Just a SPECTATOR

George Soros: How to Save the Euro

2012-01-28T13:17:00.000+01:00

New York Review of Books

My new book, Financial Turmoil in Europe and the United States, tries to explain and, to the extent possible, predict the outcome of the euro crisis. It follows the same pattern as my other books: it contains an updated version of my conceptual approach and the application of that approach to a particular situation, and it presents a real-time experiment to test the validity of my interpretation. Its account is not complete because the crisis is still ongoing.

We remain in the acute phase of the crisis; the prospect of a meltdown of the global financial system has not been removed. In my book, I proposed a plan that would bring immediate relief to global financial markets but it has not been adopted.
My proposal is to use the European Financial Stability Facility (EFSF), and its successor the European Stability Mechanism (ESM), to insure the European Central Bank (ECB) against the solvency risk on any newly issued Italian or Spanish treasury bills they may buy from commercial banks. Banks could then hold those bills as the equivalent of cash, enabling Italy and Spain to refinance their debt at close to 1 percent. Italy, for instance, would see its average cost of borrowing decline rather than increase from the current 4.3 percent. This would put their debt on a sustainable course and protect them against the threat of an impending Greek default. I call this the Padoa-Schioppa plan, in memory of my friend who helped stabilize Italy’s finances in the 1990s and who inspired the proposal. The plan is rather complicated, but it is both legally and technically sound. I describe it in detail in my book.
The European financial authorities rejected this plan in favor of the Long-Term Refinancing Operation (LTRO) of the European Central Bank, which provides unlimited amounts of liquidity to European banks—not to states themselves—for up to three years. That allows Italian and Spanish banks to buy the bonds of their own country and engage in a very profitable “carry trade”—in which one borrows at low interest to buy something that will pay higher interest—in those bonds at practically no risk because if the country defaulted the banks would be insolvent anyhow.
The difference between the two schemes is that mine would provide an instant reduction in interest costs to governments while the one actually adopted has kept the countries and their banks hovering on the edge of a potential insolvency. I am not sure whether the authorities have deliberately prolonged the crisis atmosphere in order to maintain pressure on heavily indebted countries or whether they were driven to their course of action by divergent views that they could not reconcile in any other way. As a disciple of Karl Popper, I ought to opt for the second alternative. Which interpretation is correct is not inconsequential, because the Padoa-Schioppa plan is still available and could be implemented at any time as long as the remaining funds of the EFSF are not otherwise committed.
Either way, it is Germany that dictates European policy because at times of crisis the creditors are in the driver’s seat. The trouble is that the cuts in government expenditures that Germany wants to impose on other countries will push Europe into a deflationary debt trap. Reducing budget deficits will put both wages and profits under downward pressure, the economies will contract, and tax revenues will fall. So the debt burden, which is a ratio of the accumulated debt to the GDP, will actually rise, requiring further budget cuts, setting in motion a vicious circle.
To be sure, I am not accusing Germany of acting in bad faith. It genuinely believes in the policies it is advocating. Germany is the most successful economy in Europe. Why should not the rest of Europe be like it? But it is pursuing an impossibility. In a closed system like the euro clearing system, everybody cannot be a creditor at the same time. The fact that a counterproductive policy is being imposed by Germany creates a very dangerous political dynamic. Instead of bringing the member countries closer together it will drive them to mutual recriminations. There is a real danger that the euro will undermine the political cohesion of the European Union.
The evolution of the European Union is following a course that greatly resembles a sequence of boom and bust or a financial bubble. That is no accident. Both processes are “reflexive,” that is, as I have argued elsewhere, they are largely driven by mistakes and misconceptions.
In the boom phase the European Union was what the British psychologist David Tuckett calls a “fantastic object”—an unreal but attractive object of desire. To my mind, it represented the embodiment of an open society—another fantastic object. It was an association of nations founded on the principles of democracy, human rights, and the rule of law that is not dominated by any nation or nationality. Its creation was a feat of piecemeal social engineering led by a group of farsighted statesmen who understood that the fantastic object itself was not within their reach. They set limited objectives and firm timelines and then mobilized the political will for a small step forward, knowing full well that when they accomplished it, its inadequacy would become apparent and require a further step.
That is how the European Coal and Steel Community was gradually transformed into the European Union, step by step. During the boom period Germany was the main driving force. When the Soviet empire started to fall apart, Germany’s leaders realized that reunification of their country was possible only in a more united Europe. They needed the political support of other European powers, and they were willing to make considerable sacrifices to obtain it. When it came to bargaining they were willing to contribute a little more and take a little less than the others, thereby facilitating agreement. At that time, German statesmen used to assert that Germany had no independent foreign policy, only a European policy. The process—the boom, if you will—culminated with the Maastricht Treaty in 1992 and the introduction of the euro in 2002. It was followed by a period of stagnation that turned into a process of disintegration after the crash of 2008.
The euro was an incomplete currency and its architects knew it. The Maastricht Treaty established a monetary union without a political union. The euro boasted a common central bank to provide liquidity, but it lacked a common treasury that would be able to deal with solvency risk in times of crisis. The architects had good reason to believe, however, that when the time came further steps would be taken toward a political union. But the euro also had some other defects of which the architects were unaware and that are not fully understood even today. These defects contributed to setting in motion a process of disintegration.
The fathers of the euro relied on an interpretation of financial markets that proved its inadequacy in the crash of 2008. They believed, in particular, that only the public sector is capable of producing unacceptable economic imbalances; the invisible hand of the market would correct the imbalances produced by markets. In addition, they believed that the safeguards they introduced against public sector imbalances were adequate. Consequently, they treated government bonds as riskless assets that banks could buy and hold without allocating any capital reserves against them.
When the euro was introduced, the ECB treated the government bonds of all member states as equal. This gave banks an incentive to gorge themselves on the bonds of the weaker countries in order to earn a few extra basis points, since the yields on those bonds were slightly higher. It also caused interest rates to converge. That, in turn, caused economic performance to diverge. Germany, struggling with the burdens of reunification, undertook structural reforms, principally in its labor markets, and became more competitive. Other countries, benefiting from lower interest rates, enjoyed a housing boom that made them less competitive. That is how the introduction of the euro caused the divergence in competitiveness that is now so difficult to correct. The banks were weighed down with the government bonds of less competitive countries that turned from riskless assets into the riskiest ones.
The tipping point was reached when a newly elected Greek government revealed that the previous government had cheated and the national deficit was much bigger than had been announced. The Greek crisis revealed the gravest defect in the Maastricht Treaty: it has no provisions for correcting errors in the euro’s design. There is neither a mechanism for enforcing payment by member states of the European debt nor an exit mechanism from the euro; and member countries cannot resort to printing money. The statutes of the ECB strictly prohibit it from lending to member states, although it lends to banks. So it was left to the other member states to come to Greece’s rescue.
Unfortunately the European authorities had little understanding of how financial markets really work. Far from combining all the available knowledge in the market’s movements, as economic theory claims, financial markets are ruled by impressions and emotions and they abhor uncertainty. To bring a financial crisis under control requires firm leadership and ample financial resources. But Germany did not want to become the deep pocket for bad debtors. Consequently Europe always did too little too late and the Greek crisis snowballed. The bonds of other heavily indebted countries such as Italy and Spain were hit by contagion—i.e., in view of the failure in Greece they had to pay higher yields. The European banks suffered losses that were not recognized on their balance sheets.
Germany aggravated the situation by imposing draconian conditions and insisting that Greece should pay penalty rates on the loans in the rescue package that Germany and other states provided. The Greek economy collapsed, capital fled, and Greece repeatedly failed to meet the conditions of the rescue package. Eventually Greece became patently insolvent. Germany then further destabilized the situation by insisting on private sector participation in the rescue. This pushed the risk premiums on Italian and Spanish bonds through the roof and endangered the solvency of the banking system. The authorities then ordered the European banking system to be recapitalized. This was the coup de grâce. It created a powerful incentive for the banks to shrink their balance sheets by calling in loans and getting rid of risky government bonds, rather than selling shares at a discount.
That is where we are today. The credit crunch started to make its effect felt on the real economy in the last quarter of 2011. The ECB then started to reduce interest rates and aggressively expand its balance sheet by buying government bonds in the open market. The ECB’s LTRO facility provided relief to the banking system but left Italian and Spanish bonds precariously balanced between the sustainable and the unsustainable.
What lies ahead? Economic deterioration and political and social disintegration will mutually reinforce each other. During the boom phase the political leadership was in the forefront of further integration; now the European leaders are trying to protect a status quo that is clearly untenable. Treaties and laws that were meant to be stepping stones have turned into immovable rocks. I have in mind Article 123 of the Lisbon Treaty, which prohibits the ECB from lending money directly to member states. The German authorities, notably the Constitutional Court and the Bundesbank, are dead set on enforcing rules that have proved to be unworkable. For instance, the Bundesbank’s narrow interpretation of Article 123 prevented Germany from contributing its Special Drawing Rights to a rescue effort by the G20. This is the path to disintegration. Those who find the status quo intolerable and are actively looking for change are driven to anti-European and xenophobic extremism. What is happening today in Hungary—where a far-right party is demanding that Hungary leave the EU—is a precursor of what is in store.
The outlook is truly dismal but there must be a way to avoid it. After all, history is not predetermined. I can see an alternative. It is to rediscover the European Union as the “fantastic object” that used to be so alluring when it was only an idea. That fantastic object was almost within reach until we lost our way. The authorities forgot that they are fallible and started to cling to the status quo as if it were sacrosanct. The European Union as a reality bears little resemblance to the fantastic object that used to be so alluring. It is undemocratic to the point where the electorate is disaffected and it is ungovernable to the point where it cannot deal with the crisis that it has created.
These are the defects that need to be fixed. That should not be impossible. All we need to do is to reassert the principles of open society and recognize that the prevailing order is not cast in stone and rules are in need of improvement. We need to find a European solution for the euro crisis because national solutions would lead to the dissolution of the European Union, and that would be catastrophic; but we must also change the status quo. That is the kind of program that could inspire the silent majority that is disaffected and disoriented but at heart still pro-European.
When I look around the world I see people aspiring to open society. I see it in the Arab Spring, in various African countries; I see stirrings in Russia, and as far away as Burma and Malayasia. Why not in Europe?
To be a little more specific, let me suggest the outlines of a European solution to the euro crisis. It involves a delicate two-phase maneuver, similar to the one that got us out of the crash of 2008. When a car is skidding, you first have to turn the steering wheel in the direction of the skid, and only after you have regained control can you correct your direction. In this case, you must first impose strict fiscal discipline on the deficit countries and encourage structural reforms; but then you must find some stimulus to get you out of the deflationary vicious circle— because structural reforms alone will not do it. The stimulus will have to come from the European Union and it will have to be guaranteed jointly and severally. It is likely to involve eurobonds in one guise or another. It is important, however, to spell out the solution in advance. Without a clear game plan Europe will remain mired in a larger vicious circle in which economic decline and political disintegration mutually reinforce each other.

Ron Paul Rejects Evolution Too : Dispatches from the Creation Wars

2012-01-26T18:38:00.000+01:00

Ron Paul Rejects Evolution Too : Dispatches from the Creation Wars
Posted on: August 25, 2011 9:16 AM, by Ed Brayton

Here's a video of Ron Paul being asked about evolution at a townhall meeting. There are two things that are interesting about it. First, he uses the old "it's a theory" line as if that casts some doubt on evolution. This is based on the false notion that a theory is a stepping stone to becoming something else once it's well supported.

Second, how he turns totally spineless at the end and invokes the "we don't have absolute truth on this yet" notion. Absolutely irrelevant. Does evolution explain the evidence well or not? Of course it does. That's really all that matters.

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"V means Vladimir, V means victory."

2012-01-19T11:45:00.002+01:00

Youth Don White Gloves for Putin | News | The Moscow Times

Youth Don White Gloves for Putin

23 December 2011 By Natalya Krainova

Vladimir Andreyev / For MT

With white gloves, pro-Kremlin activists illustrating the slogan “V means Vladimir, V means victory”

It's the white glove vs. the white ribbon.
Pro-Kremlin youth groups announced Thursday that they would adopt a white glove as their symbol at a series of rallies intended to counter anti-Kremlin rallies over alleged vote fraud at the Dec. 4 State Duma elections.
Many of the 40,000 to 60,000 disgruntled voters who rallied on Bolotnaya Ploshchad on Dec. 10 wore white ribbons as a symbol of their protest against election fraud.

"We will not farm out our votes to revanchist and marginal people," Anton Demidov, leader of Young Russia, told a dozen reporters, photographers and television cameras at a street news conference.
"The minority who won in 1991 will not win again," Demidov said in a reference to the Soviet collapse.
Rank-and-file activists stood in groups chatting and shivering with cold as five youth group leaders spoke for more than an hour in front of a banner reading: "V means Vladimir, V means victory."
The activists — wearing white gloves distributed shortly before the news conference near a statue of Fyodor Dostoevsky — said they wanted to help Prime Minister Vladimir Putin win election as president in March.
Demidov likened opposition leaders to the tsarist-era revolutionary democrats depicted as "demons" in Dostoevsky's novel of the same name.
Maxim Mishchenko, a former leader of Young Russia, a former State Duma deputy and current Public Chamber member, told The Moscow Times that the planned rallies would be directed at opposition leaders who receive money from the U.S. State Department. He identified those leaders as including Boris Nemtsov, Mikhail Kasyanov and Eduard Limonov.
Mishchenko promised that the rallies would be peaceful.
SUP Media, the owner of LiveJournal, meanwhile, suspended more than 30 accounts belonging to members of the new white glove alliance, formally called the Headquarters of United Actions, for attempting to manipulate their ratings, RIA-Novosti reported.
Demidov said the suspension showed that "a Russian-American campaign has started." He didn't elaborate.
Igor Gribanov, leader of Noviye Lyudi, or New People, based in the Volga Federal District, said his group has decided to join the alliance even though civic activism in the regions is low "because people have no time to waste on such nonsense."
An activist, Konstantin Tsepov, 20, said he was waiting for orders to "solve issues linked to the election" of Putin in March and to "solve problems."
A female activist refused to talk to a reporter, saying, "We have a press secretary."

Ron Paul: Batty Old Reactionary for President - The Daily Beast

2011-12-15T16:08:00.000+01:00

Ron Paul: Batty Old Reactionary for President - The Daily Beast

However delightful it would be for Ron Paul to whip Newt and Mitt in Iowa, Paul’s hipster supporters need to realize just how far right he really is. Plus, Andrew Sullivan endorses Paul for the GOP nomination.

The signs gather: Ron Paul is just one point behind Newt Gingrich in Iowa in a new poll. Paul has also won the Cedar Rapids Tea Party straw poll in high style, drawing 37 first-place votes from the 60 participants, to second-place finisher Rick Santorum’s nine votes (60 participants? It must be important!). He could win Iowa. I hope he does—the more disarray the better. But if he hauls in a plurality of votes from a caucus-going electorate that consists of hard-right evangelicals and harder-right Tea Partiers, I’d hope that maybe that fact would finally give pause to the Paul Hipster Caucus in the cities that somehow got in its head that there’s something cool about this batty old reactionary.

If Paul does win, he definitely creates at least a temporary tornado. I say temporary for two reasons. First, because Iowa is sui generis in so many ways having to do with the nature and priorities of the electorate, Paul would seem to be unlikely to have a chance to notch a victory in other early states. So even after an Iowa win, he would be likely to fade pretty quickly. Second, it’s always worth remembering that there are times in history when Iowa hasn’t been important at all. George H.W. Bush in 1988, Bill Clinton in 1992, and John McCain in 2008 all performed poorly in Iowa—Clinton didn’t compete there at all—and all went on to capture their nominations without a great amount of stress.

But the tornado, however momentary, will be plenty real, especially if Mitt Romney finishes a somewhat distant third to Paul and Gingrich, which seems completely possible. Then, for the week between Iowa and New Hampshire, the media storyline will probably be “Can Romney save his skin?” Remember 2008 on the other side. Hillary Clinton suffered an upset loss in Iowa, and the next week was all about whether she could beat Barack Obama in New Hampshire. She did and lived to fight on. But if she’d lost that one, she was going to be declared cooked. So a Paul win in Iowa, or even a comfortable second-place finish there, makes Romney’s situation that much more dire.

Rep. Ron Paul speaks during a campaign stop in Waverly, Iowa, in December. , Christopher Gannon / MCT /LANDOV

In this scenario, Paul suddenly becomes a kind of a kingmaker in Republican politics, no longer the outsider banging on the door. Maybe then, finally, those denizens of Williamsburg and Los Feliz and the Mission District who have found in Paul an interesting iconoclast will get over it.

I wonder what these young and gender-transcendent and differently melanined people would make, for example, of the racism charges. There is debate on this point, but back during the 2008 campaign, The New Republic’s James Kirchick tracked down old copies (late 1980s and early 1990s) of a newsletter that went out to subscribers under Paul’s name. The sentences that appear in these documents are so astonishing that they’d have stood out in Alabama in 1960. Martin Luther King was a “world-class philanderer who beat up his paramours” (who were, interestingly, of both sexes). The name of New York City should be changed to “Welfaria,” “Zooville,” “Rapetown,” “Dirtburg,” or “Lazyopolis.” David Duke’s near-win in the 1990 Louisiana Senate primary was celebrated. Mountains of material about welfare cheats and animals and arming oneself for the coming race riot and so on.

Does Ron Paul think a bunch of liberal busybodies woke up one day in 1795 and decided to impose taxes and regulations because these people were too free? He probably does.

Paul said then he had no idea who wrote those sentences. But they appeared in a newsletter that blazoned his name across every issue, so it scarcely matters who wrote them. By definition he endorsed the views. Hilariously, he said on CNN that King and Rosa Parks were heroes of his because they “practiced the libertarian principle of civil disobedience,” which meant that they were “trying to get the burden of government off their backs.” Putting aside the question of what exactly it is about civil disobedience that’s libertarian, it is quite true that King wanted Bull Connor off his back, but he rather strongly wanted the federal government to be the instrument of Connor’s removal. So even if Paul is not a racist, he is on this point a complete idiot or propagandist or both.

