Tag Archives: global politics

Cameron’s Cunning Plan for Bombing ISIS in Syria

My Thoughts: Now that Thanksgiving Day has passed, and Black Friday is upon us, it’s time to come back to earth. BTW, I hope you had a great Thanksgiving with family and friends; let’s do it again next year.

The subtitle of this article, which comes from The Financial Times, reads as follows: The questions over extending air raids answered in 43 key points. I’ve added a couple of edits since most of them apply to the US as well as Great Britain.

November 26, 2015 by Robert Shrimsley

David Cameron has announced his intention to seek parliamentary approval for Britain to join the international forces bombing Isis strongholds in Syria. Assuming the prime minister wins that vote, raids will start in the next few weeks.

He has wanted to do this for some time and feels the Paris attacks have turned public opinion and parliamentary arithmetic in his favour.
Here, then, are the key things you need to know about UK intervention in Syria.

1. British contributions to the air campaign against the Islamist militants will make absolutely no difference at all.
2. No, really, none.
3. You know all those bombs already being dropped on Isis? Well, now there will be a few more.
4. But not that many more.
5. And many of those that will be dropped on Isis in Syria would have been dropped on Isis in Iraq instead.
6. What do you think we are — made of bombs?
7. But even though it will make no difference, we are going to do this anyway because Britain ( also the US ) is not a country that stands on the sidelines.
8. It is important to stress that, before the decision to bomb Syria, there was absolutely no plan on how to defeat Isis.
9. And there still isn’t.
10. But something must be done.
11. And this is that something.
12. These people are really evil.
13. I mean super-evil. Horrible.
14. So we are all going to feel a lot better about ourselves because now we are going to be in there socking it to them as well.
15. I cannot say this will beat them but I can say it will degrade them, which sounds like something.
16. We are doing this to make Britain ( also the US ) safer from the threat of Isis.
17. Even though we cannot offer a single reason whatsoever to believe it will achieve that goal.
18. Some will say that Britain ( also the US ) may make itself more of a target for Isis terror attacks.
19. But we are a target already so whatever is going to happen was going to happen anyway and doesn’t it feel better to know we’ve landed a few punches in advance?
20. We do realize that air strikes alone cannot defeat Isis.
21. But that’s all we’ve got at the moment.

France has been courting US and Russian support for a war on Isis in the wake of the Paris terror attacks. But while Russia and Turkey, a Nato member, claim to be fighting the same foe, they themselves saw armed combat this week when Turkey shot down a Russian jet on its border with Syria. Mark Vandevelde asks Gideon Rachman and Geoff Dyer whether world powers are capable of making common cause against Isis.

22. We know that these attacks have to be part of a clear and coherent strategy for isolating and defeating Isis. But we do not have the luxury of waiting for one to emerge.
23. So any ideas on a postcard please.
24. Our military strategists make clear that there can be no ultimate victory over those foul butchers in Isis without “boots on the ground”.
25. But none of those boots are going to be ours.
26. We think that stuff is best left to the military forces in Iraq and Syria that have been doing such a bang-up job fighting Isis up till now.
27. We do recognize that ultimately only a negotiated political settlement can create the conditions in which Isis can be permanently defeated.
28. That’s why we are negotiating with other countries to try to work out what that settlement should be.
29. We’re not quite there yet.
30. In the meantime, bombs away.
31. We are absolutely clear that the long-term political settlement for Syria does not include Bashar al-Assad.
32. Which is a bit of a pity because Russia and Iran are clear that it does.
33. Syria’s future must lie with the moderate anti-Assad opposition.
34. The ones that Russia has been bombing.
35. We are doing this because Britain ( also the US ) is not a country that stands on the sidelines in the face of evil.
36. We step up to the plate and play our part.
37. Like we did in Libya.
38. Which worked out well.
39. We recognize that there are people in this country with doubts about the wisdom of this action.
40. But, since those doubts are going to be articulated by Labour’s Jeremy Corbyn, ( Bernie Sanders? ) we are not too worried about that.
41. We further recognize that stepping up bombing raids could increase the number of refugees fleeing Syria.
42. But they’re not coming here.
43. Because this regional problem requires a regional solution.

China’s Currency Conundrum

china-currencyMy Comments: Our standard of living, yours and mine, used to be a function of how well we built our house and how well we managed to feed and clothe ourselves. That was perhaps 250 years ago, a single blip in the passage of time.

A blip later it’s a little more complicated. Among the forces at work today is the ability of a few billion people, living on the other side of the planet, to build their houses, feed themselves, and influence their government.

It wasn’t easy a blip ago, and it’s not easy now, just different.

October 23, 2015 Commentary by Scott Minerd

There is a striking discontinuity of thinking about the greatest economic headwind facing the world today: the slowdown in China. Investors seem to universally agree that China will continue to weigh on the global economy until it devalues its currency, yet few think such an adjustment is likely anytime soon. Passive Chinese policymaking can provide a more benign environment for risk assets in the short-term, but ultimately, it holds back the world’s second largest economy and, consequently, global growth.

The bottom line is that China cannot remain competitive if it does not significantly devalue the renminbi (RMB). Consider that Japan, China’s fourth largest trading partner, has seen its currency weaken by 35 percent against the RMB since late 2012, just before Prime Minister Shinzo Abe came to power. For China, the optimal approach would be a long glide path of currency depreciation that would ultimately act as a catalyst for stronger economic growth in China and in emerging markets. For many reasons, a dramatic adjustment of the RMB is untenable for Chinese policymakers. A sudden Chinese devaluation would pose serious financial stability risks in China and around the world. If this were to happen it could push U.S. 10-year Treasury yields below 1 percent as capital rushes to find a safe haven. To this effect, Chinese policymakers are expected to announce a 2020 deadline for dismantling currency controls as part of the country’s 13th Five-Year Plan. The current proposal, to be debated at the Chinese Communist Party’s upcoming plenum, reportedly includes an open-ended commitment to speed up these reforms. Still, China is unlikely to take any dramatic action in the near term, which is consistent with the 50-basis-point reduction in the reserve requirement ratio overnight. Expect more of the same.

