As is understandable, Obama began by touting his accomplishments; came late as usual, and apparently, punished the majors, by only responding to a few questions and none from their reporters.
I am posting an article about wealth disparity and submit that yes, employment is up but that does not tell the full story. (See 1 below.)
First, far too many of those who sought work and are now employed are at jobs that did not replace former income levels or challenge their prior work experience.
Second, far too many have given up seeking work and are not part of the government calculations thus, favorably skewing the statistics.
Third, the wealth disparity of which Obama complains is a function of Fed interest rate manipulations, ie. all the Q's, which lowered interest rates to zero, drove the market up to the benefit of stock owners and to the detriment of income seekers supplementing their cost of living, to some extent, off interest returns.
Fourth, after some six years, middle class incomes are about flat and many of their ranks have been decimated.
Now, I hear how serious the FBI takes this attack on our freedom of speech. Where is/was the FBI when it comes/came to our own government's attack by the IRS on freedom of speech?
Under the constraints of Atty. General Holder, not too forthcoming!
Is the FBI willing to declare war upon Ms. Lerner and those in the IRS who continue to keep the American Public in the dark regarding their preventing Conservative Organizations from receiving legitimate and warranted tax relief?
The ability to conduct technological attacks has put into question whether our government has an obligation to protect our freedoms if such is employed against American Corporations and private businesses.
Obviously government's primal purpose is to protect its citizens and thus it goes, without question, the government must protect itself and respond to such attacks in a meaningful and effective manner. Even in this matter we are woefully ill prepared.
The question boils down to whether private enterprise can take on the threat or should the government become involved and thus, put at potential risk our freedoms as much as those who attack?
I also was bemused that Obama told Sony they should have come to him, apparently, to learn how to be tough. This from a president who ranks as one of the worst negotiators in history. and I cite his lack of extracting anything from Cuba as his most recent bungled opportunity.
I do not trust Obama to protect my freedoms. And yes, he will be out of office in two years. However, could he cause regulations to be enacted that would have a lasting and dangerous impact on our future freedoms? Common Core was begun by states to establish guidelines then Obama 'shoved' the government's nose under the tent and now dictates to states what the standards should be and threatens withholding funds if states do not acquiesce.
Meanwhile, hacking is a serious problem and must be addressed. However, I regret Obama may be the president to initially determine our policy. Why? Because I do not trust him for reasons I have enumerated and am happy to repeat: he is a proven liar, he is arrogant, he is angry, he is imperial, he does not respect our Constitution and has been found wanting and therefore distrustful!
Newt sent me the following: "We Lost the Cyberwar Over Sony: Now What?"
(See 1a below.)
Finally, Obama stated he is willing to work with Republicans but still left the impression if Republicans do not give him his wants he will continue to act unilaterally.
(It is now revealed Obama was working on the re-establishment of relations with Cuba for a year yet, he never felt the Constitutional obligation/courtesy to inform even the "Democrat Chairman" of The Foreign Relations Committee.)
Obama reminds me of a petulant child who wants his way and hates being challenged. At least Obama does not stomp his feet. Perhaps he just kicks a Netanyahu doll instead.
What America needs is a president who unites, who is convinced America stands heads and shoulders above all others, is an asset to world order and peace, notwithstanding the fact that we are not perfect and make mistakes, and finally, a person who can be trusted by Americans as well as by our allies.
===
Iran and the bomb. (See 2 and 2a below.)
===
Energy commentary. (See 3 below.)
===
Is Hamas back to its old tricks? If so how can you trust terrorists. In truth you cannot. Obama, obviously, believes you should and then trust to faith! (See 4 below.)
===
My friend, Kim, sees a Republican strategy forming! (See 5 below.)
===
Dick
-------------------------------------------------------------------------------------------------------------------------
1) Pew Research Study: US Wealth Gaps Hit Record High
The wealth gap between the country's upper-income and middle-class families has risen to a record high, according to a new study from the Pew Research Center.
The survey, based on 30 years of Federal Reserve data, shows the gap between upper- and lower-income families also has climbed to an all-time peak.
The median wealth of upper-income families totaled $639,400 last year, 6.6 times the median wealth of middle-income families — $96,500. That compares with 4.5 times in 2007, the year before the financial crisis.
In addition, the median net worth of upper-income families tops the $9,300 median of lower-income families by 68.8 times.
"The latest data reinforce the larger story of America's middle-class household wealth stagnation over the past three decades," the report states.
"The Great Recession destroyed a significant amount of middle-income and lower-income families' wealth, and the economic recovery has yet to be felt for them. . . . Middle- and lower-income families' wealth levels in 2013 are comparable to where they were in the early 1990s."
Meanwhile, Nobel laureate economist Joseph Stiglitz of Columbia University, says that growing income inequality has taken a major toll on children.
"Though an average American childhood may not be the worst in the world, the disparity between the country's wealth and the condition of its children is unparalleled," he writes in an article for Project Syndicate.
The childhood poverty rate in the U.S. is 19.9 percent, the highest among all developed countries, except Romania.
"None of this is because Americans do not care about their children," Stiglitz says. "It is because America has embraced a policy agenda in recent decades that has caused its economy to become wildly unequal, leaving the most vulnerable segments of society further and further behind."
