Category: Geopolitics

North Korea Poses a Problem for Trump, Bigly

The Daily Escape:

(Key West flower by Denise M. Riggs)

CNN reported that on Monday, North Korea (NK) fired four ballistic missiles into the Japan Sea. CNN was told by a US official that a fifth missile failed to launch. More from CNN:

Later on Monday, two US officials told CNN that US intelligence is closely monitoring the underground nuclear test site via satellite amid signs the regime could be preparing for another underground test…A US official also said that Washington is continuing to see activity including missile engine tests at another North Korean launch site, that signal potential additional launches — which the US widely expects.

This creates a strategic problem for the Trump administration. Trump has already signaled his preference to respond aggressively to NK’s missile program. In a Twitter post after Kim Jong-un issued a warning on New Year’s Day, Trump tweeted “It won’t happen!”

Obama used a different approach:

Three years ago, President Barack Obama ordered Pentagon officials to step up their cyber and electronic strikes against North Korea’s missile program in hopes of sabotaging test launches in their opening seconds.

Soon a large number of the North’s military rockets began to explode, veer off course, disintegrate in midair and plunge into the sea. Advocates of such efforts say they believe that targeted attacks have given American antimissile defenses a new edge and delayed by several years the day when North Korea will be able to threaten American cities with nuclear weapons launched atop intercontinental ballistic missiles.

But other experts have grown increasingly skeptical of the new approach…Over the past eight months, they note, the North has managed to successfully launch three medium-range rockets. And…North [Korea] is in “the final stage in preparations” for the inaugural test of its intercontinental missiles — perhaps a bluff, perhaps not.

The US lacks the ability to fully counter the NK nuclear and missile programs. The NYT’s reporting indicates that the NK danger was great enough that as Obama left office, he warned Trump it was likely to be the most urgent problem he [Trump] would confront.

As a presidential candidate, Trump said “we’re obsolete in cyber”. Now, one of the immediate questions he faces is whether to accelerate, or scale back existing cyber efforts. The US is also looking at ways to freeze the Kim family’s assets, some of which are held in Chinese banks. The Chinese have opposed the US deployment of the US high-altitude missile defense system known as THAAD in South Korea; but the Trump team may also deploy THADD systems in Japan.

A Trump administration official told the NYT that they are looking at pre-emptive military strike options, although the challenge is huge, given the country’s mountainous terrain, deep tunnels and bunkers. This is complicated. NK missiles are fired from multiple launch sites and are moved about on mobile launchers in an elaborate shell game meant to deceive adversaries.

Putting American tactical nukes back in South Korea (they were withdrawn 25 years ago) is also under consideration, even though that could accelerate a regional nuclear arms race.

Trump could re-open negotiations with NK to again freeze its nuclear and missile programs, but that would leave the current threat in place. He could prepare for direct missile strikes on the launch sites, but there is little chance of hitting all targets. He could press the Chinese to cut off trade and support for NK, but Beijing has always stopped short of steps that could lead to the regime’s collapse. The NYT said:

In two meetings of Mr. Trump’s national security deputies in the Situation Room, the most recent on Tuesday, all those options were discussed, along with the possibility of reintroducing nuclear weapons to South Korea as a dramatic warning. Administration officials say those issues will soon go to Mr. Trump and his top national security aides.

Dealing with NK requires a steady hand, and an ability to sort through complex relationships. Rash decisions will not work, while well thought-out tactics might.

Sadly, Trump has not convinced us that he has the temperament to deal with a complex situation like NK presents.

Here is the Moranbong Band, an all-female North Korean group whose members were personally selected by Kim Jong-un. Here they are performing “My Country Is The Best!”:

https://www.youtube.com/watch?v=fL7-7shibkw

Everyone thinks their country is the best.

This has a decidedly Euro pop flavor. One wag said all that is missing is Robert Palmer standing in the foreground singing “Addicted to Love”. Check out the woman playing lead guitar at 2:34.

Those who read the Wrongologist in email can view the video here.

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Trump’s Defense Budget

(The Wrongologist is heading to Florida today. The next column will be Sunday’s Cartoons)

The Daily Escape:

(Water Buffalo at night – Zimanga Private Game Reserve, South Africa)

Wrongo did not watch Donald Trump’s latest reality show. Many are giving him some credit, saying that “it’s the most presidential he’s ever been”. What a low bar.

