World Politics News   Articles for World Politics Course

On the way to Yellowstone, we went through the Grand Tetons National Park. Who cares about what is going on in the world?

This post will be the last one for about a week. I am off to Yellowstone National Park and I hope that I can avoid newspapers and television. A break from news is long overdue. Perhaps when I return home the world will be more peaceful (I doubt it, but my aspiration is to be less frantically disgusted).

US President Trump has cancelled his scheduled trip to Denmark ostensibly because the state would not discuss the sale of Greenland to the US. The US has purchased land from Denmark in the past: the Danish West Indies became the US Virgin Islands in 1917 as the US feared German control of the islands during World War I. The price was $25 million. US interest in Greenland is twofold. First, the US has only a very small territory abutting the Arctic (Alaska) in comparison to Russian territory (west of Murmansk to the North Pole and from the eastern Chukchi Peninsula). As ice in the Arctic melts because of climate change, many states are interested in the region for maritime routes and resources. Second, Greenland has mineral resources that are quite valuable.

But what was once ordinary state behavior in the early 20th century is now regarded as preposterous. It does not appear as if the US overture to Denmark (which controls the foreign policy of Greenland, but not its domestic policy) was well-considered or even more than a brain fart (I really do need a vacation). When the government of Denmark indicated that Greenland was not up for sale, President Trump cancelled his scheduled meeting with the Danish government–a government that historically has been a steadfast ally to the US. Prime Minister Mette Frederiksen made a very diplomatic statement about the cancellation, but did say that the idea of buying Greenland was “absurd”. She went on: “Thankfully, the time where you buy and sell other countries and populations is over…..Let’s leave it there. Jokes aside, we will, of course, love to have an even closer strategic relationship with the United States.” President Trump characterized the response as “nasty”.

A more likely explanation for President Trump’s cancellation is that he is afraid that former President Obama will upstage his visit when Obama visits Denmark at the end of September.

Zachary Karabell has written a fascinating essay for Foreign Affairs which addresses the demographic decline affecting many of the states in the world. Global population is still predicted to increase to about 10 billion by the middle of the century, but several countries, like Germany and Japan, but also countries like China and India, are experiencing fertility rates less than replacement. A slowdown of population growth would undoubtedly be better for the global environment, but only if people stopped consuming so much. The demographic decline may make that possible:

“No capitalist economic system operates on the presumption that there will be zero or negative growth. No one deploys investment capital or loans expecting less tomorrow than today. But in a world of graying and shrinking populations, that is the most likely scenario, as Japan’s aging, graying, and shrinking absolute population now demonstrates. A world of zero to negative population growth is likely to be a world of zero to negative economic growth, because fewer and older people consume less. There is nothing inherently problematic about that, except for the fact that it will completely upend existing financial and economic systems. The future world may be one of enough food and abundant material goods relative to the population; it may also be one in which capitalism at best frays and at worst breaks down completely.”

The shift should not be surprising. Capitalism developed when there were about 700 million people on the planet and in a region of the world (Europe) where scarcity was the main feature of human existence. Its emphasis on production led to the pillaging of the environment; its neglect of consumption will perhaps be its final undoing.

For the 11th weekend in a row, protesters mobbed the streets of Hong Kong, and the number of protesters seemed to be the largest so far. The protesters moved back into the streets and away from the airport, a strategy designed to reduce the economic backlash against the protests. President Xi is faced with difficult choices. The People’s Liberation Army has some troops stationed in Hong Kong and there are apparently more troops being massed outside the city. But the use of troops would remind too many people of the brutal repression of the 1989 protests in Tiananmen Square. And harsh repression would damage the city’s reputation as a safe place for foreign investors. President Trump also faces a difficult choice. Many Congresspeople have condemned the treatment of Hong Kong by the Beijing government, but President Trump has so far refused to criticize openly President Xi. The protesters also have difficult choices. They have clearly made their point: do they also demand that Beijing back down? Or is there some way to manage the issues without push coming to shove?

For the last few weeks, an Iranian oil tanker, the Grace I, has been held in Gibraltar, accused of violating sanctions against Syria. The seizure was part of the US policy of “maximum pressure” against Iran and was designed to deprive Iran of necessary oil revenues. Gibraltar is a British colony and it has decided to release the oil tanker. The US issued a warrant to seize the tanker on the grounds that it was associated with the Iranian Revolutionary Guard and therefore associated with terrorism. The government of Gibraltar rejected the warrant. Al Jazeera explains the decision:

“Gibraltar’s government said on Sunday it could not comply with the US request because of European law.

“‘The Central Authority’s inability to seek the Orders requested is a result of the operation of  European Union law and the differences in the sanctions regimes applicable to Iran in the EU and the US,’ the government said in a statement.

“‘The EU sanctions regime against Iran – which is applicable in Gibraltar – is much narrower than that applicable in the US.’

“Iran has denied the tanker was ever headed to Syria. 

“Al Jazeera’s Andrew Simmons, reporting from Gibraltar, said the authorities in the overseas British territory had determined that US sanctions on Iran were not applicable in the EU.

“‘The US action is based on US sanctions, while the action taken by Gibraltar and the UK was enforced under EU sanctions, and as far as that issue goes there is compliance now. There was an assurance [from Iran] that this cargo on board, 2.1 million barrels of light crude oil, is not destined for Syria,’ he said. “

The British decision to repudiate the US position is a serious setback for the US government. The ship changed its name to the Adrian Darya-1 and set sail flying an Iranian flag, not the Panamanian flag of the Grace I.

The Economic Policy Institute has published its report on the compensation of Chief Executive Officers (CEOs) in the United States. The data confirm the trend toward economic inequality:

“Average pay of CEOs at the top 350 firms in 2018 was $17.2 million—or $14.0 million using a more conservative measure. (Stock options make up a big part of CEO pay packages, and the conservative measure values the options when granted, versus when cashed in, or “realized.”) CEO compensation is very high relative to typical worker compensation (by a ratio of 278-to-1 or 221-to-1). In contrast, the CEO-to-typical-worker compensation ratio (options realized) was 20-to-1 in 1965 and 58-to-1 in 1989. CEOs are even making a lot more—about five times as much—as other earners in the top 0.1%. From 1978 to 2018, CEO compensation grew by 1,007.5% (940.3% under the options-realized measure), far outstripping S&P stock market growth (706.7%) and the wage growth of very high earners (339.2%). In contrast, wages for the typical worker grew by just 11.9%.”

The report notes that the stock options often granted in compensation packages have increased dramatically in value as the stock market has gone up, often because of the buy-backs that were stimulated by the tax changes made by the US Congress in 2017.

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.

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.

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.

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.

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.