With no end in sight to high world oil prices, India and Malaysia on Wednesday became the latest Asian countries to risk the wrath of voters by raising the price of subsidized fuel, a highly unpopular measure that could further weaken the governments of both countries made fragile by recent electoral setbacks.
The moves follow similar price increases in Indonesia, Pakistan and Sri Lanka and are a recognition by governments that they can no longer shelter their populations from the spike in energy prices.
In India the increase was quickly condemned by political parties from all sides: the Communist Party promised a week of demonstrations, including blockades of roads and trains, that were due to start Wednesday, while the conservative Bharatiya Janata Party said its members would also take to the streets. Raising fuel prices was the equivalent of “economic terrorism,” said Rajiv Pratap Rudy, a B.J.P. spokesman, who added that the move would drive the “last nail in the coffin for the common man.”
Among economists and policy makers, the decision was described as painful but necessary. Fuel subsidies in Malaysia alone would have amounted to $17 billion this year, four times more than the combined amount the government pays for national defense, education and health care.
Malaysia is raising gasoline prices by 40 percent and plans on further increases in the future, according to Shahrir Abdul Samad, the domestic trade and consumer affairs minister.
Gasoline prices vary across India, but the announcement Wednesday amounted to an increase of around 10 percent for gasoline and diesel.
Consumers will pay about 50 rupees a liter for gasoline, or about $4.45 a gallon, well above the average $3.79 a gallon average that drivers in the United States are paying, according to the most recent figures from the Department of Energy.
The fuel price increase is expected to drive inflation up in India from 8.1 percent to as high as 10 percent, when knock-on effects are felt in manufacturing and other industries.
Chandra Prakash, a gas-pump repairman in Delhi, said that because of the price increases, he might be forced to abandon his scooter altogether and start walking from job to job. Already, he said, he is barely surviving. “It is difficult to cut back expenses any more,” he said, adding that it was the government’s job to “keep prices in check.”
The Indian minister of petroleum, Murli Deora, said Tuesday that the price increases were an “absolute necessity” due to the increase in world oil prices. But the price increase could further weaken the Congress Party government, which has been losing ground in state elections in recent months. Most recently, the state of Karnataka voted for the B.J.P. in May.
In Malaysia, the governing coalition of Prime Minister Abdullah Ahmad Badawi was weakened after losing in 5 of the country’s 13 states in March elections, and Abdullah has been pressured by some senior members of his party to step down. Yet if he can hold his coalition together, cutting subsidies may benefit Abdullah and his allies in the long run.
“They will have a lot more cash to play with,” said Ibrahim Suffian, director of the Merdeka Center, an independent polling agency. The government will able to use the savings for social programs and infrastructure, moves that would please both voters and members of the governing party, the United Malays National Organization, which has been able to remain united in the past by doling out contracts.
To cushion the blow for consumers, the Malaysian government plans to offer a yearly cash rebate to owners of small cars and motorcycles. Cars with engines smaller than two liters will receive an annual payout of $200. Motorcycle owners will be given about one-fifth that amount, according to the Malaysian news Web site, Malaysiakini.
Anwar Ibrahim, the head of the largest opposition party and a former finance minister, said he feared that the billions of dollars the government will save by cutting subsidies would be wasted.
In the past, he said, Malaysia’s oil revenues were “disbursed for megaprojects and projects that benefit the rich and the cronies.”
Friday, June 6, 2008
Indians Find U.S. at Fault in Food Cost
Instead of blaming India and other developing nations for the rise in food prices, Americans should rethink their energy policy — and go on a diet.
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The purchases and disposal of food by typical American shoppers have tongues wagging bitterly at Indian research institutes.
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Managing Globalization: Indian-American Namecalling
That has been the response, basically, of a growing number of politicians, economists and academics in this country, who are angry at statements by top United States officials that India’s rising prosperity is to blame for food inflation.
The debate has sometimes devolved into what sounded like petty playground taunts over who are the real gluttons devouring the world’s resources.
For instance, Pradeep S. Mehta, secretary general of the center for international trade, economics and the environment of CUTS International, an independent research institute based here, said that if Americans slimmed down to the weight of middle-class Indians, “many hungry people in sub-Saharan Africa would find food on their plates.”
He added, archly, that the money spent in the United States on liposuction to get rid of fat from excess consumption could be funneled to feed famine victims.
Mr. Mehta’s comments may sound like the macroeconomic equivalent of “so’s your old man,” but they reflect genuine outrage — and ballooning criticism — toward the United States in particular, over recent remarks by President Bush.
After a news conference in Missouri on May 2, he was quoted as saying of India’s burgeoning middle class, “When you start getting wealth, you start demanding better nutrition and better food, and so demand is high, and that causes the price to go up.”
The comments, widely reported in the developing world, followed a statement on the subject by Secretary of State Condoleezza Rice that had upset many Indians.
In response to the president’s remarks, a ranking official in the commerce ministry, Jairam Ramesh, told the Press Trust of India, “George Bush has never been known for his knowledge of economics,” and the remarks proved again how “comprehensively wrong” he is.
The Asian Age, a newspaper based here, argued in an editorial last week that Mr. Bush’s “ignorance on most matters is widely known and openly acknowledged by his own countrymen,” and that he must not be allowed to “get away” with an effort to “divert global attention from the truth by passing the buck on to India.”
The developing nations, and in particular China and India, are being blamed for global problems, including the rising cost of commodities and the increase in greenhouse gas emissions, because they are consuming more goods and fuel than ever before. But Indians from the prime minister’s office on down frequently point out that per capita, India uses far lower quantities of commodities and pollutes far less than nations in the West, particularly the United States.
Explaining the food price increases, Indian politicians and academics cite consumption in the United States; the West’s diversion of arable land into the production of ethanol and other biofuels; agricultural subsidies and trade barriers from Washington and the European Union; and finally the decline in the exchange rate of the dollar.
