Tag Archives: global politics

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.

Israel: The Case Against Attacking Iran

bumper stickerMy Comments: George Friedman has an international reputation for his knowledge about how the world works and his ability to articulate credible analyses of what is going on. This is a fascinating article that’s very relevant to the current questions about Iran and how the world needs to respond to the existential threat they pose.

The Democrats and Republicans, mindful that most of us can only understand 5th grade words, attempt to create an “either or” decision in black and white. These words from George Friedman show how incredibly complex the issue is.  I have no clue how this is all going to play out, but I’m inclined to let professionals decide, mindful that they face the same ultimate risks you and I face. 75 years ago we were at war with Japan, but now co-exist as friends and allies. Freiedmans comments here are kinda long, so if you don’t give a damn about any of this, then simply ignore this post.

August 25, 2015 By George Friedman

On Aug. 21, Israeli Channel 2 Television aired a recording of Ehud Barak, Israel’s former defense minister and former prime minister, saying that on three separate occasions, Israel had planned to attack Iran’s nuclear facilities but canceled the attacks. According to Barak, in 2010 Israel’s chief of staff at the time, Gabi Ashkenazi, refused to approve an attack plan. Israeli Cabinet members Moshe Yaalon and Yuval Steinitz backed out of another plan, and in 2012 an attack was canceled because it coincided with planned U.S.-Israeli military exercises and a visit from then-U.S. Defense Secretary Leon Panetta.
The fact that the interview was released at all is odd. Barak claimed to have believed that the tape would not be aired, and he supposedly tried unsuccessfully to stop the broadcast. It would seem that Barak didn’t have enough clout to pressure the censor to block it, which I suppose is possible.
Yaalon, like Ashkenazi, was once chief of staff of Israel Defense Forces but was also vice premier and Barak’s successor as defense minister. Steinitz had been finance minister and was vocal in his concerns about Iran. What Barak is saying, therefore, is that a chief of staff and a vice premier and former chief of staff blocked the planned attacks. As to the coinciding of a U.S.-Israeli exercise with a planned attack, that is quite puzzling, because such exercises are planned well in advance. Perhaps there was some weakness in Iranian defenses that opened and closed periodically, and that drove the timing of the attack. Or perhaps Barak was just confusing the issue.

A number of points are worth noting: Ehud Barak is not a man to speak casually about highly classified matters, certainly not while being recorded. Moreover, the idea that Barak was unable to persuade the military censor to block the airing of the recording is highly improbable. For some reason, Barak wanted to say this, and he wanted it broadcast.

Part of the reason might have been to explain why Israel, so concerned about Iran, didn’t take action against Iran’s nuclear facilities. Given the current debate in the U.S. Congress, that is a question that is undoubtedly being asked. The explanation Barak is giving seems to be that senior military and defense officials blocked the plans and that the Israelis didn’t want to upset the Americans by attacking during a joint exercise. The problem with this explanation is that it is well known that Israeli military and intelligence officials had argued against an Israeli strike and that the United States would have been upset whether or not joint exercises were occurring.

It would seem, intentionally or unintentionally, that Barak is calling Israeli attention to two facts. The first is that militarily taking out Iranian facilities would be difficult, and the second is that attempting to do so would affect relations with Israel’s indispensible ally, the United States. Military leaders’ opposition to the strikes had been rumored and hinted at in public statements by retired military and intelligence heads; Barak is confirming that those objections were the decisive reason Israel did not attack. The military was not sure it could succeed.

The Potential for Disastrous Failure

A military operation, like anything else in life, must be judged in two ways. First, what are the consequences of failure? Second, how likely is failure? Take, for example, the failure of the U.S. hostage rescue operation in 1980. Apart from the obvious costs, the failure gave the Iranian government reason to reduce its respect for U.S. power and thus potentially emboldened Iran to take more risks. Even more important, it enhanced the reputation of the Iranian government in the eyes of its people, both demonstrating that the United States threatened Iranian sovereignty and increasing the credibility of the government’s ability to defend Iran. Finally, it eroded confidence in U.S. political and military leaders among the U.S. public. In reducing the threat and the perception of threat, the failure of the operation gave the Iranian regime more room to maneuver.

