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THE AMAZING BUBBLE-MAN
BY PETER HARTCHER
American Interests
Winter Issue
www.the-american-interest.com
Alan Greenspan
is the great guru of the American economy, the
spell-master over the fortunes of multitudes the
world over. Chairman of the U.S. Federal Reserve
for nearly 19 years under Presidents Reagan, G.
H. W. Bush, Bill Clinton and George W. Bush, he
has attained the status of what George Will once
called a "fourth arm of government."
As veteran curator of that realm of American national
power upon which all others ultimately depend,
Greenspan has inspired remarkable deference. He
long ago tamed the legislature, to the point that,
instead of exercising oversight over his tenure,
Congress has ritually idolized rather than interrogated
him. Greenspan's aura has extended even to presidents
of the United States. Bill Clinton went so far
as to ask Greenspan in 2000 if he would like to
be appointed to a fourth term as chairman, or
whether he'd prefer to "go out now on top."
The then 73-year-old replied: "Oh, no. This
is the greatest job in the world. It's like eating
peanuts. You keep doing it, keep doing it, and
you never get tired."
This past July, in the approach to his retirement
on January 31, 2006 — mandated by neither
age nor fatigue but by statute — Mr. Greenspan
made the final scheduled congressional appearance
of his remarkable career. Congressmen fell over
one another to offer their praise and gratitude.
Rep. Artur Davis (D-AL) lauded Greenspan as "a
living seminar on economic policy", while Rep.
Steve Pearce (R-NM) put an unbearable strain on
the truth in the service of hagiography by describing
Greenspan as "a handsome man."
Of course, Greenspan has been subject to criticism
from time to time. Senate Minority Leader Harry
Reid (D-NV) not long ago called him a "political
hack" for endorsing President Bush's deficit-plumping
tax cuts. But general criticism of Greenspan is
rare, and he is no less worshipped in the more esoteric
world of America's central banking fraternity. When
the Fed's former vice-chairman, Alan Blinder, was
drafted to critique Greenspan's performance, a thrill
of excitement ran through the Fed-watching world.
Blinder was known to have resigned from the Fed
in a huff, frustrated by the way Greenspan monopolized
power. As the stars and close-orbiting satellites
of the Fed universe gathered for their annual retreat
at Jackson Hole in August, many wondered whether
they would be witness to a rare act of central banking
apostasy: Would Blinder be so treacherous as to
deliver a harsh verdict on The Chairman?
Not a chance. Blinder defended Greenspan against
his critics and praised his performance as "impressive,
encompassing and overwhelmingly beneficial —
to the nation, to the institution, and to the practice
of monetary policy." His climactic flourish
was to pronounce Greenspan the "greatest central
banker who ever lived."
Is he really? Now that his tenure is drawing to
a close, it is time to ask how well Greenspan has
used his great power, whether his performance has
been as good as so many presume, and whether, perhaps,
there are some cautionary lessons in his tenure
for his successor-designate, Ben Bernanke.
We have a first hint of a sober assessment from
Allan Meltzer, Greenspan's friend and colleague
of 40 years. Meltzer summarizes the chairman's record:
The Reagan-Volcker expansion and the Clinton-Greenspan
expansion are the two greatest expansions in U.S.
history; so he bears some of the praise for that
big, long expansion. But on the negative side, it
clearly worries him to what extent he was responsible
for the rise in stock prices.
In other words, Greenspan deserves praise for aiding
the long boom that the United States enjoyed from
March 1991 to March 2001; but perhaps he shares
blame, as well, for the dramatic bust that followed.
Meltzer is right on target.
WHAT
GOES UP...
The American stock market boom of 1996-2000 was
the greatest speculative mania the world has ever
seen. It was a dizzying display of one of the persistent
problems of financial capitalism: the tendency of
a rising market to grow beyond all reason into near-hysterical
excess. Stock prices tripled in nine years. This
was unprecedented, and yet somehow it felt natural.
Indeed, the longer the rise ran, the more normal
it seemed. "Americans came to expect rising
stock prices as their right. It was extraordinary.
Everything was perfect, and yet improving",
remarked Wall Street wit James Grant, publisher
of Grant's Interest Rate Observer.
