Iran Powwow In Geneva

Today was the big meeting between the United States and other allies and Iran in Geneva. They ended with a pledge for follow-on talks, which is about all that could be expected at this point, and a good sign. The US and Iran even held bilateral discussions on the side.

Washington had hoped to begin bilateral talks with Iran on a range of issues, among them trade and Tehran’s support for Palestinian, Lebanese and Iraqi insurgent and terrorist groups, including Hezbollah and Islamic Jihad.

But after new disclosures of a hidden Iranian enrichment facility dug deep into a guarded mountain near the holy city of Qum, the immediate goal of the negotiations shifted, to the aim that talks would touch on Iran permitting serious nuclear inspections and suspending its nuclear enrichment program.

It “cannot be an open-ended process, or talks just for the sake of talks, especially in light of the revelations about Qum,” said the American official, who briefed reporters Wednesday on condition of anonymity. “We need to see practical steps and measurable results, and we need to see them starting quickly,” he said.

Speaking at the United Nations, the Iranian foreign minister, Manouchehr Mottaki, described the talks as “constructive,” and said they focused on a wide range of issues that Iran laid out in its five-page proposal for talks, which included talk of global nuclear disarmament but no specifics about the Iranian nuclear program.

The US position is a "freeze for freeze," where no new sanctions are implemented if Iran freezes their uranium enrichment. Iran may have some leverage to bluff here. China is unlikely to participate in any sanctions, given their desire to continue to receive Iranian oil and invest. An oil spike in China as a result of an embargo or trade sanctions would harm their economic growth. And I think everyone around the table knows that.

However, the timing of the Qom facility disclosure gives the West a bargaining chip. With the IAEA agreeing that Iran broke the law, a credible case can be made globally, based on that independent judgment, for punishment.

Ultimately, I think the third-way option, where Iran buys enriched uranium from a third party that it can use in its reactors under IAEA monitoring, could actually spark an agreement. Iran has shown a willingness to consider this in the past. That there will be future talks is a good sign. More talking, less posturing.

...Obama calls for inspections of the facility at Qom within two weeks.

David Broder's War

Dean Broder uncorks a rich defense of the People's Republic of China today, arguing that a trade war would ensue if the Obama Administration moves forward with tariffs on tire imports.

Many in business fear that this is the opening round in what could become a much larger and more dangerous trade war.

For now, the Chinese have threatened only minor retaliation, a cutback in imports of auto and chicken parts from the United States. But both sides have plenty of other, larger weapons they could deploy [...]

The danger is that once you strike the first blow against foreign competitors, you can't tell what will happen next. Obama has taken that risk, so fingers are crossed.

Oh noes, trade war! Except, no, China's consumer base offers little possibility for China to have the room to engage in retaliatory strikes.

Chinese consumers who buy $608 billion of goods from overseas are diminishing the prospects of a trade war with the U.S.

China’s imports, up 68 percent in five years, now amount to almost one-third of gross domestic product, according to World Bank data. The nation’s demand for foreign products is a boon for American companies, which exported $351 billion to China in the past five years.

U.S. President Barack Obama’s 35 percent tariff on tires from China spurred a Chinese investigation into prices of U.S. poultry and car products. Dangers of further escalation may be mitigated by the increasing benefit China provides the world economy. Poised to surpass Japan as No. 2 in GDP, its purchasing power is a lure to firms seeking new customers.

“As China depends more on domestic demand, its rise won’t be seen by the rest of the world to be as big a threat as some view it now,” said Shen Minggao, a former consultant to the World Bank who is chief economist in Hong Kong for the Greater China region at Citigroup Inc., the third-largest U.S. bank.

In fact, with respect to the one threat the PRC made, to look into "dumping" of chicken parts, the Chinese have such an appetite for chicken feet that they would practically revolt if the government tried to cut off imports.

The fact that China has demand and not just supply means that there is an equilibrium where trade laws can actually be enforced. That's all that's been done in this respect, and Dean Broder is just trying to protect the neoliberal consensus by arguing otherwise.

China Can Go Ahead And File A Complaint

I mentioned briefly China's counter-charge against the United States in exchange for extending tariffs on tire production. They have decided to probe US chicken and auto parts sales in China, accusing American exporters of "dumping" (selling goods at less than cost). Marcy Wheeler has a look at this:

I assume China is targeting chicken because our Ag is subsidized and the meat industry has a lot of clout in this country.

I'm more fascinated by China's decision to go after auto parts (and note, some of the announcements on this say "automotive products," which might include cars themselves).

In truth, China imposes huge tariffs on cars coming into its country (and ties permission to import cars to sourcing in China--for example, GM might get to import a certain number of Cadillacs in exchange for sourcing another part of its Chinese-production in China). And the import of parts is often limited to more complex parts that are the same in China as they are in the US. There's not much there there.

