clips from their Gaza tour.

-- Steve Clemons

The International Criminal Court just issued an arrest warrant for President Omar al-Bashir on charges of war crimes and crimes against humanity. The ICC's first indictment of a sitting head of state is likely to be a game changer, both globally and in Sudan. Globally, the ICC has served notice that the days of impunity from the world's most heinous crimes are coming to an end. For Sudan, the indictment should ratchet up international pressure on Khartoum as well as weaken Bashir domestically.

The ICC is fulfilling the promise of its constituent document, the Rome Statute. It has not been politicized or used as an instrument of state power, as some had feared. It has not overstepped its bounds or mandate. By all accounts, it's doing exactly what it was intended to do.

The reservations that some folks have about the indictment are well-intentioned, but ultimately off base. Khartoum has threatened retaliation against Darfuris, UN peacekeepers and other "ICC supporters." Much of that can be prevented, though, by a strong response from the U.S. and others, especially on the Security Council. To this point, the Obama Administration has made all the right noises: quietly but unhesitatingly supporting the investigation and refusing to consider a 12-month deferral resolution in the Security Council. If Khartoum does incite violence in response to the indictments, the U.S. should clearly put the responsibility on the government and move quickly in the Security Council to expand targeted sanctions against individuals in the regime.

Franklin Graham, who has been deeply involved in peace work in Darfur, penned an op-ed in the NY Times yesterday opposing the indictment. Here's where his argument goes off the rails:

For all his faults, Mr. Bashir has demonstrated that he is able to cooperate. On several occasions he has complied with my requests. When a hospital we operated in eastern Sudan was seized by government forces, Mr. Bashir granted us limited access. Mr. Bashir also made television time available for us to broadcast a Christian program at Christmas and Easter.

I doubt there is a single Head of State on the planet that can't be "worked with," at some level. That should be a clear lesson from the failings of the Bush Administration. First, implementing a peace deal and respecting human rights are a far cry from allowing access to a hospital Bashir took over (how reasonable!). But the question must not be whether Bashir is capable of dealing, or even of pragmatism. The question is whether or not the status quo is likely to produce a lasting peace. As Rev. Desmond Tutu points out in the same issue of the Times, the answer is a clear "no."

In the medium- and long-term, the indictment will erode Bashir's broad but thin support in the African Union. and the 105 State Parties to the ICC's Rome Statute will be legally obligated to hand him over to the Court if he enters their respective jurisdiction, which will serve to severely isolate the Sudanese President. Now it's up to the international community to understand how the game has changed and to play accordingly.

-- Scott Paul

Update: For a different point of view from someone who understands ICC proceedings more clearly than I do, see Kevin Jon Heller's post at Opinio Juris. While I agree it's a huge disappointment that genocide charges weren't included, I don't see how the omission will lead to the political problems he suggests. The UN commission of inquiry's failure to make a case for genocide four years ago didn't cause the world to lose interest in Darfur and I doubt the Pre-Trial Chamber's decision to omit genocide charges will either.

This morning I left Washington Dulles, and it was about 14 degrees outside.

Now I'm in Corpus Christi, Texas planning to speak tonight and tomorrow to groups organized by the World Affairs Council of South Texas/Corpus Christi and Texas A&M University Corpus Christi.

It's 73 degrees outside. Really.

Going home again will be very hard to do (unless I'm lured back with a good cocktail party. . .just ribbing some of my anti-cocktail party fans)

-- Steve Clemons

One of the interesting things to observe after George Bush issued his dictate to the world -- "You are with us or against us" -- was how some of those nations "with us" began to assume that their importance to and relationship with the United States was "unconditional" and that they could do virtually anything without worry of harming that relationship.

Taiwan and Israel were the two most interesting nations to watch because both suffer types of identity crises. Taiwan wants to be a fully recognized independent state by all parties but knows that China's ascending power is undermining that fantasy rapidly. Israel, on the other hand, is the only true superpower in the Middle East but lives within borders that are in dispute and with some of its citizens trying to colonize territory that the international community has determined do not belong to it.

