The world is ending! We're back! The end is nigh! Hallelujah, we're saved! Pawlenty! Bachman! Perry! Oh my God, maybe the end really is nigh! No, Ryan Mallett and Tim Tebow looked good and the heat wave in DC has broken, maybe a better autumn is ahead.

Suffice it to say, it's been a rough week. And amid the wreckage and rivers of bile, adrenaline, and tears that have flowed this week, a few stories have slipped through the cracks, a few perfectly bloggable topics have gone uncommented upon. And it's Friday and we can't let the week go by without offering a few quick takes on at least four of those bits and pieces:

• China's first aircraft carrier set off in the foggy waters around Dalian. This naturally led America's China-phobes to drop their crocheting and totter out of their rocking chairs howling. But on any level the story should not be too worrisome. First, it underscores just how far China lags behind the United States militarily. Even with China's refurbishment of the Ukrainian carrier that went to see this week, they are years away from having an operative carrier battle group, decades away from having anything like America's 11 carrier-group global capabilities, and frankly, they lag behind a host of other players in this category, including, to name a few, Thailand, Brazil, India, Spain, and Italy. Next, China, as a major power, certainly has every right to such capabilities and frankly, the world is better off when a balance among the capabilities of major powers ensures stability. Finally, while it is possible China may some day emerge as a formidable adversary of the U.S., most of their major problems are at home and will consume them for the foreseeable future. (And can any country be that worrisome that produces anything like the YouTube "Dancing Carrots" sensation?)
• For all the talk of this being Barack Obama's worst week, David Cameron has certainly given him a run for his money. Cameron's response to the riots in Britain has gone from being rhetorically over-the-top to being politically tone deaf to flirting with authoritarianism. What is it about the right wing, those supposed champions of "small government" that when the going gets rough or their "values" are threatened, they become the champions of much bigger, more intrusive government, constitutional principles be damned? Cameron's week included the latest illustration of this phenomenon with his suggestion that Britain consider curtailing social media at times of crisis because it can be used to stir up crowds. What could possibly violate fundamental principles of free speech, free association and free press more? Does anyone else see the ugly paradox in the fact that the right would have big businesses unregulated or self-regulating even to the point that they wreak havoc to the lives of millions but that the moment a crowd of the angry, disenfranchised poor take to the streets, they are willing to discuss suspending their inalienable rights?
• Read on

Here at Les Recontres Economiques d'Aix-en-Provence we are ostensibly discussing "The States of the World" but in reality the buzz around the event is about the global economic ugly pageant. Although much of the conversation among delegates --whether at the venerable conference sites like the law school of the Universite Paul Cezanne or the local outpost of Sciences Po -- focuses on the harrowing state of the Eurozone, one can regularly hear concern expressed for the other contestants in the current perverse competition among the world's economies.

To understand the competition, you just have to understand the old joke about the group of friends whose picnic is disturbed by a hungry grizzly bear. As the friends bolt from their campsite, one stops to put on his sneakers. The others ask what he is doing, worried that he will never be able to outrun the bear if he stops. The one in the sneakers observes as he starts sprinting away, "I don't have to outrun the bear, I just have to outrun the rest of you."

So it is now with the global economic ugly pageant. While most of the major economies of the world are spluttering and the possibility of an unprecedented geoeconomic disaster remains palpably real, what money there is does have to go somewhere. That place is likely to be the least ugly of the world's economies. In other words, absent a true safe haven, capital will seek the safest haven of those available. It's one reason the dollar has done fairly well recently, for example. While the U.S. government seems to do everything in its power to screw things up economically, investors buy dollars because the managers of the world's other big currencies, the Europeans and the Japanese, are screwing things up worse.

The question now is will our "luck" remain the same going forward? How will the world's economies fare in the next round of this contest? Here's the current betting line based on my scientific eavesdropping on conversations here in Provence, appropriate discounting for self-interest and biases of the speakers and my own reading of the tea leaves that get floated as economic news in the world's newspapers. (Note: I am focusing only on national and regional economies here. Suffice it to say that almost certainly the big losers of the coming months -- whether policymakers accidentally blow up the world economy or they dodge disaster through a judicious combination of austerity and stimulus -- will be the poor. They have no voices advocating for them (as do, for example, the makers of private jets currently lobbying to keep the corporate tax breaks their purchasers receive under present U.S. law). Austerity programs will squeeze them further. Disaster will crush them. And almost certainly the biggest winners will be big corporations and the super-rich who will venue-shop and use their access to cash to buy up devalued assets including fire-sales among privatizing formerly state-owned bric a brac like roads, ports, powerplants and water rights.)

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There are revolutions and there are revolutions. Those sweeping across the Arab world hold out the possibility of breakthroughs that may improve the lives of millions and remake the geopolitics of the region. But there are other revolutions more difficult to capture on camera but far more sweeping in their implications, revolutions that can change the lives of billions and remake the geopolitics and the very economic and technological fiber of the planet.

We know the familiar signs of revolutions in the Middle East. Crowds assembled in public squares. Banners. Nervous governments sending out troops or shuffling cabinets. But the signs of these other revolutions are subtler, harder to spot.

Take for example a story carried by the BBC yesterday that will not earn its own logo and theme music from TV news producers, but which has profound implications whether measured in terms of the changes it portends or the number of lives it may potentially impact.

In that story, it is reported that China is on a course to pass the United States by one important measure to become the world's leader in scientific research within two years. It cites a study by the Royal Society, Britain's national science academy, that analyzes publication trends in scientific literature.

Citing the shifts in the world's scientific output as "dramatic", the Royal Society's report observes, "The scientific league tables are not just about prestige -- they are a barometer of a country's ability to compete on the world stage."

