Obama's Continuing Arrogance
Article 1 below is another take on the SCOTUS nomination.
The reduction of emissions is a claim by Obama and, as with all pronouncements regarding emissions, must be taken with a grain of salt and in this case a lump of coal. (See 1 below.)
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I thought Obama's response to Andrea Mitchell's question was good. His response related to why personal contact between nations is critical.
The Cuban President's agitated response to a question asking about his country's political prisoners was clever, ie. 'If you have their names please provide them.'
I seldom find much to compliment Obama for but his extending a hand of friendship to Cuba is a positive move and the hope is time will produce human rights and economic benefits but I always fear Obama will give more than he gets and that seems to continue the case.
The Iran Deal is a perfect reason why I distrust him. Obama's attitude signals he is more knowledgeable than anyone else and his way is always the best and yet, events have proven him consistently wrong. Furthermore, he lies and ignores reality and consequences of his blunders (See 1a and 1b below.)
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More on Soros and how he manipulates with his many millions and Alinsky and Obama are hand maidens. (See 2 and 2a below.)
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Abbas is the Palestinian equivalent of Al Sharpton. Both are shake down artists. (See 3 below.)
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Yesterday and today all the major candidates and Joe Biden spoke at The AIPAC gathering except Sanders.
Biden came across as a shill for Obama, Hillarious dumped on Trump and told the audience what they wanted to hear which is what she does. Kasich did a little pandering but made a rational speech and Trump gave a scripted speech that was quite good. He demonstrated he could be presidential when the need presented itself. I believe he did himself some good and also demonstrated he had the good sense to call upon those who truly understand the Gordian Knot called The Middle East.
If I had any criticism of his speech It would be that in telling the world about the unbreakable relationship his administration would seek to rebuild with Israel, he should also have emphasized we would be honest brokers as well in helping Israel and the PLO come to an agreement that only they can reach.
Ironically, he also sounded like me when it came to The U.N because he castigated them for being a disappointing two faced organization.
I missed Cruz's address. (See 4 below.)
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John Mauldin's open letter continued. (See 5 below.)
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Dick
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1) GOP's message to voters should be this: Supreme Court fight is about Obama's abuse of power
By Liz Peek
Obama likens Garland SCOTUS fight to civilian in a war zone
Let us be clear: Republicans in the Senate are under no obligation to interview, vote on or confirm President Obama’s pick for the Supreme Court. It does not matter that the president has nominated Judge Merrick Garland, who is widely admired as a competent jurist. It is not about the person, it is about principle – but the GOP leadership has been remarkably inept at framing what that principle is and why they are in the right.
The point is this: President Obama has caused this conflict, by diminishing the role of the legislature and assuming unprecedented power for the executive branch. He has purposefully skirted Congress for the better part of seven years, instead pushing ahead on his mostly unpopular agenda through regulations and executive orders. As a result, the Court is being asked to act as referee, ruling on the legality of Obama’s “my way or the highway” presidency. You don’t change a referee in the middle of a contest.
This isn’t about Judge Robert Bork, or the “Biden Rule” -- this is a fight about President Obama undermining the checks and balances established in the Constitution.
For instance, President Obama has tried to essentially shut down our coal industry through new EPA regulations limiting carbon emissions. These rules would create a massive dislocation to our economy, which has long benefited from cheap energy, including abundant coal. That there is a significant cost to the economy is clear; Hillary Clinton recently said “We’re going to put a lot of coal miners and coal companies out of business.” How right, and how cruelly nonchalant that statement is. As reported in the New York Times, “The plan could transform the nation’s electricity system, cutting emissions from existing power plants by a third by 2030, from a 2005 baseline, by closing hundreds of heavily polluting coal-fired plants and increasing production of wind andsolar power.”
Because of the sizeable cost to the economy, lower courts have ruled against the president’s anti-coal regulatory blitz. The Supreme Court, in an unprecedented move, issued a stay requested by 29 states and numerous other groups which prevents implementation of the carbon rule while a lower court assesses its legality. In effect, the courts will rule on whether the White House is allowed to unilaterally punish one of our heritage industries and tens of thousands of workers.
Another important issue before the Supreme Court is President Obama’s executive action allowing some 6 million people living in the country illegally to be protected against deportation. This unilateral effort to rewrite our immigration laws is opposed by a majority of Americans; but, it is a politically useful policy for Democrats hoping to win Latino votes. Because of possibly harmful consequences, 26 states sued to prevent the order from taking effect.
Last fall, the Fifth Circuit Court of Appeals ruled in favor of those states, upholding an earlier injunction that blocked implementation of the president’s executive order. At the time, Ken Paxton, Attorney General of Texas, which is leading the suit, said, ““Today, the Fifth Circuit asserted that the separation of powers remains the law of the land, and the president must follow the rule of law, just like everybody else.” That’s the point.
For the Republican leadership, refusing to consider Mr. Obama’s nominee is a matter of principle, and also an opportunity to reward voters for having elected a Republican Congress. Mitch McConnell, John Boehner and others have come under heavy criticism for not effectively countering President Obama’s policies. In fairness, substantial resistance from Congress led the president to go his own way, using whatever tools he could find to pursue his “legacy” agenda. Many think those tools went beyond the rightful scope of the executive branch. Now, it is up to the Supreme Court to decide.
Because the Court will weigh whether Mr. Obama has overstepped, he cannot be allowed to put his thumb on the scale by adding another sympathetic jurist. This is the message that Republican leaders need to send to voters: the president has abused his authority, and we rely on the Supreme Court to reestablish the checks and balances that prevent an imperial White House. The GOP should not be cowed by the bloviating of the New York Times; they are on the right side of this battle.
1a) Obama Fails Cuban Freedom Again
Susan Rice, President Barack Obama’s National Security Advisor, looked into the television camera and declared that the American 55-year-long trade “embargo with Cuba had failed.” President Obama’s history-making visit this week to Cuba, she said, lays to rest that 55-year-long failure. She and the president neglected to mention that it was President John F. Kennedy, a Democrat, who created and implemented the embargo.
She’s wrong. Obama’s visit symbolizes his failure to help Cubans be free -- not that the embargo failed.
During a rare press conference in Havana, Cuba Monday, Communist Dictator Raul Castro became irritated with reporter questions about human rights abuses inside the country and accused the United States of double standards on the issue.
FACT: Two-thirds of the centrifuges inside one of Iran’s nuclear facilities, Fordo, have been removed in recent months, along with all nuclear material. According to the nuclear deal reached last year, “The facility is banned from any nuclear-related work and is being converted to other uses, eliminating the threat that prompted the attack plan, at least for the next 15 years.”
MYTH: “Under this deal, Iran will never be allowed to pursue nuclear weapons.”
FACT: According to Secretary of State John Kerry, the Joint Plan of Action will destroy the 20 percent enriched uranium. However, this is false. The 20 percent enriched uranium was going to be turned into an oxide making it inoperative. That process is chemically reversible, which allowed Iran to hold its 20 percent uranium that can be turned into active chemical reactions at any time. When the deal was announced, syndicated columnist Charles Krauthammer said, “This is a sham from beginning to end. It’s the worst deal since Munich.” The regime itself counters Rice’s claim that Iran has not built new centrifuges. Just two months after reaching the temporary nuclear deal in November 2013, Iran’s nuclear chief boasted the ongoing construction of a new generation of centrifuges for uranium enrichment. In actuality, the temporary deal neglected to prohibit Iran from building new centrifuges.