The delusion of an eternally expanding stock market
spread through the society. Pat Smith and Lynn Roney
— the founders of StockmarKids, an investment
club for American children-apparently believed that
the market's rising trajectory was so assured that
it was as inevitable as growing up: "How else
can you help your child put this astounding growth
into context?" they asked in their book Wow
the Dow! The Complete Guide to Teaching Your Kids
How to Invest in the Stockmarket, published in the
market's peak year of 2000. Their answer:
We've come up with another one of our handy visual
aids that help personalize the Dow for your child.
By taking the Dow Jones Industrial Average for each
of her birthdays and plotting these numbers to form
a growth curve, you can see how the Dow grows along
with your child.
Yet the stock market rise was far from normal, as
many outside observers noted. For example, the top
finance official in the Japanese government, Dr.
Eisuke Sakakibara — the famous "Mr. Yen"
— started referring to the U.S. economy as
"bubble.com." One simple comparison gives
a picture, not of the price of individual stocks,
but of how a society can allow speculation to grow
beyond manageable dimensions — of how the
stock market tail can grow so big that it can wag
the national economic dog.
The scale of the stock market may be gauged by measuring
it against the size of the American economy as a
whole. Since 1925, the value of all shares has averaged
the equivalent of 55 percent of U.S. GDP. Sometimes
the stock market has run up to levels well above
this. Just before Wall Street's Great Crash of 1929,
for example, stocks were valued at the equivalent
of 81 percent of GDP. But that was the highest the
ratio reached for another 66 years-that is, until
September 1995, when it hit 82 percent. Using the
55 percent average since 1925 as a historical benchmark,
82 percent was clearly a dangerous level, the market's
historical extremity, an omen of collapse.
But the mania was just beginning. In 1996, the ratio
of the stock market's total value as a proportion
of the economy reached 100 percent. It was at this
juncture that Alan Greenspan issued his famous and
well-founded warning of the dangers of "irrational
exuberance." The next year the market vaulted
to 120 percent of GDP; in 1998, it hit 140 percent;
in 1999, it broke 170 percent. At its zenith in
March 2000, the market hit a level equal to a whopping
183 percent of U.S. national economic production.
If the market had been in line with its long-run
average, it would have been valued at $5.3 trillion
in 2000. Instead, investors had pushed it to a peak
valuation of $17.7 trillion. Three years later,
$7.8 trillion of that value had evaporated, making
the stock market's crunch in 2000-03 the most expensive
event in the country's history. For proportion,
the second-most expensive event, World War II, cost
the country $3.4 trillion in today's dollars.
The two episodes aren't comparable, of course; wars
kill people. But in strictly monetary terms, the
bursting of the bubble on Wall Street cost America
twice as much as World War II. It was a stunning
blow, for the damage was not limited to the investors
who had actively taken the risk by putting their
money into the market. The national economy itself
had been gambled on the fate of the stock market.
The stock bubble and the wealth it generated lifted
the entire economy aloft, and its bursting dashed
the economy into recession. For the three years
that followed the crunch, America's economy grew
at an average of half the rate of the previous three
— 1.9 percent a year compared to 4.1 percent.
More than 2.3 million people were thrown out of
work. At the epicenter, New York City, the damage
from the collapse of the Great American Bubble eclipsed
even the economic cost of the terrorist attacks
of September 11, 2001, according to an economist
at the New York Federal Reserve, Jason Bram.
So what was Alan Greenspan doing while all this
was going on? He was watching in full comprehension
and quiet apprehension. The transcripts of the Fed's
pivotal policy committee, the rate-setting Federal
Open Market Committee, describe a meeting on September
24, 1996, in the Fed's splendid boardroom in Washington,
D.C., in which one of the 12 members of the committee
was particularly gripped with anxiety over the state
of the stock market. Lawrence Lindsey, former Harvard
professor and future economic advisor to George
W. Bush, told the committee:
Everyone enjoys an economic party, but the long-term
costs of a bubble to the economy and society are
potentially great. . . . As in the U.S. in the late
1920s, and Japan in the late 1980s, the case for
a central bank ultimately to burst that bubble becomes
overwhelming. I think it is far better that we do
so while the bubble still resembles surface froth,
and before the bubble carries the economy to stratospheric
heights. Whenever we do it, it is going to be painful,
however.