The report reveals that whereas in 1996, the U.S. produced approximately 290,000 scientific papers and China produced just over 25,000, by 2008, the United States had crept forward to just over 316,000 whereas China had increased to about 184,000. While estimates as to the speed China is catching up vary, the report concludes that a simple straight-line projection would put the Chinese ahead of the United States ... and every other country in the world ... in output by 2013.

How did China do it? Simple: They made it a priority. They increased research and development spending 20 percent a year or more every year since 1999 and now invest over $100 billion annually on scientific innovation. It is estimated that five years ago, the Chinese were already producing over 1.5 million new science and engineering graduates a year.

This data resonates on many levels. It suggests a profound shift in the world's intellectual balance of power. This shift is one that is historically linked to the economic vitality and consequent political and military clout of the countries that lead. It suggests a much better future for the people of the world's most populous country and knock-on benefits for their neighbors and trading partners. It suggests a relative decline in influence for the U.S. And, for the people of the Arab world, currently struggling with their own revolutions, it suggests the only true path to real reform, opportunity and empowerment.

It is an axiom of history that the silent revolutions -- like those that periodically come in science and technology -- are far more important than the noisier, bloodier and more publicized political kinds. That's why these subtle indicators of their progress can be even more momentous than the round-the-clock coverage of upheaval that seems to be dominating our attentions at the moment.

It is a certainty that the future of the world be far more greatly influenced by what is happening in a Chinese laboratory than what is happening in the Arab street.

Recently, there have been perturbations in the wonkosphere. While the trembles are so slight that they wouldn't show up on the Richter Scale of a real human being, they have generated blog headlines and conversations at conferences full of people with advanced degrees and too much time on their hands. The stir has been caused by the assertion that we now live in something that big idea branding experts are trying to characterize as a "G-Zero" world.

In the words of one of the term's proponents, Ian Bremmer, the term refers to the assertion that we now live in a world in which "no country or bloc of countries has the political and economic leverage to drive an international agenda." Bremmer, and another supporter of the idea, NYU's Nouriel Roubini, have been explaining the notion and have done so compellingly enough that after it came up at this year's World Economic Forum gabfest in the Swiss Alps, the New York Times called it the event's "buzziest buzzword."

Buzz words are important in the wonkosphere because people are very busy going from conference to conference, periodically stopping to Tweet about who they bumped into and how they influenced them, and they have very little time to really think about anything. So if you can take an idea, reduce it to a couple of key, easily digestible, tasty ingredients, and wrap into a piece of shiny gold foil you have ... a Reese's Pieces Mini. Well, actually, you have something just like it, but not quite as tasty; you have a candidate for buzz-term of the moment.

Sometimes, it must be said, that even the fizziest of the buzziest actually contain a core idea of real value. Take a stroll down foreign policy nerd memory lane and savor past hits like "illiberal democracy" or "the world is flat" or "clash of civilizations" or "the end of history." Agree with the core notion of the idea or not (the delicious peanut butter center), you have to admit these ideas performed a useful purpose, captured a zeitgeist, and got the conversation going. Some, like "the end of history," were both widely misunderstood and, when understood correctly, wrong. But it was a compelling idea thoughtfully arrived at.

This G-Zero thing, not so much. The idea, of course, plays on all the discussion that has swirled around recent international summits as the attendance lists changed and the labels were altered accordingly. We went from the G-8 to the G-20 and then, keen observers, eager to build their own bit of buzz in the pundit-hive, pondered whether we weren't really seeing a case of a G-18 wrapped around a G-2 (the United States and China.) The Chinese didn't much like this and wished pundits would leave their g-darned labels off of them.

Bremmer and Roubini and company make the case that the United States and the Europeans and the Japanese are too deeply under economic water, and the emerging powers like China and India are too busy developing all the time for anybody to be able to step up and drive the international agenda. And while I know and like Ian and think both he and Roubini are smart guys, this is as an idea that looks like what it is: not much built around a big zero.

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While it is often ruefully noted that you can't pick your relatives, there is an expectation in life that you can pick your partners. Barack Obama is discovering that when you are president of the United States, that's just not the case.

In fact, if there is one theme that runs through every corner of the Obama presidency it is that he has been forced into partnerships that are so complex, difficult, and undependable that it must leave him yearning for the relative simplicity of good old fashioned enmities. This was illustrated yesterday as the president made the short walk across Lafayette Park to visit the U.S. Chamber of Commerce, symbolic headquarters of the U.S. business community, a group with which the president has come to realize he must work more closely going forward.

But in and amid all those complicated relationships, which are the most difficult? Naturally, there are many ways to measure this but we'll stick with one: Which among the most difficult are most likely to blow up in his face during the next two years?

Here's the verdict:

10. China
This, the most important international bilateral relationship, is both difficult and likely to be relatively stable because it is so complex. There is so much economic co-dependency here that the political issues are likely to work themselves out. Over the next two years trade and currency tensions may grow, but it is unlikely that either side will flirt with a big blow up prior to the 2012 leadership change in China or the presidential elections that same year in the U.S.

9. Russia
China is likely to be the U.S. most important international counterpart in the decade ahead but Russia remains the wildcard among the major powers. Stephen Cohen summed it up well on "Morning Joe" this morning: Russia's the biggest country in landmass, the leader in energy output and it has all those nuclear weapons. It also has a massive Muslim population, related challenges in its near abroad, memories of empire and what might politely be called a mischievous streak when it comes to international challenges. Oh, and it is undergoing a demographic meltdown and it is suffering from a divided less-than-dependably friendly political leadership. It's at the bottom of this list primarily because of the "next two years" focus of our metric.

