By Meagan Wiseley – University of New Mexico/Talk Radio News Service

In a hearing before the House Foreign Affairs Committee Thursday, Dr. Frederick W. Kagan, a Resident Scholar at the American Enterprise Institute for Public Policy Research, called on the Obama administration to develop a political strategy in Afghanistan as an accompaniment to General Stanley McChrystals request for additional troops and a counterinsurgency campaign.

“We need to know what the administration’s political strategy in this crisis is going to be. Of course it’s not in General McChrystals plan, because it’s not his remit to develop a political strategy,” Kagan said.

“In order to conduct an effective counterinsurgency campaign you have to address the problems of the illegitimacy of the government that fuel insurgency…if the government was seen as legitimate you wouldn’t have an insurgency,” explained Kagan.

Gen. McChrystal’s assessment on the war in Afghanistan called for a “surge” of approximately 40,000 troops, and said protecting the Afghan populations is its highest priority. His assessment also included the key element of partnering with the National Afghan Security Forces (NASF). The assessment concluded that a partnership with the NASF would therefore hold the Afghan government more accountable.

J Alexander Thier, Director for Afghanistan and Pakistan at the United States Institute of Peace said, “I believe apart from the troops, we need to focus much more intensively on this effort to create government accountability and capacity particularly at the sub-national level.”

“Gen. McChrystal has done his homework…what we need to see is the homework for the rest of the effort, which is a political strategy to go along with this,” Kagan added.

Leah Valencia, University of New Mexico-Talk Radio News Service

While the heated debate over health care reform is often compared to the struggle that former President Bill Clinton faced in the early nineties, there are several key differences, according to a number of health care analysts.

“[President Barack Obama's] effort was initiated when the economy was in free fall, unemployment still rising, we were on the brink of a world wide financial meltdown,” Urban Institute President Robert Resichauer said during a panel discussion at the American Enterprise Institute Friday. “In 1992 the economy wasn’t chugging, but it was improving.”

Resichauer said the current economic circumstances have forced the government to take extraordinary action, which makes the American public leery of the role government is playing in the economy’s life.

Resichauer said that it is imperative to have a bipartisan effort on health care reform in order to win the support of the American public.

Health care attorney Dean Rosen said the political atmosphere surrounding the current debate also stands in contrast with Clinton’s efforts.

“I think it will be very difficult to find more than a few Republicans in the Senate who are willing to do this,” Rosen said. “It makes it a political necessity for this to be a Democrats-only enterprise. This was not the case in 1993 or 1994.”

Ultimately, all panelists in attendance agreed that the current reform effort will meet a different fate than Clinton’s.

“It is not whether we are going to have it, it is when and how,” Resichauer said. “At least at a superficial level we have a lot more support on this than we ever have.”

By Michael Combier-Talk Radio News Service

Billions of dollars used in the federal bailout of financial institutions was a mistake,said Former Federal Reserve Chairman Alan Greenspan today in D.C. Speaking at the American Enterprise Institute, Greenspan said that the ‘Too Big To Fail’ doctrine used by the Bush and Obama Administrations was seriously flawed.

“Earlier this decade,” said Greenspan, “it was widely expected that the next crisis would be triggered by the large and persistent US current-account deficit precipitating a collapse of the US dollar. The dollar accordingly came under heavy selling pressure” when the euro-dollar exchange rate rose starting in spring 2003.

“A financial crisis is characterized, in fact defined by an abrupt, discontinuous break in asset prices. But discontinuities are, of necessity, a surprise and that requires that the crisis be largely unanticipated by market participants. For, were it otherwise, financial arbiters would have diverted it,” said Greenspan.

In March, in light of the failure of Lehman Brothers and the rescue of AIG, Treasury Secretary Timothy Geithner proposed a plan to set a systemic regulator which would oversee the entire financial system and would prevent certain banks and nonbank financial firms to collapse financially. The plan would give the authority to the Federal Deposit Insurance Corporation the authority to bail out or liquidate failing banks or firms.

Greenspan said that “it is one thing to identify firms whose collapse might severely impair financial intermediation; it is quite another to identify institutions whose failure will lead to systemic breakdown. Systemic risk is readily identifiable. Potential systemic failure is not,” he said.