There may be some foundation to Indians’ accusations of hypocrisy by the West. The United States uses — or throws away — 3,770 calories a person each day, according to data from the United Nations Food and Agriculture Organization collected in 2001-3, compared with 2,440 calories per person in India. Americans are also the largest per capita consumers in any major economy of the most energy-intensive common food source, beef, the Agriculture Department says.
And the United States and Canada lead the world in oil consumption per person, according to the Energy Information Administration, an Energy Department agency.
When it comes to trade, Western farming subsidies undercut agricultural production in fertile areas of Africa, India’s commerce minister, Kamal Nath, said in a telephone interview, repeating the point that Americans waste more food than people in many other countries.
The United States is responsible “many times more” than India for the world food crisis, said Ramesh Chand, an economist with the Indian Council of Agricultural Research, which advises the government on farm policy.
The Bush administration has called for a truce. President Bush is a “great friend and admirer” of India, the United States ambassador here, David C. Mulford, said last week. He added that “this is a time for increased cooperation among nations to solve this problem and that hostile political commentary is not productive.”
A White House spokesman, Scott Stanzel, said, “We think it is a good thing countries are developing, that more and more people have higher standards of living.”
Some economists argue that blaming India’s growth is not only unfair, but makes little sense.
Food prices have not been rising continually as developing nations grew, said Ramgopal Agarwala, a former World Bank economist and senior adviser at RIS, a research institute in New Delhi. “They were static until 2006, then in 2007 and 2008 there was a sudden spark,” he said. But India has been growing for the last decade. This is “not last year’s phenomena,” he said.
“I don’t know who advised the president” on his recent comments, Mr. Agarwala added, but his analysis is “subprime.”
Mr. Mehta of the research institute conceded that his remarks on liposuction were meant to be tongue in cheek, but that “politically incorrect” attitudes like President Bush’s and Ms. Rice’s needed to be challenged. Rather than blaming India, Mr. Mehta said, the West should be adjusting to a changing world.
“If the developing world is going to develop, demand is going to go up and there are going to be new political paradigms,” he said.
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Lisa Poole/Associated Press
The purchases and disposal of food by typical American shoppers have tongues wagging bitterly at Indian research institutes.
Multimedia
Graphic
Comparison Consuming
Related
Managing Globalization: Indian-American Namecalling
That has been the response, basically, of a growing number of politicians, economists and academics in this country, who are angry at statements by top United States officials that India’s rising prosperity is to blame for food inflation.
The debate has sometimes devolved into what sounded like petty playground taunts over who are the real gluttons devouring the world’s resources.
For instance, Pradeep S. Mehta, secretary general of the center for international trade, economics and the environment of CUTS International, an independent research institute based here, said that if Americans slimmed down to the weight of middle-class Indians, “many hungry people in sub-Saharan Africa would find food on their plates.”
He added, archly, that the money spent in the United States on liposuction to get rid of fat from excess consumption could be funneled to feed famine victims.
Mr. Mehta’s comments may sound like the macroeconomic equivalent of “so’s your old man,” but they reflect genuine outrage — and ballooning criticism — toward the United States in particular, over recent remarks by President Bush.
After a news conference in Missouri on May 2, he was quoted as saying of India’s burgeoning middle class, “When you start getting wealth, you start demanding better nutrition and better food, and so demand is high, and that causes the price to go up.”
The comments, widely reported in the developing world, followed a statement on the subject by Secretary of State Condoleezza Rice that had upset many Indians.
In response to the president’s remarks, a ranking official in the commerce ministry, Jairam Ramesh, told the Press Trust of India, “George Bush has never been known for his knowledge of economics,” and the remarks proved again how “comprehensively wrong” he is.
The Asian Age, a newspaper based here, argued in an editorial last week that Mr. Bush’s “ignorance on most matters is widely known and openly acknowledged by his own countrymen,” and that he must not be allowed to “get away” with an effort to “divert global attention from the truth by passing the buck on to India.”
The developing nations, and in particular China and India, are being blamed for global problems, including the rising cost of commodities and the increase in greenhouse gas emissions, because they are consuming more goods and fuel than ever before. But Indians from the prime minister’s office on down frequently point out that per capita, India uses far lower quantities of commodities and pollutes far less than nations in the West, particularly the United States.
Explaining the food price increases, Indian politicians and academics cite consumption in the United States; the West’s diversion of arable land into the production of ethanol and other biofuels; agricultural subsidies and trade barriers from Washington and the European Union; and finally the decline in the exchange rate of the dollar.
There may be some foundation to Indians’ accusations of hypocrisy by the West. The United States uses — or throws away — 3,770 calories a person each day, according to data from the United Nations Food and Agriculture Organization collected in 2001-3, compared with 2,440 calories per person in India. Americans are also the largest per capita consumers in any major economy of the most energy-intensive common food source, beef, the Agriculture Department says.
And the United States and Canada lead the world in oil consumption per person, according to the Energy Information Administration, an Energy Department agency.
When it comes to trade, Western farming subsidies undercut agricultural production in fertile areas of Africa, India’s commerce minister, Kamal Nath, said in a telephone interview, repeating the point that Americans waste more food than people in many other countries.
The United States is responsible “many times more” than India for the world food crisis, said Ramesh Chand, an economist with the Indian Council of Agricultural Research, which advises the government on farm policy.
The Bush administration has called for a truce. President Bush is a “great friend and admirer” of India, the United States ambassador here, David C. Mulford, said last week. He added that “this is a time for increased cooperation among nations to solve this problem and that hostile political commentary is not productive.”
A White House spokesman, Scott Stanzel, said, “We think it is a good thing countries are developing, that more and more people have higher standards of living.”
Some economists argue that blaming India’s growth is not only unfair, but makes little sense.
Food prices have not been rising continually as developing nations grew, said Ramgopal Agarwala, a former World Bank economist and senior adviser at RIS, a research institute in New Delhi. “They were static until 2006, then in 2007 and 2008 there was a sudden spark,” he said. But India has been growing for the last decade. This is “not last year’s phenomena,” he said.
“I don’t know who advised the president” on his recent comments, Mr. Agarwala added, but his analysis is “subprime.”