For the Israelis, the price of failure in an attack on Iranian nuclear sites would have been substantial. One of Israel’s major strategic political assets is the public’s belief in its military competence. Forged during the 1967 war, the IDF’s public image has survived a number of stalemates and setbacks. A failure in Iran would damage that image even if, in reality, the military’s strength remained intact. Far more important, it would, as the failed U.S. operation did in 1980, enhance Iran’s position. Given the nature of the targets, any attack would likely require a special operations component along with airstrikes, and any casualties, downed pilots or commandos taken prisoner would create an impression of Israeli weakness contrasting with Iranian strength. That perception would be an immeasurable advantage for Iran in its efforts to accrue power in the region. Thus for Israel, the cost of failure would be extreme.

This must be measured against the possibility of success. In war, as in everything, the most obvious successes can evolve into failure. There were several potential points for failure in an attack on Iran. How confident were the Israelis that their intelligence on locations, fortifications and defenses were accurate? How confident were they that they could destroy the right targets? More important, perhaps, how certain could they be that the strikes had destroyed the targets? Finally, and most important, did they know what Iran’s recuperative capabilities were? How quickly could the Iranians restore their program? Frequently, an operationally successful assault does not deal with the strategic problem. The goal of an attack was to make Iran incapable of building a nuclear weapon; would destroying all known targets achieve that strategic goal?

One of the things to bear in mind is that the Iranians were as obsessed with Israeli and U.S. intelligence efforts as the Israelis and Americans were obsessed with the Iranian programs. Iran’s facilities were built to be protected from attack. The Iranians were also sophisticated in deception; knowing that they were being watched, they made efforts to confuse and mislead their observers. The Israelis could never be certain that they were not deceived by every supposedly reliable source, every satellite image and every intercepted phone call. Even if only one or two sources of information were actually misleading, which sources were they?

A failed Israeli assault on Iran would cause a major readjustment among other regional players in the way they perceive Israel and Iran. And for Israel, the perception of its military effectiveness is a strategic asset. There was a high risk of damaging that strategic asset in a failed operation, coupled with a strong chance that Israeli actions could unintentionally bolster Iran’s power in the region. The likelihood of success was thrown into question by Israel’s dependence on intelligence. In war, intelligence failure is a given. The issue is how great the failure will be — and there is no way to know until after the strike. Furthermore, operational success may not yield strategic success. Therefore, the ratio of potential risk versus reward argued against an attack.

Considering Iran’s Capabilities

There is another side to this equation: What exactly were the Iranians capable of? As I have argued before, enriched uranium is a necessary but insufficient component for a nuclear weapon. It is enough to create a device that can be detonated underground in controlled conditions. But the development of a weapon, as opposed to a device, requires extensive technology in miniaturization and ruggedization to ensure the weapon reaches its target. Those who fixated on progress in uranium enrichment failed to consider the other technologies necessary to create nuclear weaponry. Some, including myself, argued that the constant delays in completing a weapon were rooted both in the lack of critical technologies and in Iranian concerns about the consequence of failure.

Then there is the question of timing. A nuclear weapon would be most vulnerable at the moment it was completed and mounted on its delivery system. At that point, it would no longer be underground, and the Israelis would have an opportunity to strike when Iranians were in the process of marrying the weapon to the delivery device. Israel, and to an even greater extent the United States, has reconnaissance capabilities. The Iranians know that the final phase of weapon development is when they most risk detection and attack. The Israelis may have felt that, as risky as a future operation may seem, it was far less likely to fail than a premature attack.

Barak’s Motivations

Whether intentionally or not (and I suspect intentionally) Barak was calling attention, not to prior plans for an attack on Iran, but to the decision to abandon those plans. He pointed out that an Israeli chief of staff blocked one plan, a former chief of staff blocked a second plan and concern for U.S. sensibilities blocked a third. To put it in different terms, the Israelis considered and abandoned attacks on Iran on several occasions, when senior commanders or Cabinet members with significant military experience refused to approve the plan. Unmentioned was that neither the prime minister nor the Cabinet overruled them. Their judgment — and the judgment of many others — was that an attack shouldn’t be executed, at least not at that time.

