Iran is emerging as a central preoccupation of the Trump Administration, yet there is little sustained analysis of Iranian intentions or capabilities beyond flat assertions that Iran is “hostile” to the US. There is little question that many of Iran’s current policies are at odds with American objectives, but there are also important points of agreement that have never been exploited: Iran is as hostile to the Taliban in Afghanistan as is the US and Iran also shares concerns over the Wahhabist interpretations of Islam propagated by Saudi Arabia that seems to fuel many extremist groups. Kenneth Pollack is a centrist on Middle Eastern issues and he has written an well-informed and nuanced interpretation of Iran’s foreign policy objectives that deserves careful attention.
US-Turkish relations continue to deteriorate as Turkey arrested two workers in the US consulate in Ankara on suspicion that they had ties to Fethullah Gulen, a Turkish cleric living in exile in the US and who is suspected of leading a coup against President Erdogan last year. In response, the US announced that it would not issue any new travel visas from that consulate to Turks who wish to travel to the US. TUrkey reciprocated by making a similar announcement to US visitors to Turkey. The Turkish currency, the lira, fell on hearing the news, as did the Turkish stock market.
Dexter Filkins has written an impressive essay on the tenure of Rex Tillerson as US Secretary of State for the New Yorker magazine. It is a long and detailed essay, but is particularly well-informed and touches on many aspects of the complicated relationship between multinational corporations, such as ExxonMobil, and home and host governments. It also provides some important insights into the internecine warfare that seems to be endemic to the current Administration. If, as I suspect, that Tillerson leaves the State Department fairly soon, the essay will provide an important context to how to interpret what might come after he leaves. This essay complements an earlier essay in Foreign Policy by Derek Chollet which was published before the current controversy,
The Urban Institute has published a study on wealth inequality in the US and it shows that it is worsening significantly over time. Additionally, the report breaks down both wealth and income inequality by race and ethnicity and the discrepancies among these groups is even more distorted. The summary from the report reads as follows:
Average wealth has increased over the past 50 years, but it has not grown equally for all groups. Between 1963 and 2016,
families near the bottom of the wealth distribution (those at the 10th percentile) went from having no wealth on average to being about $1,000 in debt,
those in the middle more than doubled their wealth,
families near the top (at the 90th percentile) saw their wealth increase fivefold,
and the wealth of those at the 99th percentile—in other words, those wealthier than 99 percent of all families—grew sevenfold.
These changes have increased wealth inequality significantly. In 1963, families near the top had six times the wealth (or, $6 for every $1) of families in the middle. By 2016, they had 12 times the wealth of families in the middle.
The trend toward greater income and wealth inequality cannot be sustained politically or economically indefinitely. At some point, the legitimacy of the system will be completely undermined.
One reason why wealth inequality has deepened so significantly can be found in the chart below. Those that had enough money to buy stocks have been greatly enriched. Unfortunately, most Americans do not own stocks directly. Moreover, globalization has repressed wage growth as the balance of economic power has shifted away from labor and more to those owning capital.
The Catalonian independence referendum did not mysteriously appear. As this chart from Zero Hedge indicates, the independence movement has a very long and deep history. Estat Catalá even has its own Facebook Page. The chart also highlights the historical tension between the regional sentiments and the fascist leanings of the central government although the current Spanish government does not fall into that category.
As Congress begins to debate tax reform and President Trump begins to unravel President Obama’s Climate Change Program, it is instructive to read Oil Change International’s report on fossil fuel subsidies. The summary of the report suggests that significant revenue could be generated by ending tax subsidies for the fossil fuel industries:
The United States federal and state governments gave away $20.5 billion a year on
average in 2015 and 2016 in production subsidies to the oil, gas, and coal industries,
including $14.7 billion in federal subsidies and $5.8 billion through state-level incentives.
At the state level, this is likely a significantly conservative estimate, given limits to
available data.
Repeated proposals by the Obama White House to remove some of the most damaging
federal subsidies were thwarted in large part due to the cozy relationship between
Congress and the fossil fuel industry. In the 2015-2016 election cycle oil, gas, and coal
companies spent $354 million in campaign contributions and lobbying and received
$29.4 billion in federal subsidies in total over those same years – an 8,200% return
on investment.
The cost of federal fossil fuel subsidies to American taxpayers is equivalent to the
projected 2018 budget cuts from Trump’s proposals to slash 10 public programs and
services, including supports for America’s most vulnerable children and families.
