As the tiger awakens: Mohsin Hafeez on Chinese Power over and Stakes in the US Economy

TOO much of a good thing is bad. So is the case with the kind of democracy espoused by the political structure in America these days. The recent debt ceiling debate in the power corridors of Capitol Hill smacked of the worst kind of politics one has witnessed in the history of the developed world.

The Tea Party thought it fit to bring the country to the brink of the most disastrous scenario that was averted at the eleventh hour. The looming threat of the largest economy failing to keep its obligations was just as unfathomable to us here as it was spooky to the rest of the world. Notwithstanding the deal, and more because of the process that preceded the ‘signed, sealed and delivered’ moment, the debt rating of the US was lowered a notch to AA+ from its premium AAA rating.

In the last over 50 years, the debt limit has been raised at an average frequency of one and a half times every year, without as much as an eyelid being batted. Why it had to unravel the worst form of political showdown in the process this time is beyond comprehension and it does not hold up the high values of the greatest nation on earth, of American exceptionalism.

The US has borrowed with reckless abandon over the last several years.

The bubble finally burst in 2007, bringing with it the Great Recession. Even the brightest minds in the country missed the depth of the issue. Those who got it were snubbed, being labelled as ‘Keynesian’ as if it were a dirty word not fit for public utterance. The stimulus during the first few months of the Obama administration was cut down to size, with the result that it became only a half-baked effort. The Federal Reserve kept lowering the interest rates, and then deployed the silver bullet in the way of buying in billions, a combination of mortgage-backed and other US treasuries, to keep the interest rates from rising.

China is the largest creditor of the US, with about $1.3tr in US treasuries and agency securities. The Chinese found the US to be a safe haven, and holding US treasuries in large amounts also helped them mai ntain a tight relationship between the yuan and the US dollar. With the economic structure of China moving towards consumption, partially to cater to the rising middle class, at the expense of savings,

How UK police lost control during riots

By Paul Lewis and Ben Quinn

LONDON: The Metropolitan police`s embattled public order unit, CO11, once prided itself on being the world leader in containing disorder. At 3am on Monday, its exhausted officers slept in police vans lined up in Enfield town centre, bruised, exhausted and, for the second night running, entirely out-manoeuvred.

For hours they had been chasing groups of youths around Enfield, Ponders End and Edmonton, in north London, using dogs and batons to disperse anyone seen looting shops.

Any doubt that police were unable to control the violence was dispelled hours later, around 5pm on Monday, amid further outbreaks of looting in Hackney and other areas of the capital in broad daylight.

The home secretary [UK minister of the interior], Theresa May, who flew home from holiday to deal with the fallout from the riots, will have asked commanders of the UK`s largest police force: how did you lose control of London?

For the third day running, CO11`s territorial support group (TSG), nicknamed the “Muscle of the Met”, suffered the humiliation of requiring support from colleagues in neighbouring forces.

Some will rightly claim police cannot hope to contend with hundreds of roaming youths intent on causing destruction and breaking into unprotected properties in the middle of the night.

That challenge has been exacerbated since disturbances started on Saturday, initially limited to one street in Tottenham and, later in the night, Wood Green.

The contagion that saw looting spread across a 16km stretch of London in the early hours of Monday poses obvious resource issues. Analysts argued the Met suffered from a combination of bad luck, poor intelligence and overstretched forces. But there may be more long-standing and tactical reasons for its failure to quell the violence.

In Tottenham on Saturday police were accused of failing to open dialogue with protesters who had gathered outside the police station following the fatal shooting of Mark Duggan.

“Years ago there would have been a lot of dialogue,” said David Gilbertson, formerly a Metropolitan police division chief superintendent at Tottenham. “We would have gone out of our way to ensure that the organisers of a protest group would have been brought into a station like that even if others were stood outside.”

It took hours for police to change from regular uniforms to riot gear, and even longer for them to begin almost half-hearted attempts at preventing looting.