The US intends to station 250 troops and heavy military equipment in several NATO countries close to the Russian border in response to Russian activities in the region. The moves could violate the 1997 NATO-Russian Founding Act of 1997 signed by US President Clinton and Russian President Yeltsin. This move comes after the European Union voted to extend sanctions against Russia for another 6 months. The world could be moving into a second Cold War if these moves and countermoves continue to escalate.
The Greek tragedy continues, although it is difficult to know exactly what the current situation is. Over the weekend, Greek Prime Minister Tsipras presented a plane to the troika which was labeled as “promising” by some of the participants. In essence, if the news reports are to be believed, Tsipras capitulated on most of the major points, accepting the terms that were available 5 months ago (a lot of drama, little results). But now the issue is whether Tsipras can get his party to accept the terms, and there is a possibility that the deal will be rejected by Syriza hardliners. If that happens, then Tsipras will either have to call for a referendum on the deal or to seek new elections to form a new government. In short, with the deadline of 30 June as the absolute deadline (unless the troika decides to change the rules), we still do not know what will happen.
A UN Commission of Inquiry has found that both Israel and Hamas committed war crimes during the Gaza war of 2014. The New York Times summarized the finding of the Commission in this way:
- The report says 65 percent of 2,251 Palestinians killed were civilians, down from earlier United Nations estimates.
- Israel says it has documented militant activity by at least 44 percent of the dead.
- The report mainly refers to “Palestinian armed groups,” rather than Hamas, which controls Gaza and led the fight against Israel.
- Israel blocked investigators and declined to answer questions, as did Hamas; the Palestinian government cooperated.
- The report cites the killing of 21 suspected collaborators by Hamas’s armed wing and Israeli operations in residential neighborhoods as possible war crimes.
Both Israel and Hamas rejected the findings of the Commission, but there is no statute of limitations on war crimes. The matter will likely be pursued at some point in the future.
The newly elected President of Nigeria, Buhari, has made considerable progress in a very short period of time in at least setting a better tone for the political and economic stability of the country. Most importantly, the military has been able to get a handle on the violence inflicted by Boko Haram. The insurgency is still alive, but it is no longer making substantial territorial gains. The roots of the insurgency are easy to visualize by looking at the distribution of wealth in the country which is weighted toward the south and Christian part of the country. The larger issue, whether Nigeria can free itself of the corruption that compromised the economic potential of the country so severely. In that respect, President Buhari has a strong favorable reputation.
In about a year, the US Navy will launch its newest aircraft carrier, the U.S.S. Gerald Ford. It will be the largest vessel ever launched:, 1,092 feet long and it will displace 100,000 tons. It will be serviced by about 4,000 sailors and will carry 75 aircraft. The US currently has 10 aircraft carrier groups and no other country comes close to that number. The Ford will cost about $13 billion when it is completed.
Number of aircraft carriers by operating nation
| United States |
10 |
2 |
56 |
3 |
12 |
68 |
| India |
2 |
0 |
1 |
1 |
0 |
3 |
| Italy |
2 |
0 |
0 |
0 |
2 |
2 |
| China |
1 |
0 |
0 |
1 |
0 |
1 |
| Spain |
1 |
1 |
1 |
0 |
1 |
3 |
| France |
1 |
0 |
7 |
0 |
7 |
8 |
| Russia |
1 |
0 |
6 |
0 |
2 |
7 |
| Brazil |
1 |
0 |
1 |
0 |
0 |
2 |
| Thailand |
1 |
0 |
0 |
0 |
0 |
1 |
| United Kingdom |
0 |
0 |
40 |
2 |
12 |
40 |
| Japan |
0 |
0 |
20 |
0 |
4 |
20 |
| Australia |
0 |
0 |
3 |
0 |
0 |
3 |
| Canada |
0 |
0 |
3 |
0 |
0 |
3 |
| Argentina |
0 |
0 |
2 |
0 |
0 |
2 |
| Netherlands |
0 |
0 |
2 |
0 |
0 |
2 |
| Germany |
0 |
0 |
0 |
0 |
8 |
0 |
The typical CEO made about 300 times more than the typical worker in 2014. That ratio is not as extreme as the record of 376:1 in 2000, but it is still higher than most periods in American history. The rate of increase for CEO compensation has been extraordinary over the last 47 years:
“From 1978 to 2014, inflation-adjusted CEO compensation increased 997 percent, a rise almost double stock market growth and substantially greater than the painfully slow 10.9 percent growth in a typical worker’s annual compensation over the same period.”
