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Posts Tagged ‘Obama

Regulating Wall Street – just how much change can we expect?

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Obama-Blankfein

On the eve of the G-8/G-20 summit in L’Aquila the presidents of France and Brazil jointly published an article in The Huffington Post, the world’s first and famous internet newspaper, titled ‘Alliance for Change’. Their choice of this outlet speaks volume, men of such caliber never do anything without careful consideration.

The first thing comes to mind is a desire to reach a vast international audience more inclined to follow their vision of a new system of world governance. We can therefore assume that whatever it is they are suggesting is revolutionary enough to stir up some controversy and at least for now made them stay away from more traditional news channels.

What Mr. Sarkozy and Mr. daSilva are jointly suggesting is no less than a redundancy of the Group of 8 (G-8) in favor of a much wider allegiance of nations with respect to issues concerning global governance. A multilateral system that was conspicuously unrepresentative and lacking in coherence must be reformed to build a more just, developed and sustainable world.

The G-20 or similar to L’Aquila the G-8 together with the G-5/G-6 are both multilateral platforms on which to discuss various global issues in an interconnected framework. Those issues are indeed monumental and both presidents acknowledged the urgency of a multilateral system by highlighting most of the challenges that face the global community in the 21st century.

Peace and collective security require a wide-ranging reform of the U.N. Security Council. The voice of workers must be heard and their desire for more social justice and greater security met by strengthening the role and influence of the International Labour Organization (ILO) in global economic governance. Last but not least on the agenda of such an international framework is the enormously challenging task of regulation of international finance.

From Huff Post,  both presidents: The decisions taken by the G-20 to improve the regulation and oversight of international finance, to curb speculation, to crack down on tax havens and money laundering centers, and to foster growth must be implemented.

Politicians are very often a bunch of stoic bureaucrats, but no not this time. Sarkozy, daSilva and hopefully others at the recent summit are ready to see eye to eye maybe for the first time with their constituency and clearly acknowledge the vacuum of social justice pervading all layers of society in the 21st century.

This reinvigoration of literally common sense results on the one hand from the advent of Barak Obama and his new leadership in the U.S. and on the other hand from a massive global financial and economic crisis that threatens the very foundations of global world order.

The president of the U.S. has demonstrated his desire for change in many ways but has he been effective and is change indeed coming to Washington, as he has promised many times? The global economic crisis has made regulation of financial markets and the financial industry as a whole a top priority. 

Today Goldman Sachs, Deutsche Bank, UBS and others are equipped with an almost unmitigated license to gamble and at the same time fall into the category of too big to fail. This is not sustainable and even the Bank for International Settlements (BIS) is now openly debating a breakup of these giant cathedrals of capitalism.

The Financial Stability Forum and its successor the Financial Stability Board (FSB) in Basel is working on new rules to give regulators more oversight in establishing important issues such as excessive leverage and forcing banks to provide for anti-cyclical periods with putting more money aside during boom times.

They are asking for an awful lot given the most recent history of the industry but nobody disagrees bold action is necessary because of the magnitude of the current crisis. At the eve of the London summit Nikolas Sarkozy threatened world leaders to quit the talks if president Obama and chancellor Gordon Brown would resist tough regulation.

They did not and so in the end it provoked Mr. Sarkozy to say that the page of the Anglo-Saxon model of free markets had been turned. German chancellor Angela Merkel called it a victory for common sense and Nobel Laureate and economist Stiglitz hailed it a historic moment for the world to admit the push for deregulation was wrong.

The joint communiqué of the London summit included a statement acknowledging major failures in regulation being the cause of the market turmoil. To avoid another crisis hedge funds, credit rating agencies, risk taking and executive pay are subject to stricter regulation in the future.

Just how much more regulation and who those regulators will be nobody knows at this point. It is hard to fathom that a bunch of bureaucrats will be able to reign in Wall Street executives and their armada of lobbyists swarming the hallways of congress. For regulators to push the breaks when everybody else wants to accelerate seems too much to ask, in particular given the history of failed regulations in the past.