1a) Dick: No one should underestimate the historic importance of the North Korean cyber war against America and the collapse of American defenses in the Sony Pictures attack.
This was not some amusing pop culture event in which a few "hackers" played games with celebrities.
This was not an entertaining series of embarrassing leaks that allowed us to learn how viciously and nastily some senior Hollywood bosses write about famous movie stars in internal emails.
This was a deliberate assault on sovereign American soil against an American company, costing it millions of dollars in direct damages and hundreds of millions in reputational damages while blocking most of its employees from using their internal systems to get routine work done.
This was a threatened physical assault against moviegoers and movie theaters nationwide if they ignored the cyberattack and dared to laugh at the North Korean dictator Kim Jong Un.
Some commentators criticized the movie theaters for their "cowardice" in not standing up to the threats. Others criticized the rest of the movie industry for not coming to the defense of Sony.
Both critiques miss the core reality.
Private companies can't fight sovereign nations.
Private companies cannot be asked to risk the lives of their employees and their customers because of an unanswered foreign threat of violence.
Defending America against foreign enemies is the duty of the United States government. To "provide for the common defense" is one of the reasons given in the preamble to the Constitution for forming a government.
This attack on American interests began on November 24 when there was a massive hacking assault on Sony. After 24 days of government passivity and ineffectiveness, the theaters caved to the threat of terrorist attacks.
Thus with more than three weeks to find and defeat the attackers, the American government proved to be impotent.
This attack is pure cyberwarfare.
There is a big difference between hacking for intellectual property theft and hacking to coerce a change in behavior.
The former is a crime. The second is an act of war.
The real danger is that this incident will become a precedent. Other countries and other terrorist groups will conclude that it is open season on American interests and even American lives. American companies will begin (in fact have already begun) self-censoring to avoid offending dictators and terrorists. The enemies of our freedoms will have won.
We need three decisive steps to react to this defeat in a cyberwar.
First, we have to go on the offense in this campaign and refuse to accept that the fight is over. North Korea must be made to pay an extraordinary price for this attack. One step might be to simply confiscate North Korean ships until the dictatorship pays triple damages to Sony and the theaters for the cost of its attack. What must not happen is for the American people to be told it is too hard or too dangerous to defend America against an out-of-control dictatorship. That could lead to anarchy and chaos, with every predator on the planet feeling they have the right to wage cyberwar against Americans.
Second, we should develop an immediate response capability to defend American interests and crush cyberopponents immediately. The time to hit back hardest was November 24, the day the attack began. We need protocols to enable companies and the federal government to spot an assault, report it and respond to it in virtually real time. This will require the creation of a command center -- comparable to the air traffic control system in its speed of response -- for the government and private companies to cooperate on cyberattacks
Third, we must develop vastly better defensive and offensive capabilities. This will require considerable congressional involvement in thinking through the realities of the emerging permanent cyberdangers and the patterns of cyberwar.
No one should kid themselves.
We have now entered the age of cyberwar and we lost a major round in that war. The longer it takes us to confront this fact and take the necessary corrective actions, the greater our vulnerability to another defeat will be.
Your Friend,
Newt
---------------------------------------------------------------------------------------------------------------------
2) 12 MONTHS IS NOT ENOUGH TIME TO STOP AN IRANIAN NUCLEAR BREAKOUT
Author: Emily B. Landau
The objective of the P5+1 in their negotiations with Iran over a comprehensive deal is to keep Iran at about a year from what is known as “breakout”—the ability to quickly assemble one nuclear device. The logic of the P5+1 stance is that with some modifications to Iran’s nuclear infrastructure and an “ironclad” verification regime, twelve months will be enough time for an Iranian violation to be detected and for the international community to respond before Iran is able to move to a weapons capability.
In a perfect world, they might be right. But in the real world, and based on the experience of the past eleven years, this best-case scenario assumption is unwarranted. It is much more likely that twelve months will be insufficient time for detection and response. Specifically, it will require whoever is in charge—the IAEA? United States? P5+1? UN Security Council?—to successfully manage three crucial tasks: to detect a violation, and produce clear evidence; to secure agreement that the violation is significant and warrants confronting Iran; and to act on the information in a quick, coordinated and determined manner in order to stop Iran.
But the quick “detection-decision-action” process envisioned by the P5+1 will not be as smooth, problem-free and timely as they think. In fact, there are likely to be problems of interpretation, and other political constraints at every turn.
Let’s begin with presentation of evidence of a violation. Once an agreement with Iran is achieved, after so many years of difficult and time-consuming negotiations, it will no doubt be accompanied by great fanfare and praise to Iran for its cooperation. The negotiators will be ecstatic with their success, and eager to proceed with economic and political cooperation and new ties. The last thing they will want is to find evidence that the agreement is not being adhered to. In fact, the instinct of the P5+1 will be to look the other way if faced with evidence, and they will certainly have no incentive to actively seek it out.
Still, intelligence information and analyses of IAEA reports will find their way to media reports and commentary, and these will quickly become the subject of debate in the public domain—in the media and social media. This will force the relevant parties to pay attention, but some recent cases provide a glimpse of what is likely to happen.
