25 September 2018   Leave a comment

Martin Wolf is one of my favorite analysts, but I rarely refer to his articles in the Financial Times since it has a very rigid paywall.  His article today was on the state of liberal democracy in the world and I decided to use one of my “share” allotments to the FT in the blog (I hope it works).  There are a number of graphics in the article which I cannot reproduce that convey some very interesting information about the relationship between economic decline and the growth of populist politics.  His conclusion is one with which I share total agreement:

“Yet we cannot just ignore the pressures. It is impossible for democracies to ignore widespread public anger and anxiety. Elites must promote a little less liberalism, show a little more respect for the ties binding citizens to one another and pay more tax. The alternative of letting a large part of the population feel disinherited is too dangerous. Is such a rebalancing conceivable? That is the big question.”

Redistributive measures are necessary to save liberal democracy and it will require sustained political action to implement those measures. 

SWIFT is an international messaging system that serves as a clearinghouse for financial transactions.  It is a way of validating the legitimacy of all financial transactions that are conducted between and among almost 11,000 banks globally.  But is also serves as a source of information for governments who wish to monitor international transactions, particularly transactions that might be conducted by countries that are sanctioned by national and international agencies.  For example, SWIFT allows the US to check on any companies or countries that might be buying Iranian oil which the US sanctioned after it left the Iranian nuclear deal.  Many countries believe that the US action is illegitimate because the US did not offer any evidence that Iran had violated the terms of the nuclear agreement, and they wish to continue buying Iranian oil.  But the US threatened to sanction any company that bought Iranian oil.

In response to this intrusion on the sovereignty of states who do not wish the US to determine their decisions to buy any product from any country, the Europeans have developed an alternative messaging system to bypass SWIFT.  The act is a direct repudiation of the US attempt to force other nations to sanction Iran and it is likely that the other members of the Iranian nuclear agreement–China and Russia–will also use the alternative system.  The move to sidestep the US is a sharp departure from the attitude toward Iran expressed by President Trump in his speech to the UN General Assembly today:

“Every solution to the humanitarian crisis in Syria must also include a strategy to address the brutal regime that has fueled and financed it: the corrupt dictatorship in Iran.

“Iran’s leaders sow chaos, death, and destruction. They do not respect their neighbors or borders, or the sovereign rights of nations. Instead, Iran’s leaders plunder the nation’s resources to enrich themselves and to spread mayhem across the Middle East and far beyond.

“The Iranian people are rightly outraged that their leaders have embezzled billions of dollars from Iran’s treasury, seized valuable portions of the economy, and looted the people’s religious endowments, all to line their own pockets and send their proxies to wage war. Not good.

“Iran’s neighbors have paid a heavy toll for the region’s [regime’s] agenda of aggression and expansion. That is why so many countries in the Middle East strongly supported my decision to withdraw the United States from the horrible 2015 Iran Nuclear Deal and re-impose nuclear sanctions.

“The Iran deal was a windfall for Iran’s leaders. In the years since the deal was reached, Iran’s military budget grew nearly 40 percent. The dictatorship used the funds to build nuclear-capable missiles, increase internal repression, finance terrorism, and fund havoc and slaughter in Syria and Yemen.

“The United States has launched a campaign of economic pressure to deny the regime the funds it needs to advance its bloody agenda. Last month, we began re-imposing hard-hitting nuclear sanctions that had been lifted under the Iran deal. Additional sanctions will resume November 5th, and more will follow. And we’re working with countries that import Iranian crude oil to cut their purchases substantially.

“We cannot allow the world’s leading sponsor of terrorism to possess the planet’s most dangerous weapons. We cannot allow a regime that chants “Death to America,” and that threatens Israel with annihilation, to possess the means to deliver a nuclear warhead to any city on Earth. Just can’t do it.
We ask all nations to isolate Iran’s regime as long as its aggression continues. And we ask all nations to support Iran’s people as they struggle to reclaim their religious and righteous destiny.

It is clear that most of the states in the world do not agree with this assessment of Iran’s intentions.  The US may be trying to reduce its commitments to the rest of the world, but it is also true that the world appears to be willing to set its own course without regard to the US point of view. 

Posted September 25, 2018 by vferraro1971 in World Politics

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