International Relations -- Real Results Abroad

April 9, 2009

by Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, Benjamin Armbruster, Ali Frick, and Ryan Powers

INTERNATIONAL RELATIONS

Real Results Abroad

This week, President Obama returned from an eight-day tour of Europe and parts of the Middle East. Despite his significant progress on a number of economic and international security issues, members of the media have focused on superficial issues related to breaches of diplomatic protocol, questions of public perception, and transparent political posturing. Worse, conservatives have suggested that Obama's attempts to rebuild America's reputation and tackle global problems with the cooperation of the international community is somehow "yielding" to foreigners or "humbling" the stature of U.S. in the world. Today's Progress Report redirects the focus to the actual substance of the economic and international security achievements of Obama's trip, as well as the significant work that lies ahead for the international community.

NAVIGATING THE G20: Despite claims to the contrary, Obama's trip to the G20 summit in London did move forward several significant developments. First and perhaps most notably, the G20 committed to expanding resources for global lending facilities and the International Monetary Fund (IMF) from $250 billion to $1.1 trillion. As the Economist noted, observers should be cautiously optimistic about the figures, as it's not yet clear from where all of the money will come from. However, "the fatness of the figures does suggest that the world's leading emerging and rich economies are serious about bulking up the IMF." The new resources will help the IMF and other global financial institutions to "cushion the collapse in global demand, by allowing countries from which private capital flees to cut spending by less than they otherwise would." Furthermore, the G20 agreed that "the heads and senior leadership of the international financial institutions should be appointed through an open, transparent, and merit-based selection process," paving the way to allowing the World Bank or the IMF to be led for the first time by an individual from the developing world. This change would be significant because, as former IMF chief economist Simon Johnson, has explained, many countries in need of assistance are reluctant to approach the IMF because of what they view as "rich countries" forcing them to accept "onerous" lending terms. "By giving middle- and lower-income countries a greater role in [IMF] governance," other countries that need assistance may be more likely to ask for it. Additionally, Obama played a key role in brokering an agreement on a new G20 "effort to list tax havens, as a way to 'name and shame' them into becoming more transparent and cooperating with international rules." The French and Chinese delegations disagreed on how the G20 Communique should address the tax havens list and French President Nicolas Sarkozy threatened to walk out of the meeting. Obama, however, delicately took the two delegations aside individually and successfully negotiated compromise language.

ENHANCING INTERNATIONAL PEACE AND SECURITY: After the G20 summit, Obama traveled to the NATO summit in Strasbourg, France, and he appealed for more European support for NATO operations in Afghanistan. Obama reiterated his new strategy in Afghanistan, explaining that "the first reason we are there is to root out al Qaeda, so that they cannot attack members of the alliance." The European members who had long pressed President Bush to reassess his lofty agenda in the country welcomed Obama's willingness to "set limited, achievable goals in Afghanistan." In response, Obama succeeded in securing the promise of 5,000 additional troops to aid the Afghanistan effort. In light of the 68,000 American troops in the country, the Europeans' new commitment is small but symbolic. Approximately 1,400 to 2,000 of the new European forces "will be sent to form embedded training teams for the Afghan Army and the police," while "3,000 of them are to be deployed only temporarily to provide security for the August elections in Afghanistan." At NATO,too, Obama again showed himself to be a strong international negotiator. Indeed, Turkey -- NATO's only Muslim country -- had objected to "Dane Anders Fogh Rasmussen becoming the next head of NATO" because of his "handling of a 2006 crisis over cartoons of the Prophet Mohammad in a Danish newspaper." Obama, however, "met on the sidelines with Turkish President Abdullah Gul and then with Gul and Rasmussen together. By the end of a long day of repeated delays in the summit schedule, Turkey relented" on the condition that "a Turk would be Rasmussen's assistant." Also significant was the fact that prior to the NATO summit, Obama and Russian President Dmitry Medvedev "agreed to open negotiations on a treaty that could slash their nuclear arsenals by a third," in an attempt to "move beyond Cold War mentalities."

