The new Democratic establishment

Who's who in Obamaworld

A guide to the main players in Barack Obama's aspiring administration

NOT everyone believes in Barack Obama's promise to change Washington. But at least the faces will change. Should he win the White House, Mr Obama will bring in a new team to run the federal government, the Oval Office and the Democratic Party. Sitting Republicans, of course, will be out. But so too will be many members of the old Democratic establishment, long exiled to the Brookings Institution and similar perches to await the return of their powers under Hillary Clinton. So who will run the country if the voters decide that Yes, He Can?

On domestic matters, Mr Obama has assembled a team of sharp academic economists who premise their work on his supposed ability to sell sophisticated policy. Most prominent up until now has been Austan Goolsbee (pictured first left above), a University of Chicago professor whom many expect to head a President Obama's Council of Economic Advisers. Mr Goolsbee's record suggests neither the hostility towards globalised capitalism nor the desire for large-scale redistribution that conservatives, spooked by tales of Mr Obama's left-wing voting record, might fear: Mr Goolsbee is a problem-solver who favours such unsexy proposals as altering American tax forms. He got into trouble earlier this year for telling the Canadians not to worry too much about the anti-NAFTA rhetoric the candidate was emitting on the campaign trail.

From Harvard Mr Obama plucked Jeffrey Liebman, who has produced good research on the earned-income tax credit and its role in moving people from welfare to work, and David Cutler, a health economist who wants doctors' pay tied to medical outcomes. As of this week, though, Mr Obama's newly appointed economics director is Jason Furman (second left, above), an economist in the Clinton administration and a top aide to John Kerry in 2004. His presence rebuts criticism that Mr Obama's team has too little policymaking experience. Mr Furman, too, hews to the non-ideological centre, heading Washington's Hamilton Project, an economic policy group co-founded by Bob Rubin, once Bill Clinton's treasury secretary. Mr Furman is a staunch free-trader who once praised Wal-Mart and has favoured lowering corporate taxes. With a PhD from Harvard, he also does not lack for academic credentials.

Bill Galston, a former senior adviser to Mr Clinton, argues that the campaign, for all its braininess, has so far failed to frame its proposals in a “narrative” about the economy. But the campaign's post-ideological message may fit into a broader theme about Mr Obama's style of politics: that he can unite Americans behind reasoned policy as their problems pile up.

Mr Obama's plans for “change” are most concrete in his determination to leave Iraq. Indeed, his early opposition to the war attracted seasoned foreign-policy practitioners who also disapproved of the invasion. The biggest name among them is Tony Lake (third), Mr Clinton's national security adviser, who taught the ex-president how to salute and who toiled to bring peace to the Balkans. Others in Mr Clinton's top tier—such as Madeleine Albright and Richard Holbrooke—backed Mrs Clinton, leaving room for up-and-comers to nab the best spots in the Obama campaign. Susan Rice (fourth), Mr Clinton's assistant secretary of state for African affairs, is a possible national security adviser. The Rwandan genocide deeply affected Ms Rice, who now wants more done to end killing in Darfur; her prominence suggests that President Obama might attend more closely to north-south issues.

Before resigning from the campaign for calling Mrs Clinton a monster, Samantha Power, an academic who has written about genocide, tried to soften Mr Obama's commitment to pull all troops out of Iraq. She will probably find a place in an Obama administration. The campaign boasts some former military brass, including Richard Danzig, a former secretary of the navy and possible defence secretary. Mr Obama is also likely to bring in experienced former ground commanders such as Wesley Clark. And, despite tales of a deep mutual antipathy between Mr Lake and Mr Holbrooke, it would be foolish to rule the pugnacious Mr Holbrooke out of contention for a big job.

But policymaking is harder than writing theories. First, one must get elected. Afterwards, one must win battles with Congress and the public. For both, Mr Obama will look to his political team. Foremost here is David Axelrod (fifth), the man who made “change” into a campaign theme. His consultancy helped elect two mayors in rough-and-tumble Chicago, and he can deliver a punch: he was once accused of producing an ad that made an opponent resemble Hitler. Even so, he seems a true believer in Mr Obama's hopeful rhetoric. “I find myself getting very emotional about it,” he told the Los Angeles Times. All assume he will be Mr Obama's Karl Rove.