Barak’s statement can be read as an argument for sanctions. If the generals have insufficient confidence in an attack, or if an attack can be permanently canceled because of an exercise with the Americans, then the only option is to increase sanctions. But Barak also knows that pain will not always bring capitulation. Sanctions might be politically satisfying to countries unable to achieve their ends through military action or covert means. As Barak undoubtedly knows, imposing further restrictions on Iran’s economy makes everyone feel something useful is being done. But sanctions, like military action, can produce unwelcome results. Measures far more painful than economic sanctions still failed to force capitulation in the United Kingdom or Germany, and did so in Japan only after atomic weapons were used. The bombing of North Vietnam did not cause capitulation. Sanctions on South Africa did work, but that was a deeply split nation with a majority in favor of the economic measures. Sanctions have not prompted Russia to change its policy. Imposing pain frequently unites a country and empowers the government. Moreover, unless sanctions rapidly lead to a collapse, they would not give Iran any motivation not to complete a nuclear weapon.

I don’t think Barak was making the case for sanctions. What he was saying is that every time the Israelis thought of military action against Iran, they decided not to do it. And he wasn’t really saying that the generals, ministers or the Americans blocked it. In actuality, he was saying that ultimately, Prime Minister Benjamin Netanyahu blocked it, because in the end, Netanyahu was in a position to force the issue if he wanted to. Barak was saying that Israel did not have a military option. He was not attacking Netanyahu for this decision; he was simply making it known.

It’s unlikely that Barak believes sanctions will compel Iran to abandon its nuclear program, any more the current agreement does. My guess is that for him, both are irrelevant. Either the Iranians do not have the ability or desire to build a bomb, or there will come a point when they can no longer hide the program — and that is the point when they will be most vulnerable to attack. It is at that moment, when the Iranians are seen arming a delivery system, that an Israeli or U.S. submarine will fire a missile and end the issue.

If Barak didn’t want a strike on Iran, if Netanyahu didn’t want a strike and if Barak has no confidence in agreements or sanctions, then Barak must have something in mind for dealing with an Iranian nuclear weapon — if it ever does appear. Barak is an old soldier who knows how to refrain from firing until he is most certain of success, even if the delay makes everyone else nervous. He is not a believer in diplomatic solutions, gestures to indirectly inflict pain or operations destined for failure. At any rate, he has revealed that Israel did not have an effective military option to hamper Iran’s nuclear program. And I find it impossible to believe he would rely on sanctions or diplomacy. Rather, he would wait to strike until Iran had committed to arming a delivery system, leaving itself wide open to attack — a nerve-racking solution, but one with the best chance of success.

Stopping the Iran Nuclear Deal

Nixon+ChinaMy Comments: Readers of my daily posts know I agree with the proposed agreement. I disagree with the notion that the inevitable outcome of failing to approve the deal is war with Iran. But that’s not to say there won’t be some serious negative consequences. Switzerland, for example, has already lifted most of it’s sanctions against Iran.

Stephen Collins Aug. 11, 2015

The fate of the nuclear deal with Iran appears to be in some jeopardy. Key democrats in Congress – most notably New York Senator Chuck Schumer – have recently announced that they would vote to reject the agreement. So passage of the agreement is far from a done deal, with more than two dozen Senate Democrats remaining in the uncertain column.

Opponents regard the deal with disdain, characterizing the accord to curtail Iran’s nuclear program as counterproductive, naïve and reminiscent of England’s appeasement of Nazi Germany.

Critics of the Joint Comprehensive Plan of Action (JCPOA) are right to be skeptical of Iran’s commitment to multilateral accords. The International Atomic Energy Agency reported on several occasions – including in 2005, 2008 and 2011 – that Iran had violated important articles of the Nuclear Nonproliferation Treaty. But even given Iran’s lackluster record, I’d argue that a move by Congress to block the accord would result in a less favorable security outcome for the US and its allies.

The benefits of the deal for Iran are substantial. They include extensive sanctions relief that would allow Iran to resume oil export sales and gain access to frozen assets, estimated at US$55 billion. That would give the regime an enormous incentive to abide by the terms of the accord. In return for sanctions relief, Tehran has agreed to relinquish 98% of its supply of enriched uranium, limit its centrifuge operations and restrict enrichment to 3.67%. These actions would significantly lengthen Iran’s “breakout period,” or the time needed to create a nuclear weapon.

