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To: Wharf Rat who wrote (164228)3/25/2009 4:38:51 AM
From: stockman_scott  Respond to of 362291
 
Clinton Seeks to Reassure Mexico on U.S. Help for Drug Fight

By Jeff Bliss and Viola Gienger

March 25 (Bloomberg) -- Secretary of State Hillary Clinton will try to ease Mexican concerns about the U.S. commitment to free trade and the cross-border fight against drug cartels during a two-day trip to Mexico that begins today.

Ties have been strained by the escalating conflict among narcotics traffickers that has left 7,000 people dead in Mexico since the beginning of last year and spilled over to some U.S. cities. Adding to tensions is a trade dispute over U.S. restrictions on Mexican trucks.

President Barack Obama last night said his administration is beginning a “very significant” effort to keep Mexico’s drug violence from spreading across the border and to aid the Mexican government in combating drug cartels.

“We will do more” if additional actions are needed, he said at a White House news conference. He didn’t address a question about whether he would dispatch “national troops” to increase security along the border.

Arturo Sarukhan, Mexico’s ambassador to the U.S., said yesterday in Washington that the U.S. must understand its role in supporting the cartels.

“The violence in Mexico is not happening in a vacuum,” Sarukhan told a gathering organized by the Council of the Americas, a New York-based free-trade group. “It’s happening because we sit next to the biggest consumer market in the world.”

Obama at his news conference praised Mexican President Felipe Calderon for being “very courageous in taking on” the drug cartels. He also said the U.S. must step up its efforts to stop the flow of weapons and money to the drug dealers.

U.S. Initiative

Clinton, 61, will emphasize the elements of a U.S. initiative unveiled yesterday to deploy more agents to the border to battle the violence, State Department spokesman Robert Wood told reporters.

“The secretary is going to be working with other counterparts in the government to do what we can to try to help Mexico as it confronts this crisis,” he said.

Obama administration officials have said that the stability of Mexico is a top national security issue. The cartels are major suppliers of methamphetamine, cocaine and heroin, drugs that have had devastating effects in U.S. cities and rural communities.

In the legal economy, Mexico’s export-related dependence on the American market is hurting the country as the U.S. suffers through a recession. In Mexico, industrial output fell 11.1 percent in January from a year earlier, the most since 1995. Exports declined 32 percent to $15.2 billion the same month, while the economy shrank 1.6 percent in the fourth quarter, the worst slump since 2002.

Trucking Dispute

The Obama administration moved yesterday to resolve a trade dispute involving cross-border trucking. Transportation Secretary Ray LaHood pushed to revive a program that lets Mexican trucks deliver goods across the U.S. border.

The program’s funding was cut off by U.S. lawmakers who said the trucks didn’t meet U.S. safety standards. Mexico last week applied $2.4 billion in tariffs on at least 90 U.S. products in retaliation for the U.S. suspending rules that let some Mexican trucks operate beyond a zone along the border.

“What we want to do is to make it a program Congress feels good about,” LaHood said.

Broader Agenda

Clinton’s trip aims to show that the U.S. doesn’t see Mexico -- a current member of the United Nations Security Council -- solely through the lens of drug violence or trade. Clinton is set to discuss Latin American issues in preparation for a regional summit and touch on energy topics. From Mexico City, Clinton plans to visit a renewable-energy project in Monterrey.

Clinton’s visit “demonstrates that the U.S. agenda is not simply drugs and thugs,” said Janice O’Connell, a former Senate Foreign Relations Committee aide on Latin America who is now at the Gephardt Group Government Affairs firm in Washington.

Other U.S. officials plan to follow Clinton to Mexico. Next week, Homeland Security Secretary Janet Napolitano and Attorney General Eric Holder will visit as part of the anti-violence effort.

Earlier this month, Admiral Michael Mullen, chairman of the U.S. Joint Chiefs of Staff, conferred with Mexico’s military leadership on lessons learned from combating terrorists. “There are an awful lot of similarities” with Mexico, he said.

‘Bilateral Cooperation’

Mexican Foreign Minister Patricia Espinosa told reporters yesterday that the Obama border plans “are consistent with the bilateral cooperation in the fight against organized crime.”

The new U.S. initiative is a response to growing concerns in Congress and the administration that the Calderon government is struggling in his war with the cartels.

Drug violence is reducing annual gross domestic product by 1 percentage point, according to the Mexican government. Narcotics-related deaths more than doubled last year as Calderon’s crackdown disrupted drug operations and increased competition for the best supply routes to the U.S.