MYTH: To deter Iran’s nuclear program, the US has allied with “reasonable partners, not just Israel.”
FACT: Biden failed to list those “reasonable partners.”
MYTH: “My good friend President Netanyahu…”
FACT: Along with President Obama and other members of the administration, Biden refused to meet with Israel’s prime minister at this time last year. Then-Speaker of the House John Boehner invited Netanyahu to address Congress about the dangers of a nuclear Iran. Along with members of the administration, 58 congressmen (all Democrats) boycotted the prime minister’s speech.
MYTH: Regarding achieving the two-state solution between Israelis and Palestinians, Theodore Herzl said, “If you will it, it is no dream.”
FACT: That statement by one of Zionism’s forefathers isn’t related to achieving a two-state solution. Herzl said that with regards to achieving a Jewish state after thousands of years of Jews persecution by European, capped by the Holocaust during World War II.
MYTH: Both sides “need to take meaningful steps” toward peace deal.
FACT: The Palestinians have rejected Israeli offers for statehood three times. The most recent offer was in 2008 by then-Prime Minister Ehud Olmert. The offer would have annexed major Israeli blocs and, in return, given equivalent Israeli territory to the Palestinians, and would have divided Jerusalem.
MYTH: The US provides Israel with “the best [military] equipment available.”
FACT: According to a report published by Cato Institute:
MYTH: Regarding boycotting Israel, “To marginalize one group imperializes us all.”
FACT: Though the Boycott, Divest, and Sanction (BDS) movement is bigoted, this statement is hypocritical of an administration that has shown little support for military veterans, police officers, and others who serve and protect. Last month in Commentary, Manhattan Institute fellow Heather Mac Donald wrote, “Simply put, the man [Barack Obama] twice elected to the country’s highest office routinely and repeatedly charges that cops and the courts are awash in systematic racial bias…The negative effect of such rhetoric on the morale of the police, on the perceived legitimacy of the criminal-justice system, and on the atmosphere in which police operate is incalculable. Over and over again, the commander in chief of our armed forces has told the nation’s constabulary he views them as constitutional blackguards.”
Regarding the administration’s treatment of combat veterans, this month the Department of Veterans Affairs began publishing its findings of investigations launched two years ago into charges that VA medical facilities adjusted patient appointment schedules to meet department standards. The Office of the Inspector General released 15 reports on scheduling problems at VA hospitals and clinics in Florida, Iowa and Minnesota on Monday, following complaints from members of Congress and the media that the office was sitting on the investigations, which were completed in 2014. The reports found procedural aberrations at nine of the 15 facilities investigated, but the VA inspector general noted that in most cases, patient care was unaffected and managers did not direct employees to manipulate the wait times. -
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5)Today we’ll continue our world tour with more advice for the next president. Speaking of whom, lLast week’s primaries narrowed the race a bit. Marco Rubio is out of the GOP running, and Bernie Sanders is lagging further in the Democratic delegate count. The next few weeks will be interesting. An open Republican convention in Cleveland is very possible, a possibility I wrote about in a recent letter from the point of view of someone who has been deeply involved in very large, raucous, and open political conventions. I was trying to give you some insight into the mechanics of such an event. While an open convention might be fun from an entertainment perspective, I think I would prefer a clean win prior to the convention. I find it really fascinating to think that the race might actually come down to California, the last state primary and one with a potentially deci sive number of delegates.
1a) Obama Fails Cuban Freedom Again
Susan Rice, President Barack Obama’s National Security Advisor, looked into the television camera and declared that the American 55-year-long trade “embargo with Cuba had failed.” President Obama’s history-making visit this week to Cuba, she said, lays to rest that 55-year-long failure. She and the president neglected to mention that it was President John F. Kennedy, a Democrat, who created and implemented the embargo.
She’s wrong. Obama’s visit symbolizes his failure to help Cubans be free -- not that the embargo failed.
President Obama’s visit to Cuba reflects the failure of Obama’s policy towards Cuba that, while foreseen for the past seven years, is a bitter insult to the Cubans who have risked their lives to escape from the island dictatorship. It also insults all people who strive for liberty for all.
Thousands of Cubans are in prison for demanding human rights. Some were arrested even as President Obama’s Air Force One was in the air on the way to Havana according to reports. Cuba’s Communist apparatchiks are busy negotiating business deals with China, begging Venezuela for free oil, making sure Cubans do not have access to the Internet, and filling their prisons with people seeking democratic rights. Dictator Raul Castro says the United States owes Cuba billions for the “damage” he claims the United States inflicted with John F. Kennedy’s embargo. That, by the way, is an admission that the embargo worked contrary to Susan Rice’s falsities.
Americans have been imprisoned by Cuba on flimsy and false charges for years even as more than five dozen convicted and/or charged American criminals live and work in Cuba under the dictatorship’s protection and on its payroll.
President Obama had fantastic leverage and opportunities to negotiate terms with Cuba that benefited the Cuban people by making the dictatorship embark on new paradigms of governance that would benefit the Cuban people. That is, if he had seriously negotiated for freedom for all.
If you, Raul Castro, want the embargo ended then quit arresting people every weekend when they march for free speech and democratic elections. Raul, if you want Americans to come to Cuba to visit and spend money, fine, but you have to allow American communications companies to enter Cuba with their modern services and an Internet that you do not interfere with. If you want Americans to come to Cuba for any reason, for business or tourism, you must put every American criminal hiding in Cuba on a plane we will send at no cost to Cuba to bring them back escorted by U.S. Marshals. That includes the cop killer and the terror bomber.
If you want full diplomatic relations with the United States and unrestricted trade relations, you must allow full ingress and egress to Cuba for Cubans. You must compensate all claims proved for property expropriated by your government of Americans, American and foreign companies, Cubans and Cuban companies on January 1st, 1959, or after.
If you move your people towards freedom of speech, freedom of religion, freedom of association, political freedom, free political parties and elections, and return all convicted or charged American criminals to the United States, President Obama will visit Cuba and watch a baseball game with you.
Unfortunately, we do not have a president who wanted anything from Cuba. He only wants future leftist historians to write well about his presidency like the mainstream American press does as he visits Cuba. That mainstream press agrees with his Cuban gift policy as it does with his closing our naval base at Guantanamo Bay and its prison for enemy combatants of the ongoing war on terrorism. Broadcasting live from Havana? Come on.
The president’s people point to public polling that says a majority of Americans support his one-sided gifts to the Cuban dictatorship. What they don’t refer to is that Congress is the only institution that can relieve, change, or end the embargo. Obama can lift visit restrictions on people, he can allow airlines to go to Cuba because only he can deal with foreign countries but he cannot end the embargo on his own.
One can only hope that the President of the United States is uncomfortable in Havana while Cubans are in prison for the crime of asking for freedom. The president could have forced the Cuban government to ease restrictions on freedom that Americans cherish and he did not. He simply isn’t capable of being a freedom fighter even on a philosophical level. Viva Cuba Libre!