A contentious issue in this whole regulation debate is the use of credit derivatives and their contribution to the current crisis. At a recent congressional hearing on a proposal to regulate over-the-counter derivatives congressman Sherman asked Treasury secretary Geithner: “Can you correct that misconception and make a clear statement now that derivatives that are sold today are not going to be the subject of bailouts for either the issuer or the purchaser?”

The secretary even after being asked several times refused to give an answer (the full transcript of the conversation can be seen here, video in video-center). Mr. Geithner’s refusal to cooperate highlights the difficulty of the enormous task that lies ahead.

On the one hand is the commitment to put on the breaks with tougher regulations for the sake of the sustainability of the system. On the other hand are all the safeguards put into place to make sure that this ambitious goal will not kill the golden goose. It is therefore no surprise that credit derivatives experience sort of a revival in the midst of a still slumping economy, mass layoffs and record taxpayer funded economic stimulus programs.

The president of France, Brazil and other nations are talking tough on regulation but in the meantime BAB is back on Wall Street. Today Goldman Sachs released the results for second quarter earnings and revealed that bonuses are indeed back. Goldman compensation may very well reach a record $1 million per employee this year.

For the second quarter the bank set aside a staggering $226,156 for every employee working for the firm. A couple of months ago with Wall Street and the World at the precipice of catastrophe, Goldman received a $10 billion bailout in taxpayer money.

It is no surprise Wall Street has a very short memory but this development gives me indeed little hope that regulation is being seriously considered in the hallways of power on Wall Street and in Washington. Just how much change will we get in the end? Probably not enough!

Is there a rift between the democratic party and the Obama administration?

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Obama-democrats

I have written about Goldman Sachs and how the investment firm contributed to the worst financial crisis since the Great Depression. Matt Taibbi alluded to GS as The Great American Bubble Machine contributing substantially to all major investment bubbles since the 1930s. GS has always been a talent hotbed where privileged alumni leave the firm through what Stieglitz calls a revolving door to end up in critical positions of government. The list of those exiting Goldman and entering the government is long, but it is clear that they are all associated with the Democratic party.

Next to this one there could be another list, one of detrimental political decisions that contributed to the current crisis. On top of it is the repeal of the Glass-Steagall-Act under former GS employee and Bill Clinton’s Treasury secretary Robert Rubin, which allowed bank holding companies to own other financial institutions and eventually become too big to fail and a systemic risk. This of course was never intended but as we painfully recognize one of those far-reaching wrong judgments made by a democratic administration. In light of this anything but impeccable track record we have to ask if democrats are truly forthcoming in their desire for real change or are they about to make another big mistake?

In November of 2008 a new spirit of political leadership in the US was finally entering into the halls of congress and the White House. President Obama has promised to bring change to Washington and the democratic party vowed to stand beside him and his ambitious agenda. In the meantime democrats together with two independents have a sound filibuster majority of 60 in the senate. They are now calling the shots in the government and the legislature. It is therefore even more disturbing to see how the House of Representatives overwhelmingly rejected a signing statement from their president.

In June a $106 billion war supplemental bill passed legislation in the House and Senate which included conditions on World Bank and IMF funding. The bill would extend a credit line of $108 billion for international financial institutions (IFI) to aid struggling developing economies crippled by the current financial and economic crisis. Major recipients of IFI funds could be nations in Eastern Europe under immense pressure to devalue their currencies in an attempt to avoid a default scenario. This would have a ripple effect and threaten the stability of the global financial system similar to events during the Asian crisis in the late 90s.

Despite severe and eventually devastating consequences to an already ailing global financial system of such a devaluation scenario, resistance is mounting among lawmakers who view IFI funding as an unnecessary ‘global bailout’ . To reach a compromise and find the votes to pass the bill House and Senate leaders included restrictions resulting in an amendment requiring the Treasury department to report on World Bank and International Monetary Fund (IMF) activities. Late Thursday the amendment passed with strong bipartisan support and an overwhelming majority of 492-2 votes against the Obama administration.

