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16 August 2019   Leave a comment

The Trump Administration has announced its intention to sell $8 billion of weaponry, including F16 fighter jets, to Taiwan. The sale has to be approved by Congress, but China has make it clear that it strongly opposes the sale. The South China Morning Post reports:

“Beijing quickly registered its strong displeasure to the proposed contract involving the 66 Lockheed Martin F-16 Viper aircraft, which follows a US$2 billion agreement for 108 Abrams tanks and support equipment approved in July.

“’China urges the US to fully recognise the highly sensitive and harmful nature of the relevant issue, abide by the one-China principle and the three China-US joint communiqués, refrain from selling F-16 fighter jets to Taiwan and stop arms sales to and military contact with Taiwan,’ foreign ministry spokeswoman Hua Chunying said in a press briefing.

“’Otherwise, the Chinese side will surely make strong reactions, and the US will have to bear all the consequences,’ she said, without being specific.”

The issue joins the trade war, the unrest in Hong Kong, and the Iranian sanctions as ones that nettle the US-China relationship. It is hard to imagine that the weaponry sale will make the relationship any better.

Reuters is reporting that China is evading the US sanctions against Iran by disabling the transponders on ships that carry crude oil. It is a complicated process which includes off-loading the oil on the high seas, but it apparently is workable (it is also the process by which North Korea evades the sanctions). The process is described by Reuters:

“While in the Indian Ocean heading toward the Strait of Malacca, the very large crude carrier (VLCC) Pacific Bravo went dark on June 5, shutting off the transponder that signals its position and direction to other ships, ship-tracking data showed.

“A U.S. government official had warned ports in Asia not to allow the ship to dock, saying it was carrying Iranian crude in violation of U.S. economic sanctions. A VLCC typically transports about 2 million barrels of oil, worth about $120 million at current prices.

“On July 18, the transponder of the VLCC Latin Venture was activated offshore Port Dickson, Malaysia, in the Strait of Malacca, about 1,500 km (940 miles) from where the Pacific Bravo had last been signaling its position.

“But both the Latin Venture and the Pacific Bravo transmitted the same unique identification number, IMO9206035, issued by the International Maritime Organization (IMO), according to data from information provider Refinitiv and VesselsValue, a company that tracks ships and vessel transactions.

“Since IMO numbers remain with a ship for life, this indicated the Latin Venture and the Pacific Bravo were the same vessel and suggested the owner was trying to evade Iranian oil sanctions.”

China is violating international maritime law but it is difficult to see how the US can respond. US sanctions on Iran do not have the force of international law and seizing an oil tanker would be an act of war. We shall see how the US decides to react.

Posted August 16, 2019 by vferraro1971 in World Politics

15 August 2019   Leave a comment

Israel has barred two US Congresspeople, Representatives Ilhan Omar and Rashida Tlaib, from visiting East Jerusalem and the West Bank because of the support for the Boycott, Divest, and Sanction (BDS) Movement. The decision comes even though the Israeli Ambassador to the US had agreed that they should be allowed to visit. The change of heart came after US President Trump tweeted that Israel should bar the visit:

“It would show great weakness if Israel allowed Rep. Omar and Rep.Tlaib to visit. They hate Israel & all Jewish people, & there is nothing that can be said or done to change their minds. Minnesota and Michigan will have a hard time putting them back in office. They are a disgrace!”

The decision is hard to justify. Israel has passed a law barring the entry of people who support the BDS Movement, but the fact that the US Congress annually allocates a great deal of money to Israel. According to the Congressional Research Service:

” Israel is the largest cumulative recipient of U.S. foreign assistance since World War II. To date, the United States has provided Israel $142.3 billion (current, or noninflation-adjusted, dollars) in bilateral assistance and missile defense funding. Almost all U.S. bilateral aid to Israel is in the form of military assistance, although from 1971 to 2007 Israel also received significant economic assistance.

