MM Lee wrote this for Forbes magazine
http://www.forbes.com/forbes/2009/0302/017_current_events.html
Obama at the Helm With the World in Recession
Lee Kuan Yew, 02.11.09, 06:00 PM EST
Forbes Magazine dated March 02, 2009
America's recession has spread worldwide, and there has been no decoupling--for any country--from the American economy. If the U.S. does not recover, the EU will not bounce back. Other economies cannot make up the decline in demand. Asia's leaders hope that America's $800 billion-plus stimulus package will create the 3.7 million jobs President Barack Obama is targeting, which in turn will generate a more confident mood. Asians are rooting for the new President and his team to succeed.
Mr. Obama has chosen some of the most experienced and able minds to fill key economic positions in his Administration. Tim Geithner, Larry Summers, Paul Volcker and Christina Romer are four of the most highly respected experts in their fields. The next nine months will give us a fair assessment of how long and how deep this downturn is going to be.
The President has also not been hesitant to appoint men and women to other Cabinet posts who are more capable and knowledgeable in their areas of expertise than he is: General James Jones as National Security Adviser, Robert Gates as Secretary of Defense and Hillary Clinton as Secretary of State. But when these powerful, strong-willed individuals clash on policy--as they inevitably will--the President will have to make decisions. Obviously he has confidence that he can master their detailed arguments and decide among differing solutions.
Views From the Fed
Federal Reserve Chairman Ben S. Bernanke has stated that to stabilize and revive the ailing U.S. economy more must be done to strengthen the financial system. Such fiscal actions as passing the stimulus package are unlikely to promote a lasting recovery. Bernanke said stronger measures are needed, such as removing troubled assets from the balance sheets of financial institutions.
Whatever candidate Obama may have said about protecting American jobs, any move to restrict trade by Congress and/or his Administration would trigger protectionist forces across the world, setting back the global economy even further.
Obama's Other Problems
Iraq and Afghanistan. Withdrawing troops from Iraq to send more soldiers into Afghanistan is not without risk. Iraq must not be allowed to sink into civil war, with Shiite, Sunni and Kurd militias fighting to defend their different interests.
U.S. commanders know that more troops in Afghanistan will not solve the Taliban insurgency--not unless the porous Pakistan/Afghan-istan border is sealed off. Pashtuns on both sides of the border are from the same tribes. Pakistan's army has not had success in sealing the border, yet the government objects to U.S. forces carrying out bombing raids to kill Taliban forces hiding in the area's mountains.
-- Israel and Palestine. The aftermath of the Israel-Hamas war in Gaza has created a new and troubled situation--but one that offers opportunities for a two-state solution.
--Weapons of mass destruction. The constant threat of nuclear, biological or chemical weapons falling into the hands of terrorists must be addressed. Of immediate concern are Pakistan's nuclear arsenal and Iran's nuclear ambitions. Iranian President Ahmadinejad has rebuffed President Obama's offer to forge a new relationship.
Asian leaders hope that after being briefed on these awesome problems, as well as on the energy crisis and global warming, President Obama will rethink and retool his responses.
--Two emerging giants. The balance of power is shifting from the Atlantic to the Pacific. This trend began more than a decade ago with the economic reforms in China and then in India. Political and diplomatic leverage will follow the increasing economic weight of these two countries.
China, with nearly 40% of its GDP dependent on exports, has suffered badly from the sharp decline in U.S. and EU imports. Many factories in coastal regions have closed, and millions of migrant workers are returning to the countryside. Beijing is aware of the danger of social unrest should these huge numbers of retrenched workers remain idle. To this end it has announced some $600 billion in infrastructure spending. It is also working to stimulate domestic consumption, especially with regard to residential housing. With nearly $2 trillion in reserves, Beijing has ample resources to manage this problem.
Even though India has only 20% of its GDP dependent on exports (and that mainly through the sale of IT software), it has nevertheless been affected by the recession. Foreign capital has pulled out, and India's economy has slowed.
After a short period, though, both China and India will resume their spectacular growth. With their huge populations spread over two subcontinents, these two giants can prime their economies and grow through their domestic markets. They will become heavyweight actors on the world stage. Though they will not displace the U.S. as the preeminent world power, the U.S. will no longer be able to take their views and interests for granted, as it has in the past.
