Foreign Policy Blogs

OBL Is Dead, Focus On Fixing The Economy

The Global Markets reaction to the news about the capture and killing of Osama bin Laden (OBL) last week, was a momentary blip over concerns about spikes in oil & commodity price, and the oft-quoted “uncertainty” about terrorist Blowback in Western centers about his killing. But I found especially prescient a piece I saw in Time magazine, posted below, and written by the noted Global Market Strategist and PIMCO Co-CEO, Mohamed El Erian — someone whom  I’ve written about here on a number of occasions.  See here, and see video here.   In it, El-Erian argues that the capture and killing of OBL certainly doesn’t mean an immediate end to the terrorist threat, but rather it will lead to an abatement of the threat. Which in turn means we can draw down in Afghanistan, and turn more time, attention and resources to fixing the sluggard American economy. I agree with him.  See more below…

‘One of the most notable outcomes of the dramatic news that Osama bin Laden has been killed is the feeling of unity across the American political and social spectrums. The event has triggered a shared sense of achievement, pride and common purpose. It is a mood that the U.S. has not felt for years as increasingly polarized political debates, on both serious and trivial issues, gradually gutted the operational middle of the country’s political system.

Interactive MediaPhoto Gallery of Americans Celebrating OBL Killing.

After initial excitement, this moment of unity has largely been shrugged off by global markets as investors worry about the immediate risk of terrorist backlash and, more generally, the continued sense of malaise in the American economy. Yet bin Laden’s death has the potential to become a turning point for the country, and for President Barack Obama in particular, if the spirit of cooperation can be translated into broad-based, bipartisan progress on economic issues that are central to the long-term well-being of the country and the world. (See TIME’s video “Inside the Raid to Kill Osama bin Laden.”)

Unemployment remains stubbornly high. Youth joblessness is at alarming levels, with too many of the country’s teenagers getting close to the point where they go from being unemployed to being unemployable. Various budget constraints have limited the scope for easy solutions, even if these were desirable. The debt and deficit dynamics are bad and deteriorating at both state and federal levels. A major rating agency, Standard & Poor’s, has already taken the previously unthinkable step of placing the country’s AAA credit rating on negative outlook. And Americans can no longer rely on their central bank for yet another round of imaginative pump priming to buy them time, options and flexibility.

Interactive Media: The Economist – ‘What’s Wrong With America’s Economy..??

In effect, America can’t buy itself out of its economic problems, nor can it again kick the can down the road for much longer. Meanwhile, the rest of the world continues to outpace the U.S. in growth, competitiveness and wealth creation.

These structural problems were years in the making, and they require structural solutions that will need to be implemented steadfastly for a number of years. Read more here.

Source: Time magazine, The Guardian (UK), Financial Times of London




Elison Elliott

Elison Elliott , a native of Belize, is a professional investment advisor for the Global Wealth and Invesment Management division of a major worldwide financial services firm. His experience in the global financial markets span over 18 years in both the public and private sectors. Elison is a graduate, cum laude, of the City College of New York (CUNY), and completed his Masters-level course requirements in the International Finance & Banking (IFB) program at Columbia University (SIPA). Elison lives in the northern suburbs of New York City. He is an avid student of sovereign risk, global economics and market trends, and enjoys writing, aviation, outdoor adventure, International travel, cultural exploration and world affairs.

Areas of Focus:
Market Trends; International Finance; Global Trade; Economics