In the meantime, the impact of China’s slowdown is having a marked effect on Japan, Europe, and the United States. I do not believe the situation in China will derail the U.S. economic expansion, but it poses a serious threat to Europe and Asia and puts pressure on their central banks to act. At this juncture, however, it does not much matter how they respond. If benchmark interest rates were 4 percent, for example, and quantitative easing pushed rates to 2 percent, it would have a meaningful effect on economic activity. But with 10-year government yields at 0.50 percent in Germany and 0.30 percent in Japan, further quantitative easing seems unlikely to do a whole lot in terms of stimulating economic activity, though it can boost risk assets in the near-term. Case in point is the bounce that followed European Central Bank Chief Mario Draghi’s recent comments alluding to the possibility of more stimulus in December.

In the United States, I am becoming less convinced that monetary policy will lift off this year. My base case is now that there is only a 50/50 chance that the Fed moves in December. William Dudley, President of Federal Reserve Bank of New York and Vice Chairman of the Federal Open Market Committee, recently said he believed it would be appropriate to raise rates in 2015, but later said there was no urgency, especially if data did not support the move. This tells us how ambivalent the Fed is at this point about the specific date of the first rate hike after seven long years at zero percent. I see no reason to raise rates right now: The risks associated with tightening too soon are greater than the risks of delaying liftoff until next year.

The potential for higher rates, along with the headwinds of declining export activity, the strengthening of the dollar, an ongoing inventory adjustment, and continued fallout from China, has many economists on edge. Consensus estimates for U.S. third-quarter GDP have been declining steadily and many expect 1-1.5 percent growth. I believe this is too pessimistic—consumption remains strong and a figure approaching 2 percent is more realistic. The U.S. economy is clearly bearing the brunt of the headwinds I described, but I believe the market has already discounted them. Investors are being well-compensated for risk at this point, and it is prudent to consider increasing beta exposure, especially in high-yield and bank loan portfolios. As positive seasonal factors come into play, our analysis indicates that U.S. equities may increase another 7–8 percent, and that the S&P could climb to around 2,175 in the coming months. When equity prices rise heading into the holiday retail season, consumer spending also tends to be higher. This suggests that the Christmas selling season will be a reason for investors to celebrate—especially as market participants come to realize that policymakers in China are beginning a glide path to reduce domestic policy rates, which ultimately reduce the exchange value of the RMB and improve the prospects for domestic Chinese economic activity.

The conclusion is that risk assets are back in vogue. As we have indicated in the past weeks, now is the time to increase beta by adding to equities and below-investment-grade debt.

Fifth Generation Warfare: Follow the Food!

My Thoughts About This: For several years I followed the writings of Thomas P. M. Barnett. About 3 years ago, he suddenly closed his blog. He posted thousands of ideas and articles about global economics and security issues, most of which made sense. I never forgot one of them where he predicted that by 2045, (no further forward than 1980 is backward) conflict among nations and peoples will be about food.

Keep this in mind as we re-commit boots on the ground in the middle east and how we build and maintain the defense industry going forward over the next decade. In another post he suggests that among the most civilized nations on earth, we are the best prepared to satisfy our own need for food, compared to the rest. And that will influence how our grandchildren and beyond will live and die in the coming years.

By Thomas P. M. Barnett , June 08, 2011

Everybody thinks that the future is going to see fights over energy, when it’s far more likely to be primarily over food. Think about it: The 19th century is the century of chemistry and that gets us chemical weapons in World War I. The 20th century is the century of physics and that gets us nuclear weapons in World War II. But the 21st century? That’s the century of biology, and that gets us biological weaponry and biological terror. My point: obsessing over nuclear terrorism is steering by our rearview mirror.

Which gets me to our Spanish friend over here: an actual E. coli outbreak in Europe, centered largely in Germany, kills upwards of two dozen while sickening hundreds more. The early fingers point at Spanish cucumbers, but that’s looking iffy on investigation. Truth is, we may never know, but once the accusation is levied, Spain’s vegetable and fruit export industry may never be the same, and to me, that’s an interesting pathway for what I expect Fifth-Generation Warfare (which focuses – by some experts’ definition – on the disruption of the enemy’s ability to “observe” in John Boyd’s OODA loop) will be all about in the 21st century: biological terror to create economic dislocation and loss (along with the usual panics).

Same basic dynamic happened to the US beef industry early last decade: In 2003 US exports of beef amounted to about 1.3 million metric tons. Then there was a whiff of mad cow that year. They were real cases, all right, but the cause? One cow imported from Canada was fingered. The result was clear enough, though, as US beef exports plummeted by a million metric tons. The US beef industry has struggled to regain its previous level ever since, as major Asian markets that immediately shut themselves down to US exports have been very reticent to open back up again.

My point: if you’re a terrorist looking to sow fear and confusion, disrupt supply chains and ruin crucial industries, you can’t do much better than to work some biological mischief on food networks. Make that one cow happen from Canada. Make that one batch of messed-up veggies go into Germany – whatever. If you think people are afraid of radiation (dirty nukes, etc.), that’s nothing compared to their fear of tainted food.

The timing on the E. coli outbreak in Europe is perfect: right on the heels of the “periphery” debt crises, you’ve got the same countries (Spain, etc.) squared off against the same “victims” (Germany foots the bailout bill disproportionally and now suffers disproportionally on this tainted food outbreak). Bottom line: you – Mr. Terrorist – have created tons of enmity, economic loss, and discombobulating fear. If I’m al Qaeda, I’m claiming this one on principle.

The average farm-to-fork journey in this world is now about 1,500 miles, and it’s getting longer by the week. Global climate change will make it harder to grow food across a thick band of territory (roughly up to/down to the 35th parallel) centered on the Equator. That’s where most of the population growth and water stress problems will erupt in coming decades, and it’s also where countries all tend to be highly dependent on imported food. See your Arab Spring and realize how much of this unrest is caused by rising food prices and you’ll get the overall picture.

Mark my post: this century is all about biology, rising food demand – and thus dependencies exacerbated by climate change (see the buying-up of arable land in Africa by Arab and Asian nations), and thus biological terror comes to the fore. Forget about energy nets, because they all go far more localized with smart grids, co-located generation/distribution, etc. It’s food that will be the most vulnerable global network in the future.