It is very difficult to figure out a justification for the increasing discrepancy in terms of traditional concerns on what constitutes appropriate compensation for a good day’s work.
Marjory Wentworth was a student in the very first class I ever taught at Mount Holyoke College. She is now the Poet Laureate of South Carolina and she has written a poem, “Holy City”, to commemorate the lives of the people who were killed in the shootings at the Emanuel A.M.E. Church in Charlston. She recites the poem for the BBC.
The opposition party in South Africa has called for an investigation into why Sudanese president Omar al-Bashir was allowed to leave the country without being arrested. Bashir is under indictment by the International Criminal Court for war crimes and crimes against humanity in the war against his people in what is now South Sudan. South Africa, unfortunately, not alone among African countries that have failed to honor the arrest warrant for Bashir. African states are deeply suspicious of the International Criminal Court since the majority of its cases have been pursued against African leaders.
Ambrose Evan-Pritchard is an economic journalist who I regard very highly even though his analyses are usually contrary to the “mainstream” view. His views on the bad behavior of the troika in its dealings with Greece are similar to mine. In his most recent column he wrote:
“The spectacle is astonishing. The European Central Bank, the EMU bail-out fund, and the International Monetary Fund, among others, are lashing out in fury against an elected government that refuses to do what it is told. They entirely duck their own responsibility for five years of policy blunders that have led to this impasse.”
To get an idea of how far Greece has gone in its reforms, check out this chart on the “primary” government budget surplus among the various states in the EU. The primary budget surplus is the budget surplus (or deficit) without including debt repayments. Greece has cut its expenditures far beyond the norm in Europe.
The number of displaced persons in the world is the highest ever recorded by the UN High Commissioner on Refugees: 60 million. These people have been displaced by conflicts in their own countries and the number of refugees–who have fled their own countries–in 2014 reached 14.4 million. The largest number of refugees come from Syria, but six of the main sources of refugees are African countries. The circumstances of these displaced persons are miserable.
There were large protests throughout Great Britain against the austerity programs proposed by the newly empowered Conservative government. The protesters were a loose amalgam of groups who do not wish to see any further budget cuts to public sector services. The fear is that with its large majority in Parliament, the government will seek to balance the budget at the expense of vulnerable parts of the population. According to Reuters:
“Since winning the election, finance minister George Osborne has said he wants government departments to make extra cuts this year and to commit future governments to run budget surpluses during normal economic times.
“The government also plans to reduce spending on social security benefits by a further 12 billion pounds ($19 billion), arguing that high levels of public debt make Britain vulnerable if there is another global financial crisis.”
One wonders if the British government will pay attention to the recent IMF report that suggests that austerity programs rarely work.
Apparently, frantic negotiations are going on over the weekend between Greece and the troika as both sides try to avoid a Greek default. If these talks do not yield a compromise, then many expect that Greece will be forced to implement capital controls on its banks in order to prevent people from withdrawing their money out of Greek banks to avoid losing money in the case of a default. If the talks fail, then it is likely that Greece will have to take action on Monday. So we should all watch to see what happens on Monday–we could witness a genuine bank run if it appears as if reconciliation is hopeless.
As the Greek crisis continues to unfold, both sides continue to blame each other for the impasse. There is little question that Greece dug a good part of the hole in which it currently resides, and the owners of Greek debt made the loans in good faith that the debts would be repaid. But since 2010, Greece has followed the austerity policies of the troika and, as a result, its economic growth has plummeted. Declining economic activity actually makes the debt grow relative to the overall economy. So the parts of the hole that have been dug since 2010 is due almost exclusively to the troika’s misguided policies, and Greece has made huge cuts to his government budget in order to comply. What hasn’t changed is the demand of the troika for full repayment even though its policies have truly harmed Greece’s ability to repay. Perhaps it is time for some of the pain to be shared by the troika, and a willingness to take some losses on the debt.
