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How U.S.-China Relations Came Apart

At their hearings in mid-September over Chinese currency manipulation, U.S. senators directed their toughest rhetoric at cameras to show the folks back home how serious they are about protecting American workers.

Is Obama's Promise to Double Exports Feasible?

Among the promises made by President Oba­ma in the State of the Union address was his eye-popping commitment to doubling U.S. exports in the next five years. Certainly, that would be good for the U.S. economy, and since 1960 the feat has been accomplished a dozen times. But doing so today would be trickier. Last year, the U.S. exported roughly $1.5 trillion in goods and services. Getting to $3 trillion by 2015 would mean annual increases of 15 percent--three times the rate of global GDP growth--and most of that is out of Obama's control. Ratification of pending free-trade agreements with South Korea, Colombia, and Panama would add maybe $15 billion an-nually in exports, and Washington can't very well manufacture upticks in global demand. That means the crucial variable is the U.S. dollar. As it depreciates, U.S. exports look more attractive, with every 1 percent decline in the dollar's value translating into a $20 billion increase in U.S. exports, according to C. Fred...

Obama Renews Focus on Southeast Asia

Barack Obama will signal yet another break with his predecessor's foreign policy this week when he takes his first presidential trip to Asia. While the Bush administration focused almost exclusively on the big players like China and India, Obama is very deliberately focusing on smaller countries as well. In addition to stops in China, Japan, and South Korea, Obama will make the first visit by a U.S. president to meet leaders of the Association of Southeast Asian Nations. This follows visits Hillary Clinton has already made to leading ASEAN member states, including Indonesia and Thailand, and it comes immediately after Kurt Campbell, an assistant secretary of state, last week became the highest-ranking U.S. official to hold talks in Burma in more than a decade. By comparison, Condoleezza Rice skipped two out of four ASEAN meetings. Douglas Paal at the Carnegie Endowment for International Peace says that when Bush visited Indonesia after Sept. 11, he was "in and out as fast...

U.S. and Japan Disagree Over Okinawa

Japanese Prime Minister Yukio Hatoyama swept into power in August promising voters a "more equal" relationship with the U.S., raising concerns in Washington that its erstwhile Pacific ally would drift away. Now it looks as if the Obama administration is doing what it can to push Japan away. Hato­yama's campaign promised to reduce the footprint of the 47,000 U.S. troops on Okinawa--a message intended for the home audience that hardly represented an imminent threat to U.S. strategic interests in Asia. Yet last week U.S. Defense Secretary Robert Gates bluntly demanded that Tokyo live up to an agreement to relocate forces to a new U.S. air base on the island. Gates's "openly hostile" message, says Asia Society associate fellow Ayako Doi, was that "you better deliver something when the time comes." ...

Russia's Putin Misses George W. Bush

It's the Obama administration that has pressed the "reset button" on relations with Russia, scrapped plans for a missile-defense system in Eastern Europe, and toned down the rhetoric on NATO expansion. But it seems Russian Prime Minister Vladimir Putin still pines for Obama's predecessor. At his annual meeting with academics, think-tankers, and journalists, Putin barely mentioned Obama but "repeatedly expressed fondness for his friend 'George,' " says Cliff Kupchan, a Russia analyst at the Eurasia Group consultancy. "He clearly has a personal softness for George Bush," says Kupchan, who attended the meeting. ...

Biden Shaping U.S. Europe Policy

Perhaps more than anyone else, U.S. Vice President Joe Biden is shaping Washington's Europe policy. As a result of his foreign-affairs work in the Senate, Biden has enormous credibility in Europe, and he has made four trips there this year--more than the president or the secretary of state. It was Biden who announced that America wanted to press the "reset button" with Moscow, reaffirmed Kosovo's independence, and helped ease tensions with Serbia. He also delivered blunt messages in Ukraine and Georgia on the need for political reform, while reassuring those nations that the reset policy would not come at their expense. Damon Wilson, a National Security Council official under George W. Bush, says that Barack Obama's three Europe trips were largely focused on global issues. Biden, by contrast, has "tackled the toughest issue on the continent: how to advance a Europe whole and free that includes the Balkans and Europe's east." Even Biden's...

Europhobia Watch, Continued

Why are right-wing pundits like Rush Limbaugh and Glenn Beck comparing Barack Obama to Adolf Hitler? Surely they know on some level that the comparison is absurd. The answer may be that the old tricks aren't getting as much traction as they used to. For years, conservatives tarred liberals with the epithet "socialist" and mocked them for being "too French" or "too European." But recent polls show more than 60 percent of Americans now view France as an ally, compared with just 18 percent in 2006. Only 53 percent of adult Americans say capitalism is better than socialism, and 59 percent say that health care in the U.S. is no better than in other industrialized nations. It seems that most Americans believe the U.S. has a lot to learn from the continent and tend not to see Hitler's hand in Obama's policies─which means the broadsides against the administration are only likely to get louder.