8. Israel
Israel is the United States' most dependable friend in the Middle East and a vital ally. That said it is also facing massively unsettling changes from within and without that are creating enormous pressures on its political leaders. The Bibi-Barack marriage was never exactly made in Heaven but as the Israelis face demographic pressures at home, the Hezbollah take-over of Lebanon, instability in Jordan and Egypt, the prospect of a nuclear Iran, growing international pressure to cut a deal with the Palestinians and seeming growing inability of the Palestinians to cut a deal due to their own internal divisions ... what was difficult is going to get any easier. While many expect Netanyahu to offer his own concessions and a roadmap to progress sometime soon, there is real concern even among his supporters whether he can go far enough to break the logjam in the peace process. If he can't, pressure will build in this already fraught partnership.

7. Egypt
Egypt nudges out Israel only because it is so volatile right now and we don't know where the current unrest now heading into its third week is likely to head. One thing we do know, there are almost no circumstances in which the relationship will be easier for the United States. If there are massive reforms, a more pluralistic Egypt will be harder to deal with than an autocracy with a fairly dependable ally at the helm. If the current regime holds, they will never trust the U.S. in the same way as they did prior to this crisis.

6. Democrats in the Congress
Will Rogers said, "I'm not a member of any organized party, I'm a Democrat!" And as far as we know he never sat at a cocktail party between bickering leaders like Nancy Pelosi and Steny Hoyer or Harry Reid and Chuck Schumer. (Although, Pelosi clearly had a little celebratory sip of champagne last night to celebrate the departure of Jane Harmon, a longtime thorn in her side.) Pick an issue from fighting the deficit to rationalizing our regulatory framework to investing in energy infrastructure, you'll find both Obama's biggest supporters and some of his most difficult opponents in his own party.

Read on

The agenda for the state visit was dominated by trade and economic issues. The world was recovering from a recent global economic crash. There was a certain tension because the visitor had strong autocratic tendencies and according to some, imperial ambitions. He had also regularly made statements that could be interpreted as hostile to U.S. and Western influences in his country. The U.S. president, who had once enjoyed enormous popularity, was mired in the difficulties of working with a fractious Congress and poisonous political divides across the country. His main job was nation building at home but he increasingly found he had to take time to address international concerns. In the end, the best outcome the visit could produce was some limited progress on trade deals, allowing the visitor more access to a U.S. market that was vital to his country's growth.

While it sounds familiar, that is the story of the first visit of a foreign head of state to the United States. It took place in 1874. The visitor was King David Kalakaua of Hawaii. The U.S. president was Ulysses S. Grant. The signing of the trade deal -- which focused primarily on agricultural commodities -- was considered a big triumph back home in Hawaii although ultimately the king was better known for his energetic world travels, for the decline in the power of the Hawaiian monarchy that took place during his reign, that he was Hawaii's last king and for the fact that during his reign he oversaw the revivals of hula dancing and surfing.

Thus the echoes with the visit of China's president Hu Jintao to the United States this week are only distant ones. Nonetheless, there is something in this visit that compels a look backward to that first state visit of a foreign leader to Washington. Because this is the first time in the comparatively short history of such visits that any visiting leader has been seen by a substantial number of Americans as representing a rising power that might soon eclipse the United States.

Even during the visits of Soviet leaders who were seen to be at the helm of the world's other superpower, there was always a perception among Americans that we were the ones with history on our side and also that should it come to conflict that either we would win or that both sides would lose. Further they were never seen as a real economic rival. But look at recent polling data. A Pew Study released last week showed that almost half of all Americans see China as already being the world's leading economic power while fewer than a third of Americans see the United States in that role. An Allstate/Heartland survey last month showed the same thing and also suggested that at least as many Americans feel China will be the leader in 20 years as believe the United States will rebound.

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You can tell a lot about a major summit between world leaders by what happens in the weeks leading up to it. That's when staff scurry around trying to nail down "deliverables" -- agreements that might be signed, initialed, announced, dusted off, and signed again, that sort of thing -- and fine tune the optics of the upcoming meeting. Tensions are typically defused in advance. Good news is often played up to produce a positive mood.

That's just what has been happening in the run up to the visit of China's President Hu Jintao to Washington. The Chinese foreign minister blew through town last week, meeting with the likes of Hillary Clinton and Tom Donilon and allowing both sides to test out their language about how important the relationship is while also testing thrusts and parries on currency policy. Our North Korea envoy Stephen Bosworth went to Beijing to seek progress on cooperatively managing the vexing Mr. Kim. Secretary of Defense Bob Gates is in China right now seeking (unsuccessfully thus far) to reboot military cooperation that broke down in the wake of last year's decision to sell more arms to the Taiwanese.

At the same time, as is also typical with such a visit, we have members of Congress like Senator Chuck Schumer (D-NY) flexing their muscles and warning that China had better adopt "fairer" currency policies or else. And sometimes we have seen other actions designed to send messages to the rest of the world to place the upcoming meeting in context -- or at least international actions that cast an important light on the upcoming meeting whether intentionally or otherwise.

Read these tea leaves and you can tell a lot about the largely formal high-level summit to come. In fact, these pre-summit periods are actually where the real work usually gets done with the most important summits typically being so carefully orchestrated that it's almost impossible for anything to actually spontaneously occur out of them.

So, what have we learned? Here are a few highlights:

• The Chinese would like the meetings to go well. The announcement of a couple banking licenses last week is precisely the kind of commercial gifts the Chinese like to hand out as summit-related door prizes.
• The Chinese are ambivalent about how the meetings go. Their pushback on U.S. calls for currency adjustments from the likes of Donilon and Clinton was firm but diplomatic.
• The Chinese are perfectly willing to tell the United States to stuff it. Gates's effort to get military cooperation restarted was rebuffed in a way that was both embarrassing for the United States. and, rest assured, carefully cultivated. (Although getting that embarrassment out of the way this week rather than on the summit trip itself is also a part of deft trip management.)
  Read on

It is conventional wisdom that U.S. elections seldom turn on foreign-policy issues. Armies travel on their stomachs and so do American voters. It's all about the pocketbook. But every so often the pocketbook has a foreign-policy component, which is the case this year -- and it has led to a rather extraordinary shift.