Thousands of Cubans are in prison for demanding human rights. Some were arrested even as President Obama’s Air Force One was in the air on the way to Havana according to reports. Cuba’s Communist apparatchiks are busy negotiating business deals with China, begging Venezuela for free oil, making sure Cubans do not have access to the Internet, and filling their prisons with people seeking democratic rights. Dictator Raul Castro says the United States owes Cuba billions for the “damage” he claims the United States inflicted with John F. Kennedy’s embargo. That, by the way, is an admission that the embargo worked contrary to Susan Rice’s falsities.
Americans have been imprisoned by Cuba on flimsy and false charges for years even as more than five dozen convicted and/or charged American criminals live and work in Cuba under the dictatorship’s protection and on its payroll.
President Obama had fantastic leverage and opportunities to negotiate terms with Cuba that benefited the Cuban people by making the dictatorship embark on new paradigms of governance that would benefit the Cuban people. That is, if he had seriously negotiated for freedom for all.
If you, Raul Castro, want the embargo ended then quit arresting people every weekend when they march for free speech and democratic elections. Raul, if you want Americans to come to Cuba to visit and spend money, fine, but you have to allow American communications companies to enter Cuba with their modern services and an Internet that you do not interfere with. If you want Americans to come to Cuba for any reason, for business or tourism, you must put every American criminal hiding in Cuba on a plane we will send at no cost to Cuba to bring them back escorted by U.S. Marshals. That includes the cop killer and the terror bomber.
If you want full diplomatic relations with the United States and unrestricted trade relations, you must allow full ingress and egress to Cuba for Cubans. You must compensate all claims proved for property expropriated by your government of Americans, American and foreign companies, Cubans and Cuban companies on January 1st, 1959, or after.
If you move your people towards freedom of speech, freedom of religion, freedom of association, political freedom, free political parties and elections, and return all convicted or charged American criminals to the United States, President Obama will visit Cuba and watch a baseball game with you.
Unfortunately, we do not have a president who wanted anything from Cuba. He only wants future leftist historians to write well about his presidency like the mainstream American press does as he visits Cuba. That mainstream press agrees with his Cuban gift policy as it does with his closing our naval base at Guantanamo Bay and its prison for enemy combatants of the ongoing war on terrorism. Broadcasting live from Havana? Come on.
The president’s people point to public polling that says a majority of Americans support his one-sided gifts to the Cuban dictatorship. What they don’t refer to is that Congress is the only institution that can relieve, change, or end the embargo. Obama can lift visit restrictions on people, he can allow airlines to go to Cuba because only he can deal with foreign countries but he cannot end the embargo on his own.
One can only hope that the President of the United States is uncomfortable in Havana while Cubans are in prison for the crime of asking for freedom. The president could have forced the Cuban government to ease restrictions on freedom that Americans cherish and he did not. He simply isn’t capable of being a freedom fighter even on a philosophical level. Viva Cuba Libre!
1b)Raul Castro Slams the United States: Our Stance on Human Rights Will Not Change
By Katie PavlichDuring a rare press conference in Havana, Cuba Monday, Communist Dictator Raul Castro became irritated with reporter questions about human rights abuses inside the country and accused the United States of double standards on the issue.
Standing next to President Obama, who "normalized" relations with Cuba in December 2014, Castro accused the United States of racism, failing to provide the "rights" of education and healthcare to its people and accused the government of condoning unequal pay for men and women.
"The United States shouldn't be immune to criticism," Castro said, clearly frustrated and irritated with press questions. "Human rights issues should not be politicized...our stance on human rights will not change."
Castro also denied the regime holds political prisoners, despite arresting more than 50 dissidents just hours before President Obama's arrival on the island.
"What political prisoners? Give me a name? Give me a list?" Castro said, ending the press conference. "It's not correct to ask me about political prisoners. This is enough."
Practicing journalism against the government is illegal in Cuba and in 2014, Castro expressed concern surrounding American journalism professors training Cubans inside the country about how to conduct reporting.
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2) THIS MAKES IT EASIER TO UNDERSTAND WHAT'S REALLY HAPPENING!!
Which Republican Presidential Candidate Received $202,700 From George Soros?
Everyone knows George Soros, the European multi-billionaire who has backed every leftist progressive candidate and organization in the U.S. from Barack Obama to The Center for American Progress to La Raza to Media Matters to MoveOn.org to Planned Parenthood to The Southern Poverty Law Center.
Bosom Buddies Barack Obama and George Soros
Soros also conspired to destroy the British pound to make $1 billion and is now doing everything he can to undermine the United States to destroy the dollar so he can make hundreds of millions more.
To show everyone the kind of person Soros is, in the closing months of World War II, Soros, a Hungarian Jew, helped the Nazis confiscate property belonging to Jews and exposed others who were in hiding to spare himself.
So, which Republican presidential candidate received $202,700 from this delightful person?
Well, he is the only Republican candidate who allowed ObamaCare and the Medicaid expansion into his state, dooming the future of his state to stagnation and insolvency.
He is the only Republican candidate who supported TARP, which has destroyed millions of American jobs.
He is the only Republican candidate who supports a path to citizenship for illegal aliens, creating an enormous new entrenched entitlement class, giving the Democrats millions of new voters and control of our country.
He is the only Republican candidate who supports the Obama's trade agreements which will destroy even more American jobs.
So, who is this Republican candidate?
Ohio Governor John Kaisch and here is the link to his campaign contributions: https://www.opensecrets.org/pres16/contrib.php?cycle=2016&id=N00009778&type=f
Ohio Governor John Kasich
Kasich is also the only Republican candidate who has no mathematical chance of accumulating the 1237 delegates needed to secure the Republican nomination.
So, why is Kasich staying in the race? Why not ask George Soros.
So, why is Kasich staying in the race? Why not ask George Soros.
2a) Behind the anti-Trump Disruptors, the Fine Hands of Alinsky and Obama
Recently, when disrupters showed up at a Trump rally in Chicago, the first thing that came to mind was that America’s most notorious community organizer could be the wizard behind the curtain orchestrating what was being sold as an organic occurrence.
In Saul Alinsky’s 1971 book Rules for Radicals, the late author could have been describing Obama’s last seven years in office when he wrote that an efficacious organizer should be “an abrasive agent to rub raw the resentments of the people of the community; to fan latent hostilities of many of the people to the point of overt expressions.”
The father of community organizing taught that once people are “whipped up to a fighting pitch,” the agitated could be directed to participate in rowdy demonstrations. By employing those techniques on the international level, Alinsky’s star pupil, Barack Obama, has successfully managed to whip up global chaos.
Back in Chicago, in the early 1980’s, Greg Galluzzo taught student Barack Obama to avoid the spotlight because the fundamental goal of a grassroots activist is to lead “indigenous” communities to believe they were taking action independently.
As 2016 election protests continue to gather steam, it appears as if Galluzzo’s street-smart pupil is having trouble hiding his preoccupation with the Republican candidates.