I’ve never understood the allure of libertarianism. You may want a big state, you may want a smaller state. The idea of virtually no state is just silly. Does Ron Paul think the state grew because a bunch of liberal busybodies woke up one day in 1795 and said to one another, “Gee, we’d better impose some taxes and regulations here. These people are too free!” He probably does. The fact, of course, is that the state grew because dishonest and immoral and cheap and corner-cutting shysters in the private sector did things that ripped people off, made them sick, killed them, rendered them unequal citizens, and someone had to step in. And my esteemed colleague Andrew Sullivan should bear in mind that while it’s nice that Paul supports everyone’s right to privacy in the bedroom, if someone gets beaten to a pulp on the street simply for being who he is, don’t go knocking on Paul’s door, as he’ll be nowhere to be found, hate-crimes laws being a threat to the freedom of the hater and all.

I long for the day I no longer have to think about this pestilential little locust. In the meantime, I do kind of hope he wins Iowa, so that he can spread some of that pestilence around the GOP.

He gets a lot of credit from young, hip, pseudo-libertarians for being antiwar, and I’ll give him credit for sticking to that position. But it’s really less brave than it looks. There has always been an isolationist strain in the GOP, so it was always clear that he’d have a base of support there to watch his back against the neocons. And besides, the war turned out to be highly unpopular, which worked out very nicely for him. And there’s the infrequently discussed negative side to his foreign-policy views that sometimes American power actually helps do good things. We need look only as far back as Libya. But outside the realm of war, there are a million and one things the United States does every day in terms of global development and mitigating disease and hunger that our hipsters surely find agreeable, that do make the world a better place than it would be without them—and that Paul would eliminate immediately if he could.

I long for the day I no longer have to think about this pestilential little locust. In the meantime, I do kind of hope he wins Iowa, so that he can spread some of that pestilence around the GOP.

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Should the Occupy Movement Get Credit for the "Super-Committee's" Failure? | AlterNet

2011-12-05T16:26:00.000+01:00

Should the Occupy Movement Get Credit for the "Super-Committee's" Failure? | AlterNet

Should the Occupy Movement Get Credit for the "Super-Committee's" Failure?

It's rare that I disagree with Dean Baker, but I don't believe that the Occupy Movement deserves much credit for derailing the "super-committee."

Dean writes:

OWS and the response it has drawn from around the country has hugely altered the political debate. It has put inequality and the incredible upward redistribution of income over the last three decades at the center of the national debate. In this context, it became impossible for Congress to back a package that had cuts to social security and Medicare at its center, while actually lowering taxes for the richest 1%, as the Republican members of the supercommittee were demanding.

As a result, he says that "much of the credit" for the committee's failure to strike a deal "goes to the Occupy Wall Street (OWS) movement."

I couldn't agree more that OWS has had a profound impact on the national discourse -- in fact I wrote about what I called the Occupy Movement's "stunning victory" in shifting the mainstream ecenomic discussion just last month.

The problem with crediting the movement is that the 'Gang of Twelve's' failure to strike a deal was always a foregone conclusion.

In early August, fully a month before the Occupy Wall Street movement got off the ground, I wrote that the entire process was "nothing more than a piece of kabuki theater."

The “super congress” that emerged from the [debt ceiling] deal offered a way to kick what had been an unbridgeable divide down the road a ways, but it doesn't alter the contours of the debate. While some Republicans have indicated that they might support closing a few loopholes to raise revenues, the party as a whole remains committed to their no-tax pledge. Democrats – especially House Democrats – have repeated that we need a “balanced” approach to cutting debt like a mantra. They've signaled they would be willing to accept some cuts to Social Security and Medicare, but not cuts sufficiently deep to entice enough GOP support for a package with new revenues.
Political scientist Seth Maskett analyzed the voting records of the Gang of 12 and concluded that it represents a “a pretty good balance between the parties,” featuring “roughly equal proportions of extremists and moderates” that “should agree on approximately nothing.” The most likely scenario is that this group won't come up with a deal that gets the seven votes needed to send it to the full Congress for a vote. If they do, it will by necessity be at least a somewhat “balanced” approach, and the GOP, terrified of its Tea Party base, has made it clear that such a deal is a non-starter – it'd be DOA on the Hill.
The “leverage” that's supposed to move these legislators closer together is one of those Beltway fantasies that bears no resemblance to any objective reality. Conservatives have little incentive to deal, in part because Democrats have already negotiated away substantial cuts in military spending in the “trigger.”

When I wrote that, I wasn't at all worried that I'd end up with egg on my face.

By Joshua Holland | Sourced from AlterNet

Posted at November 25, 2011, 2:13 pm

Papandreou calls referendum on rescue deal | European Voice

2011-11-01T17:06:00.000+01:00

Papandreou calls referendum on rescue deal | European Voice

By Andrew Gardner - 01.11.2011 / 09:43 CET

Dazed Digital | Nicola Formichetti: Exclusive Virtual Catwalk Documentary

2011-10-10T12:58:00.001+02:00

Dazed Digital | Nicola Formichetti: Exclusive Virtual Catwalk Documentary
http://newsfeed.time.com/2011/09/29/occupy-wall-street-12-days-and-little-sign

Conservative Party Conference 2011: Boris Johnson defies David Cameron to call for referendum on Europe - Telegraph

2011-10-05T15:29:00.000+02:00

Conservative Party Conference 2011: Boris Johnson defies David Cameron to call for referendum on Europe - Telegraph

Conservative Party Conference 2011: Boris Johnson defies David Cameron to call for referendum on Europe

Boris Johnson has openly challenged David Cameron’s authority by calling for a referendum on Britain’s relationship with the European Union.

Mayor of London Boris Johnson gives his keynote speech to delegates at the Conservative Party Conference in Manchester Photo: Jeff J Mitchell/Getty Images

By James Kirkup, Political Correspondent

6:49AM BST 05 Oct 2011

The London mayor said it was “not a bad idea” to give the British people a direct say on Europe. He told a fringe meeting at the Conservative conference that voters deserved a chance to express their views on the issue.

He said: “The British people haven’t had a say on Europe since 1975. There hasn’t been a vote. It seems to me to be that if a reasonable question could be framed and put to the people of this country, I think it is not a bad idea.”

One option for the referendum would be an “in-out referendum”, he said.

He predicted that while voters might not vote to leave the EU, they might demand a “looser relationship” with Brussels.

Mr Johnson, seen as a potential future Conservative leadership contender, spoke hours after Mr Cameron had ruled out any popular vote on EU issues and insisted that the Conservatives should not focus on the issue

“I don’t want Britain to leave the EU,” the Prime Minister said. “I think it’s the wrong answer for Britain. People in rooms up and down Britain aren’t thinking, gosh, if only we could have a treaty change in Europe.”

The mayor’s intervention shatters Mr Cameron’s attempts to take Europe off the conference agenda and will infuriate Downing Street. Mr Johnson made the move even as he insisted he was not interested in trying to take Mr Cameron’s job in the future.

He said he would not take another “big job in politics” after being London mayor, and wanted to “knock on the head” speculation about his ambitions, declaring: “I really don’t want to do anything else.”

Mr Johnson, who will seek a second term as mayor next year, was repeatedly applauded as he addressed the conference about his record running London.

Mr Johnson’s performance underlined his status as a favourite of Tories and a potential leadership candidate. Many Conservative MPs believe Mr Cameron will be replaced by either Mr Johnson or George Osborne, the Chancellor.

But in television interviews last night, Mr Johnson described talk of prime ministerial ambitions as “complete nonsense”. He told ITV News: “Let’s take this opportunity to knock this on the head. The job of Mayor of London is the most wonderful, most engrossing job I could ever imagine I would have in politics.

“It gluts the appetite for power and executive action, and I love it. And I really don’t want to do anything else.”

Recent reports have suggested Mr Johnson could seek to return to the House of Commons in his second term as mayor. Conservative rules say the party leader must be an MP.

Mr Johnson told the BBC’s Newsnight there is “not a snowball’s chance in Hades” of a return to the Commons.

He has said he will only serve two terms as mayor. Asked about trying to become Prime Minister, he replied: “I don’t think I will do another big job in politics after this.”

Relations between Mr Cameron and Mr Johnson have often been tense and Downing Street insiders say the Prime Minister and the Chancellor are determined to help Mr Johnson win re-election next year in order to complicate any leadership plans he may harbour.

Russian Reality-Check

2011-10-04T23:11:00.002+02:00

David J. Kramer and Christopher Walker: Russian Reality-Check - WSJ.com

Putin's return to the presidency should dispel any remaining delusions about the Medvedev era

By DAVID J. KRAMER AND CHRISTOPHER WALKER

The prevailing wisdom is that Vladimir Putin's return to the Russian presidency is bad news. That may be, but there is also reason to welcome his not-so-surprising Kremlin homecoming: It will remove the fiction of Russian reform and modernization that the presidency of Dmitry Medvedev represented. This in turn should allow U.S. and European Union policy makers to see the country as it is, rather than as they would prefer to imagine it.

For the past several years, Mr. Putin has served, nominally, as prime minister under Mr. Medvedev. Mr. Medvedev assumed the presidency in 2008 as part of a carefully choreographed process that saw Mr. Putin, the president at the time, anoint Mr. Medvedev as his successor. In keeping with expectations, Mr. Putin then remained Russia's paramount leader while serving as prime minister, calling the shots on virtually all issues of consequence.
While the outside world became consumed with the Kremlin's theater, the two principals were clear about the charade. In announcing his return to the presidency on Sept. 24, Mr. Putin said: "I want to say directly: An agreement over what to do in the future was reached between us several years ago." Mr. Medvedev called the switch "a deeply thought-out decision."
This purposely ambiguous arrangement allowed both domestic and foreign audiences to project their hopes onto the Russian leadership. The West, after years of dealing solely with Mr. Putin's assertive and often belligerent persona, welcomed a more friendly interlocutor in the form of Mr. Medvedev. This good cop/bad cop dynamic quickly took hold, with the youthful, soft-spoken, modernizing Mr. Medvedev playing the foil to the stern, inscrutable Mr. Putin.
In July 2009, shortly before he was to meet with Mr. Putin for the first time in Russia, U.S. President Barack Obama criticized him for his "Cold War approaches" to relations with the U.S., saying Putin had "one foot in the old ways of doing business and one foot in the new." While undoubtedly true, this comment was apparently designed to sharpen a distinction between Messrs. Putin and Medvedev, with the hope of encouraging the latter's supposed ambitions to modernize. In hindsight, it is clear that the distinction was illusory, and that the U.S. strategy was misguided.
Freedom House's recent findings put the Medvedev era into perspective. Russia's performance on democratic accountability grew progressively worse during each year of Mr. Medvedev's presidency. Civil society and judicial independence were eroded. Rampant corruption continued unabated. While Mr. Medvedev has routinely cited the need for dramatically improving the rule of law in Russia, no discernible gains have been achieved.
Meanwhile, despite much talk of creating a more hospitable business environment, Russia today ranks 143rd out of 179 on the Heritage Foundation's Index of Economic Freedom. It ranks 154th out of 178 countries in Transparency International's most recent annual Corruption Perceptions Index.
The door is now open for a reset that focuses on the institutional realities—rather than the political stagecraft—of an entrenched authoritarian system. The sooner U.S. and European policy makers come to terms with the prospect of at least 12 more years of Putinism, and devise policies that can effectively deal with this challenge, the better for everyone.
Broadly speaking, the democracies should end their self-censorship on the systematic abuses of civil rights in Russia. Their messages to Russia should include stronger backing for the democracies of central and eastern Europe—natural allies that have watched apprehensively as their interests are overshadowed by Russia's relations with the U.S., Germany and other influential Western powers.
Mr. Putin's return threatens to consign Russia to a decade or more of political stagnation and growing corruption. If recent events in the Middle East are any guide, such prolonged decay could end in crisis and upheaval.
For ordinary Russians, civil-rights activists and anyone hoping to do business in the country under more favorable conditions, the next chapter of the Putin era will surely bring more bad news. It is time for the world's democracies to set aside wishful thinking and confront the challenges of an authoritarian leadership whose only plan for the future is to dig in its heels.
—Mr. Kramer is president and Mr. Walker is director of studies at Freedom House.

Gazprom-phobia escalates in Brussels : Voice of Russia

2011-10-03T21:57:00.001+02:00

Gazprom-phobia escalates in Brussels : Voice of Russia

Chernitsa Polina

Sep 28, 2011 15:21 Moscow Time

Russia has urged the European Commission to observe the rights of its energy giant Gazprom. The country’s Energy Ministry said its interests as a supplier and investor and protected by international agreements. The day before, members of the European Commission have searched offices of a number of EU energy companies that are one way or another linked to Gazprom. The Russian giant itself referred to this as common practice being in strict conformity with Brussels’ orders concerning the protection of competition. EU commissioners claim it is too early to talk about any violations.

Voice of Russia’s Polina Chernitsa has this report.

A rigorous search was carried out at offices of Gazprom Germania GmbH, Vemex in the Czech Republic and Lithuanian-based Lietuvos Dujos AB, all of which are Gazprom’s subsidiaries. Apart from that, commissioners visited the offices of German energy giants RWE and E.ON Ruhrgas. This is a totally unprecedented action, according to head of the International Energy Policy Center Yury Solozobov.

"Search operations were not only held in Germany and the Czech Republic - the two largest consumers of Russian gas and Gazprom’s strategically important partners, but in ten other EU countries as well. This obviously points to a coordinated action of Brussels," Yury Solozobov believes.

The European Commission says it suspects companies of dividing the market, limiting access to the gas transport system and holding up prices. In other words, we may be dealing with a cartel conspiracy. At the same time, it is stressed that the fact of inspections does not necessarily confirm guilt. So far, the matter at hand is information acquisition, with EU commissioners’ information hunger notably coinciding with the approaching winter when Europe will be more than ever dependent on Russian gas, Yury Solozobov goes on to say.

"Powerful pressure placed on Gazprom is closely linked to the beginning of the winter heating season and EU’s entering a severe and long-lasting economic crisis. It is their need for cheap energy resources that entails such extraordinary pressure. The European Union is fruitlessly trying to lower the price of long-term contracts. However, the costs of maintaining Gazprom’s thousand-kilometer transit structure cannot only be placed on the shoulders of organizations working at spot prices. Therefore, the Russian energy giant’s arguments are more than reliable in this context," Yury Solozobov says.

Activities of this kind may bring Brussels to trial, warns analyst with the National Energy Security foundation Alexander Pasechnik.

"I have great doubts about the discovery of any violations. They may only be invented, because pricing formulas outlined in gas contracts are perfectly comprehensible and coordinated," stresses Alexander Pasechnik.

Two weeks had not elapsed after EU Energy Chief Guenther Oettinger spoke out harshly against Gazprom after a shareholder’s agreement was signed on the South Stream pipeline. Today, there is another strange coincidence, Alexander Pasechnik is sure.

"Here we may be dealing with a conspiracy. Europe is compelled to take such counterproductive steps due to its concerns about Russian progress along the oriental track and in terms of gas supplies to China," says Alexander Pasechnik.

The Russian authorities have, by the way, repeatedly pointed to the necessity of pursuing a consistent energy policy in Europe. Present-day developments are, above all, harmful to the Europeans themselves, Russian Prime Minister Vladimir Putin said at last year’s economic forum in Germany.

“I don’t understand at all. How will you heat your houses? You do not want gas; you are not developing nuclear energy. Will you get your heat from firewood? But even for firewood you will need to go to Siberia,” Vladimir Putin said.

Experts also don’t forget about the European Commission’s major weapon against Gazprom - the Third energy Package which bans companies from simultaneously selling gas and owning a pipe. And still, Gazprom’s Nord Stream partners succeeded in their quest for the project’s special exemption from the new reforms. This may also be the case with South Stream, making Brussels adopt some non-European methods, Yuri Solozobov summarizes.

"The pattern was first used in 2004 in case of Blue Stream when the Turkish government arrested two former energy ministers and initiated a special tribunal against them. They faced up to 10 years behind bars for having allegedly signed a treaty unbeneficial for their country. Gazprom was expected to step back in the end but no one was imprisoned. Now we can see a repetition of this “Turkish gambit”, the expert says.

Gazprom provides about a fourth of all gas supplies to Europe. Breaking the transit pattern is unfavorable for the EU and the recent search operations will therefore remain nothing but an intimidating action.

EUobserver.com / News In Brief / Finland proposed to keep Greek assets in Luxembourg

2011-09-23T10:48:00.000+02:00

EUobserver.com / News In Brief / Finland proposed to keep Greek assets in Luxembourg
Finland in June proposed that Greek government shares in ports and the national phone company should be held by a company in Luxembourg as collateral in case it defaults on its second bailout, Reuters reports citing a eFinnish document. The shares were to pass to lenders if Greece goes bust.

Crashing the Tea Party - NYTimes.com

2011-09-20T16:51:00.001+02:00

Crashing the Tea Party - NYTimes.com

Op-Ed Contributors

Crashing the Tea Party

By DAVID E. CAMPBELL and ROBERT D. PUTNAM

Published: August 16, 2011

GIVEN how much sway the Tea Party has among Republicans in Congress and those seeking the Republican presidential nomination, one might think the Tea Party is redefining mainstream American politics.