In the past few weeks alone, questions have been raised (by an independent, Washington-based research institute) about evidence that Iran had fed gas into advanced IR-5 centrifuges, and an article was published about Iran’s illicit procurement of components for its heavy water reactor at Arak, in violation of UN sanctions. These two cases sparked debate over the facts and interpretation of the facts, and whether they violated the Joint Plan of Action (JPOA). In the first case, the United States reported that it confronted Iran with the evidence and told it to stop; for its part, Iran said it would continue to test the centrifuges whenever necessary, and that it is not a violation. The case of Arak elicited debates among experts in the United States over whether this was a violation of the JPOA or “only” of sanctions; regarding the JPOA, some noted the obvious and dangerous procurement loophole, while others were satisfied that procurement is not a direct violation.
Another issue that sparked media debate was whether concessions were made by Iran as part of the November 24 decision to extend the nuclear negotiations for another seven months—the United States said concessions were made in certain areas, and Iran denied them. This case was reminiscent of what happened after the Interim Deal was first decided—there was a U.S. version of the deal and an Iranian one, and they were not identical.
These cases demonstrate the “interpretation wars” that will no doubt accompany any news of future violations—among the P5+1 states (and within them), as well as between the P5+1 and Iran. Interpretation of the evidence will be strongly influenced by political considerations—as has been the case for the past eleven years. People will be challenging the veracity and significance of any evidence that is produced, in line with an entire set of political interests. This will be time-consuming, and will come at the expense of the ability to make a quick call that there is clear evidence of a violation.
Then there is the question of significance. Is the violation significant enough to warrant confronting Iran? And if it is deemed significant, what should be done about it? Will action be taken in response to any violation or only in the face of a major violation? The latter would certainly be a mistake, especially as we have learned that Iran operates incrementally—the regime consciously avoids blatant violations that may more easily elicit a harsh international response, preferring to move slowly, bit by bit. That’s how Iran got from several hundred centrifuges to 19,000, including advanced models, and from the first kilograms of low-enriched uranium to an amount today, which if enriched to weapons-grade level, would be enough for six to seven nuclear devices.
Finally, if all of these initial stages are passed successfully, and a decision is made that something must be done, what will that “something” be? More sanctions? Military force? What will be able to stop Iran in a time frame that is likely at that point to be extremely short?
When considering how things are likely to play out—on the basis of how they have played out in the past and the debilitating political constraints—twelve months is in reality no time at all.
Emily B. Landau is Head of the Arms Control Program at the Institute for National Security Studies (INSS), at Tel Aviv University and the author of “Decade of Diplomacy: Negotiations with Iran and North Korea and the Future of Nuclear Nonproliferation.”
2a) The Obama Administration vs. Israel
by Jonathan Rosenblum
Yated Ne'eman
Yated Ne'eman
A certain level of tension between even the most supportive American governments and Israel is probably inevitable, as no two governments have identical interests on every issue or evaluate those interests in the same fashion. But relations between the Obama administration and Israel (not just Prime Minister Binyamin Netanyahu) can no longer be dismissed as the occasional quibbling of two happily married spouses.
Ha'aretz reported last week that President Obama has convened his top foreign policy advisors to consider whether and in what form sanctions should be imposed on Israel for its building in east Jerusalem. Now, the fact that Ha'aretz reported something does not make it true. It could be – indeed it likely is – that the administration was testing to see what impact such a leak would have on the political fortunes of Prime Minister Netanyahu in the upcoming elections. And if so, the 'testing" no doubt came back that such a move would only improve Netanyahu's electoral changes, particularly when a recent poll found that Israelis by a margin of nearly 3:1 do not view Obama as a friend of the Jewish state.
Be that as it may, the really interesting thing about the Ha'aretz report is that neither White House press secretary Josh Earnest nor the State Department's Jen Paski initially felt any inclination to deny the report and to reaffirm (as they always to in such situations) the United States undiminished commitment to Israel's security. (On Monday, Earnest did deny the repott, while stating that the United States will continue to vigorously oppose Israel's settlement building, including in east Jerusalem.) The second point of interest is that few dismissed the report out of hand as inconsistent with the known facts about President Obama's feelings for Israel.
It should be noted that the same week that rumors flew of sanctions by the Obama administration against Israel, the U.S. Congress passed a bill conferring a unique status on Israel for the sharing of defense technologies and information. So the conflict with Israel is confined to the executive branch and not the legislative branch.
SINCE THE OUTSET OF LAST SUMMER'S FIFTY DAY GAZA WAR, there has been a steady stream of anti-Israel rhetoric and actions from the Obama administration. In the middle of the war, the administration stopped the resupply to Israel of Hellfire air to surface missiles. As reported by the Wall Street Journal, the administration did not outright deny the request, it simply refused to allow the resupply to go through the customary channels via the U.S. European command, and introduced a new level of bureaucratic oversight that resulted in the missiles arriving a month after the ceasefire ending the fighting.
In the same vein, the administration overruled the FBI's and U.S. Attorney's Office decision to procure from Facebook the IP number of those who had posted about the alleged capture of an Israeli soldier. Though time was of the essence in the attempt to find the missing soldier (whom the IDF subsequently determined had been killed), Attorney General Holder ordered the FBI and U.S. Attorney's Office not to proceed with an order requiring Facebook to turn over the information. Again he interposed a new bureaucratic requirement that would have required weeks to complete.
