Tag Archives: Foreign Policy

Maybe Germany needs to be kicked out of the Eurozone

From Foreign Policy

Last year, Germany racked up a record trade surplus of 217 billion euros ($246 billion), second only to China in global export dominance. To some, this made Germany a bright spot in an otherwise anemic eurozone economy — a “growth driver,” as the German finance minister, Wolfgang Schäuble, puts it. In fact, Germany’s chronic trade surpluses lie at the heart of Europe’s problems; far from boosting the global economy, they are dragging it down. The best way to end this perverse situation is for Germany to leave the eurozone.

Germans usually respond to such charges with a kind of hurt confusion. We run trade surpluses, they patiently explain, because we are simply much more competitive than most of our trading partners. Can you blame us, they ask, if the world prefers to buy superior German goods (and has nothing we want in return)? So goes the argument: The rest of the world just needs to up its game, get its house in order, and become a bit more like Germany. In the meantime, don’t hate us ‘cuz we’re beautiful….

Contrary to popular mythology, however, there’s absolutely no reason why being “competitive” should mean running a trade surplus. As far back as 1817, the economist David Ricardo pointed out that the optimal basis for trade is comparative, not absolute, advantage. In other words, even if a country is better at everything, it should export what it is best at and import what it is less better at. Having an across-the-board advantage does not imply that it makes good economic sense to produce everything yourself, much less to sell more than you want in return. Or, to put it a bit differently, there’s no inherent reason why earning more can’t mean spending more, on consuming both public and private goods, as well as investing in future productive capacity.

Trade surpluses take place when a country chooses to spend less than it produces — when it has excess savings, beyond its domestic need for credit. It lends that excess savings abroad, financing another country’s ability to spend more than it produces and, by running a trade deficit, purchase the lender’s excess production. It’s true that a highly productive country might have the wherewithal to conjure up excess savings, while a less productive country might be inclined to borrow rather than scrape up the savings it needs. But fundamentally, trade imbalances arise not from competitive advantage but from choices about how much to save and where that savings should be deployed — at home or abroad.

Does it ever make sense to run trade imbalances? Sure it does. In the 19th century, Britain’s Industrial Revolution enabled it to reap vast earnings from expanded output, some of which it invested in the United States. The money lent to a rapidly growing American economy generated higher returns than it would have back home, while creating a market for British-made goods. The potential productivity gains made it a win-win: It made sense for the Americans to borrow and for the British to lend. But the case also highlights something that’s easy to forget: Running a trade surplus means financing someone else’s trade deficit.

The eurozone crisis is often called a debt crisis. But, in fact, Europe as a whole did not have an external debt problem, but an internal one: German surpluses and mounting debt in Europe’s periphery were two sides of the same coin. Germans saved (a lot), and the single currency induced them — rather than save less or invest it at home — to lend it to their eurozone trading partners, which used the money to buy German goods. By 2007, Germany’s trade surplus had reached 195 billion euros, three-fifths of which came from inside the eurozone. Berlin might call this “thrift,” but it’s hard to argue that Germany’s excess savings, which its banks often struggled to put to use, were well invested. Instead, they gave Germans the illusion of prosperity, trading real work (reflected in GDP) for paper IOUs that might never be repaid.

The solution? 

So what should be done? The best solution — and the least likely to be adopted — is for Germany to leave the euro and let a reintroduced Deutsche mark appreciate.

It will never happen but it is a solution that makes sense.

How Canada neighbor became a rogue, reckless petrostate.

From Foreign Policy of all places 


For decades, the world has thought of Canada as America’s friendly northern neighbor — a responsible, earnest, if somewhat boring, land of hockey fans and single-payer health care. On the big issues, it has long played the global Boy Scout, reliably providing moral leadership on everything from ozone protection to land-mine eradication to gay rights. The late novelist Douglas Adams once quipped that if the United States often behaved like a belligerent teenage boy, Canada was an intelligent woman in her mid-30s. Basically, Canada has been the United States — not as it is, but as it should be.

But a dark secret lurks in the northern forests. Over the last decade, Canada has not so quietly become an international mining center and a rogue petrostate. It’s no longer America’s better half, but a dystopian vision of the continent’s energy-soaked future.

That’s right: The good neighbor has banked its economy on the cursed elixir of political dysfunction — oil. Flush with visions of becoming a global energy superpower, Canada’s government has taken up with pipeline evangelists, petroleum bullies, and climate change skeptics. Turns out the Boy Scout’s not just hooked on junk crude — he’s become a pusher. And that’s not even the worst of it.