It looks like China is targeting auto parts because the government is highly involved in GM and Chrysler, and China can using a threatened cut-off of those markets to leverage a scale-back on the tire tariffs. But the problem is that there's a mechanism to settle these disputes called the WTO, and with China as a member this so-called "trade war" will actually be settled by the governing body through a normal resolution process, including whatever retaliation China offers. And on that front, the US action was available under the existing trade agreement, and I can't see how any amount of legal wrangling can deny that fact. In the end, China and the US are symbiotic trading partners, and this tariff raise doesn't have to lead to any escalation at all. We'll see who stands their ground.

Better News On Bagram

Barack Obama has been lit up for not being the be-all and end-all to liberals for months now, and a fair amount of those criticisms are warranted. The storm of criticism has also driven out of the conversation what has been a pretty decent week for those who want to see a bit more fairness and humility in our domestic and foreign policy. In addition to the resumption of talks with Iran, the Administration will pursue bilateral negotiations with North Korea. The raising of tariffs against Chinese tire imports, while met with petulance and idle threats by the PRC, represents a genuine concern for American manufacturing the likes of which we haven't seen in decades. And this announcement on detainee reviews at Bagram AFB, while not wholly sufficient, is nevertheless welcome.

The Obama administration soon plans to issue new guidelines aimed at giving the hundreds of prisoners at an American detention center in Afghanistan significantly more ability to challenge their custody, Pentagon officials and detainee advocates say.

The new Pentagon guidelines would assign a United States military official to each of the roughly 600 detainees at the American-run prison at the Bagram Air Base north of Kabul. These officials would not be lawyers but could for the first time gather witnesses and evidence, including classified material, on behalf of the detainees to challenge their detention in proceedings before a military-appointed review board.

Some of the detainees have already been held at Bagram for as long as six years. And unlike the prisoners at the Guantánamo Bay naval base in Cuba, these detainees have had no access to lawyers, no right to hear the allegations against them and only rudimentary reviews of their status as “enemy combatants,” military officials said.

The changes, which are expected to be announced as early as this week after an obligatory Congressional review, come as the Obama administration is picking through the detention policies and practices of the Bush administration, to determine what it will keep and what it will abandon in an effort to distance itself from some of the harsher approaches used under President George W. Bush. Human rights groups and prisoner advocates cautiously hailed the policy changes but said the government’s track record in this area had been so poor that they wanted to see concrete results before making hard judgments.

These are not habeas trials under the American system of justice, which should follow for those detainees brought to Bagram from other countries and not as part of the Afghan war. But this is in response to a federal judge's ruling that would have allowed those very prisoners to challenge their confinement, so hopefully it can be put together in such a way that satisfies the principle. And this Defense Department official's quote is encouraging:

“We don’t want to hold anyone we don’t have to hold,” said one Defense Department official, who spoke on the condition of anonymity because the guidelines have not been formally announced. “It’s just about doing the right thing."

Karen DeYoung and Peter Finn have more.

A Defense Of American Jobs

I remember when I was told on a daily basis that the President's greatest responsibility was to protect the American people. Well, this President just did that. He protected their jobs.

In a break with the trade policies of his predecessor, President Obama announced on Friday night that he would impose a 35 percent tariff on automobile and light-truck tires imported from China [...]

The decision signals the first time that the United States has invoked a special safeguard provision that was part of its agreement to support China’s entry into the World Trade Organization in 2001.

Under that safeguard provision, American companies or workers harmed by imports from China can ask the government for protection simply by demonstrating that American producers have suffered a “market disruption” or a “surge” in imports from China.

Unlike more traditional anti-dumping cases, the government does not need to determine that a country is competing unfairly or selling its products at less than their true cost.

The International Trade Commission had already determined that Chinese tire imports were disrupting the $1.7 billion market and recommended that the president impose the new tariffs. Members of the commission, an independent government agency, voted 4-2 on June 29 to recommend that President Obama impose tariffs on Chinese tires for three years. Mr. Obama had until this coming Thursday to make a decision.

China undercuts the global market through manipulating their currency and treating their workers like slaves. America can stand by and do nothing as jobs fly away and the manufacturing base gets obliterated, or they can act under their own trade laws to do something about it. The inconvenient fact is that we don't have free trade; every country acts to protect their interests. And so should we.

Very good move by the President. Dave Johnson has more.

Let The World Be Flat, Then

Here's something everyone can sink their teeth into - the White House enforcement of trade laws! Actually, it's more serious than it sounds. The Chinese are undercutting American manufacturers on price through actions of questionable legality, and the Obama Administration needs to make a choice on whether or not to enforce that.

By Sept. 17, Obama must decide whether to slap a 55 percent tariff on tires imported from China, as recommended by a federal trade panel, or leave the matter alone, as a phalanx of lobbyists representing manufacturers in China and U.S. companies that import from them are urging.

From 2004 to last year, the number of Chinese tires imported to the United States more than tripled, and their share of the U.S. market rose from 5 percent to 17 percent. Over the same period, the share of the U.S. market served by U.S. factories declined by a similar amount. More than 5,000 U.S. jobs were lost.

Opponents of the tariff say the U.S. industry's shrinkage is unrelated to the surge in Chinese imports. The U.S. manufacturers, they say, have strategically moved into pricier, more profitable tires, shifting production of cheaper tires overseas.