AFTER AN ISRAELI ARTILLERY SHELL hit an UNRWA school during Operation Protective Shield, the State Department issued a statement said that the "U.S. is appalled by today's disgraceful shelling." The term "disgraceful" attributed to Israeli forces the intent to target civilians or willful negligence. And throughout the war, the administration (via White House spokesman Josh Earnest) repeatedly called on Israel "to take even greater steps to ensure the protection of civilians," while equally forcefully refusing to specify in what way Israel could do so against Hamas forces, who deliberately placed munitions and missile launchers amidst the civilian population of Gaza.
When Chairman of the Joint Chiefs of Staff General Martin Dempsey commented in early November that Israel had gone to "extraordinary lengths" to spare civilians, State Department spokesperson Jen Psaki continued to insist that Israel could have done more to prevent civilian casualties. Dempsey's judgment, by the way, confirmed that oft-expressed by Col. Richard Kemp, former commander of NATO expeditionary forces in Afghanistan and a man who has spent a lifetime in non-conventional warfare, that no country in the history of warfare has ever done more to avoid civilian casualties than Israel.
It turns out that the United States is a good deal more forgiving of civilian casualties caused by its own military operations, even when those operations are conducted half-way around the globe from the United States, not to protect a home front under unceasing missile fire, as was the case of the IDF in Gaza last summer.
Though the Obama administration enunciated guidelines in 2013 that drone strikes would only be launched when there was "near certainty" of no civilian casualties, it promptly suspended those requirements with respect to attacks on ISIS and Al Qaeda targets, after a Tomahawk missile designed for an Al Qaeda affiliate in Syria hit a home for displaced civilians instead. With respect to striking military targets deeply embedded among the civilian population, there is no such thing as "near certainty" of no civilian deaths.
The 1:1 ratio of Hamas fighters to civilians casualties achieved by Israel last summer is far better than that achieved by other armies fighting embedded terrorist groups, including U.S.forces. A recent study by the human rights group (and therefore not necessarily fully reliable) Reprieve, based on reports by the Bureau of Investigative Journalism found that only 3.5% – or 41 out of 1,147 -- of those who died in "targeted killings" by the U.S in the Middle East were actually targets. For example, the U.S. targeted 24 men in Pakistan, but managed to kill only six of them. It did, however, kill 874 others, including 142 children. So much for lectures about greater preventive measures.
IN LATE JULY, Secretary of State Kerry attempted to convince Israel to accept a ceasefire that would have left Hamas's infrastructure, including the attack tunnels, intact, and which called for a lifting of Israel's naval blockade. In short, the ceasefire would have rewarded for Hamas for starting the war and raining rockets on Israel's population centers. That offer was rejected by the Israeli cabinet 19-0.
Two months later, Kerry returned to his efforts to reward Hamas, and convened an international donors conference at which billions of dollars of humanitarian aid was pledged to rebuild Gaza. But not a penny was conditioned on Hamas doing anything in terms of disarming or renouncing the war of extermination that it has waged against Israel since the signing of its 1988 covenant. By taking the financial pressure off of Hamas to foot the bill for the destruction it brought about, writes Peter Berkowitz, Kerry assured that Hamas could turn its attention to rebuilding its urban labyrinth of underground tunnels.
A FEW WEEKS LATER, KERRY was back at it again. At a White House gathering in honor of the Muslim festival of Eid-al-Adha, Kerry told his largely Muslim audience that it is necessary to achieve a Palestinian-Israel peace because the failure to do so fuels ISIS recruitment. Kerry is not exactly the sharpest tack in the box, but it is amazing that even he was able to get off that line without giggles. Perhaps he did not notice that ISIS is marching on Baghdad and not Jerusalem. And videos of the beheadings of Western hostages have been a more than adequate recruitment tool for ISIS.
Given the hundreds of thousands killed, and the millions of refugees, from fighting in Syria, Iraq, and Libya in recent years, the continued discussion of a Palestinian-Israel treaty can only be termed obsessive. Even Martin Idyk, who has made a lucrative career as a Arab-Palestinian peace processor, now admits that the U.S. has little strategic interest at present in a Palestinian-Israel peace treaty.
The one positive outcome of the so-called Arab Spring and the subsequent chaos should have been to finally put to rest the implausible claim that the Arab-Israeli conflict is the cause of the various deformities of the region. As Khalid Abu-Toameh of the Gatestone Institute writes, the Arab-Israeli conflict is the tired excuse upon which failed Arab autocrats always fall back. The current bloodletting in Syria, like the Iraq-Iran war which claimed a million lives, has absolutely nothing to do with Israel. Ancient intra-Muslim religious hatreds between Sunni and Shiite Muslims are the source of most of the turmoil in the region.
Caroline Glick wondered aloud who could those Arab leaders cited by Kerry inhis Eid-al-Adha speech have been.
Perhaps it was his good friend Qatari Emir Tamim bin-Hamad Al Thani, who has been financing Hamas to the tune of billions of dollars over the last two years and is providing jihadist groups in Libya a billion dollars annually. Of late the Emir of Qatar has also been channeling money to Israel's Northern Islamic movement, which in turn funnels it into the group that attacks Jews on the Temple Mount, with the goal of heating up the Temple Mount and triggering a third intifada.