“In 2016, the U.S. and Israeli governments signed a new 10-year Memorandum of Understanding (MOU) on military aid, covering FY2019 to FY2028. Under the terms of the MOU, the United States pledges to provide $38 billion in military aid ($33 billion in Foreign Military Financing grants plus $5 billion in missile defense appropriations) to Israel. This MOU replaced a previous $30 billion 10-year agreement, which ran through FY2018.”

Additionally, the US Congress has a number of responsibilities to monitor the protection of human rights in the world as well as to address the concerns of other countries, notably in Europe and the Middle East, that have relations with Israel.

Moreover, the Democratic Party has a long history of strong support for the state of Israel, and it is not clear why Israeli Prime Minister Netanyahu believes that it is more important to curry favor with President Trump at the risk of possibly alienating members of the Democratic Party. It is unlikely that anyone in the Democratic Party will abandon support for Israel, but the rebuff to Omar and Tlaib will not sit well with some members of the Party. Jennifer Rubin, a conservative columnist for the Washington Post and a fierce opponent of President Trump, points out that many Jews in the US do not support Israel’s decision:

“Heads of major Jewish organizations had been on the phone with the U.S. ambassador to Israel imploring Israel not to take this step. According to the leader of one such group, the leader’s group had been urging the Israeli government to stick by the original decision to let the congresswomen in, while being under no illusion about the congresswomen’s views. The potential political and reputational costs of not letting them in might be even higher than of letting them in, the leader acknowledged.”

Emma Goldberg has written an op-ed for the Jewish journal, Forward, which soundly condemns the decision.

Finally, we need to think clearly what it means for an American President to advise a foreign power to insult Congresspeople who have been legitimately elected by their constituents.

Posted August 15, 2019 by vferraro1971 in World Politics

14 August 2019   Leave a comment

Stock markets around the world fell today as evidence mounts that global economic growth seems to be slowing. In China, industrial production fell 4.8 percent in July, the lowest level since 2002, and Germany experienced negative growth for the second time in the last three quarters. In the US, the bond market became “inverted” with short term rates higher than long term rates–a sign that bond investors believe that economic growth in the future will decline. An inverted bond market often signals the onset of an economic recession.

The stock market in the US was higher yesterday as US President Trump decided not to impose new tariffs on Chinese products on 1 September as he had threatened. Instead, a decision will be made at the end of the year. The tactical change revealed a number of important issues. First, the delay was justified by President Trump because he did not want prices of such goods as toys and electronics to rise before the Christmas buying season:

Q.  Would you consider moving the tariffs, even?  Delaying them even further, past December 15?

THE PRESIDENT:  No, we’re doing this for Christmas season, just in case some of the tariffs would have an impact on U.S. customers, which, so far, they’ve had virtually none.

Note that the statement contradicts President Trump’s earlier position that the Chinese are paying for the higher tariffs, as noted by Tory Newmyer in The Washington Post: ” The president’s claim that the impact of existing tariffs on American shoppers has been ‘virtually none’ is provably false. Yet the acknowledgment that consumers would be on the hook for tariffs broke new ground for Trump, who has insisted for months, against a consensus among economists and a raft of data, that the Chinese are footing the bill for his trade war.”

Second, the US received nothing in return from China from the delay. Last week, China announced that it would stop buying US agricultural products because of the threat of the new tariffs. But after Trump announced that he was delaying the tariffs, the Chinese did not say that they would return to buying US agricultural products. Backing down without any reciprocation is capitulation, which is not necessarily a bad tactic unless one is engaged in extended negotiations. Capitulation in an early stage of a negotiation weakens a bargaining position since it indicates a reluctance to endure the economic or political position to force concessions.

Third, there are two keys to winning a negotiation. First, one needs to figure out a way for both sides to benefit from the outcome of the negotiation. There is precious little evidence that either Trump or Xi are pursuing a win-win strategy at this point. Second, each side needs to persuade the other that it is willing to endure the pain of loss in order to achieve a victory. President Trump has always said that China will suffer more than the US from a trade war. But his statement today suggests that he is worried about the effects of a trade war on his re-election chances. If that is true, and China is certainly aware of that concern, then there is a real time limit on how much pain Trump is willing to suffer. The Chinese may simply decide that they should wait until election pressures force Trump to capitulate again.

