President Obama is in Australia announcing a new military commitment to the Pacific Region. There are a number of possibilities here. First, President Obama is taking the first step to address what he considers to be a potential security threat posed by the rise of China. Second, he may be making the move to reassure American allies in the region that they can count on American support in the event of Chinese aggressive action against them. Third, he may be responding to domestic pressures from the US military and other organized groups within the US to assure them all a role as the US winds down its operations in Iraq and Afghanistan. Note, however, that there is a fourth possibility that Americans never think about but which preoccupies the Chinese: that the US intends to prevent the further increase of Chinese power. As the analysts, you need to figure out which one (or combination) is closest to the truth.
We’ve talked about the growing income inequality in the world, but the Tehran Times has an interesting interpretation of the phenomenon. This interpretation of the economic issue is pervasive in many countries in the world and it represents a critique of market capitalism that resonates strongly with the poor.
The fear of contagion from the sovereign debt crisis in Greece and Italy has now spread from Europe to the US. Specifically, one of the ratings agencies (Fitch) warned of the exposure of US banks to the credit risks in Europe. As we discussed in class, we don’t really know how exposed the banks are since they are no longer required to declare publicly their exposure to these kinds of debts. It is impossible to assess the seriousness of the risk, but we are now entering a stage in which psychology may trump reality. But, if you want to get really frightened, then check out this article: talk about the fox guarding the chicken coop!
World Politics News 
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