By Fareed Zakaria
“If neither the Slavophiles nor the Westernizers can carry the entire territory, some kind of separation starts to look inevitable. Such a separation might come about as paramilitary groups establish local supremacy. Or it might happen as a result of Russian intervention, as in Armenia, Moldova and, later, South Ossetia,” writes Daniel Hannan in The Telegraph. “It is easy enough to imagine Russian security forces crossing the border at the request of local proxies and establishing a de facto Russophone state. The Trans-Dniester Republic still exists, unrecognized but very much in force, on Ukraine’s western border; why not a Trans-Dnieper Republic to its east?”
“Does Nato have the will to prevent such a development? If not, what are our options? If a partition is coming anyway, might it not be better to take ownership of the process: to see that the border is decided peacefully and by referendum rather than by military occupation?”
“Crimea could become a part of Ukraine that is not really ruled by Ukraine,” argues Anne Applebaum in the Washington Post. “Clearly, the men with machine guns are not the product of a chaotic social movement, as were the protesters in Kiev. Someone bought them their unmarked uniforms, and somebody planned their carefully timed arrival on the scene. Their presence, coupled with major Russian military exercises in the area, may be intended to encourage separatism. So are the warnings that the Russian media have issued about “fascism” and extremism in Kiev. And if separatists don’t appear in large numbers, then the issue can be used anyway, as a constant source of anxiety and tension for the fragile new government in Kiev.”
By Fareed Zakaria
"Argentina and Venezuela have run out of heterodox policy tricks," writes Dani Rodrik for Project Syndicate. "Brazil and India need new growth models. Turkey and Thailand are mired in political crises that reflect long-simmering domestic conflicts. In Africa, concern is mounting about the lack of structural change and industrialization. And the main question concerning China is whether its economic slowdown will take the form of a soft or hard landing."
"This is not the first time that developing countries have been hit hard by abrupt mood swings in global financial markets. The surprise is that we are surprised. Economists, in particular, should have learned a few fundamental lessons long ago."
By Fareed Zakaria
“It’s never made a bit of sense for health-care benefits to be routed through employers. The system emerged in the U.S. by accident,” writes Ezra Klein for Bloomberg. “Wage controls during World War II made it impossible for companies to attract workers by offering higher salaries. Because health benefits were exempt from high wartime taxes, companies began using them to attract talent. After the war, unions joined employers in pressuring Congress to ensure employer-based health benefits were never taxed. So the U.S. emerged with an odd system in which a dollar of untaxed employer-based health benefits was worth much more to a worker than a dollar of taxed salary. Employers became the main vehicles for insurance not because anyone thought it was a good idea, but because the tax code made it a bargain.”
By Fareed Zakaria
“Today’s world is different from the world of 1914 in several important ways,” writes Joseph Nye for Project Syndicate. “One is that nuclear weapons give political leaders the equivalent of a crystal ball that shows what their world would look like after escalation. Perhaps if the Emperor, the Kaiser, and the Czar had had a crystal ball showing their empires destroyed and their thrones lost in 1918, they would have been more prudent in 1914. Certainly, the crystal-ball effect had a strong influence on US and Soviet leaders during the Cuban missile crisis. It would likely have a similar influence on U.S. and Chinese leaders today.”
“Another difference is that the ideology of war is much weaker nowadays. In 1914, war really was thought to be inevitable, a fatalistic view reinforced by the Social Darwinist argument that war should be welcomed, because it would “clear the air” like a good summer storm.”
By Fareed Zakaria
“In the summer, both the Fed and the People’s Bank of China signaled their intention to normalize monetary policy,” writes Niall Ferguson for Project Syndicate. “Fed Chairman Ben Bernanke talked openly of ‘tapering’ the Fed’s policy of open-ended bond purchases, also known as quantitative easing (QE). PBOC Governor Zhou Xiaochuan actually did try to rein in his country’s runaway credit growth. But when markets in both countries reacted more violently than expected – with bond yields soaring in the United States and inter-bank lending rates spiking in China – the monetary authorities backed off.”
“It is a problem many a pop singer has encountered: After years of stimulus, rehab is just not that easy.”
“In 1970, when 11 percent of adult Americans had bachelor's degrees or more, degree holders were viewed as the nation's best and brightest,” write Richard Vedder and Christopher Denhart in the Wall Street Journal. “Today, with over 30 percent with degrees, a significant portion of college graduates are similar to the average American – not demonstrably smarter or more disciplined. Declining academic standards and grade inflation add to employers' perceptions that college degrees say little about job readiness.”
“There are exceptions. Applications to top universities are booming, as employers recognize these graduates will become our society's future innovators and leaders. The earnings differential between bachelor's and master's degree holders has grown in recent years, as those holding graduate degrees are perceived to be sharper and more responsible. But unless colleges plan to offer master's degrees in janitorial studies, they will have to change.”