Brazil Heads Closer To Total Collapse

My Comments: Many are waiting for the penny to drop indicating a new global recession and collapse of the stock markets. Is this it?

Oct. 19, 2015 by Ian Bezek


  • Brazil’s economic “Superman” may have resigned Friday, according to conflicting media reports.
  • Brazilian shares and currency fell sharply after Friday’s market close.
    His departure would bring close parallels to Argentina’s collapse in 2001.
    Investors should avoid or short sell Brazil as the country comes closer to catastrophe.
  • It’s just about over for Brazil. The signs are clearly in place that the country is in the midst of a historic implosion.
  • Brazil is following almost precisely the same script that Argentina did between 1999 and 2001. The outcome there was a 75% devaluation of the Argentine currency, the total dissolution of the government, and a black hole of losses for foreign investors.

It’s almost eerie how close these two tales are playing out. Friday brought Brazil’s “The savior throws in the towel” moment as conflicting media reports suggest the nation’s respected economic minister may have resigned. Brazil’s stocks (NYSEARCA:EWZ) and currency knifed lower in Friday’s after hours session.

First, let’s remember what happened in Argentina so we can see what’s in store for Brazil.

Up until the 1990s, Argentina’s economy was a chronic basket case, wracked by constant hyperinflation and repeated total failures of the country’s currency and budget.

All this changed in 1991, when Domingo Cavallo was appointed Minister of the Economy. He immediately and boldly pegged the Argentine currency to the dollar 1 to 1, and prevented the government from floating more currency than it had dollars in reserve.

This sharp break with the past revived the economy, which took off at lightspeed, growing more than 50% over the ensuing 8 year period. Cavallo was widely credited with saving the economy. He exited the government in 1996 following political in-fighting.

All continued well for Argentina until 1998, when various emerging market crises in Brazil, Russia and Southeast Asia started to weigh heavily. Argentina remained firm with its ironclad 1:1 peg to the dollar, newly elected president Fernando de la Rúa campaigned specifically on maintaining the peg despite mounting international instability.

During this time, the Brazilian currency devalued sharply, as did other Latin American currencies and various European monies. As such, Argentina was tied to the increasingly overvalued US dollar. Argentina had increasing difficulty competing with its peers. Brazil, in particular wa, as its leading trading partner garned a huge advantage from the currency devaluation.

By early 2001, the Argentine economy was in year 3 of a bitter recession, and questions were mounting as to whether it could service its debts. Then Argentine-President de la Rúa, after watching various economic ministers resign eventually felt compelled to ask Cavallo to be his economic minister. This was a shocking move, since Cavallo had run against de la Rúa for the presidency in 1999.

But desperate times call for desperate measures, and it was widely viewed that only Cavallo, as the economy’s “savior” had the ability to convince the IMF and foreign investors that Argentine was able to make it through the crisis.

Take this article from March 2001 in Fortune:

Argentineans are probably feeling a sense of déjà vu right now after Argentine President Fernando de la Rua’s bold and possibly threatening move of appointing Domingo Cavallo as Argentina’s economy minister for the second time in a decade.

Domingo Cavallo stepped in as Argentina’s third economy minister in the last three weeks, taking over from Ricardo Lopez Murphy, who served a controversial two weeks before resigning Monday after outraged opposition to his ambitious cost-cutting plans.

Cavallo served as economy minister in 1991 and guided the economy out of a period of hyperinflation and spiraling currency devaluation, becoming a Wall Street darling in the process. Rua’s move is being viewed by most as the return of the savior of Argentina’s economy […]

The one thing that has been lacking in Rua’s administration is political credibility. Rua was hanging by the skin of his teeth, and selecting Cavallo was an act of desperation but a good move. (emphasis added) But it wouldn’t end up being enough. Cavallo, despite being the “savior” was unable to fix Argentina’s core problems. Its currency was dramatically overvalued, further budget cuts were simply shrinking the economy and thus never closing the fiscal hole, and investor sentiment soured again after a quarter-long uptick following Cavallo’s return.

Following the September 11th attacks and increasing global economic tensions, the IMF cut Argentina loose, denying further loans. Argentina devalued the Peso 75%, the government collapsed, the capital was paralyzed by riots for months, and finally a new socialist government took over and made the country an international investing pariah – where it remains stuck even today, 13 years later.

Brazil’s Similar Trajectory

Brazil, seeing neighboring Argentina’s success in the early 1990s, tried a dollar peg to revive their economy starting in 1994. However the upturn didn’t really gain traction until 2003. Luiz Inácio Lula da Silva was elected president, and despite campaigning on a leftist platform, ended up handling the economy more moderately than expected.

His market-friendly policies, among them picking a former Bankboston CEO (now part of Bank of America) to run the central bank, drew investor interest. The country was upgraded to investment grade, commodity exports boomed catching the Chinese wave perfectly. Millions of Brazilians were lifted out of poverty and the country’s investments boomed.

After working at the ECB, Levy in 2003 was appointed Treasury Secretary by President Lula. Levy, a University of Chicago trained economist, had all the fiscal hawk credentials and orthodox economic views that make foreign investors swoon.

Under Levy’s leadership, Brazil secured the all-important investment grade credit rating and ushered in Brazil’s investment boom. Levy left the government in 2010 and went into wealth management at Bradesco (NYSE:BBD).

Fast forward to 2014 and the Brazilian economy finds itself on the ropes. The government is now headed not by the charismatic Lula but his incompetent and ever more socialist successor Rousseff.

Brazil’s economy overheated around 2007 as the Chinese boom stimulated overinvestment in Brazil. The Brazilian Real rose too sharply, making the country’s goods uncompetitive, again repeating Argentina’s sad experience.

A key sign of an investing bubble was spotted, in that Brazil’s productivity rate almost didn’t move during the boom. Unemployment fell as sharply as it did simply because the economy was so inefficient that it had to hire excess workers to complete even basic tasks.

The overstimulated economy allowed Brazilian companies to take on too much debt, much of it denominated in dollars. Once the Real went from undervalued to overvalued, the uncompetitive nature of the economy was exposed and the growth miracle suddenly went into reverse. The falling commodity market has now moved the situation from dour to dire.

