NEWS & VIEWS ROUNDUP & EDITOR’S COMMENT: September 25 – updated

Israel asked US for green light to bomb nuclear sites in Iran

Israel gave serious thought this spring to launching a military strike on Iran’s nuclear sites but was told by President George W Bush that he would not support it and did not expect to revise that view for the rest of his presidency, senior European diplomatic sources have told the Guardian.

The then prime minister, Ehud Olmert, used the occasion of Bush’s trip to Israel for the 60th anniversary of the state’s founding to raise the issue in a one-on-one meeting on May 14, the sources said. “He took it [the refusal of a US green light] as where they were at the moment, and that the US position was unlikely to change as long as Bush was in office”, they added.

The sources work for a European head of government who met the Israeli leader some time after the Bush visit. Their talks were so sensitive that no note-takers attended, but the European leader subsequently divulged to his officials the highly sensitive contents of what Olmert had told him of Bush’s position. [continued…]

Editor’s Comment — Israel — with the support of many American political leaders — likes to burnish it’s image as a free and unpredictable player in the Middle East but when it comes to its options on confronting Iran the idea that Israel might “go it alone” is a fantasy only given life by those who want to use the idea as a political tool.

Even if Bush’s exchange with Olmert was a closely guarded secret, he actually made it quite clear that the military option — forever present, though well bolted down, on that proverbial table — was not going to be used while he remained in office.

The president told The Jerusalem Post yesterday that before leaving office he wants a structure in place for dealing with Iran.

That was on May 12. Bush has subsequently not been pressed to explain what this structure might look like, but as I’ve previously speculated, if the president wants to salvage some sort of legacy, then it could well take a diplomatic form through an opening to Iran. As an “October surprise” that would undermine McCain, but I wouldn’t discount the possibility that it comes as a November surprise, right after the election.

As the New York Times said a few days ago:

Secretary of State Condoleezza Rice had hoped to salvage at least part of President Bush’s legacy, and her own, by brokering an Israeli-Palestinian peace deal before Mr. Bush leaves office. That’s looking ever less likely. Ms. Rice could still make history if she got on a plane to Tehran to deliver an offer of a grand bargain.

She could prove that she was serious by proposing to immediately open an American interests section in Tehran — an idea her aides floated a few months ago that seems to have disappeared.

We don’t know if any mix of sanctions and rewards can persuade Iran’s leaders to abandon their nuclear program. But without such an effort, we are certain that Tehran will keep pressing ahead, while the voices in the United States and Israel arguing for military action will only get louder.

Stopping a financial crisis, the Swedish way

A banking system in crisis after the collapse of a housing bubble. An economy hemorrhaging jobs. A market-oriented government struggling to stem the panic. Sound familiar?

It does to Sweden. The country was so far in the hole in 1992 — after years of imprudent regulation, short-sighted economic policy and the end of its property boom — that its banking system was, for all practical purposes, insolvent.

But Sweden took a different course than the one now being proposed by the United States Treasury. And Swedish officials say there are lessons from their own nightmare that Washington may be missing. [continued…]

A bailout we don’t need

Now that all five big investment banks — Bear Stearns, Merrill Lynch, Lehman Brothers, Goldman Sachs and Morgan Stanley — have disappeared or morphed into regular banks, a question arises.

Is this bailout still necessary?

The point of the bailout is to buy assets that are illiquid but not worthless. But regular banks hold assets like that all the time. They’re called “loans.”

With banks, runs occur only when depositors panic, because they fear the loan book is bad. Deposit insurance takes care of that. So why not eliminate the pointless $100,000 cap on federal deposit insurance and go take inventory? If a bank is solvent, money market funds would flow in, eliminating the need to insure those separately. If it isn’t, the FDIC has the bridge bank facility to take care of that. [continued…]

Save the world? Hank just didn’t have a clue

The Emperor has no clothes. If you want to know why American capitalism is on the brink of disaster, but also want to understand what will save it, then log on to the C-Span congressional website and watch the interrogations of Henry Paulson, the US Treasury Secretary, by the Senate and House banking committees.

Until last week, I was in a minority of one in arguing that Mr Paulson was personally responsible for suddenly turning the painful but manageable credit crunch that had been grinding away 18 months in the background of the US economy into a global catastrophe. Mr Paulson’s appearances on Capitol Hill, marked by the characteristic Bush-era combination of arrogance and incompetence, are turning my once-outlandish view into conventional wisdom: Henry Paulson is to finance what Donald Rumsfeld was to military strategy, Dick Cheney to geopolitics and Michael Chertoff to flood defence.

