Here is Ronald Reagan from his Inaugural Address of January 20, 1981 on the role of government in American society and how government should confront an economic crisis:

The economic ills we suffer have come upon us over several decades. They will not go away in days, weeks, or months, but they will go away. They will go away because we, as Americans, have the capacity now, as we have had in the past, to do whatever needs to be done to preserve this last and greatest bastion of freedom.

In this present crisis, government is not the solution to our problem.

From time to time, we have been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. But if no one among us is capable of governing himself, then who among us has the capacity to govern someone else? All of us together, in and out of government, must bear the burden. The solutions we seek must be equitable, with no one group singled out to pay a higher price.

So, as we begin, let us take inventory. We are a nation that has a government—not the other way around. And this makes us special among the nations of the Earth. Our Government has no power except that granted it by the people. It is time to check and reverse the growth of government which shows signs of having grown beyond the consent of the governed.

It is my intention to curb the size and influence of the Federal establishment and to demand recognition of the distinction between the powers granted to the Federal Government and those reserved to the States or to the people. All of us need to be reminded that the Federal Government did not create the States; the States created the Federal Government.

Now, so there will be no misunderstanding, it is not my intention to do away with government. It is, rather, to make it work—work with us, not over us; to stand by our side, not ride on our back. Government can and must provide opportunity, not smother it; foster productivity, not stifle it.

Now here is President Obama today:

For everywhere we look, there is work to be done. The state of the economy calls for action, bold and swift, and we will act – not only to create new jobs, but to lay a new foundation for growth. We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We will restore science to its rightful place, and wield technology’s wonders to raise health care’s quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age. All this we can do. And all this we will do.

Clearly, Obama’s “we” is government. What else can it be? And it is a far different construct than Reagan’s government of being the problem, not the solution. (more…)

Today in Harare, the multi-lateral talks on Zimbabwe collapsed after Robert Mugabe refused to relinquish control over the key security ministries that played a leading role in rigging the last election and suppressing political opposition. More from the UK Guardian.

Zimbabwe’s power-sharing talks are close to collapse after Robert Mugabe refused to relinquish control over the key security ministries that played a leading role in rigging the last election and suppressing political opposition.

Morgan Tsvangirai, the opposition leader, described the failure of 12 hours of talks brokered by regional leaders as “probably the darkest day of our lives” for his Movement for Democratic Change and for the nation, which is hit by mass hunger, cholera and hyperinflation.

Tsvangirai, who won the last broadly free election in March before being robbed of victory by a bloody campaign and vote rigging in a second round of balloting weeks later, stuck by his insistence that power-sharing had to mean his party also controlled key ministries, particularly home affairs, which is responsible for the police and finance.

The MDC proposed Mugabe took defence, national security, justice and foreign affairs.

Tsvangirai said: “For us, as the MDC, this is probably the darkest day of our lives, for the whole nation is waiting.”

(more…)

Let it be told to the future world, that in the depth of winter, when nothing but hope and virtue could survive, that the city and the country, alarmed at one common danger, came forth to meet and to repulse it. — Thomas Paine, The American Crisis #1, December 23, 1776

Not bad for a man that Teddy Roosevelt once described as “that filthy little atheist.” The line that President Obama quoted today at the end of his Inaugural Address is from Thomas Paine’s The American Crisis #1, the first in a series of 16 essays written between 1776 and 1780. Most Americans know the opening line “These are the times that try men’s souls.” Beyond that, most Americans are little aware of the circumstances or the rest of the contents of the American Crisis though it is perhaps the second most important piece of political writing, because of its immediate impact, in American history. The only other work of greater importance in the annals of American political writing is also from Paine. Common Sense stands apart in the annals of American political essays for the forty-seven page pamphlet presented the argument for independence from British rule at a time when the question of independence was still undecided.

Washington’s army was in the midst of a bitter retreat chased by Lord Cornwallis from New York across New Jersey and into Pennsylvania in the Fall of 1776. The Continental Army had dwindled to fewer than 5,000 men fit for duty, more than half captured in Battle of New York and would be soon reduced to 1,400 after enlistments expired at the end of the year. Congress had abandoned Philadelphia though the British did not occupy it. Thomas Paine had joined the Continental Army in its flight across New Jersey and wrote the first American Crisis on December 23, 1776 and then gave it to General Washington. Washington found it so moving that he had it posted and read aloud to all his troops to inspire them and motivate them. Days later, Washington would strike at the Hessians in Trenton and then outmaneuvered Lord Cornwallis to take Princeton in early January. By then an irregular militia would harass the British regulars so that by the end of the month, Cornwallis would sulk back to winter in New York. Washington would winter in Morristown and the Continental Army would live to fight another day.

As a side note, it should be noted that Ronald Reagan too quoted Thomas Paine—”We have it in our power to begin the world over again”—in his acceptance speech before the Republican National Convention in the summer of 1980. Fitting then that Paine should be resurrected yet again now by a Democrat as we close this awful chapter in American history and begin the world all over again.

Return to Main

From the UK Guardian:

Inflation fell by less than expected in December, official data out today showed, but economists still forecast a prolonged period of deflation later in the year.

The Office for National Statistics said that consumer price inflation slowed to 3.1% in December, from 4.1% the previous month. This is the lowest level since April 2008 but still above the Bank of England’s official target of 2%. Economists had predicted a drop to 2.6% but still high food and gas and electricity prices prevented the rate from falling faster.

But core inflation, which excludes things like food and energy prices, fell more sharply than expected to 1.1% last month, from 2% in November, due to a combination of the VAT cut and aggressive discounting over the Christmas period.

Clothing inflation fell 10.3% in December, from 7.3% the month before.