With oil and gas now accounting for approximately a quarter of its export revenue, Canada has lost its famous politeness. Since the Conservative Party won a majority in Parliament in 2011, the federal government has eviscerated conservationists, indigenous nations, European commissioners, and just about anyone opposing unfettered oil production as unpatriotic radicals. It has muzzled climate change scientists, killed funding for environmental science of every stripe, and in a recent pair of unprecedented omnibus bills, systematically dismantled the country’s most significant long-cherished environmental laws.

The author of this transformation is Prime Minister Stephen Harper, a right-wing policy wonk and evangelical Christian with a power base in Alberta, ground zero of Canada’s oil boom. Just as Margaret Thatcher funded her political makeover of Britain on revenue from North Sea oil, Harper intends to methodically rewire the entire Canadian experience with petrodollars sucked from the ground. In the process he has concentrated power in the prime minister’s office and reoriented Canada’s foreign priorities. Harper, who took office in 2006, increased defense spending by nearly $1 billion annually in his first four years, and he has committed $2 billion to prison expansion with a “tough on crime” policy that ignores the country’s falling crime rate. Meanwhile, Canada has amassed a huge federal debt — its highest in history at some $600 billion and counting.

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Liberal critics like to say that Harper’s political revolution caught many Canadians, generally a fat and apathetic people, by surprise — a combination of self-delusion and strategic deception. That may be true, but though Canadians live in high latitudes, they’re not above baser human instincts — like greed. Harper is aggressively pushing an economic gamble on oil, the world’s most volatile resource, and promising a new national wealth based on untapped riches far from where most Canadians live that will fill their pocketbooks, and those of their children, for generations. With nearly three-quarters of Canadians supporting oil sands development in a recent poll, Harper seems to be selling them on the idea.

It gets better

THE SINGLE-MINDED PURSUIT of this petroproject has stunned global analysts. The Economist, no left-wing shill, characterized Harper, the son of an Imperial Oil senior accountant, as a bully “intolerant of criticism and dissent” with a determined habit of rule-breaking. Lawrence Martin, one of Canada’s most influential political commentators, says that Harper’s “billy-club governance” has broken “new ground in the subverting of the democratic process.” Conservative pollster Allan Gregg has described Harper’s agenda as an ideological assault on evidence, facts, and reason.

To be fair, Harper’s government does have a plan for climate change — pumping the problem to the United States and/or China. Oil sands crude transported to the United States by the proposed Keystone XL pipeline, for example, could over a 50-year period increase carbon emissions by as much as 935 million metric tons relative to other crudes. And the planned $5.5 billion Northern Gateway pipeline from Alberta to the Pacific Ocean would result in up to 100 metric tons of carbon dioxide emissions a year, from extraction and production in Canada to combustion in China — more than British Columbia’s total emissions in 2009. The 2012 National Inventory Report by Environment Canada, the country’s environmental department, actually boasts that Canada has partly reduced overall emission intensity in the oil sands “by exporting more crude bitumen.”

All this underscores Canada’s new reality: Just about any kind of rational evidence has now come under assault by a government that believes that markets — and only markets — hold the answers. Any act that industry regards as an obstacle to rapid mineral extraction or pipeline building has been rewritten with a Saudi-like flourish. One massive omnibus budget bill alone changed 70 pieces of legislation, gutting, for example, the Fisheries Act, which directly prohibited the destruction of aquatic-life habitats but stood in the way of the Northern Gateway pipeline, which must cross 1,000 waterways en route to the Pacific Ocean. Meanwhile, funding for Canada’s iconic park system has been cut by 20 percent in what critics have called a “lobotomy.” The CBC, the respected state broadcaster long scorned by Harper as an independent check on power, has suffered a series of cutbacks. The Health Council of Canada, which once ensured national health standards and innovation across Canada’s 13 provinces and territories, also got the ax. Furthermore, with the élan of a Middle Eastern petroprince, Harper appointed the head of his security detail to be ambassador to Jordan. And he did it all with nary a peep from your average Canadian.

More than a decade ago, American political scientist Terry Lynn Karl crudely summed up the dysfunction of petrostates: Countries that become too dependent on oil and gas riches behave like plantation economies that rely on “an unsustainable development trajectory fueled by an exhaustible resource” whose revenue streams form “an implacable barrier to change.” And that’s what happened to Canada while you weren’t looking. Shackled to the hubris of a leader who dreams of building a new global energy superpower, the Boy Scout is now slave to his own greed.

I would argue some of these points.  Canadian’s have risen up through Idle No More and we have protested much of what is going on.  The issue seems to be that neither oppositon party seems to be able to get any traction on these issues and articulate them in a way where it hurts the Conservatives until recently.