Mr. Mehta of the research institute conceded that his remarks on liposuction were meant to be tongue in cheek, but that “politically incorrect” attitudes like President Bush’s and Ms. Rice’s needed to be challenged. Rather than blaming India, Mr. Mehta said, the West should be adjusting to a changing world.
“If the developing world is going to develop, demand is going to go up and there are going to be new political paradigms,” he said.
As Ills Persist, Afghan Leader Is Losing Luster
After six years in which Hamid Karzai has been the darling of the United States and its allies, his luster may be fading.
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President Hamid Karzai, at a NATO ceremony in Kabul on Tuesday, has been criticized for failing to arrest powerful drug lords.
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Times Topics: Hamid KarzaiNext week, Mr. Karzai, the Afghan president, is to arrive in Paris for a donors conference with attendees from 80 countries and organizations. He will ask for $50 billion to finance a five-year development plan intended to revive Afghanistan’s decrepit farming sector, promote economic development and diversify the economy away from its heavy reliance on opium.
But there is a growing concern in Europe, the United Nations and even the Bush administration that Mr. Karzai, while well-spoken, colorful and often larger than life, is not up to addressing Afghanistan’s many troubles.
A senior State Department official questioned whether Mr. Karzai had the “trust and the backbone” for the job.
“Of course he’s a good guy, and therefore as long as he’s president we’ll support him,” said the official, speaking on condition of anonymity because of the delicacy of the issue. “But there’s a lot of talk inside the administration saying maybe there’s a need for some tough love to push him to do the right thing.”
One European diplomat, speaking on condition of anonymity under normal diplomatic rules, said, “We’ve got the standard administration problem of fascination with a flawed figure.” The diplomat likined the support for Mr. Karzai to American backing for President Pervez Musharraf of Pakistan.
American officials expressed particular frustration over the Afghan president’s refusal to arrest drug lords who are running the country’s opium trade, which many international observers believe the Taliban have used to fuel their comeback. At both the State Department and the Pentagon, some officials are saying that President Bush should use the financial leverage of American aid to Afghanistan to demand that Mr. Karzai do more to crack down on corruption.
One senior Bush administration official said that Mr. Bush remained enamored of Mr. Karzai. Others questioned whether the White House would endorse a tougher line against him at a time when international forces in Afghanistan are continuing to face a resurgent Taliban, and when there are no obvious pro-American alternatives to Mr. Karzai among Afghan leaders.
Still, Mr. Bush has sought to address some of the complaints. Two months ago he began holding twice-monthly video conference calls with his Afghan counterpart that are similar to his regular sessions with Nuri Kamal al-Maliki, the Iraqi prime minister.
Asked to comment about Mr. Karzai, a White House spokesman, Gordon D. Johndroe, said, “President Bush appreciates the work that he’s doing in Afghanistan, but we all know that there is more to be done.”
Afghanistan’s ambassador to the United States, Said T. Jawad, defended Mr. Karzai’s leadership and warned against pointing fingers at a fledgling government. “It’s totally unnecessary to start a blame game,” Mr. Jawad said.
According to American and European diplomats, recent tension has flared around an episode that received little attention outside Afghanistan and that involved Mr. Karzai’s refusal to arrest a notorious Uzbek warlord, Gen. Abdul Rashid Dostum.
General Dostum is said to have attacked a rival warlord with a beer bottle this year, almost killing him, and Afghan law enforcement officials sought to arrest him. But Mr. Karzai’s government balked, according to Western diplomats and Afghan officials.
The diplomats — American and European, who spoke on condition of anonymity — said that they urged Mr. Karzai to have General Dostum arrested but that he told them he did not want to pick a fight with General Dostum for fear of alienating his backers.
Richard C. Holbrooke, a former United States ambassador to the United Nations, said he confronted Mr. Karzai shortly after the Dostum dustup while on a trip to Afghanistan. Mr. Holbrooke said he had asked Mr. Karzai how he could “let the thugs back you down over a murderous warlord” Mr. Karzai, he said, responded with a shrug.
A senior Afghan official said that Mr. Karzai wanted to arrest General Dostum but decided not to do so because of the strength of forces loyal to General Dostum in northern Afghanistan and because of uneasiness among NATO officials in Afghanistan.
In an interview, Mr. Holbrooke said he saw the episode as “a metaphor for a government that’s perceived as increasingly weak, but whose effectiveness is key to success in Afghanistan.” He added, “I don’t believe the Taliban can win in Afghanistan, because people remember what they really stand for, but the government as it currently functions can’t win, either.”
Administration officials said the recent sessions between Mr. Bush and Mr. Karzai had been constructive but had yet to produce any tangible steps against corruption.
The Afghan president operates from a heavily fortified presidential palace, and has not arrested any drug lords or warlords, while resisting international pressure for a strong coordinator to monitor the political, economic and military effort in Afghanistan. Mr. Karzai has insisted that Afghanistan’s fledgling government should handle the bulk of the job of deciding how to spend international aid.
Bush administration officials and their British counterparts are still fuming over Mr. Karzai’s rejection this year of the British diplomat Paddy Ashdown as a special envoy. The West had pushed him as it searched for a strong international figure, à la George C. Marshall, to help coordinate the reconstruction of Afghanistan.
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Seltan Mohammad/European Pressphoto Agency
President Hamid Karzai, at a NATO ceremony in Kabul on Tuesday, has been criticized for failing to arrest powerful drug lords.
Reach of War
Go to Complete Coverage »
Related
Times Topics: Hamid KarzaiNext week, Mr. Karzai, the Afghan president, is to arrive in Paris for a donors conference with attendees from 80 countries and organizations. He will ask for $50 billion to finance a five-year development plan intended to revive Afghanistan’s decrepit farming sector, promote economic development and diversify the economy away from its heavy reliance on opium.
But there is a growing concern in Europe, the United Nations and even the Bush administration that Mr. Karzai, while well-spoken, colorful and often larger than life, is not up to addressing Afghanistan’s many troubles.
A senior State Department official questioned whether Mr. Karzai had the “trust and the backbone” for the job.
