Secular Stag Out of the Barn & How Trump and Obama Remain Parochial Presidencies

When Lawrence Summers went back to the old keynesian playbook to justify a faltering economy of ultra low interest rates, militant intervention and macro-prudential efforts, he found the canard of secular stagnation a useful term to explain how (why) the U.S. economy was faltering.  The term originated under Alvin Hanen during the 1930’s, this is significant because it helps federal reserve pundits evade responsibility by citing weather or political events as catalysts.  In reality, its a snow job performed by highly credentialed people who can’t accept limitations upon their socialist mien.

So what accounts for a seemingly booming economy in year one of team Trump.  In a word:  credibility.

Even still, both Obama and Trump remain domestic presidencies, although for different reasons.  Differences in temperament and style matter if only to detail the overwhelming power of a television medium in American political life. With a credible presidency like Trump’s, we still have more continuity than change in our foreign policy.

The American habit of actively promoting liberalization abroad was deeply curtailed by both presidencies.  With both men, America had to learn to step back from global responsibilities.  Their strategic thinking was the primacy of the domestic over foreign affairs.  Both are correct to think that war must have a domestic constituency if the country is to marshal resources to counter threats.

For Obama, the costs of leadership were’t bearable.  His ever shifting framework of engagement in Iraq while sustaining a surge in Afghanistan unraveled with emerging contingencies in Syria, Libya, Yemen, Ukraine, and the Arab Spring.  All this happened before the South China Sea became hot.

What both men had to conquer was a truism that both flenched from:  that military means remains the principal determinant in geopolitics and a favorable balance of power in the contested commons.

We have yet to see how this inward turning reflection away from maintenance of a favorable global order turns out.  By a realist reckoning, we’re in for hard surprises given the state of our alliances, our domestic appetite for engagements abroad and the need to reform our war fighting industrial base.

When Obama stepped back from the benchmark that American dominance meant a continued military supremacy to fight and win two major wars continuously, it wrecked the post war consensus developed by Truman and fortified under Reagan.  This two war standard meant that an Imperium with vital global security interests in Europe, the Near East, East Asia and the Levant meant that we had to field and deliver a guarantee of order, or risk perishing.

The doctrine that we had to be viable in multiple theaters began with the Vinson-Walsh Two Ocean Navy Act of 1940.  It lasted until 2012.

Under Obama, the Vinson-Walsh doctrine meant that America had only to defeat the first aggressor and punish the second. Combining a unilateral drawdown in Mesopotamia and Afghanistan, regardless of conditions on the ground ushered in a hollow pivot to Asia resulting in an American posture that only sought global punitive measures elsewhere.

Our current Defense Secretary and budget has had to live with the consequences since.

Under team Trump, he’s acknowledged the reality that America has near peer competitors and our hollowed out industrial base must be fortified with a new nuclear triad. The old two war templates envisioned by Vinson-Walsh has been updated to reflect rising revisionist powers seeking regional hegemony with global aspirations to shape a contested commons out from Bretton-Woods.

Simply put, restoring the post WWII international order is beyond America’s grasp.

Here’s my judgement on this matter:  the timidity of both Obama and Trump in renouncing a moral ethos that underwrote our exceptionalism has failed to secure the present or shape our immediate future.  In this shortsightedness, both men have walked away from the promise of American life laid out by the founders, fortified by previous presidents and bled by soldiers in fields throughout the planet.

The moral foundations of liberty must be renewed.


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Hafiz Saeed, Pakistan’s Proxy & America’s Long Vision for SW Asia

Contemporary analysts don’t study military history, specifically civil military relations.  Its reserved for generals who attend secular universities or the uncommon scholar who insists on studying varying political regimes and their dependent relations with the United States.  When McMaster wrote Dereliction of Duty: Johnson, McNamara, the Joint Chiefs of Staff & the lies the led to Vietnam, he insisted that a proper study of the conflict would entail sufficient reflection on civil military relations and its corrupting influence on policy formation throughout the changing nature of the conflict.

