Time for a New Plaza Accord?

When politicians discussing the current economic situation tell us "it's likely to get worse before it gets better," it seems they weren't kidding.

Yesterday the U.S. Senate failed to come to an agreement on a $14 billion bailout for the U.S. auto industry, and this morning, the Japanese yen hit a 13-year high against the U.S. dollar, a troubling signal for two of the world's largest economies.

Apart from Germany and China, Japan is the world's preeminent export economy, relying on a weak Yen to peddle its goods to primarily the U.S. market. With slumping demand in the U.S., and the rapid depreciation of the dollar versus the yen, Japan stands to lose out significantly. This has helped to reduce Japan's current account surplus significantly, as exports fall. The drop in the oil price might help in relieving the costs of imports, but a country once known for its massive trade surpluses seems to be losing its edge.

I have argued frequently in favor of a larger role for Japan in the world economy. Too infrequently during the current economic crisis have we seen the kind of leadership that Japan is capable of and responsible for. Perhaps it is the ruling Liberal Democratic Party's precarious political prospects that are discouraging it from taking the risky but potentially rewarding policies needed to stabilize the world economy.

It may be time for a new type of "Plaza Accord," in which the U.S. coordinates with Japan a managed exchange rate revaluation. Only this time, it is the U.S. dollar, not the yen, that is increasingly depreciated and needs propping up. Another factor is that the value of the dollar, of course, has been partially supported by the massive stockpiling of U.S. dollar reserves by China, which itself enjoys a massive trade surplus because of an undervalued, but steadily appreciating, currency. But now, the problem is the Chinese also face the prospects of slower economic growth, primarily due to the American recession. And like Japan, China may face a threat of a political reckoning if it cannot help its people absorb the impact of the global recession.

Some more thoughts...

Here are some very nicely put thoughts on the Mumbai attacks from consider, evaluate, act.

There is more evidence that a Pakistani group was involved with these attacks...let's hope Pakistan and India can work with, not against, each other.

The Unsung Heroes

One of many stories of heroism in Mumbai:

http://www.tehelka.com/story_main40.asp?filename=Ne061208ro_ticket.asp

A Bleeding Heart...

It has been a long while since I've written, primarily because school work had finally gotten the best of me. This latest post is really just a dedication to the people of my motherland, my brothers and sisters in India, who are in pain after last week's terrorist attacks.

As everyone in the world knows, the 26 November attacks in Mumbai were devastating. I still feel nauseous thinking about it and I haven't been able to sleep since it happened. But if I know anything about India, it is that the country will bounce back. The country gained independence on non-violent ideals and I hope it fights back with these same ideals.

Still, there are things that I think have been missing from the entire discussion of these attacks. Here are some thoughts:

1. Trying to galvanize the world against terrorists is a noble thing to want, and it makes for rousing speeches from dignitaries ranging from Prime Minister Manmohan Singh to President George W. Bush. But the terrorism threat that confronts the United States is distinctly different from that faced by Israel, Iraq, Afghanistan, Pakistan, Great Britain, Sri Lanka and of course, India (to name only a few).

So while international cooperation is a no-brainer in the war on terror, each country that faces terrorism has domestic issues that are tied to those terrorist threats, and we must not forget that. Palestinian terrorism is connected to the Israeli-Palestinian situation, a very complex matter. Terrorism in India mostly emanates from radical groups who use violence to express a belief that Kashmir should be free from Indian control. And so on. We have to temper our expectations that a global effort - that is further intensified after last week's mayhem - can solve the world's terrorism problems, much of which are connected to long-standing regional or domestic disputes.

2. Not Secure Enough? - India's cities and streets are porous, and that is what so many people love about it. A great way to describe India is to call it "organized chaos." It is as diverse a country you can get, a place that is bursting at the seams with a billion people. And while India is still very stratified socially, it truly is a land of liberty, of imagination and thought. Music blares on the streets. Street food vendors are everywhere. Conversation and currency flow like water. It is a reason why Indians take so much pride in Mumbai, a distinctively entrepreneurial, spirited and on-the-go city.