Greenspan responded: "I recognize that there
is a stock market bubble problem at this point,
and I agree with Governor Lindsey that this is a
problem that we should keep an eye on." The
chairman ruminated that it would be tricky to raise
interest rates to deflate the bubble. But he canvassed
other options:
We do have the possibility of raising major concerns
by increasing margin requirements [forcing stock
market investors to pay for their shares with more
cash and less debt]. I guarantee that if you want
to get rid of the bubble, whatever it is, that will
do it. My concern is that I am not sure what else
it will do. But there are other ways that one can
contemplate.
He did not elaborate on them.
SOMNOLENCE
AND EXUBERANCE
There was no failure of comprehension, then, on
Greenspan's part. Five years ahead of the bust,
the Fed chairman had correctly diagnosed the bubble.
He convened a private hearing on the state of the
stock market at the Fed's headquarters on December
3, 1996. Among those invited were one of the market's
most consistent cheerleaders, Abbey Joseph Cohen
of Goldman Sachs, and one of its foremost skeptics,
Yale University economist Robert Shiller. The bearish
case evidently proved more persuasive than the bullish.
The in-house seminar confirmed for Greenspan his
view that a dangerous bubble had formed in the stock
market. Two days later he took the first public
step to do something about it.
The occasion was the annual dinner of the American
Enterprise Institute, a conservative Washington
think tank and incubator for some 30 Bush Administration
officials. The speech Greenspan gave that evening,
December 5, 1996, was about to present him with
the biggest and most dramatic test he had ever faced.
For the 1,300 dinner guests who had to suffer through
it, however, drama was not the word that came to
mind. To those at the black-tie dinner, the speech
was interminable, an excruciating survey of two
centuries of economic policy. The delivery was every
bit as electrifying as the title: "The Challenge
of Central Banking in a Democratic Society."
As midnight approached, eyelids drooped. "These
occasions are usually very entertaining and lively",
said one regular attendee, Owen Harries, then-editor
of The National Interest.
They usually have star performers, and there is
a lot of laughter and applause. Greenspan was the
dullest I can remember, and I went to eight or nine.
It was a most unsuitable lecture-heavy, boring and
long. It was an evening of yawns and raised eyebrows.
Clearly, the guests did not realize that they had
been present at a major news event until they picked
up their newspapers the next morning.
Here, essentially, is what Greenspan said. First,
he reminded his audience that the Fed's task was
to keep prices stable while pursuing the maximum
sustainable economic growth. Then he prepared the
ground by asking this question: Which prices, exactly,
should we be keeping stable? This, he explained,
was not a simple question. He suggested that the
Fed might have to consider stabilizing not just
the price of traditional items — food, clothing,
shelter, energy, a haircut — but the price
of assets, too, including stock prices.
This was a major conceptual shift for a central
bank, one thoroughly at odds with prevailing orthodoxy.
The orthodoxy said that central banks should only
target the price of goods and services, and never
the price of assets. The reason? Traditional inflation
would cause distortions in economic behavior that
would punish investment and destroy long-run growth,
but asset prices didn't matter to the so-called
real economy, where businesses invest and produce
and people shop and work.
Greenspan could see, however, that the risks to
the economy had shifted away from traditional inflation
to asset price inflation. Indeed, years earlier
Greenspan had ventured his own definition of inflation.
He said that the Fed aimed to achieve price stability,
which he defined this way: "For all practical
purposes, price stability means that expected changes
in the average price level are small enough and
gradual enough that they do not materially enter
business and household financial decisions."
It was now plain that while price stability of this
sort held for consumer price inflation, it should
have been ringing alarms when it came to asset price
inflation. The inflation on the stock market had
become the dominant influence on consumer spending
and on business investment, making it the single
biggest force in the economy. In the words of Ed
Hyman, a respected economist at the New York consultancy
ISI, "The stock market is the economy"
— and it was generating vast distortions.