Granted, thus far, Obama has not acknowledged Weather Underground bomber buddy Bill Ayers protesting Trump in Chicago. In addition, the president has been low key about Black Lives Matter Chicago leader Aislinn Pulley visiting the White House for Black History month a few weeks before #BLM shut Trump down in Chicago.
Obama has even managed to remain mum about his associations with Soros-financed MoveOn.org, Chicago’s Democratic Socialists of America (DSA), and the Communist Party USA, all of whom have also caused disruptions at recent Trump rallies.
In addition to some of the president’s dearest friends, the motley crew of community-organizing characters on the march also includes like-minded Bernie supporters who have promised that if Donald J. Trump wins the Republican nomination, mass civil disobedience is scheduled to take place that will make Chicago’s 1968 “Battle of Michigan Avenue” seem like a block party.
That’s why, despite a poor attempt at keeping a low profile, if Obama believes that Alinsky-style “direct action” possesses the power to keep a Republican billionaire populist or a “tea bagging” Constitutionalist out of the White House, it’s doubtful he will be able to sit back and let the skills he honed in Chicago go to waste.
After years of observing this president’s partisan bullying, one thing is certain, try as he might to hide it, over the last two terms, Barack Obama’s intrinsic dedication to Alinsky tactics has never wavered.
Remember when the New Black Panthers intimidated white voters with billy clubs at a Philadelphia polling place during the 2008 election? Then, remember how the Tea Party was targeted and harassed by the IRS prior to the 2012 election?
In 2008, Saul Alinsky’s son L. David Alinsky wrote the following about his father’s most dedicated former student:
Barack Obama's training in Chicago by the great community organizers is showing its effectiveness. It is an amazingly powerful format, and the method of my late father always works to get the message out and get the supporters on board. When executed meticulously and thoughtfully, it is a powerful strategy for initiating change and making it really happen. Obama learned his lesson well.
That’s why, if America is fundamentally transforming into an Alinsky playground, and if prior to a public demonstration Black Lives Matter Chicago just happens to suddenly drop in on the White House, Barack Obama is a suspect.
Think of it! Every time Obama disparages a Republican candidate, he’s merely exercising the Alinsky tactic of ridicule that served him well on the Southside of Chicago.
Recently, at a St. Patrick’s Day gathering Obama had this to say:
The longer that we allow the political rhetoric of late to continue, and the longer that we tacitly accept it, we create a permission structure that allows the animosity in one corner of our politics to infect our broader society. And animosity breeds animosity.
By choosing to forgo nibbling on Irish Soda bread and discussing his Moneygall roots, Obama turned a luncheon into an opportunity to fuel street-level strife. By doing what comes naturally, Alinsky’s charge purposely contributed to the “vicious atmosphere” he claims to reject.
And for those who tend to compartmentalize, those St. Patrick’s Day sentiments came from a verbally vindictive pol who, when not busy stirring up international turmoil, breeds domestic animosity by depicting white Americans as religious fanatic gunslingers looking to express “antipathy toward people who aren’t like them.”
In keeping with that line of thinking, Barack Obama habitually panders to African Americans, Latinos, young voters, and women. By doing so, this president confirms that the principal objective of everything he says and does is directly related to organizing communities to take action on behalf of the left’s interests.
Yet despite those and other not-so-well-hidden attempts to practice street activism, Obama does seem somewhat uneasy.
Recently, at a DNC event in Austin, Texas, Barack expressed apprehension when he pointed out that “Change doesn’t happen overnight…we never get 100 percent of change.”
Apart from the personal satisfaction this subversive enjoys from the extensive damage he’s already done to America, if ever there were a reason to drag into the middle of the Oval Office the infamous chalkboard young Barry used when marshaling the Chicago multitudes, fear that “Hope and Change” will be toppled by someone like Trump would be that reason.
Unconvinced? Let’s remember that prior to the failed Arab Spring it was Obama that helped to organize the Arab street.
So, as the “largest civil disobedience action of the century” looms on the American street, there is little doubt that deep in the bowels of the White House Barack Obama is organizing Democrats to usher in the Democracy Spring.
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By Khaled Abu Toameh
This Time on Security Coordination
- For Abbas, security coordination with Israel is indeed “sacred”: it keeps him in power and stops Hamas from taking over the West Bank.
- Abbas cannot tell his people that security coordination with Israel is keeping him on the throne. That is a topic for Israeli ears only.
- So what are the threats to end security cooperation about? Money. Here is Abbas's take-home to the world: “Send more money or we will cut off security cooperation with Israel.”
- Halting security coordination with Israel would spell both his end and that of the PA in the West Bank. The international community is simply hearing a new version of the old bid for yet more political concessions and yet more cash.
The Palestinian Authority's endless threats to suspend security coordination with Israel are a carefully crafted bluff designed to extort more funds from Western donors, scare the Israeli public and provide a cover for its refusal to talk peace with Israel.
Many Palestinians say these threats are also intended for “internal consumption” — namely to appease Hamas and other radical factions and to refute charges that the Palestinian Authority (PA) is betraying its people by “collaborating” with Israel.
Hamas has conditioned “reconciliation” with President Mahmoud Abbas's ruling Fatah faction in the West Bank on Fatah ending all forms of security coordination with Israel. Hamas clams that the security coordination is directed mostly against its members and supporters in the West Bank.
Over the past several years, PA security forces have rounded up hundreds of Hamas men in an attempt to prevent the Islamist movement from establishing bases of power in the West Bank.
Hardly a week has passed during the past few months in which a senior Palestinian Authority official does not threaten to cut off security ties with Israel. Some officials in Ramallah have even claimed that the PA has already taken a decision to suspend not only security coordination with Israel, but also political and economic relations as well.
PA officials are saying that their threats, which until now have been so much dust in the wind, will be realized next month.
“April is going to be the turning point,” declared Jamal Muheissen, member of the Fatah Central Committee. “This is a month that will witness changes with regards to several issues that can no longer be delayed or marginalized. April will witness the complete and public suspension of security coordination [with Israel]. This will be the first step taken by the Palestinian leadership.”
This sounds curiously familiar: nearly a year has passed since leaders from the Palestinian Authority and Fatah first announced their decision to halt all forms of security coordination between the PA and Israel.
Meeting in Ramallah last month, the leaders once again reaffirmed their decision. This time, it is allegedly Israel's “failure to honor all signed agreements with the Palestinians” that prompts them to suspend security coordination.
U.S. Vice President Joe Biden was reportedly informed of this intention earlier this month while visiting Ramallah.
But Biden is not the only Western leader to be privy to this threat. Palestinian sources say that foreign dignitaries and leaders who visit Ramallah have become accustomed to hearing Abbas and other Palestinian leaders announce their “intention” to suspend all relations with Israel, including security coordination.
Moreover, the PA recently leaked to the Palestinian media that it has officially notified Israel of its decision to “limit” all relations with it. According to the unconfirmed report, President Mahmoud Abbas dispatched three senior officials — General Intelligence Chief Majed Faraj, Preventive Security Chief Ziad Hab Al-Reeh and PA Minister for Civilian Affairs, Hussein Al-Sheikh — to a meeting with Israeli officials to brief them about the reported decision.
The Palestinian street, however, takes a different view of these threats. The reports, they say, call to mind President Abbas's incessant threats to resign.