What McMaster knew played out in America’s limited reach throughout Southwest Asia.  Pakistan and by extension, Afghanistan isn’t a humbling case study regarding the limits of American power, for McMaster and others residing in the American defense establishment recognized that war as formal policy cannot change the domestic consensus of regional allies, especially those that are feudal.  Japan, Germany, and a dozen other countries have proved otherwise, but American calculus was always limited; it always sought to strengthen alliances before relying on unilateral power abroad.

Immediately after 9/11, U.S. policy in Pakistan was to defend Islamabad’s nuclear arsenal from falling into the hands of jihadi’s.  Its second aim was to destroy al-Qaeda and other regional allies from developing bases in Afghanistan.  It is this policy that has proved indomitable.

The chronic, triangular mistrust can be sourced to the Obama administrations desire to withdraw from both Mesopotamia and Southwest Asia, this encouraged Islamabad to field plans to secure its rear in Afghanistan by fomenting civil war by proxy in the hope of displacing New Delhi’s interests in Kabul.

Pakistani interests are difficult to disentangle from the feudal state it stokes domestically.   Islamabad openly promotes jihadi’s on both sides of Durand while justifying its outsized claims on state resources.  Both domestic objectives have damaged Islamabad’s relations with its dominant partner while fracturing its tenuous hold on domestic jihadi’s.

The canard that the American’s lacked a coherent geopolitical vision for Southwest Asia was always wrong and shortsighted.  Written by academics with no formal experience or training in the region; sighting a fatal ambiguity that endures sells media coverage, but it cannot account for the duplicitous nature of Islamabad.  Evidenced in its handling of both domestic drone strikes and Hafiz Saeed, the Citadel is proving itself to both masters:  the U.S. and its own national interests.

Three days ago Hafiz Saeed, leader of Jamaat-ud-Dawa (JuD) gave a blistering attack upon his political masters in Islamabad at Friday’s prayers in the Jamia Qadsia mosque. JuD remains a front for Lashkar-e-Taiba, a terrorist group whose aim is perpetual agitation against India.

The reason:  Trump is pushing to harm Pakistan’s political economy by withholding $2 billion in aid while demanding that Pakistan take an open public confrontation with JuD or risk having Pakistan listed by Treasury as complicit in terrorism, effectively opening the Jamia Qadsia mosque and its JuD dependencies to state confiscation.

Saeed’s speech was aimed at his political masters claiming that “our rulers are making this country an American colony“.  Unnoticed was how many decades Saeed has roamed throughout Lahore with a $10 million bounty.

The state has confiscated over 200 properties belonging to JuD including its charity, schools, religious seminaries, ambulances and clinics throughout its campus at Muridke immediately outside Lahore.  All of this is to prevent the U.S. and its European allies from listing Pakistan as an enabler of terror at Paris’ meeting of the Finance Action Task Force. 

If the American’s want a win with Islamabad, they’ll need to confront the intrenched feudal political culture that dominates the ruling Punjabi’s.  That would mean liberalizing Pakistan’s political economy.  Having Pakistan return to being a functioning Republic will permanently threaten how the ruling Army views Pakistani interests.

We occupied Japan, Germany and hosts of nations states because we believed in changing the domestic political regime of countries that chose war.  We no longer believe that that option is viable; so the long game remains.

Until Pakistan returns to being a functioning Republic laid out by its founder Mohammed Jinnah, we’re left monitoring clowns like Saeed.


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Domestic Travails of Competing Nationalisms: A Mess Called Brexit

The foundation of England’s Imperial Empire abroad was sound governance based on ethnic kingship.  The old maxim of divide and conquer had limited yet profound appeal for imperial Brits; the crude Darwinian calculus used to determine British interests abroad, especially throughout the subcontinent remained ethnic and racial.  This is brilliantly explored in Alibis of Empire:  Henry Main & the Ends of Liberal Imperialism.  This book cannot be reconciled to Tory aims in Northern Ireland; the Irish question flogged most British leaders throughout the 18th-20th century.  Its fault line runs straight through the 100 Years War and the subsequent sectarian conflicts that raged the 20th century.  Having its origin in the need for Tutor security while England secured its Hanoverian beachhead deep in continental Europe, England used the ramparts of its lowlands in the maintenance of a genocidal campaign against the Irish since Henry VIII.