The president in a statement during signing of the original bill rejected this restrictions and vowed to ignore the amendment’s conditions. They would "interfere with my constitutional authority to conduct foreign relations (with international organizations and foreign governments)… by requiring consultation with the Congress prior to such negotiations or discussions," Obama said in the signing statement. With the passage of the amendment lawmakers including Barney Frank, a democrat and head of the powerful House Financial Services Committee (HFSC), are now threatening to withhold funds in a stand-off with the Obama administration.

492 to 2 speaks a clear language and it remains to be seen if the administration can afford to ignore congress under these conditions. Though it certainly would mean a severe blow to the authority of the president if he will be forced to revoke his signing statement. His foray into environmental politics (see also here), for the first time opening up the United States to international commitments to substantially reducing carbon emissions, could be called into question. So could his commitments he made during his Moscow speech (see also here), to the establishment of an international body together with and under the leadership of the U.S.

Much needed reform in Washington away from neoliberalism towards true and sustainable world leadership hangs on a thread. While first signs emerge of a search for an effective international body that more truthfully represents interests of all nations in a global economy, the coverage of the G-8 summit in Italy by mainstream media in the U.S. suggests otherwise.

The media are either ignoring or mocking efforts of the G-8 to increase the scope of their discussion round tables by opening it up to other powerful nations like China, Brazil, India, Mexico, South Africa and others. The NYT writes: “Eventually, the so-called Group of 8 started what might be considered auxiliary clubs. And that was how they ended up with a meeting on Thursday that was actually dubbed the G-8 + 5 + 1 + 5. Seriously.”

The Times also calls into question the relevance of the G-8 if they seemingly cannot take landmark action without enlisting others, and misses the point completely: It is not about relevance of the G-8 but rather about sustainable credibility within the G-15, G-20 or even G-194. It is not about America but rather about sustainable relations between all nations in a political and economic environment more and more intertwined by globalization. If we have learned nothing else from the current financial and economic crisis this should be it.

Leaving other nations out makes the G-8 nothing but an elite club of snobbish leaders who in a reactionary move desperately seek to conserve neoliberal, neoconservative mindset. Barak Obama, Angela Merkel, Nicolas Sarkozy and other powerful leaders understand that and therefore support this search for a new international world order. Reactionary dinosaur politicians will eventually face the same destiny. In the meantime there are still too many of them and they are still very powerful. President Obama’s stand-off with the congress on the issue of the signing statement serves as a litmus test about the determination towards change in a modernized America.

Obama’s Russia trip reveals search for true world political authority

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In the tradition of American pragmatism that seeks the meaning of truth only in those issues that relate to practical real-life consequences president Obama’s official trip to Russia is significant and can offer some insight into how and what the new world order in the twenty-first century will be like. Yesterday’s official release of the first social encyclical by Pope Benedikt XVI is another important milestone to that very same subject. The publication of the encyclical the day before political authorities from the World’s most powerful nations meet in Italy and president Obama is scheduled to meet the Pope for the first time, is testament to the daunting issues and problems that face all nations today.

President Obama’s two days in Russia were at best a mixed bag where the foundations of a lasting partnership may have been forged but the president himself admits that on divisive issues ‘a meeting of the minds won’t happen anytime soon’. Surely on issues of reducing nuclear arms and non-proliferation there was some progress but on others like Iran, NATO membership of Georgia and Ukraine, and democracy itself all efforts seem for naught.

let’s focus on the speech president Obama gave on US-Russian relations at the New Economic School graduation in Moscow. I will spare the issues of security, non proliferation and defeating violent extremism since these serve only as diversion from the real problem of global prosperity in a time of economic turmoil. That is not to say that issues like violent extremism and nuclear proliferation are not important, they certainly are, only not as important as others in the moment.