It is the city's openness that the terrorists took advantage of. To say the city is lax on security is one thing, but to fortify the city as a result of last week's events will not solve the problem. It will only suffocate a city that is meant to be vibrant and flowing.

3. "India's 9/11" - To call the latest event India's 9/11 is certainly appropriate - the terrorists had a uniquely ghastly approach to their killing spree. But what troubles me is that the attacks hit headlines only when the five-star hotels - with foreign guests abound - were named as attack sites. Even as the 100+ death count of Indian citizens mounted, the casualties among foreigners and VIPs were highlighted. Is it India's 9/11 because it hit home with folks from the West?

This crisis also came at a time that allowed the West to focus its attention. It transpired as the American and European news cycles were kicking into high gear for the day. And Americans were starting their Thanksgiving holidays; the news networks had their undivided attention through the weekend.

Like the countries named above, India has been a victim of terrorism all too often in its history. Violence has maimed and killed hundreds of average-Joe-Indians - Hindus and Muslims, Jews and Christians alike - who make a few bucks a day and catch a packed train home from the Victoria Terminus, where attackers also imposed their will. While this attack opened up India's and the world's eyes, let's not forget that this is but a chapter in a long history of terrorism. And if future attacks occur at sites that may not attract businessmen from foreign countries, I would hope it gets the same level of coverage in the news media.

Regardless of their national origin, each victim should be honored. I simply hope all victims will be treated with equal care.

4. Slow to respond - Many have been quick to criticize the Indian police and security forces for responding slow or ineffectively to the attacks. But it is important to realize that India is still a developing country that has myriad issues to deal with. Among them is a lack of a competent civil service and the presence of corrupt elements throughout government. The country's national guard did a highly admirable job, and they should be commended for responding and decisively handling a complex and uncertain situation that would not have been easy for any country to respond to - even the industrialized West. So, while the public conducts a postmortem of the attacks and bemoan the lack of security, we need to temper our expectations of what a country like India really can do in the face of such a devastating attack. Institutions that provide for public protection can take years to build. I hope the Indian government make a serious effort to examine its security gaps, while also making these efforts fiscally sustainable. The attacks also highlight the importance of preemptive intelligence gathering, an activity that even the United States is learning how to do post-9/11.

5. Indian Nationalism - The best thing Indian citizens can do is demand more from their government. But I fear these attacks will stoke Hindu nationalism and call for a return to right-wing (and tacitly anti-Muslim, anti-Pakistan) politics in India. What makes 9/11 different from 26/11 is that the former unified the United States, while the latter may be a divisive agent in India. Political instability is the last thing that India needs, and I hope that this does not jeopardize much of the goodwill between India and Pakistan. Pakistan itself is a victim of much more frequent episodes of terrorism, and must deal with the constant threat of violence from people within its own borders.

Anyway -- I am sad for my country and sad for the world. I hope we all can keep fighting against terrorism in all its forms, and someday this will all stop.

Exit Poll

There's something about crossing the River Thames at sunrise on November 5, 2008.

It is not the view of the east, where an ailing, once-venerable financial district that controlled the world's affairs for two centuries sits, awaiting the storms of the current times to pass.

Or to the west, the seat of Parliament, where MPs and PMs have tried to re-tool a fragile economic and political system, awaiting the emergence of someone on America's shores to take leadership in solving a crisis that was largely America's doing.

But something in the rising sun on the horizon of a country foreign to my own, the morning after an important election, makes me so proud to be from the United States of America.

Senator and President-elect Barack Obama has a lot to do to prove to the United States that his pledges for "hope" and "change" can be followed through with. But his resounding victory is a signal that the great nation of the U.S. has come to its senses.

Sen. Obama's speech, with figures such as Jesse Jackson - who laughed and cried with the great Martin Luther King Jr. and Robert F. Kennedy - letting the tears flow, was an inspiring spectacle. It makes me not only speculate, but know, that my 4-year-old niece, and her children, will understand the truly global world that we have come to experience, and will see it possible to run for office and make a change if she is inspired to do so. And it will be so not because she may be a Democrat or Independent or Republican, but because she is American.