This is a measure designed to save American manufacturing jobs. The "world is flat" crowd tells us that we shouldn't bother so much with that, because globalization has provided cheap crap for us all and the world must freely trade. The answer to that is that all countries restrict their own markets. Toyota wouldn't exist without tariffs. A lot of major industries overseas wouldn't. In particular, Chinese industry receives government subsidies that violate international trade law, and they should face the consequences.

In one of the largest U.S.-China trade cases ever, the U.S. Commerce Department has issued a preliminary finding that Chinese steel pipe producers have received government subsidies in violation of trade law, helping them overrun the competition.

The volume of steel pipes imported from China more than tripled between 2006 and 2008, rising from $632 million to $2.6 billion, according to the Commerce Department.

The subsidies from the Chinese government allowed the firms to overwhelm their U.S. rivals, according to six U.S. companies that filed the complaint along with the United Steelworkers union. The companies alleged that their Chinese rivals received discounts on raw materials and loans from government-owned firms.

To even the playing field, the Commerce Department has ordered that tariffs ranging from an estimated 11 percent to 31 percent be imposed on the steel pipes from China.

The steel pipes at issue in the case are those used primarily by the oil and gas industry. They are known as "oil country tubular goods." By dollar volume of imports in the industry, the case represents the largest U.S.-China trade case ever, attorneys said.

If you want to argue for a level playing field, you have to be willing to call out both sides and seek one that's truly level. Good for the Obama Administration, so far, for making that case.

The Climate Saga: Too Much For The Senate, Not Enough For The World

Though there were early indications that the House package of the Waxman-Markey energy and climate bill were spurring the development of similar policies abroad, among the Europeans who have already set up a cap and trade system for carbon emissions, the relatively weak standards forced into the bill by Blue Dogs and farm-state Democrats have them looking unkindly at it:

The European hosts of the Group of 8 summit meeting welcome the shift. But the new stance also worries them, in part because they fear that the United States is working toward an independent deal with China outside the global negotiating framework.

President Obama has stated a commitment to addressing climate change. That has been followed by the recent passage by the House of a landmark bill that, if also approved by the Senate, would begin to regulate heat-trapping gases. Those moves have given the Europeans, as well as climate scientists and some environmental groups, hope that the United States will take a leadership role in global talks toward a new climate-change treaty [...]

But Europe is also unhappy with the Obama administration’s reluctance to accept aggressive near-term goals for cutting greenhouse gases and its refusal so far to formally accept language that would limit the rise in global temperatures to 2 degrees Celsius, or 3.6 degrees Fahrenheit, above pre-industrial levels [...]

The president and other American policy makers also insist that no deal can effectively reduce emissions unless China, India and other major developing countries are on board. The United States has been pursuing a separate track of climate diplomacy directly with Beijing.

Michael Starbaek Christensen, a senior climate-change official in Denmark, said he was worried that the United States and China — the two largest emitters of greenhouse gases in the world — would cut a separate deal and push the rest of the world into a treaty that did too little to curb emissions.

“I can only encourage Europe to stay in the lead and not let a bilateral U.S.-China relationship take over,” Mr. Christensen said, “because one concern I would have with the U.S.-China relationship is that they would find a lower common denominator.”

The G8 leaders could not even agree on the same aspirational targets of a 50% reduction in greenhouse gas emissions by 2050 that George Bush agreed to in Japan at the G8 in 2008. Put simply, the rest of the developed world finds the US targets too low. I agree with them, but of course our political process is almost uniquely wired against coming to a solution that matches the needs in the science. Plus we have an entire political party composed of denialists from the Exxon Mobil school of Energy Policy.

In the first Senate hearing today on clean energy legislation supported by President Barack Obama, Sen. Sheldon Whitehouse (D-RI) compared the Senate to the “ExxonMobil board room.” Whitehouse expressed his concern that the United States would be left behind in the clean energy race, saying, “I do not want to see American industries at the back of that parade with a broom.” Addressing the Obama Cabinet members before him — Ken Salazar, Stephen Chu, Tom Vilsack, and Lisa Jackson — Whitehouse apologized for the denial of man-made climate change by his fellow senators:

"We know that this is probably — along with the ExxonMobil board room — the last place that sober people debate whether or not these problems are real, but we intend to work with you anyway, and we hope to give you strong legislative support if we can."

As I've often said, with climate change being a "boiling frog," intangible kind of concern, it's hard for me to believe that a Democrat from Idaho, for example, will face negative consequences from his No vote on Waxman-Markey. I'd like to be wrong about that. But the dynamics just haven't moved in the right direction yet.

As to the Senate, where the climate bill will almost certainly weaken again, Nate Silver postulates that there are 62-66 potential votes for legislation, and Bill Scher sees some possibilities among the GOP as well. I'm significantly more skeptical, especially with the lack of mass grassroots action, which just has not materialized.

...There's now a tentative agreement on a more limited plan to not let global temperature rise above 3.6 degrees Fahrenheit.