Alan Greenspan delivering
his "irrational exuberance" speech, December
5, 1996. ©
American Enterprise Institute Greenspan was alert
to the danger, and he demonstrated intellectual
and institutional leadership in confronting it.
The December 5, 1996 speech was Greenspan at his
best:
But how do we know when irrational exuberance has
unduly escalated asset values which then become
the subject of unexpected and prolonged contractions,
as they have in Japan over the past decade? And
how do we factor that assessment into monetary policy?
We as central bankers need not be concerned if a
collapsing financial asset bubble does not threaten
to impair the real economy, its production, jobs,
and price stability. Indeed, the sharp stock market
break of 1987 had few negative consequences for
the economy. But we should not underestimate or
become complacent about the complexity of the interactions
of asset markets and the economy.
As Greenspan ground through all 5,000 words of the
lecture in his raspy monotone, very few even noticed
the two words that were about to reverberate around
the world, move trillions of dollars, and enter
the English language as a new expression, a new
mantra. (Eight years later, those words recur 19,300
times in the Factiva database of English-language
newspaper articles and 96,000 times in a Google
search.) Financial news reporters, however, picked
up the key words instantly and sent them worldwide
on the newswires in minutes. The news: The chairman
of the U.S. Federal Reserve had publicly questioned
whether the stock market was in the grip of "irrational
exuberance."
As Greenspan stooped his way back to his seat and
grateful guests began to revive, his wife, Andrea
Mitchell, asked the dignitaries at the head table
whether they had noticed anything newsworthy in
the great man's remarks. Driven to narcolepsy by
Greenspan's delivery, none had been struck by the
words that Greenspan had deliberately calibrated
to jolt the markets.
But investors on the other side of the globe on
Tokyo's then open market floor noticed, and were
thunderstruck. The Nikkei average fell by 3 percent
that day, its biggest loss of the year. Investors
in Hong Kong noticed, too. Stock prices fell by
nearly 3 percent. They also noticed in Australia,
down 3 percent; in Germany, down 4 percent; and
in London, down 2 percent. When the markets opened
in New York the next morning, the Dow Jones Industrial
Average of 30 leading companies' stock prices fell
by 2 percent — 144.6 points — in the
first half hour of trading and ended the day down
55 points.
...MUST COME DOWN
As soon as Greenspan had delivered his oration,
he chatted with one of the few guests able to actually
follow it, Joseph Stiglitz, a member of the Clinton
Administration's Council of Economic Advisers. "When
I approached him after his speech to discuss several
of the ideas that he had thrown out, it was clear
that he was fixated on the 'irrational exuberance'
remark", reported Stiglitz. "He knew that
the pundits would know that it was the U.S. rather
than Japan that he had in mind. He was worried about
the stock market, which was having a blow-out year."
But Stiglitz was puzzled about what came next. "And
then...nothing happened", he wrote in his 2003
retrospective, The Roaring Nineties. "What
exactly had Greenspan been up to? If he thought
share prices were heading out of control —
if he feared the wider effects of a bubble —
why didn't he go ahead and act?"
It's a good question. The market shockwave had been
powerful and positive. The hit to share prices was
precisely the effect that Greenspan had been seeking.
He had indeed injected an element of risk for speculators.
The one-way bet of ever-rising stock prices was
suddenly in doubt — and that made some of
the most powerful men in Washington quite furious.
The angriest public reaction came from Senate Majority
Leader Trent Lott (R-MS). Three days after the speech,
Lott appeared on Fox News Sunday where he was asked,
"Does it scare you that one man has that much
power?" Lott replied:
You know I've always been a little nervous about
the Fed, quite frankly. I try not to be a Fed-basher,
but I sometimes think they focus too much on one
side of the equation, rather than the broader basket
of things. And I'm a little nervous about the degree
of [their] independence.
This was a plain, public threat against the Fed's
independence. The Federal Reserve is a creation
of the Congress, Lott was reminding Greenspan, and
Congress has the power to redraw the boundaries
of the Fed's freedom. "And I think probably
the chairman would say, 'I wish I had chosen some
other words'", Lott concluded.