AND FINALLY THERE WAS THE AMERICAN CHIDING of Israel for continuing to build in areas of Jerusalem that all recognize will remain part of Israel in any conceivable peace deal. The building permits in question related to the extension of the Jerusalem neighborhood of Talpiot, which is within the 1948 amnesty lines.
The decision to build said White House spokesman Josh Earnest would "draw condemnation from the international community [and] distance Israel from its closest allies. . . . "The State Departments Jen Psaki went further and said that the construction plans would "call into question Israel's ultimate commitment to a peaceful negotiated settlement with the Palestinians." Both statements were dog whistles to the Europeans to follow suit and lay on their own condemnations, and the Europeans responded accordingly.
When Prime Minister Netanyahu declared a nine-month settlement building freeze and Mahmoud Abbas still refused to come to the bargaining table, the Obama administration never issued such a condemnation. Nor has any such condemnation ever been forthcoming for the continuous incitement of the official Palestinian Authority media, including recent celebrations of terrorist murderers of Jews in Jerusalem. Only Israel's commitment to peace is questioned.
ALL THESE WRONGS, however, as we have written times before,.pale besides President Obama's
determination to sign an agreement with Iran on any terms. The only reason such an agreement has not be concluded by now is that the Iranians know that Obama has no "red lines" and that their stonewalling will always be met by further concessions. The worst that can happen is that they will stall until their nuclear program is fully operative.
Obama has never openly admitted that his primary foreign policy goal from the outset of his presidency, when he offered no succor to the Green Revolution in Iran, is to seek rapprochement with the mullahs at any price. Instead, as Caroline Glick points out, he always says that his goal is to prevent a nuclear Iran. And thus has he managed to string along a Congress that is deeply suspicious of Iran.
But thanks to the senior White House staffer who called Prime Minister Netanyahu a "chicken" for not having bombed Iran, the cat is out of the bag. According to that official perhaps three years ago, Netanyahu could have acted to stop the Iran nuclear program. But he allowed himself to be checked by Obama and his assurances that the military option was still on the table. Now, crowed the official, it is far too late for Netanyahu to stop the Iranian program.
The goal, its seems, was not preventing a nuclear Iran, whose leaders still spout eliminationist rhetoric against Israel, but rather preventing Israel from stopping the Iranian nuclear program
---------------------------------------------------------------------------------------------------------------------------------
3)Why Would the Saudis Deliberately Crash the Oil Markets?
Simple: to undermine Tehran.
By Andrew Scott Cooper
Andrew Scott Cooper is an energy analyst and the author of The Oil Kings:
How the U.S., Iran, and Saudi Arabia Changed the Balance of Power in the
Middle East. He can be followed on twitter @aascooper.
On January 2, 1977, the Shah of Iran made a painful admission about his
country’s economy. “We’re broke,” he confided bluntly to his closest aide,
court minister Asadollah Alam, in a private meeting. Alam predicted still
more dangers to come: “We have squandered every cent we had only to find
ourselves checkmated by a single move from Saudi Arabia,” he later wrote in
a letter to the shah. “[W]e are now in dire financial peril and must tighten
our belts if we are to survive.”
The two men were reacting to recent turmoil in the oil markets. A few weeks
prior, at an OPEC meeting in Doha, the Saudis had announced they would
resist an Iran-led majority vote to increase petroleum prices by 15 percent.
(The shah needed the boost to pay for billions in new spending commitments.)
King Khalid bin Abdulaziz Al Saud argued that a price hike wasn’t justified
when Western economies were still mired in a recession — but he was also
eager to place economic constraints on Iran at a time when the shah was
ordering nuclear power plants and projecting influence throughout the Middle
East. So the Saudis “flooded the markets,” ramping up oil production from 8
million to 11.8 million barrels per day and slashing crude prices. Unable to
compete, Iran was quickly driven from the market: The country’s oil
production plunged 38 percent in a month. Billions of dollars in anticipated
oil revenues vanished, and Iran was forced to abandon its five-year budget
estimates.
A damaging ripple effect persisted: Over the summer of 1977, industrial
manufacturing in Iran fell by 50 percent. Inflation ran between 30 and 40
percent. The government made deep cuts to domestic spending to balance the
books, but austerity only made matters worse when thousands of young,
unskilled men lost their jobs. Before long, economic distress had eroded
middle-class support for the shah’s monarchy — which collapsed two years
later in the Iranian Revolution.
Today, oil prices have again plummeted, from a high of $115 per barrel in
August 2013 to under $60 per barrel in mid December 2014. Western experts,
predictably, have seized the opportunity to ponder what cheaper oil might
mean for the stock market. As for why prices have dropped, some analysts
have suggested it has little to do with any manipulation of Saudi spigots: A
December essay in Bloomberg Businessweek credited the American shale
revolution with “breaking OPEC’s neck.”
There’s no doubt that shale has eroded Saudi Arabia’s “swing power” as the
world’s largest oil producer. But thanks to their pumping capacity,
reserves, and stockpiles, the Saudis are still more than capable of crashing
the oil markets — and willing to do so. In September 2014, they did just
that, boosting oil production by half a percent (to 9.6 million barrels per
day) in markets already brimming with cheap crude and, a few days later,
offering increased discounts to major Asian customers; global prices quickly
fell nearly 30 percent.