Also surrounding Mr Obama are well-connected Chicagoans who supported his Senate run in 2004, when he was an unknown state legislator. Valerie Jarrett, a former head of the Chicago Stock Exchange, is the person who can tell the Obamas uncomfortable truths. Penny Pritzker, the campaign's finance chair and a property billionaire, supposedly joined the campaign after her husband banged their kitchen door, proclaiming, “this is destiny knocking on the door of our nation,” (though the couple seem normal in other respects).

A big part of Mr Obama's success, though, is due to the Democratic operators he lured from elsewhere. His campaign manager, David Plouffe (sixth), a former aide to Dick Gephardt, is disciplined and parsimonious, overseeing the amassing of the biggest political piggybank ever seen and orchestrating Obama victories in small, organisation-intensive caucus states.

Mr Plouffe's chief organisers are Steve Hildebrand and Paul Tewes, who ran Al Gore's successful Iowa caucus bid in 2000. Mr Tewes will soon move to the Democratic National Committee to head its presidential campaign effort—and consolidate Mr Obama's control of the party. Tom Daschle, a former Senate majority leader, could help Mr Obama's team put pressure on Congress without alienating its members, a problem that can dog first-term presidents.

The ambition of Mr Obama's team is exciting, but in office it could be dangerous. In 1993 the clever Clintons tripped up very quickly. What if Congress doesn't care for the finely-tuned policies of Mr Obama's top-notch economists? Or if Mr Obama finds he can't pull out of Iraq as planned? Or if Americans tire of his charisma and he stops being able to attract adoring crowds tens of thousands strong? The lynchpin of his campaign has been a faith, almost messianic, in his personal excellence. If that fades, then the whole operation could collapse in frustration and disillusionment.

The change in Iraq

Is it turning the corner?

By all the main measures—military, political and economic—Iraq is now improving, from a dire base. But that does not yet mean it is headed for peace and prosperity

THOUGH still lacerated by the tragedy of the past five years, Iraq is at last getting better all round. The violence, albeit still ferocious in parts of the country, has subsided dramatically. The American military “surge” that began a year ago has worked better than even the optimists had hoped, helped by ceasefires with Shia militias, by accords with Sunni tribal leaders and by the fact that sectarian cleansing in many areas is sadly complete.

Politics is also beginning to stutter towards something approaching normality, with signs of an accommodation between the three main communities—Shia Arabs, Sunni Arabs and Kurds—and the prospect of a series of vital laws, on such matters as sharing the revenue from oil, being passed, though they are still subject to endless last-minute hiccups. Some key laws, for instance on pensions and the budget, have recently been enacted. A set of provincial elections towards the end of this year has a chance of empowering the aggrieved Sunni Arabs. Various Sunni ministers who walked out of the government a year ago in a huff may soon be back in.

The economy has begun to grow fast too, though its ripples have yet to be felt across the country. The soaring price of oil, along with a mild improvement in production to just above its pre-war peak, mean that the government has more cash to spend than it is has had since the first Gulf war of 1991.

In sum, the worst of the horrors unleashed in the sectarian violence after the bombing of a Shia shrine in February 2006 may be over. The death rate is sharply down. Fewer Americans were killed in hostilities in May, when 19 died, than in any month since the invasion of March 2003 (see chart). That is half the average for the first four months of this year and one-quarter of last year's rate. The Iraqi civilian toll is harder to measure. Iraq Body Count, a group that collates a tally of casualties from media reports, noted 752 civilian and police deaths in May, a grim figure but less than a third of the average last summer.

American officials in Baghdad are careful to avoid the misplaced triumphalism expressed immediately after the invasion five years ago. Progress, as General David Petraeus, the American commander on the ground, is wont to say, is “fragile and reversible”. But in Baghdad's Green Zone, the sealed-off sanctuary on the west bank of the River Tigris where the American-led coalition's headquarters and most of Iraqi ministries are ensconced, optimism is back in the air, reflecting a broader change of mood in the country. An opinion poll in February that asked Iraqis “How would you say things are going overall these days?” found that 43% said they were going well, up from only 22% in September. Among Shias, the figure rose from 39% to 61%; among Sunnis, it went from a paltry 2% to 16%, but a notable jump all the same. If the poll were conducted today, the answers would be more positive still.

One clear reason for hope is that al-Qaeda's Iraqi branch has taken a big knock. The CIA's director, Michael Hayden, recently said it had suffered a “near-strategic defeat”. Serviced mainly by Sunni radicals from the wider Arab world, al-Qaeda in Mesopotamia (as it calls itself) was responsible for most of the huge car bombs that terrorised Shia communities and provoked their backlash of sectarian cleansing, almost tipping Iraq into full-scale civil war two years ago. Such bombings and sectarian attacks are now scarcer.