In Venezuela, the dung didn’t hit the fan until the enigmatic Chavez was replaced by the thoroughly ordinary and deficient Maduro. Similarly, the Brazilian economy immediately headed south once President Lula gave way to Dilma Rousseff. The economy was already in recession by the time Rousseff felt compelled to beg for Levy, the renowned free-market austerity hawk to fix the mess.

Like with Cavallo in March 2001, another unpopular president was forced to appoint an intellectual opponent viewed by markets as a “savior” to try to head off crisis.

When Ms. Rousseff, a leftist former guerrilla who has favored a strong state hand in the economy, announced last year that a free-market “Chicago boy” would run her finance team starting Jan. 1, it was widely viewed as a shotgun marriage. But with Brazil’s economy and public accounts deteriorating fast after years of heavy government spending, the president was under pressure to change course.

Mr. Levy, whose background includes stints with the International Monetary Fund, the European Central Bank and the asset-management arm of Brazilian banking giant Bradesco, was seen as a market-friendly face to reassure investors and mollify jittery credit agencies. He had political experience as well, having earned high marks as treasury secretary under former President Luiz Inácio Lula da Silva and as a budget-cutting finance secretary in Rio de Janeiro state.

News of his appointment initially boosted markets and Brazil’s currency strengthened, a phenomenon local media dubbed the “Levy effect.” One glowing profile late last year compared the new finance minister to Superman. (emphasis added)

10 months after Caballo was appointed in March 2001, Argentina totally collapsed.

10 months after Levy was appointed last winter, Levy is now on the brink of being kicked out and the Brazilian economy is facing an Argentine-like cliff. Levy was particularly brought in to save the country’s credit rating from going to junk and reassuring nervous investors.

He failed on all counts. Brazil has been cut to junk, investors are bailing, the Real just hit all-time lows, and now the only market friendly face in an otherwise corrupt anti-capitalist and wildly unpopular government is about to leave the government.

With Rousseff taking heat from her own supporters for allowing a tax-hiking budget-cutting “Chicago boy” to handle the economy, it’s unlikely the next finance minister will be nearly as investor-friendly.

Rousseff’s own approval rating is under 10%. The country’s institutions are completely discredited following massive corruption scandals. The country’s former crown jewel, Petrobras (NYSE:PBR), is rapidly heading toward bankruptcy.

It’s hard to see many outcomes here much different from Argentina in 2001. The government called in the economic “savior” or “superman” to save the day. They failed. Then the sitting government is booted from power and the currency is devalued sharply.

Needless to say, there’s no “buy-the-dip” opportunity here. Brazil’s Debt-to-GDP ratio has mushroomed to 65%, well above the threshold that often gets emerging market nations into trouble. The economic recession is deepening with GDP shrinkage accelerating.

The country, for the first time in ages can’t even manage a primary surplus (that is, your budget before interest payments). CDS spreads are exploding. The country’s exports for hard dollars, such as iron ore are collapsing in value thanks to the global slowdown.

Even if you thought the country was about to turn, its stocks aren’t cheap. This is no Greek sale. The median Brazilian stock trades at a – considering the situation – surprisingly high 14 PE ratio.

Brazil: The Investment Takeaway

For aggressive investors, Brazil is a perfect short sale, which can be played by shorting the Real, shorting individual stocks heading lower such as Petrobras or Vale (NYSE:VALE). I’m personally heavily short the country’s main ETF, EWZ.

A more sophisticated investor might try shorting Banco Santander Brasil (NYSE:BSBR) and buying the parent Santander (NYSE:SAN) since they’re both down around 40% over the past year and may diverge at some point.
For investors wanting to buy the dip in Latin America, Brazil is simply the wrong country. Better alternatives include Peru (NYSEARCA:EPU) with its 20% Debt/GDP rating and moderately growing economy. Mexico (NYSEARCA:EWW), also investment grade, is more insulated from regional troubles as its economy becomes ever-more tied to exporting goods to the US rather than South America in the post-NAFTA world.

For the closest Brazilian proxy, try Colombia (NYSEARCA:GXG) which remains the region’s fastest growing major economy. Despite being investment grade, having a market-friendly government, and continuing to grow GDP at more than 3% a year, investors have lumped Colombia into the same boat as Brazil pricing both commodity-exporting nations similarly.

Colombia does face, like Brazil, a massive slump in its exports and its currency has sharply devalued. Unlike Brazil, it remains comfortably in investment grade territory with a much more reasonable 40% Debt/GDP reading.

The economy is largely insular and never overly relied, like Brazil, on FDI to boom in the first place. And Colombia just announced a long-awaited peace deal with the FARC terrorists that (finally!) takes geopolitical risk off the country’s table.

Both Colombia and Brazil are down 47% over the past 12 months in dollar terms. The single largest position in my portfolio is long Colombia and short Brazil and I fully expect this will be my home run investment of 2016.
The possible resignation of Brazil’s economic “superman” will usher in the next chaotic break lower in Brazilian equities as the grand finale – a fiery bankruptcy/devaluation/government collapse – looms larger and larger.

Bernie Sanders Is About as Radical as Harry Truman

My Comments: I have only vague memories of Truman; I was just 12 when he died. My father didn’t have kind words for him, but then he didn’t have kind words for any politician.

For much of my adult life I’ve thought of myself as a rightward leaning Democrat, but as the country has drifted, I’ve found myself shifting more and more to the left. Or have I stayed still and world around me shifted? I used to think Barry Goldwater was a radical conservative.

These comments by Robert Kuttner add a new perspective to how I should view the political landscape. I’ve very mixed feeling about Hillary, abject revulsion for Huckabee, Trump, et al and question whether Sanders could actually be elected by a majority of voting citizens.

Robert Kuttner on October 4, 2015

The mainstream media continues to be shocked that Bernie Sanders keeps gaining traction against frontrunner Hillary Clinton. However, if you look at what Sanders actually stands for, it is well within the mainstream of what used to be the Democratic Party.

Ever since Jimmy Carter, it has been evident that much of the Democratic electorate, and for that matter much of the country, is more progressive in its core values than what Democratic presidents have been offering. As big money has crowded out grass-roots democracy, the policies that people crave are simply not on offer.