This is the first election in U.S. history in which the most important foreign-policy issue is China. It won't be the last.

Two years ago we had one of those rare elections in which foreign policy mattered. But back then, even in the midst of an historic economic crisis, the foreign-policy focus was on the Iraq War, which served as a referendum on the Bush administration's handling of the war on terror. In 2004 and 2006, the war on terror was the dominant foreign-policy issue. In 2000 foreign policy was not central, but to the extent it played a role, it was it was all about the vision for U.S. leadership in the post-Cold War era. The 1996 vote had a similar theme, plus some focus on the ongoing small wars, notably the upsets in the former Yugoslavia. The 1992 election was influenced by the end of the Cold War and the first Gulf War. During the Reagan Era Cold War issues drove the agenda. Jimmy Carter was bounced from office largely due to his impotence in the face of the Iranian hostage crisis. Prior to that Vietnam and the Cold War were central from 1964-1972.

But during this election cycle the subject of the United States' two wars hardly came up. It is in fact, a tribute to the Obama administration's handling of those wars that, despite their potential to create the formation of political fault lines, they have not. On the contrary, they are one of the few areas in which there is a seeming confluence of views between the parties.

But if you look at campaign ads and listen to campaign rhetoric, China repeatedly arose. China was cited as our top economic rival and as an unfair competitor because of its currency policy, its potential to overtake the U.S. as a global economic leader, and especially its impact on U.S. workers. The giant sucking sound is coming from across the Pacific these days. But unlike that sound in the days of wacky Ross Perot, this time the giant sucking sound is accompanied by the ominous rumblings of a rising superpower -- that many politicians running this year had no problem framing as the United States' natural enemy in the 21st Century.

Much of it was demagoguery. But there was no other foreign policy issue that competed with it for prominence … with the exception of immigration in the border states; a coincidence that reflects a broader theme of turning inward, protectionism and isolationism that threatens to alter the fundamental nature of U.S. international engagement in the long run.

Call it what you will, but this election won't be the last in which China plays such a central role. This administration is also the first, as has been noted here in the past, for which the relationship with China was paramount among all those the United States has worldwide. It was also the first during which China played a central role in an issue outside its region -- as in the case of its important role in the Iranian nuclear issue. It was also the first during which Chinese views began to play a central role driving important international discussions -- from climate, to currency, to coordinating the global economic recovery.

It looks like President Obama's first major visitor of the new year will be Chinese President Hu Jintao. That is no coincidence either.

There are big shifts afoot this election day. And despite what you may read in tomorrow's papers, they have precious little to do with how many House seats the Republicans pick up in these midterm elections.

Once again, America's political pundits got it wrong in their analysis of this week's primary elections in the U.S. They immediately sounded the alarums regarding the big Tea Party wins, focusing on two of the most bizarre and extreme candidates to recently win victories -- Delaware's anti-masturbation advocate Christine O'Donnell and New York's porn-loving gubernatorial cartoon Carl Paladino. In so doing, they missed a far greater threat to the U.S. that was imbedded in the election results -- the success of the teachers' unions in defeating Washington, D.C.'s reformist mayor Adrian Fenty.

The unions didn't like his tough schools Chancellor Michelle Rhee and her policies holding teachers accountable for their students' performance. So they poured money into the campaign of Fenty's opponent, D.C. City Council Chairman Vincent Gray. The spin on the election was that Fenty lost touch with the city's black voters, but behind the scenes it was another victory for special interests that care more about their job security than they do about America's economic future. The side that seems dedicated to ensuring that the U.S. continues to fall behind other countries in academic performance -- and thus in terms of competitiveness, growth and by extension, national security, scored a big victory … if anything so cynical and counter-productive could actually be called a victory. Sadly, within hours of this setback for education reform in the nation's capital, it became clear that another courageous reformer -- with Rhee, one of the two or three most notable in the country --, New York City's Department of Education Chancellor Joel Klein, was also under growing pressure to suspend some of his trail-blazing accountability practices. The argument the critics made was that some New York City students were underperforming on one measure of English and Math proficiency, even while they conveniently overlooked a wide variety of national and state-level achievement gains made under Klein's stewardship. They also ignored the fact that the areas in which the setbacks occurred were ones in which standards were only this past summer revised upward (as Klein himself had urged for a long time).

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The Washington Post, like many Beltway watchers, took President Obama's statement that White House Chief of Staff Rahm Emanuel would make a "great mayor of Chicago" as an acknowledgement that Emanuel is as good as gone from his administration -- and that the typical midterm game of musical chairs that enlivens the West Wing has begun.

I take the statement as something different. I take it as a personal request from the President to me to let him know what changes he needs to make after the November elections.

So, let's begin with replacing Rahm. Rumor has it that Emanuel himself has been mentioning Valerie Jarrett, among the president's closest confidantes, for the job. While being as simpatico with the president as Jarrett clearly is would be a big plus, the chief of staff job has a massively tough management component to it that would undercut Jarrett's ability to remain the vital sounding board for the President she has become. Better suited to the job would be two of the other names mentioned: Ron Klain, the vice president's chief of staff, and Tom Donilon, the deputy national security advisor. Both are excellent, smart and proven administrative masters. Tom Daschle, former Democratic majority leader in the Senate, has also been mentioned. He played a vital role in the president's campaign and would add an important capacity for Hill outreach to the mix.

Read on

This weekend the Obama Administration will send a team to China headed by the somewhat unlikely duo of Larry Summers, head of the National Economic Council, and Tom Donilon, deputy national security advisor. The purpose is to send a clear message that the U.S. is approaching its relations with China strategically, with a view that integrates the full range of economic and security concerns.