Still, there were the panes of bullet-proof glass shielding President Obama in Chicago's Grant Park from the realities he will encounter over the next four, perhaps eight, years. He will face white supremacists, a weakened but nonetheless fierce Republican opposition and a skeptical right-leaning segment of the populace. On Day One in office, January 21, 2009, the Obama dream campaign will necessarily transition to painful reality - when Sen. Obama must address the immediate concerns of two costly wars in western and central Asia and a financial crisis that has already affected the world in ways unprecedented.

The achievements of Obama's opponent, Sen. John McCain, must not go unnoticed. In fact, Sen. Obama's gift of oratory was often matched by that of Sen. McCain -- and it was no more apparent during the campaign than during Sen. McCain's classy, respectful concession speech from the Biltmore Hotel in Phoenix.

I have a very dear friend in the U.S. Army, who is a centrist Republican and McCain supporter. And for his sake, I do feel some sadness that Sen. McCain, a man whom I also rooted for in 2000, seems to have reached his pinnacle and political destiny, without reaching the office he so deserved -- primarily because he emerged when an even more formidable electoral force emerged in the campaign of Sen. Obama. And Sen. McCain picked a horribly inept running mate.

John McCain was truly a maverick, a voice of reason for a party that had increasingly catered to the whims of a far-right religious coalition and a war-frenetic military-industrial complex that exploited the U.S. Constitution to expand executive and extra-judiciary power under President George W. Bush. Sen. McCain was a true patriot, one of the few public servants who could stand in front of a crowd and provide cold, hard evidence that he is a "maverick" worthy of such a distinction. He braved the cruelty of war for several years, and those of us like myself who complain about cold weather or untimely subway trains can learn a thing or two from a man who suffered in prison camps and came out a strong survivor. John McCain is just as deserving of the presidency as any other public servant, and is as intellectually and politically astute as any politician. He was never given much credit for that, and I think such credit is due.

For that, I can express my hopefulness not only in Sen. Obama's victory, but the fact that a man like Sen. John McCain was finally able to get his due shot at the U.S. presidency. It reflects America's return to common-sense and dignified politics, even if it got nasty toward the end, as it always does. America's best made it to the top, and had a fair chance to win over the American public's imagination. At the age of 72, Sen. McCain likely will never run for president again. But he, like Sen. Obama, will continue to inspire myself and millions of others to fight for what is true and just.

President Obama, let's get to work. There is much to be done, and the whole world, including the great city on The Thames, is watching and waiting.

Oh, the Symbolism

On my walk along the Victoria Embankment to campus yesterday, I couldn't help but notice the somewhat chunky runner in short shorts running toward me. He was running east, toward the City of London, where the UK's financial center is located. I could hear him panting in exhaustion from several yards, his lips parched. The guy looked like he was going to keel over and explode. The veins in his forehead looked like tree stumps.

The best part, was not his evident lack of athletic ability, but his shirt, which proudly advertised:

"BEAR STEARNS"

I love irony. Kinda' like that magazine ad I read on exactly that weekend when Lehman Brothers and a certain insurance company kicked the can:

"The AIG companies have the strength to be there when you retire, so you'll never outlive your money. Ask your financial advisor about AIG or call 877 AIG 0993.

"live longer. retire stronger. AIG: The Strength to Be There."

"Vote for Me" Brought to you by...

Sen. Barack Obama will soon deliver a 30-minute address on television - it's technically an advertisement ($150 million in new campaign money can buy a heck of a lot), but it is clearly Obama's last big campaign push before the election (FINALLY).

Notwithstanding your political views, do you think this is ethical? Should John McCain be given a similar opportunity to provide his own life story and offer his own campaign message, uninterrupted for one half hour?

http://www.thrfeed.com/2008/10/obama-ad-may-ha.html

My pro-1st Amendment stance tells me it should be OK, but at the same time, Obama will likely reach a broad collction of voters/TV viewers with this ad. Should McCain have the same opportunity even though he lacks the cash?