Like so many times before we could expect this president to plant the glimmer of hope into the hearts of people with the mere weapon of his words. Famous German philosopher and sociologist Jürgen Habermas once emphasized the importance of words in his main work about ‘The Theory of Communicative Action’:

“A higher degree of communicative rationality within communicative societies increases the latitude of unconstrained coordination of actions and consensual reconciliation of conflicts.”

So in this context it is worth noting that his speech was well received among young graduates who according to the president’s own words represent the future of their country and are therefore crucial in advancing US-Russian relations in the form of a global partnership. Obama called for a reset in relations between both countries to identify mutual interests and expanding dialogue and cooperation.

In front of an audience of young economists and future businessmen he stressed that economies only function within the rule of law. “People everywhere should have the right to do business or get an education without paying a bribe – that’s how people and countries will succeed in the 21st century”, Obama said.

On the issue of democratic governments the president was very forthcoming when he admitted that America should not impose any system of government on any other country, but we haven’t always done what we should have on that front. Alleging to the situation in Georgia and Ukraine, Obama emphasized the right of nations to have secure borders. “State sovereignty must be a cornerstone of international order”, he said. The question of NATO membership should be entirely up to the free will of a nation’s majority of its people. “NATO should be seeking collaboration with Russia, not confrontation.”

In his speech the president recognizes that no one nation alone can meet the challenges of the 21st century. It is therefore important to have an international system where all nations can pursue their interests peacefully.

President Obama: “…..a system where the universal rights of human beings are respected, and violations of those rights are opposed; a system where we hold ourselves to the same standards that we apply to other nations, with clear rights and responsibilities for all.”

Of course the president does not identify the specifics of such an international system but it is significant that he acknowledges the importance and necessity of it. One day before the world’s greatest nations gather in Italy it becomes increasingly obvious, the neoliberal movement in the US is broken. The economic crisis that is tormenting the global economy has forced the neo-conservative agenda to its knees. That’s the yin and yang of our political system: We get change for the better only if bad things happen first.

German philosopher and sociologist Habermas urgently advocated need for change a long time ago. In an interview with the newspaper Die Zeit in November last year, he acknowledged the demise of neoliberalism with far reaching consequences and at the same time encouraged engagement in an new world order. To fix what is broken the United Nations in its current form are according to Habermas not suitable enough. His great hope for a new revolutionary World domestic policy still remained the US, as the only liberal superpower left. Though for the US to lead this epochal effort and to take this chance of reason it would be necessary according to Habermas to thoroughly revise its neoconservative agenda.

Pope Benedikt XVI in his first social encyclical, Caritas in veritate, also stresses the importance of a true world political authority based on the rule of law and the principles of subsidiarity and solidarity. He calls for a reform of the United Nations Organizations, economic institutions and international finance to avoid a deterioration of the present crisis, to bring about disarmament, food security and peace, to protect the environment and to regulate migration.

From the encyclical:“The integral development of peoples and international cooperation require the establishment of a greater degree of international ordering, marked by subsidiarity, for the management of globalization. They also require the construction of a social order that at last conforms to the moral order, to the interconnection between moral and social spheres, and to the link between politics and the economic and civil spheres, as envisaged by the Charter of the United Nations.”

In today’s world of social and economic interconnections where borders and strict nationalism are increasingly counterproductive Pope Benedict, Jürgen Habermas and Barak Obama recognize the new challenges in the 21st century. The economic crisis that has spread to all nations is demanding a comprehensive readjustment of our common values. The answer we get from Pope Benedict’s encyclical is already in the title. Salvation, rescue and maybe even survival of mankind depends on it, a new felt devotion and passion towards honesty. Caritas in veritate- Charity in truth – would have prevented financial shenanigans from carelessly toying with the livelihood of millions. As Pope Benedict says in his encyclical there is nothing wrong with capitalism, there is nothing wrong with the desire of people to improve themselves, but it must not happen without charity in truth. It is urgent that our political leaders take notice. President Obama seems to understand, others may hopefully follow when they have the chance to read the Pope’s encyclical. It would be great if they do so before they gather at a meeting of the G8 and G20 this weekend.