A new study indicates that human beings are responsible for the “sixth” great extinction. There have been five previous periods in Earth’s history where a large number of species died off. In the worst, 250 million years ago, 96 percent of marine species and 70 percent of land species died off. According to the new study, “…the rate of extinction for species in the 20th century was up to 100 times higher than it would have been without man’s impact.”
The Global Peace Index measures violence and the fear of violence in different countries. It uses a set of quantitative and qualitative indices to measure the level of fear, and by these measures the world spent $14 trillion in 2014 to address the problem of violence. The highlights of the annual report are:
- Since last year, 81 countries have become more peaceful, while 78 have deteriorated.
- Many countries in Europe, the world’s most peaceful region, have reached historically high levels of peace. 15 of the 20 most peaceful countries are in Europe.
- Due to an increase in civil unrest and terrorist activity, the Middle East and North Africa is now the world’s least peaceful region for the first time since the Index began.
- Globally the intensity of internal armed conflict has increased dramatically, with the number of people killed in conflicts rising over 3.5 times from 49,000 in 2010 to 180,000 in 2014.
- The economic impact of violence reached a total of US$14.3 trillion or 13.4% of global GDP last year.
Unfortunately, most of the world’s population (2 billion) live in the 20 least peaceful countries while a minority (500 million) live in the 20 most peaceful countries.
Pope Francis issued his encyclical “Laudato Si (Praise Be), On the Care of Our Common Home“, and the language of the encyclical is straightforward and harsh:
1. “Laudato si’, mi’ Signore” – “Praise be to you, my Lord”. In the words of this beautiful canticle, Saint Francis of Assisi reminds us that our common home is like a sister with whom we share our life and a beautiful mother who opens her arms to embrace us. “Praise be to you, my Lord, through our Sister, Mother Earth, who sustains and governs us, and who produces various fruit with coloured flowers and herbs”.
2. This sister now cries out to us because of the harm we have inflicted on her by our irresponsible use and abuse of the goods with which God has endowed her. We have come to see ourselves as her lords and masters, entitled to plunder her at will. The violence present in our hearts, wounded by sin, is also reflected in the symptoms of sickness evident in the soil, in the water, in the air and in all forms of life. This is why the earth herself, burdened and laid waste, is among the most abandoned and maltreated of our poor; she “groans in travail” (Rom 8:22). We have forgotten that we ourselves are dust of the earth (cf. Gen 2:7); our very bodies are made upof her elements, we breathe her air and we receive life and refreshment from her waters.
Most analysts have concentrated on the Pope’s analysis of the problem of climate change. But his more important analysis has to do with the link between inequality and the environmental crisis:
56. In the meantime, economic powers continue to justify the current global system where priority tends to be given to speculation and the pursuit of financial gain, which fail to take the context into account, let alone the effects on human dignity and the natural environment. Here we see how environmental deterioration and human and ethical degradation are closely linked. Many people will deny doing anything wrong because distractions constantly dull our consciousness of just how limited and finite our world really is. As a result, “whatever is fragile, like the environment, is defenceless before the interests of a deified market, which become the only rule”.
The Greek Parliament established it Truth Committee on Public Debt in April 2015. Today it published its Preliminary Findings and used the term “odious debt” to describe the current circumstances of Greece. Odious debt is considered an illegitimate debt that does not need to be repayed. The Executive summary describes the debt in these terms:
“All the evidence we present in this report shows that Greece not only does not have the ability to pay this debt, but also should not pay this debt first and foremost because the debt emerging from the Troika’s arrangements is a direct infringement on the fundamental human rights of the residents of Greece. Hence, we came to the conclusion that Greece should not pay this debt because it is illegal, illegitimate, and odious.”
The Report concludes with an attack the International Monetary Fund, The European Central Bank, and the European Commission:
“Having concluded a preliminary investigation, the Committee considers that Greece has been and still is the victim of an attack premeditated and organized by the International Monetary Fund, the European Central Bank, and the European Commission. This violent, illegal, and immoral mission aimed exclusively at shifting private debt onto the public sector.”
The report certainly strengthens the hand of Prime Minister Tsipras but points to a repudiation of the debt. A Greek default is looking more and more likely.