Posted August 14, 2019 by vferraro1971 in World Politics

13 August 2019   Leave a comment

The Paris Agreements on climate change were a set of policies designed to keep the increase of global temperatures below 2 degrees Celsius. That increase was determined to be critical to efforts to prevent catastrophic changes which would be either difficult or impossible to accommodate. The Washington Post, however, has published an article that indicates that many places in the US have already passed temperature increases equal to or higher than 2 degrees C.:

“NOAA data shows that in every Northeast state except Pennsylvania, the temperatures of the winter months of December through February have risen by 2 degrees Celsius since 1895-1896. And U.S. Geological Survey data shows that ice breaks up in New England lakes nine to 16 days earlier than in the 19th century.

“This doesn’t mean the states can’t have extreme winters anymore. Polar vortex events, in which frigid Arctic air descends into the heart of the country, can still bring biting cold. But the overall trend remains the same and is set to continue. One recent study found that by the time the entire globe crosses 2 degrees Celsius, the Northeast can expect to have risen by about 3 degrees Celsius, with winter temperatures higher still.”

There are several other areas of the US that have passed the 2 degree increase, and all areas of the US except for the deep South have experienced higher average temperatures. Globally, last July was the warmest month ever recorded.

The situation in Hong Kong continues to deteriorate as protesters and riot police have violent exchanges. For the second day in a row, flights in and out of the airport have been cancelled. The Guardian describes the change in tone:

“The messages from Beijing to protesters in Hong Kong are increasingly ominous. First there was propaganda footage of Chinese soldiers garrisoned in Hong Kong drilling for intense urban fighting that looked more like a civil war than search and rescue or crowd control.

“Now footage has emerged of armoured paramilitary vehicles massing across the border. Two months into demonstrations sparked by a controversial extradition law, official rhetoric from Beijing has escalated too. Authorities recently denounced protests as “terrorist acts”, promised an “iron fist” response and, perhaps most alarmingly, described the movement as a ‘colour revolution’.

China considered the pro-democracy protests which swept across the former Soviet Union during the early years of this century, most prominently Ukraine’s 2004 Orange Revolution, to be existential threats to be tackled at almost any cost. Putting the same label on protesters implies Beijing will stop at little to crush the movement.”

US President Trump tweeted some rather extraordinary information today: “Our Intelligence has informed us that the Chinese Government is moving troops to the Border with Hong Kong. Everyone should be calm and safe!” It is highly unusual for a power to relate classified intelligence about the internal problems of another power (just imagine what a tit-for-tat exchange of intelligence suggesting vulnerability would look like). But Mr. Trump did not support the protesters, although a number of US politicians, both Republican and Democratic, voiced support for the protesters.

The protesters have also amplified their demands. Kevin Drum outlines their objectives in Mother Jones:

” The movement now has five key demands for Hong Kong’s government:

  • to withdraw the extradition bill
  • to officially retract descriptions of the protests as a “riot”
  • to drop charges against protesters
  • to launch an investigation into police force during the protests
  • “universal suffrage,” which would allow Hong Kong voters to directly pick their leaders rather than the current process that includes Beijing’s involvement.

The US should be strongly supportive of these demands. There is no question that China will regard US expressions of support as meddling in their internal affairs. So be it.

Posted August 13, 2019 by vferraro1971 in World Politics

12 August 2019   Leave a comment

As the US continues to exert pressure on Iran, one can assume that Iran is trying to find allies, or, at the least, sympathetic friends to maintain its economy. It is also pretty safe to assume that it has been successful, given that the price of oil has not risen dramatically, even as the US tries to cut off exports of oil from Iran and Venezuela. The suspicion is that both China and Russia are moving closer to Iran (and perhaps India as well), and are conducting economic and strategic relations surreptitiously. US policy seems to be isolating the US quite effectively, and the long-term consequences of the shift will likely be significant.