Times Topic: Tea Party Movement

But in fact the Tea Party is increasingly swimming against the tide of public opinion: among most Americans, even before the furor over the debt limit, its brand was becoming toxic. To embrace the Tea Party carries great political risk for Republicans, but perhaps not for the reason you might think.
Polls show that disapproval of the Tea Party is climbing. In April 2010, a New York Times/CBS News survey found that 18 percent of Americans had an unfavorable opinion of it, 21 percent had a favorable opinion and 46 percent had not heard enough. Now, 14 months later, Tea Party supporters have slipped to 20 percent, while their opponents have more than doubled, to 40 percent.
Of course, politicians of all stripes are not faring well among the public these days. But in data we have recently collected, the Tea Party ranks lower than any of the 23 other groups we asked about — lower than both Republicans and Democrats. It is even less popular than much maligned groups like “atheists” and “Muslims.” Interestingly, one group that approaches it in unpopularity is the Christian Right.
The strange thing is that over the last five years, Americans have moved in an economically conservative direction: they are more likely to favor smaller government, to oppose redistribution of income and to favor private charities over government to aid the poor. While none of these opinions are held by a majority of Americans, the trends would seem to favor the Tea Party. So why are its negatives so high? To find out, we need to examine what kinds of people actually support it.
Beginning in 2006 we interviewed a representative sample of 3,000 Americans as part of our continuing research into national political attitudes, and we returned to interview many of the same people again this summer. As a result, we can look at what people told us, long before there was a Tea Party, to predict who would become a Tea Party supporter five years later. We can also account for multiple influences simultaneously — isolating the impact of one factor while holding others constant.
Our analysis casts doubt on the Tea Party’s “origin story.” Early on, Tea Partiers were often described as nonpartisan political neophytes. Actually, the Tea Party’s supporters today were highly partisan Republicans long before the Tea Party was born, and were more likely than others to have contacted government officials. In fact, past Republican affiliation is the single strongest predictor of Tea Party support today.
What’s more, contrary to some accounts, the Tea Party is not a creature of the Great Recession. Many Americans have suffered in the last four years, but they are no more likely than anyone else to support the Tea Party. And while the public image of the Tea Party focuses on a desire to shrink government, concern over big government is hardly the only or even the most important predictor of Tea Party support among voters.
So what do Tea Partiers have in common? They are overwhelmingly white, but even compared to other white Republicans, they had a low regard for immigrants and blacks long before Barack Obama was president, and they still do.
More important, they were disproportionately social conservatives in 2006 — opposing abortion, for example — and still are today. Next to being a Republican, the strongest predictor of being a Tea Party supporter today was a desire, back in 2006, to see religion play a prominent role in politics. And Tea Partiers continue to hold these views: they seek “deeply religious” elected officials, approve of religious leaders’ engaging in politics and want religion brought into political debates. The Tea Party’s generals may say their overriding concern is a smaller government, but not their rank and file, who are more concerned about putting God in government.
This inclination among the Tea Party faithful to mix religion and politics explains their support for Representative Michele Bachmann of Minnesota and Gov. Rick Perry of Texas. Their appeal to Tea Partiers lies less in what they say about the budget or taxes, and more in their overt use of religious language and imagery, including Mrs. Bachmann’s lengthy prayers at campaign stops and Mr. Perry’s prayer rally in Houston.
Yet it is precisely this infusion of religion into politics that most Americans increasingly oppose. While over the last five years Americans have become slightly more conservative economically, they have swung even further in opposition to mingling religion and politics. It thus makes sense that the Tea Party ranks alongside the Christian Right in unpopularity.
On everything but the size of government, Tea Party supporters are increasingly out of step with most Americans, even many Republicans. Indeed, at the opposite end of the ideological spectrum, today’s Tea Party parallels the anti-Vietnam War movement which rallied behind George S. McGovern in 1972. The McGovernite activists brought energy, but also stridency, to the Democratic Party — repelling moderate voters and damaging the Democratic brand for a generation. By embracing the Tea Party, Republicans risk repeating history.

David E. Campbell, an associate professor of political science at Notre Dame, and Robert D. Putnam, a professor of public policy at Harvard, are the authors of “American Grace: How Religion Divides and Unites Us.”

A version of this op-ed appeared in print on August 17, 2011, on page A23 of the New York edition with the headline: Crashing the Tea Party.

BBC News - Russia media boss Alexander Lebedev in TV punch-up

2011-09-18T20:07:00.001+02:00

BBC News - Russia media boss Alexander Lebedev in TV punch-up

Russia media boss Alexander Lebedev in TV punch-up

View Blog

Russian media mogul Alexander Lebedev, who owns two UK newspapers, has punched a fellow guest off his seat during a televised economic debate in Moscow.

Mr Lebedev, owner of the Independent and Evening Standard, hit former real estate businessmen Sergei Polonsky with two right hooks, sending him off the back of the platform.
Mr Lebedev said Mr Polonsky had been aggressive throughout the debate, which is to be aired on NTV on Sunday.

"I neutralised him," Mr Lebedev said.
Ripped trousers
Just prior to the attack, Mr Polonsky told the other guests he wanted to "stick one in the mouth".
Mr Lebedev stands, turns to the audience and then sits back down, only to launch immediately into a two-punch attack that sends Mr Polonsky sprawling.
Mr Lebedev, who also co-owns the Russian newspaper Novaya Gazeta with former Soviet leader Mikhail Gorbachev and is the largest private share holder in Aeroflot, used his blog to try to justify the assault.
"In a critical situation, there is no choice. I see no reason to be hit with the first shot. I neutralised him."
Mr Polonsky did not appear to be harmed but pictures posted later online appeared to show a cut arm and torn trousers.
The BBC's Steve Rosenberg in Moscow says Mr Polonsky is considering legal action.
But Mr Polonsky's complaint about ripped trousers drew short shrift from Mr Lebedev.
"Now he's showing his ripped pants, and it is hard to say anything about that. He was hit in the face and he's showing off a hole in the backside of his trousers. Strange," Mr Lebedev wrote.
Mr Polonsky headed the Mirax Group, worth $1.2bn in 2008, but it was hit hard by the financial crisis and had to stop construction.
He once said: "Those who don't have a billion can go to hell."

We need to come up with a plan B for the Euro crisis - Irish, Business - Independent.ie

2011-09-11T22:54:00.000+02:00

We need to come up with a plan B for the Euro crisis - Irish, Business - Independent.ie

We need to come up with a plan B for the Euro crisis

The tyranny of mediocrity in Brussels will march on -- unless drastic action is taken immediately, writes Declan Ganley

Sunday July 03 2011

LAST Tuesday morning, I woke up in the pre-dawn darkness of a downtown Manhattan hotel. Having flown in the night before and still unadjusted to the five-hour time change, I decided to take a walk along the Hudson shoreline to the Irish Famine memorial, a place that, for me, always stirs deep emotions.

I walked south along Battery Park, looking out over the Hudson and the illuminated Statue of Liberty. On the morning that was in it, with news of the latest Greek tragedy cramming the Twitterosphere, I was reminded once again of the costs of the errors that have led the European project to this seminal moment.
I thought of another man who had stood in that part of lower Manhattan on another summer morning in 1776. From that spot, Alexander Hamilton had, with a meagre cadre of men and with extraordinary courage in the face of overwhelming odds, stood his ground and returned the cannon fire of two of His Majesty's prize warships. It would not be the last time that Hamilton would show the courage to take on the impossible and triumph.
When the war ended, Hamilton became the first American Secretary of the Treasury, and found himself facing a threat even more destructive to his nascent nation -- the overwhelming debts of the 13 colonies that had merged to form a more perfect Union.
Hamilton did then what Europe must do now. Recognising that the debts of the individual states posed an almost insurmountable barrier to the economic survival of the Union, he federalised them, sharing the burden evenly and in the process purging failed lending and speculators (including close friends), and forever cementing the economic bonds of Union that were to make his country the leading world power of the next two centuries.
Faced with a similar crisis today, with debt burdens in various member states threatening to pull the European project apart at the economic seams, our leaders have no plan. And so the tyranny of mediocrity in Brussels and Europe's capitals marches on.
To borrow a line from Churchill: "They are decided only to be undecided, resolved to be irresolute, adamant for drift, solid for fluidity, all powerful to be impotent."
The response of those leaders has been to stumble from crisis to crisis, responding to events, but never shaping them. This latest Greek disaster is the perfect example of that -- a hole temporarily plugged, even as the foundations of the dam are giving way.
The member states' political establishments, our own included (by which I mean a complacent civil service as well as the main parties), have learned nothing from this crisis. They still labour under the delusion that simply being "good Europeans" and doing what they're told will get them out of this mess. Given this penchant for Brussels and Frankfurt to react to, rather than shape events, we must give them something to react to.
If only to force affirmative decision, Ireland needs a plan B. We should immediately begin printing an alternative currency -- in Ireland's case, the Irish punt. We should signal our European brethren that failure to federalise and purge the bank-related portion of our debts in short order will result in us leaving the euro, slashing our costs, liquidating failed banks, and dissolving the suffocating carbuncle that is Nama. This will restore competitiveness quickly. We need to show that we are prepared to go our own way if we must.
It may sound daunting, but the alternative for Ireland is for several generations to be bled over and over again to pay for a stalled political project that without urgent and radical reform is headed for grand failure. If Europe will not lead for us, we must follow the steps of our forefathers and lead ourselves.
Of course, that is not what I hope will happen. Yet, in this seminal moment for Europe, we face the choice that Hamilton did all those years ago -- to unite and succeed, or to allow the power of an economic crisis and nationalistic rivalry fuelled by half-truths, (such as "the lazy Greek" myth, or that Irish bailouts were due to low corporate taxes) tear us apart.
The crisis of the moment calls for vision and clarity. As a committed federalist, my vision is for a Europe that is united, democratic, accountable, transparent and strong. A United States of Europe whose leaders are directly elected and accountable, where the power of large member states is mitigated so as not to harm the smaller, where tax competition is as stiff and unfettered between Ireland and France as it is between Texas and California. Where member states are sovereign, but where an accountable, efficient and small central administration can keep us all moving in the same direction.
There is but one solution -- Europe must federalise the debts of its member states. It must create a fiscal firewall to this crisis, with the full power of all 27 economies standing behind it. In doing so, it must be prepared to allow its failing banks to liquidate and its failed lending to be purged.
Confidence in the European Union will not be restored until the perception that it is a reluctant union ends and Europe recognises that it must allow its broken financial institutions the freedom to fail.
The lesson of this crisis is that half-union, with its Potemkin accountability has failed, and failed utterly. We must either go our separate ways, or take the steps and make the reforms necessary to unite fully in the face of the challenge of the moment. To do that we must reform not only how the euro works, but also the way the entire European project is governed.
The courageous Hamilton and his mentor George Washington had an advantage in entering into America's debt federalisation. They already had enshrined the concept at federal level, of government by consent of the governed.
Their Declaration of Independence and newly minted Constitution thus provided the foundation for Hamilton's state debt federalisation.
Europe has no such sound constitutional foundation; the Lisbon Treaty's constitutional arrangement is unfit for purpose, a classic failed Euro fudge.
Therefore, we now need European leaders with the courage of Hamilton and Washington to step forward and lead a speedy democratic and institutional reform that is the prerequisite to a safe and much needed debt federalisation. This need not take months; with courage and leadership and the appropriate sense of urgency, it can be done.
Anything less can no longer be acceptable. If we are to be in, we must do so in full faith and commitment to a reformed, democratic Europe worthy of our country's prior historic sacrifices for liberty, or we should get out and go the way of Switzerland or others, while we still can. Europe's time for dithering is over, as is Ireland's.

The Right Word: Fox News fears riots | Sadhbh Walshe | Comment is free | guardian.co.uk

2011-08-18T23:13:00.000+02:00

The Right Word: Fox News fears riots | Sadhbh Walshe | Comment is free | guardian.co.uk

The talk show pundits have no hangups about attributing the UK riots to cuts and deprivation, but their prescriptions differ

- Sadhbh Walshe
- guardian.co.uk, Thursday 11 August 2011 14.09 BST

Sean Hannity

Sean Hannity is deeply troubled by the British riots, particularly because he believes we may soon see similar levels of unrest here in America (view clip). Unlike many of his conservative counterparts in the United Kingdom, even Prime Minister Cameron who declared the riots nothing but "criminality, pure and simple", Hannity sees a direct link between the riots and the recent austerity measures imposed in Britain. Yet he believes the best way to avoid a similar outcome in America is to impose even deeper spending cuts than the $2.4tn recently authorised by Congress.

I'm looking at what's going on in London right now and the rioting that's taking place there. Rioting is taking place in large part because of austerity measures because their country's going bankrupt. We should be learning from their mistakes but we're not; and people are out there, they're blaming conservatives, they're blaming the government, they're blaming "rich people" that it's their fault. They've got 16,000 police officers in London trying to handle this – more than they've ever had – and I'm thinking this sounds a lot like America ten, 12, 15 years down the road, because once those promises can never be fulfilled [sic].

He discussed the problem with freshman Senator Rand Paul, a leading member of the Tea Party caucus, who agreed that the austerity measures that are due to be implemented in the US aren't nearly severe enough to stop Americans imitating their British counterparts. Although it may seem counterintuitive to think that the best way to prevent riots that both men believe were caused by austerity measures is to impose even more drastic austerity measures, Paul explains that it's best to start implementing cuts immediately, because if we wait too long, people will just get a bigger shock when their checks stop coming.

Neither Hannity nor Paul saw any merit in trying to find alternative means of dealing with our deficit woes (such as increasing revenue by revoking the tax cuts on the rich, for instance) that might avoid inflicting the sort of pain on the masses that could possibly cause them to revolt. Hannity was also upset that the Tea Party is being blamed for the downgrade of America's credit rating, which he fears will not be restored anytime soon.

Half the country doesn't pay taxes; 15% of the country now is on food stamps, Senator, and the chairman of S&P said they upgraded after they downgraded five countries, the average length of time that takes is between nine and 18 years. We're not going to be upgraded anytime soon, in spite of congressional senate investigations. That's not going to happen.

Paul agreed that the downgrade will be with us for a while, and added that blaming the Tea Party was "like blaming firemen for coming to put out the fire". (Although S&P did make it clear that some of the Tea Party contributions to the debate, including the "prolonged controversy" and the inability to reach "an agreement on raising revenues", were some of the reasons for their decision.) Anyway, the bottom line for both men was that the best way to prevent riots in America is to continue cutting spending.

Rush Limbaugh

Rush Limbaugh was also deeply concerned about the possibility of riot fever spreading to the United States (listen to clip). He did not buy the idea put forth by many in the media that the riots in British cities are simply hooliganism run amok; instead, he is certain that what we are witnessing is class warfare of the worst kind – that is, an all-out war on the rich. He equates the rioters with "Obama voters", or a group of have-nots, who just want to bring the have-lots down to their level.

All this is happening 'cause of rich people, the people that got businesses, the conservatives. That's why all this is happening. You're dubious about this? They burn down the stores to show the rich people we can destroy what they have so that they will have nothing, too. We can burn down the property of the rich people so that they've got nothing, either.

In addition to believing that the rioters and looters are no different than "Obama voters", Limbaugh goes on to assert than not only is it inevitable that the rioting is "precisely what we are headed for", but also that "Obama would not be upset. Obama wants it." He doesn't explain exactly why he thinks that President Obama would like to see American cities descend into chaos, but it appears to have something to do the fact that he believes the president is trying to spoil Americans the same way that British people have been spoiled with free healthcare.

They live in a full-fledged socialist country. They have their equivalent of food stamps. They have interminable unemployment. They have free medical care, ostensibly. This is what they were promised. These were the people that bought into the false promises of socialism. These are the people that bought into the false promises of Utopia, and who are they mad at? They are mad at people who didn't! They are mad at people who are self-reliant. They're mad at people who are making something of themselves independently. They think they have been defrauded.

So, apparently, Limbaugh believes that the best way to ensure that Americans do not react in a similar way to harsh spending cuts is to condition them to believe that they are entitled to nothing from the government, not even the entitlement programmes they pay into. Otherwise, they too will turn to rioting and looting or what he calls "the privilege of the new leisured class" or "wards of the state".

Bill O'Reilly

Bill O'Reilly believes that there is probably some economic element to the riots, but he is not sure how much of it has to do with the spending cuts and how much is just "a combination of thuggery and a little bit of that anarchy" (view clip). He discusses the situation with Fox News correspondent Amy Kellogg, who explains that while there have been huge cuts, some of which have affected youth programs and education opportunities, and while the riots may have been sparked by a legitimate grievance (the death of a Tottenham man shot by police), they have since turned into something else that everyone is grappling to understand. O'Reilly draws on his personal experience covering the Rodney King riots in Los Angeles to try to make sense of the situation.

Yeah, these are neighbourhoods that are marginalised, they're largely immigrant neighbourhoods; there is a class system in Great Britain, but this is similar to Rodney King situation in LA – and I was right in the middle of that, Amy, where you had the Rodney King beaten by the cops, and then you had all the riots and the looting and the burning and people dying … and it was crazy; there's no difference. All right, so the fuse is lit and this happens.

Like many people, O'Reilly is less concerned at the moment with the underlying causes of the riots than with containing them, and he thinks that this might be a good moment for Britain to review their stance on gun ownership: that is, to allow ordinary citizens, as well as police, to bear arms.

The difference between America and Great Britain is that here in America, many of us are armed because of the second amendment. In Great Britain, they don't like guns, as you mentioned, the cops don't even carry guns. But here is a really good example of if you are a shop owner or a store owner and you don't have a gun, you're in big trouble. Now, is [sic] any of that been raised by the BBC and the other liberal British press that maybe the cops should be tougher and maybe should be armed?

So far, there has been no serious proposal to arm British citizens, and considering that there were 54 fatalities in the LA riots, mostly from gun violence, that might not be a bad thing. O'Reilly feels certain, however, that if the riots spread to more upmarket areas, then the authorities will "have to bring in the military – and then the gun debate will ramp up".

Ron Paul remains media poison - Roger Simon - POLITICO.com

2011-08-16T08:44:00.001+02:00

Ron Paul remains media poison - Roger Simon - POLITICO.com

Ron Paul remains media poison
By: Roger Simon
August 15, 2011 03:17 PM EDT

I admit I do not fully understand Ron Paul and his beliefs. But I do understand when a guy gets shafted, and Ron Paul just got shafted.

On Saturday, the Ames Straw Poll was conducted in Iowa amid huge media interest and scrutiny. The results were enough to force one Republican candidate, Tim Pawlenty, out of the race, and catapult another, Michele Bachmann, into the “top tier.”

