Winter/Spring 2009

Alan Greenspan Explains “Mistake” behind Global Meltdown

What Went Wrong on his Watch as Fed Chairman?

Alan GreenspanAmerican financial oracle Alan Greenspan, hailed as a man with the Midas touch during the decade he presided over the Federal Reserve Board up to 2006, finally provided his explanation of what went disastrously wrong with the U.S. economy on his watch. As the economy melted down last October, he was summoned to testify to Congress. Shedding his famously turgid verbal style, Greenspan said that he was in a state of “shocked disbelief” about the evidence demonstrating that lending institutions “did not self-regulate to protect shareholders’ equity.”


The Economic Quicksands of Globalization

The World Is Curved: Hidden Dangers to the Global Economy
By David M. Smick
Portfolio, 305pp. $26.95

Reviewed by Martin Walker

Future historians will likely look back on the year 2001 as pivotal, not for the usual date of 9/11, but rather for an event three days later when China joined the World Trade Organization. From that moment, China’s exports and trade surpluses began to soar, with consequent imbalances between Chinese surpluses and U.S. debt; between American consumption and Chinese exports. This dynamic sharply accelerated the extraordinary interdependency of the global economy.


Non-Military Organizations Should Lead on “Nation Building”

Integrating Instruments of Power and Influence: Lessons Learned and Best Practices
Robert E. Hunter, Edward Gnehm and George Joulwan
Rand Corporation, 2008. 151pp.

Reviewed by Courtney N. Meyers

This timely book suggests a changed approach in the way the United States handles future conflicts of the type now under way in Iraq and Afghanistan. Such situations require a reconstruction phase to put in place new foundations in infrastructure and governance, a task for which the armed services of the U.S. and other countries have so far been ill-prepared to handle. The report is intended to be a blueprint for the now, new Obama administration. It focuses on a new consensus emerging in Washington – that over-reliance on military power should be rebalanced by tapping inter-governmental civilian resources to manage the end phase of conflicts that resemble civil wars or forcible regime changes.

Asymmetric Warfare Creates the Need for “New Soldier”

Rumu SarkarThis essay addresses the stabilization and reconstruction operations currently taking place in conflict areas of dangerous, unpredictable and highly volatile environments.

The world finds itself severely challenged by asymmetric threats posed by global terrorists acting through non-state actors such as Al Qaeda and related organizations or cells. In this stage, not only are we, the West, terrorized by the acts of terrorists, but I also feel that many Islamic-based terrorists are fearful (if not actually terrorized) by the perceived threat posed by Western ideals and institutions. There has been a palpable shift from the mere tactical level of posing asymmetric threats by global terrorists to an overarching psychological dimension where both sides instill fear in each other.

Russian Gas Problem Could Be Opportunity for Europe

Pekka SutelaRussia is critically important to the European Union’s energy supply, as we all know, but it is important to analyze this situation in detail. For example, while about one-third of the EU oil consumption comes from Russia, oil is a fungible commodity with worldwide markets. When it comes to gas, one-fourth of EU-consumed gas comes from Russia. This element is not fungible: it comes in pipelines and so there will not be major global markets in gas for a long, long time to come – certainly not before and unless liquefied natural gas expands tremendously. My country, Finland, is somewhat an extreme case because one-half of all the energy we consume comes from Russia, including 100 percent reliance on Russia for our natural gas. But in trying to assess these dependency figures, one has to take into account a few things. For example, the role of gas in the energy balance of different countries varies hugely. So Poland, I understand, is for the time being one hundred percent dependent on Russian gas, but gas is relatively minor in their energy mix because Poland is basically a coal-based economy. In my country, about 10 to 15 percent of all primary energy comes from gas and therefore from Russia. There is only one pipeline.