Additionally, the JCPOA also includes a carefully crafted verification protocol that permits intrusive and technically savvy inspections of known and suspected nuclear facilities.

Critics want to coerce Iran into complete capitulation so that it would cease all nuclear activities in perpetuity and allow “anywhere, anytime inspections.” Barring that, they advocate starving the regime so that it would be unable to afford nuclear, militant or terrorist activities.

But this sort of result was unfeasible. Short of Iran actually testing a nuclear device, the P5+1 – the US, Germany, China, UK, Russia and France – were never willing to support a marked increase in economic pressure.

What if the deal fails? A blocked deal would lead to several alarming consequences.

A no-deal Iran would have 33,000 pounds of enriched uranium instead of just 660 pounds. It would be able to produce enough fuel for a nuclear weapon in a few weeks instead of a full year.

If Tehran does aspire to build a nuclear weapon, as critics maintain, the dissolution of the deal would, in fact, facilitate their goal. The regime has publicly stated that it would speed up enrichment if the deal was blocked. Iran would also possess additional paths to a bomb without the deal’s prohibition on Iran reprocessing its plutonium.

What is more, the collapse of the plan would scuttle the enhanced transparency that the international community would have gained about Iran’s nuclear program as a result of inspections.

In the wake of a blocked deal, the solidarity underpinning the present multilateral, UN-backed sanctions program would dissipate. That would leave the US standing alone or with few allies. The historical record shows that without multilateral sanctions, the US lacks leverage to make Iran capitulate.

Additionally, China and Russia are likely to benefit by exploiting American obstinacy as an excuse to strike trade deals with Iran. That would bolster China’s economic and Russian’s strategic positions.

But the most dangerous diplomatic setback would be the effect a botched deal could have on America’s transatlantic alliances. America’s allies strongly back the deal. Blocking the JCPOA would quite likely result in a deep rift between the United States and its NATO allies, crippling support for future collaboration.

And then there is the question of how the sinking of the pact would complicate nonproliferation objectives far beyond the Middle East. America’s perceived unwillingness to negotiate on nuclear diplomacy would further marginalize any pro-diplomacy voices inside North Korea, arguably the more significant nuclear threat. Blocking the accord would ossify Pyongyang’s distrust of the US and give greater momentum to North Korea’s nuclear buildup.

Critics of the deal emphasize the danger presented by the windfall of unfrozen money Tehran will acquire. They predict that money will flow to Iran’s military and its investment in militant foreign activities, including sponsorship of terrorist organizations.

They’re not wrong – funding will probably flow in this direction. Still, the danger presented by this for the US and its regional allies is far less than the threat posed by the robust nuclear program that will likely emerge in the deal’s absence.

Moreover, the amount of funds freed up by the end of sanctions that will be devoted to military ends is probably much less than critics suggest.

Iran has pressing economic matters it must deal with immediately. The regime will have to invest between $100 billion and $200 billion in its oil and gas industries simply to reestablish past production levels. To satisfy the rising expectations of the public regarding the economic bounty it expects to materialize after the deal, the government will also have to invest in the domestic economy.

If the bulk of the unfrozen money does indeed flow to the military, the US and its allies might even benefit from a better financed Iranian military, which could use the new funds to step up its military operations against the Islamic State.

Still, simply signing a deal with Iran does not automatically make this episode of diplomacy a success. The devil is indeed in the details – implementation and verification.

The international community must prove its resolve to Iran. Iran must be shown that it will be held accountable and that automatic “snapback” provisions of the deal will be reimposed in response to a significant and unresolved violation.

The deal indeed fails to achieve all that the US could have hoped for. Still, the accord offers a credible path to a peaceful resolution of the crisis, and therefore it would be far too risky to turn it down.

Read the original @ http://www.businessinsider.com/there-are-alarming-consequences-to-stopping-the-iran-nuclear-deal-2015-8#ixzz3icvmd6U8

The Next Hiroshima?

deathMy Comments: As a financial planner, my job is to identify existential financial threats faced by a client and attempt to remedy the potential problem before it becomes a real problem. For the record, an existential threat is something bad that might happen. The idea is to take steps to keep them far in the background so the negative consequences don’t surface. Some we can deal with and some we can’t.