A new grand US strategy includes walkable streets and sustainable communities

From Foreign Policy

“America has never confronted a global challenge of the type or magnitude it faces today,” concludes Doherty. “If it does not change course, the United States will be racked by violent storms — both figurative and literal — as the global order breaks down. The country cannot delay. For a few short years, it has a window in which it can choose an incredibly prosperous 21st century, but that window will close. It is time once more to lead the world through difficult change.”

As Planetizen summarizes it

The U.S.’s economic engine, foreign policy, and infrastructure are all out of date, argues Doherty, and to meet the interdependent challenges of the 21st century’s strategic landscape – inclusion, depletion, depression, and resilience – the country will need to develop a new strategy: to “lead the global transition to sustainability.”

As part of that strategy he envisions a new economic engine for the United States oriented around walkable communities, regenerative agriculture, a revolution in resource productivity, investment in regional growth, and the transition to a reduced carbon emitting energy sector. This strategy will have major implications for the country’s foreign policy and governance structures.

Some lessons for Saskatoon and Saskatchewan in there as well.

Obama’s Foreign Policy

From Robert Kaplan in Foreign Policy

Obama has substantially withdrawn from Iraq, positioned America for a 2014 withdrawal from Afghanistan, killed bin Laden, avoided war with Iran (even as industrial espionage slows Tehran’s drive for nuclear weapons), and overseen a more vigorous and creative foreign policy towards East Asia than did President George W. Bush, particularly in the way that he has reassured our allies in the South China Sea. Yes, there is uncertainty surrounding Libya — but without boots on the ground there, a quagmire is unlikely. Thus, despite all the criticism he gets from the elite, this could well end up as the most competent foreign policy administration since President George H. W. Bush.

Ducking Responsibility

Bob Woodward takes over Thomas Rick’s blog and talks about Donald Rumsfeld’s memoir.

Rumsfeld’s memoir is one big clean-up job, a brazen effort to shift blame to others — including President Bush — distort history, ignore the record or simply avoid discussing matters that cannot be airbrushed away. It is a travesty, and I think the rewrite job won’t wash.

The Iraq War is essential to the understanding of the Bush presidency and the Rumsfeld era at the Pentagon. In the book, Rumsfeld tries to push so much off on Bush. That is fair because Bush made the ultimate decisions. But the record shows that it was Rumsfeld stoking the Iraq fires — facts he has completely left out of his memoir.

Wow Bob, tell us what you really think.

As numerous accounts have documented, the post-war planning and organization was close to a disaster. Rumsfeld blames the lack of "effective interagency coordination" and "the way the United States government is organized." (p. 487)

As secretary of defense he was responsible. Under our system, he was next in the chain of command after the president, effectively making him the deputy president for war. But he sidestepped his responsibility time and time again.

Why is Haiti stuck?

Everything continues to be centered around one city while the rest of the country is ignored.

So why is Haiti stuck? Why has the tyrant Duvalier returned to a country that has not moved forward since he was deposed?  The problem seems not to be one of conceptualization but rather execution.

On the international side, slow disbursements and an approach that bypasses local and national authorities inhibits needed coordination. Donors continue to condone a "projectized" approach towards development that yields unsustainable results and inhibits long-term strategic thinking. Moreover, the Haitian Interim Recovery Commission — a hybrid mechanism designed to coordinate and prioritize post-quake investment — is still in first gear. In the meantime, timid decision-making by Haitian political leaders, the self-serving instincts of the elite, and the exclusion of poor people’s voices in policy-making restrain progress.

Harper’s Diplomacy

Scott Taylor talks about the problems with Harper’s Camp Mirage diplomacy

For one thing, the location of Camp Mirage was always a closely protected secret. This was not done out of fear that terrorists would overrun the Canadian base, but rather to lessen the impact on the host nation regarding relations with its neighbouring states.

The United Arab Emirates remains a conservative Muslim state surrounded by many fundamentalist Arab countries that see the NATO intervention in Afghanistan as a Western war against Islam.

Further complicating matters is the fact that, since coming to power in 2006, the Harper government has publicly decreed, at every opportunity, its unwavering, unilateral support for Israel. For better or for worse, that is the path the Conservatives have chosen to follow, so it seems incredibly hypocritical that Harper would still expect an Arab nation to provide us the use of an airbase for nine years — for free.

In his exclusive interview, Harper also claimed that this experience has been a valuable learning opportunity for himself and his government.