Misplaced priorities, not a scarcity of resources, are driving this administration’s efforts
to balance the national budget at the expense of the most vulnerable.
The White House press secretary, Sarah Sanders, indicated today that President Trump will give a speech this week addressing what he perceives as the threats from Iran. Sanders said:
“The president isn’t looking at one piece of this. He’s looking at all of the bad behavior of Iran. Not just the nuclear deal as bad behavior, but the ballistic missile testing, destabilizing of the region, Number One state sponsor of terrorism, cyber attacks, illicit nuclear program”. Sanders added that Trump “wants to look for a broad strategy that addresses all of those problems, not just one-offing those. That’s what his team is focused on and that’s what he’ll be rolling out to address that as a whole in the coming days.”
That list is long and apparently Mr. Trump will start out by refusing to certify that the Iranian nuclear deal does not serve the US national interest. There were no clues about what the new policy toward Iran will consist of.
New polls suggest that Americans increasingly believe that global warming is actually occurring. For the first time in many years, even a majority of Republican voters believe that global warming is occurring. But the split between Democrats and Republicans on the issue remains quite large.
The Washington Post is running an article that asserts that US President Trump plans to decertify the Iranian nuclear deal and will make a speech next week arguing that the deal is not in the US national interest. As indicated in an earlier blog post on 3 October, Trump’s Defense Secretary Mattis has testified before the Senate Armed Service Committee that the US should uphold the agreement. The Post is suggesting that Trump would refer the matter to the US Congress which would then have 60 days to decide whether to reimpose sanctions on Iran. None of the other partners to the agreement (China, France, Germany, Great Britain, Iran, and Russia) appear to be willing to renegotiate the agreement. Under those circumstances it is not clear what would happen to the agreement. If the Congress does not reimpose sanctions, then the agreement would probably stand. If the US decides to reimpose sanctions, then Iran would likely pull out as well.
There is a curious contradiction coming out of this news. If the US does pull out of the agreement without any clear evidence that Iran has violated the terms of the agreement, then the rest of the world will likely ask whether the US can be trusted to honor its word. This doubt will undoubtedly affect North Korea’s perception of any deal that the US might offer to defuse the current nuclear impasse. I suspect that North Korea would not sign any agreement with the US if it pulls out of the Iranian agreement. Which leaves war as the only option for for sides.
One of the reactions to the Catalonian independence referendum has been an increase in Spanish nationalism, a political force that had been somewhat dormant in Spain because of its association with Spain’s fascist past. The reaction may be simply a response to a fear that Spain will be pulled apart–there are other separatist movements in Spain, such as sentiment in the Basque region–, but it may also be part of the nationalist movements responsible for the British exit from the European Union or the rise of the right-wing party, Alternative for Germany, in Germany. Nationalist sentiment is also highly visible in the US, China, Russia, and India, to speak only of some of the great powers. A similar increase in nationalist sentiment preceded World War I in 1914.
The US relationship to Puerto Rico is difficult to articulate. The US gained control over the island in the Spanish-American War of 1898 and anyone born in Puerto Rico is a natural born citizen of the US. But Puerto Ricans cannot vote in federal elections, pay no federal income tax, and have no vote in the US Congress. In the most recent referendum held in Puerto Rico in 2017 on its future, 97% of the voters favored statehood but only 23% of the registered voters actually voted so no action was taken. But the relationship between the US and Puerto Rico has always been shaped by early colonial attitudes prevalent in the US in the early 20th century. Those attitudes were best expressed by Senator Beveridge (Indiana) who said in a speech in 1898:
“The opposition tells us that we ought not to govern a people without their consent. I answer, the rule of liberty that all just government derives its authority from the consent of the governed, applies only to those who are capable of self-government. We govern the Indians without their consent; we govern our territories without their consent; we govern our children without their consent. I answer, would not the natives of the Philippines prefer the just, humane, civilizing government of this Republic to the savage, bloody rule of pillage and extortion from which we have rescued them? Do not the blazing fires of joy and the ringing bells of gladness in Porto Rico prove the welcome of our flag? And, regardless of this formula of words made only for enlightened, self-governing peoples, do we owe no duty to the world? Shall we turn these peoples back to the reeking hands from which we have taken them? Shall we abandon them to their fate with the wolves of conquest all about them? Shall we save them from those nations, to give them a self-rule of tragedy? It would be like giving a razor to a babe and telling it to shave itself. It would be like giving a typewriter to an Eskimo and telling him to publish one of the great dailies of the world.”