By Fareed Zakaria
“There are still huge pools of private wealth sitting on the sidelines that can be rapidly mobilized to support productive infrastructure. The government needs to help with rights of way before construction, and with strong regulation to protect the public interest afterwards,” writes Ken Rogoff for Project Syndicate.
“In his first term in office, U.S. President Barack Obama suggested the creation of an infrastructure bank to help promote public-private partnerships. It is still a good idea, particularly if the bank maintained a professional staff to help guide public choice on costs and benefits (including environmental costs and benefits). Even if Keynesian multipliers are truly at the upper end of consensus, mobilizing private capital for investment has most of the advantages of issuing public debt.”
“Even as the Suez Canal has become a touchstone of Egyptian nationalism, the great power of today – the United States – tends to see the waterway in similar terms as the colonial powers of the past,” argues Steven Cook in Foreign Affairs. “Like Disraeli, U.S. presidents and strategic planners have long regarded the canal as a means to another end – a critical component of global trade and a vital conduit for U.S. warships between the Mediterranean and the Persian Gulf. The question is no longer about control; Egyptian control of the canal is universally accepted. Yet as the debate about U.S. military aid to Egypt raged after the July 3 military coup, and as the subsequent low-level insurgency broke out in the Sinai Peninsula, analysts have begun to question just how secure the canal is – and whether that even matters anymore.”
By Fareed Zakaria
“The Syrian war presents the Saudis with a chance to hit three birds with one stone: Iran, its rival for regional dominance, Tehran’s ally Assad, and his Hezbollah supporters,” writes Fahad Nazer in the New York Times.
“But Riyadh’s policy makers are wary. They know that once fully committed, it will be difficult to disengage. And so they are taking to heart the lessons of another regional war that flared on their border 50 years ago.”
“To many observers, Glass-Steagall made no sense. Why shouldn’t banks be allowed to engage in any business they want, at least as long as we have regulators to ensure that the banks’ activities do not jeopardize the entire financial infrastructure?” argues Robert Shiller for Project Syndicate.
“In fact, the main advantages of the original Glass-Steagall Act may have been more sociological than technical, changing the business culture and environment in subtle ways. By keeping the deal-making business separate, banks may have focused more on their traditional core business.”
By Fareed Zakaria
“There are many other examples of Syrian-Iranian coordination and the utter ruthlessness of both states in pursuing their objectives, such as the 2005 assassination of Lebanese Prime Minister Rafiq al-Hariri. During my time in Lebanon, we had a dark joke about ‘Hama rules,’ meaning there were no rules governing Syrian conduct,” writes Ryan Crocker in Yale Global.
“So this current fight didn’t start in the southern Syrian city of Dara’a in 2011. Nor is it part of the so-called Arab Spring. It began decades before. Lebanese, Palestinians, Iranians, Jordanians, Iraqis and Syrians – Sunnis, Alawis, Christians and Druze – all remember. Americans may not have ever really understood it in the first place. The history helps explain the ferocity of the fight on the part of both the regime and its opponents, and it illustrates why this regime is not like those in Egypt, Tunisia or Libya. It was ready for this war.”
“Whatever hope Egypt’s transitional government has instilled in Egyptians as it gets to work, it also faces an angry and resentful Muslim Brotherhood that is determined to do what it can to disrupt the political process,” argues Steven Cook in Foreign Affairs.
“The Brothers might ultimately be unsuccessful, but their sit-ins, demonstrations, and not-so-hushed rhetoric of violence and martyrdom vastly complicate the tasks ahead. The narrative of victimhood will stir a base that might have otherwise dissipated had the calamitous Morsi been permitted to carry on. Of course, the Brothers’ commitment to the ballot box has always been most pronounced when the group is under pressure. If the now-deposed president had stayed in office, he and the Brothers’ guidance office would likely have found a way to ensure the Brotherhood’s political power regardless of the group’s performance. It now seems unlikely that the colorless jurist who is palace-sitting has the ability to match the Brothers’ war of position with anything other than coercion. This portends a slide toward authoritarianism, not democracy.”
“The government is using a variety of instruments, including financial-sector credit discipline, to rein in investment demand. Essentially, the government guarantee associated with financing public-sector investment is being withdrawn – as it should be,” writes Michael Spence for Project Syndicate.
“But, to circumvent the restrictions in the state-dominated financial system, a shadow banking system has developed, raising new risks: economic distortions; reliance on excess leverage to drive growth in the consumer, real estate, corporate, and government sectors; and dangers associated with inadequate regulation. As a result, investors are worried that China could slip into the excess-leverage growth model that has served many developed economies so poorly.”