The Battle Of Urumqi

While the Chinese government is claiming that the Uighur riots in Urumqi, Western China are under control, the importance of this uprising for the future of China should not be overlooked. It took thousands of troops to quell Uighurs brandishing makeshift weapons. The Chinese have engaged in brutal repression in Tibet and in Xinxiang Province, but it doesn't look entirely sustainable to me. Rebiya Kadeer writes in the WSJ:

On Sunday, students organized a protest in the Döng Körük (Erdaoqiao) area of Urumqi. They wished to express discontent with the Chinese authorities' inaction on the mob killing and beating of Uighurs at a toy factory in Shaoguan in China's southern Guangdong province and to express sympathy with the families of those killed and injured. What started as a peaceful assembly of Uighurs turned violent as some elements of the crowd reacted to heavy-handed policing. I unequivocally condemn the use of violence by Uighurs during the demonstration as much as I do China's use of excessive force against protestors.

While the incident in Shaoguan upset Uighurs, it was the Chinese government's inaction over the racially motivated killings that compelled Uighurs to show their dissatisfaction on the streets of Urumqi. Wang Lequan, the Party Secretary of the "Xinjiang Uighur Autonomous Region" has blamed me for the unrest; however, years of Chinese repression of Uighurs topped by a confirmation that Chinese officials have no interest in observing the rule of law when Uighurs are concerned is the cause of the current Uighur discontent [...]

The unrest is spreading. The cities of Kashgar, Yarkand, Aksu, Khotan and Karamay may have also seen unrest, though it's hard to tell, given China's state-run propanganda. Kashgar has been the worst effected of these cities and unconfirmed reports state that over 100 Uighurs have been killed there. Troops have entered Kashgar, and sources in the city say that two Chinese soldiers have been posted to each Uighur house.

The nature of recent Uighur repression has taken on a racial tone. The Chinese government is well-known for encouraging a nationalistic streak among Han Chinese as it seeks to replace the bankrupt communist ideology it used to promote. This nationalism was clearly in evidence as the Han Chinese mob attacked Uighur workers in Shaoguan, and it seems that the Chinese government is now content to let some of its citizens carry out its repression of Uighurs on its behalf.

It's possible that this works in the short-term, but not in perpetuity. Closed societies like China's struggle to remain close. Eventually, Xinxiang will be free just as Tibet will be free.

The China Syndrome

There's been a serious and ongoing uprising in Western China, between Muslim Uighurs and Chinese police. Apparently the police killed at least 150 people in the capital of Xinxiang Province, Urumqi, with thousands of injuries and even more arrests. The tensions between the ethnic majority Uighurs in this region and the Chinese government have long been known, and after years of cultural and political repression, things are spilling over.

In fact, the reason why the group of 17 Uighurs at Guantanamo could not be sent to China is because of pretty much this outcome - they would have been persecuted and possibly tortured. However, Andy McCarthy at NRO hears "Uighurs" and "riots" and decides to spin out this marvel:

The Wall Street Journal (as flagged in the NRO web briefing) reports on rioting in China by Uighur "students" that has left scores dead and hundreds wounded. The "students," described elsewhere in the story as from a "predominantly Muslim ethnic group[, which has] long chafed at restrictions on their civil liberties and religious practices imposed by a Chinese government fearful of political dissent," expressed their dissent by torching cars and buses, as well as — according to accounts of some witnesses to state-controlled media — rampaging "with big knives stabbing people" on the street.

No reason for non-Muslims in Bermuda, Palau, or the United States to worry, though. The lovable Uighurs are merely trying to address "economic and social discrimination." Once they get social justice, I'm sure they'll stop.

McCarthy decides that state-run media reports in China are credible enough to just regurgitate. And neoconservatives like McCarthy, who used to praise the stirrings of democracy in totalitarian regions, let that go when political points can be scored against a Democratic President.

Remarkable.

Falling Behind

The value of a planned economy: no need for debates that can be hijacked by the forces of regress.

As the United States takes its first steps toward mandating that power companies generate more electricity from renewable sources, China already has a similar requirement and is investing billions to remake itself into a green energy superpower.

Through a combination of carrots and sticks, Beijing is starting to change how this country generates energy. Although coal remains the biggest energy source and is almost certain to stay that way, the rise of renewable energy, especially wind power, is helping to slow China’s steep growth in emissions of global warming gases [...]

This year China is on track to pass the United States as the world’s largest market for wind turbines — after doubling wind power capacity in each of the last four years. State-owned power companies are competing to see which can build solar plants fastest, though these projects are much smaller than the wind projects. And other green energy projects, like burning farm waste to generate electricity, are sprouting up.

To be clear, I don't SUPPORT the kind of totalitarianism evident in China, easier though it may make the transition to renewable energy. I wish that Republicans in this country would figure out that our value to the global economy lies in innovation and entrepreneurship, which is far more flexible here than in China, and if they would only allow it to flourish, America could easily become a world leader on this front. As it is, China uses its buying power and the relative alacrity with which they can turn the ship of state to crush us.

