Stop worrying, Obama, learn to love the Bomb

Stop worrying, Obama, learn to love the Bomb

Disarmament is a noble goal but atomic arsenals are now key to stability

By William Choong, Senior Writer

DURING my postgraduate studies in Canberra, I had a friend who was so enamoured of nuclear weapons, he even had a coffee-table book with high-resolution photographs of various nuclear detonations. When he secured a lectureship after finishing his doctorate, Stephan wanted to stick a poster of a large mushroom cloud on his office door. It was disallowed, for various reasons.
In the overall scheme of things, Stephan’s mushroom cloud fetish is morally insane. Nuclear weapons, after all, are expressly designed to destroy billions of people. At the same time, he was also politically sane, since he strongly believed that nuclear weapons were not inherently evil, but stabilising weapons.

The opposite applies to United States President Barack Obama’s recent proposal for a nuclear-free world: it is morally sane, but politically insane since it rejects the notion that such weapons can bring stability.

This does not mean that the proposal is not laudable. Mr Obama joins a distinguished company of notable abolitionists such as Robert Oppenheimer, the father of the nuclear bomb, Albert Einstein and Bertrand Russell, as well US elder statesmen George Shultz and Henry Kissinger. Unlike most other anti-nuclear advocates though, Mr Obama is also infused with a good deal of realism. Speaking in Prague earlier this month, he noted that a nuclear-free world would not be realised quickly, even in his lifetime, but that it will take lots of ‘patience and persistence’.

But like other noble goals - such as world peace, say - Mr Obama’s proposal is normatively desirable, but operatively impossible. This is because nuclear weapons - now more than 60 years old - cannot be disinvented.

Suppose we nevertheless give him the benefit of the doubt, and assume that a whiff of Obama magic so wows the world that he convinces everyone, from Moscow to Pyongyang, of the virtues of nuclear disarmament. Disarmament would still face two major hurdles.

To begin with, it would have to be implemented by the five great powers - the US, Russia, China, France and Britain - as well as second- and third-tier powers comprising Israel, India and Pakistan, as well as Iran and North Korea. The typical response to any American proposal for disarmament would be ‘yes, sure, but you go first’. Even if the US commits to drastic disarmament (unlikely), the rest will not follow suit, given the relationships among their arsenals: China’s arsenal, for example, is linked to Russia’s; India’s to China’s; and Pakistan’s to India’s.

Let us assume, again, that in the best-case scenario, the countries involved somehow manage to give up large chunks of their arsenals, such that the total number of nuclear weapons is zero or approaching zero. Paradoxically, the dash to zero will throw open Pandora’s Box. A nuclear-free world will inevitably be a ‘nuclear-prone’ world: one or more countries will be tempted to seek a strategic ‘break-out’ by amassing nuclear weapons, leading to destabilising arms races. Argues Colin Gray, a prominent strategist: ‘Given that the principal nuclear ’secrets’ are secrets no longer, even a supposedly nuclear-free world would be a world wherein (a) the country that concealed a handful of weapons could be a winner, and (b) nuclear rearmament races would be a reality.’

Ultimately, the push for disarmament is not technical, but psychological. For a long time, nuclear-armed countries have considered nuclear weapons to be indispensable trump cards. Jonathan Schell, who sparked off the nuclear disarmament movement in 1980s, argues that the world’s nuclear dilemma arises from ‘bombs in the mind’. But that, unfortunately, is a mental construct that will persist even after nuclear weapons are got rid off.

This does not mean that Mr Obama’s quest should not be attempted. If the journey of a thousand miles begins with the first step, Mr Obama’s best shot is to seek the reduction of Russian and American stockpiles to around 1,000 warheads each. In 2002, both countries agreed to reduce their arsenals to between 1,700 and 2,200 warheads each by 2012. Both Mr Obama and his Russian counterpart Dmitry Medvedev have agreed on the possibility of more ambitious cuts.

In the meantime, Mr Obama should depend on the Cold War-era concept of deterrence, and its associated stability. Deterrence received a bum rap after the Cold War, but its potency lies in its simplicity. The threat of mutual assured destruction (or MAD) is a line that no country has yet crossed. Distinctions between conventional and nuclear weapons have blurred, but the latter still retains a critical edge. As Nobel laureate Thomas Schelling puts it, nuclear weapons have the ability to wreak destruction ‘in a moment, at the twinkling of an eye, at the last trumpet’ - and thus concentrate minds wonderfully.

Herman Kahn - the famed nuclear strategist and gallows humour specialist - once advised against over-emotionality on the issue of nuclear weapons and seeing the weapons as the enemy of humanity. He wrote in Thinking About The Unthinkable In The 1980s: ‘The objective of nuclear-weapons policy should not be solely to decrease the number of weapons in the world, but to make the world safer - which is not necessarily the same thing.’