In real life, these existential threats range from an asteroid hitting the earth to understanding that on the day you get married, you are now exposed to a divorce proceeding. These comments by Richard Haass appear in the context of the Iran agreement that is opposed by almost everyone in the GOP.

The threat posed by a nuclear armed Iran may not be so existential. We need to better understand the dynamics involved before resorting to a knee jerk response, conditioned by the last 7 years of visceral objection to the person sitting in the White House.

Richard Haass, August 6, 2015

The 70th anniversary of the bombings of Hiroshima and Nagasaki has understandably garnered reflection and more than a little debate. Much of the looking back has underestimated the case for the American use of nuclear weapons (to avoid what would have been a prolonged and costly invasion of Japan to end the second world war) and overlooked the subsequent utility of nuclear weapons in helping to keep the cold war cold.

Less commented on, though, is a question not of history but of the future: is the world likely to go another 70 years without nuclear weapons being used? The short and troubling answer is no. Even worse, the potential for such use has increased in recent years and seems likely to rise further. The potential for use is least among those that maintain the largest inventories of nuclear weapons and have possessed them the longest. The chance of the five formal nuclear weapon states — the US, Russia, China, Britain and France — deliberately using such weapons is minuscule.

The fact that they have robust arsenals capable of surviving a first strike by someone else and still delivering a devastating response makes the possibility of any such initial use remote.

These countries also possess intelligence capabilities that give each of them a good picture of what the others are doing, reducing the chance of miscalculation leading to catastrophe. Diplomacy and arms control arrangements further buttress stability.

Russia is the one country that gives one some pause, in part because President Vladimir Putin operates with fewer constraints than any of his predecessors since Stalin. Still, the political differences between him and the US, however real, do not rise to the level of nuclear use. More worrying is the chance of political instability developing in Russia, and the possibility that some terrorist group could gain control of one or more devices.

The greatest potential for nuclear use, though, comes from those countries that have acquired these weapons more recently. Pakistan, with a large and growing arsenal of more than 100 weapons, is arguably the most serious concern. One can all too easily imagine a conflict with India not just breaking out but also escalating. Pakistan, the weaker of the two states in conventional military terms, might be tempted to use nuclear weapons as an equaliser.

Pakistan also represents another nuclear-related concern, one that stems from its potential internal instability and lack of firm civilian oversight. It is at once a strong state, in terms of nuclear might, and a weak one, in terms of political fragility — a bad combination when it comes to seeing that nuclear weapons are not used or acquired by terrorists.

North Korea is yet another country that might use nuclear weapons. One can imagine a crisis set off by an act of aggression on the part of Pyongyang, or by a crisis that results from some form of internal collapse. A desperate leadership might turn to nuclear weapons to survive.
“These possibilities may seem like the stuff of fiction. In fact, they are anything but”.

In addition, to stave off collapse, the cash-starved government there might also be tempted to sell nuclear weapons or critical components to other countries or organisations with few if any qualms about using such weapons.

What might be the fastest growing threat to extending the nuclear peace for another 70 years, though, comes from the Middle East.

Israel already has a substantial nuc­lear arsenal. Meanwhile, the just-negotiated agreement with Iran allows the Islamic Republic to keep most of the prerequisites of a large nuclear weapons programme, and to add to its inventory of centrifuges and supplies of enriched uranium in 10 or 15 years respectively. Other countries in the region, including Saudi Arabia, the United Arab Emirates, Turkey and Egypt, may well follow suit.

We could witness a race to establish a nuclear identity. Several governments could see value in striking first, be it to prevent an adversary developing such a capability or, amid a crisis, from actually using it. Brittle governments could lose control of weapons or materials to groups such as the Islamic State of Iraq and the Levant or al-Qaeda. And terrorists could marry nuclear materials to conventional explosives and cause widespread panic and harm, even without detonating a nuclear explosion.

These and other such possibilities may seem like the stuff of fiction. In fact, they are anything but. Preventing further spread of these nuclear weapons and their use may
well turn out to be the great challenge of the 21st century. One hopes the world is up to it.