“Of course he’s a good guy, and therefore as long as he’s president we’ll support him,” said the official, speaking on condition of anonymity because of the delicacy of the issue. “But there’s a lot of talk inside the administration saying maybe there’s a need for some tough love to push him to do the right thing.”
One European diplomat, speaking on condition of anonymity under normal diplomatic rules, said, “We’ve got the standard administration problem of fascination with a flawed figure.” The diplomat likined the support for Mr. Karzai to American backing for President Pervez Musharraf of Pakistan.
American officials expressed particular frustration over the Afghan president’s refusal to arrest drug lords who are running the country’s opium trade, which many international observers believe the Taliban have used to fuel their comeback. At both the State Department and the Pentagon, some officials are saying that President Bush should use the financial leverage of American aid to Afghanistan to demand that Mr. Karzai do more to crack down on corruption.
One senior Bush administration official said that Mr. Bush remained enamored of Mr. Karzai. Others questioned whether the White House would endorse a tougher line against him at a time when international forces in Afghanistan are continuing to face a resurgent Taliban, and when there are no obvious pro-American alternatives to Mr. Karzai among Afghan leaders.
Still, Mr. Bush has sought to address some of the complaints. Two months ago he began holding twice-monthly video conference calls with his Afghan counterpart that are similar to his regular sessions with Nuri Kamal al-Maliki, the Iraqi prime minister.
Asked to comment about Mr. Karzai, a White House spokesman, Gordon D. Johndroe, said, “President Bush appreciates the work that he’s doing in Afghanistan, but we all know that there is more to be done.”
Afghanistan’s ambassador to the United States, Said T. Jawad, defended Mr. Karzai’s leadership and warned against pointing fingers at a fledgling government. “It’s totally unnecessary to start a blame game,” Mr. Jawad said.
According to American and European diplomats, recent tension has flared around an episode that received little attention outside Afghanistan and that involved Mr. Karzai’s refusal to arrest a notorious Uzbek warlord, Gen. Abdul Rashid Dostum.
General Dostum is said to have attacked a rival warlord with a beer bottle this year, almost killing him, and Afghan law enforcement officials sought to arrest him. But Mr. Karzai’s government balked, according to Western diplomats and Afghan officials.
The diplomats — American and European, who spoke on condition of anonymity — said that they urged Mr. Karzai to have General Dostum arrested but that he told them he did not want to pick a fight with General Dostum for fear of alienating his backers.
Richard C. Holbrooke, a former United States ambassador to the United Nations, said he confronted Mr. Karzai shortly after the Dostum dustup while on a trip to Afghanistan. Mr. Holbrooke said he had asked Mr. Karzai how he could “let the thugs back you down over a murderous warlord” Mr. Karzai, he said, responded with a shrug.
A senior Afghan official said that Mr. Karzai wanted to arrest General Dostum but decided not to do so because of the strength of forces loyal to General Dostum in northern Afghanistan and because of uneasiness among NATO officials in Afghanistan.
In an interview, Mr. Holbrooke said he saw the episode as “a metaphor for a government that’s perceived as increasingly weak, but whose effectiveness is key to success in Afghanistan.” He added, “I don’t believe the Taliban can win in Afghanistan, because people remember what they really stand for, but the government as it currently functions can’t win, either.”
Administration officials said the recent sessions between Mr. Bush and Mr. Karzai had been constructive but had yet to produce any tangible steps against corruption.
The Afghan president operates from a heavily fortified presidential palace, and has not arrested any drug lords or warlords, while resisting international pressure for a strong coordinator to monitor the political, economic and military effort in Afghanistan. Mr. Karzai has insisted that Afghanistan’s fledgling government should handle the bulk of the job of deciding how to spend international aid.
Bush administration officials and their British counterparts are still fuming over Mr. Karzai’s rejection this year of the British diplomat Paddy Ashdown as a special envoy. The West had pushed him as it searched for a strong international figure, à la George C. Marshall, to help coordinate the reconstruction of Afghanistan.
Obama Claims Nomination; First Black Candidate to Lead a Major Party Ticket
Senator Barack Obama claimed the Democratic presidential nomination on Tuesday night, prevailing through an epic battle with Senator Hillary Rodham Clinton in a primary campaign that inspired millions of voters from every corner of America to demand change in Washington.
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On Day of Last Primary, Obama's Superdelegate Surge
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News Analysis: Next on Agenda Is Clinton’s Role (June 4, 2008)
Man in the News: Calm in the Swirl of History (June 4, 2008)
The Caucus: The Superdelegate Tally (June 3, 2008)
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Senator Hillary Rodham Clinton with her daughter, Chelsea, and husband, Bill, in New York on Tuesday night.
A last-minute rush of Democratic superdelegates, as well as split results from the final primaries in Montana and South Dakota, pushed Mr. Obama over the threshold of 2,118 delegates needed to be nominated at the party’s convention in Denver in August. The victory for Mr. Obama, the son of a black Kenyan father and white Kansan mother, broke racial barriers and represented a remarkable rise for a man who just four years ago served in the Illinois State Senate.
“You chose to listen not to your doubts or your fears, but to your greatest hopes and highest aspirations,” Mr. Obama told supporters at a rally in St. Paul. “Tonight, we mark the end of one historic journey with the beginning of another — a journey that will bring a new and better day to America. Because of you, tonight, I can stand before you and say that I will be the Democratic nominee for president of the United States.”
Mrs. Clinton paid tribute to Mr. Obama, but she did not leave the race. “This has been a long campaign and I will be making no decisions tonight," Mrs. Clinton told supporters in New York. She said she would be speaking with party officials about her next move.
In a combative speech, she again presented her case that she was the stronger candidate and argued that she had won the popular vote, a notion disputed by the Obama campaign.
“I want the 18 million Americans who voted for me to be respected,” she said in New York to loud cheers.
But she paid homage to Mr. Obama’s accomplishments, saying, “It has been an honor to contest the primaries with him, just as it has been an honor to call him my friend.”