There are so many “top tier” stories in the media today that I can barely count them, let alone read them all, and Bachmann is in all of them by virtue of her victory at Ames. The rest of the tier is made up of two candidates who skipped Ames, Rick Perry and Mitt Romney.

As The Daily Beast put it: “The new top tier of Bachmann, Perry, and Romney — created by Bachmann’s Iowa straw poll win, Perry’s entry into the race and Romney’s lead so far in many national and state polls — has unleashed torrents of talk about the reshaped race.”

Paul’s name was not mentioned in this piece nor in many others. A Wall Street Journal editorial Monday magnanimously granted Paul’s showing in the straw poll a parenthetical dismissal: “(Libertarian Ron Paul, who has no chance to win the nomination, finished a close second.)”

But “close” does not fully describe Paul’s second-place finish. Paul lost to Bachmann by nine-tenths of one percentage point, or 152 votes out of 16,892 cast.

If it had been an election, such a result would almost certainly have triggered a recount. It was not an election, however, and that is my point. Straw polls are supposed to tell us, like a straw tossed into the air, which way the wind is blowing.

And any fair assessment of Ames, therefore, would have said the winds of the Republican Party are blowing toward both Bachmann and Paul.

Nonsense, some would say. Straw polls are just organized bribery, with the campaigns buying the tickets and distributing them to supporters. (And, in fact, this is what I wrote before Ames.)

What they really show, many argue, is not where the philosophical heart of the party is, but the organizational abilities of the candidates.

Fine, I’ll buy that. But why didn’t Paul get the same credit for his organizational abilities as Bachmann did for hers?

I am far from a Libertarian. I believe big government is swell as long as it does big things to help the common good. But after Ames, it was as if Paul had been sentenced to the Phantom Zone.

Bachmann appeared on five Sunday shows following Ames. Paul appeared on none. POLITICO’s Kasie Hunt was one of the few reporters to do a separate story on Paul’s showing at the straw poll, but to most of the media he remained an exotic, unworthy of attention.

And I don’t disagree that some of his beliefs — legalizing heroin, the right of states to secede — are strikingly peculiar (though he has been elected to a congressional district in Texas 12 times). But if Bachmann’s victory at Ames was good enough to gain her enormous publicity and top-tier status, why was Paul’s virtual tie good enough only to relegate him to being ignored?
So I asked Paul Monday if the media blackout disturbed him,

“It did disturb me, but it was not a total surprise,” he replied. “The result at Ames was significant; it might well have propelled us to the top tier. The media cannot change that.”

Though the media can, of course, change that since we get to determine who the top tier is.

“It is hard for them to accept,” Paul said of his showing at Ames. “I had one interview scheduled for this morning, a national program, but they canceled. It is shocking to be told nobody wants you.”

Was this because technically Paul came in second and not first? I don’t think so. Four years ago, Mike Huckabee came in a bad second to Romney, losing by 13.4 percentage points. Huckabee managed to spin that into a victory at Ames and became a media darling.

But Paul almost wins the thing and he remains poison.

“They [the media] believe this guy is dangerous to the status quo,” Paul said, “but that is a reason to be more energized. I am a bit more challenging, but I am not on the wrong track. I don’t think that my ideas are more exotic. They are threatening.”

In his interview with me, Paul stressed his “peace” message — he wants our troops brought home from foreign soil — and believes that and his fiscal conservatism will gain him supporters.

“We are trying to reverse 100 years of history, the change from a republic to an empire, the change to tax and spending, who wants to admit that?” Paul said. “Who wants to admit we don’t have to be policeman of the world?”

Let me say right here that unlike many of Paul’s supporters, I don’t believe there is a left-wing media conspiracy working against him. Ralph Nader, who is about as far as you can get from Paul politically, has the same problem whenever he runs for president.

And, no, media attention is not based solely on polls. The most recent polls, taken before Ames, showed Bachmann with 10.2 percent of the vote and Paul with 9.0 percent. That’s not a huge difference. Though those polls will no doubt change with all the publicity Bachmann is now getting because of her “stunning” victory at Ames.

There was a deliciously intriguing line in The Washington Post’s fine recap of Ames on Sunday. It said had Paul edged out Bachmann, “it would have hurt the credibility and future of the straw poll, a number of Republicans said.”

So don’t blame the media. Here are Republicans, presumably Republican operatives, who said if one candidate wins, the contest is significant, but if another wins the contest is not credible

Amazing. And disturbing.

“Well, yes I can get discouraged and dispirited,” Paul told me. “We came so very close. To come that close to winning, it shows my views are very mainstream. And if we are worth our salt and our message is sound and we tell it honestly, we will do well.”

Though possibly no one will notice.

Stop Coddling the Super-Rich - NYTimes.com

2011-08-15T10:35:00.001+02:00

Stop Coddling the Super-Rich - NYTimes.com

By WARREN E. BUFFETT | August 14, 2011

Kelly Blair

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.

Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.

To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.

Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.

Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent.

The taxes I refer to here include only federal income tax, but you can be sure that any payroll tax for the 400 was inconsequential compared to income. In fact, 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest. (I can relate to that.)

I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.

Twelve members of Congress will soon take on the crucial job of rearranging our country’s finances. They’ve been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It’s vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.

Job one for the 12 is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.

But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.

My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.

Warren E. Buffett is the chairman and chief executive of Berkshire Hathaway.

A version of this op-ed appeared in print on August 15, 2011, on page A21 of the New York edition with the headline: Stop Coddling the Super-Rich.

Hundreds arrested as London riots spread

2011-08-14T21:14:00.000+02:00

Hundreds arrested as London riots spread | Pakistan Today | Latest news, Breaking news, Pakistan News, World news, business, sport and multimedia

Monitoring Desk/Agencies

LONDON – Firefighters tackle a blaze at a store attacked by rioters in Croydon. (Inset) Police use armoured vehicles, called Jankels, in Hackney. Reuters/AFP

British govt deploys 10,000 more police to stop unrest
Buildings and vehicles set ablaze in worst-ever violence
Looting spreads to other British cities

LONDON - Prime Minister David Cameron called Tuesday for an emergency session of Parliament, and announced an almost tripling of police on London streets, after the capital and other British cities burned in this nation’s worse civil disturbances in decades.

TV channels reported that riots have spread to new areas of London while looting erupted in Birmingham, Liverpool and Bristol as Britain's worst violence in decades extended into a third night. Shops and cars were set ablaze across London late on Monday and early on Tuesday with authorities struggling to contain the unrest in the capital city.
Police said on Tuesday they had arrested more than 200 people in the worst night of unrest so far and more than 450 overall. Cameron, who cut short a vacation in Italy Monday night as the violence escalated, decried the sickening scenes of gangs of youths looting shops, setting businesses ablaze and clashing with police in neighbourhoods across London.
Effectively acknowledging that the embattled Metropolitan Police had been completely overwhelmed – images showed riot police standing by as rioters looted and set buildings ablaze – Cameron said a force some 16,000 strong would take to the streets on Tuesday evening, up from 6,000 a day earlier.
“People should be in no doubt that we will everything necessary to restore order to Britain’s streets,” Cameron said. “This is criminality pure and simple, and it must be confronted and defeated.” But Cameron did not appear to immediately embrace calls by some to send in the army or deploy water cannons against the rioters.
After more than 450 arrests, authorities said prisons in London were already reaching capacity, leading the newly detained to be shuttled to jails outside the capital. British authorities said that the Parliament will convene on Thursday to address the riots. In some neighbourhoods on Tuesday morning, normally bustling streets were eerily quiet.
Hours earlier, rampant looting and raging fires engulfed swaths of London, including a neighbourhood not far from that of the athletes’ village and shiny stadiums being built for the 2012 Olympic Games. The images of violence — with hundreds of youths looting shops, setting businesses ablaze and clashing with police in almost a dozen neighbourhoods — deeply shocked Londoners, dealing the city an enormously damaging blow less than a year before the start of the Olympics.
In the worst bout of urban violence to hit Britain in more than two decades, parts of London morphed into lawless no-man’s-lands. Gangs of youths roamed one south London neighborhood while carrying molotov cocktails, the BBC reported. And widespread looting was reported in the west London borough of Ealing after a shopping mall caught fire.
The violence spread beyond the capital, to Birmingham, the country’s second-largest city, as well as Liverpool, Bristol, Leeds and Nottingham. Overwhelmed by the scope of violence, the embattled Metropolitan Police called in reinforcements from police forces outside London.
Police use armoured vehicles – Armoured vehicles have been brought in to clear streets of London for the first time by police to tackle the worst rioting and looting. Armoured vehicles – known as Jankels – were brought in during the early hours of Tuesday morning in Clapham Junction where much of the worst looting and arson took place.
The vehicles were driven on to Lavender Hill to push back a crowd of 150 looters who had smashed up Debenhams and other stores and businesses in the area. Jankels were also out in Hackney. Their deployment brought echoes of Northern Ireland during the Troubles to the streets of the capital and marked the start of what sources say are much tougher tactics against rioters.
But a police source said the use of water cannon was a decision for government, not Scotland Yard. The use of armoured vehicles to clear rioters after hours in which it appeared the police had lost control of the streets means they will be used again if violence continues, the Yard said.

Comments (2)

Jacob MOSES· 5 days ago

May UK,England,EUROPE,aMERICA BURN IN FLAMES BY EVERY INCH OF THEIR LAND AND ALL THEIR GOLD RESERVE,DOLLORS,pOUNDS,eUROS ARE BURNT TO ASHES AND NATIONAL ASSETS.THE way they on false wars of wmds ruined iraq to ashes and Afghanistan,sudan libya ,pakistan through their regional traitors and corrupt toades,they killed twenty million MUSLIMS,MADE THEM WIDOWS,ORPHANS,DESTITUTE,REFUGEES FOR LIFE ;MAY NATURE POUND THEM TO PIECES AND THEY ALLSO BURN IN FIRE AND THEIR COUNTRIWEES AND ECONOMIES ARE RUINED INTO ASHES.LET CHINA ,JAPAN,RUSSIA HAS NO MERCY ON THEM.] as did not have when they dropped atomic bombs on Japan,broke Russia and want tio ruin China.LET THEM RUIN THESE ENEMIES OF HUMANUTY OBNCE FOR ALL.

London Riots: BlackBerry Messenger Service Should Be Suspended, MP David Lammy Reportedly Says (UPDATE) (VIDEO)

2011-08-14T17:02:00.002+02:00

London Riots: BlackBerry Messenger Service Should Be Suspended, MP David Lammy Reportedly Says (UPDATE) (VIDEO)

Video , Tottenham Riot , UK Riots , Bbm London Riots , Blackberry London Riots ,London Riots , World News

London riots entered their third night on Monday, reportedly prompting Tottenham MP David Lammy to call for the suspension of the BlackBerry Messenger service some rioters are using to organize their movements. As Sky News reported:

@ SkyNewsBreak : Tottenham MP David Lammy calls on Blackberry to suspend its messaging service in attempt to stop rioters communicating.

The nearly free, non-public BBM service is credited with allowing the rioters to coordinate movements.As ABC reports, the service is popular among young Brits, who referred repeatedly to the service on Twitter over the weekend. "The news ain't even showing the extent of what's actually happening on the streets of tottenham? BBM is doing da ting right now!" read one tweet, according to ABC.

Explaining the appeal of the service for the rioters, blogger Jonathan Akwue wrote, "BBM, as it is known, is an instant messenger system that has become popular for three main reasons: it's fast (naturally), it's virtually free, and unlike Twitter or Facebook, it's private." Unlike Facebook and Twitter, which have received accolades for their roles in recent uprisings across the Middle East and North Africa, BBM, which allows users to share messages by exchanging PINs, is not a public forum. "The key point here is that although these messages are spreading virally, by being shared via BBM they have been less visible to the outside world, making them harder to track," Akwue noted.

Research in Motion, the manufacturer of BlackBerry phones, released the following statement after reports of rioters using BBM began to appear:

"We feel for those impacted by this weekend's riots in London. We have engaged with the authorities to assist in any way we can. As in all markets around the world where BlackBerry is available, we cooperate with local telecommunications operators, law enforcement and regulatory officials."

According to TechCrunch Europe, as much as 37 percent of 16-24 year olds and 37 percent of 12-15 year olds prefer BlackBerry over iPhones "precisely because of the free BlackBerry messenger service."

UPDATE: Apparently in response to RIM's statement that it will cooperate with the police, hackers have targeted Inside BlackBerry, the official BlackBerry blog, PC Advisor reports. This site, which does not seem to be working at this time, read:

Dear Rim; You Will _NOT_ assist the UK Police because if u do innocent members of the public who were at the wrong place at the wrong time and owned a blackberry will get charged for no reason at all, the Police are looking to arrest as many people as possible to save themselves from embarrassment…. if you do assist the police by giving them chat logs, gps locations, customer information & access to peoples BlackBerryMessengers you will regret it, we have access to your database which includes your employees information; e.g – Addresses, Names, Phone Numbers etc. – now if u assist the police, we _WILL_ make this information public and pass it onto rioters…. do you really want a bunch of angry youths on your employees doorsteps? Think about it…. and don't think that the police will protect your employees, the police can't protect themselves let alone protect others….. if you make the wrong choice your database will be made public, save yourself the embarrassment and make the right choice. don't be a puppet.

A group calling itself Team Poison appeared to be taking responsibility for the hack. The group posted on Twitter:

@ TeaMp0isoN_ : This hack took less then 5mins, very very embarrasing for the company and the feds

GOP Presidential Candidates Spurn Press -- And Gain Popularity For It

2011-08-14T13:35:00.002+02:00

GOP Presidential Candidates Spurn Press -- And Gain Popularity For It

First Posted: 8/13/11 03:29 PM ET Updated: 8/13/11 03:29 PM 2012 Republican Primary , Mitt Romney ,
Newt Gingrich , Republican Debate , Republican Presidential Candidate , Elections 2012 , Facebook , Newt Gingrich , Republican Primary , Rick Perry , Social Media , Transparency , 2012 Presidential Election , Texas Governor Rick Perry , Ames Straw Poll, Gop 2012 Primary , Iowa , Media , Mitt Romney 2012 , Rick Perry 2012 , Texas , Politics News

AMES, IOWA -- Politicians don't like the press. Republican politicians like the press even less. Richard Nixon put reporters on his Enemies List, perhaps with good reason. George W. Bush kept the press at at arms length, allowing only a few reporters glancing access.

It was ever thus.

But something new is going on this year. The leading GOP candidates are conducting their campaign with almost NO direct, uncontrolled access to the press (or, in many cases, the public). What's more -- and more noteworthy -- the candidates increasingly are taking pride in and bragging about their contempt for reporters and even for the very idea of open campaigning.

Mitt Romney's handlers seem almost to glory in their candidate's aloof invisibility. Sarah Palin floats like a butterfly and stings the media like a bee. Even Michele Bachmann, a long shot in the larger context, surrounds herself with a cordon of security wherever she goes.

And when Newt Gingrich makes headlines by attacking Fox News -- the conservative outlet he used to work for -- you know a trend is in full swing. If Newt is attacking Fox, what does that mean about the GOP field's attitude toward the rest of the non-Fox press corps? It means that however nasty and dismissive the candidate-media relationship is now, it is only going to get worse -- much worse.

At Thursday night's Fox debate, Gingrich not only attacked designated bad cop Chris Wallace, the former speaker attacked designated nice guy Bret Baier. The genial Fox anchor had asked Gingrich to explain his seeming flip-flops on Libya policy.

"This is an example of a gotcha question,” Gingrich replied. “The fact that I was commenting on Fox about a president who changes his opinion every other day ought to be covered by a Fox News commentator using all the things I said and not picking and choosing the ones that fit your premise."

Gingrich responded with acid contempt.

Now comes Rick Perry, whose supporters positively glory in his record of stiffing the press -- as though that alone is a qualification for holding the highest office in the land.

Melanie Schwartz, political director of the Texas College Republicans, is an example of that kind of Perry acolyte.

"I like the way he has outsmarted the media," she told The Huffington Post at the straw poll site, where she was asking passersby to write in Perry's name on their straw poll ballots. "He knows how to control the message and not let the media get in the way. In his reelection for governor, he just said, 'No, I'm not going to debate,' and he didn't -- and he won easily. I loved that."

For his latest trick, Perry skipped the Fox debate here on Thursday, then announced his candidacy at a conservative bloggers event in Charleston, S.C.

"He's just blowing past the media, and that is the way to do it," said Schwartz, a history major at the University of Texas. According to Schwartz, the press corps had lost its role because of the rise of new media such as Facebook and Twitter, and by dwelling on issues that most Americans don't care about. If voters in Texas had cared or been concerned, she said, they wouldn't have reelected Perry.

"The regular media has kind of lost it's role," she said. "Rick Perry doesn't need an intermediary anymore to communicate with the people. And if people want to ask elected officials questions, they can do it by sending them a Twitter or asking them a question on Facebook. And sometimes the voters will actually get an answer!"

Deeper Than Oil: Russia’s reaction to the UK riots | Columnists | RIA Novosti

2011-08-14T12:34:00.000+02:00

Deeper Than Oil: Russia’s reaction to the UK riots | Columnists | RIA Novosti

Topic: England's summer of discontent

09:40 11/08/2011

Weekly column by Marc Bennetts“England pays for its tolerance,” ran the headline in one leading Russian daily, as rioting swept the UK. There was a similar gleefulness to other reports here in Moscow of the disturbances, many of which focused on “immigrant rioters.” But these articles perhaps said much more about Russian xenophobia than the real situation in London and other cities.

“England pays for its tolerance,” ran the headline in one leading Russian daily, as rioting swept the UK. There was a similar gleefulness to other reports here in Moscow of the disturbances, many of which focused on “immigrant rioters.” But these articles perhaps said much more about Russian xenophobia than the real situation in London and other cities.
When I spoke to family members and friends in the cities hit by rioting, it was notable that not one of them mentioned the racial make-up of the rampaging mobs. Russians, however, were obsessed with the theme.