There was a clear sign of displeasure from the Clinton
Administration, as well. It came from Treasury Secretary
Robert Rubin, Greenspan's primary point of contact
with the Administration. Rubin's discontent was
even more significant than Lott's because Rubin
had been protecting Greenspan's Fed from Administration
interference for years. Rubin remarked in a television
interview, "The chairman was simply raising
a question, not suggesting an answer. He was just
seeking to widen the intellectual debate over the
level of the markets." Greenspan had made a
point of injecting risk into the stock market; now
Rubin was taking it out again. It was safe for irrational
exuberance, he seemed to be saying. Greenspan is
just waffling; there's no chance that he'll actually
do anything.
The chief of the Federal Reserve thus found himself
politically surrounded. The Republicans in Congress
were angry with him and the Democrats in the Clinton
Administration were no longer prepared to protect
him. Those two words had put him in a cursed circle,
standing alone. No politician would stand by an
official whose policy, even if it were in the national
interest, could anger his constituents. The situation
recalled a rebuke that a Texas Baptist pastor once
made of his congressman, Bill Sarpalius, in 1993:
"We didn't send you to Washington to make intelligent
decisions. We sent you to represent us."
Twelve days after the celebrated speech, the Federal
Open Market Committee met again. The chairman had
nothing to say on the subject of the stock market
bubble. He did not propose to raise interest rates,
reconsider margin-lending requirements, or take
any other action. Greenspan's only remark about
his speech was a jocular aside, and the market never
looked back — until the ground fell away from
under its feet some three years later.
Lawrence Lindsey, who had pressed Greenspan to act
on the bubble, explained the events of the time
this way: "People said, 'How dare you take
our bubble away!'" Lindsey continued:
The political reaction was extremely hostile. Greenspan
decided that he didn't have a mandate. The lesson
from the irrational exuberance speech was that you
have a democratic society in which the vast majority
of people benefit enormously from something that
may be hazardous in the long run.
But that's supposed to be the whole point of the
Fed. Congress gave control of monetary policy to
an independent central bank so that the technocrats
could make difficult, but necessary, decisions about
managing the economy. If Congress just wanted popular
economic decisions, it could abolish the Fed and
run the economy itself — as it used to do
before 1913. Greenspan had set out on a course of
what he judged to be wise policy, but then had allowed
himself to be cowed by political pressure. During
a congressional committee meeting in 2002, one congressman
told Greenspan he was "the best politician
I have ever seen in Washington." Greenspan
seemed to take it as a compliment: "Thank you"
was his only response.
Having abandoned his efforts to contain the bubble,
the chairman of the U.S. Federal Reserve now became
the bubble's most important accomplice. He did not
take a middle course. Rather, he changed direction
completely and clasped the whole madness to his
aged breast with the zeal of a convert. He provided
three essential commodities to bloat and blister
the Great American Bubble beyond all American historical
experience. First, he went to great lengths to continue
supplying the cheap money that all bubbles feed
upon. Second, he endorsed the mania and dignified
it with his patronage, affirming the sense that
the market was correctly recognizing a great historical
transformation. And third, he lent an air of assurance
to investors, a notion that the Fed would somehow
protect them against disaster.
The man who was supposed to be the guardian of economic
stability and financial prudence became the charismatic
leader of a manic cult. Greenspan became so closely
identified with the tech frenzy that President Clinton
lightheartedly likened him to the object of the
speculative mania of the time — a dot-com.
He poked gentle fun at the chairman's enthusiasm:
"His devotion to new technologies has been
so significant, I've been thinking of taking Alan.com
public; then we can pay the debt off even before
2015."
GREENSPANISM
To return to the question that Professor Meltzer
said has been troubling his friend, to what extent
was the Fed chairman responsible for the bubble?
A group of economists has tried to calculate exactly
that. Citing surveys taken in the bubble's peak
year of 2000, the economists pointed out that Greenspan
had created the impression in the minds of many
investors that he would offer some protection, or
insurance, against the risk of a fall in stock prices.
Investors believed that Greenspan's Fed could be
relied upon to cut interest rates if the stock market
were in trouble, but that it would not raise rates
to constrain a bubble. In short, Greenspan had created
the idea that the stock market had no downside.