While such trips are old hat for Summers, the journey represents a bit of a change of pace for Donilon, the inside guy who is credited with having done a great job making sure the policy process trains have been running on time within the National Security Council. Some in Washington are buzzing that this is a profile- and skill-raising trip intended to make Donilon a better candidate to replace National Security Advisor James L. Jones should Jones decide to depart, as many expect he will. Others grumble that the trip represents precisely the kind of "operational" role for the NSC and NEC that many cabinet departments have long thought should be out of bounds for White House policy coordinators.

But beyond the Washington gossip the trip has caused, the juxtaposition of economic and security concerns offers an illustration of an often over-looked fact -- the centrality of economic issues to current U.S. national security concerns. In China, the tricky calculus is fostering collaboration on security issues from North Korea to Iran in the face of political pressure back home to press Beijing harder on issues like currency valuation and unfair competitive practices (especially those associated with pressuring foreign firms to transfer proprietary technologies).

The U.S. has never been especially effective at coordinating its multiple interests in China so that pressure in one policy area produces progress in another -- or even simply avoids causing setbacks. So this trip, in concept at least, represents a step in the right direction -- at least if Congress doesn't undercut the administration's efforts by, for example, drafting its own legislation on currency issues.

But China is just one of a host of current hotspots where Summers, Geithner, and the international economic team are playing a central role on national security issues.

For example, in Afghanistan, the story of the week turns on the amazingly brazen behavior of the Karzai gang in trying to pressure the United States into bailing out a clearly corrupt and mismanaged bank in which President Hamid Karzai's brother, Mahmood Karzai, is the third largest shareholder. Mahmood has publicly called for a bailout even though his affiliation with a bank through which U.S. funds flow to Afghan security forces compromises both him and the president. Both remain unabashed, however, behaving like the proverbial kids who murder their parents and seek the mercy of the court on the grounds that they are now orphans. So the United States is in a pickle: Step in and support the Afghan kleptocracy and its culture of corruption or stand on principle (and law), and run the risk that the bank falters. It's not a situation that General David Petraeus can handle, but how the economic team manages it will have direct ramifications for him.

In the same way, some of the most sensitive concerns regarding Pakistan turn on economic policy. Will the Zardari government pump too much cash into the economy to deal with the aftereffects of the devastating flooding, and risk a major inflationary episode? Or will it introduce price controls and a set of micro economic measures that, if mismanaged, could produce social tensions or even rioting? The wrong mix of policies could plunge the already fractured and battered country into political turmoil and perhaps the reintroduction of military rule.

In talks with the Israelis and the Palestinians, many of the core concerns will turn on how to improve the economic conditions for the Palestinian people. If they can get past initial hurdles, they will, of course, ultimately have to move to a state structure that will enable organic economic growth in a Palestinian state, actually fostering job and wealth creation for people who have lived in an economic no man's land for too long.

In North Korea, it is reported that the administration, conducting high level meetings on the subject this week, is seeking to explore "engagement." In the case of the economically isolated and struggling North, that inevitably will mean economic packages in exchange for gradual normalization of relations or reductions of threats.  At the same time, this week, the administration widened sanctions intended to force Pyongyang to give up its nuclear weapons.

In Iran, the core initiative at the moment is making targeted economic sanctions work. In Iraq, the issue is fostering economic growth to help "purchase" social stability. The list goes on. It is clear that wherever the stakes are highest for the United States in the world, even as military and diplomatic initiatives garner most of the attention, behind the scenes much of the most critical work is being undertaken by international economic officials.

It is interesting to note in this respect that the responsibility for conceiving and coordinating most of these activities lies in the White House to a much greater degree than it does with military or diplomatic initiatives. The White House team on these issues is excellent. But in the end, these functions are so fundamental that the real leadership capabilities need to be cultivated elsewhere.

The economic team at the State Department could and should play a greater role in this respect; Undersecretary for Economic Affairs Robert Hormats is a talented and experienced official. As I have written before, State also could and should develop a dramatically enhanced capability when it comes to emergency economic intervention -- pre- or post-crisis. And all the other economic agencies need to be prepared to collaborate on this, not on an ad hoc basis but through a permanent program promoting cross-training and what the military might call inter-operability. Call it an economic rapid response capability -- or call them economic green berets.

We need people we can drop into critical situations and help manage them with an eye to our security and political needs rather than traditional purely economic metrics. That's a critical role for which development officials are ill-suited, and we still don't really have the fully developed institutional structure we need to support it.

Looking at the issues faced by the United States today, while one can't help but admire much of what is being done, the strategic side of the international economic agenda is such that it warrants some real thought about how and with whom we should be meeting such challenges in the future.

In yesterday's post, I noted some of the most relevant developments in the political world that've occurred recently. But we're hardly out of the neck of the woods. The summer of 2010 promises to be an ... interesting time.

As promised, here's an idea of the potential Black Swans to come:

1. Wars of Summer, Part I: The Koreas

As we've seen just in the past couple of days, "engagement" doesn't seem to be doing the trick with North Korea. When you have two countries that have been pointing guns at each other for half a century and one of them is run by the kind of guy who makes Mahmoud Ahmadinejad look like Albert Schweitzer trouble is always just a Dear Leader moodswing away. When one of those countries starts firing torpedoes at the other, that raises the temperature a bit ... and when that same country has a diplomatic tantrum because its neighbor actually doesn't like having its ships sunk, you get a sense of how off-balance and dangerous the whole thing is. (You also get dictionary editors everywhere rushing to insert North Korea's reaction into the official definition of chutzpah right where "burying your husband in a rented suit" used to be.) While most people assume this is just one of those periodic Korean peninsula hiccups, you never know.

