Obama mends Wright’s wrongs

The past week has been one of extremes for Senetor Barack Obama. After incendiary and insane statements by his longtime pastor Jeremiah Wright came to light, Obama’s association with the radical priest grew into a story that went well beyond the cover of Newsweek magazine. In response to Wright’s rhetoric, Obama delivered a speech on both his personal relationship with Wright and the larger state of race relations in America at a campaign stop in Philadelphia last Tuesday. Although two decades of direct involvement with Wright are difficult to overlook, Obama’s speech was a candid and sincere discussion of an issue that has long simmered beneath his candidacy. Unlike some of Wright’s wackier statements (and those of most politicians), it was intelligent rhetoric. And perhaps most importantly, the speech was a masterful act of political judo. We’ll have to wait until Pennsylvania’s April 22 primary to see whether Obama’s set things right, but we think his speech deserves to stand as an oration for the ages.

Tension in Tibet

The Dalai Lama, exiled spiritual and political leader of the Tibetan people, is admired for his commitment to the Buddhist principle of nonviolence. But after arson, riots and bloodshed in Tibet last week, the same cannot be said for his followers, nor the Chinese forces that now have Tibet under lockdown. On March 14, the rumored beating of a Buddhist monk by Chinese police gave rise to mayhem and looting in Lhasa, the capital of the “”Tibet Autonomous Region,”” which has been under Chinese control since 1950. With the world’s eyes on China as it prepares to host the 2008 Summer Olympics, the Chinese government has stopped short of declaring martial law in Tibet, as it did to quell a similar uprising in 1989. And although the Chinese government’s customary heavy-handed response is repugnant, destruction and violence on the part of many Tibetans is just as awful. During the riots, widespread looting of businesses owned by the Han Chinese, China’s majority ethnic group, paralyzed Lhasa and revealed the nasty cultural and ethnic undercurrent that divides Tibet. If China hopes to avoid further international condemnation, it ought to engage with the Dalai Lama, whose sway over the Tibetan people and modest hope for a “”middle road”” solution short of full independence is the best chance to end the crisis. Unfortunately, it looks like that won’t happen any time soon – just yesterday, the Chinese government accused the Dalai Lama (who made his opposition to the violent protests clear last week) of encouraging “”terror”” in Tibet. Without meaningful dialogue with the most important figure in Tibetan life, terror at the hands of both Chinese and Tibetans will continue.

Bear market on Wall Street

It started with a slew of stupid home loans. It nearly ended in the collapse of Wall Street. On March 16, the U.S. Federal Reserve scrambled to rescue Bear Stearns, a major investment bank, by arranging a fire sale of the struggling firm to rival JPMorgan Chase. The Fed, in full-bore crisis mode, took several unprecedented steps, agreeing to become a “”lender of last resort”” to investment banks, pledging to cover $30 billion worth of Bear Stearns’ riskiest investments, and making emergency interest-rate cuts.

The details might sound boring, but the Fed’s unusual action is a troubling indicator of problems with the modern world of global finance. As big finance firms have engineered more exotic ways to package, sell and spread risk (like the stinky bundled mortgages that presaged last week’s crisis), problems in certain markets have entangled themselves with others.

The Fed’s quick response is an admirable stopgap solution, but it’s clear that a close look at the workings of modern finance is in order – and policymakers and regulators must take care to ensure that today’s bailouts don’t encourage tomorrow’s crises.