Mr. Obama’s victory moved the presidential campaign to a new phase as he tangled with Senator John McCain of Arizona in televised addresses Tuesday night over Mr. Obama’s assertion that Mr. McCain would continue President Bush’s policies. Mr. McCain vigorously rebuffed that criticism in a speech in Kenner, La., in which he distanced himself from the outgoing president while contrasting his own breadth of experience with Mr. Obama’s record.
“The American people didn’t get to know me yesterday, as they are just getting to know Senator Obama,” Mr. McCain told supporters. Mr. Obama’s victory capped a marathon nominating contest that broke records on several fronts: the number of voters who participated, the amount of money raised and spent, and the sheer length of a grueling battle. The campaign, infused by tensions over race and sex, provided unexpected twists to the bitter end as Mr. Obama ultimately prevailed over Mrs. Clinton, who just a year ago appeared headed toward becoming the first woman to be nominated by a major party. The last two contests reflected the party’s continuing divisions, as Mrs. Clinton won the South Dakota primary and Mr. Obama won Montana.
The race drew to its final hours with a burst of announcements — delegate-by-delegate — of Democrats stepping forward to declare their support for Mr. Obama. The Democratic establishment, from former President Jimmy Carter to rank-and-file local officials who make up the ranks of the party’s superdelegates, rallied behind Mr. Obama as the day wore on.
When the day began, Mr. Obama needed 41 delegates to effectively claim the nomination. Just as the polls began to close in Montana and South Dakota, Mr. Obama secured the delegates he needed to end his duel with Mrs. Clinton, which wound through every state and territory in an unprecedented 57 contests over five months.
Every time a new endorsement was announced at the Obama headquarters in Chicago, campaign workers interrupted with a booming round of applause. They are members of Mr. Obama’s team — a political start up — that is responsible for defeating one of the most tried and tested operations in Democratic politics.
While the Democratic race may have ended, a new chapter began in the complicated tensions that have defined the relationship with Mr. Obama and Mrs. Clinton.
On a conference call with members of the New York Congressional delegation on Tuesday, Mrs. Clinton was asked whether she would be open to joining a ticket with Mr. Obama. She replied that she would do whatever she could — including a vice presidential bid — to help Democrats win the White House.
In his speech on Tuesday evening, Mr. Obama paid respect to his rival.
“Our party and our country are better off because of her,” Mr. Obama said, “and I am a better candidate for having had the honor to compete with Hillary Rodham Clinton
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On Day of Last Primary, Obama's Superdelegate Surge
Related
News Analysis: Next on Agenda Is Clinton’s Role (June 4, 2008)
Man in the News: Calm in the Swirl of History (June 4, 2008)
The Caucus: The Superdelegate Tally (June 3, 2008)
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The latest political news from around the nation. Join the discussion.
Election GuideMore Politics News
Enlarge This Image
James Estrin/The New York Times
Senator Hillary Rodham Clinton with her daughter, Chelsea, and husband, Bill, in New York on Tuesday night.
A last-minute rush of Democratic superdelegates, as well as split results from the final primaries in Montana and South Dakota, pushed Mr. Obama over the threshold of 2,118 delegates needed to be nominated at the party’s convention in Denver in August. The victory for Mr. Obama, the son of a black Kenyan father and white Kansan mother, broke racial barriers and represented a remarkable rise for a man who just four years ago served in the Illinois State Senate.
“You chose to listen not to your doubts or your fears, but to your greatest hopes and highest aspirations,” Mr. Obama told supporters at a rally in St. Paul. “Tonight, we mark the end of one historic journey with the beginning of another — a journey that will bring a new and better day to America. Because of you, tonight, I can stand before you and say that I will be the Democratic nominee for president of the United States.”
Mrs. Clinton paid tribute to Mr. Obama, but she did not leave the race. “This has been a long campaign and I will be making no decisions tonight," Mrs. Clinton told supporters in New York. She said she would be speaking with party officials about her next move.
In a combative speech, she again presented her case that she was the stronger candidate and argued that she had won the popular vote, a notion disputed by the Obama campaign.
“I want the 18 million Americans who voted for me to be respected,” she said in New York to loud cheers.
But she paid homage to Mr. Obama’s accomplishments, saying, “It has been an honor to contest the primaries with him, just as it has been an honor to call him my friend.”
Mr. Obama’s victory moved the presidential campaign to a new phase as he tangled with Senator John McCain of Arizona in televised addresses Tuesday night over Mr. Obama’s assertion that Mr. McCain would continue President Bush’s policies. Mr. McCain vigorously rebuffed that criticism in a speech in Kenner, La., in which he distanced himself from the outgoing president while contrasting his own breadth of experience with Mr. Obama’s record.
“The American people didn’t get to know me yesterday, as they are just getting to know Senator Obama,” Mr. McCain told supporters. Mr. Obama’s victory capped a marathon nominating contest that broke records on several fronts: the number of voters who participated, the amount of money raised and spent, and the sheer length of a grueling battle. The campaign, infused by tensions over race and sex, provided unexpected twists to the bitter end as Mr. Obama ultimately prevailed over Mrs. Clinton, who just a year ago appeared headed toward becoming the first woman to be nominated by a major party. The last two contests reflected the party’s continuing divisions, as Mrs. Clinton won the South Dakota primary and Mr. Obama won Montana.
The race drew to its final hours with a burst of announcements — delegate-by-delegate — of Democrats stepping forward to declare their support for Mr. Obama. The Democratic establishment, from former President Jimmy Carter to rank-and-file local officials who make up the ranks of the party’s superdelegates, rallied behind Mr. Obama as the day wore on.
When the day began, Mr. Obama needed 41 delegates to effectively claim the nomination. Just as the polls began to close in Montana and South Dakota, Mr. Obama secured the delegates he needed to end his duel with Mrs. Clinton, which wound through every state and territory in an unprecedented 57 contests over five months.
Every time a new endorsement was announced at the Obama headquarters in Chicago, campaign workers interrupted with a booming round of applause. They are members of Mr. Obama’s team — a political start up — that is responsible for defeating one of the most tried and tested operations in Democratic politics.