The language resonates with the tweet of US President Trump on Puerto Rico: “They want everything to be done for them”. Apparently, some attitudes never change.
US Secretary of State Rex Tillerson held an unusual press conference today in which he denied reports from NBC News that he was close to reigning this past summer because of comments President Trump had made to the Boy Scouts of America. Provocatively, however, he did not directly deny having called the President a “moron”. Tillerson has been undermined by the President on several occasions, most recently when Trump tweeted that negotiations with North Korea were not worth pursuing while Tillerson was in China requesting Chinese help in supporting those negotiations. Discord between the President and his aides seems to be endemic, but seemed also to be directed toward an exclusively American audience. President Trump does not seem to be aware of how foreign audiences and foreign diplomats assess that discord–the net effect is to diminish seriously the credibility of the US in world affairs.
Dani Rodrik is one of my favorite economists–he is smart, intellectually nimble and creative, and engaging. He has written an essay whose title initially caught me short: “Why Nation-States are Good”. Economists generally have a low regard for nation-states because they impede the free flow of the factors of production and often distort markets. Rodrik, however, points out the necessary role of nation-states to establish codes of conduct that make economic transactions possible and which allow markets to coordinate activity more efficiently. It is a well-written and provocative essay.
Peace of Westphalia, 1648
On this day in 1957 the Soviet Union launched a satellite, named Sputnik, and ushered in the Space Age. The satellite was quite small and emitted only a small beep that ham radio operators on earth could hear. The scientific merits of the accomplishment, however, were vastly overshadowed by the strategic implications of the satellite. The USSR proved that it could launch what we would later call an intercontinental ballistic missile (ICBM). The reaction in the US was dramatic–immediately Americans began to ask questions about whether the US was scientifically competitive with the Soviets. More importantly, the US lost the strategic invulnerability sustained by the Atlantic and Pacific Oceans as ICBMs would ultimately be perfected so that the American homeland would be open to a Soviet rocket attack with nuclear weapons.
Defense Secretary Jim Mattis testified before the Senate Armed Services Committee and said that Iran is adhering to the terms of the nuclear agreement: “At this point in time, absent indications to the contrary, it is something the president should consider staying in”. The statement puts Secretary Mattis at odds with President Trump who believes that Iran is violating the “spirit” of the agreement by supporting Hezbollah and by its missile program. Neither of those two concerns are covered by the nuclear agreement. The President must certify to Congress whether he believes that Iran is in “material breach” of the agreement by 15 October. If the President decides to leave the agreement, it is not clear how Iran will respond.
Inside Climate News has published an article about new research on the effects of global warming on ocean water temperatures. Ocean temperatures do not fluctuate as widely as land temperatures and are therefore more reliable indices of actual temperature. Unfortunately, reliable records of ocean temperatures only go back a few decades, so it is difficult to draw conclusions. But recent studies indicate that “[t]he excess energy amassed in the oceans since 1992 is roughly equivalent to 2,000 times U.S. electricity generation during the past decade”. Moreover, “[t]he rate at which the oceans are heating up has nearly doubled since 1992, and that heat is reaching ever deeper waters”.
According to the Pew Research Center, “more than 80 countries either have an official religion or favor one or more religious groups over others”. A fifth of the 199 countries surveyed have an official religion and another fifth have a “preferred” religion. The majority of states with an official religion are Muslim and the majority of states with a preferred religion are Christian. There are some states that repress religion: “In 10 countries, the state either tightly regulates all religious institutions or is actively hostile to religion in general. These countries include China, Cuba, North Korea, Vietnam and several former Soviet republics – places where government officials seek to control worship practices, public expressions of religion and political activity by religious groups”.
Iran has sent tanks and an artillery brigade to bolster Iraqi troops at a border crossing near the Kurdish autonomous area in Iraq. Iran thus joins Iraq and Turkey in an attempt to seal off the Kurdish area after the independence referendum passed with 92% approval. Iraq has closed off air traffic into the Kurdish region and is working hard to prevent movement in and out of it. Iran and Iraq are also holding military exercises together as a show of strength to the Kurds who support independence. With such unified opposition, it is hard to see how the Kurdish independence meeting can succeed.