For Greenspan, the role of shareholders is important to explain the current financial crisis. “In Capitalist societies, we need shareholders to govern,” said Greenspan. “But their perspective has become increasingly that of investors, not owner-managers. When dissatisfied with corporate performance, they tend to sell their shares rather than seek to change management.”

“Of all the regulatory challenges that have emerged out of this crisis,” Greenspan views “the ‘too big to fail’ problem and its precedents, now fresh in everyone’s mind, is the most threatening to market efficiency and our economic future.”

Coffee Brown, University of New Mexico, for Talk Radio News

“Rethinking Global Institutions: Do We Have the International Tools to Fight the Global Economic Crisis?” Well … no.
The American Enterprise Institute’s discussion panel included Brink Lindsey, of the Cato Institute, Marc Busch, a professor in the government department at Georgetown University, and T. N. Srinivasan, from Yale University.
Lindsey said that the global problem is unique within each country, that cultural and political differences would undermine any effort to coordinate monetary strategy, and that this could be a good thing. Allowing each nation to try to muddle though in its own way would reveal which of the competing strategies worked and which did not. If no theory is strong, then Lindsey recommends testing them all empirically. The EuropeanUnion, for example, is testing right now whether a coordinated international economy can weather such a crisis, he said.
All of the board members agreed strongly that no economist understands the complex interplay between parts of the economic system, globally or nationally, even when the individual parts are more or less understood.
Srinivasan opened with an excerpt from John Keynes on the Great Depression, to the effect that we don’t really understand all the mechanisms that led to it. Srinivasan pointed out that the proliferation of new financial instruments in the ’80s greatly increased the problem. “We don’t don’t know how it worked when it worked,” he said. But, he added, the key to a coordinated effort lies in the common goals; health, education, poverty, and the economy; among nations that differ on almost every other point.
Busch made the case that the present financial institutions, the World Trade Organization, the International Monetary Fund, the United Nations Conference on Trade and Development (UNCTAD), the United Nations Development Programme (UNDP), the International Trade Commission (ITC), and most especially the World bank, have been effective at stabilizing economies, but only at the margins. He took the mediating position that international tools can help, at least a little.

While at a book review at the American Enterprise Institute, John Bolton spoke with his fellow panelists about the role the Bureaucracy plays in shaping policy. The forum addressed the late Peter W. Rodman’s book Presidential Command: Power, Leadership, and the Making of Foreign Policy from Richard Nixon to George W. Bush. The author and the panelists found that some of the bureaucratic practices often limited the number of options presented to those higher up, by deriving consensus and stifling dissent. Bolton said, “Secretaries of State and Presidents ought to welcome competing views, and then the higher level policy maker makes the decision.” Lack of accountability was also of concern to both author Rodman and the panel, who stressed that the the president and other elected officials are the ones who have legitimacy derived from the constitution and the democratic process. The panel met for approximately an hour and a half.

By Michael Ruhl, University of New Mexico – Talk Radio News Service

 

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Charles Calomiris who is currently serving as a visiting scholar at the American Enterprise Institute believes that the current foreclosure crisis might go until 2009. Calomiris added that he feels we have a couple of rough years ahead but that he is optimistic about the economy. (0:27)

 

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By watching the news most Americans believe that there is a real crisis in the foreclosure market. This is not the held belief though of Charles Calomiris who is currently serving as a visiting scholar at the American Enterprise Institute (AEI). (more…)

At the American Enterprise Institute for Public Policy Research (AEI) Discussion on “Iranian Influence in the Middle East and Beyond,” Kimberly Kagan, President of the Institute for the Study of War, says Iran has been a force of tremendous instability in Iraq since 2003, and has been involved in establishing groups that are hostile to the Maliki government, to the democratic government, and to the U.S. Government.

 

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At the The American Enterprise Institute for Public Policy Research (AEI) discussion on “Iranian Influence in the Middle East and Beyond,” Danielle Pletka of AEI said looking at the Iranian “reach” from the past helps us gets some insight into the regime’s intent in Iraq. There are a lot of telling signs of change, she said, using as an example the economy in Syria, and how Iran is becoming a dominant role there. Iran imports weapons from Russia, and then provides them to Syria, she said. In regards to Iran’s relationship with Hezbollah, they provide diplomatic, military, and economic support. They have taken a ‘very prominent role’ in the re-armament of the Lebanese.
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