We know that Russia has been developing new weapons to counteract the US effort to build an effective anti-missile system. The US systems are far from operational, but Russia is taking no chances that its nuclear arsenal could be made obsolete by new technologies. The two ways to defeat an anti-missile system is to make nuclear missiles so fast that an anti-missile system could not respond in time and/or to develop missiles that can travel close to the ground for extended periods of time, allowing missile trajectories that cannot be effectively tracked. The Russians (and the Chinese) are developing hypersonic missiles to accomplish the first tactic and there have been some successes in this area. The second tactic requires missiles that use an energy source other than chemical fuels. The most obvious fuel source is an very small nuclear reactor fitted onto a cruise missile, but the technological hurdles for building such reactors are formidable.

The Russians are reporting that a nuclear accident occurred near their testing site in the Arctic, in a closed town named Sarov. At least five people, all scientists, were killed in the accident and higher levels of radioactivity were reported. It appears as if a new cruise missile was being tested. In talking about the Russian test, US President Trump also revealed that the US is working on a similar missile, apparently breaching a highly classified secret. Both states are working on a weapon that neither side needs for any strategic purpose.

Posted August 12, 2019 by vferraro1971 in World Politics

11 August 2019   Leave a comment

Protests in Hong Kong are continuing and the protesters are adopting cat-and-mouse tactics to evade the riot police. The protests seem to have gone far beyond expressing displeasure at the extradition bill proposed by Beijing that places Hong Kongers within the jurisdiction of the central government in Beijing. Now, protesters are using slogans that refer to the “liberation” of Hong Kong. Global Times, a media outlet that often reflects the opinion of the Beijing government, claims that the protesters do not have the support of ordinary people in Hong Kong:

“More and more Hongkongers urged police to strictly enforce  the law and bring all violent rioters to justice after the city suffered another weekend of chaos and public transport disruption.

“Illegal protesters began to use guerrilla-style assemblies and flash mob protests to hit different districts during the weekend, seriously affecting the normal life of Hong Kong  residents.” 

Xinhua also makes the same claim:

“Large groups of Hong Kong people visited several police stations in Hong Kong Saturday to express their firm support for and utmost respect to the police force.

“The scene stood in stark contrast to the chaotic and violent besieges of police stations by black-clad protesters on many nights over the past weeks.

“‘The police have been working really hard to safeguard social order. We came here to show our support,’ said a resident surnamed Chan, who visited Kwai Chung Police Station with his wife and son. The boy gave the police a hand-written card as a gift.’

The evidence, however, suggests that the protests have wide support. The protesters are also becoming quite sophisticated, playing games of rock-scissors-paper to determine the location of their protests so that the police cannot anticipate their moves. It seems clear, however, that the Beijing government’s willingness to tolerate the protests is getting short, and there is great danger that violence will be used to suppress the protests, as was done in the protests in Tiananmen Square in 1989.

Bloomberg has published a very unsettling article about the concentration of wealth in the world and how that concentration seems to be accelerating at a very high rate.

“The numbers are mind-boggling: $70,000 per minute, $4 million per hour, $100 million per day.

“That’s how quickly the fortune of the Waltons, the clan behind Walmart Inc., has been growing since last year’s Bloomberg ranking of the world’s richest families.

“At that rate, their wealth would’ve expanded about $23,000 since you began reading this. A new Walmart associate in the U.S. would’ve made about 6 cents in that time, on the way to an $11 hourly minimum….

“So it goes around the globe. America’s richest 0.1% today control more wealth than at any time since 1929, but their counterparts in Asia and Europe are gaining too. Worldwide, the 25 richest families now control almost $1.4 trillion in wealth, up 24% from last year.”

The rate at which wealth is being concentrated cannot be sustained, economically or politically. Common Dreams extrapolated the rate and found that there is an end point which is morally inconeivable:

“If wealth inequality in the United States continues to soar at its current rate, the top 10 percent of Americans could own 100 percent of the nation’s net worth by 2052.

