Month: January 2020

(Yes, I know, another caucus state).

OVERVIEW: After two losses, Biden needs a win here. Sanders and Warren continue to battle for supremacy in the progressive lane. Mayor Pete tries to prove he’s still relevant.

THE PREDICTION: Biden gets his win. Sanders is second. It’s starting to look like a two person race. A 2016 sequel, anyone?

Attacking billionaires is a staple of both the Sanders and Warren campaigns. But does America really hate billionaires?

Absent evidence of wrongdoing, I don’t think so. I suspect most Americans think of billionaires as superstar capitalists who have created a product that improved society, movie stars, and extremely successful pro athletes. Those people have all legitimately earned their money in one way or another, without injuring the rest of us. The public does not resent them for it.

For Warren and Sanders to make the argument stick, they need to provide more details about who the billionaires really are, how little they actually did to earn their money, and how they are screwing over the rest of society in their own interest. Thus far, I haven’t seen that level of sophistication in their campaigns.

Trump and Pompeo claim that they have made America safer by killing Suleimani. Are they right?

It depends on the answers to two questions:

1. Do the immediate benefits of killing Suleimani exceed the down sides?

2. Does Trump have the finesse to avoid climbing the escalation ladder to a full scale conflict?

My reactions are as follows:

1. The first question is complicated; for one thing, you have to know how replaceable Suleimani really was, from the Iranian perspective. The gist of this appears to be clear, however. The Iranians have repudiated the nuclear agreement, thereby bring their bomb much closer. The Iraqis are in the process of throwing us out of their country. Our allies are unhappy with us. Oil prices are up, and the markets are down. Does the loss of Suleimani’s ability as a tactician and fixer to cause trouble balance that? Not likely, which is why the Israelis, who had more reason to kill him than anyone, and the ability to do it, never did.

2. The man with the golden gut, who is already threatening to commit war crimes in Iran? Are you kidding me? His instincts will always be to use disproportionate force, which is a recipe for war.

OVERVIEW: This is a steel cage match between Sanders and Warren for the lead in the progressive lane. The other candidates don’t matter much.

PREDICTION: Sanders wins, and deals a serious blow to Warren’s hopes of winning the nomination. The others aren’t particularly close, and don’t care.

(Yes, I know Iowa has caucuses, not a primary, but the series will primarily encompass, well, primaries).

OVERVIEW: There are several races within the race here. Biden doesn’t have to win, but a victory here would make his ultimate success look nearly inevitable. Sanders doesn’t need to win, either; his principal competition at this point is with Warren, with whom he will subsequently face off in New Hampshire. Given the amount of time and resources she has poured into the state, Warren needs to win, period. So do Mayor Pete and Klobuchar; given their lack of minority and progressive support, their only hope is to ride a bandwagon that starts here. The rest are also-rans.

THE PREDICTION: Warren has the best organization here. She relies on it to pull out a narrow victory, but it isn’t enough to give her much of a bounce. Biden, Mayor Pete, and Sanders are all close behind. Klobuchar is nowhere close, and ceases to be a factor in the race.

Inevitably citing statistics to the effect that America spends more money on its military than the next ten nations combined, Sanders argues that his programs can be paid for, in part, with large defense cuts. Is that a good idea?

It is important to realize that the statistics are a little bit misleading; the defense budget is driven up by the needs of an all-volunteer army and, of course, soaring health care costs. As a result, per capita, we have to spend a lot more than the Russians and the Chinese for a similar product.

The bigger issue, however, is whether it makes sense to slash the military at a time when the Russians and Chinese are looking more and more threatening, and wars with Iran and North Korea could be just around the corner. The good guys need an army, too, and the EU certainly isn’t going to provide one. Yes, we need to put more effort and resources into diplomacy, but diplomacy without an effective military isn’t going to deter Putin or Kim.

Defense improvements, certainly. Nibbles, maybe. Large cuts–now is not the time.