Down but not out

But al-Qaeda is certainly not defeated. It is still active in the mixed Sunni-Shia province of Diyala and in the northern city of Mosul and its surrounding Nineveh province. It attacks the tribal leaders of the Sunni Awakening (or Sahwa) movement, for instance in the western province of Anbar, who have been persuaded to throw in their lot with the Americans. Most Sunni Arabs have turned strongly against it.

APA chance to build

Another reason for the drop in violence is that the mass movement loyal to a fierce Shia cleric, Muqtada al-Sadr, has also either decided to back off, perhaps just for the time being, or has been beaten back by a mixture of American and Iraqi government forces. Earlier this year, Sadrist violence had risen, culminating in March in a big battle for the southern port city of Basra. At first, the Sadrists seemed to have fended off attempts by the Iraqi army to squash them. The Sadrists' Mahdi Army militias elsewhere in southern and central Iraq and in the eastern slums of Baghdad known as Sadr City rose up in solidarity with their brothers in Basra. From their base in Sadr City, on the opposite side of the Tigris, they subjected Baghdad's Green Zone to a hail of mortar and rocket fire.

But in mid-May they accepted a truce. Since then, the Iraqi army has been able to patrol Sadr City more or less unmolested, uncovering weapons caches and sniffing out leaders of so-called “special groups” of renegade Sadrists who appear to be beyond the control of Mr Sadr himself. The government will get a big boost if it can at last bring basic services into the wretched slums of Sadr City, such as electricity, sanitation and medicine. In Basra too, after an astonishing turn-round, the Iraqi army seems to have bested the Sadrists.

Yet the Sadrists still have a wide base of support, especially among the poor. Mr Sadr himself may be planning to turn his movement into a mainstream political-cum-religious party. The prime minister, Nuri al-Maliki, aiming his wrath at the Sadrists, has said that no party may take part in the provincial elections unless it first disbands its militias. No one expects the Mahdi Army to disband fully—and no one is sure how much control Mr Sadr has over his movement's fractious components. He may manage to persuade most of his militiamen to stand down. But if Mr Maliki seeks to disbar the movement from competing in the elections, the Sadrists may still run as independents—and could yet sweep the board in the south.

In the north, further progress in pacifying Mosul and its surrounding area would allow the government to claim with some justification that it is winning the war. The city is a last redoubt of al-Qaeda and a bastion of nationalist Baathists. By most accounts, government forces, with the Americans, are making steady advances.

The government has gained in confidence too. Mr Maliki's reputation has risen sharply since his forces' success in Basra, particularly among Sunnis and Kurds, many of whom praised him for showing that he was prepared to take on the militias from within his own Shia community. Since then, Western diplomats in Baghdad have noticed Mr Maliki's growing readiness to take decisions without conferring with the Americans first.

He is trying to strengthen his nationalist credentials in negotiations between his government and the American administration over a “status of forces agreement”. Mr Maliki wants to end the UN's formal sway over Iraq enshrined in an agreement renewed periodically since the invasion. He would like to replace it with a bilateral deal that would curb American powers—for instance, the power to detain Iraqi citizens, to launch military attacks without having to consult the Iraqi authorities, to fly through Iraqi airspace at will, and to give American soldiers and contractors immunity from prosecution if they break Iraqi laws.

In reality, Mr Maliki still relies on the Americans, so he is unlikely to force the issue. Moreover, the results of provincial elections in the autumn and of America's own presidential election in November may sharply change the political landscape. So he may well let the matter drag on towards the end of the year. But he has been flashing his nationalist teeth—and may yet succeed to some degree in shifting power from the occupier to the government of a sovereign country.

An oil-fired recovery

If, with the government's growing political and military authority, Mr Maliki could get the economy moving, then the much-uttered phrase “turning the corner” may be apt. Iraq's windfall from higher oil prices is grand. America's State Department reckons that, if prices stay put, Iraq this year should earn more than $70 billion, though this year's budget projected $35.5 billion based on $57 a barrel at a production rate of 1.7m barrels a day. The latest production figure is 2.53m, a shade higher than its pre-war peak.

So far the cash has yet to be turned into decent public services. People in Baghdad say that they have only a few hours of state-provided electricity a day; the Americans admit that the Baghdad average is seven hours. A vaunted advance is in telephony: there are now 12m cellular phones, against a handful before the war, and 261,000 Iraqis subscribe to the internet, against almost none before the war.

