The sub-prime conundrum

Great perspective piece in yesterday's Journal from Jon Hilsenrath's "Ahead of the Tape". In the piece Hilsenrath quotes former Indonesian Minister of Economics Rizal Ramli who explains that the US is having difficulty swallowing its own medicine. My concern is that the US economy is soon going to resemble Japan's in the 1990s...


Seven decades after the Great Depression, economists still are trying to calibrate the government's proper role. As Mr. Paulson is discovering, the answers aren't easy.

If policy makers embrace tough medicine, allowing banks to fail and mortgage defaults to soar, they risk an Indonesia-style downward spiral in which millions suffer.

If they intervene too aggressively to forestall the pain, they could end up with a different problem, a financial system that remains dysfunctional for years, as Japan's did when nonperforming loans were allowed to sit idly on bank balance sheets throughout the 1990s.

Waning US influence in Latin America

The article by Joe Contreras in this week's Newsweek subtitled "The influence the United States once claimed as a divine right in Latin America is slipping away, fast." Obviously China has enormous economic pull for the region; but Iran and North Korea? Come on. Is it our markets or our policies and actions that have contributed to the US's declining influence.

"From Tijuana to Tierra Del Fuego, American rivals are making rapid inroads into a region that the United States has long regarded as its natural sphere of influence. Though the United States remains Latin America's largest trading partner by far, Russia, China and Iran are cutting deals, opening up new markets and building diplomatic ties. Even North Korea has forged diplomatic relations with Guatemala and the Dominican Republic in recent weeks as Washington's focus remains stuck on the Middle East. "The Monroe Doctrine that the United States has had for nearly two centuries has completely gone out the window," says Alejandro Sánchez, a research fellow at the Washington-based Council on Hemispheric" Affairs.

Rumsfeld speaks...watch out

The following op-ed piece written by former Secretary of Defense Rumsfeld poses some interesting, and troubling points; especially when juxtaposed with Naomi Campbell's 10 steps to dictatorship. The quick passage of the Patriot Act so shortly after 9/11; Clear Channel's burning of the Dixie Chicks for their statements about President Bush; the promotion of the use of torture; the employment of private contractors; not to mention the bizaare story of Andrew Card and Alberto Gonzalez trying to force Attorney General Ashcroft to sign documents expanding the wiretap law all hold the mirror to Rumsfeld and the actions of the Bush administration during its first term.

From the article:
"The world is saying little and doing less as President Hugo Chávez dismantles Venezuela's constitution, silences its independent media and confiscates private property. Chávez's ambitions do not stop at Venezuela's borders, either. He has repeatedly threatened its neighbors." - See passage of the Patriot Act, legalization of torture, and burning of Dixie Chicks records by Clear Channel; also see fear of US actions, particularly in AFRICOM.

"Turf-conscious subcommittees in Congress inhibit the country's ability to mobilize government agencies to tackle new challenges." - forget about subcommittees in congress, what about 'turf-conscious' departments sharing information prior to the invasion of Iraq (see Defense vs. State)

"But when institutions no longer serve our interests well -- or, worse, hamper important efforts -- we need to hear more about reform through public commentary, in Congress and on the campaign trail." - Our way or the highway? Sounds like yet more steps to isolate America...

Banksy returns to the West Bank

A good friend who grew up in Nablus shared this BBC piece on the return of Banksy's artistry to the West Bank barrier...Provocative stuff.