2. Wars of Summer, Part II: Somalia, Yemen, etc.

These places are just two examples of plenty where conditions are chronically horrible and getting worse. If you're going to worry about the Koreas where the stakes are high and both sides would pay an unimaginable price for a conflict, don't rule out conflicts in places where everyone has a gun and life is cheap.

3. Wars of Summer, Part III: Israel, Syria, Lebanon

Speaking of places not to rule out, over the years few places have proven themselves more reliable breeding grounds for warfare than the borders of the state of Israel. And tensions are rising along the most northern of these as we speak. The Israelis are worried about growing stockpiles of missiles being deployed in Lebanon, new missile capabilities in Syria and Iranian mischief in both places. Of all the possibilities for tensions turning to a shooting war this summer, this one may top the list. And, what a great distraction it would make from Iran's nuclear issues (or what great cover for an Israeli strike against the Iranians who are paying for the missiles and underwriting Hezbollah trouble-makers in Lebanon and elsewhere).  

4. The Other "Big Spill"

While Washington works itself up into a lather over the spill in the Gulf, it effectively ignores a much bigger catastrophe. A recent NPR report indicated that the amount of man made pollutants that have flowed into the Gulf during the current crisis flow into the air every 2 minutes or so. That's 30 crises like this an hour. 360 a day. Over 1,000 a month. That means this summer there will be 3000 crises like this offshore drilling calamity ... and throughout this period the likelihood that the U.S. government or the world move any closer to addressing this much larger, much less photogenic disaster is pretty close to zero.

5. The Financial Crisis They Call "The Big One"

Remember the financial crisis that took down Bear Sterns? Now we look at that as only prelude. Remember the one that took down Lehman, Merrill and AIG? Perhaps we'll look at that as just the appetizer. Because with the world economy now trembling at the thought of further deterioration in the Eurozone, it wouldn't take much to send us into territory that was unimaginable even two years ago. Likely? No. But possible? Well, let's see, Japan has a debt to GDP ratio that is worse than most of Europe's. What if the markets sour on lending them any more money? What if that takes down some of their banks and they start calling in IOUs and cut lending in places like China? Tim Geithner said this week that overall China's economy is not a bubble. Maybe so. But that doesn't mean it doesn't have some pretty big bubbles in it (see: real estate). 

6. The Dem Rebound

The big political story in the United States is supposed to be the losses Dems will suffer in mid-term elections in November. Big time members of the punditocracy are calling for a big swing to the right, a likely Republican take-over in the House and even the possibility of one in the Senate. But by the end of the summer, once campaigns have started in earnest, the loony, fringy, dysfunctionality of the "just say no" party will be revealed and the big surprise U.S. political story of the year will start to take shape. The Dems may have modest losses in November, but it won't be anything like the washout the chattering classes expect.

7. Argentina's Surprise Victory

Despite Lionel Messi's dominance on the soccer field, Argentina won't win the World Cup this year. That'll be Spain. But maybe as the summer ticks on a few more people will start to realize that having done everything wrong and utterly alienated the financial system by telling the big banks to take a hike a few years ago, Argentina is actually having something like a recovery worthy of a tango. Oh, all is not rosy to be sure, but take a look at its per capita GDP in purchasing power parity terms. It just passed Chile to be number one in Latin America (according to Latin Business Chronicle). Between this and the U.S. dollar strengthening despite the fact that the U.S. has also done practically everything wrong (and China's flourishing for years despite its penchant for, how shall we put it, well, communism) who knows... this could be the summer that moral hazard makes its long awaited big comeback.

8. Someone Writes the Truth About Financial Reform

This is the least likely black swan on this list. But it is possible that once financial reform passes later this summer and is signed into law that someone will note that "the most sweeping financial reforms since the Great Depression" actually don't amount to much when it comes to fixing the problems we face. Mortgage defaults, unregulated global derivatives markets, unintended consequences of interconnectivity of markets, lack of global regulatory mechanisms, failure to address the trading culture's perversion of finance, etc... this is like the health care bill and Beatlemania: not the real thing, just an incredible simulation.

9. The White House Gets Humble

Ok, maybe I'm wrong. Maybe this is the most improbable of the Black Swans. But the folks in the White House are good people at heart and smart ones. Sooner or later they will realize that their mixed, incomplete record in office trumps the historic nature of their victory and that a little humility is in order ... if not because they feel that way then because by alienating even their most enthusiastic supporters they are doing themselves great political damage. As for the American people, they would do better with more realistic expectations. We all want Washington, Lincoln or Roosevelt whenever we elect a president. But the vast majority of the time we get Chester A. Arthur. Bush was Chester A. Arthur. Clinton was Chester A. Arthur. And in all likelihood Obama will end up being Chester A. Arthur.

10. Iran Cooperates

Ok, never mind. This one is most likely. But the dangerous twist here is that cooperation from Iran is actually just them buying time to move toward their goal of possessing nuclear weapons technology. The only thing that will stop them from such a stalling course is if they are much further ahead of schedule than we think and that the big black swan of this summer will be the announcement that the world's largest state sponsor of terror will actually have gone nuclear.

What would the world do without Mahmoud Ahmadinejad? While it may be pleasing to contemplate, the reality is that Iran's leader has become the one nut job that many of the world's other leaders can't do without.