While the Democratic race may have ended, a new chapter began in the complicated tensions that have defined the relationship with Mr. Obama and Mrs. Clinton.
On a conference call with members of the New York Congressional delegation on Tuesday, Mrs. Clinton was asked whether she would be open to joining a ticket with Mr. Obama. She replied that she would do whatever she could — including a vice presidential bid — to help Democrats win the White House.
In his speech on Tuesday evening, Mr. Obama paid respect to his rival.
“Our party and our country are better off because of her,” Mr. Obama said, “and I am a better candidate for having had the honor to compete with Hillary Rodham Clinton
iPhone 2.0 Takes on the World
As Apple prepares to unveil the next version of its iPhone on June 9, fans will be focused on how much better the new device is than its predecessor. It will likely be able to run on speedier wireless networks, it may boast improved navigation services, and it's expected to support a batch of new software tools and features made by third-party developers.
But amid the speculation around what the new device may or may not do, it's easy to lose sight of a theme central to Apple's larger strategic objectives. The new version of the iPhone will do more than perhaps any other device in history to fuel Apple's ability to reach international markets.
Bigger Seller than BlackBerry?
Until now, Apple (AAPL) has officially launched the iPhone in only six countries: the U.S., Britain, France, Germany, Austria, and Ireland. But Apple's recent agreements with wireless carriers around the globe will bring the iPhone into an additional 64 countries by the end of the year. The two latest deals, announced June 4, are with Telefónica (TEF) in Spain and Softbank in Japan (BusinessWeek.com, 6/5/08).
The first iPhone has catapulted Apple into the lucrative U.S. market for so-called smartphones, which handle an array of advanced services including Web surfing and e-mail. Market research firm IDC pegs Apple's share of the U.S. market for smart wireless phones at 19%, behind Research In Motion's (RIMM) BlackBerry, which has a 44% share, and ahead of Palm's (PALM) 13% share. When it last disclosed sales, Apple had sold 4 million iPhones globally, and analysts expect the company will report sales of about 1.5 million to 1.7 million iPhones in the quarter that ends on June 30. Apple's goal is to have sold 10 million units by the end of 2008.
By enabling the iPhone to run on so-called third-generation, or 3G, networks, Apple makes the device more appealing to a global wireless customer. Within months, the phone will be officially available in key European markets like Italy, Spain, and the Scandinavian countries. Countries as varied as Australia and Uruguay are also on the docket.
Some analysts say Apple may sell 40 million or more iPhones by the end of 2009. If that prediction pans out, iPhones will outnumber BlackBerry devices, even if RIM sells the handsets at an accelerated pace. RIM had 14 million subscribers at last count and added 6 million in fiscal 2008. That track record would make the iPhone the most successful single product in Apple's history, based on adoption rates. It took the vaunted iPod four years to break the 20-million-unit mark.
Ready Market Worldwide
The iPhone stands to make Apple a more global player. In each of its last three fiscal years, sales to the Americas accounted for about 48% of the total, while Europe accounted for about 22%. "Apple must do three things if it is to be successful internationally," says Neil Mawston, an analyst with Strategy Analytics in Britain. "Expand its brand, expand its product portfolio, and broaden its international footprint."
Of course, Apple needs to do more than just make the iPhone available in more places. The iPod is still bought mainly in the U.S. According to Mawston, 60% to 70% of iPods have been sold through Apple-owned retail stores, and 70% to 80% of those are in the U.S.
The good news for Apple is that there's already demand for the iPhone in countries where it's not yet officially available.
But amid the speculation around what the new device may or may not do, it's easy to lose sight of a theme central to Apple's larger strategic objectives. The new version of the iPhone will do more than perhaps any other device in history to fuel Apple's ability to reach international markets.
Bigger Seller than BlackBerry?
Until now, Apple (AAPL) has officially launched the iPhone in only six countries: the U.S., Britain, France, Germany, Austria, and Ireland. But Apple's recent agreements with wireless carriers around the globe will bring the iPhone into an additional 64 countries by the end of the year. The two latest deals, announced June 4, are with Telefónica (TEF) in Spain and Softbank in Japan (BusinessWeek.com, 6/5/08).
The first iPhone has catapulted Apple into the lucrative U.S. market for so-called smartphones, which handle an array of advanced services including Web surfing and e-mail. Market research firm IDC pegs Apple's share of the U.S. market for smart wireless phones at 19%, behind Research In Motion's (RIMM) BlackBerry, which has a 44% share, and ahead of Palm's (PALM) 13% share. When it last disclosed sales, Apple had sold 4 million iPhones globally, and analysts expect the company will report sales of about 1.5 million to 1.7 million iPhones in the quarter that ends on June 30. Apple's goal is to have sold 10 million units by the end of 2008.
By enabling the iPhone to run on so-called third-generation, or 3G, networks, Apple makes the device more appealing to a global wireless customer. Within months, the phone will be officially available in key European markets like Italy, Spain, and the Scandinavian countries. Countries as varied as Australia and Uruguay are also on the docket.
Some analysts say Apple may sell 40 million or more iPhones by the end of 2009. If that prediction pans out, iPhones will outnumber BlackBerry devices, even if RIM sells the handsets at an accelerated pace. RIM had 14 million subscribers at last count and added 6 million in fiscal 2008. That track record would make the iPhone the most successful single product in Apple's history, based on adoption rates. It took the vaunted iPod four years to break the 20-million-unit mark.
Ready Market Worldwide
The iPhone stands to make Apple a more global player. In each of its last three fiscal years, sales to the Americas accounted for about 48% of the total, while Europe accounted for about 22%. "Apple must do three things if it is to be successful internationally," says Neil Mawston, an analyst with Strategy Analytics in Britain. "Expand its brand, expand its product portfolio, and broaden its international footprint."
Of course, Apple needs to do more than just make the iPhone available in more places. The iPod is still bought mainly in the U.S. According to Mawston, 60% to 70% of iPods have been sold through Apple-owned retail stores, and 70% to 80% of those are in the U.S.