The role reversals that reel London now have reversed their informing center.  Londonstan isn’t identified as British by any means now, after having giving citizenship to every British dependency abroad, the prescient admonitions of Enoch Powell are coming home with vengeance.

Theresa May needed Northern Ireland’s (DUP) Democratic Unionist Party to support her flailing coalition or subjugate all of England to the Socialist agenda of Labor.  Her weak hand hasn’t been strengthened by her choice of cabinet leaders, they too have sought open ideological war supporting a hard Brexit favoring local sovereignty over technocratic incompetence of Brussels.

The irony here is immense because May’s Presbyterian cohorts from Northern Ireland continue to ignore London’s plea to restore devolved government in Belfast.  Having abandoned any pretext of governing, the Orangeman in the north have suspended all arrangements to share power with Irish home rule.  On December 04, Orange Unionists stepped in to block a concession led by May aiming to avert a hard border in Northern Ireland.

The problem rests with discrete social, tactical components that underwrite the Good Friday agreement.  Just as Rome was tutored in evaluating the origins of the Peloponnesian War by the idolization of an ephemeral achievement of the city state,  dual sovereignty as a solution prevented Rome from succumbing to Hellenic hubris.  The creative response of dividing allegiance was used by Madison to secure the social ramparts of our Constitutional Republic.  England doesn’t have these checks and balances.  In fact, Henry Main’s achievement of reifying ethnicity or race as the foundation stone of governance has returned in the shape of hard frontiers.

DUP’s bombshell trigged Wales, London and Scotland for special treatment with England.  Given that the British Constitution remains un-enumerated, May’s theoretical problems are growing exponentially, and I haven’t even gotten to the Islamist agitators yet. The Good Friday agreement lessened strong sectarian components of the Irish civil war, but it only skirted the ethnic drive that animates Presbyterian Orangemen.  By alleviating the   norths mentality as besieged settlers, the Good Friday agreement was tactical, it never sought to openly and creatively respond to what underwrote the governance of imperial Brits:  Henry Main’s socio-theoretical compact of ethnicity.

In effect, what the DUP did for May was to accelerate debate within her Cabinet about Tory end goals regarding Britain’s relationship with the EU.  May has sought to place all her efforts into denying having to tackle this theoretical question, even though the Brexit vote concretized it for her.

Consequently, DUP’s intransigence will either force a hard border in the North or give Jeremy Corbyn power.

May’s troubles are growing because phase II of negotiations will remain much harder than the initial phase.  March 29, 2019 is when Brexit is scheduled to happen, and two years isn’t enough time for London to secure its footing on theoretical questions regarding sovereignty while Cabinet members initiate separate policy tracks peeling off bilateral trade deals.  What all this means is that Brussels remains ahead of England in its Brexit engagement.

The very best May can deliver is half a loaf:  swallowing a difficult Brexit with hard imposed borders with regulatory alignment that will only cover goods not services.

May needs to mine the resurgent nationalism that underwrite the publics appeal for Brexit.  She remains distracted and unwilling to engage this topic as a conviction politician.

Just what did Thatcher know that May doesn’t?

The specter of a Soviet menace hung over continental Europe.  The social base of Europe was united with strong leadership that possessed policy clarity.  When European unity was born from the 1958 Coal & Steel Community, it was American stewardship in the maintenance of federated Franco-German unity that sutured the continent together.  And this was performed while France’s 5th Republic was dying in Algeria and Indo-China!  Today, Europe’s old ethnic rivalries, national grievances, tribal hostilities are amplified by technology and the atheist militant secularism that has become the EU. All of this is happening when Europe has abandoned its Christian roots and no longer has any moral authority from with to parry secular trends.

As of this writing, Theresa May’s handling of her portfolio is diminishing, as are her resources within domestic England.