Consider for a moment the following cases:

• Benjamin Netanyahu's apparent vision of himself turns on his role as protector of Israel in the face of the existential threat posed by the Iranians. And while the Iranians have long been seen as posing such a threat, with a front man like Ahmadinejad who denies the Holocaust, defies international law when it comes to nuclear weapons development and regularly calls for the destruction of Israel, it makes Bibi's job that much easier.
• The Iranian religious elite, paradoxically, also must thank goodness for their country's president on a regular basis because he often makes them look thoughtful and reflective by comparison. The reality of course, is that many of them live further down toward the end of Insanity Lane than Ahmadinejad, but he is an ideal front man, a limit-tester who can take matters to the brink and then be dialed back when it suits the real regime, the clerical inner circle.
• The Iranian opposition, of course, is delighted to have a thug like Ahmadinejad in power -- at least for the moment. Because he is the kind of callous, brutal, crude politician that does more to stir up his enemies than he does to effectively unite his allies. He is a big part of the reason that thoughtful observers like the CFR's Richard Haass believe that regime change is actually a plausible alternative in Iran. (Although it is unclear who we would get after Ahmadinejad or whether they would actually change some of the policies that make the West most uncomfortable.)
• The Saudi leadership and others from throughout the Arab world have been worried about Iranian hegemony (or Iran's hegemonic aspirations) for years. But thanks to the little guy in the tan windbreaker, they are now increasingly gaining the support of the rest of the world in their efforts to isolate and contain the country. He is also giving those that seek it, a good excuse to cultivate their own nuclear weapons program.
• Hugo Chavez loves his BFF in Tehran because mere association with him makes Hugo seem larger and more dangerous than he really is. Talk of a "mysterious" daily flight from Caracas to Tehran is all the rage among the anti-Chavistas carrying with it the most sinister sort of implications. Will Venezuela go nuclear if Iran does? Is Venezuela a partner in a new kind of axis of crackpots that will work to be destabilizing in a variety of situations worldwide? By making people ask these questions, the five foot two Ahmadinejad is like a pair of elevator shoes for the five foot eight Chavez.
• The government of Brazil has also embraced Iran as a way of sending the message to the world that it is charting its own course, that it is not in the thrall of U.S. or Western views. It sends a message of solidarity with the new non-aligned without really having much impact except irritating the U.S. government (which is a plus in many political circles in Brazil). Lula hugs Ahmadinejad and says, we are a rising major power that will be quite different from the 20th century-variety of major powers. Is it a responsible stance? Not if it gives cover to dangerous Iranian programs or legitimizes repulsive Iranian policies... but Brazil now also gets to offer itself up as a channel to the bad guys, a useful middleman role that makes it relevant in two different worlds.
• Ahmadinejad also is helpful to the Russians and the Chinese. While both dither over sanctions, they also both remain close to Tehran in important ways -- from Russian security cooperation to Chinese dependency on Iran for 20 percent of its oil. The United States is distracted and bears a huge cost through the need to maintain militarily present in the region... and again, two rising powers get to send a mixed message that well suits their domestic and international objectives.

While this list goes on, however, there is another dimension to the festering tensions with Iran over its nuclear program that may not, as of yet, be fully understood. This relates specifically to Netanyahu's framing of Iran as an existential threat. It may be just that, but not in the way he was envisioning.

Because over the past several years, growing concerns over Iran and its nuclear program have come to trump most others in the Middle East proper. They have transcended in terms of the security threat involved those associated with either the Israeli-Palestinian issue or those associated, at least for now, with al Qaeda (thanks in part to defeats for al Qaeda like today's killing of its leader in Iraq, and thanks in part to the fact that Iran seems to be, in the words of a former colleague of mine who was a career naval officer and Jack London fan, the wolf closest to the sled). Is a potentially nuclear Iran more dangerous than an unstable Pakistan? Probably not... but that's like saying you have two forms of cancer. You want to treat both, but the one that is most threatening at the moment will dominate your attention.

The Israeli government has played up this threat for completely legitimate and understandable reasons. Getting Iran's nuclear program just a little bit wrong might be minor for the world but a really big deal for Israel. However, having thus framed the issue, the Israelis have to live with the consequences... and the consequences are not what they intended.

Because if, as seems likely, the ultimate result of the Iranian nuclear program is (after "engagement" and sanctions ultimately prove ineffective, as seems likely) that we accept the idea of a nuclear Iran and revert to a strategy of containment, paradoxically Israel may move to be less central to U.S. interests in the region, trumped by the urgent need for a strong alliance with Arab states like Saudi, the UAE, Iraq, etc. designed to contain the new Iranian threat. Further, if we create a "nuclear umbrella" for the region, it is hard to imagine treaty or diplomatic language that did not, of necessity, promise to protect those states from all nuclear threats including those posed by Israel.

We're already seeing signs that the risks of having to live with a nuclear Iran are sufficiently real that relations with anti-Iranian Arab states are becoming more and more central -- and thus are likely to give those states an ever greater voice in the Israeli-Palestinian issue. Hence all the buzz about seeking to set American terms for a peace, gain Arab support and then go to the Israelis and say, here's the deal: You want to contain Iran, you need to give this serious consideration. 

Israel felt compelled to sell the Iranian threat. But their pitch really only would work if they persuaded the world to preempt that threat. If Iran got the bomb, then the geopolitics change, U.S. interests align more closely with those of some historic enemies of Israel, and a difficult relationship becomes even more complex. (And it's not so good now. My bet is that if the Palestinians unilaterally declared independence tomorrow there would be two kinds of reaction worldwide: celebration and, perhaps in a few cases, effective silence. Another point the Israelis need to consider: in the 21st Century emerging powers that are less sympathetic to their case are playing an increasingly important role in shaping multilateral outcomes.)

Ahmadinejad may be the region's indispensable lunatic, but if things keep trending in the current direction, he may ultimately be one that the Israelis could well have done without.

U.S. national security is too important to be left to foreign policy specialists, the media or politicians. These are the clear lessons of the Post-Underpants Bomber Era. 

Before Christmas and the disturbing revelations of a man setting his balls on fire on a Northwest Airlines flight from Amsterdam to Detroit (rendering himself only slightly more uncomfortable than those flying economy class), there was at least a feeling that America was regaining her senses following the 8 hysterical years of the so-called War on Terror. 