The writer is president of the Council on Foreign Relations

Saudi Arabia May Go Broke Soon

My Comments:  If Saudi Arabia ceases to function and Iran has a nuclear weapon, what are the implications for the rest of the world?

I accept that I’ll be just a memory by 2045. However, the United States may then be the only country on the planet with the ability to both unilaterally feed itself and produce 100% of the energy it needs. Food and fuel are as critical today as they were millennia ago.

Yes, there are environmental reasons to oppose fracking anywhere in the world but you have to admit the technology has the potential to dramatically change existing global economic and political dynamics.

How all this plays out politically with concurrent changes to existing global security arrangements is yet to be seen. It helps explain Russia’s recent moves to be more aggressive and paranoid about their future. As for Saudi Arabia, without oil to pump, they become a ghost town. We need to think about all this as we argue for or against the pending Iran nuclear deal.

By Ambrose Evans-Pritchard 05 Aug 2015

If the oil futures market is correct, Saudi Arabia will start running into trouble within two years. It will be in existential crisis by the end of the decade.

The contract price of US crude oil for delivery in December 2020 is currently $62.05, implying a drastic change in the economic landscape for the Middle East and the petro-rentier states.

The Saudis took a huge gamble last November when they stopped supporting prices and opted instead to flood the market and drive out rivals, boosting their own output to 10.6m barrels a day (b/d) into the teeth of the downturn.

Bank of America says OPEC is now “effectively dissolved”. The cartel might as well shut down its offices in Vienna to save money.

If the aim was to choke the US shale industry, the Saudis have misjudged badly, just as they misjudged the growing shale threat at every stage for eight years. “It is becoming apparent that non-OPEC producers are not as responsive to low oil prices as had been thought, at least in the short-run,” said the Saudi central bank in its latest stability report.

“The main impact has been to cut back on developmental drilling of new oil wells, rather than slowing the flow of oil from existing wells. This requires more patience,” it said.

One Saudi expert was blunter. “The policy hasn’t worked and it will never work,” he said.

By causing the oil price to crash, the Saudis and their Gulf allies have certainly killed off prospects for a raft of high-cost ventures in the Russian Arctic, the Gulf of Mexico, the deep waters of the mid-Atlantic, and the Canadian tar sands.

Consultants Wood Mackenzie say the major oil and gas companies have shelved 46 large projects, deferring $200bn of investments.

The problem for the Saudis is that US shale frackers are not high-cost. They are mostly mid-cost, and as I reported from the CERAWeek energy forum in Houston, experts at IHS think shale companies may be able to shave those costs by 45pc this year – and not only by switching tactically to high-yielding wells.

Advanced pad drilling techniques allow frackers to launch five or ten wells in different directions from the same site. Smart drill-bits with computer chips can seek out cracks in the rock. New dissolvable plugs promise to save $300,000 a well. “We’ve driven down drilling costs by 50pc, and we can see another 30pc ahead,” said John Hess, head of the Hess Corporation.

It was the same story from Scott Sheffield, head of Pioneer Natural Resources. “We have just drilled an 18,000 ft well in 16 days in the Permian Basin. Last year it took 30 days,” he said.

The North American rig-count has dropped to 664 from 1,608 in October but output still rose to a 43-year high of 9.6m b/d June. It has only just begun to roll over. “The freight train of North American tight oil has kept on coming,” said Rex Tillerson, head of Exxon Mobil.

He said the resilience of the sister industry of shale gas should be a cautionary warning to those reading too much into the rig-count. Gas prices have collapsed from $8 to $2.78 since 2009, and the number of gas rigs has dropped 1,200 to 209. Yet output has risen by 30pc over that period.

Until now, shale drillers have been cushioned by hedging contracts. The stress test will come over coming months as these expire. But even if scores of over-leveraged wild-catters go bankrupt as funding dries up, it will not do OPEC any good.

The wells will still be there. The technology and infrastructure will still be there. Stronger companies will mop up on the cheap, taking over the operations. Once oil climbs back to $60 or even $55 – since the threshold keeps falling – they will crank up production almost instantly.