The article contains good news for the planet, and that supersedes the depressing news it augurs for this country's role in the post-American world, but it's frustrating to watch.

...meanwhile, in exceptional America, it takes months of browbeating for the EPA to reveal all the sites where coal ash can get into drinking water, rivers and streams.

Who Pissed In Dana Rohrabacher's Corn Flakes?

Dana Rohrabacher has been out front in yipping about the need for the President to rhetorically confront Iran, a stupid idea given our history in the region, and the opposite of what actual Iranian dissidents and experts like Shirin Ebadi, Trita Parsi and Akbar Ganji suggest. As OC Progressive notes, he is undermining the protests and demonstrations by giving credence to the complaint of the ruling regime that foreign interests are intervening in their election. By saber-rattling, like in the passage of a resolution in support of the protests and then wielding it as a club to criticize the President for not being belligerent enough, you just play into the hands of the regime. And Rohrabacher and his colleagues never had this kind of commitment to human rights when it involved the systematic, needless torture of detainees at Guantanamo and Abu Ghraib. In fact, Rohrabacher called those cruel, inhumane and degrading tactics fraternity hazing pranks - when Dick Cheney orders them. When the Iranians or North Koreans order them, it's a whole different ballgame.

But I have to step back and admire - and kind of marvel - at Rohrabacher's comments yesterday about the Uighurs, a group of 18 Muslims held at Guantanamo for seven years without charges, despite having been proven to commit no acts of terrorism or crimes of any kind. Several were released to Bermuda this week, amidst clamoring by many conservatives, in particular Newt Gingrich. But Rohrabacher smacked the former House Speaker down pretty hard on this point, decrying him for raising needless fears. It's idiosyncratic, of course, because it's Rohrabacher, and it mostly constitutes a conspiracy theory about the Chinese government. But embedded in the madness are some true statements about Republican fearmongering and overhyping of threats.

ROHRABACHER: And also, right off the bat, I’d like to express my deep appreciation to the leader in Bermuda — it’s Premier Brown — for his courage to do what is morally right in this situation. He’s demonstrated, I think, the best of democracy. That’s what leadership is all about: being willing to take such tough stands. I’m sorry that our own leadership here at home, and even in my own party, seems lacking at this moment. [...]

Much to my dismay, some pundits in the Republican party have fallen for this bait and are lumping the Uighurs in with Islamic extremists. The Bush administration did not help matters. It held Uighurs in Guantanamo as terrorists, and they did this, I believe, to appease the Chinese government in a pathetic attempt to gain its support at the beginning of the war against Iraq, and also to ensure China’s continued purchase of U.S. treasuries. Many, if not all, the negative allegations against the Uighurs, can be traced by to Communist Chinese intelligence, whose purpose is to snuff out a legitimate independence movement that challenges the Communist party bosses in Beijing.

No patriot, especially no Republican who considers themselves a Reagan Republican, should fall for this manipulation, which has us do the bidding of a dictatorship in Beijing.

In the hall of shame, of course, is our former speaker, Newt Gingrich. His positioning on this should be of no surprise — and is of no surprise — to those of who, during Newt’s leadership, were dismayed by his active support for Clinton-era trade policies with Communist China.

Video here.

Would that Rohrabacher would listen to his own words when saber-rattling against Iran. That moment of clarity - all right, about 1/3 of a moment - ought to be repeated.

Oh yeah, and George Packer is a media royalist buffoon.

More Screaming From The Korean Peninsula

North Korea draws out the sabers over their neighbors to the south joining the Proliferation Security Initiative.

North Korea threatened Wednesday to launch military strikes against South Korea if any of its ships were stopped or searched as part of an American-led operation to intercept vessels suspected of carrying weapons of mass destruction.

South Korea agreed to join the global interdiction program after North Korea tested a nuclear device on Monday — its second nuclear test in three years. The North had earlier warned the South not to participate in the effort, known as the Proliferation Security Initiative.

“We consider this a declaration of war against us,” an unidentified North Korean military spokesman said Wednesday in a statement carried by the North’s official news agency, KCNA. “Any hostile act against our peaceful vessels, including search and seizure, will be considered an unpardonable infringement on our sovereignty and we will immediately respond with a powerful military strike.”

The North Koreans also said in the statement that they “no longer feel bound by the armistice” that ended the fighting in the 1950-53 Korean War. Technically, the two Koreas have remained at war for more than 50 years, because the 1953 armistice never gave way to a final peace treaty. North Korea has previously called the armistice a “useless piece of paper.”

I guess this newfound bluster is a combination of testing a young President and jockeying for power inside North Korea in the event of the death of Dear Leader. Regardless, their threat is ridiculous. The Proliferation Security Initiative, maybe the only half-decent thing John Bolton ever came up with, allows South Korea, in this case, to search ships in their own territorial waters suspected of carrying WMD. North Korea may try to provoke a skirmish at the DMZ, but their true threat is from selling weapons technology to other nations. I believe in a strong nonproliferation effort, no matter how much North Korea screams.