Mr Paulson may be a former chairman of Goldman Sachs, but as US Treasury Secretary he does not know what he is doing. His recent blunders, starting with the “rescue” of Fannie Mae, have triggered unintended consequences around the world, resulting in the death-spiral of financial values. But last Friday Mr Paulson outdid even these Rumsfeldian achievements, when he demanded $700 billion from Congress for a “comprehensive and fundamental” solution to the global financial crisis, without apparently having any idea of what he would actually do. [continued…]

U.S. appeals abroad fall flat as leaders see no crisis at home

As the world watched Congress struggle yesterday with a plan to bail out the U.S. financial system, foreign leaders balked at similar fixes for their own economies, a few even dismissing the credit meltdown as an American problem. Some foreign investors who had previously provided crucial injections of capital remained on the sidelines.

Senior U.S. officials, notably Treasury Secretary Henry M. Paulson Jr., have in recent days urged the leaders of other industrialized countries to help prop the global financial system. But the appeals have fallen short. While policymakers and economic analysts in Europe and Latin America said yesterday that they recognized the severity of the challenge facing the global financial system, they saw little need at the moment for major rescue packages in their own countries.

“The situation we face here in Europe is less acute, and member states do not at this point consider that a U.S.-style plan is needed,” said Joaquín Almunia, the European Commissioner for Economic and Monetary Policy in Brussels. [continued…]

Bush aides linked to talks on interrogations

Senior White House officials played a central role in deliberations in the spring of 2002 about whether the Central Intelligence Agency could legally use harsh interrogation techniques while questioning an operative of Al Qaeda, Abu Zubaydah, according to newly released documents.

In meetings during that period, the officials debated specific interrogation methods that the C.I.A. had proposed to use on Qaeda operatives held at secret C.I.A. prisons overseas, the documents show. The meetings were led by Condoleezza Rice, then the national security adviser, and attended by Defense Secretary Donald H. Rumsfeld, Attorney General John Ashcroft and other top administration officials.

The documents provide new details about the still-murky early months of the C.I.A.’s detention program, when the agency began using a set of harsh interrogation techniques weeks before the Justice Department issued a written legal opinion in August 2002 authorizing their use. Congressional investigators have long tried to determine exactly who authorized these techniques before the legal opinion was completed. [continued…]

The time has come for a final report on the 43rd president of the US

As the two men who would succeed him train like Olympic athletes for tomorrow’s foreign policy debate, pause for a moment to complete your final report on the 43rd president of the United States. What would you say?

I would sum up his two terms in four words: hubris followed by nemesis.

Remember the mood music of eight years ago. The greatest power the world has ever seen. Rome on steroids. An international system said to be unipolar, and Washington’s unabashed embrace of unilateralism. The US as “Prometheus unbound”, according to the neoconservative commentator Charles Krauthammer. Wall Street investment bankers bestriding the financial globe as Pentagon generals did the military globe and Harvard professors the soft power one. Masters of the universe. Personifying that hubristic moment: George Walker Bush.

And now: nemesis. The irony of the Bush years is that a man who came into office committed to both celebrating and reinforcing sovereign, unbridled national power has presided over the weakening of that power in all three dimensions: military, economic and soft. [continued…]

As crime increases in Kabul, so does nostalgia for Taliban

Mirza Kunduzai, 58, a slight man with a short white goatee, had almost reached his house after a day of trading in the capital’s open-air currency market when his taxi was forced to stop by six heavily armed men dressed in Afghan National Army uniforms.

For the next week, Kunduzai recounted, he endured one horror after another — beaten unconscious, hooded and handcuffed, strung up by his wrists and ankles, dumped in a filthy latrine — while his family frantically tried to raise the kidnappers’ astronomical ransom demand of $2 million.

“I was 95 percent sure I was a dead man,” Kunduzai said last week. “They said if my family went to the police, they would chop off my fingers and send them to my wife. I begged them to be reasonable. I offered them my house and my farmland back home. Finally, they agreed to settle for $500,000 and released me. I am poor again, but I am thankful to be alive.” [continued…]

Iraq passes provincial elections law

After months of negotiation, Iraq’s Parliament passed a crucial election law on Wednesday, but only by setting aside for future debate the most divisive political issues.

The law could clear the way for provincial elections to take place in much of the country early next year. The elections are viewed by many Iraqi and American officials as crucial for the nation to heal its deep-running political and religious fissures and also to shore up the fragile security gains that have been achieved in recent months.

The question of how to settle a fierce dispute over control of the ethnically mixed and oil-rich northern city of Kirkuk, however, was given to a committee for further study. And an article in an earlier version of the law that provided a limited number of provincial council seats for Iraq’s Christians and other minorities was eliminated from the new bill, stirring outrage among the groups. [continued…]

Contact man’s murder delays Syria nuclear probe: IAEA

The UN atomic watchdog’s probe into alleged illicit nuclear work in Syria has been delayed because the agency’s contact man in Syria was murdered, IAEA chief Mohamed ElBaradei revealed Thursday.

“The reason that Syria has been late in providing additional information (is) that our interlocutor has been assassinated in Syria,” ElBaradei told a closed-door session of the International Atomic Energy Agency’s 35-member board. A recording of his remarks was obtained by AFP.

He did not provide any further details about the identity of the man or circumstances of the assassination. [continued…]

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