As in 1977, the Saudis instigated this flood for political reasons: Whether
foreign analysts believe it or not, oil markets remain important venues in
the Saudi-Iranian struggle for supremacy over the Persian Gulf.
This isn’t the first time since the late 1970s that Saudi Arabia has used
oil as a political weapon against its rival. In November 2006, Nawaf Obaid,
a Saudi security consultant connected to Prince Turki al-Faisal, then Saudi
Arabia’s ambassador to Washington, wrote an op-ed in the Washington Post
noting that if “[i]f Saudi Arabia boosted production and cut the price of
oil in half … it would be devastating to Iran … [and] limit Tehran’s ability
to continue funneling hundreds of millions each year to Shiite militias in
Iraq and elsewhere.” Two years later, at the height of the global financial
crisis, the Saudis acted: They flooded the market, and within six months,
oil prices had fallen from their record high of $147 per barrel to just $33.
Thus, Iranian President Mahmoud Ahmadinejad began 2009, an election year,
struggling with the sudden collapse in government oil revenues and forced to
slash popular subsidies and social programs. The election’s contested
outcome was accompanied by economic contraction and the worst political
violence in Iran since the fall of the shah.
Signals of a new flood emerged as early as June 2011. While addressing an
audience of senior American and British officials at a NATO operations base,
Prince Turki warned Iran not to take advantage of the regional unrest
triggered by the Arab Spring. Paraphrasing some of Turki’s comments, the
Guardian noted that Iran’s economy could be squeezed hard by “undermining
its profits from oil, something the Saudis … were ideally positioned to do.”
The Saudis understood, too, that the best time to crash the markets would be
when prices were already soft and consumer demand low. In early December,
just a few months after Saudi Arabia unleashed its latest oil flood, Obaid
wrote in a Reuters article that his government’s decision to depress prices
is “going to have a huge effect on the political situation in the Middle
East. Iran will come under unprecedented economic and financial pressure as
it tries to sustain an economy already battered by international sanctions.”
Around the same time, the Saudis were no doubt pleased to see bread prices
shoot up by 30 percent in Tehran. (Bread is a staple of the Iranian diet,
and its prices are a bellwether for the economy.)
On Dec. 10, the Saudi oil minister said his country would keep pumping 9.7
million barrels per day into the global markets, regardless of demand. For
their part, the Iranians have shown alarm, if not yet panic. Without naming
names — he didn’t have to — President Hassan Rouhani decried the
“treacherous” actions of a major oil producer whose “politically motivated”
behavior was evidence of “a conspiracy against the interests of the region….
Iran and the people of the region will not forget such conspiracies.” The
previous day, Vice President Eshag Jahangiri had described the rapid plunge
in oil prices as a “political plot … not a result of supply and demand.”
Riyadh’s real hope, if history is any indicator, is that escalated
production will force Rouhani’s government to implement an austerity budget
that will ultimately stoke underlying social unrest and once again push
people into the streets. If this happens, it might not lead to an event as
significant as the shah losing his grip on power — but it would reinforce
the Saudis’ faith in oil as a potent weapon in the battle to dominate the
Middle East. And oil floods, in turn, would likely continue their periodic,
dangerous rattling of both the markets and the region.
3)Why Would the Saudis Deliberately Crash the Oil Markets?
Simple: to undermine Tehran.
By Andrew Scott Cooper
Andrew Scott Cooper is an energy analyst and the author of The Oil Kings:
How the U.S., Iran, and Saudi Arabia Changed the Balance of Power in the
Middle East. He can be followed on twitter @aascooper.
On January 2, 1977, the Shah of Iran made a painful admission about his
country’s economy. “We’re broke,” he confided bluntly to his closest aide,
court minister Asadollah Alam, in a private meeting. Alam predicted still
more dangers to come: “We have squandered every cent we had only to find
ourselves checkmated by a single move from Saudi Arabia,” he later wrote in
a letter to the shah. “[W]e are now in dire financial peril and must tighten
our belts if we are to survive.”
The two men were reacting to recent turmoil in the oil markets. A few weeks
prior, at an OPEC meeting in Doha, the Saudis had announced they would
resist an Iran-led majority vote to increase petroleum prices by 15 percent.
(The shah needed the boost to pay for billions in new spending commitments.)
King Khalid bin Abdulaziz Al Saud argued that a price hike wasn’t justified
when Western economies were still mired in a recession — but he was also
eager to place economic constraints on Iran at a time when the shah was
ordering nuclear power plants and projecting influence throughout the Middle
East. So the Saudis “flooded the markets,” ramping up oil production from 8
million to 11.8 million barrels per day and slashing crude prices. Unable to
compete, Iran was quickly driven from the market: The country’s oil
production plunged 38 percent in a month. Billions of dollars in anticipated
oil revenues vanished, and Iran was forced to abandon its five-year budget
estimates.
A damaging ripple effect persisted: Over the summer of 1977, industrial
manufacturing in Iran fell by 50 percent. Inflation ran between 30 and 40
percent. The government made deep cuts to domestic spending to balance the
books, but austerity only made matters worse when thousands of young,
unskilled men lost their jobs. Before long, economic distress had eroded
middle-class support for the shah’s monarchy — which collapsed two years
later in the Iranian Revolution.