We should ignore the tone, and focus on the content. Today let’s discuss Trump’s aspirations regarding defense spending, cuts in non-defense discretionary spending and Trump’s tax reduction plans. In his speech, Trump repeated his commitment to increasing defense spending by $54 billion.

The Budget Control Act caps military spending at $549 billion for 2018. Trump’s proposed increase would bring military spending to $603 billion. He indicated that would mean getting rid of the Sequester spending cap agreement. But, he didn’t address how the spending caps would be overturned (it requires 60 Senate votes). And there was also nothing said about the rest of the budget, including the subject of what programs will be cut to fund the defense increase.

The problem is math. Trump’s plans require solving simultaneous equations: It may be impossible to cut discretionary spending by enough to fund the defense increase. It will be difficult to give a big personal and corporate tax cut while spending $1 Trillion on infrastructure. As Bryce Covert at Bloomberg said:

To increase defense spending, cut taxes, spend money on infrastructure and the border, protect entitlements, and balance the budget, almost everything else must go.

Neither Trump nor Congressional Republicans had a better idea about how to accomplish that after the speech than they had before it.

Trump in particular, has no idea. In a Fox interview on Tuesday, Trump argued that his increase in defense spending could be covered not by severe spending cuts elsewhere, but by an increase in economic growth. He said:

I think the money is going to come from a revved up economy…

He promised on TV to grow GDP by 3% or more each year, not something that is all that easy to do. The economic concept behind his thinking is the Laffer curve, which says that an optimal level of taxation will assure high economic growth. It’s a discredited theory.

If Trump and Congress can’t get Sequestration eliminated and they still want to spend the $54 billion, non-defense spending would be 25% below what it used to be, bringing spending on these programs to the lowest level ever recorded. The historical low point of Discretionary non-defense spending was 3.09% of GDP in 1962; Trump’s proposal could bring it below 3%.

Military spending increases are never justified to Americans by what the money will be used for. Instead, we hear vague arguments about how we need to be “stronger”, or laundry lists of the various kinds of new hardware we need to buy, without any focus on the strategic rationale for the new hardware. For example, how do new aircraft carriers help defeat ISIS?

More military spending has an opportunity cost: If we spend on defense, that’s money we can’t spend on education, healthcare, or rudimentary things, like the State Department.

It can’t be enough to say that larger numbers will make us safer.

We need a geopolitical rationale for why additional defense spending is necessary. Trump hasn’t offered that argument. He and the GOP say that President Obama “neglected” the military, but in truth, Obama left our military stronger than it was under Reagan: If we look at total military spending by China, Russia and the US in 2015, the US accounted for 68% of that total, while Russia accounted for 8% and China for 24%

Under Reagan the totals were: US, 62%, Russia, 36% and China 2%. So we are up from 62% to 68% under the Kenyan Muslim.

We should be thinking about cutting defense spending, not increasing it.

Take a break and listen to guitar hero Joe Bonamassa playing “Further on Up the Road” live in 2009 at Royal Albert Hall with his hero, Eric Clapton:

https://www.youtube.com/watch?v=0u03h73ClZ8

Those who read the Wrongologist in email can view the video here.

 

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Saturday Soother – February 11, 2017

Tons of moving parts this week. Jeff Sessions and Tom Price were confirmed; the 9th Circuit Court of Appeals handed Trump a setback in his plan to keep most Muslims out of the country, making our Overlord 0-2 vs. the justice system. The tweets continued; Elizabeth Warren was told to shut up, and Kellyanne was shut down for pumping Ivanka’s merch on a Fox news show.

But the big news for Wrongo was hearing on the BBC about National Security Advisor Michael Flynn: (brackets by the Wrongologist)

[Flynn] couldn’t be certain that he didn’t discuss sanctions with Russia’s Ambassador [Kislyak] to the US on December 29, 2016.

In December, it was rumored that Gen. Flynn had done exactly that, which brought denials from the Trump transition team. You may remember that Mike Pence said in an interview with CBS News that he had spoken with Flynn about the matter. Pence said there had been no contact between members of Trump’s team and Russia during the campaign. To suggest otherwise, he said: (brackets by the Wrongologist)

Is to give credence to some of these bizarre rumors that have swirled around the [Trump’s] candidacy.

Of course, December 29, 2016 was not during the campaign. Now, the WaPo has a blockbuster story indicating that Flynn did talk to the Russians:

National Security Advisor Michael Flynn privately discussed US sanctions against Russia with that country’s ambassador to the United States during the month before President Trump took office, contrary to public assertions by Trump officials, current and former US officials said.