SIGNIFICANT WORK REMAINS: Despite the substantive results of Obama's tour of Europe, significant work remains. Spencer Boyer, Director of International Law and Diplomacy at the Center for American Progress, noted that despite the sometimes slow progress of international cooperation, it is a necessary part of the now globalized world. Boyer and CAP researcher Archana Menon recently wrote, "Luckily, we have U.S. leadership that recognizes that going at it alone, or with the aid of small groups of like-minded countries, won't be sufficient. We don't really have a choice. Unless there's a global solution, there won't be a solution." While the new resources for international financial institutions and changes in their leadership selection are welcome, it will take time and significant effort to ensure that the international community makes the best use of those resources. Obama acknowledged that much work remains after the G20, noting, "I think we did OK. When I came here, it was with the intention of listening and learning, but also providing American leadership. And I think the document that has been produced as well as concrete actions reflect a range of our priorities." From here, the G20 could go further. As CAP explained recently, Obama could push the G20 to shape itself into an institution with "the legitimacy to lead discussions on global economic governance" by establishing "a G-20 leaders forum" with a clear mission, evolving membership, and a commitment to annual meetings. In the short term, Obama must work at repairing the damage done to U.S. relations abroad by the previous administration. Presidential Adviser David Axelrod explained, "Over time, the seeds that were planted here are going to be very, very valuable for the security and progress of the United States." Obama put it much more directly, telling the the Spanish Prime Minister (whom Bush often shunned), "You'll notice my approach is quite different from my predecessor."

ECONOMY -- TARP OVERSIGHT PANEL: TREASURY MAY NOT BE ACKNOWLEDGING THE DOWNTURN'S 'DEPTH': According to new forecasts set to be released by the International Monetary Fund (IMF), "toxic debts racked up by banks and insurers could spiral to $4 trillion." With that harrowing number hanging overhead, the Troubled Asset Relief Program's Congressional Oversight Panel released its six-month report today. The panel, chaired by Harvard Law School professor Elizabeth Warren, questioned Treasury Secretary Timothy Geithner's assumption that the toxic assets clogging the banks are merely economically depressed, noting that Treasury's response "fails to acknowledge the depth of the current downturn." "If the economic crisis is deeper than anticipated, it is possible that Treasury will need to take very different actions in order to restore financial stability," wrote the panel. The Warren panel also noted that Treasury "has not explained its assumption that the proper values for these assets are their book values." As estimates regarding the number of toxic assets climb higher and higher -- with Nouriel Roubini claiming there are $3.6 trillion worth -- it is becoming clearer just how much depends on Treasury finding a workable plan for cleaning up the banks. As IMF managing director Dominique Strauss-Kahn said, "[Y]ou never recover before the cleaning up of the banking sector has been done." And right now, Geithner's clean up is premised on an assumption with which more and more people are taking issue.

ECONOMY -- SEN. LINCOLN'S $250 BILLION ESTATE TAX CUT HELPS ONLY 60 SMALL BUSINESSES: Last week, 10 Democrats in the Senate joined all 41 Republicans in voting for a $250 billion proposal to cut estate taxes. More than 99 percent of this cost (approximately $249.5 billion) would go to the inheritors of estates worth over $7 million. Sens. Blanche Lincoln (D-AR) and Jon Kyl (R-AZ) were the key advocates of the proposal, and in a press release, Lincoln touted the measure, claiming that it was "aimed at farms and small businesses." "With all the money we've spent to help the economy improve, very little of it has filtered down to Main Street and family-owned businesses," the release said. However, as a New York Times editorial noted, "[T]he implication is that upon the death of an owner, estate taxes typically devastate small businesses and the jobs they provide. That is swill." Indeed, according to a new Tax Policy Center (TPC) analysis, Lincoln and Kyl want to spend $250 billion slashing taxes for the heirs of multi-millionaires in order to save just 60 small businesses or farms from the estate tax. "We estimate that under the Obama proposal, 100 family farms and businesses would owe tax...The Lincoln-Kyl proposal would cut the number to 40," the analysis says. The Times notes that according to the Congressional Budget Office, "almost all such estates are able to pay the tax bill without having to sell business assets." As the TPC pointed out, "the biggest winners [of the estate tax cut] would be the very wealthy. Estates worth over $20 million would save an average of $3.5 million."