"What this teaches us in (the) future and when we’re looking at other options is: Don’t get in a place where somebody’s going to try and use it to leverage some unrelated issue."

(Second note to Harper: There’s no such thing as a free lunch.)

I’m not hearing anyone suggest an alternate payment option for all the services and access our military had to the Emirates’ airbase during the past nine years.

Surely, as a good ally, Canada will pony up the back rent!

I’m positive that, if such negotiations were initiated in good faith, to settle our account amicably, those Canadian officials seeking a new staging base in the region would find their job a whole lot easier.

Condoleeza Rice takes the high road

I have always liked Rice (even when I didn’t agree with her worldview) and it’s nice to see that she has taken the high road in defending her successors at Foggy Bottom and the White House.

"I am not going to chirp at the people inside," Rice said Wednesday on Jon Stewart’s "The Daily Show" on Comedy Central. "I know that it’s a lot easier out here than it is in there, and these are patriotic people who are trying to do their best every day."

Speaking to Fox News’s Bill O’Reilly, she lavished praise on her successor, Hillary Rodham Clinton: "I think she is doing a lot of the right things. . . . She is very tough. . . . I think she has done a fine job, I really do."

Rice even chastised former House speaker Newt Gingrich (R-Ga.) for his assertion that Obama has a "Kenyan, anticolonial" worldview. "That’s over the top, and I don’t think very helpful," she told Andrea Mitchell on MSNBC.

Before she left Foggy Bottom, Rice repeatedly said that she would not criticize publicly the people who came after her. Indeed, one of her most uncomfortable moments in office came when former secretary of state James A. Baker III was co-leader of a bipartisan panel that issued a tough critique of the Bush administration’s policy in Iraq – in particular, the diplomatic efforts that were part of Rice’s portfolio.

A review of Obama’s Foreign Policy

Washington Post columnist David Ignatius speaks with former national security advisors Zbigniew Brzezinski and Brent Scowcroft, about the greatest success and shortcomings of the Obama administration’s foreign policy.

The two men cited the Israel-Palestinian peace process as Obama’s most important unfinished business. Both have argued often that the president should have started by outlining the basic parameters for a Palestinian state, as they have emerged in negotiations over the past 40 years.

Brzezinski contended that it was "pathetic" to see the United States making big concessions to Israel this month — ones that should be reserved for a final "grand bargain" — simply to add another 60 days to a temporary freeze on Israeli settlements. If the peace process should collapse, Scowcroft argued that it still would make sense for Obama to specify the terms of a U.S. peace plan.

What perplexed both men was the disconnect between Obama’s strategic vision and what he has been able to achieve. "He makes dramatic presidential speeches," said Brzezinski, "but it’s never translated into a process in which good ideas become strategies." One complication, both noted, was a process of "subcontracting," in which major policy areas such as Middle East negotiations and Afghanistan-Pakistan have been handed over to special representatives.

Is Wikileaks the Future of Journalism?

Foreign Policy ponders the question after the release of this video that shows the murder of civilians by an Apache attack helicopter.  The video is not safe for work or to be shown to kids.

Yet, we wouldn’t be seeing the guns at all if not for a sustained campaign by Wikileaks. At its best, the rise of Wikileaks represents the type of accountability journalism made famous in the 1970s by Carl Bernstein and Bob Woodward of Watergate fame, and practiced today by Jane Mayer of the New Yorker and Eric Lichtblau and James Risen of the New York Times — and Seymour Hersh in both eras.

Wikileaks, however, makes no bones about its desire to advance a political message, promising sources that their material will be used for "maximal political impact."  Assange says that he hopes Wikileaks’ work on this case will lead to "world-wide attention to the issue, and hopefully a renewed investigation into those events, and a change in government policy."

Assange writes initial analyses and stories from leaked material himself, and there’s often a Noam Chomsky-esque critique of America in his work. It’s clear he distrusts big corporations and governments. He has more reason to do so than most, having lived and worked in Kenya, where he has helped to expose hundreds of government-sponsored extrajudicial assassinations. Two of his colleagues were killed in March 2009, in an attack some have linked to the Kenyan police.

Wikileaks’ editors are definitely outspoken, but they can’t quite be accused of partisanship. They released the evidence of toxic waste dumping, which The Guardian had been barred from running, but also posted the so-called "climategate" emails from the University of East Anglia in November 2009, mere weeks before the Copenhagen talks. They’ve also leaked the confidential creditor list of collapsed Icelandic Bank Kaupthing, Australia’s secret blacklist of censored URLs, and more than 500,000 pager messages from New York City on the morning of September 11, 2001.