The new Bunch – climate change bill passes House

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Obama Democrats

I recently argued in What change – one step forward two steps back that when it comes to foreign policy the Obama administration lacks their long touted claims for change and yes we can. But I am willing to give Obama credit when it comes to making important progress on environmental policies. The bill passed by the House of Representatives on Friday can be viewed as a significant change and setback for neoliberal neoconservative forces in Washington.

After many years of stonewalling international efforts to fight climate change politicians in Washington demonstrated that change is indeed possible. Friday evening a much anticipated roll call on the floor of the House of Representatives succeeded with a narrow margin of 219 to 212 votes. This historic climate and energy legislation is a significant win for House Speaker Nancy Pelosi, a democrat from California, and president Barack Obama.

Of course this vote is only the first step to a final legislation finding its way to Obama’s desk. It is now up to the Senate to take the bill to the next level. This might be more challenging than Friday’s vote. Already Forty-four democrats voted against the bill and just eight republicans crossed the aisle to support it. In the Senate the margin of the vote for democrats is certainly smaller.

Some freshman democrats, who’s vote is up again in 2010, had to be protected by their older peers. Nevertheless a day long effort by leading democrats in the House of Representatives and outside obviously helped to secure the necessary votes. It is no secrete that republicans in general consider this bill unpopular among ordinary Americans and blast it as economic catastrophe . In an immediate reaction the National Republican Congressional Committee in a press release therefore accused more than two dozen democrats to support a bill that would cost jobs and raise electricity prices for already recession plagued consumers.

“This is the biggest job killing bill that’s ever been on the floor of the House of Representatives. Right here, this bill, said House Minority Leader John Boehner. And I don’t think that’s what the American people want.”

Old-America versus new-America is the struggle that is heating up since the Obama administration moved into the White House. The old neoconservative, neoliberal leadership is wearing down and a new modern America emerges with a renewal to the claim for World-leadership. The world is ready to say to America: If you just unite us we are ready to follow.

There is of course a long way to go but this bill is certainly a step in the right direction. The main sponsors were House Energy and Commerce committee chairman Henry Waxman (D-Ca.) and Massachusetts Rep. Edward Markey (D). Together Speaker Nancy Pelosi, former vice president Al Gore, the don of the climate-change world, and significant efforts from the White House helped to push it through.

“We passed transformational legislation which takes us into the future, Pelosi said at a press conference following the vote, after she and other leaders took congratulatory phone calls from Obama, former Vice President Al Gore and Senate Majority Leader Harry Reid.”

The final legislation will help to cut greenhouse gas emissions by 17 percent by 2020 and 83 percent by 2050. It will do so by putting a price on carbon dioxide emissions through a cap-and–trade system. It will help to increase energy efficiency and mandate a 20 percent renewable energy contribution by 2020. According to democrats it will, increase electricity prices for consumers only by $175 a year per household by 2020, much less than the $3000 price hike predicted by republicans.

More proof for democrats’ commitment to change in environmental policies came also on Friday with a $32.3 billion natural resources budget bill clearing the House. Additional funds will be used to increase Energy Protection Agency core programs in clean-water projects and Superfund toxic-waste cleanups. Unlike the climate-change vote this call, 261 to 179, was more decisive. Most republicans of course rejected the bill and argued that increasing EPA funds by almost 40 percent is simply irresponsible with the economy contracting. Funny I am sure they did not oppose the spending-on-the-troops part of a $106 billion war-funding bill that passed the House on June 16. Democrats argued that additional funding for EPA is only making up for years of real reductions under George W.