These Palestinians consider the threats a smokescreen to conceal the continued security coordination with Israel which, they say, seems even to have increased in recent months. They say that President Abbas can probably fool Western leaders with these threats, but not his people, who have become used to hearing empty threats from their leaders.
A senior Fatah official in Ramallah summed up the Palestinian Authority's dilemma: “We are facing a complicated crisis. If we carry out the threat [to suspend security coordination with Israel], we will suffer; similarly, if we don't we will suffer.”
The situation, however, is not all about money: it is also about power. President Abbas and his security chiefs know perfectly well that the security coordination benefits them first and foremost. They are well aware that without Israel's help, Hamas would spread in the West Bank like a cancer, ultimately overthrowing the PA and replacing it with another Islamist regime like the one in the Gaza Strip.
It is helpful to remember Abbas's moment of lucidity, when in 2014, in front of a visiting Israeli group, hedeclared that security coordination with Israel was “sacred.” He added: “We will continue with it even if we differ on political matters.”
For a change, Abbas was being honest. And he is right. For Abbas, security coordination is indeed “sacred”: it is keeping him in power and stopping Hamas from taking over the West Bank. Hence the security coordination — in Abbas's words — is very important for the Palestinian Authority – perhaps more than thwarting Hamas terror attacks against Israel.
Abbas has a problem. He cannot tell his people that security coordination with Israel is what is keeping him on the throne. The sacredness of security coordination is a topic for Israeli ears only.
So what are the threats about? Money.
Here is Abbas's take-home to the world: “Send more money or we will cut off security cooperation with Israel.” And now there is a little added value, messaged mostly to the U.S. and EU: Convene an international conference for “solving” the Israeli-Palestinian conflict, or we will cut off security cooperation with Israel.
 Abbas to the world: “Send more money or we will cut off security cooperation with Israel.” Left: Palestinian Authority President Mahmoud Abbas with French President François Hollande. Right: Abbas with top European Union officials Federica Mogherini and Jean-Claude Juncker. |
Whatever else he is, Abbas is not suicidal. Halting security coordination with Israel would spell both his end and the end of the Palestinian Authority in the West Bank. What the international community is hearing, then, is nothing more than a new version of the old bid for yet more political concessions and yet more cash.
Khaled Abu Toameh, an award winning journalist, is based in Jerusalem.
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4) Myth Busting Biden's Speech
MYTH: Regarding Iran’s nuclear weapons program, “We’re no longer dealing with hypotheticals.” Two-thirds of Iran’s centrifuges have been removed.
FACT: Two-thirds of the centrifuges inside one of Iran’s nuclear facilities, Fordo, have been removed in recent months, along with all nuclear material. According to the nuclear deal reached last year, “The facility is banned from any nuclear-related work and is being converted to other uses, eliminating the threat that prompted the attack plan, at least for the next 15 years.”
MYTH: “Under this deal, Iran will never be allowed to pursue nuclear weapons.”
FACT: According to Secretary of State John Kerry, the Joint Plan of Action will destroy the 20 percent enriched uranium. However, this is false. The 20 percent enriched uranium was going to be turned into an oxide making it inoperative. That process is chemically reversible, which allowed Iran to hold its 20 percent uranium that can be turned into active chemical reactions at any time. When the deal was announced, syndicated columnist Charles Krauthammer said, “This is a sham from beginning to end. It’s the worst deal since Munich.” The regime itself counters Rice’s claim that Iran has not built new centrifuges. Just two months after reaching the temporary nuclear deal in November 2013, Iran’s nuclear chief boasted the ongoing construction of a new generation of centrifuges for uranium enrichment. In actuality, the temporary deal neglected to prohibit Iran from building new centrifuges.
MYTH: To deter Iran’s nuclear program, the US has allied with “reasonable partners, not just Israel.”
FACT: Biden failed to list those “reasonable partners.”
MYTH: If Iran violates the deal, the US will act.
FACT: Last week, Iran launched ballistic missiles capable of striking American allies, especially Israel, in the Middle East. The radical Islamic regime stamped the weapon with a Hebrew translation of the slogan “Israel must be wiped off the face of the earth." There has yet to be a reaction from the US, such as enacting sanctions or military action.MYTH: “My good friend President Netanyahu…”
FACT: Along with President Obama and other members of the administration, Biden refused to meet with Israel’s prime minister at this time last year. Then-Speaker of the House John Boehner invited Netanyahu to address Congress about the dangers of a nuclear Iran. Along with members of the administration, 58 congressmen (all Democrats) boycotted the prime minister’s speech.
MYTH: Regarding achieving the two-state solution between Israelis and Palestinians, Theodore Herzl said, “If you will it, it is no dream.”
FACT: That statement by one of Zionism’s forefathers isn’t related to achieving a two-state solution. Herzl said that with regards to achieving a Jewish state after thousands of years of Jews persecution by European, capped by the Holocaust during World War II.
MYTH: Both sides “need to take meaningful steps” toward peace deal.
FACT: The Palestinians have rejected Israeli offers for statehood three times. The most recent offer was in 2008 by then-Prime Minister Ehud Olmert. The offer would have annexed major Israeli blocs and, in return, given equivalent Israeli territory to the Palestinians, and would have divided Jerusalem.
MYTH: The US provides Israel with “the best [military] equipment available.”
FACT: According to a report published by Cato Institute:
While bilateral defense cooperation has helped boost the Israeli arms industry, the conditions on American aid do the opposite. Since in some cases the Israeli government has to go with U.S. weapons even if the domestic products were better, cheaper or both, efficient Israeli producers lose government contracts and consequent economies of scale. Israeli companies also have to purchase American raw materials, which raise the costs of Israeli weapons in world markets.
MYTH: Regarding boycotting Israel, “To marginalize one group imperializes us all.”
FACT: Though the Boycott, Divest, and Sanction (BDS) movement is bigoted, this statement is hypocritical of an administration that has shown little support for military veterans, police officers, and others who serve and protect. Last month in Commentary, Manhattan Institute fellow Heather Mac Donald wrote, “Simply put, the man [Barack Obama] twice elected to the country’s highest office routinely and repeatedly charges that cops and the courts are awash in systematic racial bias…The negative effect of such rhetoric on the morale of the police, on the perceived legitimacy of the criminal-justice system, and on the atmosphere in which police operate is incalculable. Over and over again, the commander in chief of our armed forces has told the nation’s constabulary he views them as constitutional blackguards.”
Regarding the administration’s treatment of combat veterans, this month the Department of Veterans Affairs began publishing its findings of investigations launched two years ago into charges that VA medical facilities adjusted patient appointment schedules to meet department standards. The Office of the Inspector General released 15 reports on scheduling problems at VA hospitals and clinics in Florida, Iowa and Minnesota on Monday, following complaints from members of Congress and the media that the office was sitting on the investigations, which were completed in 2014. The reports found procedural aberrations at nine of the 15 facilities investigated, but the VA inspector general noted that in most cases, patient care was unaffected and managers did not direct employees to manipulate the wait times. -
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5)Today we’ll continue our world tour with more advice for the next president. Speaking of whom, lLast week’s primaries narrowed the race a bit. Marco Rubio is out of the GOP running, and Bernie Sanders is lagging further in the Democratic delegate count. The next few weeks will be interesting. An open Republican convention in Cleveland is very possible, a possibility I wrote about in a recent letter from the point of view of someone who has been deeply involved in very large, raucous, and open political conventions. I was trying to give you some insight into the mechanics of such an event. While an open convention might be fun from an entertainment perspective, I think I would prefer a clean win prior to the convention. I find it really fascinating to think that the race might actually come down to California, the last state primary and one with a potentially deci sive number of delegates.