"We argue that the asymmetric behavior
of the monetary authorities has played a key role
as investors came to believe that there was a floor
to market prices, but no ceiling", wrote Marcus
Miller and Lei Zhang of the University of Warwick
and Paul Weller of the University of Iowa in a paper
presented on September 7, 2001. In a computer modeling
exercise, the three arrived at the conclusion that
investors perceived that Greenspan's Federal Reserve
had reduced the riskiness of investing in stocks
by up to 40 percent. "What we describe is not
so much 'irrational exuberance' as exaggerated faith
in the stabilizing power of Mr. Greenspan and the
Fed", the economists concluded. They were not
expressing an eccentric or uncommon view. They were
merely trying to put a specific value on a phenomenon
widely recognized in the market during the bubble
years. Call it Greenspanism.
As Robert J. Samuelson wrote in the New Republic
in 2002, "Trust in Greenspan became, in the
late 1990s, almost a religion. The economy might
have bad moments, but Alan would find a way out.
He was a magician." Even Robert Rubin was unsettled
by the cult of Greenspanism. He wrote in his memoir
that, after stepping down from his post as Secretary
of the Treasury, "What had struck me after
returning to New York was the pervasive assumption
that everything would always be well and that any
interruptions in the advance of prosperity would
be temporary and mild — solvable, in any case,
by the Federal Reserve Board."
This was certainly the message that made its way
into the minds of ordinary investors. In a 2001
survey of 933 stock market investors conducted for
the Securities Investor Protection Corporation,
five out of six investors said they believed there
was or might be some kind of government insurance
for any losses they might suffer in the stock market.
These people were, in short, disastrously misinformed.
Greenspan, meanwhile, has vigorously defended himself
against charges of responsibility for the bubble
and its aftermath, and opinion polling shows that
he's been remarkably successful at evading blame.
Nonetheless, the legacy of Greenspan's failure to
curb the bubble is clear. That legacy has been threefold.
First, as the bubble burst and collapsing stock
prices dragged the economy down into recession,
the Fed cut interest rates in a dramatic, staccato
fashion. Low rates were essential to aiding economic
recovery, but they also created a vast pool of cheap
money. Where did that money go? Much of it went
into housing, inflating a new American bubble, this
time in real estate rather than stocks. So to help
the economy recover from one bubble, Greenspan created
another.
Second, the federal government used the national
budget to stimulate the economy. It cut taxes and
spent money it didn't have. The consequence was
that the federal budget, which had been in balance
in 2001, was in deficit by almost half a trillion
dollars by 2004.
Third, because Greenspan has been busy defending
himself, there has been no rethinking of economic
doctrine by U.S. authorities. A rethinking has emerged
in official circles in other developed countries.
In Britain, the European Union, Canada, Australia,
Norway, New Zealand and the Swiss-based organization
known as "the central bankers' central bank",
the Bank for International Settlements, a conceptual
breakthrough has occurred: an acknowledgment that
the authorities do have a legitimate role in managing
bubbles to minimize the damage they can inflict.
The Great American Bubble has thus been a turning
point in the modern world's understanding of how
to manage an economy, but the United States has
missed the turn.
In a capitalist system, the allocation of capital
is central to the organization of the economy and
society. One of the main lessons of the 20th century
is that the market is the best mechanism to do the
allocating. One of the main lessons of the last
400 years of financial capitalism, however, is that
this mechanism can be pushed to malfunction by a
speculative mania. So it is of central importance
to examine epic misallocations to comprehend what
went wrong and how they might be avoided in the
future. This is the challenge of the times, and
it is the challenge that Alan Greenspan was prepared
to meet in 1996, before he retreated in the face
of political difficulty. Instead of fulfilling his
mandate in the face of opposition, he hid himself
in the orthodoxy of the day, and in the madness
of the crowd.
Despite his many signal accomplishments, Alan Greenspan
failed this vital test. He will go into retirement
a national hero, yet with the uneasy knowledge of
this failure no doubt weighing on his mind. He is
a brilliant, powerful and successful man, and yet
he lacks the leadership and the boldness to be remembered
as a great man. He has won many awards and accolades,
and the Federal Reserve proudly lists them on its
website. But there is one honor he was granted that
his official biography does not record: the Enron
Award for Public Service in 2001. It was an appropriate
tribute for the times.