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Caveats In Pakistan’s Oriental Orbit

Its getting amusing to witness the bemoaning of U.S. Pakistani relations, especially regarding Beijing’s attempt to corral Islamabad out from its U.S. orbit with promises of money, roads and security.  The Punjabi’s that run the Citadel don’t really want to lose America’s credible stewardship, they know a few things about the realists in Beijing and Moscow.  Pakistan’s ruling elites face west and remain stalwart in their defense of interests that cannot easily be overcome.  Pakistan has lost every war it launched against India, this is why nuclear asymmetry is a cornerstone of their calculus.  But they do proliferate and their love-hate relation with frontier jihadi’s isn’t something a westerner can appreciate without grasping how Pakistan’s security establishment views itself.

Pakistan is a weak state without a strong national identity.  This is the crux of Islamabad’s problem.  The diaries, notebooks, letters and public correspondence of its founder, Mohammed Jinnah testify to the kind of Republic he envisioned.  That entire oeuvre was hijacked by history; the Bhutto’s, Zia’s and other Army Presidents that ruled Islamabad. This is the thicket of the Pakistani conundrum.  Pakistan isn’t a country, its an army with a country.  And this citadel is run by Punjabi’s.  Once you understand that, you’ll figure out the rest of the social, political components of this feudal state.

The ruling PML-N, the acronym for Pakistan Muslim League Nawaz, remains a political, social front that the Army permits to run parliament.  But the guts of Pakistan’s industry are conglomerates that are hosted or ran by former Army generals.  Pakistan doesn’t have a functioning independent civil society.  The army runs the country, industries and media.  It is these hybrid components that masks, shields Pakistan from ever becoming a governing Republic.  Defense industry people call this civil-military relations, and it dominates most of Islamic civilization.

Why is this significant?

The writ of Beijing and other authoritarians remains limited because Pakistan, Egypt and other hybrid Islamic nation states with opaque governing institutions cannot be openly bought.  Without a functioning civil society grounded in a market based economy, authoritarian foreign governments must spend enormous capital to sustain the very rent seeking that produces decline.  This is why the American’s should not be worried about Pakistan’s new friend called China.  The Chinese remain uber realists, and want access to the Arabian Sea.  They will give the ruling Punjabi’s of the PML-N guns and butter.  But without a middle class tethered to a market based economy, these investments wane after the photo-op and suck the very precious capital that cannot be sustained nor procured by weak states.

Pakistani domestic needs are driving its attachment to China’s CPEC (China-Pakistan Economic Corridor).  With debt laden investments abroad, China hopes to use the failed Keynesian multiplier to induce border states to tether themselves to Beijing.  It would be ironic if it took Chinese investments to fix the opacity that hinders Pakistan’s political development.  American security experts believe that CPEC will either paralyze recipient states or move them towards transparency.  Given the western mien of the ruling Punjabi’s, its a safe bet that CPEC will strengthen U.S. Pakistani relations.

Much of Pakistan’s domestic energy comes from coal.  But Chinese firms have invested over $38 billion in Islamabad’s power sector under joint development schemes that the PML-N cheerlead.  But domestic tariffs keep Pakistan’s energy sector uncompetitive.  Even with abundance of coal, hydropower and solar terminals, Pakistan cannot export its energy to any of its neighbors.  Pakistan’s own domestic politics of rent seeking keeps its domestic energy moribund. No amount of infrastructure building can relieve Islamabad, they either seek reform toward competitive arrangements that openly dump tariffs, taxes and surcharges or they stay paralyzed.  The energy blackouts that animate PML-N to seek Chinese subsidies in CPEC don’t address failed non-competitive domestic energy policies of distribution, inefficiency and theft.

Building power plants by foreigners that rely on imported fuel will destroy the rupee and drain the coffers of Pakistan’s central bank.  Currently, Pakistani energy firms possess $8 billion of debt that require currency devaluation to sustain operating costs.

Increased generation and infrastructure aren’t solutions, and neither is Beijing’s gambit on monetary velocity.

We should welcome the imminent collapse of China’s debt abroad and begin reading Mohammed Jinnah’s diaries on his vision of a functioning Islamic Republic.