One thing is sure: somebody will take the ball from Barack Obama next January 20. Whoever it is will face a world full of challenges, economic and otherwise. Last week we flew west and reviewed Japan and China. Today we’ll continue the trip.
By the way, please don’t take offense if I skip over your country or region. It likely means your problems are relatively minor on the global scale of things. You may not want whatever “help” our new president offers, anyway. Now, on with the letter.
Dear Presidential Candidates:
One of you may move into the White House next January, and you’re going to have your hands full. Last week I gave you my thoughts on Japan and China. Today we’ll take Air Force One further around the challenging world you hope to lead. I hope you’re ready.
We’ll start with a dip Down Under. Australia is an important American ally. It was also, until recently, a big resource supplier to China. Its huge, high-quality iron ore reserves and convenient location ensured Australia an important role in China’s massive infrastructure binge.
With that binge now winding down, Australia’s economy and currency are struggling. The country spent several years gearing up to accommodate Chinese demand that is now gone, or at least greatly reduced. On the plus side, wealthy Chinese citizens are finding Australia a convenient place to buy real estate, propping up what to the rest of the world looks like a housing bubble. This trend could persist for some time if China maintains its capital controls. But as you enter office, Australia will be economically fragile.
Your challenge, Mr. or Mrs. President, will be to help Australia economically so that they can afford to continue their cooperative stance as our allies in various endeavors around the world. The same goes for New Zealand, for whom China is now an important agricultural customer. The Aussies and Kiwis I know typically want strong ties with the US, and I believe those ties will remain close. These two countries have been willing partners of the US, but their budgets are being strained, and domestic priorities are coming to the forefront.
This observation brings me to an important point. You will find as president that your power is not absolute. Circumstances are going to dictate what you can and can’t do. You won’t be able to fix everything, but you will be able to make every situation worse. Resist the urge to “do something” simply because you can.
When your predecessor, Barack Obama, promised a “pivot to Asia,” he was talking mostly about China. India is equally important, but many Americans forget about Asia’s other mega-state. You need to pay attention to it.
India and China may look like neighbors on a map, but they are worlds apart. George Friedman explained recently how the Himalayas make a China-India military conflict all but impossible. Neither country has ever been able to invade the other or even conduct very much cross-border trade across the world’s largest mountain range, so the two nations have grown to their present gargantuan size independently. India has been regularly growing at 7%-plus GDP per year.
Your Indian counterpart, Narendra Modi, is now almost two years into a much-needed economic reform plan. India does not have China’s vast export industries. Services comprise almost a third of India’s exports, mainly call centers serving the English-speaking West. Modi is wrestling with an entrenched bureaucracy, crumbling infrastructure, and a fast-growing labor force. But he is making progress. Roadbuilding has accelerated to more than ten miles a day from barely one mile a day just a few years ago. Modi is beginning to put a damper on the rampant corruption in the bureaucracy and is actually making the bureaucracy accountable. His has been a very tough job.
In an experiment to watch, India is assigning a biometric digital identity to every citizen so that the government can pay subsidies directly into citizens’ bank accounts and thus prevent the money from falling prey to a corrupt and incompetent bureaucracy. India is also putting money into its banking system, which has needed a boost. Indian banks are under pressure (a story that is being repeated all across the world, highlighting the fragility of our global financial system).
Geopolitically, India bridges South Asia with the Middle East. Its uneasy relations with Pakistan give India an interest in promoting Middle East stability and trade, but given everything else that is happening in the Middle East now, achieving that end won’t be easy.
American presidents since Nixon have tried to bring peace to the Middle East. Some came closer than others. You will have to try your hand, too, but the odds are against you. The entire region remains a powder keg, and the situation you inherit will have added complexity and instability.
Saudi Arabia’s oil wealth once let it enforce relative calm on its neighbors. That era is now over, as George Friedman and I explained in our recent report. Oil prices stuck at $40–$50 per barrel are forcing a massive Saudi budget shift and draining enormous amounts from their sovereign wealth fund. By some estimates, if the country maintains its current budget, it will run out of cash by 2021. Which of course means it can’t maintain its current budget. The Saudi royal family is trying to build a cushion for the inevitable hard landing. Their success, or lack of it, will be outside your control, but the outcome will dictate your options.
Saudi Arabia has been offering major financial support to Egypt and other Middle East countries. How long the Saudis will be able to continue to do so is a question that you will need to answer in order to be prepared for whatever exigencies arise.
Across the Gulf from Saudi Arabia is Iran, where implementation of the Obama nuclear deal is proceeding at an unsteady pace. Here you have an opportunity to make something happen. There are two schools of thought. One posits that the single best way to keep Iran from threatening its neighbors, including Israel, is to reintegrate the country into the global economy, since countries that trade with each rarely resort to war. A big barrier to that process is decades-old US economic sanctions on Iran that Congress refuses to lift. The other school of thought asserts that renewed sanctions and further financial repression are required to force Iran to give up its nuclear ambitions. While most people focus on the political implications of the US–Iran deal, the economic implications might have even more far-reaching consequences. Formulate your Iran policy wisely.
The Middle East is, of course, complicated by the presence of ISIS. Fighting ISIS requires money, and the nations that have been working with us are going to be financially constrained. For the moment, fear of ISIS is spurring many in the Muslim world to flee toward Europe, a continent with its own problems. Dealing with the refugees in cooperation with the Europeans may be one of your greatest challenges as president.
Russia is another commodity exporter that is under tremendous economic pressure. The Russians are running through their dollar reserves at a rapid rate; the country is in recession; and a turnaround doesn’t appear imminent. They are reportedly cutting their budgets by 10%, including education and social welfare. Just think about how hard it would be to get through the US Congress a bill that would halt increases in spending for a few years—never mind cutting spending by 10%. Theoretically, Russia’s military budget will actually grow a bit, but the realities on the ground mean that the country’s projected 1% growth won’t go very far. Inflation in Russia is now down to just under 10% but has averaged much higher than that over the past year. Everyone is feeling the squeeze.
The fact that Russia is economically challenged does not make the country any less challenging to US interests. Ukraine is clearly in Russia’s backyard, and Russia is obviously opposed to Ukraine’s becoming a NATO member. Thus, Ukraine is now a divided country in a semi-anarchic state.