"The foolishness with which Europe regards its historical past has led to the filling of its cities with migrants from the Third World, many of whom do not give a damn about European values," Mikhail Margelov, a Russian senator and head of the State Duma's international affairs committee, said.
Or, as a colleague put it, "You let these people in to your country and this is what they do."
The Komsomolskaya Pravda paper went even further, putting forward the view that the disturbances would sweep over “all of England and lead to genuine chaos in the country.” It even suggested that “radical Islamists” would team up with the looters.
“And then,” the piece went on, positively foaming with the anticipation of more schadenfreude to come, “the disorder will spread to the continent…”
The reports of “immigrant violence” also saw Russia’s wanna-be Breiviks flock to internet forums to give vent to their pet racial supremacy theories. Many of them were undoubtedly among the thousands here who subscribed to a now deleted site formed in honor of the Norwegian psycho.
But CCTV images released by police and media footage indicated that the looters were a fairly multi-racial group, united only in their desire to blag a new pair of trainers or a nifty laptop. Indeed, one report spoke of white children as young as 10 looting shops in Enfield.
There were, of course, Russian voices of dissent.
“This disorder isn’t connected in any way with skin color!” one reader commented on the article. “Just look at the photos and videos! There are blacks and whites there.” “England has a massive underclass – of all colors,” another pointed out.
Whatever the riots are a sign of, it’s probably wrong to say they reflect racial tensions in the UK. The initial spark may have been the shooting of a young black man by police, but it’s likely that a fair number of the “feral rats” tearing the country apart were entirely unaware of the incident that led to Britain’s summer of discontent.
So why did so many Russians get so worked up about the ethnicity of the rioters?
Well, for a start, it was the lazy way to report the story. With a few notable exceptions, Russian journalists are generally extremely reticent to do any real reporting. The foreign correspondents for many Russian media organizations generally shy away from actually going out and talking to people on the streets. The “immigrant angle” is by far the easiest to write up, and also has the advantage of pandering to widespread racial intolerance at home.
But there was something else, too. The bizarre and unpleasant subtext seemed to be that Britain was somehow wrong to even try to embrace multi-culturalism, that it would be much better off following the example of Russia, where people of a “non-Slavic appearance” are regularly beaten and killed on the country’s streets.
It’s odd to compare all this casual, off-hand racism with the official line during the Soviet period.
In his 1985 book “Britain Without Fog” (a play on the common Russian belief that the UK is covered in perpetual fog), Soviet journalist Vladimir Simonov saw race relations in London and elsewhere in quite a different fashion.
“For the British police, black skin is damning evidence. Are you an immigrant? The descendent of an immigrant? Then your place is behind bars,” he wrote under a photo of leering cops detaining a terrified black youth. “There is no limit to the cruelty of the guardians of law and order when dealing with black citizens.”
Or this, the caption to a photo of inner-city disturbances.
“A house in a region for ‘coloreds’ burns. Or is it British democracy that has driven its black citizens to desperation?”
Even more poignant – and prophetic – is the caption under the photograph of a scowling skinhead, his middle finger raised as the cops lead him away.
“‘Made in London’ the tattoo on his forehead says – but more precise would be ‘Made by unemployment, and an atmosphere of violence and racial hatred.’ We fear for your future Britain!”
Of course, all this was perhaps more the result of Soviet ideology rather than any real sympathy with immigrants in the UK. Still, the difference in tone is startling. I can’t help but wonder what the very same journalists spewing out stories about “immigrants” would have written had the Soviet Union not collapsed.
But if the disturbances weren’t all the fault of immigrants, then what caused them? There are no easy, glib answers. The thrill factor is one that shouldn’t be ruled out, though. People love a bit of excitement, something to relieve the everyday monotony. And rioting provides a genuine adrenalin high. For both blacks and whites.
Deeper Than Oil: What made Russia sick?

Deeper Than Oil: Rasputin’s heirs

Deeper Than Oil: Murdoch and son, Russia and soup

Deeper Than Oil: Calm down, that’s just your wife’s head in the box!
Deeper Than Oil: The Real News Gets Odd
Deeper Than Oil: More smog anyone?

Deeper Than Oil: Russian football slips up on another banana skin

Deeper Than Oil: Does Russia Exist?

Deeper Than Oil: Doom Rider

Deeper Than Oil: The smell of freedom

Deeper Than Oil: The driest place in Russia

Deeper Than Oil: Some thoughts on Batman and friends
Deeper Than Oil: Altai Bloodsuckers
Deeper Than Oil: Tolerance and Gopniks in Siberia
Deeper Than Oil: Eurovision Song Contest through the eyes of cops
Deeper Than Oil: The Cursed Team?
Deeper Than Oil: The day I met Drugg

Deeper Than Oil: Hushed hellos and no horror films

Deeper Than Oil: The Resurrection of Lenin
Deeper Than Oil: Satan denies rift with God over Earth policy

Deeper Than Oil: The Final Resting Places of Russia’s Flatheads

Deeper Than Oil: Chechen pizza on Putin Avenue
Deeper than Oil: From perestroika punk to Putin pap
Deeper than Oil: Can Russian cops kick the habit of killing folk?

Deeper than Oil: A talk with Dmitry Medvedev

Deeper Than Oil: The eXile - Equal-Opportunity Haters

Deeper Than Oil: Russia Decoded Through Football

Deeper Than Oil: Sh*talin, Lenin’s kittens and Soviet fishcake heroes

Deeper Than Oil: Moscow terminal tramps (bums)
Deeper Than Oil: Nostalgia For Moscow Cop Banter

Deeper Than Oil: Occult Health Solutions in Central Russia

Deeper Than Oil: Hell is an airport

Deeper Than Oil: The winter of juxtaposition

Deeper Than Oil: Satanic Cucumbers Near Moscow

Deeper Than Oil: Christmas Presents in Narnia (Russia)

Deeper Than Oil: One nation under a spell
Deeper Than Oil: World War Three has already begun
Deeper Than Oil: An ode to Russia! or My neighbor Viktor
Deeper Than Oil: Chechen Champions
Deeper Than Oil: Yanka – The Tale of a Siberian Punk
Deeper Than Oil: Very Big in Russia
Deeper Than Oil: Magical Services
Deeper Than Oil: Afternoon tea with a Soviet psychic
Deeper Than Oil: More tea with a Soviet psychic

From lurid tales of oligarch excess to scare stories about Moscow’s stranglehold on Europe’s energy supplies, the land that gave us Roman Abramovich and Vladimir Putin is very rarely out of the news. But there is much more to modern Russia than billionaire tycoons and political conspiracy. Marc Bennetts’ weekly column, Deeper Than Oil, goes beyond the headlines to explore the hidden sides of the world’s largest, and often strangest, country.
Marc Bennetts is a journalist (The Guardian, The Observer, The Times, and more) and the author of Football Dynamo: Modern Russia and the People’s Game (Virgin Books).

Vladimir Putin: Russia's "real life action man'

2011-08-08T11:21:00.003+02:00

Express.co.uk - Home of the Daily and Sunday Express | Express Yourself :: Vladimir Putin: Russia's "real life action man"

VLADIMIR PUTIN: RUSSIA'S REAL LIFE ACTION MAN

Russian Prime Minister Vladimir Putin rides a horse during his vacation outside the town of Kyzyl

Monday August 8,2011

By Anna Pukas

Have your say(0)

DRESSED in killer heels and figure-hugging suit, the shapely blonde strides through central Moscow, speaking into an iPhone.

Rather than talking business, she is in fact arranging to meet up with two friends who are chilling out on sun loungers at what looks like a trendy private club.

This is what Modern Russia looks like: confident, self-assured and savvy, they know what they want.

And what they want is Vladimir Putin. So much so that the young woman in question daubs “I’ll strip off for Putin” in red lipstick on her T-shirt – and then proceeds to do precisely that.

The short video, which has become a YouTube hit, is the work of a group of campaigners calling themselves Putin’s Army.

Describing themselves as “beautiful, young and smart girls”, they have been formed via the Russian equivalent of Facebook with the aim of getting Putin elected president of Russia next year.

Putin has already done the job before but the Russian constitution prevented him from serving more than two consecutive terms.

Now after a one-term break, during which he has served as prime minister under President Dmitry Medvedev, he could be eligible again for the top job.

Putin’s Army certainly think there’s nobody better. Hands on hips, our blonde supporter turns to the camera and declares: “He’s a first-rate politician and a chic guy. There are millions who adore him. But there are people who throw mud at him. Maybe they’re scared? Or maybe out of their own weakness? Because they’ll never be in his place.”

Phew! We’ve had Blair’s Babes and now Cameron’s Cuties but they were nothing like this. But then Vladimir Vladimirovich Putin is not as other prime ministers.

Indeed his campaign strategy throughout his political career ever since his meteoric rise from KGB gent to Boris Yeltsin’s deputy in the first post-communist government, has been to present himself as not as other men – or rather as much more than other men.

Only last week he was pictured at a Kremlin youth camp scaling a climbing wall with neither helmet nor safety harness and apparently trying to bend a frying pan with his bare hands. In fact Putin has been taking things up a notch for the past two years.

His prowess at judo – he is a 6th dan black belt and has released his own masterclass DVD – was already well-known but he has also been filmed shooting, fishing and horseriding in Siberia, always barechested, displaying an impressively well-muscled body.

In July 2010 he donned black leathers and shades to ride a Harley-Davidson at a bikers’ festival in Sevastopol.

Last August, he drove 1,300 miles in a Lada across Russia’s Far East to mark the completion of Russia’s first continuous east-to-west highway and in November he clocked 150mph in a Renault Formula 1 car on a racetrack in St Petersburg.

He has watched bare knuckle fighting with Jean-Claude Van Damme and proximity to the Belgian beefcake only enhanced his own macho-ness.

After all Van Damme’s screen heroics are just pretend; Putin is for real. But not only is Putin, a well-preserved 58, a man of action, he is also a man of conscience.

Last August he co-piloted a plane dumping water on to forest fires raging over south-east Moscow. He has shot a tiger and a polar bear to sedate them so they could be fitted with a tracking collar.

In August last year he collected a skin sample from a whale in the choppy waters off Olga Bay on the remote Russian Pacific coast. “I wasn’t scared, it was exciting,” Putin told assembled journalists.

When asked if chasing whales was a dangerous pursuit for someone with his responsibilities, he fixed the questioner with a glacial stare and replied: “Dangerous? Life is dangerous.” He let out a rare bark of laughter when
asked if he would recommend it to other politicians.

“To anybody,” he said, in a manner that suggested that no other politician in Russia was man enough for it.

In November 2009 he gave out the awards at a hip-hop music show and in April this year he whizzed around the ice in a training session with a teenage ice hockey team in Moscow.

Last Christmas he showed his spiritual side, attending midnight mass in the church in Turginovo, the village in western Russia where his ancestors settled in the 17th century.

Putin is the son and grandson of committed communists. His grandfather Spiridon worked as a cook for both Lenin and Stalin while his father, also Vladimir, served with the NKVD (forerunner of the KGB) as a saboteur in the Second World War.

Putin himself joined the KGB straight from university in 1975 and resigned only in 1992 following the abortive attempt to overthrow the then leader Mikhail Gorbachev, which ultimately led to the collapse of the Soviet Union.

It is therefore unlikely that he feels a strong attachment to the Russian Orthodox faith. But footage of the prime minister worshipping with headscarved babushkas in his old village church, casually dressed in a plain khaki jumper (a gift from a local official) went down very well with millions of ordinary Russians.

By contrast, Russian President Medvedev went to mass in the biggest church in Russia. Putin also knows the value of not appearing too serious.

At a glittering celebrity-strewn charity banquet in St Petersburg last December he played the piano and sang Blueberry Hill in English while the likes of Goldie Hawn, Kevin Costner, Sharon Stone and Gerard Depardieu clapped and swayed in time.

All in all the past two years have been a brilliant exercise in projecting Putin as the man for all of Russia’s seasons.

He may not have declared yet his intention to run for president but it is surely a very broad hint.

Other world leaders may feel dismay at the return of the cold-eyed, unsmiling former spymaster. But what about the Russian people?

Putin’s approval ratings are the stuff of dreams for western leaders they have never fallen below 65 per cent and have gone above 80 per cent more than once.

In 2003 during Putin’s first term as president a pop song was released called Someone Like Putin, in which a girl sang about her love for the president who was “full of strength” and didn’t drink.

The singer was never identified and the record never went on sale yet Russian radio stations played it constantly.

In 2007 Russia’s best-selling tabloid Komsomolskaya Pravda published a huge picture of a bare-chested Putin on holiday in Siberia with the headline, “Be like Putin” along with suggested exercises.

Two special editions of the magazine Secrets Of The Stars featured Putin on the cover, with more pictures inside of him kayaking, swimming with dolphins and arm-wrestling, plus articles about his likes and dislikes (ham with fried cabbage is his favourite, apparently) and an interview with his wife Ludmila (she praised him as a model husband because he doesn’t beat her). They sold out.

Putin’s name and image are widely used as product brands; you can buy Putin caviar and Putin vodka. This may look like a cult of personality to Western eyes but the fact is that Russia has always been an autocracy.

Whether it was Ivan the Terrible or Peter the Great or Stalin or Gorbachev, the rule of one strong man is the Russian habit.

Putin himself recognises this. “There is no point speculating whether this tradition is good or bad. It exists and remains dominant for now.”

In any case after the chaos that followed the collapse of communism in the early Nineties, Russia is less in love with the West than she used to be.

Putin undoubtedly is a disturbing figure to the West, a wolf in wolf’s clothing. But to Russians, he is their wolf.

China's 'tea party' grumbles over government waste - Washington Times

2011-08-05T19:05:00.001+02:00

China's 'tea party' grumbles over government waste - Washington Times

BEIJING — It might not be the beginning of a Chinese tea party movement, but some citizens are railing about bureaucratic waste as the Communist Party releases some details about government spending.

Internet-savvy Chinese are using social networking to share their complaints about extravagant government spending. Even the state-controlled media are starting to grumble. Caijing magazine called for the government to prosecute bureaucrats who still ignore the June 30 deadline for reporting on some expenses.

“They just don’t have a sense of how much money they’re spending,” saidLiang Xiaoqin, a Chinese college student from Nanjing.

In March, the government ordered all 98 agencies to release their 2010 budgets for official banquets, overseas travel and the cost of government vehicles. The expenses are known as “san gong spending” and are the first budgets the government has made public.

The Ministry of Science and Technology was the only agency to meet the deadline, and 14 departments still have not released their budgets.

Despite what the government described as the “large budget cuts” of 2009 and 2010, most of the published reports showed an increase in spending, with at least 10 agencies lavishing more than $9.2 million for san gong expenses alone.

Ironically, one of the largest budget increases was for the agency that approves the budgets of all other agencies. The Ministry of Finance added nearly $1 million to its budget, an increase of 14 percent.

Although the spending reports hardly represent a full picture of the total budget, analysts say their release is a step in the right direction.

“Now, the people will have a basis,” said Zeng Kanghua, a professor at theCentral University of Finance and Economics. “Now that they can know what’s really happening, they can continue to monitor what the officials are doing.”

He said the release of the budgets should put some pressure on the government to control spending.

Mr. Zeng said government officials have become used to spending public funds however they want for their personal convenience and vacations and have never answered to anyone for it.

The san gong reports now spotlight such frivolous behavior.

For example, the Chinese Academy of Sciences spent $15.4 million on banquets alone, and the Prosecutorial Department spent $850,000 just on bus fares - figures the agencies normally would not want released.

Mr. Zeng said the san gong budget reports will encourage citizens to pay more attention to government spending.

“People will begin to see that they have rights [as taxpayers],” Mr. Zengsaid.

However, analysts and citizens alike agree that the Chinese government will need to take further steps to make a real difference in the spending habits of bureaucrats.

The san gong budgets show rounded-off numbers and contain few details about specific expenses, said Ye Qing, a member of the National People’s Congress who is campaigning to cut san gong spending.

Without any further details, the reported numbers can be deceiving, Mr. Ye told the South China Morning Post newspaper.

The Ministry of Agriculture had one of the largest san gong budgets, totaling $37 million. However, the agency divided that number by its payroll of 84,000 employees and 86,000 retirees to report that it spent only $217 per worker.

On the other hand, the Poverty Alleviation office’s $225,000 san gong spending added up to an average of $1,680 per employee.

Such discrepancies are not readily revealed by the san gong reports, Mr. Zeng said.

A commentary on the financial news site Hexun.com argued that a more scientific approach - one that takes into account staff and functions - would be needed to more effectively monitor and control government spending in China.

The limited experiment in reporting on government budgets leaves Chinese citizens like Ms. Liang feeling powerless.

“People complaining is not going to stop them from spending. They’ve been doing it for so long,” she said.

Ms. Liang said she expects little to change until the government imposes laws to rein in spendthrift bureaucrats.

“The reason they give us the san gong is that they want the public to watch the government,” Ms. Liangsaid. “But since there is no legal limit on government spending, there’s nothing we can actually do about it.”

Russia uses dirty tricks despite U.S. 'reset' - Washington Times

2011-08-05T18:02:00.002+02:00

Russia uses dirty tricks despite U.S. 'reset' - Washington Times

“We are concerned about the acts of intimidation as well as their record on previous agreements and other activities. It’s a real concern, I’ve raised it. It’s not the intelligence committee that fails to understand the problem. It’s the Obama administration.” -Former Sen. Christopher S. Bond, (right) who served as the vice chairman of the Senate Select Committee on Intelligence between 2007 and 2010

By Eli Lake

The Washington Times

8:18 p.m., Thursday, August 4, 2011

In the past four years, Russia's intelligence services have stepped up a campaign of intimidation and dirty tricks against U.S. officials and diplomats in Russia and the countries that used to form the Soviet Union.

U.S. diplomats and officials have found their homes broken into and vandalized, or altered in ways as trivial as bathroom use; faced anonymous or veiled threats; and in some cases found themselves set up in compromising photos or videos that are later leaked to the local press and presented as a sex scandal.

"The point was to show that 'we can get to you where you sleep,' " one U.S. intelligence officer told The Washington Times. "It's a psychological kind of attack."