More interesting than North Korea's idle threats is the evolution of China on the matter. Not only have they signed on to the strong statement condemning the nuclear test, but Kevin Drum finds this:

North Korea's latest nuclear test raises the question of just how long the bonds forged between old communist allies will endure....Increasingly, China itself is questioning whether the relationship is worth the effort.

Within the Chinese intelligentsia there is a deep divide over how to handle North Korea. The Global Times, a newspaper with close party ties, Tuesday published a survey of 20 of the country's top foreign policy experts. It found them split down the middle — 10 arguing for tough sanctions against North Korea, 10 opposed.

If China throws down the hammer, North Korea will truly be isolated, far more than they are today. International solidarity is more important than the belligerence of empty threats.

Waxman-Markey Clears Energy And Commerce Committee

At long last, the House Energy and Commerce Committee blew through the hundreds of Republican amendments and passed the Waxman-Markey climate and energy bill out of committee. While the bill is certainly not as good as it could be, it does represent a step in the right direction, and given the wrangling in Congress there are months upon months to get it right. Left to their own devices, members of Congress will only hurt the bill, in all likelihood, which is why movement pressure must be brought to bear on the politicians. President Obama has clearly sequenced health care first in the queue, but his voice will be needed in this debate.

The other lever in this debate could actually be China. Their demands for the upcoming Copenhagen conference will include targets that are much deeper than what Waxman-Markey now provides, and without those targets, I assume China will reject any move to cap their own emissions. Apparently China and the US are holding secret talks on how to deal with climate change and have reached some kind of preliminary understanding, and if Congress can be made to comply with this kind of leverage, maybe the bill can get strengthened.

The real end point is the global summit in Copenhagen in December, so perhaps that can be used like a vice to force the bill through. At any rate, we'll need to be on top of this.

...more from the Sierra Club. Wow, Republican Mary Bono Mack (CA-45) ended up voting for the bill. That's significant. Apparently we only lost 4 Dems, all Blue Dogs: Ross, Melancon, Matheson, and Barrow.

Cold-Blooded

Obama has a nice-guy personality that he presents to the world, but his political instincts have always been pretty hard-core. He won his initial State Senate race by forcing everyone else off the ballot after getting their official signatures disqualified. That's what I'm reminded of by today's move sending Utah Governor Jon Huntsman to Beijing as the US Ambassador to China. Aside from being qualified for the job by spending a lot of time in Asia and speaking fluent Mandarin, Huntsman is a rising young star in the Republican Party mentioned often as a potential 2012 Presidential candidate. Just a couple weeks ago, Obama campaign manager David Plouffe labeled Huntsman the biggest threat to Obama in 2012. So the President up and co-opted him.

Huntsman may be playing a long game, getting the imprimatur of a popular President and setting up for a future run way down the road. But I tend to reject the idea that the GOP primary voters would nominate anyone who took a job in the Obama Administration. At any rate, in the short-term, Obama just neutralized the guy his campaign manager saw as the toughest opponent to his re-election.

I wish he would use this kind of strategy against the ConservaDems...

Climate/Energy Bill Deal?

It's a bit odd to have two important bills moving rapidly through the Congress, on parallel tracks, both of which would represent a key pillar of the President's agenda. I've focused a lot of health care, but there's also climate and energy legislation, which may have hit a breakthrough, according to CQ (subs. req.):

House Democrats may be nearing a resolution on energy and climate legislation ... Waxman will meet Tuesday afternoon with committee Democrats to follow up on staff discussions over the weekend. A markup is expected to begin as early as May 14, though a committee spokeswoman said no decision has been made...

...The biggest area of contention is the bill’s cap-and-trade plan to reduce greenhouse gas emissions. President Obama proposed to auction pollution allowances that industry would use in order to meet the cap. Yet to win votes, Waxman’s bill will almost certainly allow businesses to receive some of these allowances for free.

Lawmakers are not divulging any details of a compromise proposal. However, the bill is generally expected to provide about 35 percent of the allowances to local electric distribution companies, which would then be expected to pass the savings on to consumers. Additional allowances, most likely around 15 percent, could go to the manufacturing industry, and coal-fired utilities could receive some allowances to fund research into carbon capture and sequestration. Oil-state lawmakers want 5 percent of the allowances to go to refineries, but Gene Green, D-Texas, said negotiations are continuing. “We’re not there yet,” he said.

Several members also want to auction a substantial portion of the allowances to pay for research into clean-energy technologies and to assist low-income consumers. Some of the allowances would also go to the Treasury so the bill is deficit-neutral.

An even bigger decision for Waxman is whether to change the draft bill’s short-term target to reduce emissions 20 percent from current levels by 2020. Waxman has repeatedly said he does not want to change the target, but to reach a deal, he could move closer to Obama’s proposal to reduce emissions 14 percent by 2020.