There is also the historical accident of which leaders arise at what moments. We have not had a large number of plausible progressives with national appeal.

In 2008, John Edwards, who looked to be a pocketbook progressive, turned out to be a phony. A lot of people who voted for Barack Obama thought they were supporting a more progressive candidate than Hillary Clinton, but they turned out to be wrong.

Go back through the history of the Democratic Party primaries for the past half-century, and look what happened to progressives. In 2004, Howard Dean rallied the popular hunger for someone “from the Democratic wing of the Democratic Party,” but he turned out to be a flawed candidate.

Paul Wellstone? Died in a plane crash. Bobby Kennedy? Assassinated. Fred Harris and Mo Udall, both progressives who ran in 1976, crowded each other out. As politics has been captured by elites, we have not had a rendezvous of the right leader with the right moment.

Meanwhile, the American economy has turned viciously against ordinary people. Banks, corporations, and the one percent have more power than ever, political as well as economic.

So there is a pent-up demand for a candidate who can articulate popular frustrations. The fact that a 74-year-old, self-described socialist transplant from Brooklyn to Burlington, Jewish no less, is the surging vessel of these demands only tells you how deeply felt they must be.

But Bernie is no more radical than, say, Harry Truman, FDR or LBJ (when he was thinking about domestic policies). My friend Peter Dreier, a few months ago, performed a real service when he compared key Sanders positions with public opinion generally.

As Dreier reported, overwhelming majorities of Americans support a higher minimum wage: 74 percent think corporations have too much influence; 73 percent favor tougher regulation of Wall Street; 58 percent support breaking up big banks; 79 percent think the wealthy don’t pay their fair share of taxes; 85 percent favor paid family leave; 80 percent of Democrats and half the public generally support single-payer Medicare for all; well over 70 percent of Americans support workers’ right to unionize; and on and on.

No wonder Sanders is gaining ground.

Republicans have been disparaging Democrats as socialists — even centrist ones like Barack Obama — ever since FDR. So if this be socialism, let’s make the most of it.

Sanders and Clinton are both rock solid on civil rights and on LBGT rights. But it’s on the pocketbook issues that Bernie out-flanks Hillary. The fact that he raises his money mainly from small donors while she gets it from the usual suspects underscores the difference.

The press also likes to compare Bernie Sanders with Donald Trump. Superficially, both reflect mass frustrations with economic unease and political blockage. But Trump represents know-nothing celebrity politics, while Sanders is actually serious about ideas and policies. What they have in common is the threat that they pose to politics as usual and to the bipartisan elites.

It’s not at all clear that Sanders can be nominated, much less elected. But he does create major problems for Hillary Clinton. The idea that Joe Biden could get into the race and save the day for what passes for the Democratic center is preposterous. Biden would dilute the Clinton vote, not the Sanders vote.

Some of us have argued that Elizabeth Warren could be a more electable version of Bernie Sanders, but it’s hard to imagine a scenario that gets her into the race.

And the more Sanders keeps gaining appeal, the less likely it is that he would get out of the way for Warren.

Leaving aside the horse-race aspects, which are hard to resist, here’s the point: Sanders represents the pent-up demand of rank and file Democrats to get their party back.

Half a century ago, such ideas as full employment, a strong labor movement, national health insurance, investments in early childhood, free higher education, ending poverty in the richest nation on earth, progressive taxation, large-scale public infrastructure outlay, effective consumer regulation, and full enforcement of civil rights were utterly mainstream. Guess what? They still are.

Robert Kuttner is co-editor of The American Prospect and professor at Brandeis University’s Heller School. His latest book is Debtors’ Prison: The Politics of Austerity Versus Possibility.

An Unheralded Force Shaping US Policy

108679-bruegel-wedding-dance-outsideMy Comments: I’ve been registered to vote since about 1960. During these 55 years, I’ve managed to cast a vote in almost every election held for which I was eligible. Some of the time, my votes have been positive and others negative. But I’m convinced my participation was meaningful and remains meaningful today.

This article suggests there is a movement afoot that will reinforce the notion that the US is a democracy, something all of us should embrace, never mind our personal beliefs in the ideology involved in any particular contest. At our core as a nation, it’s imperative that as many people as possible become and remain engaged in the process and not be discouraged if your particular bent fails to carry the day.

Ben Wikler 09/17/2015

At midnight tonight, the clock stops. The congressional review period for the Iran nuclear deal expires, and the opponents of the deal officially lose their chance to torpedo the landmark foreign policy achievement of the Obama era. Thanks to 42 Democratic and Independent Senators, the GOP-driven sabotage bill never even reached the president’s desk, and the United States has moved off the path to war with Iran.

It’s a moment worth marking: the visible sign of a tectonic shift in the politics of American foreign policy.

The Iran deal’s political survival means many things at once. It signals the decline of AIPAC and the Likud lobby, a masterfully executed vote-whipping operation driven by the White House, Dick Durbin and Harry Reid in the Senate, and Leader Nancy Pelosi, Rep. Jan Schakowsky, Rep. David Price, and Rep. Lloyd Doggett in the House.

But it also means something more, something largely missed in the many write-ups of how the victory was forged. The success of the Iran nuclear deal marks a crescendo of a politically mature constituency for peace and diplomacy. It’s a milestone in the ascendancy of a grassroots movement stirred to action by the Iraq war that has been building steadily since, a force that will shape the politics of war and peace in 2016 and the years beyond.

In mid-July, when the seven-country negotiations finally ended and the Iran Joint Comprehensive Plan of Action was unveiled, today’s moment of victory was anything but assured. A front-page New York Times story detailed a $20 million campaign plan, backed by the American Israel Public Affairs Committee (AIPAC), to sink the deal. Former Republican Sen. Norm Coleman helmed another $10 million attack, while neoconservative hawks ranging from Joe Lieberman to Dick Cheney geared up to join the fray. The deal’s opponents promised — and pundits expected — a 2009 Tea Party-style uprising during the August congressional recess that would send members of Congress running for cover.