Let me offer an economic solution to Ukraine. Instead of supporting the various oligarchs who are squabbling over Ukrainian spoils, why not get Ukraine to open up its agricultural industry to outside investment? If Ukraine became productive along the lines of US farms, it could be the breadbasket of all of Eurasia. There has been enormous resistance to outside private capital, but Ukraine could become prosperous in less than 10 years if the country were opened up. This initiative would also create significant new employment and whole new industries supporting agricultural growth in Ukraine, stabilizing the country. And this objective is something that could be achieved without a shot’s being fired. It would mean that entrenched interests would have to be negotiated with, but continuing to pursue the present policy just isn’t working. Just a thought…
Europe is in economic and political crisis. The last European financial crisis exposed a façade of unity that was never sustainable. The façade will almost certainly collapse before you finish your first term in office. The Eurozone’s breakup has the potential to be the biggest economic crisis you will face. How you handle it will make or break the entire global economy. The problem is that there is nothing you can do to prevent the coming crisis. All you can do is help steer Europe on a course that will result in the least damage to the US economy in particular and the global economy in general.
The European Union was a noble dream, but as happens with most dreams, reality eventually sets in. It is simply not possible to maintain economic unity and a single monetary policy among a collection of states each of which sets its own fiscal policies. The EU subset that shares the euro currency already sees this. The rest of the members will follow soon enough.
Europe’s sovereign debt crisis was the first sign that something was structurally wrong. Germany spent years loaning euros to poorer Eurozone countries so they could buy German-made goods. Other exporting nations within the EU did the same. The resulting trade imbalance had to show itself somewhere. It did, in the government debts of countries like Greece, Italy, Spain, Portugal, and Ireland.
To this point, the attempted solution for outsized debt has been to impose “austerity” measures on those countries while they supposedly restore fiscal discipline. The European Central Bank has bought struggling nations time by depressing interest rates to artificially low levels, but that policy carries its own unintended consequences. The results have been mixed at best. Spain and Ireland are recovering somewhat; Greece, Portugal, and Italy are not.
Italy will probably be your main headache. Its banking system is already breaking down as nonperforming loans proliferate. Nonperforming loans make up almost 20% of Italian banking system assets. Not surprisingly, as you go from north to south in Italy, the percentage of bad loans increases. Some southern banks hold nearly 40% nonperforming loans. (By contrast, you should be thankful that nonperforming loans of US banks are down to a somewhat manageable 1%. During the worst of our banking crisis, US nonperforming loans never rose above 3½%. Italy’s level is almost six times greater, and there is not an economic crisis yet.)
A collapse of the Italian banking system is a systemic risk for all of Europe, which means that it is also a systemic risk for the global economy. Italy is the eighth-largest economy in the world, only slightly smaller than India. But, whereas the world could probably tolerate a major setback in India, Italy is extremely critical because of its economic impact on Europe and thus on the global economy.
Italian government debt is already 132% of GDP and rising. The Italian economy is roughly the same size it was in 2000. Economists have been projecting growth for Italy for nearly all the intervening time, but that elusive growth just keeping slipping farther into the hypothetical future. Italian nonperforming loans represent just under 20% of GDP, yet Italian banks are literally too big to save. Further, another 10% of GDP and more would likely go up in smoke in a banking crisis, in the form of Italian bank bonds that have been sold to the general public as safe-yield vehicles.
There are negotiations underway to create a “bad bank” in Italy and somehow sell its paper to the public. That bad-bank debt would of course come with government guarantees, but these would cover only a portion of the nonperforming loans. There is still no agreement for a total solution. Germany is especially wary of committing to cover bad-bank loans of another country, because to do so would set a precedent that could be staggeringly expensive.
Italy is not the only European country with problematic nonperforming bank loans; it is just the biggest such country with the largest pile of debts. There is a laundry list of countries in Europe whose economic problems may not be as big as Italy’s but whose woes are certainly significant and will become much worse if another financial crisis hits Europe. Crises have a way of cascading beyond national boundaries.
Compared to Italy, Greece will seem quite manageable. Obama was able to watch from afar as Merkel and the EU dealt with Athens. You will not have that luxury when Italy craters. It is much bigger than Greece and far more important to the world economy.
Greece remains important for another reason, though. It is the main gate through which fleeing Syrians, Iraqis, and others try to enter Europe. The wealthier states need Greece’s cooperation to keep the flow of refugees manageable.
I know some of you presidential candidates are not fans of the New York Times, but let’s look at a recent Times report concerning Greece and the refugee crisis anyway. A feature story last week explained how Greece is the eye of two different storms:
Greece is now ground zero for the two greatest challenges to afflict Europe in recent years: the debt crisis and Germany’s insistence on austerity as the only cure, and the backlash against the wave of human migration from war-torn and impoverished countries….
Greek officials warn that refugees might be stranded in the country for two years. So many are stranded at the port of Piraeus, near Athens, that the passenger terminals – usually where vacationers wait for ferries to the islands – are crammed with sleeping Syrians and others. On Saturday morning, a group of bewildered Korean tourists wandered into a terminal transformed into a Little Syria.
The migrant crisis is already a humanitarian disaster, and the situation is getting worse. The European Union is all but paralyzed, as I wrote last September in “Merkel Opens the Gates.” In that letter I quoted a column from The Economist that nicely illustrates the problem:
Policymakers are fizzing with ideas, from the use of development aid to bring recalcitrant transit countries into line to the strengthening of a Europe-wide border guard. Once the principle of shared responsibility for migrants is established, says another official, the numbers of relocated migrants can be scaled up, and new programmes established, without too much wrangling.
I responded with this:
What arrogance. Brussels will bring those “recalcitrant transit countries” back in line. The “wrangling” will be over once they establish the “principle of shared responsibility.”
“Shared responsibility” is exactly the principle the EU never manages to establish, regarding immigrants or anything else. Yet nameless officials still tell everyone not to expect “too much wrangling.”
Nothing is ever done in Europe without a great deal of wrangling.
That was more than six months ago. Is Europe any closer to a solution now? Hardly. If anything, the crisis is intensifying. The Paris terror attacks in November resulted in the reimposition of border controls through most of the previously open “Schengen” area. The attacks also convinced many Europeans that migrating Muslims are a security threat. An initial welcome turned into fear. One of the key leaders in Europe, Angelina Merkel of Germany, finds herself under intense political pressure because of an anti-immigrant backlash from voters.
Desperate for any solution, the EU is now seriously entertaining a deal to accept Turkey as a member in exchange for Turkey’s holding most of the migrants within its borders. That nascent deal is already running into the EU’s dysfunctional structure that demands unanimous approval by member nations for everything.
Stop right here. Those who originally designed the EU had visions of a “United States of Europe.” Yet the USA they wish to copy does not require every state to agree on everything. Can you imagine if we had to do so? Would Texas and Vermont ever find common ground? Florida and Montana? Hawaii and Mississippi? Of course not. The idea is absurd. Our government would have collapsed long ago if unanimity were the requirement.
We can amend our Constitution if 75% of the states agree. An amendment to the Maastricht Treaty, which is the organizing document for the EU, requires agreement by all 23 members.
The US has survived because we have a system of majority rule with minority rights. We require supermajorities for certain big decisions such as Constitutional amendments. We do not demand that every state agree to every major decision, because it would never happen. Paralysis would be the result – as Europe is now proving.
Giving Turkey a path to EU membership is problematic to Cyprus, which is a tiny island but an equally powerful EU member state, with technically the same vote and potential veto that Germany and France have. Cyprus can veto the refugee deal that the rest of Europe so desperately needs to make with Turkey.
