January 28, 2010

MAGIC, MYSTERY AND CONUNDRUM – SOTU ADDRESS

Arshad M. Khan

The President performed his campaign magic once again yesterday.  The state of the Union address cast a spell on listeners and for once we forgot the trillion dollar wars, the conning bankers fleecing taxpayer dollars under threat of catastrophe — their demands met unquestioningly by their chums in Treasury — and the aborted health care plan.

The laudable focus on jobs was the main policy thrust.  But the expenditure necessary was contradicted by a simultaneous call for a freeze on Federal spending with the exception of Medicare, Social Security and Defense — essentially the main components of the budget.  The freeze on the remainder is estimated to save a paltry $250 billion over ten years, an amount about the same as the annual cost of the Iraq and Afghan wars.  It is a mystery how the grab bag of small investment ideas will make more than a dent in the jobs picture.  Thirty billion to community banks to stimulate lending to local small business, eight billion for high-speed rail, investment in clean energy and so on.  No one can quibble with these ideas although efficient execution, particularly in the distributions to banks is critical.  It should be based on actual proposals, scrutinized carefully before the funds are released.

If our goal is to be number one in high speed rail, then we have a long way to go.  The Illinois project is touted to run the trains up to 110 mph, a significant improvement from the current 70 mph.  It pales, however, in comparison with, say, France.  The normal service runs on some lines at 320 kph (200 mph) and on others at 300 kph (187 mph).  The record fast speed for a TGV is an incredible 357 mph.  Yes, we have a long road ahead, and it will be fought tooth and nail by Boeing and the Airlines.

The wars, given nary a mention in the speech, remain a conundrum.  We are promised withdrawal from Iraq, but if chaos results, we will be blamed; the distrust, diminished prestige and the loss of credibility will create a vacuum filled happily by rivals China and Russia.  Our policy of paying off insurgents worked for a while.  But if the spate of recent bombings before the impending election is any indication, we are a long way from a permanent resolution.  George W.’s legacy continues to drain Iraqi blood and our treasure.

In Afghanistan, we are also busy trying to buy off insurgents even as they bomb the heart of Kabul right by the seat of government.  But now that we are finally accepting real Pashtun participation in the central government, perhaps we can speed up negotiations and avoid the needless killing of the coming Spring offensive.  Sun Tzu’s advice from two and a half millenia ago still holds:  Know your enemy and know yourself.

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