I think it's a mistake to allow pollution credits to go to industry for free. But importantly, cap and trade makes up just part of the proposal, and the other elements of the bill would not only clean up some of the shortcomings of cap and trade, but actually strengthen the cap:

...unpriced carbon is not the only market failure. In fact, there are dozens, hundreds of such failures. If you sought to address them all with a carbon price—a fairly blunt tool—you’d need a very, very high price, and that’s not going to happen. A politically realistic price on carbon, likely to be low at least for the first decade or two, will not address or overcome most of those failures. The idea behind “complementary policies,” or policies outside the carbon price, is to address some of those failures and thereby make the road smoother (cheaper, more efficient) for the declining cap.

Roberts uses some examples: utilities, which are regulated monopolies acting outside the free market that may default to the most cost-effective but least climate-friendly options; the need for coal-fired plants to get phased out to meet the cap target despite the fact that they are grandfathered in under the Clean Air Act; and some more. Ultimately, complementary policies like a renewable energy standard drives the cap down to a level where it can actually mitigate the most disastrous effects of climate change. Ultimately, this may not be enough to prevent a rise of, say, three degrees in global temperature, and we need to move to an adaptation strategy as much as a mitigation one. But the fatalist notion of "there's no political will to tke meaningful steps," or "even if we lower carbon emissions, India and China won't" doesn't fly with me. In fact, since China has built power plants far more efficiently than we have, perhaps that phrase should get flipped around.

We don't really know what the changes in the legislation will be - hopefully, Peter Welch fattened up the Blue Dogs with enough lasagna so they didn't muck around with the bill too much. But while I still wonder whether we can get this done in this year, the most hopeful sign, for me, happened outside of Congress:

Bloomberg reports that Duke Energy Corp., which owns utilities in the Southeast and Midwest, announced that it won’t be renewing its membership with NAM, in part because of NAM’s refusal to address global warming:

“We are not renewing our membership in the NAM because in tough times, we want to invest in associations that are pulling in the same direction we are,” Duke Chief Executive Officer Jim Rogers said last month in an interview. The association, the U.S. Chamber of Commerce and Republicans “ought to roll up their sleeves and get to work on a climate bill, but quite frankly, I don’t see them changing.”

Charlotte, North Carolina-based Duke is a founding member of the United States Climate Action Partnership, a coalition of business and environmental groups that seeks to influence legislation on greenhouse gases linked to global warming. The National Association of Manufacturers has opposed mandatory controls, arguing they will harm the economy.

A Duke spokesman also said that the company would like to see cap-and-trade legislation “happen this year if possible.”

If energy companies like this want something done, something can actually get done.

Still Falling Off A Cliff

Another terrible jobs number for March.

Nonfarm payroll employment continued to decline sharply in March (-663,000), and the unemployment rate rose from 8.1 to 8.5 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Since the recession began in December 2007, 5.1 million jobs have been lost, with almost two-thirds (3.3 million) of the decrease occurring in the last 5 months. In March, job losses were large and widespread across the major industry sectors.

Almost half of the jobs were lost in the manufacturing and construction sectors. We're becoming more of a service-sector McJob economy as a result of this Great Recession. Meanwhile China wants to become the leader in electric vehicles.

We're screwed.

I Suggest Everyone Take A Course In Mandarin

Barack Obama's op-ed on the G20 Summit has a global audience for a reason: there has been a lot of wrangling between member nations about how to best tackle the global economic crisis. America has called for additional stimulus while Europe in particular wants increased regulation of the financial sector. I think Obama mainly asks for a both/and approach here rather than either/or.

My message is clear: The United States is ready to lead, and we call on our partners to join us with a sense of urgency and common purpose. Much good work has been done, but much more remains. Our leadership is grounded in a simple premise: We will act boldly to lift the American economy out of crisis and reform our regulatory structure, and these actions will be strengthened by complementary action abroad. Through our example, the United States can promote a global recovery and build confidence around the world; and if the London summit helps galvanize collective action, we can forge a secure recovery, and future crises can be averted.

Our efforts must begin with swift action to stimulate growth. Already, the United States has passed the American Recovery and Reinvestment Act -- the most dramatic effort to jump-start job creation and lay a foundation for growth in a generation. Other members of the G-20 have pursued fiscal stimulus as well, and these efforts should be robust and sustained until demand is restored. As we go forward, we should embrace a collective commitment to encourage open trade and investment, while resisting the protectionism that would deepen this crisis [...]

While these actions can help get us out of crisis, we cannot settle for a return to the status quo. We must put an end to the reckless speculation and spending beyond our means; to the bad credit, over-leveraged banks and absence of oversight that condemns us to bubbles that inevitably bust. Only coordinated international action can prevent the irresponsible risk-taking that caused this crisis. That is why I am committed to seizing this opportunity to advance comprehensive reforms of our regulatory and supervisory framework.

All of our financial institutions -- on Wall Street and around the globe -- need strong oversight and common- sense rules. All markets should have standards for stability and a mechanism for disclosure. A strong framework of capital requirements should protect against future crises. We must crack down on offshore tax havens and money laundering. Rigorous transparency and accountability must check abuse, and the days of out-of-control compensation must end. Instead of patchwork efforts that enable a race to the bottom, we must provide the clear incentives for good behavior that foster a race to the top.