Today, oil prices have again plummeted, from a high of $115 per barrel in
August 2013 to under $60 per barrel in mid December 2014. Western experts,
predictably, have seized the opportunity to ponder what cheaper oil might
mean for the stock market. As for why prices have dropped, some analysts
have suggested it has little to do with any manipulation of Saudi spigots: A
December essay in Bloomberg Businessweek credited the American shale
revolution with “breaking OPEC’s neck.”
There’s no doubt that shale has eroded Saudi Arabia’s “swing power” as the
world’s largest oil producer. But thanks to their pumping capacity,
reserves, and stockpiles, the Saudis are still more than capable of crashing
the oil markets — and willing to do so. In September 2014, they did just
that, boosting oil production by half a percent (to 9.6 million barrels per
day) in markets already brimming with cheap crude and, a few days later,
offering increased discounts to major Asian customers; global prices quickly
fell nearly 30 percent.
As in 1977, the Saudis instigated this flood for political reasons: Whether
foreign analysts believe it or not, oil markets remain important venues in
the Saudi-Iranian struggle for supremacy over the Persian Gulf.
This isn’t the first time since the late 1970s that Saudi Arabia has used
oil as a political weapon against its rival. In November 2006, Nawaf Obaid,
a Saudi security consultant connected to Prince Turki al-Faisal, then Saudi
Arabia’s ambassador to Washington, wrote an op-ed in the Washington Post
noting that if “[i]f Saudi Arabia boosted production and cut the price of
oil in half … it would be devastating to Iran … [and] limit Tehran’s ability
to continue funneling hundreds of millions each year to Shiite militias in
Iraq and elsewhere.” Two years later, at the height of the global financial
crisis, the Saudis acted: They flooded the market, and within six months,
oil prices had fallen from their record high of $147 per barrel to just $33.
Thus, Iranian President Mahmoud Ahmadinejad began 2009, an election year,
struggling with the sudden collapse in government oil revenues and forced to
slash popular subsidies and social programs. The election’s contested
outcome was accompanied by economic contraction and the worst political
violence in Iran since the fall of the shah.
Signals of a new flood emerged as early as June 2011. While addressing an
audience of senior American and British officials at a NATO operations base,
Prince Turki warned Iran not to take advantage of the regional unrest
triggered by the Arab Spring. Paraphrasing some of Turki’s comments, the
Guardian noted that Iran’s economy could be squeezed hard by “undermining
its profits from oil, something the Saudis … were ideally positioned to do.”
The Saudis understood, too, that the best time to crash the markets would be
when prices were already soft and consumer demand low. In early December,
just a few months after Saudi Arabia unleashed its latest oil flood, Obaid
wrote in a Reuters article that his government’s decision to depress prices
is “going to have a huge effect on the political situation in the Middle
East. Iran will come under unprecedented economic and financial pressure as
it tries to sustain an economy already battered by international sanctions.”
Around the same time, the Saudis were no doubt pleased to see bread prices
shoot up by 30 percent in Tehran. (Bread is a staple of the Iranian diet,
and its prices are a bellwether for the economy.)
On Dec. 10, the Saudi oil minister said his country would keep pumping 9.7
million barrels per day into the global markets, regardless of demand. For
their part, the Iranians have shown alarm, if not yet panic. Without naming
names — he didn’t have to — President Hassan Rouhani decried the
“treacherous” actions of a major oil producer whose “politically motivated”
behavior was evidence of “a conspiracy against the interests of the region….
Iran and the people of the region will not forget such conspiracies.” The
previous day, Vice President Eshag Jahangiri had described the rapid plunge
in oil prices as a “political plot … not a result of supply and demand.”
Riyadh’s real hope, if history is any indicator, is that escalated
production will force Rouhani’s government to implement an austerity budget
that will ultimately stoke underlying social unrest and once again push
people into the streets. If this happens, it might not lead to an event as
significant as the shah losing his grip on power — but it would reinforce
the Saudis’ faith in oil as a potent weapon in the battle to dominate the
Middle East. And oil floods, in turn, would likely continue their periodic,
dangerous rattling of both the markets and the region.
----------------------------------------------------------------------------------------------------------------
4) Report: Hamas using Gaza reconstruction materials to repair infiltration tunnels
Hamas has been reinforcing damaged tunnel network by means of diverted
building materials that recently entered Gaza for reparation efforts,
according to anonymous Palestinian sources.
Israel-Gaza border
Hamas has reportedly begun repairing its network of underground infiltration
tunnels damaged in the summer war with Israel, Israel Radio cited unnamed
Palestinian sources as saying.
According to the report, Hamas has been reinforcing its tunnel offensive
used against Israel by means of diverted cement and building materials that
recently entered Gaza for reparation efforts following Operation Protective
Edge.
The sources said that while the majority of construction materials have
reached their intended destinations for use in rebuilding private home,
Gaza's ruling Islamist group has obtained a share, Israel Radio reported.
In October, truckloads of cement and steel rolled into the Gaza Strip for
the first time in a year.