To his credit, George Bush instructed his Ambassadorial equivalent in Taipei, American Institute in Taiwan Director Douglas Paal, to tell Taiwan's premier that the US would not countenance any declaration of independent status from China by Taiwan. Bush set his own red line and told Taiwan there were conditions to the relationship -- real ones.

Israel, in contrast, seems not to have been given any red lines or conditions by the Bush team -- other than perhaps pretending to be interested in the Annapolis peace process. Secretary of State Condoleezza Rice and even Bush himself complained about the ongoing expansion of settlements by Israelis in occupied territories -- but no firm penalties were applied by the US to Israel for these illegal settlements.

Now Israel has gone one better and is issuing instructions to the United States on what America's red lines with Iran should be. The implication of course is that Israel will take matters into its own hands if these lines are crossed -- whether America does or not.

According to a piece that will appear in tomorrow's Haaretz, Barak Ravid writes that these red lines and instructions of Israel to the U.S. will be presented to Secretary of State Hillary Clinton:

1. Any dialogue must be both preceded by and accompanied by harsher sanctions against Iran, both within the framework of the UN Security Council and outside it. Otherwise, the talks are liable to be perceived by both Iran and the international community as acceptance of Iran's nuclear program.

2. Before the dialogue begins, the U.S. should formulate an action plan with Russia, China, France, Germany and Britain regarding what to do if the talks fail. Specifically, there must be an agreement that the talks' failure will prompt extremely harsh international sanctions on Iran.

3. A time limit must be set for the talks, to prevent Iran from merely buying time to complete its nuclear development. The talks should also be defined as a "one-time opportunity" for Tehran.

4. Timing is critical, and the U.S. should consider whether it makes sense to begin the talks before Iran's presidential election in June.

Iran's pretensions in the region are a problem in my view -- but Iran, which fears regime change efforts by the US and other of its neighbors, is responding to an "ecosystem" that many around the world have complicity in building.

Israel should be rebuffed by Hillary Clinton. She should listen to Israel's views on the region of course -- and consider proposals. But this kind of instruction manual on what red lines can be tolerated or not is pretty outrageous -- and borders on the type of irresponsibilty and consequences of what a Taiwanese declaration of independence from China would mean.

In other words, if Taiwan wants to declare independence from China -- so be it, but America will not be there as a stabilizer, defender or buffer. And if Israel has the audacity to make America's strategic choices -- particularly in public -- then Israel can bomb away -- but needs to know that such an act will irreparably harm US-Israel relations. A collision with Iran has nothing to do with Israel -- despite Obama's and Lieberman's and Cheney's and Clinton's and McCain's rhetoric.

A potential war with Iran will have other drivers than Israel's circumstances and will have truly global ramifications that reach far beyond Israeli security. Such a conflict could happen -- and depending on Iran's course in the future perhaps even should happen (though that's clearly not the case today) -- but such a move would need to be weighed and managed hyper carefully. Israel can not be allowed to determine such a consequential choice for the United States.

Israel can help a lot by trying to become a constructive participant in changing the climate of tension and hostility in the Arab region. Right now, Israel's performance leaves a lot to be desired -- and the act of the victimized, bullied superpower is growing old. Israel controls a great deal of temperature in the Middle East and could significantly change the views of many Arabs towards the US, the West, and even Israel if it tried. Not doing so actually animates the bravado from and tension with Iran's political leadership.

Israel is crossing the line by instructing the American Secretary of State and President where there lines "should be".

-- Steve Clemons

Something big is up in Havana. So big that some are saying that Fidel Castro has finally moved on to the next world -- though I don't believe this to be the case.

Others are saying that they saw Fidel out in public today on an odd shuffling, walk about, flanked by well armed security guards -- and a trailing Mercedes.

What has happened is that Raul Castro, now President of Cuba, has sacked his brother's closest followers and advisers in government.

Both Vice President Carlos Lage and Foreign Minister Felipe Perez Roque have been given pink slips. These were Fidel's most obvious heir apparents and his chief ideological spear carriers in the next generation of Cuban political leadership.

This is one of those historical pivot points in normally opaque (often Communist) regimes that will be remembered for generations.

