Obama’s man flies in

Although the death rate is sharply down, chaos on the ground still prevails—and could easily become much bloodier again. More parts of the region are unsafe for aid workers. It is harder to negotiate safe passage with increasingly unpredictable armed groups. General Agwai was promised 26,000 troops. He still has only 17,000. They cannot ensure humanitarian workers secure access to the region, so the food and medical handouts on which some 2.7m Darfuris survive often fail to get through. A political solution is as sorely needed as ever.

Fortunately, another general, this one formerly of the American air force, is providing fresh political momentum. Scott Gration, Barack Obama’s energetic new special envoy to Sudan, believes that the best chance of peace for this divided country remains the Comprehensive Peace Agreement (CPA) signed in 2005 between the Islamist government in Khartoum, in the north of the country, and the former rebels of south Sudan, who are quite separate from the Darfuris, and had been fighting their northern masters for most of the past half-century. The CPA offers a new deal for the whole of Sudan, including national elections to be held next year and the possibility of secession for the south following a referendum promised for 2011. But it has been under severe strain partly because of intertribal fighting in the south.

Mr Gration is using his political clout to force both sides to stick to their agreements under the CPA, thus offering hope that the peace will stick and that the south will be allowed to split off peacefully, if it chooses to. He has also enjoyed some success in softening the Sudanese government’s stance on Darfur, for instance by persuading the regime to allow in other aid agencies to replace those expelled in retaliation for the issuing of the ICC’s arrest warrant for Mr Bashir in March. Some of Mr Obama’s people think Mr Bashir’s indubitably nasty regime should be further isolated and squeezed by economic sanctions. Mr Gration, by contrast, favours a wary but active engagement with Sudan’s government in the hope that it will be more co-operative and less brutal in Darfur and the south. At the moment Mr Gration’s approach seems to be yielding results and should be supported.

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Unemployment benefits

Read this shirt

A titanic struggle to decide whether the jobless should get money for longer

Jul 22nd 2010 | Washington, dc

THE news is not yet official, but America’s recession probably ended in June last year. Americans could be forgiven for failing to notice. Nearly 15m remain out of work, close to the peak that followed the recession. This summer, Congress has been busy rubbing salt in their wounds. Some 2.5m unemployed lost access to their benefits when the Senate failed to extend the government’s programme of emergency unemployment assistance in early June. This week the swearing-in of a successor to Robert Byrd, the veteran senator who died last month, delivered to Democrats the extra vote they needed to break a Republican filibuster, and the extension passed at last. But the episode is a glaring reminder of the crisis in America’s labour markets.

Congress had never before failed to extend benefits when unemployment remained above 7.2%, and this week’s action marked the seventh extension in this recession. But passage has become steadily more difficult. In February Senator Jim Bunning, Republican of Kentucky, held up an extension vote before giving ground under pressure from colleagues fearful of bad press. This time, Republicans were nearly united in their opposition. Only the defection of two liberal-minded colleagues, Olympia Snowe and Susan Collins of Maine, allowed the measure to move forward. But the delaying tactics were not entirely unsuccessful. The $34 billion extension bill was all that remained of a hoped-for mini-stimulus package, which included aid to states and business tax credits totalling $120 billion.

Republicans will have a chance to attack unemployment benefits again. The new extension will last only until the end of November, while unemployment is projected to stay above 7% into 2012. The battle over long-term help for jobless workers is far from over.

There are two main reasons why Republicans oppose extending benefits: because the country cannot afford it, and because benefits, they believe, have given the unemployed an incentive to stay out of work. Neither reason is well founded. The bill’s price tag, at $34 billion, is small—equal to just 2.5% of this year’s deficit forecast. With the American economy still convalescent, weak demand remains a bigger threat to recovery than indebtedness. Meanwhile, federal stimulus spending is on the wane and will become a net drag on output in the second half of this year. A bit more borrowing will help cushion the withdrawal.

Unemployment benefits may also be the government’s thriftiest option. When they exhaust unemployment assistance, many workers apply for Social Security Disability Insurance (SSDI)—a programme from which they are unlikely to return to the labour force. The lifetime cost of disability benefits is significant. By recent estimates, a shift of just 200,000 unemployed workers to SSDI could entail an increase in government lifetime costs of up to $24 billion. If unemployment benefits keep those people in the labour force, the savings could be substantial.