But within hours of the bungled terror attempt, we saw once again America's true vulnerabilities. And while they are linked to intelligence failures, it is not the ones on which the media and the president's political opponents have focused that are most salient.

Obama's reaction to the junkbomber incident was precisely right and just what you want from a leader: Dispassionate, thoughtful, and calculated. He gave his team the time to assess the threat, the breaches and the right next steps to take. At least one person in the United States, Barack Obama, seemed to recognize that the objective of terrorism is to promote terror and sought to defuse that effort by handling the threat with the proportionality and common sense that has long been missing from U.S. counterterrorism strategy.

But almost immediately, the foreign policy establishment -- acting with the acuity and purity of motives of Tila Tequila squeezing a few extra minutes of undeserved fame out of the untimely death of her "fiancé" Casey Johnson -- whipped itself up into a critical lather. Why? Because it was good for America or because it was in their own self-interest?

I'll leave you to work that out on your own, but here are a few clues:

First, we have seen very few such attempted attacks carried to the stage of that of the underpants bomber in the last decade. Second, we have been successful in foiling many such attacks -- successes for which those responsible get little credit. Third, the attempt revealed as much about the genuine and enduring weaknesses of even terrorists affiliated with major league terror operations like al Qaeda as it did about our own counter-terror efforts. Fourth, terrorism by definition is only successful if it produces "terror" -- the kind of hysterical over-reaction we are once again seeing -- yet this fact does not seem to have resulted in very many critics toning down their hysteria or shrillness. (The Republican Party has the collective cool on these matters of Prissy helping to birth Melanie's baby in Gone With the Wind. As for the media, given that the "news" networks probably devoted more live news coverage to the balloon boy hoax than were devoted to say, the invasion of Normandy, you recognize that they are actually in the business of emotional over-reaction. In fact, their constant refrain that every event is an earth-shattering pinnacle of human experience that could well be the biggest thing they have ever seen suggests they have more in common with folks in say, Ashley Dupre's line of work than that of, say, a journalist.)

Most important, however, is that within days of what may go down on record as the world's first and last attempt at plastic explosive-assisted self-circumcision, news stories kept popping up that underscored the fact that the terror attack paled in significance for those concerned with America's future to other concurrent global developments. To begin with, the intelligence failures involved were not even the biggest problem of the week for the intelligence community given the devastating blow to some of our most senior field operatives in Afghanistan. 

But the biggest threats to U.S. leadership and security ... to our very ability to protect ourselves at home and abroad ... manifested themselves in other stories that have simply not gotten sufficient attention among the accusations and inflammations of the holiday season terror frenzy. Like unemployment staying at 10 percent. Or, over the weekend, like China passing Germany as the world's largest exporter. Or like the fact that our impending health care bill will still not actually fix the financial threats to our system posed by grotesquely under-funded health care liabilities. Or like the fact that the world is far away from solving the biggest security problems it faces from stabilizing Pakistan to stopping Iran's nuclear program (and thus the WMD proliferation that poses the one great terror threat) to reversing climate change or addressing resource disparities that will trigger many of the wars of the century ahead. (It is worth noting that for America today ... the greatest threats to the nation's future well-being don't involve things that explode ... always the favored topic of foreign policy elites ... but rather things that are imploding ... like our economy, about which most big time foreign policy specialists haven't  a clue.)

If one terrorist can in one failed attempt distract America from addressing priorities and will almost certainly lead to further billions and billions being misdirected to the global whackamole game of trying to snuff out the geopolitical pipsqueaks who lead international terror networks it explains more about why terrorists will keep trying than any in-depth analysis of the conditions on the ground in terror-prone regions. 

Thus, what this incident really reminds us is, terrorists only have the power we give them. And that the emotional, the shrill, the over-the-top, the self-promoters, the hyper-political, and the other tummlers responsible for the inside-the-beltway mob mentality are as complicit in the spread of terror as those who are too soft on it. If the president's rhetoric was slightly too weak for some tastes, he erred in the direction that also weakens our enemies rather than, as did his most vocal critics, the direction that turns operational failures like the one on Christmas Day into strategic successes for the bad guys.

P.S. I'd like to add that not only is the over-the-top nature of the terrorism debate of late done damage to U.S. interests, the appropriate response is not only not more spending, more programs, more rules ... but that complimenting the moderate response would actually be improvements to our anti-terror efforts all of which would actually be in the direction of narrowing, focusing and spending less. For example, want to improve Intel sharing? Let's start with getting rid of the Directorate of National Intelligence, a legacy of Bush's big government response to 9/11, that amounts to precisely the opposite of what we need: an additional layer of thousands of bureaucrats who actually do not enhance (apparently) our analytical capacity and undoubtedly reduce communications efficiency. The Central Intelligence Agency was created to do all the coordinating the DNI does and easily could do it again if sufficiently empowered? Want another step to improve our intel sharing? How about reducing and eliminating many of the unnecessary levels of information classification that make it impossible for policy makers to actually have access to all the information they need to make decisions? Want another? Heed the advice of former advisor to Dwight Eisenhower General Andrew Goodpaster, who laughed to me during our last intel "crisis" after 9/11 that Eisenhower would have had no patience with it because he knew -- from bitter experience during World War II -- that intelligence can be useful but expectations must be set at the right level. It was always an imperfect tool and one that could not be perfected. Want another? Let's get out of the unwinnable mess in Afghanistan and focus some of those resources on directly targeting terrorists, some on better tools for early warning and the rest on the domestic needs that are actually essential to maintaining long-term U.S. strength.  I could go on. But it is clear ... when it comes to responding to terror, the lesson of the past decade is that we need to think a lot harder about proportionality and the unintended consequences of our understandable horror and outrage.