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Prince bin Salman’s Paradox: Governing Yemen

There are three regions in the world that are heating up:  the Info-Pacific, the Red Med-African Horn & the southern tier of the Arabian peninsula.  Yemen is a real trap for the Saudi’s, it can destroy the House of Saud while nuclearizing the peninsula.  Russia is already in Riyadh helping the Saudi’s build nuclear power which will be converted into a military program.  This leaves us with ethnic proxies that aren’t governed by any political center.  Yemen will remain the center of gravity for this region for decades to come.

The Houthis are a group of Shia that have been identified and supplied by Iran to target Riyadh.  Its working.  Unhappy with reforms of the state and their share of political power, they tore out of their northern strongholds in 2014 and hit Sana’a.  With Iranian support under the former dictator Ali Abdullah Saleh, Yemeni Houthis have nearly destroyed Saudi Arabia’s governing covenant in Yemen.

The Yemeni president, named And Rabbi Mansour Hadi fled to Aden, a southern port, then off to Riyadh where he remained until the assassination of Saleh who played both sides of the conflict.

The Iranian’s chose the Houthis to destroy Saudi Arabia because of the impact of British colonial rule that brought Yemen into civil war in 1960.  British colonial forces in the south were fighting a pitched insurgency against the north.  From this, two different Yemeni states emerged.  The north sought clerical custodianship while the south moved into Soviet orbit.  Both the south and north agreed on a new constitution after wars in ’72, ’79 and long torturous negotiations throughout the ’70’s and ’80’s.  It was oil that proved too much for any nascent comity to emerge, so in 1994 Saleh’s northern enclave moved against the south, sparking war again.  It was Saleh’s General People’s Congress that dominated parliament and enriched itself by pilfering from state treasuries.

Opposition to Saleh’s rule came to a head under the Arab Spring where he was pushed out with help from Gulf States and succeeded by his vice president, Mr. Hadi.  Saleh sought to undermine any transition while actively promoting his son.

In 2014, a short alliance between Saleh and Hadi was forged to counter Egyptian foreign policy of actively funding the Muslim Brotherhood as a reliable proxy for Cairo throughout Yemen.  The alliance broke down in September of 2014 with a power sharing agreement brokered by the U.N.  This deal created a political vacuum demonstrating that the Houthis weren’t capable of governing its southern tier.  This is where Saudi prince bin Salman comes in.

The incompetence of the Houthis throughout Yemen promoted Riyadh to build a coalition to assist Hadi’s rule.  Egypt, Morocco, Jordan, Sudan, Kuwait, the UAE, Qatar and Bahrain began air campaigns against the Houthis throughout late 2014 ending in March the following year.  But the character of the war exacerbated Saudi rule because an air campaign could not defeat an infantry led insurgency.  With Houthis embedded deep in its northern mountainous region, Riyadh sought to starve the opposition.

Iran recognized opportunities to build the Houthie like Hezbollah, armed with missiles, it sought to flank Riyadh by hitting the Saudi capital and vital links throughout the empire. The Saudi’s were assisted by U.S. missile defense, but the ground war consolidated Iran’s hold on its regional dominance encircling the Arabian peninsula.

What Gulf money bought was aligned along Sunni lines, with Emirati, Salafist’s and hosts of local southern secessionists building militias that have been assisted by U.S. Central Command.  Houthi leadership is currently led by Abdel-Malik al-Houthi, his infantry is identified by U.S. special forces seeking al-Qaeda, Iranian and Houthi led insurgents throughout Yemen.

While Riyadh remains grateful for close air support that has wrecked any future comity between northern-southern Yemen, the limits of air war doctrines that have dominated the west for decades have exposed new strengthens of infantry assisted ground superiority.  The new way of waging war is the old:  light infantry.

What is Iran teaching the west?

Iranian light infantry is performing superior work with little or no air (regional) support.  The American’s and the Saudi’s are learning that governance matters, and that the rule of the state must be socially fortified on the ground.  For decades, the west dominated war by its effective placement of nuclear devices and commanding the air, that’s over.  Clausewitz’s dictum on the indissolubility of war from politics has returned with a vengeance.  Iranian light infantry is leading.


