Wednesday, September 10, 2008

Wall Street vs. the Politicians

Nothing signifies to me the growing disconnect between Wall Street and American politicians more than the chasm that has opened up on Russia. When I've spoken before New York and DC audiences, the differences have been tremendous.

So, why DC politicians are gearing up for a new containment of Russia, we have money managers telling us that while Russia's move into Georgia is just one of the issues that have put its stock market deep into bear territory. That makes this a tempting time for investors to buy in.

Politicians call for boycotts, business figures look for opportunities. It doesn't seem like a recipe for a coherent policy approach to Russia.

At a recent House Foreign Relations Committee Hearing featuring Dan Fried, several members of Congress from both parties cautioned about the dangers of escalating relations with Russia. They certainly didn't feel like they were "Georgians." It is also important to note that since each side believes that they have nothing to lose, there are no incentives to keep positive relations. If there is something great at stake, then both countries would think twice before acting. Increasing trends in areas of business, investment and trade are necessary to improve relations as cooler heads would prevail if there is big money at stake.
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