Written by Alfred

27. June 2009 at 11:10 am

What change? – one step forward two steps back

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The reformist opposition in Iran is still dedicated and vowed to continue their fight against what they claim are fraudulent election results. In the meantime the demonstrations have for the most part abated and the streets of Tehran are back to a kind of normalcy again.

Some leaders of European governments have submitted their protests to the Iranian theocratic rulers about how they chose to deal with demonstrators in the last couple of days. Yesterday the president of the United States expressed his criticism saying he was appalled and outraged about the post-election crackdown.

This interference in their internal affairs seemed to have angered Iranian leadership who accuse mainly the US and UK in being supportive of violence in the streets of Tehran. After expelling two British diplomats from Iran the UK did the same with their Iranian colleagues in London. The US joined this diplomatic row and withdrew invitations to Iranian diplomats to attend US Independence Day celebrations on July 4.

This is reminiscent of the Bush-neoconservative era of exclusive axis-of-evil type of policy rather than change under which premise Obama run and successfully won the White House in the November election. Obviously Obama is becoming choosy again and does not want to sit down with just anybody anymore. If a covert attempt to regime change in Iran is his only answer to the problems in the Middle East than yes we can and change is possible more and more resemble empty phrases. The unvitation is clearly a step backwards in the crucial relationship between these two countries.

It was the first time since Washington cut diplomatic ties with Tehran in 1980 that Iranian diplomats had been invited to the embassy parties, but the move to withdraw the invites was largely symbolic as no Iranians had even responded.

"The president’s policy of engagement is obviously delayed, but we are going to have to deal with the government of Iran," Senator John Kerry, chairman of the influential Senate Foreign Relations Committee, told Reuters.

The best U.S. option for pressuring Iran, the world’s fifth biggest oil producer, was to drive down crude prices by reducing America’s dependence on imported energy, Kerry said.

Mohammad Marandi, who is the head of North American Studies at Tehran University, said mistrust of the United States and Britain was rife, partly due to the "very negative" role of U.S.- and British-funded Persian-language television stations.

"They are working 24 hours a day spreading rumours and trying to turn people against each other," he told Reuters.

"In the short term relations will definitely get worse, but in the long term the U.S. really has to re-think its policy and to recognize that regime change is not possible in Iran."

Written by Alfred

25. June 2009 at 11:17 am

Update on deepest global recession in over 60 years

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Yesterday US president Obama for the first time offered a passionate defense of Ben Bernanke, chairman of the Federal Reserve. Bernanke did a fine job and performed well during the crisis. This support is supposed to strengthen Obama’s position on reform and oversight of the financial-services industry. He plans to vest almost unlimited power with Bernanke and the Federal Reserve and this has drawn some criticism. Many blame the Fed for the current financial and economic crisis and despite drastic actions by the Fed and other central banks around the world, global growth has continued to contract. Here is an update on the most recent forecast for global growth and despite some improvement it ain’t looking good.

Weltbank Kahlschlag bei Euro-Zone-Prognose:

World Bank lowers Euro-zone GDP growth forecast dramatically from minus 2.7 to minus 4.5 percent GDP growth for 2009. US GDP will also contract by 3 percent, worse than the previous 2.4, and Japan by 6.8 percent versus 4.3 percent contraction of GDP in 2009. According to WB the recovery in 2010 will also be more tepid than previously thought. A modest better growth uptick is expected for China, Russia and India.

Weltwirtschaft erholt sich laut IWF schneller:

According to the International Monetary Fund (IMF) the recovery from the global recession will be stronger than previously thought but deleveraging of private and public households, slow credit growth, unemployment and shrinking private wealth will slow down recovery. For 2009 global growth will contract by 1.3 percent according to the IMF.

World Bank cuts 2009 global growth forecast:

Global trade is expected to plunge by 9.7 percent this year, while total gross domestic product for high-income countries contracts by 4.2 percent, the bank said. Economic growth in developing countries should slow to 1.2 percent — but excluding relatively strong China and India, developing economies will contract by 1.6 percent. The WB sees a projected recovery beginning at the end of 2009 but expects it to be much less vigorous than normal.