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Can FARC Become Sinn Fein

When the late Martin McGuinness spoke of preparing for the long war he implicitly knew Clausewitz’s dictum that war is politics by another means. Having confounded Thatcher and divided London from Washington while Soviet propaganda raged on about Apartheid and Sun City, the IRA knew its weakness, of recurring fracturing and Scotland Yard’s communication devices hidden throughout northern Ireland.  As the long war got hotter, London’s position was strengthened; but the sources underwriting the IRA’s political wing remained a steel trap.  Evidenced in the satanic genocidal campaign of hunger striking, the IRA moved aggressively to consolidate its hold upon the Irish psyche.  No one should ever forget the strategic and tactical ruthless Leninist like work of the hunger strikers.  Their goal was to capture and harness the minds of an easily fractured Irish republicanism toward open confrontation with London.

What can Dublin teach Bogota?

As Colombia’s terrorist group known by the acronym FARC fields presidential candidates for the 2018 election, Imelda Daza, the vice presidential candidate has harnessed upon a rubric of inclusive governance.  Identical to Lenin’s claim of ‘all power to the Soviets‘; a refrain revealing more weakness than strength.  She’s galloping toward promises that will fail.  Proposing a government to overcome poverty, hunger and education, she’s Che without the haughty asthmatic mien.  Even still, a terrorist network that openly colludes with Iranian Shia in human trafficking and cocaine, FARC and its newly minted leader Rodrigo Londono (aka Timochenko) are responsible for displacing nearly 7 million Colombians with over 200,000 killed.

The FARC candidacy is an outrage to Colombians.  There are lessons here about the limits to idealism, especially the kind forged in war.

Nevertheless, FARC is guaranteed 10 seats for the next two election cycles under current peace accord rubrics signed last year under President Juan Manuel Santos.  The only sane voice speaking authoritatively for working Colombian’s is its former president Alvaro Uribe.

Pakistan is going through identical domestic maneuvers in publicly wrangling jihadi’s into public office.  This is a long way from Mohammed Jinnah’s vision of Pakistan, but it may be the only way out for Islamabad.  Both nations reveal a startling similarity:  both remain weak states, with fragile borders and volatile ethnic rivalries.

For Colombia to win in its open hand toward FARC, Bogota needs stronger governance with clear mandated leadership.  This mean a functioning economy that rears the Colombian interior out from trafficking and cash crops.  It means openly confronting small right wing paramilitaries.  It also means coming to terms with FARC’s political legitimacy.  This isn’t something the IRA had to do, but FARC does.  How it openly engages a stalwart public will tell if it relinquished its Leninist hold on power.

For America to win in Colombia, we need to strike at the heart of Tehran and begin rolling up American enemies in the near abroad that has always found a home throughout Latin America.

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Fragile by Design: Bubbles, Mania’s & Credit Cycles

Ten years ago, the U.S. entered a Great Depression.  A decade on, the depression still occupies a strange place in the American psyche. America suffered a cumulative loss of output equaling $4trillion.  By any measure, working stiff’s haven’t recovered.  Many lost everything they were working for.  Because our political economy doesn’t allow working people to get to equity/capital formation, we rely on credit cycles to finance our entire lives.  Anyone over the age of 40 has some memory of what America was like as a cash economy.  Those days are returning along with a convention of the States, regional based economies and mercantile state based practices.  But it all began with giving government a larger share in civil society.  It didn’t have to be this way, but members of Congress did an unconstitutional thing, they punted to the Federal Reserve.  Congress is forbidden by the doctrine of non-delegation of power from abdicating.  Yet it did just that. The rest was Obama’s tenure.  But the wreckage was and is still with us.

By seeking redistribution instead of innovation in the growth of civil society, the speed and efficacy of the creative response left our political economy less reformed and vulnerable to the identical policies that procured the crisis.