Yet the biggest obstacle to economic progress is the lack of qualified people and civil servants to make use of the cash pouring in. The ministries spent barely half of their capital budgets last year, while provincial governments used up less than a third, according to an American government watchdog. Thanks partly to the “de-Baathification” decree of the early American administration which chased out the senior ranks of Saddam's old bureaucracy, the state virtually ceased to function. But what is left of the old civil service may be starting to operate better again. Professor Toby Dodge, a British expert who has been sceptical of many of the American administration's past policies in Iraq, says that “the state is beginning to re-cohere”.

There is a long way to go. Much of the middle class has fled; many of its members have been killed. According to the UN's High Commissioner for Refugees, some 2.8m Iraqis are still displaced within the country; another 2.2m-plus have gone abroad, out of an original population of 27m or so. The official unemployment rate is 25-40%; in reality, it may be a lot higher. Businessmen and investors have yet to come back.

For there is still a risk of renewed general violence, not least from within the Shia community, where power is being sought by four main rival parties. The provincial elections are rightly promoted as the next crucial political event. The hope is that they will bring the Sunnis back into the fold of peaceful politics. But they could also unleash a furious cycle of intra-Shia violence, either if the Sadrists compete and win or if they compete and believe they have been cheated of victory.

As for the Sunnis, who are now often divided between the ascendant Sahwa movement and the older declining Islamic Party, Mr Maliki remains loth to draw them fully into his circle of power. If they continue to feel left out, they could easily turn their weapons once again against the new Shia-led establishment.

Meanwhile, the Kurds in the north are quietly consolidating their autonomy and peacefully making progress on all fronts, hoping that Iraq's Arabs will fully accept that federalism is the way to go. But they are angry that a promised referendum to determine whether the oil-rich province of Kirkuk should become part of their region is again sure to be delayed. In their hearts, most Kurds still hanker after full independence, even if many know in their heads that it is not practicable.

Iraq's future is still full of pitfalls. The sectarian chasms remain deep, the wounds of strife raw. But for the first time since the insurgency against the Americans took off, the tide, which may quickly ebb, is flowing in the direction of the new order.

Turkey

A tragedy in the making

The likelihood of a ban on the ruling party is growing. It would be a disastrous mistake

TURKEY'S staunch secularists have been uneasy ever since the Justice and Development Party (AKP) swept to power in 2002. The AKP has its roots in two overtly Islamist parties that were previously banned for anti-secularism. So it is not, at first sight, surprising that the constitutional court should be considering a similar ban on the AKP, and on 71 named individuals, including the president, Abdullah Gul, and the prime minister, Recep Tayyip Erdogan.

Yet to ban the party, and to bar its leaders from politics for five years, less than 12 months after the AKP won re-election with 47% of the vote, would be to drop a bomb on Turkey's fragile democracy. Unfortunately, the court's latest ruling, overturning a law to permit women to wear the Islamic-style headscarf at universities, makes it likely that it will indeed ban the AKP. The headscarf law is central to the chief prosecutor's case. By voting 9-2 to annul it, the court is hinting heavily that it will endorse the prosecutor's main claim that the AKP is “the focal point of anti-secular activities” (see article).

There is nothing misguided about secularism, a cornerstone of Kemal Ataturk's republic since 1923. Nor is it wrong in principle for a court to decide that a law, or even a political party, is unconstitutional. But Turkish secularism can be overly fundamentalist, implying not just a healthy separation of church and state but total control of religion by the state. As for the constitutional court, it has a spotty, partisan record and a history of banning political parties, not always with good reason. Some 24 parties have been banned in Turkey since 1961 (against only three in western Europe since 1950). And in 23 of these cases, the European Court of Human Rights has ruled that the ban violates its charter of human rights.

The Turkish prosecutor insists that the European court will not take this view in the case of the AKP. Yet his charge sheet is long on assertions and short on hard facts. He cites newspaper articles and interviews to justify an otherwise unsubstantiated claim that the party is employing “dissimulation” to bring in sharia law. That is not good enough. Not only do Mr Erdogan and the AKP insist vehemently that they uphold the secular state; they are also supported by a six-year record of economic and political reform, more rights for minorities and women, and the start of membership talks with the European Union. The AKP government has, in short, been both more liberal and more successful than any secular predecessor.