Signs that the fight has crossed the border, fueling an increase in kidnappings in Phoenix, are alarming U.S. lawmakers.

“We’re not doing enough,” said Representative Hal Rogers of Kentucky, senior Republican on the House subcommittee that sets the Homeland Security Department budget.

Lessened Violence

Although the violence across the border has eased in the past few weeks, “prior to that, every day you were hearing about several murder victims being found” in Ciudad Juarez, said Chris Mears, a police spokesman in El Paso, Texas. “To know it’s literally a stone’s throw away from where we shop and eat” is a “sobering situation,” he said.

Mexico’s stability was affirmed yesterday by Moody’s Investors Service, which said the country isn’t a “failed state,” a label that Calderon, 46, rejected this month.

Obama administration officials said their intent is to help Calderon, not to criticize him.

Under the U.S. plan, the Bureau of Alcohol, Tobacco, Firearms and Explosives will relocate 100 agents along the southwestern border to uncover guns being shipped from the U.S. into Mexico. The Drug Enforcement Administration will put 16 more agents on the border in an attempt to break up methamphetamine traffic.

Lawmakers who represent southwestern border communities met with Clinton yesterday to ask for more money to help combat the drug-related violence. The administration plans to spend $700 million this year to supply Mexico with surveillance technology, including aircraft.

To contact the reporter on this story: Jeff Bliss in Washington jbliss@bloomberg.net; Viola Gienger in Washington at vgienger@bloomberg.net

Last Updated: March 25, 2009 00:00 EDT



To: Wharf Rat who wrote (164228)3/25/2009 8:50:25 AM
From: koan  Read Replies (1) | Respond to of 362291
 
In the modern world I would call that a dfference without a distinction-lol. I would argue that economics deals more with the macro picture and finance with the micro picture.

We need to deal with both and I feel Krugman is smarter than Geitner, more honest than Geithner, and has the needed larger picture in his head than Geithner.

But I could also be dead wrong.

>>Geitner's not dealing with economic problems; he's dealing with financial ones. From the Wik,

Economics is the social science that studies the production, distribution, and consumption of goods and services.

The field of finance refers to the concepts of time, money and risk and how they are interrelated. Banks are the main facilitators of funding through the provision of credit, although private equity, mutual funds, hedge funds, and other organizations have become important. Financial assets, known as investments, are financially managed with careful attention to financial risk management to control financial risk. Financial instruments allow many forms of securitized assets to be traded on securities exchanges such as stock exchanges, including debt such as bonds as well as equity in publicly-traded corporations.<<



To: Wharf Rat who wrote (164228)3/25/2009 9:37:28 AM
From: koan  Read Replies (1) | Respond to of 362291
 
Here is the mistake Geithner is making:

Roger Craine (UC Berkeley):

Lights, Camera, Action, Take One. In a rushed, poorly thought-out, one page memo to Congress in Sept. 2008, Hank Paulson outlined the Troubled Asset Relief Program (TARP) which proposed that the Treasury (i.e. taxpayers) buy toxic assets (mostly underwater real estate loans and securities backed by real estate loans) from the banks to cleanse their balance sheets and provide them with badly needed capital. It didn't take a Nobel Prize winner to figure out that the Treasury can't provide banks with more capital without overpaying (a taxpayer subsidy to banks) for the toxic assets. Still, when Paul Krugman, the 2008 Nobel Prize winner in economics, pointed out the obvious logical fallacy in the New York Times, it became even more embarrassing.

Lights, Camera, Action Take Five. On Mar. 23, 2009, Tim Geithner announced TARP Take Five which is a sophisticated (sneaky?) redo of TARP Take One. In TARP Take Five -- relabled as the "Public Private Partnership Investment Program" -- private investors instead of the Treasury buy the toxic assets. Of course, as Krugman noted, the banks won't get more capital unless the private investors overpay for the toxic assets. To increase the value of the toxic assets, the FDIC (taxpayers) threw in a valuable insurance policy. The insurance limits investors' losses to 15 percent of the value of their purchase. The insured toxic assets are worth more than the uninsured toxic assets and the investors will pay a premium. Taxpayers provide the insurance, but they don't get the premiums. The premiums go to the banks. Underneath the bells and whistles, TARP remains a cleverly disguised vehicle for taxpayers to subsidize the banks without getting compensated through partial ownership.

-- Roger Craine is professor of economics at the University of California at Berkeley.