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February 25, 2005

Not Enough Time...

Not enough time to do more than cut, paste, and post:

John Berry at Bloomberg: "The dogged debate among Federal Reserve officials these days is not over whether to raise their target for the overnight lending rate again next month. They will, for the seventh meeting in a row, by a unanimous vote. Rather, the issue that has more or less split the policy makers down the middle is whether the Federal Open Market Committee should set an explicit inflation target, either a single number or a range."

Brad Setser: "The Saudis indicated that they really don't mind $50 a barrel oil. Shocking, I know. The Saudis do want the world to eventually buy all their oil, and thus don't want too rapid a move to alternative fuel sources. Consequently, they sometimes do start to worry if rising oil prices lead to a fall in demand for oil. This time around, though, high oil prices have not triggered much of a reduction in demand. Asian economies (huge oil importers: most Asian economies have higher oil imports as a share of GDP than the US) have generally resisted letting gasoline prices rise in line with rising oil prices. Remember, China is still a communist country. The state oil companies seem to have been told to keep retail prices low. That is one way to contain inflation."

The New York Times > Opinion > Editorial: Warning From the Markets: "Tuesday's sell-off of dollars did not precipitate a meltdown. But it sure gave a taste of one. The dollar suffered its worst single-day decline in two months against the yen and the euro. Stock markets in New York, London, Paris and Frankfurt dropped, and gold and oil prices, which tend to go up when the dollar goes down, spiked.... Tuesday's market episode has its roots in American structural imbalances that will be corrected only by new policies, not more of the same tax-cut-and-weak-dollar deficit-bloating ploys. If Mr. Bush were half the capitalist he claims he is, he would listen to what the markets are telling him."

Bob Herbert: "In the fall of 2002 Mr. Arar... attempting to change planes at Kennedy Airport... was seized by American authorities, interrogated and thrown into jail. He was not charged with anything, and he never would be charged with anything.... Mr. Arar was surreptitiously flown out of the United States to Jordan and then driven to Syria, where he was kept like a nocturnal animal in an unlit, underground, rat-infested cell that was the size of a grave. From time to time he was tortured. He wept. He begged not to be beaten anymore. He signed whatever confessions he was told to sign. He prayed. Among the worst moments, he said, were the times he could hear babies crying in a nearby cell where women were imprisoned. He recalled hearing one woman pleading with a guard for several days for milk for her child. He could hear other prisoners screaming as they were tortured.... The Justice Department has alleged, without disclosing any evidence whatsoever, that Mr. Arar is a member of, or somehow linked to, Al Qaeda. If that's so, how can the administration possibly allow him to roam free? The Syrians, who tortured him, have concluded that Mr. Arar is not linked in any way to terrorism. And the Royal Canadian Mounted Police, a sometimes-clownish outfit that seems to have helped set this entire fiasco in motion by forwarding bad information to American authorities, is being criticized heavily in Canada for failing to follow its own rules on the handling and dissemination of raw classified information.... One former Canadian official, commenting on the Arar case, was quoted in a local newspaper as saying 'accidents will happen' in the war on terror."

Chris Giles | Financial Times: "Remember these names. Toshihiko Fukui. Zhou Xiaochuan. Perng Fai-Nan. Park Seung. Joseph Yam. And Yaga Venugopal Reddy. They are the central bank governors of Japan, China, Taiwan, South Korea, Hong Kong and India respectively. They are also arguably more important for US monetary policy than Alan Greenspan.... When a Bank of Korea spokesman implied on Monday that Korea wanted gradually to shift its reserves away from the dollar... the Dow plunged by 174 points and the US dollar fell 1.4 per cent against the euro... if the mere hint that South Korea might stop buying US dollar assets can move edgy markets more than Mr Greenspan's most trenchant comments to date on US deficits, it signifies how far the balance of power in the global economy has changed.... The US must attract roughly $2bn capital a day to finance its current account deficit. This has to come either from private investors or foreign governments.... In the past two years, the reliance on official purchases of US assets from Asian central banks has been enormous.... Japan's official exchange reserves now exceed $800bn; China holds more than $600bn; Taiwan and South Korea each holds more than $200bn; and Hong Kong and India are not far behind."

The Washington Monthly: "AMERICAN STYLE....Via Ezra Klein, this is pretty funny. Apparently George Bush had planned an 'American style townhall meeting' as the centerpiece of his current trip to Germany, but it's been quietly dropped from the schedule. Why? Because his idea of 'American style' meant a scripted event in which all the questions were screened and approved in advance. As Ezra says, 'American style, in some ways, is a lot like Cuban style. Or North Korean style. It shares some threads with Russian and Iranian style too.'"

Jason Vest | Dumb intelligence: "Negroponte’s position on the list of preferred candidates may reflect a harsher reality. According to both political and intelligence-community sources familiar with the DNI search, Negroponte was approximately eighth on the White House’s list of candidates... Robert M. Gates... Sam Nunn... William P. Barr... Tommy Franks.. John McMahon... Bobby Ray Inman... William Studeman and William Odom.... [T]he prospective candidates were... true IC veterans... people who have publicly and privately made some of the most thoughtful and potentially useful recommendations on intelligence reform.... [I]t doesn’t seem unreasonable to think that any of those guys would welcome the once-in-a-lifetime chance to serve as the nation’s first intelligence czar.... So why take a pass?... '[R]eform' of the intelligence community... has created a dedicated DNI... that could make the hapless Department of Homeland Security look like a model of efficacy by comparison...

Posted by DeLong at February 25, 2005 03:39 PM