Imagine that you are the President of Iran. How would you retaliate? Here is my analysis:

1. THROW THE AMERICANS OUT OF IRAQ: This would be the time to make a peaceful effort to persuade the Iraqi government to order the Americans to leave. There would be opposition from forces hostile to Iran, but it might work under the present circumstances. THE PROGNOSIS: Certain.
2. CYBERATTACKS: Cyberattacks can do plenty of damage to America without running very much risk of a military response. The only question is whether the Iranians have much ability to pull it off. You can probably assume they do. THE PROGNOSIS: Virtually certain.
3. MILITIA ATTACKS ON AMERICAN FORCES IN IRAQ, INCLUDING THE EMBASSY: These would probably fail miserably–you’re outgunned, and the political consequences would be negative. THE PROGNOSIS: Only if the militia groups do it on their own, which is possible.
4. STRIKES ON SAUDI OIL FACILITIES: They wouldn’t be a direct attack on the Great Satan, but they would do lots of harm, and they have a good chance of success. THE PROGNOSIS: Possible.
5. DIRECT OR PROXY ATTACKS ON ISRAEL: The present issue is with America, not Israel, and the Israelis are fully prepared. THE PROGNOSIS: Unlikely, as the risks outweigh the rewards.
6. CLOSE THE STRAITS OF HORMUZ: You need diplomatic support, and this is a good way to lose it. Rogue actions by elements of the Revolutionary Guard are a real possibility, however. THE PROGNOSIS: If they happen, they will be unauthorized.
7. TERRORIST ATTACKS ON SOFT AMERICAN TARGETS: There are so many possibilities, they are hard to analyze. THE PROGNOSIS: Unknown.

Given the events of the last few days, and Suleimani’s unique value as a target, you can understand the decision to kill him. Nevertheless, it can only be described as an act of war, and the Iranians will undoubtedly treat it as such. Even if the government doesn’t, the Revolutionary Guards will, and they are perfectly capable of taking action on their own.

You know what happened the last time the world saw an act of political violence of this nature. This has the potential to take our country, and the world, to some very dark places. It could well make our politics uglier, exacerbate our divisions, and even threaten our civil liberties, to say nothing about terrorism and the impact on oil prices.

I desperately hope I’m wrong, and that both the Iranians and Trump–now no longer restrained by any adults in the room–will pull back from the brink. Knowing the nature of both, it’s hard to be optimistic.

Now that’s starting the new year off with a bang!

The Iranians and the Iraqi militias are bound to retaliate in a big way. Hold on to your hats–some really serious turbulence is coming, and soon.

Given that Trump is apparently scheduled to sign his Phase I deal with the Chinese later in the month, it is appropriate to review what the issues are, where we are in the negotiations, and what we are trying to accomplish.

Trump has given a variety of rationales for the war over time. Here is at least a partial list of them, with my responses:

1. THE MONSTROUS BILATERAL TRADE DEFICIT REPRESENTS THE THEFT OF AMERICAN RESOURCES BY THE CHINESE. THAT HAS TO BE STOPPED. In reality, the trade deficit is the product of an immense number of perfectly reasonable private decisions on investment and consumption; it says nothing about the respective wealth of the affected nations. It appears that America’s bilateral trade deficit with China has been reduced as a result of the war, but the effect of the tariffs has been to move production from China to other nations with low labor costs–not to bring it home. As a result, our overall trade deficit has actually gone up. This was, and is, the dumbest possible reason to engage in a trade war.
2. CURRENCY MANIPULATION IS A PROBLEM THAT NEEDS TO BE ADDRESSED. Not really. The Chinese stopped manipulating their currency in a mercantilist way years ago. This is a classic effort to refight a war that is already over.
3. WE NEED TO PROTECT AMERICAN INTELLECTUAL PROPERTY. This is a legitimate issue that was fought by Obama with limited success before Trump took office. As the Chinese economy moves upstream, however, Chinese producers will want increased protection for intellectual property, as well. The problem will probably solve itself over time without a trade war.
4. WE NEED BETTER ACCESS TO CHINESE MARKETS. Another legitimate battle, but one that is better fought with allies. Trump views the EU in some respects as being worse than the Chinese, which makes progress difficult.
5. WE NEED TO STAMP OUT CHINESE MERCANTILIST ACTIONS IN THE TECH FIELD THAT PRESENT A DANGER TO OUR NATIONAL SECURITY. Finally, a battle worth fighting! If Trump’s focus was on this issue, rather than the last war, I would feel better about it. The problem here is that the Chinese are never going to agree to make fundamental changes to their political and economic systems, which is what Trump is essentially demanding, simply as a result of American tariffs. It is doubtful that even the assistance of the EU would do the trick. In the long run, we will have to decide whether we are going to engage in similar behavior in order to compete, or not; it is our response, not the actions of the Chinese, that are really open to debate. Phase II, which is supposed to address this issue, will go nowhere.

