Posted 3:44 pm by BOTE
Where's the good news?

The bad news keeps on coming. In Iraq, US forces are playing a dangerous game of attrition that they cannot win. The longer they remain the more organised and effective those in Iraq willing to use violence to eject them become. The reprisals of embattled US soldiers, demoralised and tired, will only encourage more volunteers. This is exactly the cycle of violence that has left thousands dead in Israel over the past three decades.

In the UK, an ill judged offensive against the BBC and its journalistic sources, has led to the suicide of an innocent scientist. The tragedy has caused simmering resentment against the government to boil over into accusations of dishonesty. There is now a widespread perception that the government lied to the people and to parliament that is likely to hasten the end of the "new labour" project.

In the US, the administration is twisting itself in knots in an attempt to deflect criticism of its pre-war manipulation of intelligence and its strong arming of the CIA. The mainstream media has been unusually aggressive in its search for the truth behind the inclusion of the now infamous Nigerien nuclear materials allegation in the State of the Union speech. The administration is having difficulty fending off the attack.

A string of scapegoats have been trotted out. The CIA, and George Tenet, refused to carry the can and have made it clear that the administration inserted the claim over repeated objections by the CIA. Some junior administration officials have been sacrificed but right now the noose seems to be closing around Condoleeza Rice. Its unlikely to end there though as there is substantial circumstantial evidence pointing to the office of the secretary of defence. Can Don escape? Maybe, but its clear that anyone will be sacrificed to protect the President. This becoming more important as some Democratic presidential candidates (Dr. Dean in particular) are becoming more pointed in their criticism of George W.

On the economic front optimism in the US and UK is inexplicably on the up. Why? most likely because people are fed up feeling bad. Unfortunately wishing things were better is only a short term panacea. Most of mainland Europe is sliding into recession, Japan remains a basket case, and the US and UK economies are struggling to keep their heads above water.

It is true that the corporate sector has worked through much of its near term debt problem. There has been a recent surge in corporate finance activity and investment banks are likely to make serious money this year, this is always a sign that the sector has more money to spend. Unfortunately asbestos and pensions liabilities remain serious impediments to a sustained revival in corporate profitability across large swathes of industry.

Consumers in both countries remain overburdened with debt and are not going to start spending anytime soon. Add to that the startlingly large US trade and budget deficits (well done George), oil prices that remain near recent peaks and the political and terrorism risks that are, if anything, on the increase its hard to see the optimism surviving past the autumn. September is a traditional time for corrections......

So where's the good news? How about this...Tony and George are looking less likely to be re-elected.