For America to retain its role in global affairs, President Obama will have to exercise wise leadership--as thoughtful and effective as that shown in his quest for the presidency. America's friends hope he will succeed in remaking America.
http://www.forbes.com/forbes/2009/0302/017_current_events.html
Obama at the Helm With the World in Recession
Lee Kuan Yew, 02.11.09, 06:00 PM EST
Forbes Magazine dated March 02, 2009
America's recession has spread worldwide, and there has been no decoupling--for any country--from the American economy. If the U.S. does not recover, the EU will not bounce back. Other economies cannot make up the decline in demand. Asia's leaders hope that America's $800 billion-plus stimulus package will create the 3.7 million jobs President Barack Obama is targeting, which in turn will generate a more confident mood. Asians are rooting for the new President and his team to succeed.
Mr. Obama has chosen some of the most experienced and able minds to fill key economic positions in his Administration. Tim Geithner, Larry Summers, Paul Volcker and Christina Romer are four of the most highly respected experts in their fields. The next nine months will give us a fair assessment of how long and how deep this downturn is going to be.
The President has also not been hesitant to appoint men and women to other Cabinet posts who are more capable and knowledgeable in their areas of expertise than he is: General James Jones as National Security Adviser, Robert Gates as Secretary of Defense and Hillary Clinton as Secretary of State. But when these powerful, strong-willed individuals clash on policy--as they inevitably will--the President will have to make decisions. Obviously he has confidence that he can master their detailed arguments and decide among differing solutions.
Views From the Fed
Federal Reserve Chairman Ben S. Bernanke has stated that to stabilize and revive the ailing U.S. economy more must be done to strengthen the financial system. Such fiscal actions as passing the stimulus package are unlikely to promote a lasting recovery. Bernanke said stronger measures are needed, such as removing troubled assets from the balance sheets of financial institutions.
Whatever candidate Obama may have said about protecting American jobs, any move to restrict trade by Congress and/or his Administration would trigger protectionist forces across the world, setting back the global economy even further.
Obama's Other Problems
Iraq and Afghanistan. Withdrawing troops from Iraq to send more soldiers into Afghanistan is not without risk. Iraq must not be allowed to sink into civil war, with Shiite, Sunni and Kurd militias fighting to defend their different interests.
U.S. commanders know that more troops in Afghanistan will not solve the Taliban insurgency--not unless the porous Pakistan/Afghan-istan border is sealed off. Pashtuns on both sides of the border are from the same tribes. Pakistan's army has not had success in sealing the border, yet the government objects to U.S. forces carrying out bombing raids to kill Taliban forces hiding in the area's mountains.
-- Israel and Palestine. The aftermath of the Israel-Hamas war in Gaza has created a new and troubled situation--but one that offers opportunities for a two-state solution.
--Weapons of mass destruction. The constant threat of nuclear, biological or chemical weapons falling into the hands of terrorists must be addressed. Of immediate concern are Pakistan's nuclear arsenal and Iran's nuclear ambitions. Iranian President Ahmadinejad has rebuffed President Obama's offer to forge a new relationship.
Asian leaders hope that after being briefed on these awesome problems, as well as on the energy crisis and global warming, President Obama will rethink and retool his responses.
--Two emerging giants. The balance of power is shifting from the Atlantic to the Pacific. This trend began more than a decade ago with the economic reforms in China and then in India. Political and diplomatic leverage will follow the increasing economic weight of these two countries.
China, with nearly 40% of its GDP dependent on exports, has suffered badly from the sharp decline in U.S. and EU imports. Many factories in coastal regions have closed, and millions of migrant workers are returning to the countryside. Beijing is aware of the danger of social unrest should these huge numbers of retrenched workers remain idle. To this end it has announced some $600 billion in infrastructure spending. It is also working to stimulate domestic consumption, especially with regard to residential housing. With nearly $2 trillion in reserves, Beijing has ample resources to manage this problem.
Even though India has only 20% of its GDP dependent on exports (and that mainly through the sale of IT software), it has nevertheless been affected by the recession. Foreign capital has pulled out, and India's economy has slowed.
After a short period, though, both China and India will resume their spectacular growth. With their huge populations spread over two subcontinents, these two giants can prime their economies and grow through their domestic markets. They will become heavyweight actors on the world stage. Though they will not displace the U.S. as the preeminent world power, the U.S. will no longer be able to take their views and interests for granted, as it has in the past.
For America to retain its role in global affairs, President Obama will have to exercise wise leadership--as thoughtful and effective as that shown in his quest for the presidency. America's friends hope he will succeed in remaking America.
WAF is the old fart talking?