As the Washington Director of MoveOn.org, I experienced the D.C. effort to support the deal from the inside. On paper, the pro-diplomacy coalition looked hopelessly outgunned. The coalition of nuclear policy experts and peace advocates who were lobbying Congress couldn’t come close to matching the resources of the hawks. The widespread assumption was that the GOP would pass a resolution of disapproval through both houses of Congress. Our modest and urgent goal, then, was to retain enough Democrats to sustain a presidential veto. I remember a fierce private debate about whether we should give up on the Senate entirely and focus all of our energy on the House.

And as for the grassroots, out beyond the D.C. bubble? The prevailing wisdom was captured well by Peter Beinart in a piece this April: “It’s notoriously hard to mobilize Americans against wars until those wars begin.”
What few realized, however, is that the war had already begun — in 2003.

Millions marched against the war in Iraq. In the wake of that disastrous conflict, a network of new and newly revitalized organizations arose, groups capable of channeling public outrage about a war-first foreign policy into concrete political power. The energy of this movement coursed through the Howard Dean campaign, sparked the primary challenge to Joe Lieberman, and helped electrify the fight to send Barack Obama — a candidate vocally opposed to needless war and ready to take heat for his commitment to diplomacy with Iran — to the Oval Office. As it turned out, those anti-war marchers from the Bush era had never given up. In fact, they fundamentally shifted the center of gravity of the Democratic Party.

Yet conventional wisdom held that AIPAC and its allies were unbeatable. In fact, the anti-war grassroots had helped defeat them only last year, in a largely unnoticed skirmish that presaged this year’s Iran fight. From late 2013 to early 2014, insiders were caught off guard as an AIPAC-backed bill intended to derail the Iran nuclear negotiations was itself derailed by, as the National Journal put it, “the re¬sur¬gent pro¬gress¬ive move¬ment.” Alerted to the moment by groups like MoveOn.org, J Street, DailyKos, and CREDO Action, grassroots activists poured hundreds of thousands of petition signatures and more than 10,000 phone calls supporting diplomacy into congressional offices, backed up by constituent meetings in Washington, D.C. and across the country. Soon, even co-sponsors of the bill backtracked on their support, and it died on the vine.

This summer’s showdown was even bigger. Per the final tally tracked by Win Without War, a 37-group coalition of which MoveOn.org is a member, grassroots supporters made 141,631 phone calls to Congress after the deal was finalized on July 14. We sent 288,990 emails to congressional offices and collected 1,181,307 petition signatures supporting the deal.

And we took to the streets. On a single day of action in August, local supporters organized 207 public events attended by thousands of people. To counter the threatened Tea Party outbursts at local events, pro-deal activists traded notes on 258 upcoming August recess public appearances by members of Congress, turning out supporters to town halls, debates, and farmer’s markets from coast to coast. And vocal constituents visited hundreds of congressional offices in their home districts and in Washington, D.C. to press their case.

The deal’s opponents haven’t released their numbers. But from all available indications, despite their vast war chest, they were out-organized. At 87 percent of the events we tracked (and we tracked all we could), Iran deal supporters outnumbered opponents. Meanwhile, congressional offices have indicated that the volume of phone calls from each side roughly balanced out — but not all calls are created equal. One Senate staff assistant told me that during anti-deal calls, she could often hear phone bank operators telling confused callers what to say before patching them through.

As they say, there are some things money can’t buy. Authentic grassroots intensity is one of them.

To win, our effort had to be broad as the public’s support for an alternative to war. The coalition spanned peace and security groups, veterans, faith groups, civil rights organizations, the netroots, and beyond. MoveOn staffed up an election-style field program, with nine full-time No War With Iran organizers supporting local activists in key states. J Street, the pro-Israel pro-peace group, pulled out all the stops, organizing speaking tours with pro-deal Israeli generals and commissioning polls showing wide support for the deal among American Jews — puncturing specious claims by opponents. After hundreds of thousands of members of 24 national groups signed a joint petition coordinated by CREDO Action, leaders of the Congressional Progressive Caucus stood outside the Capitol to receive it in person and pledge their support for the deal. The Ploughshares Fund, the National Iranian American Council, Democracy for America, Friends Committee on National Legislation, Peace Action, Council for a Livable World, VoteVets, and dozens of other groups all poured time, resources, and effort into the fight. And an extraordinary array of nuclear scientists, retired generals and ambassadors, and other experts and authorities took the time to answer every question and debunk every myth as soon as it arose.

Thanks to the ferocious grassroots response, even the opposition’s greatest coup backfired. On August 7, New York Sen. Chuck Schumer announced his opposition to the deal. As the Senate’s presumptive Democratic Leader-In-Waiting, Schumer could have triggered a wave of defections. But the lightning response to Schumer’s move was so scorching, and so visible, that almost no other Democrats followed in his footsteps. MoveOn members launched a “donor strike,” vowing to withhold $42 million in political contributions if Democratic votes undercut the Iran deal — and then deployed the “SchumerMobile,” a billboard mounted on the back of a truck depicting Schumer, in the style of a high school yearbook, as the Senator voted “Most Likely to Start a War.” As more and more activists and groups voiced their anger at his decision, joined with aggressive pushback coming from the White House, journalists began wondering aloud if Schumer’s bid for Democratic Leader might be imperiled by his alienation of the party’s grassroots base.

It wasn’t just a message to Sen. Schumer. It was a message to all Democrats that opposition to the Iran deal would invite accountability from the grassroots. Primary voters and progressive activists across the country had worked to elect Senators and Representatives who would prevent the next Iraq war, and they wouldn’t take betrayal sitting down.

It worked. Word on the Hill was that every Senator noticed what happened to Schumer–and that some offices who had been poised to oppose the deal pulled back to avoid the same fate. Ultimately, the vast majority of Democrats in both houses of Congress supported the deal–with more than enough votes to protect it in either chamber.

This was the rare political fight where, on the progressive side, everything seemed to click. Just a few months before, grassroots progressives and the White House were utterly at odds over the Trans-Pacific Partnership. That conflict will flare up again — but on Iran, there was no daylight between the grassroots and the Oval Office. Similarly, any supposed gulf between the administration and its congressional allies was nowhere to be seen. And in sharp contrast to Hill negotiations where policy experts watch in horror as one after another key detail disappears amidst political horse-trading, this–the most comprehensive anti-nuclear proliferation accord ever negotiated — remains fully intact.