PETER HARTCHER is political editor of the
Sydney Morning Herald and author of Bubble Man:
Alan Greenspan and the Missing Seven Trillion Dollars,
to be published by W.W. Norton in April 2006.
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to Pay to Plant Articles in Iraq Papers
WASHINGTON,
Nov. 30 - Titled "The Sands Are Blowing Toward a Democratic Iraq,"
an article written this week for publication in the Iraqi press was
scornful of outsiders' pessimism about the country's future... |
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N. Korea warns of nuclear war if attacked
North Korea will respond to a pre-emptive U.S. military attack with an "annihilating strike and a nuclear war," the state-run media said Monday, heightening its antagonistic rhetoric.... |
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Israel says no negotiations on soldier
Palestinian militants holding an Israeli soldier gave Israel less than 24 hours Monday to start releasing 1,500 Palestinian prisoners ... |
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In the Shadow
of Sharon
IT
is too early to assess Ariel Sharon's legacy. To be sure, he will
be remembered as one of Israel's great field commanders, the wily,
bulldozing general ... |
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The New Red,
White and Blue
As
we enter 2006, we find ourselves in trouble, at home and abroad. We
are in trouble because we are led by defeatists - wimps, actually... |
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Life After
Ariel Sharon
When
Prime Minister Ariel Sharon announced two months ago that he was leaving
the right-wing Likud Party, which he had embodied for three decades... |
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Administration
Cites War Vote in Spying Case
WASHINGTON,
Dec. 19 - President Bush and two of his most senior aides argued Monday
that the highly ... |
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Austrian presidency
will not press for EU constitution
EUOBSERVER
/ BRUSSELS - Austrian foreign minister Ursula Plassnik has indicated
that her country's incoming six-month EU... |
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DEFINING THE
AMERICAN INTEREST
The
American Interest (AI) is a new and independent voice devoted to the
broad theme of "America in the world." Our agenda is threefold.
The first is to analyze America's... |
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THE AMAZING
BUBBLE-MAN
Alan
Greenspan is the great guru of the American economy, the spell-master
over the fortunes of multitudes the world over. Chairman of... |
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US DEPARTMENT
OF STATE RELEASED A PRESS STATEMENT ABOUT U.S.-IZRAEL STRATEGIC DIALOGUE
On
November 28, 2005, the United States and Israel conducted a strategic
dialogue led by Under Secretary for Political Affairs Nicholas Burns
and Minister of Jerusalem... |
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An Offering
of Detail But No New Substance
Thirty-two
months after U.S. forces invaded Iraq, President Bush's advisers concluded
that his message of "stay the course" has been translated by a weary
American public as "stay forever." And so yesterday the president
tried to reassure the nation... |
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9/11 Commissioners
Fault Administration
WASHINGTON
-- Reviewing action on recommendations it made last year, the Sept.
