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The US, the S&P and the Tea Party in the Debt Ceiling Crisis Aftermath

By Patricia H. Kushlis

The Conservative Party of America claims Obama won the recent debt ceiling crisis shoot-out in Washington DC while voices on the Left claim the Tea Party reigns victorious. Should the issue be seen simply as one of who blinked or who caved first as so often portrayed by our increasingly partisan 24/7 media throughout that finger-biting weekend and its aftermath?

Meanwhile an S&P team – based apparently on partially flawed data combined with an abhorrence of political gridlock – has declared a pox on the US.

Standard and Poor’s (S&P), one of the three major government bond rating agencies, waited until after the stock market closed on Friday to downgrade US government debt from its 70 year old triple A rating to AA+ -lowering its standing to that of Belgium and New Zealand although the US Treasury argues that “A judgment flawed by a $2 trillion error, speaks for itself.” Since the downgrading had been rumored for over a week, it’s unclear whether the S&P’s pronouncement will usher in a self-fulfilling prophecy by raising rates the US will need to pay for borrowing – or given the lack of alternatives – be shrugged off in today’s turbulent economic world.

An aside: Here’s a snapshot of a few select, but important, S&P ratings which, in themselves, make me wonder about how several were calculated: AAA: UK, France, Germany, Canada, Australia; AA+: USA, Belgium, New Zealand; AA-: Japan, China. Source: S&P

It’s not that I disagree with the team’s concerns about current US political problems – the dysfunctional result of our divide and rule form of government and an election last fall that produced the current stalemate.  But it wasn’t divide and rule that got the country into the current economic mess. 

A Plan B for the UK and a lesson for the US, replacing austerity with investment and fear with hope

By John C. Dyer, UK correspondent

On 31 July, 2010 President Obama broke through Congressional deadlock over the looming United States debt ceiling.  But the deal calls for Trillions in cuts over the next 10 years.   

The President and Congress must compromise. The Tea Party's perception and intransigence hold the US hostage.    Neither can ignore that portion of the electorate the Tea Party represents, however deluded I may think them.     

That noted, it appears the United States may be about to repeat the mistakes of the UK and Eurozone.  While this post's Plan B addresses the situation in the UK, Congress and the President would do well to take a close look at what they propose in light of the experience of the UK and Western Europe documented in "Time for a Plan B" and the principles outlined below in the proposed Plan B. 

European and UK "Debt Crisis" mismanagement

The management of the "debt crisis" in Europe and the UK has not led either into a good place.   Nor will it.   Although the proposed pace of cuts in the US remains far less draconian than in Europe or the UK even now, the focus on cutting one's way out of a deficit in accordance with arbitrary deadlines is problematical. It surprises me that the electorate (and therefore the politicians) are not listening to the voices from the Clinton Administration who presided over the only reductions in the US national debt in a generation. Instead, they are listening to the voices of those who presided over the largest single increases in the National Debt, beginning with President Reagan.    

Turning to the UK and the Eurozone, both would do well to study the administrations of both Clinton and, perhaps more relevantly, Roosevelt.   

Somerset Trip Day 2, Bath

By John C. Dyer, UK Correspondent

Braced by Costas Cappuccino, Victoria and I approached the entrance to the Square adjoined by both the Cathedral and the ruins of the Roman Baths. It was early.

Street musicians made their way to their posts as we entered.  A bicycle parked next to its street musician owner advertised a performance schedule that evening.  ( Photo left: Bath Cathedral -"Through a Portal," photo right center "Beside One Musician", photo right "Street Musicians Take Their Places" by JC Dyer, summer 2011)

We were distracted by one of the objects of our quest in Somerset, a shop selling Wedding Rings. But they were not the hand crafted type we sought. (Photo left "Wedding Bands, by JC Dyer, summer 2011)

The Cathedral rose majestically at the Square’s other end.  As we gazed at the towers of the Cathedral extending toward the sky as if in praise, a woman’s voice filled the Square with the most unexpectedly rich Soprano. Tourists and locals stopped what they were doing and listened. (Photos center right "The Voice" and "Bath Cathedral" by JC Dyer, summer 2011)

 

Both Victoria and I felt our spirits soar with the Voice.  As if ushered along by it we entered Bath Cathedral.  I gasped at its interior. (Photo left "Bath Cathedral Interior by JC Dyer summer 2011). 

Hungary in World War II: Caught in the Cauldron - A Book Review Essay

By Patricia H. Kushlis

Deborah Cornelius’ book Hungary in World War II is as much about the aftermath that followed the destruction of the Austro-Hungarian Empire at the Paris Peace Conference in 1919 and the ensuing Treaty of Versailles as it is about the horrific years suffered by many Hungarians living in that new, smaller country during World War II itself. 