Europhobia Is Only Getting Uglier

What's so bad about Europe? Consider: the EU has a lower infant-mortality rate than the U.S., with France among the lowest. The life expectancy for a boy born tomorrow in the United States is 78; in most of the European Union, he will live an extra year, and he gets another two if he is lucky enough to be born in France. As that boy becomes a man, he is more likely to spend his days in happiness, according to data collected by the Organization for Economic Cooperation and Development. His education, from grade school through university, will be essentially free. When he begins a job in allegedly socialist Europe he can work at one of the world’s leading firms, including three of the top oil companies (BP, Royal Dutch Shell, Total), two of the top telecom companies (Nokia and Ericsson) and four of the world’s 10 biggest firms, as measured by sales. He will get more vacation, and have more time off to deal with medical issues and for paternity leave. Europeans report a lower rate...

Obama Pushes Back Against Big Business

Barack Obama may turn out to be the most anti-big-business president in decades. His gentle bank bailouts are obscuring a get-tough stand on corporations, particularly abroad. Obama's choice for U.S. trade representative was the mayor of Dallas, with scant trade experience, suggesting the administration has little real interest in pushing the corporate case for free trade. The Justice Department has vowed to aggressively prosecute companies for bribing foreign officials, even though global money flows are falling and few other nations go after foreign bribery with anywhere near the zeal of the United States. Obama trumpets his ability to prioritize, but personally announced a crackdown on corporate abuse of overseas tax havens like the Cayman Islands. In doing so, he was making good on a campaign promise to rein in what he called "the biggest tax scam on record," but it is hardly a key to the global crisis. And last week his administration signaled plans to go out and break up...

Joshua Cooper Ramo on "The Age of the Unthinkable"

Swine flu. Stock-market implosion. The Taliban advancing toward Islamabad. If it seems to you that every day brings with it yet another potentially earth-shattering event, you're not alone. In Joshua Cooper Ramo's new book, The Age of the Unthinkable, he argues that technological and economic shifts have created a world of unprecedented complexity, in which radical changes in one area are increasingly likely to produce radical effects in another. "One bank fails, then fifty; one country develops an atom bomb, a dozen try to follow; one computer or one child comes down with a virus, and the speed of its spread is incomprehensible."The correct response, he writes, is unlikely to be found in the West, where most policymakers treat crises of all kinds as discrete events with well-defined endpoints. The Pentagon is guided by this world view, drawing up lists of dangers and then budgeting, training and organizing itself to eliminate each threat, head on. After September 11, George W. Bush...

Obama's Foreign Policy Is More Nixon Than Carter

Republicans have been trying to link Barack Obama to Jimmy Carter ever since he started his presidential campaign, and they're still at it. After Obama recently shook hands with Venezuelan strongman Hugo Chávez, GOP ideologue Newt Gingrich said the president looked just like Carter—showing the kind of "weakness" that keeps the "aggressors, the anti-Americans, the dictators" licking their chops.But Obama is no Carter. Carter made human rights the cornerstone of his foreign policy, while the Obama team has put that issue on the back burner. In fact, Obama sounds more like another 1970s president: Richard Nixon. Both men inherited the White House from swaggering Texans, whose overriding sense of mission fueled disastrous wars that tarnished America's image. Obama is a staunch realist, like Nixon, eschewing fuzzy democracy-building and focusing on advancing national interests. "Obama is cutting back on the idea that we're going to have Jeffersonian democracy in Pakistan or anywhere else...

An Interview With Gazprom's Alexander Medvedev

Not long ago, Russia's state-controlled energy giant Gazprom was among the world's largest companies in terms of market capitalization, and as it grew so did the perception—fervently denied by company executives—that it was an arm of the Kremlin and that its goals were as much geopolitical as commercial. NEWSWEEK's Michael Freedman met recently with Alexander Medvedev, Gazprom's deputy chief executive, to discuss the economic crisis, the Ukraine gas dispute and foreign investment in the Russian energy sector. Excerpts: ...