Mr Kahn was said to be the inspiration behind Dr Strangelove, a 1964 black comedy about a madcap American general who launched a first strike on the Soviet Union. The film is now basic ‘reading’ in universities around the world. Its most potent lesson: Amid the madness of using nuclear weapons - the author of the book on which the movie is based committed suicide, for fear of nuclear war - nuclear weapons can still engender stability. In this sense, they should be loved, not loathed.

Perhaps Mr Obama might be heartened to know that an alternative title of the movie is: How I Learnt to Stop Worrying and Love the Bomb.

Source : Business Times - 23 April 2009

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Two signals speak volumes about condo prices

Two signals speak volumes about condo prices

Study by DTZ finds STI and developers’ stock to be reliable guides to turning points

By KALPANA RASHIWALA

THE Straits Times Index and cumulative unsold inventory held by developers have been found to be reliable indicators preceding major turning points for private apartment and condo prices in Singapore, according to a study by DTZ.

The STI has been observed to lead the Urban Redevelopment Authority’s non-landed private residential price index by one to four quarters since 1993.

For instance, the STI peaked in the third quarter of 2007 - nine months before the URA’s index peaked in Q2 2008.

Similarly, the cumulative unsold inventory of non-landed private homes - with sales licences - held by developers has peaked or bottomed between two to 12 quarters ahead of turning points in the URA’s index.

DTZ also devised an internal risk assessment model to estimate the probability of future major turning points in the Singapore residential market.

The STI has been observed to lead URA’s non-landed private residential price index by one to four quarters since 1993.

It showed the risk of entering a correction phase has escalated considerably since Q2 2008.

The property consulting group said: ‘Our assessment indicates that the probability of a full recovery by the end of 2009 - for the office and residential property markets in Hong Kong, China and Singapore - remains low.’ DTZ added: ‘Our internal model also indicates that the Singapore residential market has a higher chance of bottoming by mid-2010 (than by end-2009) and staging a gradual recovery from that point onwards.’

Both the Hong Kong and Singapore office markets have a lower probability of recovering by end-2010 than the residential markets in these two cities, as the office sector is more closely correlated with economic growth than the residential sector, DTZ reckons.

Asked whether the recent stockmarket rally will presage a recovery in home prices in Singapore, DTZ senior research director Chua Chor Hoon said: ‘It’s too early to say if the stockmarket rally will be sustained. A lot will hinge on when the economy recovers.’

Source : Business Times - 23 April 2009

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Temp jobs still don’t appeal to Singaporeans

Temp jobs still don’t appeal to Singaporeans

Only 33% surveyed say they will be willing to take a contract position

By JOYCE HOOI

WHILE Singaporeans may be warming up to the idea of contract positions in a tight job market, they still lag their regional peers in terms of willingness to do so.

Ms Ross: More professionals and employers are beginning to see contract work as mutually beneficial
Only 33 per cent of Singapore respondents indicated that they would be ‘happy to take on a contract role’, according to a survey of professionals by recruitment consultancy Robert Walters.

This is far below the global average of the 55 per cent who said that they would have no qualms taking up a contract position.

Within the region, 53 per cent of respondents in Thailand and 42 per cent in Hong Kong felt the same way. Only Malaysia recorded a smaller proportion of respondents who would be happy with a contract position, at 30 per cent.

Nevertheless, reality has begun to sink in for local professionals, with 50 per cent of them saying that they would consider contract work if there were ‘no permanent options’, compared with the global average of 33 per cent.

But 50% of local professionals say that they will consider contract work if there were no permanent options.

According to Andrea Ross, managing director of Robert Walters Singapore, more professionals and employers are beginning to see contract work as mutually beneficial.

‘It is well known that employers can turn to temporary recruitment in tougher economic conditions as a way to control headcount costs and maintain productivity,’ she said.

‘What is interesting is that candidates are also increasingly focusing on the flexibility that contract work can offer - from hours worked to experiencing different work environments and roles.’

The remaining 17 per cent of local respondents said that they would not consider contract work, against the global average of 12 per cent.

The survey was conducted with 4,288 people in 17 countries, including about 700 people in Singapore.

Source : Business Times - 23 April 2009

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Geithner: Enough money left for economic initiatives

Geithner: Enough money left for economic initiatives

Rescue fund still has US$110b; banks also set to return or pay dividends of US$25b

(WASHINGTON) The Obama administration has enough money left for its economic initiatives with US$110 billion remaining in the federal financial rescue fund and US$25 billion more coming this year as some banks return bailout money or pay dividends on their government loans, Treasury Secretary Timothy Geithner said on Tuesday.

Mr Geithner: Federal funding has helped to stimulate consumer and business lending, but more work is needed to revive an economy mired in recession
Mr Geithner disclosed the new numbers as he defended the administration’s bailout efforts in the face of tough questioning from a special panel overseeing the US$700 billion Troubled Asset Relief Program, or TARP. In his first appearance before the panel, Mr Geithner said federal funding has helped stimulate consumer and business lending, but more work was needed to revive an economy mired in recession.