History and recent practice tell us that economic sanctions can result in regime change, or at least a change in course, if the offending government doubts its own legitimacy, or if the offensive behavior is not viewed as being particularly important to the regime. Otherwise, sanctions only result in misery for the general public, and give the regime a convenient excuse for its failures. That has certainly been the case in North Korea, Cuba, Venezuela, and Iran.

It has been noted, even by his friends, that Trump is an admirer of Orban’s Hungary. So how could we get to an illiberal democracy from here? Let me count the ways:

1. POLITICIZE LAW ENFORCEMENT: Use all of the legal powers at your disposal to reward your friends and punish your enemies. The word will get out quickly.

2. REMAKE THE JUDICIARY IN YOUR IMAGE: Most of your opponents will be deterred simply by the potential of enforcement actions, but not all. You will need a friendly judiciary to take care of the rest. This is a very high priority item.

3. STIFLE THE INDEPENDENT MEDIA: This is easier in Hungary than it is here. You probably need an emergency to create the necessary legal basis. A wag-the-dog war, anyone?

4. STACK THE ELECTORAL DECK: Gerrymandering, voter suppression, and large campaign contributions from people and corporations who depend on your goodwill are the key here.

5. DEMONIZE YOUR OPPONENTS: You can always find some group of evil outsiders who are to blame if things go wrong for your government.

Does any of this ring a bell? If it doesn’t, it certainly should.

Bret Stephens thinks Elizabeth Warren’s personal success proves that her argument about the “rigged” system is incorrect. Some Sanders supporters believe that her representation of corporate clients during her tenure as a Harvard professor is proof that she is a faux populist. Are they right?

I’m not a Warren supporter, but the answer is no. As to the Stephens allegation, Warren always makes it clear on the stump that she was only able to overcome her economic disadvantages because tuition was cheap back in the day; that is no longer true. On the representation issue, Warren only made a tiny fraction of the amount of money that was available to her, given her reputation. Anyway, her willingness to take on business clients is evidence of a degree of open-mindedness that all of us should welcome.

The big story for 2020, of course, is the American election; I will address that in a series of posts next week. Here are the other major themes for the year:

1. WAR WITH IRAN?: It is clear that Trump doesn’t really want war with Iran, but, given his ego and his lack of finesse, he could still easily blunder into one. A small scale war is more probable than not.

2. THE RETURN OF “LITTLE ROCKET MAN”: Kim makes lots of new threats and shows off his improved weaponry. Trump continues to argue (implausibly) that the status quo represents some sort of a success, so he ignores him. Without openly conceding the point, we ultimately wind up with deterrence, not preemption, as our position, which is probably where we should have been in the first place.

3. AND YOU THOUGHT BREXIT WAS OVER!: The absurdly optimistic date for reaching a free trade agreement with the EU comes and goes; Boris, seeing no domestic political advantage to no deal under the new circumstances, lets it slip. There is lots of noise about independence from Edinburgh and Belfast, but no real action . . . yet.

4. THE RETURN OF EU PROTECTIONISM: Tech taxes and carbon-based tariffs are all the rage in the EU, which has become increasingly determined to show its independence from the US. Trump fumes and threatens a new trade war, but puts it off until after the election, fearing adverse political consequences from an economic slowdown.

5. THE HONG KONG PROTESTS DIMINISH: The freedom fighters get tired, and there are no new major provocations. Beijing counts that as a victory; the government starts to chip away quietly at the opposition through abductions and prosecutions. The PLA stays in its barracks.