The tragedy in Las Vegas is horrific and defies analysis–there is so much we do not know and will never know. But it makes us aware of how deeply embedded violence is in many societies. And it will, one hopes, provide an opportunity for Americans to discuss more openly the phenomenon of domestic terrorism. The US spends, literally, billions of dollars on the issue of foreign terrorism, but many more Americans are killed by their fellow citizens than are killed by non-citizens. We should hope that this latest tragedy will force us to answer the question of why it is so easy for these acts of mass murder to occur.
There is a lot of soul-searching in Spain as the violence in Catalonia subsides to a degree. The significance of Catalonia to the entire Spanish economy has been highlighted to a high degree and the violence used to repress the referendum has shattered the legitimacy of the central government. According to The Guardian:
“With 7.45 million people, the region accounts for 16% of Spain’s population. Its €215.6bn (£191bn) economy, larger than that of most countries in the eurozone, generates more than one-fifth of Spanish GDP, while Catalonia’s exports of €65.2bn represent more than one-quarter of the national total. At about €37bn, foreign investment in Catalonia accounts for more than one-quarter of inward investment to Spain.”
Even though the European Union has verbally supported the Spanish government, the President of the Catalonian region, Carles Puigdemont, has asked for the EU to investigate the behavior of the Spanish government. The UN is likely to investigate human rights violations by the Spanish government.
In an extraordinary act, US President Trump rebuffed his Secretary of State, Rex Tillerson. Yesterday. Tillerson indicated that the US was talking directly to North Korea about the impasse over the North Korean nuclear program which is exactly the right thing to do in any serious crisis. Today President Trump tweeted:
“I told Rex Tillerson, our wonderful Secretary of State, that he is wasting his time trying to negotiate with Little Rocket Man….Save your energy Rex, we’ll do what has to be done!”
The comment is telling: apparently President Trump no longer believes that diplomacy can be effective which leaves the use of force as the only alternative. The question is whether Mr. Trump has already decided that force is inevitable. Publicly giving up on negotiations will leave open the question as to whether all non-violent options were exhausted before the decision is made to go to war. Moreover, Mr. Trump made the announcement while Mr. Tillerson was meeting with the Chinese who undoubtedly will think that Mr. Tillerson lacks legitimacy and does not speak for the President. The public humiliation of a nation’s top diplomat is unconscionable.
The Royal United Services Institute is one of the more prestigious strategic think-tanks in the world and it has just released a grim report entitled “Preparing for War in Korea”. The report argues that the likelihood of a war between the US and North Korea is “a real possibility”. The report suggests two different scenarios for such a war and the analysis is thoughtful and well-informed. From the Executive Summary:
War is now a real possibility. With North Korea making rapid progress in its missile and nuclear programmes, time is not on diplomacy’s side. US President Donald Trump and his senior officials have said that America will not tolerate a North Korean ICBM threat to its territory and citizens, and that ‘classical deterrence theory’ is not applicable. The president has told the UN that ‘Rocket Man [Kim Jong-un] is on a suicide mission for himself and for his regime’.
The war could start in a variety of ways: North Korea could strike first if it believed that the US were moving towards a surprise attack; or a US attack might be triggered by North Korean test missiles hitting the ocean near Guam or California.
The critical assumption of the report is that US President Trump will not allow North Korea to develop the capability to strike the US homeland with nuclear weapons. I do not think that this assumption is as solid as the report believes it to be. Trump’s aides have long lived with other adversaries that have had this capability and they may be able to persuade the President that the situation is manageable.
The US Federal Reserve has issued its Survey of Consumer Finances for 2013-16. Its survey of income and wealth in the US during that period is discouraging. According to the report, inequality in the US has deepened to historically troubling levels:
“Data from the 2016 SCF indicate that the shares of income and wealth held by affluent families have reached historically high levels since the modern SCF began in 1989. The share of income received by the top 1 percent of families was 20.3 percent in 2013 and rose to 23.8 percent in 2016 (figure A). The top 1 percent of families now receives nearly as large a share of total income as the next highest 9 percent of families combined (percentiles 91 through 99), who received 26.5 percent of all income. This share has remained fairly stable over the past quarter of a century. Correspondingly, the rising income share of the top 1 percent mirrors the declining income share of the bottom 90 percent of the distribution, which fell to 49.7 percent in 2016.”
Such trends cannot be sustained, economically or politically. People who believe that their futures will only get worse have no stake in maintaining the system which demands their loyalty.
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