Daily Archives: January 22, 2010

An interesting shoving match is developing between the Americans and the Chinese over the internet. The Chinese reaction to Hillary Clinton’s speech calling for internet freedom around the world has been predictably fierce. But, equally interesting I think, is the question of why Hillary chose to weigh in on this subject, in a way that was bound to antagonise the Chinese. The Google row made her speech pertinent, of course. But I also know that there has been fretting – even among some Democrats – that a succession of actions by the Obama administration has given the impression of American weakness to the Chinese. So there might be a demand to show a slightly tougher side to US policy.

What are these alleged acts of weakness? Here are some, in no particular order: 1) Hillary Clinton says, early in the administration, that she is not going to let human-rights issues interfere with dialogue on other important issues. This message is re-enforced by Nancy Pelosi’s refusal, around the same time, to present the Chinese with a list of imprisoned dissidents. 2) Hillary Clinton tells the Chinese that she hopes that they keep buying US Treasury bonds. 3) The Obama administration does not make much of a fuss when the president’s town-hall meeting in China is censored on Chinese television. 4) The Americans agree to a communique after the Beijing trip which includes a phrase about China’s “core interests” – language that refers to Taiwan that the US has hitherto resisted. 5) The Obama administration hesitates to announce arms-sales to Taiwan and does not make much fuss, publicly, about cyber-security issues. Read more

It was fascinating to see Paul Volcker standing next to Barack Obama yesterday, when the president made his big announcement on the reform of investment banking. Volcker, the slayer of inflation in the early 1980s, who more or less disappeared from the public eye for a generation after retiring as head of the Fed in 1987, is now back in fashion and back in power. Meanwhile, Alan Greenspan – the man who succeeded Volcker, the high priest of deregulation and once hailed as a “Maestro” – has had his reputation trashed.

There is a fascinating contrast in styles between the two men. Watching the pictures yesterday, I was reminded of what Greenspan had to say about Volcker in his autobiography:

“Volcker and I were not personal friends. At six foot seven with an ever present cigar, he made a vivid impression, but in conversation I always found him quite introverted and withdrawn. He didn’t play tennis or golf – instead, he liked to go off by himself and fly-fish … Having been a civil servant most of his career, he didn’t have much money. He kept his family at their house in suburban New York for the entire team he was Fed chairman. All he had in Washington was a tiny apartment – he invited me over once in the early 1980s to to talk about the Mexican debt crisis, and the place was filled with piles of old newspapers and all the other clutter of a bachelor apartment.” Read more