By Fareed Zakaria
“The reality is that the border is more secure today than at just about any time in this nation's recent history,” argues the Los Angeles Times. “The number of immigrants who entered the U.S. illegally at the nine major crossing points from California to Texas fell by an astounding 86 percent between 2006 and 2011, according to the Government Accountability Office. Overall, the number of immigrants coming illegally to the United States is at a 40-year low, having dropped from slightly more than 1 million in 2005 to fewer than 365,000 in 2012 and 2011, according to the Border Patrol.”
“The current Chinese system is a gigantic rent-distributing mechanism,” writes Minxin Pei for Project Syndicate. “The ruling elites have learned to live with each other not through shared beliefs, values, or rules, but by carving up the spoils of economic development. In a high-growth environment, each group or individual could count on getting a lucrative contract or project. When growth falters, the food fight among party members will become vicious.”
By Fareed Zakaria
“Young French people need to go abroad, to work, to travel, to see how things can work differently in cultures and countries that don’t play by the same old rules — and then come back to France, and reinject some of the energy and enthusiasm they’ve absorbed to help reconcile the broader population with the global reality that France has shunned for far too long,” writes Felix Marquardt in the New York Times.
“Though it may be anathema to French pride that anyone would want to leave (and that evidently Ms. Merkel, France’s No. 1 partner and rival, agrees), young people voting with their feet and coming back with a new worldview could be the best thing to happen to France in 30 years.”
“If Mohamed Morsi falls or steps down, millions of Egyptians will view it as a victory. Perhaps he could be succeeded by a salvation government, and some kind of stable progress will ensue, though the Brotherhood can hardly be expected to quietly allow their project to dissolve around them, and it would likely mean the return of the army to a guiding role,” writes Evan Hill in the Globe and Mail.
“Revolutions come with chaos. History teaches us that many years may pass before a country comes out of such upheaval with a working government, satisfactory justice and reconciliation, and a consensus about national identity. But even in such a positive scenario, it is hard not to view the first two and a half years of Egypt’s revolution as a series of squandered promises.”
By Fareed Zakaria
For now, the post-Wall generation in Europe lacks a clear focus for its anger, writes Gene Frieda for project Syndicate. “New populist parties in Italy, Greece, and Germany reflect the direction in which politics is moving, not the final destination. Their ability to win support from both the left and the right suggests a shared aspiration to rebuild the protective national barriers that the post-War generation demolished.”
“Against this background, most European leaders are afraid that their electorates will reject anything that seems to imply more integration. It is a classic prisoner’s dilemma: all countries are better off if they contribute to a common cause, but the pressure of national elections impedes politicians’ ability to champion that cause. The ultimate test of leadership will be a commitment to EU treaty reform, with all the thorny negotiations and referenda that this entails.”
Our access to high-quality information has not, unfortunately, ushered in an age in which disagreements over conspiracy theories can easily be solved with a quick Google search, argues Maggie Koerth-Baker in the New York Times magazine. “In fact, the Internet has made things worse. Confirmation bias — the tendency to pay more attention to evidence that supports what you already believe — is a well-documented and common human failing. People have been writing about it for centuries. In recent years, though, researchers have found that confirmation bias is not easy to overcome. You can’t just drown it in facts.”
“In 2006, the political scientists Brendan Nyhan and Jason Reifler identified a phenomenon called the ‘backfire effect.’ They showed that efforts to debunk inaccurate political information can leave people more convinced that false information is true than they would have been otherwise.”
By Mark Sparkman, Special to CNN
Editor’s note: Mark Sparkman, a former senior officer with the CIA’s National Clandestine Service, is a senior international affairs analyst with the nonprofit, nonpartisan RAND Corporation. The views expressed are his own.
The announcement by prosecutors that charges had been filed against suspected cyber thieves believed responsible for stealing $45 million in a matter of hours from ATM’s in two dozen countries should send a stark message to governments around the world – banks could be the most vulnerable front in cyber space.
Plenty of people have been warning us these days to worry about cyber attacks, but generally we have been worrying about the wrong things. Most “cyber Armageddon” scenarios focus on gaps in our physical infrastructure and even far-fetched scenarios such as infant incubators in hospitals being turned off. But major swathes of the United States have routinely gone without electricity and water for days following natural disasters. Soon enough, life gradually gets back to normal. Want real chaos? Destroy confidence in the banking system (or even a part of it), and just stand back and watch.
Since last fall, a series of Distributed Denial of Service (DDoS) attacks on financial institutions have temporarily denied customers access to their bank accounts, and U.S. officials have pointed an accusatory finger at Iran. Although the attacks were not devastating, U.S. officials are rightly weighing their response options. The fact is that the United States needs to gear up for the coming era of cyber threats – and start by ensuring its financial flank is not catastrophically compromised.