Don't do it

That ought to be enough to persuade the judges to be cautious, even at this late stage. It is, after all, one thing to find a specific law unconstitutional. But it is quite another to ban an entire political party and its leaders so soon after they have been massively endorsed by voters. In any democracy, this would be hugely problematic—so the bar for such a decision should be set exceptionally high.

The fallout at home would be serious, even if the AKP were reconstituted in a different form. It is now the only party with seats all over the country; its secular opponents are almost entirely unrepresented in the east and south-east. The AKP stands firmly for a growing middle class of conservative (and pious) Turks in Anatolia, and increasingly for Turkey's Kurds as well. The secular parties speak largely for a shrinking elite that has understandable but excessive fears of a rising Islamic fundamentalism turning Turkey into a new Iran. A ban on the AKP would create huge tensions in a country that is anyway edgy—and whose economy is already teetering.

A constitutional crisis in Turkey would have grave international repercussions, too. It is hard to see how the EU could continue membership talks with a country that had banned its biggest party and its leaders. Opponents of Turkish membership would leap at the chance to stop the talks starting again. Renewed restiveness among Kurds could spill into northern Iraq: some Turkish generals say they would like to expand operations against Kurdish terrorists based there. And a crisis in Turkey would surely halt the hesitant first steps being taken towards settling the Cyprus dispute.

A better course would be for all parties to work together to revise Turkey's constitution, which was written soon after a military coup in 1980, and which both the EU and most Turks believe needs modernisation. Mr Erdogan can rightly be blamed for displaying an autocratic streak, for failing to engage his opponents and for not pursuing constitutional reform urgently enough since his re-election last July. But it would serve nobody's interest to ban him and his party.

Global markets

Too hot or too cold?

Investors are caught between the desire for growth and the fear of inflation

POOR Goldilocks is suddenly out of sorts. After five years when economic conditions have been, like baby bear's porridge, “just right”—strong growth and low inflation—they are now spoiling fast. And as central banks begin to react vigorously, investors are taking fright.

When 2008 started, most investors assumed that the lingering effects of the credit crunch would allow interest rates to fall, or at worst be kept on hold. But over the past week markets have priced in a number of rate rises later in the year from the Federal Reserve, the European Central Bank (ECB) and the Bank of England. That has caused turmoil in short-term government-bond markets (see chart), as yields have been forced sharply higher.

The problem is inflation. Central bankers may hope that soaring oil and food prices will prove to be just a blip, and will not result in secondary effects such as higher wages. But they know that higher inflation expectations, once entrenched, are difficult to eliminate. So they are sounding as tough as they can.

Tricky Trichet

This has not been well co-ordinated. On June 3rd Ben Bernanke, the chairman of the Fed, tried to talk up the dollar (a falling currency adds to inflationary pressures). But on June 5th Jean-Claude Trichet, the ECB president, gave a strong hint that euro-zone rates were soon to rise. That sent the euro sharply higher. As Albert Edwards, a strategist at Société Générale, put it: “Only [two days] after Bernanke made his dollar-supportive comments and retreated to the sidelines, he received the studmarks from Trichet's boot in his chest.”

If that central-banking snafu was not bad enough, June 6th saw both an unexpected rise in American unemployment and an $11 gain in the price of oil—a combination that points to higher inflation and slower growth. Small wonder that the Dow Jones Industrial Average tumbled nearly 400 points on the day.

Investors fear that central banks, in their zeal to prove their anti-inflationary credentials, may inflict some severe damage on economic growth. The problems of the financial sector are far from over, as the $2.8 billion second-quarter loss at Lehman Brothers illustrated. Its share price continued to take a hammering this week as investors worried about its balance sheet and business model.

There have been few bond defaults as yet, but Stephen Dulake, a credit strategist at JPMorgan, reckons investors may be looking in the wrong place for trouble; there have already been 26 defaults in the American corporate-loan market this year. Credit spreads (the excess rates paid by risky borrowers), having fallen sharply between mid-March and mid-May, have been edging higher again.

Meanwhile, house prices are falling in America and Britain. Consumers are struggling to cope with the impact of that on their wealth and with the effect of higher fuel and food prices on their wallets; a rise in interest rates may push them over the edge. In the global economy, more bad news came on June 11th: Australian consumer confidence and New Zealand home sales fell to 16-year lows.