Despite a stated policy from President Obama and Russian President Dmitry Medvedev of warm U.S.-Russian ties, the campaign of intelligence intimidation - or what the CIA calls "direct action" - has persisted throughout what both sides have called a "reset" in the relations.

They have become worse in just the past year, some U.S. officials said. Also, their targets are broadening to include human rights workers and nongovernmental organizations as well as embassy staff.

The most brazen example of this kind of intimidation was the Sept. 22 bombing attack on the U.S. Embassy in Tbilisi, Georgia. A National Intelligence Council assessment sent to Congress last week confirmed that the bombing was ordered by Maj. Yevgeny Borisov of Russian military intelligence, said four U.S. officials who have read the report.

False rape charge

One example of such intimidation occurred in 2009 against a senior U.S. official in the Moscow office of the National Democratic Institute (NDI), the congressionally funded nongovernmental organization that promotes democracy throughout the world. The Times has withheld the name of the official at the request of NDI.

According to a Jan. 30, 2009, cable from U.S. Ambassador John Beyrle disclosed by WikiLeaks, USAID employees received an email with a doctored photo of the NDI official reclining with an underage girl.

The email from someone purporting to be a Russian citizen accused the official of raping her 9-year-old daughter.

In the cable, Mr. Beyrle said the embassy thought the Russia's Federal Security Service (FSB) was behind the smear attack, which also appeared in Russian newspapers. The FSB is the successor agency of the Soviet-era KGB.

Kathy Gest, the NDI director of public affairs, said, "The allegations recounted in the WikiLeaks memo are all false and were protested at the time. We consider the matter closed and NDI, which is legally registered in Russia, continues its programs."

Former Sen. Christopher S. Bond, who served as the vice chairman of the Senate Select Committee on Intelligence between 2007 and 2010, said he had raised the issue of Russian intimidation of U.S. diplomats with the Obama administration.

"We are concerned about the acts of intimidation as well as their record on previous agreements and other activities," Mr. Bond said. "It's a real concern, I've raised it. It's not the intelligence committee that fails to understand the problem. It's the Obama administration."

Yevgeny Khorishko, a spokesman for the Russian Embassy in Washington, said accusations that Russian diplomats have stepped up intimidation of U.S. officials were false.

"Those are absolutely false insinuations that are not worth any comments. Such kind of 'information' is disseminated by those who are not pleased with the new state of the Russian-American relations," he said.

Recent escalations

Since 2007, according to two U.S. intelligence officials, American posts in Belarus, Russia, Georgia and Kyrgyzstan have complained about instances in which junior Foreign Service officers have come home to find jewelry rearranged, cigarette butts stubbed out on the kitchen table, defecations in the bathroom, and break-ins with nothing of value stolen.

More recently, visiting congressional staff on official delegations have complained of having their hotel rooms broken into and seeing their things rearranged, according to these officials.

David A. Merkel, who served as deputy assistant secretary of state for European and Eurasian affairs in 2008 and 2009, said he had seen an escalation in these kinds of direct actions starting in the last two years of the George W. Bush administration.

"It's meant to limit a diplomat's ability to meet with individuals by aggressively demonstrating that they are being watched. If you are a political officer and you are cognizant your actions are being watched, you are less willing to meet with people, even if this is a normal activity for a political officer," said Mr. Merkel, who also served as director for European and Eurasian affairs on the National Security Council from 2005 to 2007.

Other U.S. officials said the intimidation campaign escalated even more in 2010 after the Obama administration expelled 10 Russian "deep cover" agents as part of a spy swap.

Mr. Merkel said these acts of intimidation were reported throughout what Russia calls its "near abroad," or the independent states that used to be part of the Soviet Union.

"It's mainly focused on people whose jobs are domestic politics and human rights reporting," he said. "You have to appreciate how much courage it takes for a foreign national, a Russian or a Belarusian to meet with our diplomats because they know they are being watched."

Another diplomat who was targeted for embarrassment was Kyle Hatcher, who served at the U.S. Embassy in Moscow as a political officer responsible for tracking religious freedom in Russia.

In August 2009, two Russian newspapers printed stories based on spliced video footage of Mr. Hatcher at a hotel room, claiming he was employing the services of a prostitute.

Two U.S. officials familiar with the incident, who asked not to be named, said the U.S. intelligence community saw this as the work of the FSB.

"They intercepted some phone calls he made and spliced them in a way that made them look strange. Then they took footage of him in a hotel room or something. They made it all look like they had footage of him in sex acts with prostitutes in a hotel," one of those officials said.

Long history

Moscow's intelligence services long have played dirty tricks on U.S. diplomats. In the "Spy vs. Spy" world of the Cold War, operations known as "honey traps" - a young, attractive woman woos a U.S. Foreign Service officer into state of semi-undress where he can be photographed and blackmailed later - were commonplace.

The KGB-trained services also on occasion would deliberately break into the hotel room or residence of visiting dignitaries. In some cases, these incidents escalated and U.S. diplomats found their pets killed.

These kinds of tactics largely quieted down after the Cold War, but a spike in such incidents at the end of the 1990s prompted the Clinton administration to form a special bilateral committee to look into them. Moscow's representative at the time was Vladimir Putin, a former KGB officer who would later become president of the Russian Federation.

The spike in these incidents, described by one U.S. intelligence official as "discreet acts of intimidation," has been raised discreetly by members of Congress with the Obama administration since 2009.

But the issue became public last month after The Times published a series of stories about the bombing attempt in Georgia.

After The Times published an interview with a Georgian interior ministry official laying out evidence that Mr. Borisov was behind the bombing attempt, five senators led by Republicans Jon Kyl of Arizona and Mark Kirk of Illinois asked the Office of the Director of National Intelligence to provide a briefing on the incident.

In response to that query, the Obama administration released an assessment from the National Intelligence Council, the analytic arm of the Office of the Director of National Intelligence.

That report, four U.S. officials said, concluded that two bombs were placed outside a parking lot that abuts the U.S. Embassy compound. One bomb exploded outside the parking lot, another unexploded bomb was tossed over the parking lot wall.

The CIA concluded that Mr. Borisov was acting on orders from Russian military intelligence headquarters, according to these officials. The State Department's Bureau of Intelligence and Research assessed that Mr. Borisov was acting as a rogue agent, these officials said.

Jamie Fly, executive director of the Foreign Policy Initiative who also served on the National Security Council staff in 2008 and 2009, said the incidents of intimidation of U.S. officials were evidence that the "reset" policy had failed.

"These types of Russian activities directed against U.S. officials, combined with Russian policies pursued by Moscow against U.S. allies, show the concept of a reset in relations with Russia is a joke," Mr. Fly said.

Internal Russian politics

Mr. Obama was far more optimistic last week in an interview with Russia's official ITAR-Tass news agency.

"Well, first of all, I think it's important for us to look back over the last two years and see the enormous progress we've made. I started talking about reset when I was still a candidate for president, and immediately reached out to President Medvedev as soon as I was elected. And we have been, I think, extraordinarily successful partners in moving towards reset," he said.

An administration official who defended Mr. Obama's reset policy stressed that the political leadership of Russia was sincere in wanting to improve ties with the United States.

"There are most certainly some in the Russian government - nationalists, hard-liners, KGB folks, etc. - who don't like the reset and are doing whatever they can to derail it," this official said.

The official compared the Russia situation to domestic U.S. political divisions.

"We also have our critics/skeptics here within the U.S. government who are also still busy fighting the Cold War. And in these matters, they have good justification since certain elements of the Russian establishment are also still fighting the Cold War," the official said.

This official pointed to Russia's willingness to help supply U.S. troops in Afghanistan and their support for U.N. sanctions against Iran, North Korea and Libya as evidence of the reset policy's success.

"The Kremlin seems to be a willing partner, even if maybe some in that regime don't like this new trend and are doing what they can to derail it," he said.

However, on Tuesday, Mr. Putin, now Russia's prime minister and widely seen as its real leader, made some belligerent comments about the U.S., calling it a "parasite" on the world economy.

At a conference of the Nashi and Young Guard youth associations, Mr. Putin also suggested that his country would invite the Georgian breakaway province of South Ossetia into the Russian Federation, effectively annexing land taken in a war three years ago.

Mr. Putin, a former FSB director, is widely regarded as the real man in charge of Russia's elite establishment of current FSB and former KGB officers.

In 2006, sociologist Olga Kryshtanovskaya produced a study that found 78 percent of Russia's current elite had ties to the KGB or FSB.

Intelligence agents tell of intimidation, smears of American officials, diplomats

Pelosi: Unlike GOP, Democrats will focus on jobs - USATODAY.com

2011-08-04T07:48:00.001+02:00

Pelosi: Unlike GOP, Democrats will focus on jobs - USATODAY.com

Pelosi: Unlike GOP, Democrats will focus on jobs

The American people have made it clear: Our nation's top priority is job creation. No recovery can take place until we address kitchen table concerns of America's families: having a steady paycheck, being able to make ends meet, and helping our small businesses and entrepreneurs attract customers, grow, and hire.

By Nancy Pelosi

Enlarge

In Congress, our work must be putting people back to work. To meet that charge, Democrats have proposed our "Make It In America" initiative, led by Democratic Whip Steny Hoyer. It presents ideas backed by both parties: to rebuild our roads, bridges, and rail lines; to invest in innovation, broadband, clean energy, and new technologies to create the jobs of tomorrow for our businesses and workers.

Make It In America is a manufacturing strategy designed to create jobs and keep America No. 1, and it will fulfill President Obama's goal to out-innovate, out-educate, and out-build the rest of the world. This is not a partisan agenda or cause; it is an American priority.

Take infrastructure, for example: Business and labor agree with the need to rebuild America by bringing the public and private sectors together. As the presidents of the Chamber of Commerce and the AFL-CIO said in a joint statement in January, infrastructure "projects not only create jobs and demand for businesses, they are an investment in building the modern infrastructure our country needs to compete in a global economy." One way to fund these projects, which has bipartisan support, is through an infrastructure bank.

Consider fairness in our trade relationships: In the last Congress, an overwhelming, bipartisan majority in the House passed legislation to demand China stop manipulating its currency and start playing fair in global trade — an action that could create more than one million American jobs and enhance our economic and national security. On behalf of our workers, our entrepreneurs, and our small businesses, we can, and must, pass this legislation again.

This week's debt limit legislation created a new, bipartisan Joint Committee, which will soon begin deliberations on a comprehensive plan to reduce our deficit. Any real solution must put job creation and economic growth front and center. Any package must be balanced between revenues and spending cuts — an approach supported by Democratic, Republican and independent voters. And we must hold true to our values, protecting Medicare, Medicaid and Social Security benefits.

During more than 200 days in the majority, House Republicans have put our economy at risk by threatening a first-ever default on our debt and refusing to propose legislation to create jobs. Instead, they've passed bills that would destroy up to 2 million jobs — nearly 10,000 jobs per day. And every time Democrats have brought a jobs initiative to the floor — 10 times so far — Republicans voted "no."

There's no better way to reduce the deficit than by creating jobs. We must focus squarely on getting our economy back on track, strengthening our middle class, and addressing the American people's kitchen-table concerns. Working together, it's time to place Americans' top priority — job creation — at the top of our agenda.

Rep. Nancy Pelosi, D-Calif., is the House minority leader.

Putin says U.S. is parasite on global economy | Reuters

2011-08-02T09:03:00.001+02:00

Putin says U.S. is parasite on global economy | Reuters

Putin says U.S. is "parasite" on global economy

By Maria Tsvetkova

LAKE SELIGER, Russia | Mon Aug 1, 2011 5:45pm EDT

(Reuters) - Russian Prime Minister Vladimir Putin accused the United States Monday of living beyond its means "like a parasite" on the global economy and said dollar dominance was a threat to the financial markets.

"They are living beyond their means and shifting a part of the weight of their problems to the world economy," Putin told the pro-Kremlin youth group Nashi while touring its lakeside summer camp some five hours drive north of Moscow.

"They are living like parasites off the global economy and their monopoly of the dollar," Putin said at the open-air meeting with admiring young Russians in what looked like early campaigning before parliamentary and presidential polls.

US President Barack Obama earlier announced a last-ditch deal to cut about $2.4 trillion from the U.S. deficit over a decade, avoid a crushing debt default and stave off the risk that the nation's AAA credit rating would be downgraded.

The deal initially soothed anxieties and led Russian stocks to jump to three-month highs, but jitters remained over the possibility of a credit downgrade.

"Thank god," Putin said, "that they had enough common sense and responsibility to make a balanced decision."

But Putin, who has often criticized the United States' foreign exchange policy, noted that Russia holds a large amount of U.S. bonds and treasuries.

"If over there (in America) there is a systemic malfunction,

this will affect everyone," Putin told the young Russians.

"Countries like Russia and China hold a significant part of their reserves in American securities ... There should be other reserve currencies."

U.S.-Russian ties soured during Putin's 2000-2008 presidency but have warmed significantly since his protégé and successor President Dmitry Medvedev responded to Obama's stated desire for a "reset" in bilateral relations.

EARLY CAMPAIGNING?

Casually dressed in khaki trousers and a striped white shirt, Putin flew by helicopter to the tented camp as part of a string of appearances that are being closely watched in the run-up to the elections.

He did not say whether he plans a return to the Kremlin or will stand aside for Medvedev, his partner in Russia's leadership tandem, to run for a second term.

But young people crowding round Putin, caught up in the campaigning spirit created by huge portraits of Putin hung from trees, were not shy about saying who they wanted as president.

"Russia's next president will be small, bald and look like Putin," 17-year-old Ilya Mzokov joked with reporters. Asked why Medvedev was not paying a visit to the summer camp, he said: "Only serious people come here."

Youngsters chanted Putin's name and applauded his remarks as he strolled round the camp, where US-style business seminars, extreme sports and political mudslinging were among the topics on offer.

Putin, whose macho image appeals to many Russians, briefly swung himself up the first half of a climbing wall, filmed by a gaggle of state television cameras.

Nashi, which means "Our People," was created by the Kremlin to counter popular dissent after youth activism helped topple a pro-Moscow government in Ukraine's 2005 Orange revolution.

The group has worked to spread a personality cult around Putin and regularly campaigns against Kremlin critics.

Opinion polls show Putin, still widely viewed as the country's paramount leader, retains near 70 percent approval.

But his United Russia party is trying to reverse a slide in popularity before December parliamentary polls, hoping to use a strong showing there to help Putin in the March 2012 presidential vote.

(Writing by Alissa de Carbonnel; editing by Tim Pearce)

Progressives Complain Obama's Debt Deal 'Trades People's Livelihoods for the Votes of a Few Unappeasable Right-Wing Radicals' | The Nation

2011-08-01T11:45:00.002+02:00

Progressives Complain Obama's Debt Deal 'Trades People's Livelihoods for the Votes of a Few Unappeasable Right-Wing Radicals' | The Nation

John Nichols

July 31, 2011

Given the choice between a Republican and someone who acts like a Republican, people will vote for the real

Republican all the time,” said Harry Truman.

If the thirty-third president was right, then Barack Obama just did himself and his party a world of hurt.
Faced with the threat that Tea Party–pressured Republicans in the House really would steer the United States toward default, and in so doing steer the US economy over the cliff, Obama had to do something. But instead of bold action—borrowing a page from Ronald Reagan to demand a straight up-or-down vote on raising the debt ceiling; borrowing a page from Franklin Roosevelt to pledge to use the authority afforded him by the Constitution to defend the full faith and credit of the United States—the president engaged in inside-the-Beltway bargaining of the most dysfunctional sort.

In cutting a deal with Congressional Republicans that places Democratic legacy programs—Social Security, Medicare and Medicaid—at risk while cutting essential programs for working families and the poor, Obama has positioned himself and his administration to the right of where mainstream Republicans such as Howard Baker, Bob Dole and George H.W. Bush used to stand in fights with the fringe elements of their party.

Now, the fringe is in charge of the GOP. And Obama is cutting deals to satisfy Republicans that Britain’s banking minister describes as “right-wing nutters.’”

Obama and Democratic Congressional leaders are claiming that they have done everything in their power to avert deep cuts in Social Security, Medicare and Medicaid. And it is true that they have given the Republicans (and their paymasters) less than House Budget Committee chair Paul Ryan was demanding with a budget proposal that turned Medicare into a voucher program and began the process of privatizing Social Security.

But a compromise with total destruction can still do a lot of damage.

The president’s bow to the political extremism—and the economic irrationality—of a tiny circle of “right-wing nutters” in Congress and their dwindling Tea Party “base” will, according to reports based on briefings by White House and GOP aides, “raise the debt limit by about $2.7 trillion and reduce the deficit by the same amount in two steps. It would cut about $1 trillion in spending up front and set up a select bicameral committee to put together a future deficit-reduction package worth $1.7 trillion to $1.8 trillion. Failure of Congress to pass the future deficit-reduction package would automatically trigger cuts to defense spending and Medicare.”

An aide familiar with the deal the Hill newspaper that the Medicare cut would not affect beneficiaries. “Instead,” the aide indicated, “healthcare providers and insurance companies would see lower payments.”

But that’s still a squeezing of Medicare in order to meet the demands of Congressional Republicans who have spent the past six months trying to put the program on the chopping block.

Congressional Black Caucus chairman Emanuel Cleaver, D-Missouri, responded to initial reports regarding the deal by describing it as “a sugar-coated Satan sandwich.”

Congressional Progressive Caucus co-chair Raul Grijalva says Obama and his negotiators have bent too far to the extremists. Like many progressives, Grijalva favored the straight up-or-down vote on debt ceiling. “Had that vote failed,” he argued, “the president should have exercised his Fourteenth Amendment responsibilities and ended this manufactured crisis.”

Grijalva is expected to join members of the Congerssional Progressive Caucus and the Congressional Black Caucusat a Monday press conference, where they will call on Obama to sidestep Congress and raise the debt limit by invoking the Fourteenth Amendment.

Obama has, so far, rejected this option.

