On Rate Cuts, Iraq, Tawain’s Independence, and Spies

What is happening around the world today? From The Economist, “Greenspan Under Pressure,” it says the Fed might consider another interest rate cut. Alan Greenspan, the chairperson of the Fed, is quite an amazing man. He’s responsible for the low inflation rates that the U.S. has experienced in the past decade. He’s been at his post for 15 years – working through three presidencies! Now, he has “almost mythical status.” However, reputation aside, Greenspan faces a great – albeit typical for a Fed chairperson – challenge: to cut, or not to cut prime interest rates? Throughout the year 2001, the Fed had cut the rates eleven times. Rates are now at an all-time forty year low at 1.75%. My family is considering a third refinancing of our home, taking advantage of the record lows. What I think is interesting is how Greenspan and his group create speculation of whether a cut will occur, and they can all observe how the public reacts. For, the public reaction to a rate cut is an important factor to whether “undue haste could smack of panic and so bring about the economic slowdown which such monetary easing would be intended to prevent.”

In other news, from “Saddam’s Promises and Threats,” SecDef Rumsfield and VP Cheney (via satellite) met with exiled Iraqi opposition leaders to discuss US support for overthrowing Saddam Hussein. The leaders were representatives of “six factions of a fractured opposition.” I agree that Iraq under Saddam is a threat to the U.S. However, to start a war from perceived threats is a horrible precedent. For China is also a threat to U.S. security. Will U.S. make war with that country? No, our country wouldn’t do that because all this talk about Iraq being a threat is just an excuse to pursue some strategic advantage. What would that advantage be? Perhaps, gaining a greater presence in the Mideast? Installing or “supporting” a replacement government would provide the U.S. with an OPEC member that plays into Western interests. Saudi Arabia is a dubious partner, Kuwait is too small a player to matter, and the other members of OPEC generally dislike the U.S. Toppling Saddam and replacing it with a so-called democracy is a great opportunity for the U.S. to have a bigger role in the oil markets. This talk about “nation-building” is doublespeak for furthering our country’s economic/political dominance.

Why does China want to keep Taiwan? Currently, Taiwan’s president, Chen Shuibian, is voicing his island’s desire for independence via a formal referendum (a.k.a., a declaration of independence). Although China’s inner party is fractured from power plays for succession, it is united by the issue of Taiwan: there will be no annexation of that island. Yet, throughout all this, I’m wondering “Why?” Is there a military advantage for China having Taiwan as its own? A political or economic advantage? Is Taiwan, for instance, currently paying taxes to the mainland government? If not, then that may be a reason why China wants the island. Taiwan is also very close to the mainland’s vital coastal economy. If Taiwan has independence, maybe it will favor a greater U.S. military presence (to protect Taiwanese children from Chinese aggression, of course) that will become a threat to China’s security. The island would be a gateway for U.S. spies and intelligence units (more so than it already is).

Speaking of spies, according to the NYT, SecDef Rumsfield made inspections of U.S. Special Ops forces. He is trying to make arguments for increasing the role of Special Ops in clandestine operations. Opponents argue this would conflict with the CIA’s role, although CIA director George Tenet doesn’t necessarily disagree with SecDef’s proposals.

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