Nor have long-term benefits played much of a role in keeping unemployment high, as Republicans claim. A recent study of their effect, by economists at the San Francisco Federal Reserve Bank, pegged their contribution at just 0.4 percentage points of the close-to-10% jobless rate.

The main driver of joblessness remains the difficulty of finding work. A year into recovery, there are still nearly five workers for every new job opening. Such intense competition reduces the odds that a given worker will be hired and increases the length of time he will expect to be out of a job. Extended jobless payments will not be available everywhere, but only in states where the unemployment rate remains over 8%. That in itself will help with the problem of malingerers.

But if the extended assistance is not in itself problematic, it is nonetheless a reminder that something is deeply amiss in American labour markets. A year into recovery, job growth has been halting and alarmingly slow. In the year that followed the end of the 1981-82 recession, when the unemployment rate last exceeded 10%, 3.6m jobs were added. In June of this year, by contrast, employment remained below the level at the estimated end of the recession, one year before.

The length of the downturn (the longest since the Depression) and the weakness of the recovery have combined to generate an unprecedented rise in the rate of long-term unemployment. Nearly half of the country’s unemployed workers have been off the job for 27 weeks or more, and the average duration of unemployment has risen to over 35 weeks. In the best of circumstances, long-term unemployed workers struggle to find new jobs. Given the slow present pace of recovery, America risks the creation of a class of the structurally unemployed.

America’s present labour market policies cannot deal with this. A simple system of unemployment benefits served the country fairly well in the past. A flexible, resilient jobs market quickly absorbed idle labour, preventing the sustained detachment from the labour force that afflicted European economies in the 1970s and 1980s. But the system has been overwhelmed by current unemployment, and is ill-equipped for the job of putting the long-term unemployed back to work. To avoid repeating the European experience, America will need to adjust its strategy.

Finding an effective approach will be a challenge. Insufficient demand and slow job creation remain big problems. But new data also show that job openings are not supporting the expected level of new hires. Structural barriers to full employment may be to blame. Many displaced workers have obsolete skills. Others are locked in moribund job markets because their houses are unsellable, worth less than the mortgage loans they must repay.

The record of programmes designed to put the long-term unemployed back to work is also somewhat mixed. Job search and matching assistance would typically be the quickest way to cut the number of jobless, but not when the economy is as weak as it is now. Retraining workers, particularly in technical fields, can be effective, but the benefits accrue slowly over time. Job-finding bonuses may pep up motivation among the long-term unemployed, and could encourage them to move to places with more jobs.

Sadly, no quick fix is available. But the failure to change tack may prove costly, leading to slower growth and larger fiscal burdens. When Congress takes up the question of benefits again in November, it should bear this in mind: a failure to deal promptly with long-term unemployment will ensure that unemployment becomes a long-term problem.

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Palestine and Israel

Hamas thinks time is on its side

As indirect talks between Israel and the more moderate Palestinians falter, Hamas sends signals that it wants to join the diplomatic fray—but on its own terms

Jul 8th 2010 | Damascus

KHALED MESHAL, the head of Hamas, the Palestinian Islamist movement widely regarded in the West—and even more so in Israel—as a gang of terrorists bent on destroying the Jewish state, exudes a tranquil confidence as he calmly lays out his case in a well-guarded safe-house in Damascus, the Syrian capital. “The world will deal with us not because it wants to deal with us but because it has to deal with us…Hamas is a moderate and open organisation that is ready to talk to anybody. It has emerged as an important player in the region. It’s clear it cannot be bypassed.”

An increasing number of Western politicians, diplomats and soldiers, though not the American administration nor yet the European Union and certainly not Israel, are groping towards that conclusion. The trimly bearded, stocky Mr Meshal, relaxed and often humorous, plainly thinks time is on his side. Aged 54, he has the demeanour of a winner. Indeed his Islamist movement won the only general election, in 2006, that it has contested. Hamas views Mahmoud Abbas, the Palestinians’ internationally recognised president, who heads the rival and more secular Fatah party, merely as a “transitional figure”.