Instead of taking a tough stance, the president has blinked in the face of Republican recalcitrance. And in so doing Obama agreed to what the Progressive Caucus co-chair decsribed as “a cure as bad as the disease.”

“This deal trades people’s livelihoods for the votes of a few unappeasable right-wing radicals, and I will not support it,” Grijalva declared Sunday afternoon. “Progressives have been organizing for months to oppose any scheme that cuts Medicare, Medicaid or Social Security, and it now seems clear that even these bedrock pillars of the American success story are on the chopping block. Even if this deal were not as bad as it is, this would be enough for me to fight against its passage.”

How widespread that sentiment will be within the House Democratic Caucus remains to be seen. While Senate majority leader Harry Reid, D-Nevada, has signed on with the president, House minority leader Nancy Pelosi, D-California, says she must meet with caucus members before taking a position.

Grijalva is far from the only member who is upset with the deal.

Congresswoman Donna Edwards, D-Maryland, slammed the deal.

“Nada from million/billionaires; corp tax loopholes aplenty; only sacrifice from the poor/middle class? Shared sacrifice, balance? Really?” she complained, via Twitter, on Sunday.

Congresswoman Barbara Lee, D-California, complained that she was “not sure how Social Security and Medicare” will be preserved by the bargain the president has cut with the Republicans. “We have to make sure that within this deal…Medicare and Medicare and Social Security and the most vulnerable are protected,” she said, while withholding an endorsement of the measure. “I worry about these triggers [for more cuts],” Lee concluded.

Grijalva objected, in particular, to the lack of shared sacrifice in the deal.

“This deal does not even attempt to strike a balance between more cuts for the working people of America and a fairer contribution from millionaires and corporations. The very wealthy will continue to receive taxpayer handouts, and corporations will keep their expensive federal giveaways. Meanwhile, millions of families unfairly lose more in this deal than they have already lost. I will not be a part of it,” the Arizona congressman explained. “Republicans have succeeded in imposing their vision of a country without real economic hope. Their message has no public appeal, and Democrats have had every opportunity to stand firm in the face of their irrational demands. Progressives have been rallying support for the successful government programs that have meant health and economic security to generations of our people. Today we, and everyone we have worked to speak for and fight for, were thrown under the bus. We have made our bottom line clear for months: a final deal must strike a balance between cuts and revenue, and must not put all the burden on the working people of this country. This deal fails those tests and many more.”

But Grijalva’s gripe was not merely a moral or economic one.

It was political, as well.

“The Democratic Party, no less than the Republican Party, is at a very serious crossroads at this moment. For decades Democrats have stood for a capable, meaningful government—a government that works for the people, not just the powerful, and that represents everyone fairly and equally. This deal weakens the Democratic Party as badly as it weakens the country,” explained Grijalva. “We have given much and received nothing in return. The lesson today is that Republicans can hold their breath long enough to get what they want. While I believe the country will not reward them for this in the long run, the damage has already been done.”

The question that remains is: How much damage? How much damage to vulnerable Americans? How much damage to the global reputation of the United States as a functional state? How much damage to a US economy that is threatened by rising unemployment? How much damage to the image of the Democratic Party as a defender of working families?

There will still be a good deal of wrangling over this deal. It could be rejected. It could be altered. But it cannot be defended as a sound or necessary response to a manufactured debt-ceiling debate and the mess that House Speaker John Boehner, R-Ohio, has made of it.

That is why the co-chair of the Congressional Progressive Caucus says: “I will not support the emerging debt deal.”

“I will have no part of a deal that cuts Social Security, Medicare and Medicaid to appease the farthest reaches of the right wing of the Republican Party,” argues Grijalva. “It is unconscionable to put these programs on the chopping block and ignore the voices and beliefs of the millions of Americans who trust us to lead while continuing to give handouts to the ultra wealthy and the largest corporations. There is no human decency in that.”

John Nichols

July 31, 2011

Boehner: Republicans Want Chaos In Order To Force Bigger Cuts | AlterNet

2011-07-29T18:59:00.001+02:00

Boehner: Republicans Want Chaos In Order To Force Bigger Cuts | AlterNet

Boehner: Republicans Want Chaos In Order To Force Bigger Cuts

House Speaker John Boehner (R-OH) said today that some members of his own caucus who are refusing to agree to a compromise debt ceiling deal are hoping to unleash “chaos” and thus force the White House and Senate Democrats to make bigger concessions than they’re already offering. As many as 40 House Republicans, especially Tea Party members and freshmen, have demanded nothing short of changing the Constitution to include a balanced budget amendment before they would vote to raise debt ceiling, even though that has zero chance before the U.S. faces potential default on Aug. 2.

Speaking on conservative radio host Laura Ingraham’s show this morning, Boehner agreed that failing to raise the limit before the deadline would be devastating, and said the “chaos” plan won’t work when asked by Ingraham what’s motivating the recalcitrant Republicans:

BOEHNER: Well, first they want more. And my goodness, I want more too. And secondly, a lot of them believe that if we get past August the second and we have enough chaos, we could force the Senate and the White House to accept a balanced budget amendment. I’m not sure that that — I don’t think that that strategy works. Because I think the closer we get to August the second, frankly, the less leverage we have vis a vis our colleagues in the Senate and the White House.

Boehner offers only political calculus for why this Tea Party plan wouldn’t work. He completely ignores the devastating effect a downgrade in U.S. debt and potential default would have on the American people and the global economy, who happen to be innocent bystanders to this high-stakes hostage negotiation.

Many on the left have been arguing all along that some Republicans are more interested in extorting concessions than addressing the debt issue, and are willing to blow up the economy if they don’t get their way — it’s refreshing, if troubling, to see that their leader agrees.

Listen here:

By Alex Seitz-Wald | Sourced from Think Progress

Posted at July 28, 2011, 7:46 am

'Super Congress': Debt Ceiling Negotiators Aim To Create New Legislative Body

2011-07-24T18:34:00.000+02:00

'Super Congress': Debt Ceiling Negotiators Aim To Create New Legislative Body

PressTV - 'US riding second wave of depression'

2011-07-20T19:21:00.001+02:00

PressTV - 'US riding second wave of depression'

'US riding second wave of depression'

The United States is witnessing the 'second wave' of economic depression as pressure grows on the US administration to hammer out a deal to avoid a debt default that could have global ramifications.

Press TV talks with Dr. Webster Griffin Tarpley, an author and historian in Washington, for his insights on the US economic situation and the potential risks of a default.

Press TV: If we look at this in context of tough economic times, can it be argued these negative sentiments are natural in such trying times?

Tarpley: Well, the negativity is fully justified. We are in a world economic depression as in the 1930s, it comes in waves. We had the first wave in 2008 were the bankruptcy of Bear Stearns [Companies], Lehman Brothers [Holdings] and really all of Wall Street. We are no going through the second wave of the depression, on the one side, the European debt and banking crises, or the euro crises, but that is now joined by these really unnecessary crises around the dollar and the US public debt. We have a mass of fanatics inside the Republican Party; this is known as Tea Party [movement]. These are reactionaries. They are founded by extreme right-wing business men, like the Koch brothers [of Koch Industries], they want the United States to go bankrupt, they want the US to default because they figured that if the United States can no longer borrow, they would be able to destroy the social safety net that we have had left over from the new deal, that is to say Medicare, Medicaid, social security and so forth.

Since they can't get that done by legal means, they are trying to go outside of the government and the constitution to force the bankruptcy of the country, thinking that in that case there won't be any money for these programs.

Unfortunately, Obama has not put up a good front against them; he has gratuitously said that he wants to sacrifice parts of Medicare, Medicaid, and social security. That was the surprised announcement that he made at the middle of last week.

Right now though Wall Street is making its voice heard. If the Unites States defaults all central bank reserves in the world will be radically devalued, there will be a world panic, a catastrophe.

Press TV: Some economists say that neither party would let the US default, and that they are simply playing politics. Do you agree?

Tarpley: Normally that would be true, but we know have a group of true ideological fanatics, the Tea Party. They believe in the Austrian school, and the Chicago school. They believe they you can have market without a government. They are neo-feudalist, right-wing anarchist - whatever you want- they believe that.

Now, the leaders of the Republican Party are getting calls from Wall Street right now saying that either you raise the debt ceiling, and preserve some kind of stability, or you are maybe sleeping with the fishes or a cement overcoat, that's the level that it has come to. The problem is that there are 70 or 80 or 90 Republicans in the house who are impervious to all kind of reason discourse. They are getting threats, they may come around as a result of the threats, but the situation is now on the brink, it would never be this way if you never had these fanatics who are essentially beyond all reason.

REZ/GHN

Obama's Russia 'Reset': Another Lost Opportunity? | The Nation

2011-06-03T00:21:00.000+02:00

Obama's Russia 'Reset': Another Lost Opportunity? | The Nation

This article is adapted from the new epilogue for the paperback edition of Stephen F. Cohen’s book Soviet Fates and Lost Alternatives: From Stalinism to the New Cold War, which will be published by Columbia University Press in July.

An enduring existential reality has been lost in Washington’s post–cold war illusions and the fog of subsequent US wars: the road to American national security still runs through Moscow.

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Despite the Soviet breakup twenty years ago, only Russia still possesses devices of mass destruction capable of destroying the United States and tempting international terrorists for years to come. Russia also remains the world’s largest territorial country, a crucial Eurasian frontline in the conflict between Western and Islamic civilizations, with a vastly disproportionate share of the planet’s essential resources including oil, natural gas, iron ore, nickel, gold, timber, fertile land and fresh water. In addition, Moscow’s military and diplomatic reach can still thwart, or abet, vital US interests around the globe, from Afghanistan, Iran, China and North Korea to Europe and Latin America. In short, without an expansive cooperative relationship with Russia, there can be no real US national security.

And yet, when President Obama took office in January 2009, relations between Washington and Moscow were so bad that some close observers, myself included, characterized them as a new cold war. Almost all cooperation, even decades-long agreements regulating nuclear weapons, had been displaced by increasingly acrimonious conflicts. Indeed, the relationship had led to a military confrontation potentially as dangerous as the 1962 Cuban missile crisis. The Georgian-Russian War of August 2008 was also a proxy American-Russian war, the Georgian forces having been supplied and trained by Washington.

What happened to the “strategic partnership and friendship” between post-Soviet Moscow and Washington promised by leaders on both sides after 1991? For more than a decade, the American political and media establishments have maintained that such a relationship was achieved by President Bill Clinton and Russian President Boris Yeltsin in the 1990s but destroyed by the “antidemocratic and neo-imperialist agenda” of Vladimir Putin, who succeeded Yeltsin in 2000.

In reality, the historic opportunity for a post–cold war partnership was lost in Washington, not Moscow, when the Clinton administration, in the early 1990s, adopted an approach based on the false premise that Russia, having “lost” the cold war, could be treated as a defeated nation. (The cold war actually ended through negotiations sometime between 1988 and 1990, well before the end of Soviet Russia in December 1991, as all the leading participants—Soviet President Mikhail Gorbachev, President Ronald Reagan and President George H.W. Bush—agreed.)

The result was the Clinton administration’s triumphalist, winner-take-all approach, including an intrusive crusade to dictate Russia’s internal political and economic development; broken strategic promises, most importantly Bush’s assurance to Gorbachev in 1990 that NATO would not expand eastward beyond a reunited Germany; and double-standard policies impinging on Russia (along with sermons) that presumed Moscow no longer had any legitimate security concerns abroad apart from those of the United States, even in its own neighborhood. The backlash came with Putin, but it would have come with any Kremlin leader more self-confident, more sober and less reliant on Washington than was Yeltsin.

Nor did Washington’s triumphalism end with Clinton or Yeltsin. Following the events of September 11, 2001, to take the most ramifying example, Putin’s Kremlin gave the George W. Bush administration more assistance in its anti-Taliban war in Afghanistan, including in intelligence and combat, than did any NATO ally. In return, Putin expected the long-denied US-Russian partnership. Instead, the Bush White House soon expanded NATO all the way to Russia’s borders and withdrew unilaterally from the Anti-Ballistic Missile Treaty, which Moscow regarded as the bedrock of its nuclear security. Those “deceptions” have not been forgotten in Moscow.

Now Russia’s political class, alarmed by the deterioration of the country’s essential infrastructures since 1991, is locked in a struggle over the nation’s future—one with profound consequences for its foreign policies. One side, associated with Putin’s handpicked successor as president, Dmitri Medvedev, is calling for a “democratic” transformation that would rely on “modernizing alliances with the West.” The other side, which includes ultra-nationalists and neo-Stalinists, insists that only Russia’s traditional state-imposed methods, or “modernization without Westernization,” are possible. As evidence, they point to NATO’s encirclement of Russia and other US “perfidies.”

The choice of “modernizing alternatives” will be made in Moscow, not, as US policy-makers once thought, in Washington, but American policy will be a crucial factor. In the centuries-long struggle between reform and reaction in Russia, anti-authoritarian forces have had a political chance only when relations with the West were improving. In this regard, Washington still plays the leading Western role, for better or worse.

* * *

When President Obama made “resetting” relations with Moscow a foreign-policy priority, he seemed to understand that a chance for a necessary partnership with post-Soviet Russia had been lost and might still be retrieved. The meaning of “reset” was, of course, what used to be called détente. And since détente had always meant replacing cold war conflicts with cooperation, the president’s initiative also suggested an understanding that he had inherited something akin to a new cold war.

The long, episodic history of détente, which began in 1933 when President Franklin Roosevelt established diplomatic relations with Soviet Russia after fifteen years of non-recognition, tells us something important about Obama’s reset. Each episode was opposed by powerful ideological, elite and institutional forces in Washington and Moscow; each required strong leadership to sustain the process of cooperation; and each, after a period of success, dissipated or collapsed in a resurgence of cold war conflicts, as did even the historic détente initiated by Gorbachev and Reagan in 1985 that promised to abolish cold war altogether.

Many commentators, like the Russia specialist Thomas E. Graham of Kissinger Associates and Peter Baker of the New York Times, believe that Obama’s reset, a term also adopted by the Kremlin, has been “remarkably successful” and already achieved a “new partnership.” Discourse between Washington and Moscow is more conciliatory. Both Obama and President Medvedev, who have met frequently, have declared the revamped relationship a success, citing their personal friendship as evidence. There are also tangible signs. Moscow is cooperating on two top US priorities: the war in Afghanistan and curbing Iran’s nuclear-weapons aspirations. In addition, in 2010, a treaty, New START, was negotiated that is designed to reduce US and Russian long-range nuclear arsenals by almost a third.

Nonetheless, Obama’s reset remains limited and inherently unstable. This is due in part to political circumstances over which he has had little control. Opposition in both capitals is fierce and unrelenting. Drawing on a traditional Russophobia that attributes sinister motives to every Moscow initiative, American neo–cold warriors have assailed Obama’s reset as “capitulation,” a “dangerous bargain” and a policy of “seeing no evil.” One even likened it to the 1939 Nazi-Soviet Pact. Without a countervailing pro-Russia lobby or a significant US-Russian economic relationship to buffer the reset, it is highly vulnerable to such attacks.

In Moscow, equally harsh attacks are being directed at Obama’s designated partner, President Medvedev. According to the leading Russian ultranationalist ideologue, Aleksandr Dugin, “The West stands behind Medvedev…. No one stands behind Medvedev except enemies of Russia.” More ominously, in July 2009 a prominent general accused Medvedev of “treason,” a charge reiterated in several quarters since March when Medvedev was also accused of “a betrayal of Russia’s interests” for not using its seat on the United Nations Security Council to veto authorization of NATO’s air attacks on Libya.

Still worse, both Obama and Medvedev are relatively weak leaders. Obama’s authority has been diminished, of course, by his declining popularity and by Democratic Party losses in the 2010 Congressional elections. (By then, he had already yielded to demands for a “reset of the reset,” restoring democracy-promotion to his agenda and embracing the Georgian leader, Mikheil Saakashvili, who brought America and Russia close to war in August 2008.) Medvedev’s authority remains limited by Prime Minister Putin’s continuing pre-eminence and the possibility he might reclaim the Russian presidency in the election scheduled for March 2012. Whatever the explanation, neither Obama nor Medvedev is able or willing to aggressively defend their reset or even prevent apparent attempts to disrupt it by members of their own administrations, as even Vice President Joseph Biden seems to have done more than once.

Obama’s decision to base his Russia policy on a partnership with the presumed “liberal” Medvedev, in the hope of promoting his political fortunes over Putin’s, has further limited support for the reset in Moscow. (Like the US media, Obama and his advisers continue to denigrate Putin as a leader with “one foot in the old ways” and even one who, as Secretary of State Hillary Clinton once remarked, “doesn’t have a soul.”) This political wager on Medvedev repeats the longstanding White House practice of mistaking a personal friend in the Kremlin—“my friend Dmitri,” Obama calls Medvedev—for broad support in the Russian policy class. Indeed, openly backing Medvedev for the Russian presidency in 2012, as Biden did so improperly while in Moscow in March, has revived the Russian elite’s resentment over US interference in its internal affairs and reinforced the view that only Putin can be trusted not to “sell out Russia to the West.”

The political failings of the reset may be transitory, but the fundamental fallacies of Obama’s Russia policy derive from the winner-take-all triumphalism of the 1990s. One is the enduring conceit of “selective cooperation,” or seeking Moscow’s support for America’s vital interests while disregarding Russia’s. Even though this approach had been pursued repeatedly since the 1990s, by Presidents Clinton and Bush, resulting only in failure and mounting Russian resentments, the Obama White House sought one-way concessions as the basis of the reset. As the National Security Council adviser on Russia, and reportedly the next US Ambassador to Moscow, Michael McFaul explained, “We’re going to see if there are ways we can have Russia cooperate on those things that we define as our national interests, but we don’t want to trade with them.”

Obama did gain Kremlin cooperation on Afghanistan and Iran without yielding on the two US policies most resented by Moscow—locating missile defense sites close to Russia and continuing NATO expansion in the same direction—but at a high political cost. The disparity further undermined Medvedev’s position as well as general support for the reset in Moscow, where it now bears his political “brand.” Thus, Putin, who usually leaves the US relationship to his protégé, remarked publicly, “So, where is this reset?”

