Obama / Kerry: Peace In Our Time

    These are dangerous times. Politics and polling aside, we are seeing the end game of the Obama administration's policy of withdrawal from the Middle East. Unlike Obama's domestic legacy, Obamacare, which can be absorbed and corrected over time, the administration's attempt to restructure the balance of power in the Middle East - away from our traditional allies in Israel, Saudi Arabia, and Egypt, and toward our 35-year adversary Iran - will have generational consequences. Israel has had the loudest complaining voice in the American debate, but Saudi Arabia is at the epicenter of the looming conflict.

    The problem has two dimensions:

    1. The potential nuclear arms race.

        - At least on April 2, 2015, it seems that John Kerry, his counterpart from Iran, and negotiators from the UK, Germany, France, Russia, and China have reached the framework of an agreement which, in exchange for eliminating economic sanctions, contains the Iranian nuclear program for at least ten years, provides extensive verification, and assures at least a year's lead time and a "snap back" of sanctions should the Iranians renege on their part. Details are to be filled in by June 30, but if the deal unfolds as it seems it will, the administration deserves credit for keeping the genie in the bottle.

        - Attention should expand to include Saudi Arabia which, by virtue of its oil wealth and as the keeper of the Muslim holy sites of Mecca and Medina, is filling the leadership role of the Sunni Arab world. Among the regimes to have long benefitted from Saudi largesse is nuclear-armed fellow-Sunni state Pakistan. The quid pro quo?  There is broad belief that Pakistan will provide nuclear weapons to Saudi Arabia if asked; the question is now whether the Saudi's will seek the technology to match Iran themselves.  

    2. The expansion of Iranian influence throughout the Middle East.

        -  Whatever its other merits, the removal of Saddam Hussein in 2003 eliminated the major obstacle to Iranian ascendency. With the withdrawal of American troops by President Obama, the Iraqi Shiite majority government has migrated toward a natural alliance with Iran -  clumsily under Maliki; more carefully under Haider al-Abadi. For both the largest source of external military support is from Iran, not the West.  

        - In a fragmented neighborhood with weak central governments, modest financial and military assistance to Shia minorities has allowed Iran to dominate Syria with its Allawite regime, and Lebanon with Hezbiollah. The Iranian-supported Houthi movement in Yemen, brings the specter of an Iranian proxy to Saudi Arabia's southern border. With the removal of sanctions as part of the nuclear deal, much of the economic benefit is needed at home, but more is available for the proxies.

        - ISIS actually brings clarity for the traditional Sunni regimes - Egypt, Jordan, Tunisia, the Gulf states - who are looking for Saudi Arabia to lead where the United States once did. The combination of a generational change in Riyadh, the rise of ISIS, and an emboldened Iran promise to elevate President Obama's most hated ally to a leadership role which the more cautious King Abdullah had long avoided.    

   The underlying question for President Obama - as we leave the Middle East to its own devices, will he, acting without the support of Congress, tilt one way or the other - as the officially-neutral Nixon administration tilted toward Pakistan in the South Asia conflict of 1971?  Much to the chagrin of our long time allies, the real price of a nuclear deal with Supreme Leader Ali Khamenei may well be a tilt toward Iran.

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    This week's video is an interview with rookie Senator Tom Cotton of Arkansas who drafted a letter to the Iranian leaders signed by 47 Republican senators explaining that Congressional approval is needed for any meaningful agreement.   

bill bowen - 4/3/15  

 

 

 

 

 

  

Comments

[Bill McCormick]

Cruz and Paul: Republican agitators launch first. Cruz is first of the "my way or the highway" candidates for the Tea Party anti compromise group. He is this year's Newt. Sure to make all the solid candidates look bad. Paul is our version of the "leave the Foreign Policy to others" isolationists. He seems to believe no threat can possibly cross the oceans and would fit well in The President's cabinet if it weren't for the fact that he believes we need to eliminate Federal Government. Defense too, I suppose. Thank goodness most Americans are right center and can't take either party's base.

[Bill McCormick]

America's new role in the world: Seems to be exactly as the President said it would be when he took office. That is we will ignore our 70 year position of the world's dominant military power and replace it with a role as the world's leader in selectively organizing economic sanctions against regime's who we feel embark on programs that The President alone considers "out of line". Regime's can be held in line with sanctions as we proved in Cuba so long as they are no match for the US military and have no protector such as the USSR. Terrorist organizations composed of people who have nothing to lose economically are not easy to hold in line with economic warfare. And, as they prove to be more and more ruthless are more and more difficult to defeat militarily, something I thought we learned in Vietnam. ISIS, dispersed geographically and allowed to gain large territories before we acted in a limited military way, will keep the US focused for a long time.
Somehow it seems that agreeing to anything with Iran is folly. They have played the stall game since the President drew his line in the sand in 2009. Now we have a celebration of an agreement to agree in the future. An agreement no one knows will be ratified or consummated. Meanwhile we watch Putin play his games in Ukraine and Syria with Crimea solidly in his possession. Assad remains.
Yemen is erupting. Somalia supports terrorist attacks in Kenya. Iraq explores mass graves. Iran is engaged in Iraq.
There are no easy answers but leaving the field unattended is definitely worrisome. Israel is unlikely to leave their defense to the Jordanians, Saudis, Egyptians and Pakistanis.

[Bill McCormick]

A note on the US jobs:

I thought it was interesting to hear a guest yesterday on CNBC say that his data shows that of the 16 million people who have gone back to work since 2009 only 1 million have found permanent work. That is consistent with my data that show the lack of hiring in the permanent jobs through Executive Search firms. One of the reasons we are likely to see a struggling economy for a while longer despite the lower energy prices is that the oil industry supported the falling economy in nearly 25 states during the same period 2009-2014 creating millions of jobs directly and indirectly. Many of those jobs filled were contract jobs as employers were not willing to guess what the impact of Obamacare would be on their benefit packages. Now those jobs are disappearing as oil companies reduce staff in the upstream exploration and production departments. The impact of this will be felt longer term as the lower investment and employment will hit the regional economies and supporting services. This is basically a recovery of financial engineering. Whereby stock prices are artificially inflated through expense reductions, stock buybacks and dividend increases. There are signs that permanent hiring is coming as the business community feels less threat from the Democratic administration and Congress. However, growth and new investment is still low. America is based on a residential real estate industry and that is still not back. Until it is I believe it will be tough to get America back to full employment in full time jobs and wages increasing.