The Council of Foreign Relations has begun a new forum on Financial Turmoil and U.S. Power. Sebastian Mallaby leads off with a short introductory essay. Invited contributors will be looking at whether the U.S. "capacity to sustain an international role may have been compromised" (or was German Finance
Minister Peer Steinbrueck right that “the United States
will lose its superpower status in the world financial system”).
Mallaby starts the discussion with three specific questions: (1) Will U.S. growth slow relative to that of its rivals?; (2) Will it become harder to sustain the pre-eminence of the dollar?; (3) Will American foreign policy be compromised by mounting indebtedness?
In 2003 and 2004 the Russian government deliberately and systematically trashed the Yukos oil company so that the government-owned company Rosneft could acquire its assets at a fraction of their real value. U.S. citizens may have lost $6 to $7 billion in investments in Yukos because of this. How did the U.S. government respond when its citizens' assets were expropriated?
The Pennsylvannia Fair Trade Coalition asked Clinton and Obama about their opinions on investor protection provisions in trade agreements. Simon Lester reports the responses: The Democratic Candidates on Investment Rules (International Economic Law and Policy Blog, April 18).
Kenneth Scheve and Mathew Slaughter looked at American ideas about the economic impacts of foreign direct investment (FDI) in their paper on Globalization and the Perceptions of American Workers (Peterson Institute, 2001).
All the responses they report came from polls in the late 1980s and the 1990s. Although the results are from different polls conducted over more than 10 years, they treat the results as if they came from a body of persons at a given point in time.
Farnaz Fassihi and Chip Cummins report that the U.S. financial sanctions on Iran are working, but are also having some undesirable efects as well: Iranians Scheme to Elude Sanctions (Wall Street Journal, Feb 13):
Democratic Senators Evan Bayh of Indiana and James Webb of Virginia made it clear they expect the Treasury to address the potential security issues raised by sovereign wealth funds as it revamps the regulations governing security reviews of foreign investments.