Global recession nearing bottom, OECD says:

The deepest global recession in over 60 years is close to bottoming out, but recovery will be weak unless governments do more to remove uncertainty over banks’ balance sheets, the Organization for Economic Cooperation and Development (OECD) said Wednesday. The economy of OECD countries will shrink by 4.1 percent in 2009, slightly better than a 4.3 percent from the previous forecast. But the recovery "is likely to be both weak and fragile for some time” . The OECD forecasts return to an average of 0.7 percent growth across its member countries in 2010. In the US recovery "could be uncharacteristically weak and insufficient" .

 WachstumsprognosenJun2009

Written by Alfred

24. June 2009 at 10:11 pm

US to Israel – make peace with Palestine

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Not everything is quiet on Obama’s front. Economic crisis, unemployment, the crisis on Wall Street, executive compensation, General Motors, the environment just to name a few issues he has to tackle and he is only in his mid fifties. Oh, not to speak of a record current account deficit that is now poised to break through the alarming 1 trillion dollar mark.

On foreign policy two wars, in Irak and Afghanistan, are still looming high and no end seems in sight. The solutions promised to the people in the Middle East are a reason for deep frustration. Israel-Palestinian peace negotiations seemed to have stalled in part because of lack of leadership from the US. And above all the nuclear stand-off with Iran.

President Obama has more than once stated during his campaign speeches that he is frustrated with the lack of progress in the Israel-Palestinian conflict. He sees it as a "constant sore" that "infect[s] all of our foreign policy". Vice-president Jo Biden and General James Jones, Obama’s national security adviser, wowed to be ‘more forceful toward Israel than under Bush’.

This has alarmed a powerful pro-Israel lobby group in the US to get Congress to deliver a written letter to president Obama in an attempt to right what seemed wrong for Israeli hardliners. The American Israel Public Affairs Committee (Aipac) calls on the US to remain a devoted friend of Israel. Aipac wants to maintain the current pace of negotiations with the Palestinians and does not see this conflict crucial to peace in the Middle East. By the way Aipac also wants military attacks on Iran’s nuclear facilities something the Obama administration clearly rejected so far.

Aipac is very powerful and has considerable influence over American lawmakers. Their message is clear, that there will only be a two-state solution when Israel is ready for it. Well, they had about 60 years now, that is a lot of prep time. So, hopefully Obama stays the course so as to this region will have peace in our lifetime.

There are considerable forces that work against a two-state solution. Netanyahu’s speech about the conditions for a formation of a Palestinian state was meant to be rejected and certainly will not in anyway open a door for successful peace negotiations.

The Obama administration is under considerable stress concerning the nominations of some of their top administrative positions. In March Chas Freeman, a veteran American diplomat and former ambassador to Saudi Arabia, had to withdraw as chairman of the national intelligence council. Behind this move is arguable Freeman’s criticism of Israel.

The "Israel Lobby", he argued, was stifling any discussion of US policy options in the Middle East except those endorsed by "the ruling faction in Israeli politics" – a situation that could "ultimately threaten the existence of the state of Israel".

This underscores the alarmingly powerful influence Aipac has in Washington and although the last elections brought hope of change, so far its the same ol same ol. Wait, maybe not so fast. Obama has obviously sacked a state department advisor on Iran. Dennis Ross, Hillary Clinton’s special adviser on Iran has been removed from his post because of reports that Tehran was unwilling to engage with him. Ross is believed to be very close with Israel. The real reason for his removal is his rejection of the Obama administration’s approach to the Middle East. Mr. Ross sees himself eye to eye with Aipac and Netanyahu. Well his boss did not like it and fired him.

I hope we will see more of this, because it is absolutely clear by now that peace in the Middle east will only come if Israel will be forced to accept it.

Written by Alfred

16. June 2009 at 6:17 pm