The solution to this point has been for the large and economically powerful EU/Eurozone members to simply force their will on the smaller states, resolving short-term challenges at the cost of long-term unity. This week they did it to Cyprus. The Wall Street Journalreported on Friday that the “EU Agrees on Deal to Send Migrants Back to Turkey.” Notice this part of the deal:
Turkey’s EU membership bid will also be accelerated, while steering clear of a conflict with Cyprus that has held up negotiations. Cyprus has an EU-backed veto on starting accession negotiations over a number of new policy areas, because Turkey doesn’t recognize its passports or allow ships and airplanes from Cyprus into its ports and airports.
Under the agreement, the EU commits by the end of June to start negotiations on aligning Turkey’s legislation on financial and budgetary affairs to EU law – a policy area, or chapter, that wasn't blocked by Cyprus.
Cyprus has legitimate concerns here. The EU solution is to simply ignore those concerns and plow ahead on other fronts. That approach will probably work, too, but each such episode pulls a few more bricks out of the EU superstructure. Bullying your smaller members is not consistent with the idea of an “ever-closer” union.
Let me put this more bluntly: there is a substantial probability that Europe will have a financial crisis that will create significant economic chaos, and if it is combined with an immigration crisis, the results are unknowable but unpleasant to contemplate.
Another looming danger is that the United Kingdom will hold a referendum this summer that may well lead it out of the EU. A member leaving the EU would set a dangerous precedent. For years following, there would be major consequences for world trade and currency flows.
There are two possible outcomes to a European financial crisis stemming from massive sovereign debts and unbalanced budgets. The first is that an entirely new economic structure might evolve in the European Union. If the EU is to stay together, it is going to have to resolve the sovereign debt issues. Because the European elites really do want to see a united Europe when push comes to shove, they are likely to take on the debt of every Eurozone nation according to some odd formula that only a European bureaucrat could love, mutualize that debt, and stick it on the balance sheet of the European Central Bank. They would then require each country to balance its own budget, much as the various states of the United States must do. It would be a difficult thing to do, but it could be done.
However, mutualization would very likely make the euro weaker, possibly much weaker. And of course, Germany would have to go along with the mutualization of debt. Why would they do this? Because 40% of their GDP derives from exports, half of which are sold to their fellow European Union members.
The second possible outcome is that there will be no agreement on how to deal with the debt, and the European Union currency region will sunder and its various countries go back to managing their own currencies. Those new currencies would likely be much weaker against the reinstituted German mark, thus pummeling German exports. As a side effect, a significant portion of the European Union’s former member states would then find their currencies 30 to 40% lower against the dollar (and some small countries might see a much more significant drop). While that scenario would be good for American tourists (think cheap Italian and Greek holidays), it would not be good for American exporters of all types, including and especially agriculture.
We will talk next week of what you as president might do to strengthen the exporting capability of US corporations – and there is much that could be done on a bipartisan basis – but continuing deterioration of the European situation could lead to an immensely difficult environment for US exporters and would likely trigger a deep recession in the US.
Alternatively, the ECB could continue to monetize Eurozone debt and step it up a notch or two in the wake of an Italian crisis, which is likely to weaken the euro. Such a program might kick the European crisis can down the road a few years, but that debt is going to have to be rationalized sometime. The latest ECB move to create a multitrillion-euro “loan book” – essentially paying European banks 40 basis points to borrow money and then turn around and lend it at very low rates, and presumably even buying negative-rate sovereign debt – could potentially kick the can far enough down the road to bounce it into your second term. It is unclear what the consequences of such a radical ECB action will be, but the experience so far suggests that the strategy might not result in the growth that we would like to see in Europe. How long a low-growth or no-growth continent could maintain political stability without a backlash from voters – especially given the immigrant crisis – is a question that looms like a spectre over the whole EU project .
Regardless how the economic crisis turns out, the migrant crisis will remain. The refugees will not stop coming as long as jihadists threaten their homes. The deal with Turkey is unlikely to solve the problem. Refugees will keep crossing the sea; and with 23 countries having to approve Turkish membership in the EU, it is truly up in the air as to whether such a deal on immigration will actually come about. There is much more potential for instability in a region that is the equivalent of the US in economic importance.
I could say much more about Europe, but I will leave it there. We’ll wrap up this letter next week when we look at Africa, Latin America, and the US itself.
I’ll be heading out at the end of month to Rob Arnott’s fabulous advisory council meetings, this time at Pelican Hill in Newport Beach. Those of you who know Rob and Research Affiliates know that his conference is a tad more academic than most, but he combines the intellectual heavy lifting with a fabulous food and party experience. It’s kind of like Adult Nerd Heaven. Then the following week I’ll be in New York, speaking and attending a conference.
For those who want to attend my annual Strategic Investment Conference this May 24–27 in Dallas, I hope you have registered. The conference is sold out, and we are creating a waiting list. We are trying to figure out how to accommodate more people but will not do so if we cannot make sure that the total experience for those already registered will be up to the standards we always strive for.
That said, if you want to attend, I suggest you go to the Strategic Investment Conferencewebsite and register to have your name put on the waiting list. I can almost guarantee that if we do find a way to accommodate a few more folks, those seats will almost immediately disappear, too. Those who wanted to wait until the last month to register are going to be disappointed. I won’t even tease you with the fabulous new speakers that we are adding every week. The lineup just keeps getting better and better. And since I can’t take everybody to Austin for the amazing local music scene, we are working on bringing Austin music to Dallas. It’s going to be fun! Just a little Texas ambience for y’all.
By the way, I was looking through the list of attendees. There are almost 100 people from outside of the US already registered. I see a lot of familiar names, and we could easily put together a fascinating conference just from the attendees. We are evaluating two different computer apps that will, among other things, significantly enhance attendee networking. One of the things I have heard over the years is that people would like to be able to meet more of the other attendees but are not sure whom they want to meet. Whichever app we choose, it is going to allow you to find and grow a network of people who share your interests.
Just for the record, I can’t write about your favorite market every week. But I am paying attention to the possible bottoming of the commodity markets and to what looks like a significant new bull market developing in gold and gold stocks. I continue to be mystified by continually lowering projections of future earnings almost across the board … and a rising stock market. Past performance says that perverse trend should not endure; but then, markets can be perverse longer than you can stay solvent.
As readers know, I am immersing myself not just in the economics of the future but also in the technology of the future as I put together my new book, The Age of Transformation: What the World Will Look like in 20 Years. I will leave you with this Ted Talk about some of the latest developments in augmented reality. I suspect that it’s not as easy as Meron Gribetz makes it look, but this technology is coming to a home near you (and if you have millennials in your family, it may come to a home near you very soon).
As cyberpunk science-fiction writer William Gibson said back in 1993, “The future is already here. It’s just not evenly distributed.” I am increasingly drawn to thinking about the implications of an unevenly distributed future. It’s not something that we can prevent or should necessarily want to. But it is a transition that is going to force a great deal of uncomfortable change and adaptation on many of us. Oh well, full ahead warp five, Scotty.
Have a great week as the seasons, too, began to change.
Your really worried about Europe analyst,
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