Raul Castro seems fully in control now -- and he's done with ideology.

Raul not only demands pragmatism from his team, he wants a government that "works" and which can function with greater efficiency than the past. This is particularly the case given the grim reality that the global economic crisis is hitting Cuba hard -- as the price of oil has made Venezuela's patronage less robust and global tourism to and investment in Cuba have both taken significant hits in recent months.

Ideology is on feeble legs throughout Cuba despite Senator Bob Menendez's anachronistic screed on the floor of the Senate this afternoon about Cuba's governing villains. Menendez today seemed to be pining for the enemies of the past, so the warped politics of anti-Cuba, anti-Castro compulsive obsessiveness could live another day.

But Menendez is behind the times and has been complicit in undermining American national interests with Cuba for far too long -- and he and others in Cuba who have strangled opportunity for a new course in US-Cuba relations should pay a political price for for their destructive intransigence. Menendez should go check in with his friends at the formerly right wing Cuban American National Foundation who for the most part think that pols like Menendez, Ileana Ros-Lehtinen, the Diaz-Balart brothers in Congress, and their Democratic Party ally Debbie Wassmerman Schulz went way too far in strangling Cuban-American family emergency travel and financial remittances.

We are at one of those significant punctuation points in Cuban history.

We may be at a real moment of opportunity in US-Cuba relations if Obama's team of foreign policy hands can find the guts and smarts to realize that it was wrong during the Bush administration for a Cold War with Cuba to actually get colder over the last ten years -- and to realize that incrementalism only works in times of historical continuity.

As Brent Scowcroft, Zbigniew Brzezinski, James Baker, David Abshire, Paul Volcker, Thomas Pickering, George Soros, Bill Joy, Jeffrey Sachs, Joseph Stiglitz, Francis Fukuyama, and many others have said -- this is a time of significant "historical discontinuity."

Change is needed and is a smarter, better choice than incrementalism and inertia.

Let's not see a Foreign Affairs article written this next year titled "Who Lost Cuba?"

Cuba matters a great deal -- far beyond its 11 million people and beyond even Latin America. Cuba is the ripest fruit for picking on America's tree of foreign policy options.

Change there can happen at extremely low cost to the United States. And America's approach will telegraph much about exactly what kind of America Barack Obama is trying to usher forth in this next phase of restoring U.S. benign moral, economic and political prestige. . .and power.

-- Steve Clemons

The Washington Post ran a feature yesterday that asked a number of foreign policy experts to offer their first impressions of President Obama's speech at Camp Lejuene.

I found many of the responses interesting, but was particularly struck by Andrew Bacevich's comments. Bacevich teaches International Relations at Boston University and is the author of The Limits of Power: The End of American Exceptionalism.

He wrote:

A promise to end the war in Iraq formed the cornerstone of Barack Obama's run for the White House. Yet his announced "withdrawal" plan ends nothing. It serves chiefly to reorder the Pentagon's operational priorities. Meanwhile, the "Long War" -- conceived in the wake of Sept. 11, 2001, and now in its eighth year with no end in sight -- continues.

For President Bush, Iraq was priority No. 1. He expected victory to yield a rich strategic and political payoff. He neither gained victory nor reaped any payoff. Meanwhile, Afghanistan and Pakistan, the Long War's other fronts, languished as afterthoughts. Obama's plan to reduce the U.S. military presence in Iraq to a residual force of 35,000 to 50,000 troops now transforms the Persian Gulf into a secondary theater. In effect, the president is orienting the Pentagon's attention back to Central Asia, the front where the war began in 2001. Yet in doing so, he implicitly recommits the United States to what has become an open-ended military endeavor.

Lost in the shuffling of troops is any clear understanding of that endeavor's strategic rationale. Iraq alone has cost the United States a trillion dollars or more. The putative success of the "surge" notwithstanding, we have achieved exceedingly modest and tenuous gains. To imagine that simply trying harder in Afghanistan and Pakistan will produce a happier outcome is surely a fantasy.

