Baithak

But frustration among Muslim countries over Israel’s refusal to put its nuclear program under international purview, and resistance from Israel to Muslim pressure on the issue, threatens to force a vote for the third year running. Muslim IAEA members were expected to put forward a resolution urging all Mideast nations to refrain from testing or developing nuclear arms and urging nuclear weapons states “to refrain from any action” hindering a Mideast nuclear-free zone.

After losing this vote two consecutive years, Islamic nations are threatening to up the ante this year, warning they will call for a ballot on every item, no matter how uncontroversial, unless they get conference backing on the Israeli nuclear issue. Arab members - backed by Iran - this year have again asked conference organizers to include an item on Israel - a move being protested by Israel. Focusing on Israel by name “is substantially unwarranted and flawed,” said a letter prepared for review by the conference from Israel Michaeli, the Jewish state’s IAEA representative. Sponsors of the item should instead “address the most pressing proliferation concerns in the Middle East,” the letter said, an allusion to Iran’s defiance of U.N. Security Council sanctions for refusal to stop uranium enrichment.

More: continued here

CityBeat: You’ve been asked this today I’m sure, but how much of this week’s ongoing economic disaster can be traced to the war?
Joseph Stiglitz: It’s clearly played an important role in two important respects. First, I think the war had a lot to do with the increase in the price of oil. There could be debate about how much, but even if it’s only responsible for 30 percent, 40 percent, the chain of logic is that with the price of oil climbing, Americans were spending more money abroad. The Fed responded in what I’d say was a shortsighted way to the weakness of the economy by keeping interest rates lower, lending standards lower, and it’s precisely those lower rates, the flood of liquidity and the lower regulatory standards, which led to the current problem. Now, I think that you could argue it may in fact be the war that broke the camel’s back. The system has an enormous amount of resilience, so it can take a certain amount of abuse. People can gamble and it can survive. The second way, very important, goes back to 2001; when we had our economic downturn, we had a surplus of two percent GDP. It became clear in August 2007 something needed to be done, but they didn’t get around to it until February 2008. What it did was very mild and it was mild because we were constrained by a very big budget deficit. Even Bush’s advisor – now Fed Chairman – [Ben] Bernanke identified this as a main difference between 2001 and 2008.

Yes. The Clinton surplus, now gone.
Yes. It was still extant at that time. Now, in 2009, we’ll be looking at the largest deficit in our history.

Lordy. Give us the bad news, as if that wasn’t bad enough. Can a major and long-lasting world recession be far behind?
Um. Well. Um. [Long pause, as the professor makes a mildly discomfited face.] Economists are always two-handed, so I’ll be a two-handed economist. On the one hand, in many ways, this current financial meltdown, which is just beginning, is more complicated yet not so serious as the Great Depression – yet could easily become so. But the real consequences have been much milder. The Great Depression saw 25 percent unemployment. Most economists would say we now know how to combat that through Keynesian measures and there’s no need for us to wind up in that situation. That’s probably what’s behind some of the extraordinary events this week: the government going into the insurance business, the mortgage business, the government becoming the largest insurer, the largest mortgage company. Talk about socialism, we have it! It’s an irony the biggest increase in the role of government in the economy would happen this way.

More: continued here

Israel will have to give up “almost all” of the West Bank areas it occupies and accept the division of Jerusalem in order to take advantage of a rapidly closing window of opportunity for peace with the Arabs, outgoing Prime Minister Ehud Olmert said in an interview published Monday. “The decision we are going to have to make is a decision we have been refusing for 40 years to look at open-eyed,” the Israeli leader told the Yediot Aharonot newspaper. “The time has come to say these things. The time has come to put them on the table.”

Olmert has resigned from the premiership because of a host of corruption investigations. But he remains in a caretaker position while Tzipi Livni, his successor as head of the ruling Kadima party, works to assemble a new government. His interview with the prominent Israeli daily amounted to both a challenge to beliefs held as central to the Jewish state and a personal mea culpa. Though fresh rounds of talks with the Palestinian Authority and Syria were launched under his watch, Olmert acknowledged some of the positions he was advocating in the interview — such as the division of Jerusalem — were things he opposed during most of his 35-year political career.

More: continued here