OPEC now faces a permanent headwind. Each rise in price will be capped by a surge in US output. The only constraint is the scale of US reserves that can be extracted at mid-cost, and these may be bigger than originally supposed, not to mention the parallel possibilities in Argentina and Australia, or the possibility for “clean fracking” in China as plasma pulse technology cuts water needs.

Mr Sheffield said the Permian Basin in Texas could alone produce 5-6m b/d in the long-term, more than Saudi Arabia’s giant Ghawar field, the biggest in the world.

Saudi Arabia is effectively beached. It relies on oil for 90pc of its budget revenues. There is no other industry to speak of, a full fifty years after the oil bonanza began.

Citizens pay no tax on income, interest, or stock dividends. Subsidized petrol costs twelve cents a litre at the pump. Electricity is given away for 1.3 cents a kilowatt-hour. Spending on patronage exploded after the Arab Spring as the kingdom sought to smother dissent.

The International Monetary Fund estimates that the budget deficit will reach 20pc of GDP this year, or roughly $140bn. The ‘fiscal break-even price’ is $106.

Far from retrenching, King Salman is spraying money around, giving away $32bn in a coronation bonus for all workers and pensioners.

He has launched a costly war against the Houthis in Yemen and is engaged in a massive military build-up – entirely reliant on imported weapons – that will propel Saudi Arabia to fifth place in the world defence ranking.

The Saudi royal family is leading the Sunni cause against a resurgent Iran, battling for dominance in a bitter struggle between Sunni and Shia across the Middle East. “Right now, the Saudis have only one thing on their mind and that is the Iranians. They have a very serious problem. Iranian proxies are running Yemen, Syria, Iraq, and Lebanon,” said Jim Woolsey, the former head of the US Central Intelligence Agency.

Money began to leak out of Saudi Arabia after the Arab Spring, with net capital outflows reaching 8pc of GDP annually even before the oil price crash. The country has since been burning through its foreign reserves at a vertiginous pace.

The reserves peaked at $737bn in August of 2014. They dropped to $672 in May. At current prices they are falling by at least $12bn a month.

Khalid Alsweilem, a former official at the Saudi central bank and now at Harvard University, said the fiscal deficit must be covered almost dollar for dollar by drawing down reserves.

The Saudi buffer is not particularly large given the country’s fixed exchange system. Kuwait, Qatar, and Abu Dhabi all have three times greater reserves per capita. “We are much more vulnerable. That is why we are the fourth rated sovereign in the Gulf at AA-. We cannot afford to lose our cushion over the next two years,” he said.

Standard & Poor’s lowered its outlook to “negative” in February. “We view Saudi Arabia’s economy as undiversified and vulnerable to a steep and sustained decline in oil prices,” it said.

Mr Alsweilem wrote in a Harvard report that Saudi Arabia would have an extra trillion of assets by now if it had adopted the Norwegian model of a sovereign wealth fund to recyle the money instead of treating it as a piggy bank for the finance ministry. The report has caused storm in Riyadh.

“We were lucky before because the oil price recovered in time. But we can’t count on that again,” he said.

OPEC have left matters too late, though perhaps there is little they could have done to combat the advances of American technology.

In hindsight, it was a strategic error to hold prices so high, for so long, allowing shale frackers – and the solar industry – to come of age. The genie cannot be put back in the bottle.

The Saudis are now trapped. Even if they could do a deal with Russia and orchestrate a cut in output to boost prices – far from clear – they might merely gain a few more years of high income at the cost of bringing forward more shale production later on.

Yet on the current course their reserves may be down to $200bn by the end of 2018. The markets will react long before this, seeing the writing on the wall. Capital flight will accelerate.

The government can slash investment spending for a while – as it did in the mid-1980s – but in the end it must face draconian austerity. It cannot afford to prop up Egypt and maintain an exorbitant political patronage machine across the Sunni world.

Social spending is the glue that holds together a medieval Wahhabi regime at a time of fermenting unrest among the Shia minority of the Eastern Province, pin-prick terrorist attacks from ISIS, and blowback from the invasion of Yemen.

Diplomatic spending is what underpins the Saudi sphere of influence in a Middle East suffering its own version of Europe’s Thirty Year War, and still reeling from the after-shocks of a crushed democratic revolt.

We may yet find that the US oil industry has greater staying power than the rickety political edifice behind OPEC.