Three authorities have grasped this better than anyone:  Peter Wallison at the American Enterprise Institute, author of Hidden in Plain Sight, and Charles Calomiris with Stephen Haber, coauthored Fragile by Design:  the Political Origins of Bank Crisis’ and Scarce Credit.  Even though the late, great monetary authority Allan Meltzer spoke of how the origin of the Great Depression was adherence to a Protestant ethos called the real bills doctrine. Because money was dependent on effort and minted in gold, it wasn’t elastic.  You couldn’t just print money.  So the intrinsic requirements of the gold standard were exacerbated by emerging totalitarian movements.  But our own Bretton Woods system that in effect replaced gold with the U.S. dollar hasn’t reformed participating political economies toward the efficiencies promoted by its architects.

With massive swings in capital flows dependent on volatile market sentiments, hinged to Congressionally mandated credit cycles, participating economies become dollar denominated and accumulate massive foreign exchange reserves that depress interest rates and encourage borrowing.  This immediately destabilizes entire continents exposed to American financial crisis’.  We saw this with the Arab Spring, whose origin was massive capital outflows from American into BRICS that destroyed efficient price signals on subsistent peoples dependent on stable crops.

Under team Obama, the punishment continued with ever growing unaccountability and unconstitutional regulatory institutions that openly sought to constrain our market based economy.

So why was there no V recovery?

The Federal Reserve sought to fight deflation and had to do it alone because Congress never promoted fiscal stabilizers that would have prevented the social impact of falling prices by working closely within the confines of the business cycle. Instead what we got was redistribution, confiscatory taxation and currency depreciation.  In effect, the economic fundaments that procured our crisis remain.  We still don’t openly promote work, equity-capital formation.  In a word, we no longer believe in the efficacy of civil society.

Even still, this ain’t the final chapter on the impact of the Great Recession.

This great Republic is moving in social, political tones that aren’t captured by mass media, but are structured by the very digital mediums that source disruption.  Get ready for a convention of the States, regional based economies, sound money, and a return to equity and capital formation.

In a word, get ready to enjoy the fruits of a new civil war that has already taken off and bequeathed us a new world about work, about the moral, even theological sources of human capital.  Yes, the defeated Socialists abandoned Marx for the green movement’s anti-capitalist rhetoric.  But working American’s aren’t beholden to those who work the commanding heights of our political economy.

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Saudi’s Try Coordination, Shale Fracks On

The rise in oil prices is due to two converging outcomes, neither of which is planned in a global commodity market.  The Saudi’s are still wrangling both OPEC and non-OPEC members to slash 2% of supply so as to build a floor bidding prices higher.  This takes time and unrelenting effort which the Saudi ministry portfolio has, for now.  The second factor is U.S. shale frackers are poised to finally begin earning revenue.  Both coincide to producer higher oil prices.  But there remain caveats.  Lets examine them.

Crude has surged 40% in six months.  Fracking wildcats have decided to limit spending while performing operations.  This is new because U.S. industries have used both private equity and the stock market to finance their operations on credit.  Historically, higher oil prices in North America meant one thing:  drill.  With 24 hour news cycles abound, U.S. shale producers are limiting spending and enjoying profits.  Both the U.S. Energy Information Administration and the Paris based International Energy Agency reveal that America has overtaken Saudi Arabia as the world’s highest output in petroleum.

So where does the money go?

Most fracking companies need to pay off debt, fatten dividends or sustain intensive buy-back shares to sustain a balanced fisc.

Last week, U.S. Brent crude topped $65, the highest level since 2014.  Since the boom began, U.S. shale fracking companies have spent $265 billion more than they generated from operations beginning in 2010, so its fitting that revenue flow towards lower costs, better balance sheets and more secure management teams.

As the Saudi’s begin to panic about wrangling in OPEC members to produce a 2% annual cut in production, they need to remember this:  the American market in petroleum needs a 6-9 month lag time from drilling a well to output.  U.S. fracking companies have nearly 7,000 wells that have been drilled but not fracked.  This 30% gross output gap can easily be put on line to envelop OPEC.  Near Eastern regimes remain worried now because their own regimes have turned inward to address both social and geopolitical worries.

So what’s the Saudi calculus?

Saudi Arabia’s chief oil official is Khalid al-Falih, and he want to cut 1.8 million barrels a day to instill confidence for longterm investments in expensive international projects. Riyadh notes that the balance between supply and demand still favors the American’s. The Saudi threat is domestic, monetary and fiscal.  They need to procure profound monetary velocity in their domestic economies favoring consumption.  To do this, they need massive foreign direct investment, domestic comity, high oil dollar denominated output and a deep cooperative agreement from OPEC to sustain annual cuts.