The good news for Apple is that there's already demand for the iPhone in countries where it's not yet officially available.
Banks vs. Consumers (Guess Who Wins)
What if a judge solicited cases from big corporations by offering them a business-friendly venue in which to pursue consumers who are behind on their bills? What if the judge tried to make this pitch more appealing by teaming up with the corporations' outside lawyers? And what if the same corporations helped pay the judge's salary?
It would, of course, amount to a conflict of interest and cast doubt on the fairness of proceedings before the judge.
Yet that's essentially how one of the country's largest private arbitration firms operates. The National Arbitration Forum (NAF), a for-profit company based in Minneapolis, specializes in resolving claims by banks, credit-card companies, and major retailers that contend consumers owe them money. Often without knowing it, individuals agree in the fine print of their credit-card applications to arbitrate any disputes over bills rather than have the cases go to court. What consumers also don't know is that NAF, which dominates credit-card arbitration, operates a system in which it is exceedingly difficult for individuals to prevail.
Some current and former NAF arbitrators say they make decisions in haste—sometimes in just a few minutes—based on scant information and rarely with debtor participation. Consumers who have been through the process complain that NAF spews baffling paperwork and fails to provide the hearings that it promises. Corporations seldom lose. In California, the one state where arbitration results are made public, creditors win 99.998% of the time in NAF cases that are decided by arbitrators on the merits, according to a lawsuit filed by the San Francisco city attorney against NAF.
"NAF is nothing more than an arm of the collection industry hiding behind a veneer of impartiality," says Richard Neely, a former justice of the West Virginia supreme court who as part of his private practice arbitrated several cases for NAF in 2004 and 2005.
A DIFFERENT REALITY
NAF presents its service in print and online advertising as quicker and less expensive than litigation but every bit as unbiased. Its Web site promotes "a fair, efficient, and effective system for the resolution of commercial and civil disputes in America and worldwide."
But internal NAF documents and interviews with people familiar with the firm reveal a different reality. Behind closed doors, NAF sells itself to lenders as an effective tool for collecting debts. The point of these pitches is to persuade the companies to use the firm to resolve clashes over delinquent accounts. JPMorgan Chase (JPM) and Bank of America (BAC) are among the large institutions that do so. A September, 2007, NAF PowerPoint presentation aimed at creditors and labeled "confidential" promises "marked increase in recovery rates over existing collection methods." At times, NAF does this kind of marketing with the aid of law firms representing the very creditors it's trying to sign up as clients.
NAF, which is privately held, employs about 1,700 freelance arbitrators—mostly moonlighting lawyers and retired judges—who handle some 200,000 cases a year, most of them concerning consumer debt. Millions of credit-card accounts mandate the use of arbitration by NAF or one of its rivals. NAF also resolves disputes involving Internet domain names, auto insurance, and other matters. In 2006 it had net income of $10 million, a robust margin of 26% on revenue of $39 million, according to company documents.
NAF's success is part of a broader boom in arbitration dating back to the 1980s, when companies began introducing language into employment contracts requiring that disputes with workers be resolved out of court. Mandatory arbitration spread to other kinds of agreements, including those involving credit cards.
It would, of course, amount to a conflict of interest and cast doubt on the fairness of proceedings before the judge.
Yet that's essentially how one of the country's largest private arbitration firms operates. The National Arbitration Forum (NAF), a for-profit company based in Minneapolis, specializes in resolving claims by banks, credit-card companies, and major retailers that contend consumers owe them money. Often without knowing it, individuals agree in the fine print of their credit-card applications to arbitrate any disputes over bills rather than have the cases go to court. What consumers also don't know is that NAF, which dominates credit-card arbitration, operates a system in which it is exceedingly difficult for individuals to prevail.
Some current and former NAF arbitrators say they make decisions in haste—sometimes in just a few minutes—based on scant information and rarely with debtor participation. Consumers who have been through the process complain that NAF spews baffling paperwork and fails to provide the hearings that it promises. Corporations seldom lose. In California, the one state where arbitration results are made public, creditors win 99.998% of the time in NAF cases that are decided by arbitrators on the merits, according to a lawsuit filed by the San Francisco city attorney against NAF.
"NAF is nothing more than an arm of the collection industry hiding behind a veneer of impartiality," says Richard Neely, a former justice of the West Virginia supreme court who as part of his private practice arbitrated several cases for NAF in 2004 and 2005.
A DIFFERENT REALITY
NAF presents its service in print and online advertising as quicker and less expensive than litigation but every bit as unbiased. Its Web site promotes "a fair, efficient, and effective system for the resolution of commercial and civil disputes in America and worldwide."
But internal NAF documents and interviews with people familiar with the firm reveal a different reality. Behind closed doors, NAF sells itself to lenders as an effective tool for collecting debts. The point of these pitches is to persuade the companies to use the firm to resolve clashes over delinquent accounts. JPMorgan Chase (JPM) and Bank of America (BAC) are among the large institutions that do so. A September, 2007, NAF PowerPoint presentation aimed at creditors and labeled "confidential" promises "marked increase in recovery rates over existing collection methods." At times, NAF does this kind of marketing with the aid of law firms representing the very creditors it's trying to sign up as clients.
NAF, which is privately held, employs about 1,700 freelance arbitrators—mostly moonlighting lawyers and retired judges—who handle some 200,000 cases a year, most of them concerning consumer debt. Millions of credit-card accounts mandate the use of arbitration by NAF or one of its rivals. NAF also resolves disputes involving Internet domain names, auto insurance, and other matters. In 2006 it had net income of $10 million, a robust margin of 26% on revenue of $39 million, according to company documents.
NAF's success is part of a broader boom in arbitration dating back to the 1980s, when companies began introducing language into employment contracts requiring that disputes with workers be resolved out of court. Mandatory arbitration spread to other kinds of agreements, including those involving credit cards.
An Ugly Day for Stocks
Major U.S. stock indexes each tumbled nearly 3% Friday as a surge in crude oil prices to fresh record highs and a weaker-than-expected May U.S. jobs report heightened investors' worries about inflation and the economy.