This win had many authors. Tremendous credit has been rightly accorded to President Obama’s team and to the leaders of the pro-deal effort in both houses of Congress. We all owe a debt of gratitude to the technical experts who helped shape the deal and communicate its contents. And it’s true that the deal’s opponents made a series of strategic missteps, particularly by making the opposition to the deal so bleakly partisan. You don’t win Democratic votes with rallies outside the Capitol helmed by Glenn Beck, Ted Cruz, and Donald Trump, or with transparently partisan speeches to Congress by foreign heads of state invited without consulting the President.
But if the analysis ends there, without mentioning the crucial role played by grassroots activists, then we lose sight of one of the most significant consequences of the Iran vote.

In the coming year, candidates for House, Senate, and the Presidency will be crafting their agendas. Lists of potential nominees to foreign policy posts will be compiled. As the Iran fight demonstrated, anyone seeking to build a winning coalition around a vision for America’s role in the world would be remiss to forget the power of the progressive grassroots.

Today, foreign policy is not the sole domain of insiders. It is not controlled by a small group of lawmakers, think tanks, and check-writing, lobbyist-hiring interests that don’t share the American public’s belief that war should never be a first resort.

The day before the vote, I visited undecided Democrats in Congress with a group of people who knew the price we paid for getting this wrong before. Retired generals, combat veterans — and a Gold Star mom, whose son had died in Iraq on Memorial Day. Each had a personal story, and personal plea, of extraordinary power.

Their voices were heard. Their voices won’t go away. On profound matters of war and peace, the public will not stop paying attention — which means that future decisions, like the Iran deal, will be subject to that most fundamental of political powers: democracy.

Plutonium Is Unsung Concession in Iran Nuclear Deal

My Comments: I think I’m beating a dead horse here but I’m going ahead anyway. This new article points out something I’ve missed in every single argument I’ve read that argued either in favor of or against the agreement on Iran.

As a financial professional, I often hear arguments in favor of or against the use of professional help to achieve the desired outcome. Almost invariably, an amateur approach results in missed opportunities or worse.

If what appears below is accurate, and I’m going to assume it is, then the comments by Dick Cheney, Donald Trump et al follow the same lack of understanding as do clients who believe they don’t need professionals to help them manage their money. Sometimes they can, at least for a while, or until something comes along that they had no clue was relevant.


At first glance, the metals that give atom bombs their destructive fury might seem interchangeable: Uranium and plutonium are both more valuable than gold. Both captivate would-be atomic powers. And both fueled bombs that leveled Japanese cities — uranium at Hiroshima and plutonium at Nagasaki.
But to see them as equal is to ignore a crucial difference: Of the 15,000 or so nuclear warheads on the planet, atomic experts say, more than 95 percent rely on plutonium to ignite their firestorms.

As a fuel for weapons, plutonium packs a far greater punch than uranium, and in bulk can be easier and cheaper to produce. Which is why some nuclear experts voice incomprehension at what they see as a lopsided focus on uranium in evaluations of the deal reached with Iran — under which Tehran would forsake the production of plutonium.

“It was an incredibly big breakthrough,” said Siegfried S. Hecker, a Stanford professor and former director of the Los Alamos weapons lab in New Mexico, the birthplace of the bomb. “But nobody seems to care.”

Nearly two years of negotiations went into the landmark deal, which would limit Iran’s production of uranium and plutonium in exchange for the end of international oil and financial sanctions. It was finalized in July and is set for a congressional vote this month. Last week, President Obama secured commitments for enough votes to put the agreement in place over fierce Republican opposition.

But in the dauntingly complex analyses that preceded that political alignment, questions and criticism revolved almost exclusively around uranium — how much of it Iran would be allowed to enrich and stockpile, and how compliance would be verified.

Atomic experts call the uranium focus potentially misleading, because it is the lesser path to the bomb.

In secret, three decades ago, Iran began exploring the plutonium path and was perhaps only months from inaugurating a plant for its production when, last year, as negotiations gained momentum, it abruptly agreed to a fundamental redesign that would end the facility’s potential for making substantial amounts of bomb fuel.

The nuclear reactor complex near Arak, Iran, is ringed with antiaircraft guns and missiles. Last year, the complex was nearly ready to begin converting uranium fuel into weapons-grade plutonium. But as part of the nuclear deal between Iran and the West, Tehran agreed to redesign the reactor and not to build other plutonium reactors for at least 15 years.

Tehran’s vow was a major turnaround, say nuclear experts, who express frustration that political jousting and technical naïveté have largely obscured what they call one of the accord’s main triumphs.

“It’s a real success,” said Frank N. von Hippel, a physicist who advised the Clinton administration and now teaches at Princeton. “I was surprised that they were willing to give it up.”

Richard L. Garwin, a principal designer of the world’s first hydrogen bomb and a longtime adviser to Washington on nuclear weapons and arms control, called the redesign “a great achievement.” He and other scientists signed a letter to President Obama last month praising the Iran deal as innovative and stringent.

Bomb veterans say the central importance of Tehran’s plutonium concession becomes strikingly clear in the light of history.

After the Manhattan Project began, in 1942, plutonium became a superstar and uranium a sideshow. Purifying uranium into bomb fuel turned out to be extraordinarily difficult, whereas plutonium was an atomic byproduct, easing its manufacture. Moreover, it took far less plutonium to produce a blast of equal size. “It’s got twice the punch,” said Ray E. Kidder, a retired arms designer at the Livermore weapons lab in California. “All things being equal, it makes for a more powerful weapon.”

The plutonium was made in reactors. Tiny particles known as neutrons would zip through fuel rods, splitting atoms of uranium in two. That released energy and more neutrons in multiplying chain reactions.

In a kind of modern alchemy, some of the uranium atoms would also absorb neutrons and turn into plutonium. The Manhattan engineers refined that process so plutonium became the main product. The work was far more dangerous than purifying uranium, in part because the fresh plutonium had to be scavenged from highly radioactive fuel rods. But the results were spectacular.