Ever fewer Israelis can imagine doing a deal with Fatah, let alone with Hamas, though President Shimon Peres, in a cryptic comment, recently seemed to urge Europeans to try drawing Hamas into the diplomatic fold. Most Israelis think Hamas wants to throw them into the sea. Besides, they would struggle to forgive it for the scores of bombings and attacks its people carried out during the intifada, or uprising, between 2000 and 2005, killing hundreds of Israeli civilians and soldiers, often blowing themselves up at the same time. In any event, Hamas is still isolated from the main diplomatic game, as Fatah’s more emollient negotiators strive to make headway.

This week, three months after Barack Obama gave Israel’s prime minister, Binyamin Netanyahu, the coldest shoulder ever felt by an Israeli leader, the two men had a politer meeting in Washington, DC. This time Mr Obama made the standard assurance that America would never let Israel down, even implying rare support for Israel’s nuclear deterrent. Mr Netanyahu, he averred, was “willing to take risks for peace”. For his part, Israel’s prime minister said he would take “concrete steps” to enable the indirect “proximity talks” between his government and the Palestinians’ more moderate wing, to develop into face-to-face talks that could, in hopeful theory, lead to the establishment of a Palestinian state beside an Israeli one. There has been no indication, so far, what those concrete steps might be—or whether Mr Netanyahu is truly bent on getting a deal.

Mr Abbas, who was given red-carpet treatment by Mr Obama in Washington only a month ago, has no apparent desire to bring Hamas to the negotiating table any time soon. The two factions are still at loggerheads. A year and a half after its election win, Hamas violently evicted Mr Abbas’s Fatah from the Gaza Strip. Since then, Fatah has sat back as Israel, increasingly criticised by most of the rest of the world, has blockaded the territory. It was partly thanks to the clumsily lethal confrontation between Israeli commandos and a flotilla that challenged the blockade that Hamas, as Gaza’s ruling party, has stridden back into the limelight.

The pro-Western Arab countries most closely involved, in particular Egypt, are still keen to bolster Mr Abbas’s party and keep Hamas out of the negotiating game. For several years Egypt’s government has been trying, after a fashion, to patch up differences between Hamas and Fatah, but in reality it loathes Hamas, originally a branch of the Muslim Brotherhood, because it bitterly opposes Egypt’s regime and its ailing president, Hosni Mubarak. .

Meanwhile Hamas waits on the sidelines as the proximity talks stumble, despite the doggedly hopeful assertions of Mr Obama’s Middle East officials. George Mitchell, America’s envoy, keeps his cards to his chest, unable so far to point to any gains. Mr Abbas’s Palestinians, who insist that two of the biggest issues—redrawing the borders of the would-be states and arranging their security—should be tackled first, say the talks have got nowhere.

They are especially concerned that Mr Netanyahu should extend his freeze on the building of Jewish settlements in the West Bank after the promised ten-month period elapses in September. It was his refusal to do so and his determination to exclude East Jerusalem, which the Palestinians see as their future capital, that previously so enraged Mr Obama that he refused to welcome Mr Netanyahu warmly the last time he visited the White House. Mr Obama and the Israelis have talked up this week’s meeting: the American president is acutely conscious, in the run-up to November’s congressional elections, that he has been accused by the Republicans of being unduly harsh towards Israel.

So Mr Meshal is waiting for the talks to fail, hoping for a groundswell of diplomatic calls for Hamas to be part of future negotiations, even if it refuses to recognise Israel first. He notes with relish the weakening diplomatic clout of Egypt, the reluctance of Saudi Arabia to take the lead, the rise of Turkey and its froideur with Israel following the flotilla episode that left nine Turks dead, and the resilience of both Syria and Iran, both backers of Hamas. At the same time, he savours the apparent enfeeblement of America, as it flounders in Afghanistan and fails to pacify Iraq. “They can’t even deal with the Somali pirates,” says Hamas’s foreign-affairs spokesman, Osama Hamdan, with a chuckle.

A growing number of Americans, though not yet officials in the administration, are keen to seek him out, claims Mr Meshal. “The American administration and European officials are having to hold themselves back [from talking to Hamas] and that’s a bigger burden for them than for us. The world must engage with us, if not today, then tomorrow. Internally, the EU knows it must meet Hamas. The current policy is a burden on the Europeans.”

Mr Meshal also points to a split in the peacemaking Quartet of the EU, Russia, the UN and the United States. The Quartet says it will not engage with Hamas unless, among other things, it recognises Israel. Yet Russia’s president, Dmitri Medvedev, recently held talks with Mr Meshal, making it plain he intends to foster relations.