Relations between the Dominican Republic and Haiti, which share the same island of Hispaniola, have never been very good. Haiti is significantly poorer than the Dominican Republic, and there is significant racial prejudice against Haitians within the Dominican. The Dominican Republic has begun a massive drive against Haitian immigrants and deporting them back to Haiti. The drive is reminiscent of a massacre against Haitians which occurred in 1937, and resonates strongly with the anti-immigrant hysteria that seems to be affecting countries all across the planet.
Hungary is also part of the anti-immigrant campaign. But it is going one step further and building a security fence along the entire Hungarian-Serbian border to prevent the influx of refugees from Serbia. The refugees come largely from Syria, Iraq, and Afghanistan, but the EU has a rule (called the Dublin Regulation) which places the initial responsibility for asylum on the state first processing the refugees. The current right-wing government of Hungary is not at all sympathetic to the plight of the refugees.
Greek Prime Minister Tsipras accused Greece’s creditors of “criminal responsibility” and of trying to humiliate Greece. The harsh rhetoric did not sit well with the economic ministers that are scheduled to meet for the last time this weekend. Tsipras is holding to a very hard line, but the troika is doing so as well. Such rhetoric is not unusual at the moment just before a crisis breaks, but both sides are going to have a difficult time walking back their words if a compromise is eventually found.
It did not take long for Russia to respond to the US decision to place heavy equipment and more troops in the Baltic states and other eastern European states. Russia President Putin announced that Russia would increase its intercontinental ballistic missiles by 40 in order to address what he termed as the US attempt to place anti-ballistic missiles in eastern Europe. President Putin has referred to the Russian nuclear capability on a number of occasions since the Ukrainian crisis developed, and the implicit message is that Putin believes that Russia should be taken more seriously in world affairs because of that capability. It is a strong but dangerous message.
Abdel Bari Atwan is one of the Arab world’s most respected journalists and he has written a new book on the Islamic State that will be published in September. It is reviewed in The New York Review of Books and the book apparently does a very good job of explaining the attractiveness of the Islamic State and its ability to run the affairs of the caliphate in the manner of a traditional state. Its application of sharia law seems barbaric to many in the West, but Atwan argues that the Islamic State is a very disciplined and ordered state. The West would be well advised to shed its misconceptions about the IS and deal with the group as an adversary not completely dissimilar from other non-liberal states that it has faced in the past.
The US Congressional Research Service is well-known for its ability to present information in a fairly objective manner (no source is free of bias). It has released an analysis of US-Israel relations which is substantive and filled with information that is not readily available from news sources. It was released on 1 June and is up-to-date.
The IMF has just issued a report on income inequality which essentially refutes the distributional model of market capitalism which is colloquially termed “trickle-down.” The report finds that:
“We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down.”
The study seems to be fairly comprehensive: ““159 advanced, emerging, and developing economies for the period 1980–2012.” It remains to be seen whether the IMF pays any attention to its own research.
The US is planning to send heavy military equipment and about 5,000 troops to the Baltic states and other eastern European countries. The move, which has not yet been fully approved by the Defense Department, is designed to send a message to Russian President Putin that NATO is not willing to accept any further Russian moves like the one in Crimea. Of course, the Russians will interpret the move as an attempt by the West to encircle and contain Russian aspirations. A classic case of the security dilemma.
The slow motion train wreck that has impoverished Greece over the last five years seems to be coming to a head, although many have thought the end point had come many times earlier. So one should not think that a Greek default is inevitable. But talks between the Greeks and the troika broke down over the weekend and the Greeks refused to make any changes to their pension plans. The complete Greek payment to the IMF is due on 30 June, but the Greeks have already missed the full installment and it is unlikely that the Greeks can come up with the full amount if they could not make the first payment.
Today is the 800th anniversary of the signing of the Magna Carta. It was an agreement between King John of England and 40 nobles who were tired of being taxed by the King to finance his failing war against France. Many regard the document as the beginning of what we now know as liberal society. Its most important clause reads: “no free man shall be seized or imprisoned, or stripped of his rights or possessions, or outlawed or exiled, or deprived of his standing in any other way, nor will we proceed with force against him, or send others to do so, except by the lawful judgment of his equals or by the law of the land.” King John repudiated the document a month after it was signed, but the idea of restraints on the monarchy was an idea that refused to die.
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