Nor is the task of balancing inflation and growth confined to the developed world. In China the central bank raised the amount of reserves banks must hold against their loans, in an effort to restrain inflation, and shares fell for seven days in a row up to June 12th. Inflationary fears led India's central bank to raise interest rates for the first time in more than a year.

In essence, the global economy has received two shocks in the past 12 months—the credit crunch and higher commodity prices. Those shocks have made the outlook more uncertain, not just for the economy but for monetary policy. And uncertainty makes investors nervous, not least because it comes after a long period when markets seem to have underpriced risk. “Recent years have seen the world get all the benefits of globalisation without the costs,” says Peter Oppenheimer, a strategist at Goldman Sachs. “Emerging markets got growth, developed countries kept the lid on inflation.”

But higher commodity prices are a zero-sum game; for every winner, there is a loser. Many of those losers are likely to be companies. Profit margins have been at historic highs in some big countries, in large part because businesses have been successful in controlling labour costs. But higher raw-material prices present firms with a problem. Pass those costs on, and not only will consumer demand falter, but central banks may raise rates. So they may have to accept lower margins instead.

At the start of the year analysts were forecasting 15% profits growth for European companies in 2008. Revisions have brought that number down to 4%, largely because of problems in the finance industry. But Goldman Sachs thinks analysts are still too optimistic; it is predicting an earnings decline of 12% this year. A combination of higher interest rates and lower profits makes it difficult to see how stockmarkets could advance much during the rest of the year.

Currency markets are also likely to be volatile. The Fed would like to engineer a rise in the dollar against the euro and the yen and a fall against the developing Asian currencies. But that will be hard to pull off as central banks around the world grapple with the inflation/growth trade-off. The dollar's yield will continue to look unattractive, since American interest rates are likely to remain lower than most (bar Japan's). The Bank of Canada, which was widely expected to cut rates this week, decided to keep them steady.

And government-bond markets may also be set for turmoil. Analysts have been scratching their heads at some of the recent moves. “If we told you that the Dow fell by 400 points one Friday after the largest rise in the unemployment rate in nearly three decades, would you buy or sell two-year Treasury notes?” asks William O'Donnell, a strategist at UBS. The usual response would be to buy, but investors sold. Expectations of higher short-term interest rates trumped the safe-haven appeal of the bonds.

At the ten-year level, it may seem odd that investors are willing to receive a Treasury-bond yield of just 4.1% when headline inflation is 3.9%. But if the American economy slips into recession, ten-year yields could fall a lot lower than that; they were 3.1% in June 2003.

So, a world without Goldilocks would be a harsh one for investors. It is not a place where bears eat porridge and go for strolls in the wood. It is one where bears eat ingénues for breakfast.

The week ahead

More strikes in France, and other news

• NICOLAS SARKOZY, the man elected to shake up France, faces another challenge to the reforms he wants to introduce to make France more competitive. The country’s two biggest trade unions have called for widespread strikes and a mass protest on Tuesday June 17th. The unions and other opponents of the president’s scheme to give French firms increased opportunities to by-pass laws that limit the working week to 35 hours are hoping to bring France to a grinding halt.

For background see article

• GAY couples from across America are expected to descend on California after Tuesday June 17th, the day that gay marriages become legal in the state. Unlike Massachusetts, the other place in America that allows same-sex marriages, California has no residency requirement. Some analysts reckon that gay marriage will provide a useful economic boost for the state. But gay couples wishing to tie the knot should get a move on. A constitutional amendment that will appear on the ballot in November’s’ election could ban gay marriages.

For background see article

• BOEING will be hoping that America’s government Accountability Office, a congressional watchdog, upholds its protest over an order for refuelling aircraft when it gives its verdict by Thursday June 19th. The aerospace giant is annoyed that a $35-billion contract to supply planes to the US Airforce was awarded to EADS, a European consortium, and its American partner, Northrop Grumman. Boeing says that the airforce rejigged the contract to favour its rivals. If Boeing fails to have the contest refought then it may well drag the case into the courts.

For background see article

• THE Olympic torch is set to be paraded around Lhasa, Tibet’s capital, probably on Thursday June 19th, two months after violent protests against China’s rule in the region. Chinese authorities, perhaps mindful of the potential for provocation, have cut the torch’s tour round Tibet from three days to one and are keeping quiet about the exact timing. The torch's progress around the world was frequently disrupted by protestors hoping to draw attention to grievances about Chinese rule in Tibet. The Chinese are certain to ensure that security is tight to avoid anything similar in Lhasa.