Bush hoped to transform the Middle East. Obama's instincts point in a different direction. To preserve the American way of life, he appears intent on changing it, a project with vast economic, social and even cultural implications.

The Long War is incompatible with that project. Protracted war or domestic reform: We may be able to afford one. We cannot afford both. So Obama must choose. If, instead of choosing, he tries to finesse the Long War -- and shifting the weight of U.S. military efforts from Iraq to Afghanistan amounts to little more than temporizing -- his reform agenda is likely to be stillborn.

Bacevich's comments serve as a useful reminder that the war in Afghanistan and the war in Iraq were both borne of a a strategic vision that considers radical Islamic terrorism to be America's "defining ideological challenge" that will last for generations.

President Obama's first move - shifting troops from Iraq to Afghanistan - is a tactical decision to emphasize one battle over another, rather than a strategic shift from "transforming the Middle East and Central Asia through military force as priority number one" to "anti-terrorism through law enforcement, limited military campaigns, and economic development as one priority among many."

As President Obama comes to grips with the multitude of challenges America faces, I hope he will end the "long war" as it was conceived by the Bush administration and offer an alternative strategy to manage international terrorism that is proportional to the threat and leaves room for other priorities.

-- Ben Katcher

Eric Schmidt has a somewhat optimistic short op-ed in today's New York Times, "Back Online by 2010," on the economy and when it might rebound.

He thinks that bargain hunters need to have their acquisitions of deflated assets in hand before things begin to bounce back mid-2010. Fine. But this won't drive growth and won't solve the "collapse of consumption" problem we have seen in this dramatic recession.

Schmidt writes:

There are, however, steps that need to be taken to speed up the process -- getting credit flowing again, taking action to create jobs, repairing our broken infrastructure and increased transparency to ensure we measure the effectiveness of the dollars we spend. And the good news is that Congress and the president are pressing ahead in the knowledge that to stand still is no solution at all.

The result, I hope, will be that by the late summer our economy will start to show signs of life, with a slowing rate of economic contraction and small but noticeable upticks in areas like auto sales and real estate.

By the end of the year, we may see some growth, with gains in employment to follow a few months later. In early to mid-2010, as banks recover and begin to lend, we should see further progress with consumers taking advantage of the once-in-a-lifetime economic opportunities emerging from this historic collapse. After all, Americans love a bargain.

I hope Schmidt is right. I would love nothing more than this financial contraction to bounce back to some normality a little over a year from now.

But I don't believe that the level of financial deleveraging we are seeing now can be turned around with quick fixes -- but let's say that much of Eric Schmidt's forecast is on target. What will drive growth?

Our equation since the late 1990s is to encourage American consumers to spend more than they had. When 9/11 occurred, George Bush asked that Americans go out and "spend" and assured them that this was the way to keep the U.S. strong.

Global growth has depended on American consumers overconsuming and underproducing -- while surplus economies like China, Japan and Germany wired their economies to grow by feeding the avaricious and under-resourced American economy. This was a macro-bubble that depended on fast growing economies loaning Americans the money to consume their products.

I think that Eric Schmidt is missing the vital need to get China, Japan and Germany to reorient a significant portion of their economic plans toward domestic consumption. They will, of course, continue to be strong export economies -- and America will continue to import much, but we can't keep up the level of imbalance that has characterized what we have seen over the last decade.

Eric Schmidt, one of those Obama listens to, needs to make sure that as the CEO of a global firm worried about achieving globally healthy commerce and trade, he needs to add to his equation the need to rebalance global growth -- particularly as we tilt towards the April 2nd G20 Summit in London.

(Truth in advertising. Eric Schmidt, CEO of Google, is Chairman of the Board of Directors of the New America Foundation where I work.)

-- Steve Clemons

I can't get into names, but if a crafty business journalist got on the phone to the biggest billionaires and financial wizards who support the Democratic Party and Barack Obama, he or she would find a large passel of very frustrated economic elites who think that Obama's stimulus package and spending priorities are not going to either restore confidence and economic growth or reinvest in the backbone of the US economy in a way that can help generate recurring returns for future generations of citizens.