‘The lessons of financial crises … is that early action, forceful action, sustained action to repair financial systems, promote the flow of credit, is essential to limit the damage recessions cause and to make it possible to bring recovery about at least cost to the taxpayer over time,’ he said.

In his written testimony, Mr Geithner said the vast majority of banks ‘have more capital than they need to be considered well-capitalised by their regulators,’ a comment that helped boost the stock market after it had been shaken by huge loan losses reported on Monday by Bank of America Corp.

The TARP money has been used primarily to bolster the financial industry but also to try to steady the teetering US car industry, specifically Chrysler and General Motors.

Mr Geithner tried to blunt criticism of the bailouts by saying the government was doing its best to balance the protection of taxpayer money with prevention of a collapse of the financial system.

‘My basic obligation, and our responsibility, is to make sure that the system as a whole has the ability to provide the credit that recovery requires. And so we need to make a careful judgment about what policies are going to best promote that objective,’ Mr Geithner told the Congressional Oversight Panel, which was created to monitor use of the US$700 billion fund.

In a letter to panel chairwoman Elizabeth Warren, a Harvard University law professor, Mr Geithner said the fund has at least US$109.6 billion remaining after a series of unprecedented investments in US banks and other financial institutions through TARP.

With repayments and dividends, the administration expects to have US$134.6 billion to use for additional rescue efforts the rest of the year.

Noting that the administration plans to provide additional money to banks, as well as to GM and Chrysler, ‘we believe that even under the conservative estimate of available funds described here, we have the resources to move forward implementing all aspects of our Financial Stability Plan,’ Mr Geithner wrote.

The administration has not said how much more money it would provide to GM as it aims to restructure by June 1 and to Chrysler as it seeks a government- brokered merger with Italian carmaker Fiat by May 1. But a report on Tuesday from the office of the TARP special inspector general said GM would receive up to US$5 billion and Chrysler up to US$500 million in working capital.

In February, the White House said it might need an additional US$750 billion in bailout money should economic conditions worsen. But administration officials have since stressed they have no plans to ask Congress for more money.

Such a request would be a hard sell because many lawmakers from both parties have been upset about the way the programme has been run, particularly with the large amounts of money injected into banks with no requirements that they lend it.

Critics received more ammunition on Tuesday from the inspector general’s 250-page report, which said it had opened 20 criminal investigations into fraud and other misuse of the money. — LAT-WP

Source : Business Times - 23 April 2009

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UK economy looking up, says central bank - LONDON

UK economy looking up, says central bank - LONDON

Contraction could start to moderate in Q2

(LONDON) Bank of England rate-setters spotted some signs that Britain’s recession was becoming less acute at their most recent meeting on April 9 - but held back from saying that the economy was on the road to recovery, according to minutes released yesterday.

While unanimously voting to keep the benchmark interest rate unchanged at the record low of 0.5 per cent and to press on with a £75 billion (S$165.23 billion) programme to expand the money supply, the nine-member monetary policy committee, or MPC, did lay out the hope that the worst of the recession may have passed.

Though agreeing that the British economy was likely to have contracted again in the first quarter of 2009 as it did in the fourth quarter of 2008, the MPC, led by governor Mervyn King, noted business surveys suggest the ‘rate of contraction might be starting to moderate in the second quarter’. This, the MPC said, may indicate that businesses were drawing down their stock of goods at a slower rate and the past sharp fall in the value of the pound was encouraging exports.

In addition, the rate-setters noted that housing market activity indicators had appeared to stabilise, although at low levels, that share prices had risen and that credit availability might be starting to improve somewhat.

They stressed that it was ‘too soon to be sure that these improvements would continue, as many of the indicators were volatile from month to month and were vulnerable to further shocks’.

In particular, they said the sharp rise in unemployment - many economists think the number of jobless people could rise another one million this year to over three million - might prompt further falls in confidence and a reining in of consumer spending.

Overall, the risks to the domestic economy remained weighted to the downside, the bank said.

Though the fall in the pound may be beginning to boost exports, the committee said the unexpected rise in inflation in February may have been due to higher import prices related to the currency’s weakness. A lower pound makes exports less expensive but makes the price of imported goods higher.

Still, the MPC said inflation would likely fall below the 2 per cent target by the second half of this year - official figures on Tuesday showed consumer price inflation down at 2.9 per cent in the year compared to March from February’s 3.2 per cent - partly as a result of lower energy and food costs and partly because the recession was reining in wage demands and business price hikes.

The Bank of England will unveil its latest quarterly economic projections in the middle of May after the next meeting of the monetary policy committee. In the minutes, the MPC said it will reassess the pressures on costs and prices from the lower pound and from the increasing spare capacity within firms and the labour market as a result of the recession.

The minutes also showed that the bank had purchased around £26.5 billion worth of assets from the commercial banks during the first month of its quantitative easing programme. — AP

Source : Business Times - 23 April 2009

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