Despite these public-interest successes, Wikileaks’ disregard for gag orders and their unabashed advocacy makes full-throated praise for the organization rare. Yet no journalist I’ve spoken to will speak ill of Wikileaks in private: Every reporter understands that Wikileaks is the thin end of the wedge. If they can’t run a dangerous story, no one can.

While it may not be the future of journalism it is a fun part of the future.  The lack of accountability is one problem while at the same time you don’t have stories being killed because of a publishers opinion on how the news should be portrayed.  It also gives reporters an outlet to release their own killed stories.

The Republic of Texas

Texas Governor Rick Perry, who doesn’t like Barack Obama’s tax and spend policies is threatening to have Texas succeed from the union.  I have to admit that as a Canadian who has grown up with Quebec trying to leave Canada, this struck me as both stupid and funny.  Of course over at the Foreign Policy blog, they decided to see what would happen to Texas and the United States if this happened.

So what would Texas look like as a foreign country?

Republic of Texas It would be the world’s thirteenth largest economy — bigger than South Korea, Sweden, and Saudi Arabia. But its worth would crater precipitously, after NAFTA rejected it and the United States slapped it with an embargo that would make Cuba look like a free-trade zone. Indeed, Texas would quick become the next North Korea, relying on foreign aid due to its insistence on relying on itself.

On the foreign policy front, a seceded Texas would suffer for deserting the world superpower. Obama wouldn’t look kindly on secessionists, and would send in the military to tamp down rebellion. If Texas miraculously managed to hold its borders, Obama would not establish relations with the country — though he might send a special rapporteur. (We nominate Kinky Friedman.)

So, Texas would need to court Mexico and Central American nations as a trading partners and protectors. Those very nations would also pose a host of problems for Texas. President Perry might find friends in anti-U.S. nations like Venezuela and Cuba, but their socialist politics would rankle the libertarian nation. 

And Texas would become a conduit for drugs moving north to the United States from Mexico, maybe even becoming a narco-state. It would need to invest heavily in its own military and policing force to stop drug violence within its borders — taking away valuable resources from, oh, feeding its people, fending off U.S. border incursions, and improving its standing in the world. 

In short: the state of Texas would rapidly become direly impoverished, would need to be heavily armed, and would be wracked with existential domestic and foreign policy threats. It would probably make our failed states list in short order. Probably better to pay the damn taxes.

The only way this story could get any stupider is if Chuck Norris said he would be the Republic of Texas’ new President.


Warren Kinsella has a good post about the spin that is coming out of Gaza.  I agree with what he is saying but I struggle with the strategy of what Israel is doing and if it is going to work.

First of all, I can’t imagine how difficult it is to live right beside a people group whose stated goal is your destruction.  When I am traveling in southern Saskatchewan, I am never worried about a missile strike from Montana or North Dakota.

In reading Thomas Rick’s excellent book, Fiasco, he speaks of the concept of honor among Arabs.  Many of the sniper attacks on American soldiers were in response to being assaulted a couple of hours/days/weeks before.  The reason they often missed was not because of poor marksmanship but because the Iraqi’s just didn’t feel like killing anyone but had to do something to restore their honor.  I can’t help but wonder that by attacking back with force that the Israeli’s are not just helping the Hamas instead of weakening them.  I am no terrorist strategist but I would assume that this is Hamas’ strategy, to irritate and anger Israel into acting, placing civilians in harm’s way, appealing to the west to make Israel stop, then proclaiming Israel’s weakness to anyone who will listen.  Of course if Israel doesn’t act, then the rockets get bolder and bolder and it’s people suffer more.

Of course the other side my thinking is drawn back to many of the books that I have read by Bernard Lewis on Islamic culture and the west and he maintains that Israel is too soft on the Palestinians therefore introducing the thought that they are weak.  Hamas comes from the rebellion in Hama under the Egyptian Brotherhood.  To deal with the rebellion, Syria surrounded, shelled, masacred, and then paved over Hama.  Thomas Friedman described Hama as a parking lot as the city no longer exists.

It has been suggested by giving aid and helping rebuild homes mistakenly hit by rockets, Israel is undermining its own show of force.   That being said, I don’t think the Israeli people or the western world has the stomach for the kind of war that would deliver the kind of blow to Hamas that Lewis is talking is necessary.

Despite what Jimmy Carter says, I don’t think Hamas wants peace now or in the near future, they want to destroy Israel.   Israel on the other hand is caught between needing to take drastic short term steps to survive right now that may actually be prolonging the conflict in the future.

It puts the struggles that our own countries are facing in perspective.