The folks I am talking to are definitely not part of the market fundamentalist Robert Rubin fan club. They see the world differently, but I'm beginning to wonder if we really all should be very worried that some in Obama's economic kitchen cabinet (or who we think is in it) are so dissatisfied with the substance of the policy outcomes we are seeing thus far.

I asked one of them who I assume can get through to the President or at least to Rahm Emanuel any time he wants why he doesn't make his case more clearly to the occupants of the White House. The response was, "Yes, I can get through to Rahm Emanuel any time, but I get three minutes with him, and then someone else gets their three minutes, and so on. Rahm is the three minute guy -- and he's great during those three minutes."

Wealthy donors on the outside of the political process probably should not be able to just call up the President and get their way -- but the frustration I'm hearing from a great number of these types of donors -- types who are not only wealthy and helped finance much of the Democratic Party's victory in November but who are also smart and connected -- is that they are not getting through where it counts. The policy options they are proposing aren't getting into the basket of proposals that Obama is considering.

In other words, some feel that Obama is not getting a full range of choices on the economy and is being provided a narrow band of views that fit the preconceived biases of Larry Summers and Tim Geithner.

One of the fatal mistakes of the Bush administration in the build up to the Iraq War was the tight constriction of choices and views that Bush's advisors allowed him to see.

Let's hope that the Obama team isn't making the same mistake on the economy.

-- Steve Clemons

(photo credit: Andrew and Diane of Nemablog)

I had never heard of a polar desert before -- but the pic above is of one. I was enticed to learn a bit more after receiving an invitation from the Embassy of France to a meeting co-hosted by the National Science Foundation, and the Embassies of Italy and France titled "Polar Deserts and their Secrets." The meeting is on March 18th at 6 pm at "La Maison Francaise" at the Embassy of France in Washington DC. RSVP to deputy-cnrs@ambafrance-us.org if you want to go.

On other fronts, after ten years of bliss in Dupont Circle, the offices of the New America Foundation, where I work, are moving closer to the White House and to "K Street" and will be located at 1899 L Street, NW, 4th Floor. This is primarily a note for those who attend meetings that I help organize.

And tomorrow, at 3 pm at the City Club of Washington, I will be moderating a session on the future of the Middle East peace process. Given Hillary Clinton's trip there this week, the discussion should be timely and will feature Amjad Atallah of the New America Foundation, MJ Rosenberg of the Israel Policy Forum, Farah Stockman of the Boston Globe, and Abderrahim Foukara of Al Jazeera.

RSVP here if you'd like to attend -- though I hear that the room may be at maximum. But hey, it's not my event. I'm just hired help -- so attend if you like.

-- Steve Clemons

BRUSSELS: While stomping around through Europe on various endeavors, I coincidentally found myself in Belgium today amid an economic summit. I've squirreled my way into the working press center --- the top floor, too (this thing goes down an additional two stories) -- to find roughly as much press attention as the US presidential campaign drew.

Nothing substantial is projected to come out of today's lunch/ press junket. The story appears to be the human narrative beneath the bleak economic meltdown set stage front. I woke up this morning to this cover story in the IHT, arguing that this meeting -- a week after all heads met up in Berlin, and 18 days before they all meet once more in Brussels -- is more about Czech insecurity chairing the EU than a sudden shift in economic duress or vision.

Regardless, table furnishings will be privy to an incredible, impassioned, possibly brutal exchange today as an ongoing debate continues, largely pitting east vs. west. Will it fall upon Germany and other titans to bolster and recapitalize banks to the East? Will former bloc states convince further liberalization as Germany holds on to immigrant employment restrictions set on nations entering the union in 04 and 07? Will Finland and Sweden be left out to dry, having invested heavily in the Baltics and now suffering as a result? What of the auto world; Saab appears to be dead, despite Swedish efforts to assist the GM brand, so long as jobs remain in Sweden, and Sarkozy has made it clear -- to the anger of some states -- that a French bailout of its car makers would expect that production not be further shifted out of state.

If anything breaking occurs, I certainly won't be the first to print -- my French is struggling -- but I will dutifully file as quickly as possible on the heals of Reuters.

-- Brian Till