11 commission on Monday criticized the Bush administration for not
adopting standards for treatment of captured terror suspects... |
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US
refuses to rule out use of torture
THE
White House has refused to rule out the use of torture in an effort
to prevent a major terrorist attack, arguing the war on terror could
present a "difficult dilemma" and the US administration
was duty-bound to protect the American people... |
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American
Majority Says Bush Misled on Iraq
(Angus
Reid Global Scan) – Many adults in the United States are questioning
their president’s motives to launch the coalition effort, according
to a poll by Hart/McInturff released by the Wall Street Journal... |
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EU opens door to hidden TV adverts
EUOBSERVER / BRUSSELS – More frequent commercial breaks as well as product placements, ... |
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EU states under fire for red tape on foreign workers
EUOBSERVER / BRUSSELS - The European Commission is set next week to present a report criticising ... |
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There is too much hyperbole over the EU consitutional treaty
EUOBSERVER / COMMENT - I am getting increasingly fed up with those who qualify the Constitutional Treaty as a "radical new departure" ... |
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Brussels asks Helsinki to push for stronger EU in criminal matters
The European Commission has renewed calls to boost EU powers in criminal matters as well as increase the role of ... |
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MEPs shelve prickly anti-fraud debate, again
The European Parliament has for the third time postponed a plenary debate on ... |
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Frattini calls for national search into CIA flights and prisons
EU justice comissioner Franco Frattini has urged national prosecutors and judges ... |
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EU praises Bush for wanting 'end' to Guantanamo
The EU has welcomed US president George W. Bush's statements on ending the Guantanamo ... |
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This WEEK in the European Union
EUOBSERVER / WEEKLY AGENDA (2-9 July) This week will be the first in office for the Finnish EU presidency. ... |
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EU troops kill
wife of Bosnian war crimes suspect
The
wife of Bosnian Serb war crimes suspect Dragomir Abazovic was shot
to death in a gun battle as EU troops stormed the couple's house ... |
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Bird flu kills
third child in Turkey
Avian
influenza has cost the life of a third child in Eastern Turkey, raising
fears that the deadly strain of the so-called bird flu virus could
spread ... |
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EU draws up
Adriatic gas plan after Russia-Ukraine fiasco
The
EU might build a new gas pipeline on the Adriatic Sea coast in order... |
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Slovak-Vatican
abortion deal criticised by EU experts
Slovakia
has been challenged by EU legal experts over an agreement with the
Vatican... |
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Commissioner
proposes constitution cherry-picking
French
commissioner Jacques Barrot has proposed that single elements of the
EU constitution be taken out in a bid to save the charter... |
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Blair takes
hits on EU budget deal
British
prime minister Tony Blair, defending the deal on EU’s budget
in front of the House of Commons... |
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Italian bank
chief resigns
Italian
Central Bank governor Antonio Fazio resigned yesterday after the Italian
government had announced... |
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WTO fallout
expected
Polish
experts say the WTO deal could harm EU exporters of milk, sugar, beef
and grain leading to oversupply... |
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Austria to
revive constitution chat
Austria
plans to revive the EU constitution debate and plough ahead with Turkey
accession talks under its incoming... |
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EU threatens
to cut Palestine funds if Hamas wins
The
EU's exterior relations chief Javier Solana will stop EU funding for
Palestine if Hamas wins the Palestinian elections saying... |
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Ukraine snubbed
in Russia gas row
Ukraine
prime minister Yuri Yekhanourov flew to Moscow for gas price talks
but came back with nothing as Russia... |
|
Serbian grip
on Kosovo weakening
Less
and less people in Serbia and on an international level support the
idea of a Serbian Kosovo, Le Figaro writes... |
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New Baltic
gas pipeline scheme
Finland
and Estonia are talking about building a gas pipeline linking... |
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Germany to
cooperate with Italy
German
chancellor Angela Merkel on Monday visited Italian prime minister
Silvio Berlusconi amid promises... |
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Turkey pressed
to stop blocking EU-NATO meetings
EUOBSERVER
/ BRUSSELS - Turkey has come under increased pressure to stop blocking
strategic meetings between the EU and NATO... |
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Slovaks
voting on design of euro coins
EUOBSERVER
/ BRUSSELS - Slovak citizens are voting on the country's future eurocoin
designs, with a possibility... |
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Bosnian
leaders in Brussels for US-led constitution talks
Bosnian
political leaders are meeting in Brussels to discuss a reform of their
country’s constitution, on the basis of a draft... |
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Polish
government deepens eurosceptic ties
The
new Polish government secured parliamentary backing on Thursday (10
November) but some fear mounting tension with Brussels in store... |
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Estonian
foreign minister denied entry visa to Russia
Russia
has refused to give the Estonian foreign minister an entry visa, sparking
a diplomatic row with Tallinn... |
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Ex-commissioner
Edith Cresson may lose EU pension
EUOBSERVER
/ BRUSSELS - The European Commission has called for the suspension
of EU pension rights for former French prime minister... |
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Letters
to commissioners to go public in EU transparency drive
EUOBSERVER
/ BRUSSELS - The European Commission has adopted today (9 November)
a controversial "transparency initiative."... |
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