On July 16, 1945, the world’s first atom bomb lit up the New Mexico desert. Its plutonium core was 3.6 inches wide. In his diary, President Harry S. Truman called the blast “startling — to put it mildly.” The shock wave, he said, knocked down men nearly six miles away.

The nature of a detonating atom bomb is that it rapidly tears itself apart, stopping the chain reactions long before all the atoms are split in energetic bursts.

In New Mexico that day, the bomb’s core started with 6.2 kilograms of plutonium. About a fifth of those atoms split in two, producing waves of smaller atoms as well as a gargantuan flash of pure energy. The plutonium behind that flash is estimated at one gram – the weight of a dollar bill.

The secret, and that of all nuclear arms, lies in the colossal divide between matter and energy that Einstein laid out decades earlier in his famous E = mc², where energy equals mass times the speed of light squared, a staggeringly large number.

On Aug. 9, 1945, when the United States dropped a plutonium bomb on Nagasaki, a gram of matter again flashed into energy. Some 75,000 people died. More plutonium bombs were in preparation as Japan surrendered.

The Soviet Union, Britain and France used plutonium to power their first atom bombs. The metal liberates more energy than uranium in part because its atoms emit more neutrons when split, speeding chain reactions and increasing the weapon’s explosive yield. The high multiplication factor also means that plutonium warheads can be smaller and lighter, so missiles can fire them over longer distances.

Experts say India, North Korea, Israel and Pakistan have used reactors to make plutonium for nuclear arms.

Advanced states use plutonium mainly for hydrogen weapons, which dominate their arsenals. A small mass of the silvery metal, typically no bigger than a baseball, acts as a superhot match to light the thermonuclear fuel. The resulting warhead is up to a thousand times more powerful than an atomic bomb.

Tehran’s bid for plutonium was revealed publicly in late 2002, at the start of Iran’s standoff with the West. Attention focused on a sprawling, half-built reactor complex, named Arak after a nearby city. The isolated site was ringed by miles of barbed wire.

Tehran claimed that Arak would make radioisotopes for such humanitarian purposes as treating cancer. But as work on the complex progressed, nearby valleys and mountaintops came to bristle with scores of antiaircraft weapons.

“It’s pretty well defended for something that’s supposedly peaceful,” said Forbes McKenzie, managing director of McKenzie Intelligence, a private firm in London that examined satellite images of the remote site.

Experts say Arak’s antiaircraft guns are primed for Israeli jets, which have twice hit emerging plutonium threats. In 1981, Israel bombed an unfinished reactor in Iraq and, in 2007, smashed another in Syria.

The most palpable roots of Iran’s plutonium reversal go back to 2012, when arms control experts began discussing Arak’s redesign. Early last year, as part of the interim diplomatic accord, Iran agreed to stop making improvements at its three nuclear fuel plants, including the unfinished reactor.

“Progress,” Secretary of State John Kerry told reporters, “is frozen in place.” The reactor was said to have been months from commissioning.

By mid-2014, Iranian officials surprised Western experts by agreeing to scrap two decades of planning and redo the Arak reactor. They pledged a fundamental redesign so the finished plant would focus exclusively on medical isotopes rather than also producing what Western experts estimated as up to two bombs worth of weapons-grade plutonium each year. With an eye to diplomatic ambiguity, Tehran never admitted that it had sought plutonium for weapons.

A year ago, at the New York City residence of Iran’s ambassador to the United Nations, Iranian reactor designers laid out for American experts a summary of the detailed plan. “It was a remarkably good redesign,” recalled R. Scott Kemp, a nuclear expert at M.I.T. who formerly worked at the State Department.

In selling the Iran deal, the White House has stressed the plutonium step. Tehran does the opposite, telling home audiences that it will still purify uranium. In April this year, when diplomats announced the preliminary accord, Mr. Obama put Arak atop his list of selling points. “First, Iran will not be able to pursue a bomb using plutonium,” he told reporters in the Rose Garden. “The core of its reactor at Arak will be dismantled and replaced.”

¬Siegfried S. Hecker, a former director of the Los Alamos weapons lab, called Iran’s concession “an incredibly big breakthrough.” The final accord, announced in Vienna on July 14, detailed the curbs on uranium before those on plutonium – perhaps as a gesture to Tehran. Mr. Obama, in his Aug. 5 speech at American University, flipped the order. Iran, he said in his first technical point, “cannot acquire the plutonium needed for a bomb.”

Critics fault the deal as leaving Iran free to speed ahead after the accord’s main provisions expire. Its ban on plutonium reactors is to remain in place for at least 15 years. The Obama administration says the deal is better than the alternatives, including war.

Why did Iran’s reversal on Arak fall off the public radar so quickly? Nuclear experts list a number of possible factors.

They note that the military threat from an unfinished plutonium complex can be viewed as abstract compared with Iran’s success at purifying uranium in its two underground plants. Worst-case estimates say Iran could enrich enough uranium for a bomb in as little as two or three months.

The plutonium deal, experts add, displayed no loose ends. It basically ended Iran’s longtime bid, leaving few openings for opponents and doubters of the accord.

“There’s nothing left to discuss,” Dr. von Hippel said.

In contrast, the overall deal let Iran keep thousands of centrifuges spinning to purify uranium. Diplomats see that as a defensible concession to Tehran. But in Washington, it has fueled opposition to the agreement, with some critics questioning whether inspectors will be able to adequately verify the uranium curbs.

Why did Iran give up plutonium? Dr. Hecker, the former director of Los Alamos, said Tehran had probably decided to abandon its push for an arsenal. But he argued that the nation’s hard bargaining to save much of its uranium complex suggested that it still wanted to hedge its bets.

“I think, at this point, Iran really doesn’t want to develop nuclear weapons,” he said in an interview. “But they’ve kept the option.”

Dr. von Hippel of Princeton agreed. He said it appeared that Iran had been aggressively pursuing two pathways to bomb fuel and decided that one was enough.

“They don’t want an arsenal,” he said. “They want the U.S. to know that they could still go for a bomb.”

If the deal goes through, experts say, the redesign and rebuilding of the Arak reactor could take up to a decade.

And if the accord falls apart? Experts say the Arak reactor could soon become a plutonium factory. Iranian troops, they add, appear to have long exercised the nearby guns and missiles, preparing for war.