In light of fear that incoming construction material would end up in the
hands of Hamas, the UN brokered a deal with Israel and the Palestinian
Authority to create a monitoring mechanism to ensure that material are not
diverted to Hamas for use in rebuilding the tunnels Israel destroyed during
the summer conflict.
That mechanism – which went into operation during UN Secretary-General Ban
Ki-moon’s visit to Gaza in mid-October – is designed to allow an estimated
60,000 homes that were damaged or destroyed to be rebuilt. The material is
earmarked for both the private and public projects, as well as those
organized by the international community.
Israel, which controls the sole commercial crossing between Israel and the
Gaza Strip, at Kerem Shalom, banned most building materials from entering
the area in October 2013.
It did so for security reasons after it uncovered a large tunnel through
which Hamas had planned to attack Israel.
Tovah Lazaroff contributed to this report.
-------------------------------------------------------------------------------------------------------------------------
5) A GOP Strategy Begins to Emerge
Congressional leaders will use coalitions to achieve small wins. Conservatives may not be satisfied.
By Kimberley A. Strassel
Democratic control of the Senate came to an end this week, and most of the press is already predicting the incoming Republican Congress will immediately implode. That’s a distinct possibility, though doomsayers might consider this caveat: Even Republicans are human. And humans evolve.
If there is a silver lining to the GOP’s six minority years under President Obama, it’s that the party has already made almost every mistake. John Boehner has learned the hard way that this White House isn’t interested in compromise. The conservative right (at least some of it) has learned the hard way that holding the government hostage won’t win victories. The GOP caucus has learned the hard way the perils of fracturing. The party has learned the hard way that it can’t run Washington from one branch of government.
One result of these unforced errors is the glimmer of the strategy that Republicans appear to be concocting for the next few years. It isn’t rooted in the fury that brought in the 2010 tea party wave, or shutdown politics or grand bargains. It isn’t about ObamaCare repeal, or Medicare overhaul. It is more measured, more aimed at incremental achievement. Slow as it has been to gel, we’re beginning to see the framework take shape:
Flood the zone : Six long years have given Republicans a decent feel for what this White House considers a priority. Their tactic in the recent omnibus was to inundate the administration with policy riders and force the White House to single out those it found most offensive. Republicans cut those few loose, but sent the rest to the president for his signature. The omnibus as a result contained more conservative policy progress—from blocking a sage grouse listing, to trucking rules, to EPA authority—than Republicans had gained in the previous four years.
This will be the model for most GOP policy victories. Every spending bill it creates will contain dozens of policy riders, and Mr. Obama will have to choose the ones over which he’ll threaten a veto. The rest, presumably, will pass. Mr. Boehner recently said that he may attach GOP border-security priorities to the Homeland Security funding bill that is due in February. Republicans may not be able to force the president to rescind his immigration executive order, but they might end up with a start to immigration reform.
Bipartisan embarrassment: Mitch McConnell ’s first Senate bill will be to greenlight the Keystone XL pipeline, and no surprise. That project has huge support among the voters, and Democrats risk a backlash by opposing it. Republicans are clearly going to make coalition-building a priority, with a view to using Democrats to help pressure Mr. Obama to sign bills.
Dozens of House Democrats this session voted with Republicans to expand access to charter schools, expedite natural-gas exports, ban taxes on the Internet. Senate Democrats are in favor of repealing the medical-device tax in ObamaCare, and possibly more Iran sanctions. Harry Reid sheltered his colleagues from having to take these votes. Those days are over. The GOP looks intent on highlighting its agenda by getting as many Democrats as possible to agree with it, and by isolating Mr. Obama.
Bipartisan stop signs: Coalition-building also will include efforts to halt the president’s regulatory agenda with tools like the Congressional Review Act—which allows Congress to overrule federal rules. EPA coal rules? Net neutrality? The NLRB’s latest rule on “quickie” union elections? Many Democrats will be under pressure to join Republican efforts—through the review act, policy riders or defunding provisions—to crack down on Obama offices that are exceeding their statutory boundaries.
Investigations: Incoming House Oversight Chairman Jason Chaffetz has vowed to keep a focus on existing Obama scandals such as the IRS, but also to shine a big light on hundreds of less-noticed administration regulations. The public can’t oppose government messes they don’t even know about, and Republicans appear to have a new vigor to highlight regulatory overreach and demonstrate their own opposition to it.
A lot of conservatives will feel all this too small, and continue to howl for impeachment. Responding to those demands may in fact be the biggest challenge Republicans face now that they hold both the House and Senate. It will be particularly tricky given the GOP is unlikely to win many “clean” victories. Its success will rest in compromises, ones that cede big issues in return for smaller triumphs.
The GOP’s other challenge will be managing both sides of its caucus: its grand standers and its weaklings. Too many Republicans, particularly in the Senate, have yet to understand the limits of congressional power. Too many other Republicans, particularly in the Senate, lack the political courage to take policy risks (like corporate tax reform). Messrs. Boehner and McConnell have to search out a middle ground, something they’ll only be able to do by coordinating with their troops and with each other.
Just as remarkable as the GOP victory on midterm night has been the GOP sobriety in the aftermath. It suggests the party is learning. Just maybe.
------------------------------------------------------------------------------------------------------------------------
No comments:
Post a Comment