Get ready for volatility.  Again.

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Armed Insurrection Begins: Venezuela

Armed civilians seek to counter Maduro’s regime, a dictatorship backed by Iran and Russia skirt by as civilian life in Latin America’s richest state is sundered by political brutality.  How does this end?

If a government begins to pauperize its people, what is the responsibility of the people towards that government?  These theoretical questions animate not only US conservatives who seek a convention of the states, but entire swaths of nation states throughout Latin America.  Venezuela is ground zero for the American’s to checkmate Russian and Iranian regional expansion.

Venezuelan opposition to Maduro’s regime began in 2015 immediately after a duly elected legislature was shut down by regime appointed judges who openly sought to strip power from a legitimate parliament.  Since that time famine brews while starvation becomes state policy.  It isn’t just Riyadh that seeks to starve out both Yemeni civilians but Iranian backed Shia Houthi’s.  In Caracas, an organized populist revolt against Maduro has sought two strategies, one is open revolution met by state sanctioned violence, another is negotiation for open presidential elections this spring.

While the opposition has no central leadership, Maduro’s regime has sought to pit citizens against each other by criminalizing ethnic groups through ruthless clientelism for food and medicine effectively ushering in famine throughout the country.

Last weeks talks in the Dominican Republic reveal just how strong the Maduro regime remains.  It barred popular political parties from campaigning while refusing to acknowledge non-partisan electoral authorities or international monitoring.  Seeking to wear down an opposition with no face, Maduro’s foreign backed junta may win.

Venezuela’s central bank stopped publishing monetary, fiscal statistics; even still, hyperinflation continues to break down the social bonds that procure the very violence both Maduro and citizens wish to avoid.  In 2017 alone, prices for staple food products rose 2,616%.  They rose again in January of 2018 by 85%.  The state owns the most productive capacity in oil and refinery, but the regime is closed off from international market exports and must rely on oil production from private cartels.  The gross availability of state share is shrinking because Venezuela itself is dying.  2018 will see the Venezuelan economy shrink by one third.  A man made calamity of engineered famine identical to Somalia in the 1980’s is on the way.

Guerrilla action has begun.  We should expect citizens throughout the county to begin taking up arms against its oppressor.

Team Trump needs to consolidate regional and international policy aims by striking at the heart of Iranian, Chinese and Russian expansion throughout Latin America.

What Reagan accomplished with the Contras in Central America has to be done AGAIN.  This time we don’t have a Polish Pope, Solidarity and an easily identified villain of Soviet Russia.

Even still, starvation as official state policy in the criminalization of political differences can only be halted by armed insurrection.  Its time we got a dog in this fight.

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Turkey Wages War Against US Led Kurdish Proxies in Syria

Russia and Iran hold nominal sovereignty over Syria.  To complicate matters, Kurdish forces and indigenous Syrians trained and led by American forces have created border security guards to alleviate Turkish incursions into northwest Syria.  But on Friday, January 19, Turkish led artillery began shelling Afrin, a city bordering Turkey/Syria.  Its clear that Istanbul’s own offensive at clearing Kurdish enclaves throughout northern Syria sought Russian acquiescence.  If anything, Turkish incursions have deeply complicated Russian ability for peace talks or de-escalation zones within Syria.

Turkey isn’t happy with Russia’s vision of a post-war Syria, so the incursion into northern Syria is aimed at scuttling Russia’s sovereignty over Syria.

Two points to consider going forward.  One, how is Washington going to settle its unwieldy ally in Ankara while fortifying Kurdish buffer-security zones along along the entire contested border between Syria/Turkey.  Both components invoke the wrath of Moscow, Tehran and Ankara.

What’s playing out in Syria is the envelopment of a weak Assad.  Yet in remains to be seen if this current settlement of geopolitics benefits Russia, Iran and the Turks.

The Institute for the Study of War is following these moving arrangements.


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