When I was on the US Delegation to the 1992 CSCE (now OSCE) Review Conference in Helsinki, Finland, I learned that a major concern for American foreign policy makers at the time was the possibility of irredentism rearing its ugly head after the Soviet Union’s break up, the collapse of the Warsaw Pact and Soviet troop withdrawals from Central Europe.

This was one of the major reasons the US hoped the EU would open its doors to its Central European neighbors far sooner than it did.  It was also a major reason why NATO almost immediately established “Partners for Peace” – an associate kind of affiliation with NATO for former Warsaw Pact members.  The goal was to maintain stability in Central Europe and prevent it from turning into another Yugoslavia then being torn apart by civil war.

Fears of irredentism

The US fears of irredentism concerned Hungary in particular because of the relatively large number of ethnic Hungarians living in traditionally Hungarian lands outside the country’s borders and the population’s earlier desire to regain those lost territories that had once part of the Austro-Hungarian Empire. These sought-after contiguous lands had been awarded to less than friendly neighbors in the questionable European post-World War I settlement that destroyed that empire for good and set the stage for World War II. (Photo right: Treaty of Paris -US State Department)

It was also one reason ultra-right and even less politically conservative Hungarians were so susceptible to the rhetoric of Hitler’s Reich.  Their goal was to regain even part of the lost lands – which, in the end, happened for a short time as a result of their siding with the Germans.   This dangerous irredentist quest also helped to destabilize and weaken the country politically as happened not only during the interwar years but throughout the ensuing war. Then when the Soviets reached Hungarian soil on their drive across Europe near the end of the war, their treatment of the Hungarians was exactly how an occupation force should not have behaved.  Stalin treated the country as the overlord of conquered territory and Hungarians as subjugated people - allowing his soldiers to rape and pillage at will.

Percentage Agreements Ignored

And despite the secret percentage agreements between Stalin and Churchill forged on a scrap of paper at Yalta in 1945 which had supposedly divided influence over the country 50-50 between the Soviets and the West, possession became nine-tens of the law.  The West was preoccupied elsewhere, a possible Allied Balkan landing and drive up the peninsula never materialized and the Soviets had a free hand.  

Changing the Dial

By John C. Dyer, UK correspondent

A Paradigm in crisis

A ComRes poll out 25 July 2010 shows a softening of British confidence in coalition "austerity" cuts and privatization, but paradoxically, a continuing belief that they are necessary.   Only 37% do not think the cuts are "too deep." Only 35% think the "front loaded" pace of cuts isn't "too fast." The percentage by which the electorate agrees with Coalition policies approximates those intending to vote Conservative in the next election.   Yet 57% of the British public believes the cuts are necessary. 

What accounts for the internal inconsistency?  

I suspect many a PhD will be earned analyzing this period of history in years to come.  There is the feel of events building to a climax where the governing paradigm across the West (the faith in private enterprise free of government) confronts a nonconforming reality.  It is the kind of "period of perturbation" that launches new "isms," new paradigms, new leaders, new alliances.  But it is also the kind of newness that comes at a heavy cost.  

The tea leaves suggest to some the bankruptcy of the old paradigm could come as soon as August, but all I will say with confidence is that it appears to be such a time.    I will leave to the PhD's thorough documentation and thoughtful analysis as to how it all happened.  I want, however, in this post to highlight Public Relations techniques I believe contributed to both the development and ascendency of the current paradigm.

The Influence of Spin Doctors

One of the many sub stories in the jaw dropping spectacle of The News of the World (Nowt) debacle is that of the influence of "spin doctors."   Particularly the influence of spin doctors who learned their craft in what is increasingly regarded as "the Empire."  They have contributed significantly to the framing of political debate in the UK.  

Andy Coulson, yesterday's spin doctor to both the Conservative Party in opposition and the Prime Minister, today faces criminal charges for unscrupulous and corrupt practices as editor of the News of the World. 

Neil Wallis, today's spin doctor to Scotland Yard as Scotland Yard sought to manage the debacle, is also today facing similar criminal charges for his time with News of the World. 

Tom Baldwin, Labour Leader David Miliband's spin doctor, is also an alumnus of The Times of London, where he worked for Gove when Gove worked for The Times prior to becoming the Coalition's Education Secretary.

Although Baldwin is, as of yet, uncharged, and for the present not linked with phone hacking, Conservatives defending their judgment in employing Coulson have been quick to point out Baldwin's participation in the demise of Lord Ashcroft during the time Baldwin was a journalist.