Jonathan Loynes, an economist at Capital Economics, said: “Food and energy effects will continue to have a strong downward influence over the coming months, particularly if gas and electricity bills finally respond to the fall in oil prices.”

He added that this alone should be enough to push the headline rate of CPI inflation into negative territory over the summer. “However, the weakness of core inflation and the further downward pressure likely to result from the opening of a large amount of slack in the economy points to a growing danger of a more fundamental and longer-lasting period of deflation further ahead,” he said.

Retail price inflation (RPI) – used to calculate many pay rises – dropped to just 0.9% last month – the lowest annual rate since December 2001 – on the back of lower mortgage interest rate payments and falling house prices, which are including in RPI but not CPI.

Sterling pared earlier losses against the dollar on the back of the data. The pound edged up to around $1.3995 after the data, compared with $1.3970 shortly before the news.

Analysts believe that the fall in inflation will give the Bank more scope to make further cuts to rates. “The smaller-than-expected drop in consumer price inflation in December is most unlikely to stop the Bank of England cutting interest rates by a further 50 basis points from 1.50% to a new record low of 1.00% in February,” said Howard Archer, chief UK and European economist at IHS Global Insight.

Colin Ellis at Daiwa Securities added: “The question is when, not if, RPI inflation turns negative; zero inflation, unlike interest rates, is not binding.”

“The prospect of inflation getting below zero and staying there is the key reason the MPC has been cutting Bank Rate aggressively – and was also arguing behind the scenes for the pot of money the Government gave it yesterday to fund security purchases.

Return to Main

A generation ago, Nicaragua was regularly in the news — when the leftist Sandinista government of Daniel Ortega took power, and the United States funneled millions to the contras to try to undermine him.

The Cold War ended and Nicaragua faded from public view. Worldfocus special correspondent Lynn Sherr and producer Megan Thompson recently traveled to the Central American country of 6 million people. They talk baseball and politics and discover that Nicaraguans are hoping for closer ties with the new Obama administration after years of frosty relations during the Bush era. While most of the world’s attention towards Latin America has been focused on Hugo Chavez’s Venezuela, the reality is that a dictatorship has risen in Managua.

Return to Main

North Korea claims it has enough enriched plutonium for several nuclear weapons and has renewed its use of confrontational rhetoric toward South Korea in both television and print.

To discuss these developments, Martin Savidge speaks with Leon Sigal of the Social Science Research council. Sigal discussses the motivation for this aggression and its implications for the new Obama administration.

From the New York Times:

The North Korean military declared an “all-out confrontational posture” against South Korea on Saturday as an American scholar said North Korean officials told him they had “weaponized” enough plutonium for roughly four or five nuclear bombs.

American intelligence officials have previously estimated that the North had harvested enough fuel for six or more bombs, although it has never been clear whether the North constructed the weapons. The scholar, Selig S. Harrison, said the officials had not defined what “weaponized” meant, but the implication was that they had built nuclear arms.

The North conducted a test of a nuclear device in 2006, but it appeared to result in a fizzle and experts concluded the explosion was relatively small. While the country has often claimed to possess a “deterrent,” this appears to be the first time it has quantified how much plutonium it says it has turned into weapons.

After the threats on Saturday, South Korea ordered its military to heighten vigilance along the heavily fortified border with North Korea, according to a spokesman for the South Korean military joint chiefs of staff.

North Korea’s saber-rattling toward the South has increased in intensity since President Lee Myung-bak took office in Seoul a year ago with a vow to take a tougher stance on North Korea, reversing 10 years of his liberal predecessors’ efforts to engage the North with economic aid. But what made the threat on Saturday unusual, and more worrisome to some South Korean analysts, was the way it was delivered: in a statement read on North Korean television by a uniformed spokesman for the North’s joint chiefs of staff.

“Strong military measures will follow from our revolutionary armed force,” the spokesman, a colonel, said, according to Yonhap, South Korea’s national news agency, which monitors North Korean broadcasts.

Usually the North Korean government issues written statements that are delivered by the state-controlled media; sometimes the statements are read by press officers, not by a uniformed member of the military.

The spokesman warned of a clash along a disputed western sea border between the Koreas. Their navies fought skirmishes there in 1999 and 2002. It is always difficult to decipher the messages that North Korea’s government is trying to send with its often bombastic statements. In times of crucial bargaining, North Korea often tries to drive a wedge between Washington and South Korea and raises the stakes by increasing demands and issuing threats.

Return to Main

My fellow citizens:

I stand here today humbled by the task before us, grateful for the trust you have bestowed, mindful of the sacrifices borne by our ancestors. I thank President Bush for his service to our nation, as well as the generosity and cooperation he has shown throughout this transition.

Forty-four Americans have now taken the presidential oath. The words have been spoken during rising tides of prosperity and the still waters of peace. Yet, every so often the oath is taken amidst gathering clouds and raging storms. At these moments, America has carried on not simply because of the skill or vision of those in high office, but because We the People have remained faithful to the ideals of our forbearers, and true to our founding documents.

So it has been. So it must be with this generation of Americans.

That we are in the midst of crisis is now well understood. Our nation is at war, against a far-reaching network of violence and hatred. Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age. Homes have been lost; jobs shed; businesses shuttered. Our health care is too costly; our schools fail too many; and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.

These are the indicators of crisis, subject to data and statistics. Less measurable but no less profound is a sapping of confidence across our land – a nagging fear that America’s decline is inevitable, and that the next generation must lower its sights.

Today I say to you that the challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time. But know this, America – they will be met.

On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.

On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn out dogmas, that for far too long have strangled our politics.

We remain a young nation, but in the words of Scripture, the time has come to set aside childish things. The time has come to reaffirm our enduring spirit; to choose our better history; to carry forward that precious gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free, and all deserve a chance to pursue their full measure of happiness.

(more…)