Bonds, which plunged Thursday as stocks rallied, soared in a flight to safety from the weakness in equities. Gold finished higher.
The dollar index was lower, while the euro was higher as the European Central Bank indicated it may raise interest rates.
On Friday, the blue-chip Dow Jones industrial average sank 394.64 points, or 3.13%, to end the session at 12,209.81. Transportation issues were among the hardest hit, although all Dow components fell. The broader S&P 500 index shed 43.37 points, or 3.09%, to finish at 1,360.68. The tech-heavy Nasdaq composite index declined 62 points, or 2.43%, to close at 2,487.94.
Activity in the broader market was resoundingly negative. On the New York stock exchange, 26 stocks were lower in price for every six that gained. The ratio on the Nasdaq was 23-5 negative.
“It was a fairly quiet week until Thursday and Friday, when all hell broke loose,” says S&P chief technical strategist Mark Arbeter. “The rebound in crude, along with the
spike in the May unemployment rate, was too much for the stock market to take in one day, so today was just plain ugly.”
Among the groups suffering significant losses in Friday’s rout: The S&P Airlines index was down 4.3% as the industry, which had a couple of days of positive results, felt renewed pressure from the spike is crude oil.
The S&P Homebuilders index fell 6.4% amid pres reports of record levels of mortgage delinquencies and foreclosures in the first quarter.
The S&P Regional Banks index fell 4.1% on a Wall Street Journal report that National City’s (NCC) banking unit, which has been buffeted by rising bad loans, has recently entered into a "memorandum of understanding" with federal regulators, effectively putting the bank on probation.
The S&P Multi-line Insurance index sank 3.9% on weakness in shares of American International Group (AIG) on reports that the SEC is investigation whether AIG overstated the value of contracts linked to subprime mortgages.
Crude oil staged an extraordinary recovery from its recent slump. July West Texas Intermediate crude-oil futures were up $11.13 a barrel in late trading Friday to a record $138.92, spurred by heightened tensions in the Middle East and Asia and a weaker US dollar.
Market watchers said crude oil scored one of its biggest one-day gains ever after Shaul Mofaz, Israel's transportation minister and a contender for the post of prime minister, told the daily newspaper Yediot Ahronot that Israel will have to attack Iran if it doesn't abandon its nuclear development. In addition, Morgan Stanley issued at note stating current crude oil shipping patterns are suggesting WTI oil could reach $150 per barrel by July 4.
The oil run-up was a carryover of Thursday's late $5.49 surge that had Rep. Bart Stupak (D., Mich.) complaining oil and products markets were being "manipulated" by the biggest trading houses in the futures markets. But he said a probe hasn't uncovered illegal activity. Wall Street firms denied the charges.
U.S. nonfarm payrolls fell 49,000 in May, in line with market expectations. Both April and May were downwardly revised to -28,000 and -88,000, respectively (-20,000 and -81,000 previously).
The big surprise in the report: The unemployment rate jumped to 5.5% from 5.0% in April, and was well above the 5.1% expected.
Bonds, which plunged Thursday as stocks rallied, soared in a flight to safety from the weakness in equities. Gold finished higher.
The dollar index was lower, while the euro was higher as the European Central Bank indicated it may raise interest rates.
On Friday, the blue-chip Dow Jones industrial average sank 394.64 points, or 3.13%, to end the session at 12,209.81. Transportation issues were among the hardest hit, although all Dow components fell. The broader S&P 500 index shed 43.37 points, or 3.09%, to finish at 1,360.68. The tech-heavy Nasdaq composite index declined 62 points, or 2.43%, to close at 2,487.94.
Activity in the broader market was resoundingly negative. On the New York stock exchange, 26 stocks were lower in price for every six that gained. The ratio on the Nasdaq was 23-5 negative.
“It was a fairly quiet week until Thursday and Friday, when all hell broke loose,” says S&P chief technical strategist Mark Arbeter. “The rebound in crude, along with the
spike in the May unemployment rate, was too much for the stock market to take in one day, so today was just plain ugly.”
Among the groups suffering significant losses in Friday’s rout: The S&P Airlines index was down 4.3% as the industry, which had a couple of days of positive results, felt renewed pressure from the spike is crude oil.
The S&P Homebuilders index fell 6.4% amid pres reports of record levels of mortgage delinquencies and foreclosures in the first quarter.
The S&P Regional Banks index fell 4.1% on a Wall Street Journal report that National City’s (NCC) banking unit, which has been buffeted by rising bad loans, has recently entered into a "memorandum of understanding" with federal regulators, effectively putting the bank on probation.
The S&P Multi-line Insurance index sank 3.9% on weakness in shares of American International Group (AIG) on reports that the SEC is investigation whether AIG overstated the value of contracts linked to subprime mortgages.
Crude oil staged an extraordinary recovery from its recent slump. July West Texas Intermediate crude-oil futures were up $11.13 a barrel in late trading Friday to a record $138.92, spurred by heightened tensions in the Middle East and Asia and a weaker US dollar.
Market watchers said crude oil scored one of its biggest one-day gains ever after Shaul Mofaz, Israel's transportation minister and a contender for the post of prime minister, told the daily newspaper Yediot Ahronot that Israel will have to attack Iran if it doesn't abandon its nuclear development. In addition, Morgan Stanley issued at note stating current crude oil shipping patterns are suggesting WTI oil could reach $150 per barrel by July 4.
The oil run-up was a carryover of Thursday's late $5.49 surge that had Rep. Bart Stupak (D., Mich.) complaining oil and products markets were being "manipulated" by the biggest trading houses in the futures markets. But he said a probe hasn't uncovered illegal activity. Wall Street firms denied the charges.
U.S. nonfarm payrolls fell 49,000 in May, in line with market expectations. Both April and May were downwardly revised to -28,000 and -88,000, respectively (-20,000 and -81,000 previously).
The big surprise in the report: The unemployment rate jumped to 5.5% from 5.0% in April, and was well above the 5.1% expected.
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