March 24th, 2014
12:09 PM ET

What I'm reading: Why would Obama administration do this?

By Fareed Zakaria

“The Internet is often described as a miracle of self-regulation, which is almost true. The exception is that the United States government has had ultimate control from the beginning,” writes L. Gordon Crovitz in the Wall Street Journal. “Washington has used this oversight only to ensure that the Internet runs efficiently and openly, without political pressure from any country.”

“This was the happy state of affairs until last Friday, when the Obama administration made the surprise announcement it will relinquish its oversight of the Internet Corporation for Assigned Names and Numbers, or Icann, which assigns and maintains domain names and Web addresses for the Internet. Russia, China and other authoritarian governments have already been working to redesign the Internet more to their liking, and now they will no doubt leap to fill the power vacuum caused by America's unilateral retreat.”

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“The old economic paradigm relied on unsustainable growth, so we must change the paradigm,” write Sean McElwee and Lew Daly for The Week. “For decades, our rising standard of living came at a deep cost to our environment and our children's future. There is simply not enough planetary bio-capacity to grow our way out of the messy moral discussions of distribution. The idea that inequality is merely an inefficiency to be corrected with a technocratic fix or perpetual growth is no longer tenable.”

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“Putin certainly does have the power to complicate and even ruin Obama’s diplomacy with Tehran,” writes Michael Crowley in TIME. “Russia can undermine the united front of the six powers – including China, Great Britain, France, Germany and the U.S. – working to turn a temporary nuclear deal struck with Iran in November into a permanent one designed to ensure Iran does not have the ability to quickly develop a nuclear weapon. It can use its U.N. Security Council veto to block further punishment should Iran accelerate its program or abandon the talks. And it can undermine current sanctions by cutting direct business deals with Tehran. (In a potentially ominous sign, Moscow recently agreed to build two new nuclear power reactors for Iran in exchange for oil).”

“But while Putin has shown a cold-blooded streak, he has yet to prove himself a stupid strategist.”

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“Corporations now hold $2.30 for every dollar of cash they had in 1994, after adjusting for inflation. The total corporate cash reserve also amounts to almost $25,000 per American, up from $13,000 per American in 1994 (again after adjusting for inflation). And this cash is highly concentrated, most of it held by the 2,800 biggest companies, IRS data shows,” notes David Cay Johnston for Al Jazeera. “Since 1994, liquid assets have grown at about six times sales, my analysis of the official data shows. When liquid assets grow six times faster than revenues, it tells you that companies are hoarding cash, not investing or spending.”

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“Ironically the vigorous claims of shortages concern occupations in science and engineering, yet manage to ignore or reject most of the science-based evidence on the subject,” writes Michael S. Teitelbaum for The Atlantic. “The repeated past cycles of ‘alarm/boom/bust’ have misallocated public and private resources by periodically expanding higher education in science and engineering beyond levels for which there were attractive career opportunities. In so doing they produced large unintended costs for those talented students who devoted many years of advanced education to prepare for careers that turned out to be unattractive by the time they graduated, or who later experienced massive layoffs in mid-career with few prospects to be rehired.”


soundoff (5 Responses)
  1. ✠RZ✠

    Well, if some corporations are sitting on a lot of cash it's not entirely surprising. An environment of cheap offshore labour, skyrocketing rising real estate prices, non-existent interest rates, low taxes and lax regulations combined with massive consumer markets on credit steroids could certainly have the potential to make some companies float in cash if they played their cards right. But take warning! The whole scenario is somewhat of a fallacy because cash is not real wealth. Your land, your resources, your country, your technology, your people and the ability to make them all perform and produce is real wealth. But never mind our corporations, if you think foreign corporations and governments are going to just sit on their wads of cash, you had better think again. Just look at how much foreigners have increased their holdings in American corporations and real estate over the past few decades. The end game spells a big sell out which we're all just starting to feel. That's right, "little pink houses for you me".

    March 25, 2014 at 6:48 am | Reply
  2. chrissy

    Well said @ RZ!

    March 25, 2014 at 10:45 am | Reply
    • ✠RZ✠

      Speak of the devil, here's an interesting related article hot off the press from CNN MONEY;

      "RICH CHINESE OVERWHELM US VISA PROGRAM". By Sophia Yan, @sophia_yan March 25, 2014: 10:22 PM ET

      March 26, 2014 at 3:43 am | Reply
    • ✠RZ✠

      Here's maybe even a better one from Sophia.

      "CANADA KILLS INVESTOR VISA POPULAR WITH CHINESE"
      By Sophia Yan @sophia_yan March 25, 2014: 2:21 AM ET

      March 26, 2014 at 3:54 am | Reply
  3. polin

    Too long a read

    March 28, 2014 at 2:31 pm | Reply

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