Indeed, missile defense is a time bomb embedded in the New START treaty and therefore in the reset itself. During the negotiations, Moscow believed the Obama administration had agreed to respect Russian objections to putting antimissile sites in Eastern Europe. But in December 2010, Obama, seeking Senate ratification, personally promised that the agreement “places no limitations on the development or deployment of our missile defense programs,” which he pledged to pursue fully “regardless of Russia’s actions.” In its resolution of ratification, the Senate went further, spelling out this intention in detail. Remembering previous violated agreements, Moscow reacted with such suspicion that Medvedev felt the need to vouch for Obama as a president who “keeps his word.”

More generally, the unresolved conflict over missile defense exemplifies the futility of “selective cooperation.” Medvedev’s announcement, in November 2010, that Russia might participate in a NATO version of the project was heralded as another success of the reset. But both he and Putin quickly emphasized that “Russia will participate only on an absolutely equal basis…or we will not participate at all.” No one on either side believes, of course, that the US-led alliance will give the Kremlin “equal” control over its antimissile system.

In pursuing the one-way concessions implicit in “selective cooperation,” Obama, like Clinton and Bush before him, seems unable or unwilling to connect the strategic dots of mutual security the way Reagan and Gorbachev did in the late 1980s. In effect, Obama is asking Moscow to substantially reduce its long-range nuclear weapons while Russia is being surrounded by NATO bases with their superior conventional forces and with an antimissile system potentially capable of neutralizing Russia’s reduced retaliatory capability. In that crucial respect, the new arms-reduction treaty is inherently unstable. If nothing else, Obama is undermining his own hope of also negotiating a major reduction of Russia’s enormous advantage in short-range tactical nuclear weapons, which Moscow increasingly considers vital for its national defense. Instead, as Medvedev also warned, unless the missile defense conflict is resolved, there will be “another escalation of the arms race” that would, he added on May 18, “throw us back into the cold war era.”

The twenty-year-long notion that Moscow will make unreciprocated concessions for the sake of partnership with the United States derives from the same illusion: that post-Soviet Russia, diminished and enfeebled by having “lost the cold war,” can play the role of a great power only on American terms. In the real world, when Obama took office, everything Russia supposedly needed from the United States, including in order to modernize, it could obtain from other partners. Today, two of its bilateral relationships—with Beijing and Berlin, and increasingly with Paris—are already much more important to Moscow, politically, economically and even militarily, than its barren relations with a Washington that for two decades has seemed chronically unreliable, even duplicitous.

Behind that perception lies a more fundamental weakness of the reset: conflicting American and Russian understandings of why it was needed. Each side continues to blame the other for the deterioration of relations after 1991. Neither Obama nor the Clinton-era officials advising him have conceded there were any mistakes in US policy toward post-Soviet Russia. Instead, virtually the entire US political class persists in blaming Russia and in particular Putin, even though he came to power only in 2000. In effect, this exculpatory history deletes the historic opportunities lost in Washington in the 1990s and later. It also means that the success or failure of the reset is “up to the Russians” and that “Moscow’s thinking must change,” not Washington’s.

American policy-makers and pundits may care little about history, but it is no arcane matter for their Russian counterparts. For them, the reset was necessary because Washington rejected Gorbachev’s proposal for a “new model of guaranteeing security” in favor of a “Pax Americana” and because there was a “new US semi-cold war against Russia in 1991-2008.” Putin and Medvedev are personally no less adamant about the prehistory of the reset and who was to blame. Before Obama became president, both Russian leaders repeatedly accused Washington of having constantly deceived Moscow. That acute sense of betrayal remains on their minds. Less than a year ago, Putin admitted having been slow to understand the pattern of US duplicity: “I was simply unable to comprehend its depth…. But in reality it is all very simple…. They told us one thing, and they did something completely different. They duped us, in the full sense of this word.”

Medvedev agreed: “Relations soured because of the previous US administration’s plans.” He even said what is widely believed but rarely spoken publicly by Russian officials, that Washington had not just armed and trained the Georgian military but had known in advance, perhaps encouraged, Saakashvili’s surprise attack on South Ossetian civilians and Russian peacekeepers, which began the August 2008 war: “Personally,” Medvedev complained, “I found it very surprising that it all began after the US secretary of state [Condoleezza Rice] paid a visit to Georgia. Before that…Mr. Saakashvili was planning to come see me in Sochi, but he did not come.”

Not surprisingly, the Russian leadership entered into the reset in 2009 with expectations diametrically opposed to the unilateral concessions expected by the Obama administration. As an unnamed Kremlin aide bluntly told a Washington Post columnist, “America owes Russia, and it owes a lot, and it has to pay its debt.” A year later, when the head of NATO assured the international media that the reset would “bury the ghosts of the past,” it was another example of how little the US-led alliance understands or cares about history.

The “ghost” barring a truly fundamental change in relations is, of course, the twelve-year expansion of NATO to Russia’s borders—the first and most fateful broken American promise. Despite assurances of a “NATO-Russian friendship,” the Obama administration has not disavowed more NATO expansion and instead reaffirmed US support for eventual membership for the former Soviet republics of Ukraine and Georgia, Moscow’s declared “red lines.” No state that feels encircled and threatened by an encroaching military alliance—an anxiety repeatedly expressed by Moscow, most recently by Putin in April—will, of course, ever feel itself an equal or secure partner of that alliance.

Still more, expanding NATO eastward has institutionalized a new and even larger geopolitical conflict with Russia. Moscow’s protests and countersteps against NATO encroachment, especially Medvedev’s statement in 2008 that Russia is entitled to a “sphere of strategic interests” in the former Soviet republics, have been indignantly denounced by American officials and commentators as “Russia’s determination to re-establish a sphere of influence in neighboring countries.” Thus, Biden stated in Moscow in March, “We will not recognize any state having a sphere of influence.”

But what is NATO’s eastward movement other than a vast expansion of America’s sphere of influence—military, political and economic—into what had previously been Russia’s? No US official or mainstream commentator will admit as much, but Saakashvili, the Georgian leader bent on joining the alliance, feels no such constraint. In 2010, he welcomed the growth of “NATO’s presence in the region” because it enables the United States and its allies to “expand their sphere of influence.” Of all the several double standards in US policy-making—“hypocrisy,” Moscow charges—none has done more to prevent an American-Russian partnership and to provoke a new cold war.

* * *

Given that the new NATO states cannot now be deprived of membership, there is only one way to resolve, or at least reduce, this profound geopolitical conflict between the US and Russia: in return for Moscow’s reaffirmation of the sovereignty of all the former Soviet republics, Washington and its allies should honor retroactively another broken promise—that Western military forces would not be based in any new NATO country east of Germany. Though anathema to the US policy establishment and weapons industries, this would, in effect, demilitarize NATO’s expansion since 1999. Without diminishing the alliance’s guarantee of collective security for all of its members, such a grand accommodation would make possible a real partnership with post-Soviet Russia.

First, and crucially, it would redeem one of America’s broken promises to Russia. Second, it would recognize that Moscow is entitled to at least one “strategic interest”—the absence of a potential military threat on its borders. (Washington has long claimed this privilege for itself, defending it to the brink of nuclear war in Cuba in 1962.) Third, the demilitarization of NATO’s expansion would alleviate Russia’s historical fear of military encirclement while bolstering its trust in Western partners. And fourth, this would reduce the Kremlin’s concerns about missile defense sites in Eastern Europe, making it more willing to contribute what may be Russia’s necessary resources to the still unproven project.

Much else of essential importance both to America and Russia could then follow, from far greater reductions in all of their weapons of mass destruction to full cooperation against the looming dangers of nuclear proliferation and international terrorism. The result would be, that is, another chance to regain the historic opportunity lost in the 1990s.

In 2009, Russia’s pro-Western modernizers hoped that Obama’s proposed reset meant Washington finally understood the necessity of partnership with Moscow. Two years later, however, Medvedev was still worried that “alternatives await us” in US-Russian relations. A leading pro-Western member of the Russian parliament was more explicit: “In Moscow and in Washington, people have been known to lose opportunities…. We have to hope that this time we won’t lose the opportunity.”

That both Obama and Medvedev, who personify the reset, are under attack in their own countries for “traitorous” policies is an ominous sign. Nonetheless, the political prospects are actually better in Moscow in one important respect: a significant part of the Russian policy class at least understands that the two countries have come not only to another turning point but possibly to the last chance for a post–cold war relationship. Pro-Western Russians can no longer find comfort in their customary association of major policy alternatives with a successor generation of leaders; the youthful Obama and Medvedev are that generation.

No such urgency or even awareness is evident today in the American establishment. Instead, the possibility of greater cooperation with Moscow has accelerated the tendency to equate “the crimes and abuses of this Russian government,” in the words of Senator John McCain, with those of Communist Russia. In the same vein, US cold war–era themes have become more pronounced. Moscow’s initiatives are again presented by media commentators like Charles Krauthammer as “brazen Russian provocations.” (Even Putin’s historic acknowledgment of the 1940 Soviet murder of thousands of Polish officers in Katyn Forest was dismissed by The Weekly Standard as a “trivial gesture” designed to “manipulate” foreign opinion.) Dire warnings by Ariel Cohen of the Heritage Foundation and others that Moscow is trying “to play off…the European allies against the United States” have reappeared along with demands that Washington deploy military power to “roll back the Kremlin’s growing regional influence.”

Obama’s proposed reset has also brought more extreme views to the fore. Present-day Russia, Ariel Cohen warns, is even more dangerous than its Soviet predecessor: “This is not your father’s Russia…. Today’s Russian leadership is younger and tougher.” Earlier a Wall Street Journal editor published an even more startling revelation: “Russia has become, in the precise sense of the word, a fascist state.” Previously a fringe notion, it has since been taken up by an established American scholar, Rutgers professor Alexander J. Motyl, in the journal of a leading university center of Russian studies.

Lost in this reckless (and uninformed) commentary are the multiple threats to America’s national security lurking in Russia—not only its vast, questionably secure stockpiles of lethal nuclear, biological and chemical materials but also its crumbling infrastructures and growing extremist movements—as well as the flickering chance for cooperation with Moscow to avert them. Veteran pundits in leading American newspapers assure readers that “nuclear war between Russia and America has become inconceivable”; indeed, that the danger of any US-Russian war is “minuscule,” despite the near miss in Georgia in August 2008, when the Bush White House considered sending military forces to support its client state; and that in general “what was needed was not the chimera of arms control” but a “renewal of the arms race.”

Such myopia has inspired an even more reckless view: the worse the situation inside Russia, the better for America. Thus, Washington Post columnist George Will, deriding the new nuclear-reductions treaty, reported with satisfaction on the “emaciated Russian bear.” And a former Bush official, writing in the same newspaper, urged the Obama administration to “refuse to help Russian leaders with economic modernization,” even though modernizing that country’s infrastructures is essential for securing its devices of mass destruction. Motyl went further, hoping for “a destabilized Russia,” deaf to warnings from Moscow that this would be “catastrophic” in a country laden with nuclear weapons and eleven Chernobyl-style reactors.

Political and media myopia, the familiar triumph of ideology over reality, abetted another unwise Washington decision. Despite the Kremlin’s uncertain grip on its own nuclear materials—indeed, despite alarm that uncontrolled wildfires in August 2010 might reach fallout from the 1986 Chernobyl reactor explosion, or even nuclear weapons facilities—the US Senate voted four months later to ship massive quantities of spent fuel from American-built reactors to Russia for safekeeping and disposal. While Russian environmentalists protested this would turn their country into “an international radioactive waste dump,” and a Moscow military expert warned that no Russian region was “truly safe,” the Obama administration hailed the decision as a victory for its “reset.”

* * *

A fundamental transformation of US-Russian relations, from what was essentially a state of cold war to a strategic partnership, requires bold, resolute leadership based on a full rethinking of the entire post-Soviet relationship, especially Washington’s triumphalist attitudes. Given the citadels of vested institutional, professional and personal interests in the failed policies since 1991, centered in Washington but with ample support throughout the nation’s media and educational system, nothing less will result in a full “reset.”

Several factors probably explain why President Obama has not provided any of these essentials. One is his own irresolute nature, also displayed in his domestic policies. (To be fair, the first black US president may be reluctant to assault too many American citadels or orthodoxies.) Nor has President Obama turned out to be a new thinker about security as were Gorbachev and Reagan when they achieved their breakthrough to partnership. Having surrounded himself with advisers tied to the failed Russia policies of the Clinton years, Obama has no one in his inner circle to propose fundamentally different approaches, still less heretical ones, or even much rethinking. As a result, Obama’s reset has been cast in the same fallacies that made it necessary.

But the president is not solely, or even mainly, to blame. The larger failure is that of the entire American policy establishment, including its legions of media opinion-makers, think-tank experts and academic intellectuals. Leaders who had previously enacted major improvements in US-Russian relations, most recently Gorbachev and Reagan, were influenced by unorthodox ideas advocated over time by dissenting thinkers inside or near the political establishment, however few in number and however much in disfavor, even in danger, they often were.

No such nonconformist American thinking about Russia was in circulation when Obama took office. Nor has it been since, no lessons having been learned from the failures of the last two decades. The triumphalist orthodoxy still monopolizes the political spectrum, from right-wing and neoconservatives to Russia specialists at the “progressive” Center for American Progress, in effect unchallenged in the parties, mainstream media, policy institutes or universities. Even though the United States is mired in three wars and a corrosive economic crisis, while Moscow has regained crucial positions in its own region, from Ukraine to Kyrgyzstan, and developed flourishing partnerships from China to Western Europe, “experts” still insist that, as Clifford Kupchan of the Eurasia Group declared, “the road where Russia needs to go leads through Washington.”

Still worse, in addition to triumphalist fallacies about the end of the cold war, three new tenets of neo–cold war US policy have become axiomatic. First, that present-day Russia is as brutally antidemocratic as its Soviet predecessor. Evidence cited usually includes the Kremlin’s alleged radioactive poisoning of a KGB defector, Alexander Litvinenko, in London, in 2006, and its ongoing persecution of the imprisoned oligarch Mikhail Khodorkovsky, on whom the New York Times and Washington Post have bestowed the mantle of the great Soviet-era dissenters Aleksandr Solzhenitsyn and Andrei Sakharov. Second, that Russia’s nature makes it a growing threat abroad, especially to former Soviet republics, as demonstrated by its “invasion and occupation of Georgia” in August 2008. And third, that more NATO expansion is therefore necessary to protect both Georgia and Ukraine.

All of these assertions are far from the full truth and should be challenged in a critical policy debate, yet there is none. Moreover, one involves another Washington double standard. Moscow’s military defense of Georgia’s secessionist provinces, South Ossetia and Abkhazia, and recognition of their independence were more justifiable, historically and politically, than was the US-led NATO bombing of Russia’s ally Serbia in 1999, which turned the Serbian province of Kosovo into an independent (and highly criminalized) state. If nothing else, Washington set the precedent for military intervention in conflicts in multiethnic states and for redrawing national boundaries.

The Obama administration has done nothing to discourage such anti-Russian axioms and too much to encourage them. Revising the reset to include so-called democracy-promotion policies—intrusions into Russia’s domestic politics that offended the Kremlin for years while doing more to undermine democratic prospects than to promote them—has only rearmed US opponents of the reset and further demoralized its Moscow supporters. In January, for example, Obama personally deplored the (brief) jailing of the new US-anointed Russian “democratic leader,” Boris Nemtsov, a former high-level Yeltsin-era official; and in March, Biden instructed his audience at Moscow State University, “Get your system right.” Not surprisingly, Russian officials who had hoped Obama’s policy would exclude such interference in their internal affairs concluded that “those hopes were unfounded.”

Obama’s re-endorsement of Georgian leader Saakashvili, whose ambitions to join NATO contributed to the proxy American-Russian war in 2008, also challenges Moscow’s understanding of the reset, reaffirming the widespread Russian view that the United States thinks it is “the only country in the world with national interests.” Moreover, Washington’s Georgian project is still dangerous. The Kremlin demonstrated that if provoked it will strike hard at a US-client regime on the wrong side of its “red lines,” especially in the North Caucasus region where Islamic terrorism and social turbulence are threatening Russian statehood. Visiting Tbilisi last fall, even an analyst from the reliably deferential Council on Foreign Relations, Walter Russell Mead, found Saakashvili’s “hotheaded” leadership “unpredictable and impulsive.” Nonetheless, the Obama administration continues to train Saakashvili’s military, even staging demonstrative NATO-Georgian exercises, while remaining silent about the regime’s brutal repression of street demonstrations in Tbilisi in late May.

Obama’s recapitulations of failed American policies, along with his declared intention to pursue missile defense in Eastern Europe—plans to put interceptor missiles in Romania and related weapons in Poland have already been announced—can only severely limit his détente with Moscow, and possibly destroy it. Given Russia’s overriding importance for vital US interests, the president seems to have no national security priorities. Even the wanton NATO air attacks on Libya are eroding support for the reset in Moscow, where lessons are being drawn that “Russia was essentially deceived” (again) and Obama’s partner Medvedev was “naïve” in trusting the US-backed UN resolution on a “no-fly zone”; that nations without formidable nuclear weapons—first Serbia, then Iraq and now Libya (Muammar el-Qaddafi relinquished his nuclear materials in 2004) risk becoming targets of such attacks; and that NATO’s slouching toward Russia is even more menacing than previously thought.

Obama has already made clear that in his re-election campaign the “successful” reset of relations with Russia will be touted (along with the killing of Osama bin Laden) as his great foreign-policy achievement. As 2012 approaches, it is therefore possible he will finally pursue the kind of real transformation in the relationship carried out by Gorbachev and Reagan twenty-five years ago. To do so, however, will require the serious rethinking and determined leadership Obama has failed to provide thus far. We may continue to hope, but the adage of Russians who have experienced so many lost opportunities in their own politics seems more apt: “An optimist is an uninformed pessimist.”

Stephen F. Cohen

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Stephen F. Cohen