CIVIL RIGHTS -- FAR-RIGHT GROUP WARNS OF A 'GATHERING STORM' OF MARRIAGE EQUALITY: In the wake of marriage equality victories in Iowa and Vermont -- and promising signs in New York and Washington, D.C. -- far-right activists are gearing for a battle. Yesterday, the National Organization for Marriage (NOM) announced a $1.5 million national advertising campaign to fight marriage equality. NOM executive director Brian Brown s "the biggest lie" that marriage equality advocates tell "is that it's not going to have any affect on you." He argued, "In state after state, we've seen same-sex marriage directly conflict with the people's religious beliefs." The group's first ad featured "people describing same-sex marriage as a threat to their personal and religious freedoms against a backdrop of dark clouds and bolts of lightening." One actor warned of "a storm gathering"; "I am afraid," another woman intones. A third complained that she is "helplessly watching public schools teach my son that gay marriage is OK." It's true, Center for American Progress Action Fund Fellow Matthew Yglesias noted, that with the end of Jim Crow came the end of teaching that racism was acceptable -- "a big imposition on racists." Similarly, "people who don't like gay people can be legitimately concerned that the spread of gay equality will create an environment in which their children are less likely to share their own prejudices." The Human Rights Campaign has more on the lies peddled by the ad.

Attorney General Eric Holder "began a series of personnel moves yesterday" aimed at restoring “public confidence in the nation’s highest law enforcement operation." Holder appointed Mary Patrice Brown to head the Justice Department's internal ethics unit while moving the unit’s former head, H. Marshall Jarrett, over to lead the executive office of U.S. attorneys.

Four Somali pirates are holding an American ship captain hostage after briefly seizing a cargo ship Wednesday. A U.S. Navy destroyer is now keeping watch over the small lifeboat to which the pirates fled with their hostage, after the American crew retook the cargo ship yesterday.

On a "mostly party-line 46-53 vote," the Virginia General Assembly "rejected $125 million in federal stimulus money Wednesday that would have provided additional unemployment benefits to thousands of jobless Virginians." Gov. Tim Kaine (D) was "visibly angry" after the vote. Virginia's unemployment rate is at 6.6 percent.

President Obama "plans to begin addressing the country's immigration system this year, including looking for a path for illegal immigrants to become legal," says director of intergovernmental affairs in the White House Cecilia Muñoz. Obama plans to speak publicly about the issue in May and will hold working groups over the summer "to begin discussing possible legislation for as early as this fall."

The White House is "open to compromise on certain key elements of its climate-change agenda, including whether businesses could get some emissions allowances for free." An Obama administration spokesman said the president prefers a "100% auction" but "will be flexible during the policy-making process as long as those larger goals" of a clean-energy economy are met.

A coalition of liberal groups called Health Care for America Now (HCAN), which includes the AFL-CIO, Campaign for America’s Future, and MoveOn.org, is "waging a national grassroots campaign this week to demand that all Americans be given access to government-run public health insurance plans." They are also pushing centrist senators like Evan Bayh (D-IN) to allow health care legislation to pass through budget reconciliation.

The team organizing the Chicago Tea Party protest has rejected RNC Chairman Michael Steele as a speaker. Eric Odom, the event's organizer, explained: "[W]e prefer to limit stage time to those who are not elected officials, both in Government as well as political parties."

And finally: The Colorado Division of Motor Vehicles has turned down a vegan driver's license plate request for "ILVTOFU." According to the agency, "the plate might be offensive to some people." "We don't allow FU because some people could read that as street language for sex," explained a spokesman for the Department of Revenue. Kelley Coffman-Lee, the woman who requested the personalized plate, said that she simply wanted to show her love for tofu, a "staple" for her vegan family.

The Obama administration said yesterday that the U.S. would join Britain, France, Germany, Russia, and China in talks with Iran regarding its nuclear program -- a further step toward direct American engagement with Iran.

THINK PROGRESS: Fox News's Glenn Beck's latest conspiracy: Foreign nationals have "penetrated" the U.S., staging a Marxist revolution.

WONK ROOM: Climate equity alliance establishes principles for green economic reform.

YGLESIAS: South Carolina Gov. Mark Sanford (R) is fiddling while his state burns.

JONATHAN TURLEY: Turkish anchor wears blackface to report on President Obama's visit.

ALASKA: Investigators continue to ask questions about corrupt Alaska politicians.

NEW YORK: Gov. David Paterson (D) says "he plans to re-introduce legislation to make same-sex marriages legal in New York."

MINNESOTA: The problems of only having one senator.

"We are not a secular country."
-- Former House speaker Newt Gingrich, 4/8/09, on Fox News's Sean Hannity show

VERSUS

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof."
-- U.S. Constitution

The research team that brings you The Progress Report and ThinkProgress.org needs summer interns! Click here for more information.

Think Progress

Real Results Abroad

Blogroll