Hail To The Bureaucrats

the guest list at the annual World Economic Forum in Davos is a thumbnail sketch of who holds power—or would like to. Most recently, the big shots were the titans of banking, private equity, hedge funds and sovereign wealth funds—the chief beneficiaries of globalization, and, in a phrase popularized by political scientist Samuel Huntington, examples of Davos Man, the superclass who see national governments as anachronisms "whose only useful function is to facilitate the elite's global operations."But this year, forum promoters say "a record 41 heads of state or government" will attend, suggesting that just as power is flowing from New York to Washington, power is flowing from Davos Man toward national governments. Few saw this coming. Huntington once described an executive who "confidently predicted" that soon the "only people who will care about national boundaries are politicians." Huntington died in December. Davos Man may have died, too.

Too Much Trust in Greenspan Led to Bad Economy

Possibly one of the clearest public statements ever uttered by the notoriously opaque Alan Greenspan came in late October, when he admitted he had "found a flaw" in the laissez-faire ideology he had promoted for decades. "I don't know how significant or permanent it is," he told a congressional committee, "but I've been very distressed by that fact." That this icon of the financial world should falter, even if only for a moment, will live to be one of the most enduring symbols of the 2008 economic and financial crisis. In more than 18 years as chairman of the Federal Reserve, he became the trustworthy face of global capitalism. "With Greenspan, we find comfort," Bob Woodward wrote in "Maestro," his 2000 biography of the central banker. "He helps breathe life into the vision of America as strong, the best, invincible."But as 2009 begins America no longer looks quite so invincible. The icons of capitalism have fallen around Greenspan with such bewildering speed it bears repeating:...

European Union's First Naval Mission: Gulf of Aden

When six warships flying the European Union flag began their mission in the Gulf of Aden last week, it marked the first naval operation in EU history—and for good reason: this year Somali pirates have hijacked 40 ships in this key shipping lane, taking 806 hostages. Given the region's size, EU officials know that the other foreign navies there need all the help they can get.The operation will mark a sharp departure for EU defense, which has historically meant boots-on-the-ground peacekeeping and humanitarian missions in Africa, European trouble spots like the Balkans and elsewhere. Typically, these missions involve French military forces, while Britain has generally favored working within a NATO coalition. Naval missions, meanwhile, have been carried out by individual EU states, or with NATO, rather than through Brussels.But the Somali operation makes sense. With dwindling financial resources, and a low appetite for risk, EU foreign ministers are split over the United Nations'...

Georgia's Quasi-Democracy

GOP vice presidential candidate Sarah Palin made news when she confirmed her belief that Georgia belonged in NATO, even if it meant that "perhaps" the United States would have to go to war with Russia. But largely overlooked was her rationale: Georgia, she said, is a "democracy"—a word thrown around casually by U.S. politicians on the left and the right. John McCain has called Georgia a "tiny little democracy" and declared "We are all Georgians now" after Russia moved in to South Ossetia, suggesting a threat to Georgia was a threat to all freedom. Joe Biden calls it a "young democracy," and Barack Obama's point man on Russia, Michael McFaul, also referred to it as a democracy in recent congressional testimony.But things are viewed differently beyond the Beltway. The NGO Freedom House puts the country in the same category as Venezuela and Nigeria in its most recent study, rating Georgia less free and democratic than Moldova, Ukraine and every EU and NATO membership candidate. Lincoln...

Time To Come Home

Most leaders at last week's G8 summit in Japan shared a dubious distinction: they're unloved at home. George W. Bush is so unpopular his own party doesn't know what to do with him. Same goes for Gordon Brown. Nicolas Sarkozy's approval numbers keep sliding, and Yasuo Fukuda's are in the pits.Among other things, this suggests we should expect less emphasis on high-profile summitry in the days ahead. Apart from Russians, who are enjoying a commodities boom—and are rewarding their president for it—citizens of other G8 nations are suffering from rising prices plus slower economic growth and a relative decline in their nation's power. So they're ever more likely to lose patience with leaders who focus on international issues. Most people, according to polls, now consider the economy at home to be their top priority. The message is clear: voters want more attention paid to them at home. Politicians take note.

From Russia With Love

He has said he sees the letters KGB in Vladimir Putin's eyes and that he wants to kick Russia out of the G8. Yet Russians have a greater appreciation for GOP presidential candidate John McCain than citizens of the big European nations. A survey from British pollster YouGov shows that if Europeans could vote, they would choose McCain's Democratic opponent, Barack Obama, by double-digit margins. In Germany the spread was 61 points. But in Russia? Seven.Uniquely, Russians saw McCain as better equipped to lead the world economy. They tend to prefer right-leaning politicians and view McCain as a more powerful figure, says Boris Makarenko, a Moscow analyst. The Democrats are also associated with Russia's humiliation in the 1990s. After 20 years of turmoil, Obama's message of change is something Russians can do without.