That’s according to an analysis by Dallas Morning News finance columnist Scott Burns, who wrote Sunday that the wealthiest Americans ‘will truly ‘have it all’ just 33 years from now.’

“‘However you slice it, the rich have been getting richer. Lots richer,’ wrote Burns, citing Federal Reserve data. ‘Here are the basics. From 2013 to 2016, the top 10 percent of households increased their share of total wealth from an amazing 75.3 percent to a stunning 77.2 percent. That’s a share gain of 1.87 percent in just three years.’

“‘If they continue to gain share at that rate,’ Burns added, ‘they’ll have the remaining 22.8 percent of net worth held by the other 90 percent in just 12 more surveys, give or take an upheaval or two.'”

We should all keep this data in mind as we are flooded with charges of “socialism” as efforts are made to protect the interests of those who are not benefiting from the economic system in place.

Posted August 11, 2019 by vferraro1971 in World Politics

10 August 2019   Leave a comment

We need to keep a close eye on what’s happening in North Korea. In the last few weeks it has conducted five short-range missile tests, but the more recent tests seem to be of a different kind of missile. We do know that the Trump Administration believes that as long as North Korea does not test a nuclear bomb or launch a long-range ballistic missile, it does not violate the understanding reached between leader Kim and President Trump in Singapore last year. But it appears as if leader Kim is threading a very small needle of understanding. North Korea believes that the US is preparing to violate the Singapore Agreement by conducting military exercises with South Korea tomorrow, and these tests are expressions of discontent with the US actions. If the war games occur, then it may be the case that North Korea considers the Singapore Agreement null and void. If that is the case, then we should expect North Korea to reciprocate by either testing a bomb or a long-range missile. How President Trump responds to that move is a matter of conjecture: President Trump will likely downplay its significance, but National Security Adviser Bolton and Secretary of State Pompeo, both of whom have argued for regime change in North Korea. will likely push for a more robust response. While the US and North Korea continue to dance, South Korea seems to be increasingly worried about the reliability of the US as an ally. It recently announced that Lee Soo-hyuck, who has described Mr. Trump as “treacherous”, will be the next South Korean Ambassador to the US.

We have virtually no hard information about what is happening in Kashmir. The Indian government has cut off all internet connections with the territory, controls all flows of information, and has reportedly sent a large number of troops into the region. The Straits Times reports that India has arrested 300 Kashmiri politicians. The New York Times reports:

“On the streets of Srinagar, Kashmir’s biggest city, security officers tied black bandannas over their faces, grabbed their guns and took positions behind checkpoints. People glanced out the windows of their homes, afraid to step outside. Many were cutting back on meals and getting hungry.

“A sense of coiled menace hung over the locked-down city and the wider region on Saturday, a day after a huge protest erupted into clashes between Kashmiris and Indian security forces.

“Shops were shut. A.T.M.s had run dry. Just about all lines to the outside world — internet, mobile phones, even landlines — remained severed, rendering millions of people incommunicado.”

The fear is that India wants to shift the demographic balance in the Muslim-majority province:

“A swing of about 2.5 million residents would shift Jammu and Kashmir from majority-Muslim to majority-Hindu. In a nation of 1.3 billion, that’s not such a stretch. The BJP forcefully advocates for in-migration of Hindus to the state. Officially, this applies only to those who fled Kashmir in the violence of the 1990s, but there is now no legal barrier to a full-bore program of government-sponsored in-migration. Such a move would solidify the BJP’s Hindu-nationalist agenda of redefining India not as a multireligious secular state, but as a Hindu rastra in which 200 million Muslims are tolerated only so long as they remain on good behavior.”

It is difficult to see how Pakistan can effectively respond to this move. It has recalled its ambassador, but the Indian government of Narendra Modi has unquestionably committed to this course of action. I suspect, however, that there is no stable outcome without a dramatic reversal by India.

Posted August 10, 2019 by vferraro1971 in World Politics

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