Generally speaking, we actually do have to deal with all these things at once, not just because of the political concerns (no better time for reform than in the midst of the crisis, etc.), but to insure against the very real prospect of moral hazard or the desire for personal greed to supersede a return to stability for the greater economy.

However, I'm concerned that the only people playing 8-dimensional chess with respect to this are the Chinese:

China will propose the new world 'currency' with reserve status, in fact a basket of major currencies as defined by the IMF Special Drawing Rights, at the G20 meeting on April 2.

It will take a few years until a full fledged SDR based system will become functional. The U.S. and the UK will likely fight against this. The Euro based countries will mostly be indifferent. For China this is now a major official policy goal. With BRIC pressing for a new reserve system and support from others medium weight countries like South Korea and South Africa the new initiative has a lot of momentum.

So far the U.S. could borrow cheaply and pay back less in real value than the original loan. That privilege is now going away. The trillions the U.S. currently needs to borrow from abroad will have to be payed back in full. That is a major change in its global power status and will seriously decrease its influence in international policy questions.

Russia appears to be on board with this, which would tip it in the direction of China. It doesn't seem like hyperbole to call this the end of American empire. And you know, we screwed the pooch so we lost the right to lead the world, in many respect. However, I find it always worthwhile to fear second-rate powers with lots and lots of guns. Steve Hynd has more.

Symbiotic Dysfunction

So China is talking about being "worried" about all the US Treasury bonds they're holding. I'm sure they are, at some level. And I used to be extremely concerned about this as well, until it was basically explained to me that China has little choice. In a collapsing world economy, there is not much recourse for a safe place to drop your cash other than US securities. In addition, Chinese exports are plummeting, and they actually need to keep America flush with money to keep buying their goods. President Obama basically said this today, albeit not using those words.

“There’s a reason why even in the midst of this economic crisis, you’ve seen actual increases in investment flows here into the United States,” Mr. Obama told reporters. “I think it’s a recognition that the stability not only of our economic system but our political system is extraordinary.”

He added, “Not just the Chinese government, but every investor can have absolute confidence in the soundness of investments in the United States.”

That sounds jingoistic, but it happens to be true. Obama is simply saying that China has nowhere else to go.

Like Clockwork

I'm trying to figure out this US-China naval row. The US says the Chinese surrounded their ship, China says the USNS Impeccable was illegally surveying Chinese waters, and apparently the crew on the unarmed Impeccable had to use fire hoses - FIRE HOSES - in self-defense.

Anyway, the Secretary of State and China's Foreign Minister spoke yesterday and agreed to work to avoid further incidents. This happened eight years ago at the beginning of Bush's regime with a mid-air collision and 24 Naval airmen briefly held on Hainan Island. I would say that Obama's Administration acted a bit better, but you get the sense that China just wants to feel things out at the beginning of a new Presidency to test the boundaries.

Can We Really Reconcile Taliban?

Barack Obama's nod to the possibility that moderate Taliban could potentially be co-opted into working with the Afghan government and US forces, the way Sunni insurgents were presumably co-opted to work against Al Qaeda in Iraq (I say "presumably" because that's not the accurate description of what happened, in fact the Awakening forces got sick of Al Qaeda practically of their own accord), is a fairly good position to take. It recognizes that peace can only happen with the support of those who can enforce it. However, the reality of actually getting moderate Taliban to ally with the US is that it's unlikely to happen. That doesn't mean you stop trying, but it's important to understand the truth of the situation on the ground.

Barack Obama's call for "moderate" Taliban members to be brought in from the cold met with scepticism yesterday from leading Afghan opposition figures, who warned that co-opting fighters would fail as long as Hamid Karzai's government appeared weak and corrupt [...]

Ashraf Ghani, a former Afghanistan finance minister, who is to stand as presidential candiate in the elections in August, said: "I don't know of a single peace process that has been successfully negotiated from a position of weakness or stalemate."

A Taliban spokesman, who said that the US president's overture was a sign of weakness, poured cold water on the notion that "moderate" fighters could be easily turned.

Qari Yusuf Ahmadi, a Taliban spokesman contacted by telephone, said: "They say they want to speak to moderate Taliban but they will not be able to find such people because we are united around the aim of fighting for freedom and bringing an Islamic system to Afghanistan." He added that Obama's comments were a reflection of the fact that the Americans had "become tired and worried".

the tenor of this piece is that there's no reason for the Taliban to switch sides when they appear to be winning. This would have been a good strategy five or six years ago, but now it will be difficult to turn Taliban unless the government first turns itself around and recaptures the support of the Afghan people. And that probably doesn't happen without the end of the Karzai regime. His reputation is too tarnished with weakness and corruption.

Spencer Ackerman goes deeper on this possibility, and is a little more optimistic - hoping that alliances between midlevel commanders and US unit leaders at the brigade level could break out. Personally, I see Chinese copper wealth and a new government able to distribute it as being a potentially better bet.