More from WaPo:

Nine current and former officials, who were in senior positions at multiple agencies at the time of the calls, spoke on the condition of anonymity to discuss intelligence matters.

All of those officials said Flynn’s references to the election-related sanctions were explicit. Two of those officials went further, saying that Flynn urged Russia not to overreact to the penalties being imposed by President Barack Obama, making clear that the two sides would be in position to review the matter after Trump was sworn in as president.

MoJo reports that on Friday, the Trump administration confirmed that Flynn did speak to the Russians about sanctions.

This means that Flynn was working against established US policy. He was telling Moscow not to worry about new sanctions imposed by Obama, and to stand by until Trump was inaugurated, which is what Russia did.

In some quarters, this is aiding an enemy. It also was dumb, since US intelligence routinely intercepts Russian conversations. The WaPo indicates that a transcript of Flynn’s conversation was passed among the intelligence community.

This is not the way a senior national security official should behave. He isn’t fit for the office he holds, he should be fired.

Gen. Flynn clearly needs a soothing something after the week he is having, and you do too. So grab a hot cup of cocoa, put your feet up and listen to “Hungarian Rhapsody No. 2” by Franz Liszt, composed in 1847 and performed here by Katica IllĂ©nyi, a Hungarian violinist, with the GyƑr Philharmonic Orchestra in 2011:

If you grew up with Saturday cartoons on the tube, this will sound familiar. It has been featured in Bugs Bunny, Mickey Mouse, Krazy Kat and Tom & Jerry cartoons, and in “Who Framed Roger Rabbit?”

Those who read the Wrongologist in email can view the video here.

A Bonus Video: IllĂ©nyi is one of the few people who plays the Theremin. Here she is playing “Only You” by the Platters:

Those who read the Wrongologist in email can view the video here.

 

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What, Me Worry?

“The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.” –HL Mencken

As we head towards the inauguration of Donald J. Trump, it is interesting to look at a recent survey by Ipsos Public Affairs, Which countries are on the right track, according to their citizens? that was cited in an article by the World Economic Forum. The global conclusion was that people think things are getting worse:

Between October and November 2016, the percentage of people who believe things are on the right track in their country dropped by 2 percentage points to 37% globally.

The survey is conducted online monthly in 25 countries by Ipsos. The countries are Argentina, Australia, Belgium, Brazil, Canada, China, France, Great Britain, Germany, Hungary, India, Israel, Italy, Japan, Mexico, Peru, Poland, Russia, Saudi Arabia, South Africa, South Korea, Spain, Sweden, Turkey and the US. Ipsos samples 18,110 adults aged 18-64 in Canada, Israel and the US, and aged 16-64 in all other countries. They were interviewed between October 21st and November 4th 2016, with about 1000 people participating in the US and other Western countries.  The survey has an estimated margin of error of +/-3.1 percentage points.

Here is a chart giving a snapshot of right track/wrong track just prior to the US presidential election:

This shows the US in the middle of the pack, with 65% of those surveyed saying we are on the wrong track. That is consistent with other surveys of American sentiment. In China, 90% of people expressed confidence in their country’s direction, followed by Saudi Arabia (80%), India (76%) and Russia (58%).

  • Among Western nations, Canadians are the only people with a predominantly positive outlook (54%).
  • The US showed a small month-on-month drop in “right track” from 37% to 35%.
  • France and Mexico bring up the rear as their citizens have the least confidence in their country’s direction: 88% and 96% of the populace respectively believe that their country is on the wrong track. Only 4% of Mexicans think their country is on the right track!

Ipsos also surveyed the issues that worry citizens in each country the most. They asked the question: Which three of the following topics do you find the most worrying in your country? In the US, the top three issues were:

  • Terrorism: 33%
  • Healthcare: 32%
  • Financial/Political Corruption: 29%

It is not clear that terrorism is profoundly worrying to Americans, since 67% of those surveyed chose something else to worry about. Remember that the rankings are based on how frequently the item is mentioned as the first in a list of three issues. Here is an Ipsos chart that compares the number one issue people worry about in each country:

Only Turkey, Israel and the US ranked terrorism first. Americans fear terrorism slightly more than uncertainty with their healthcare (32%). And they worry about corruption slightly more (29%-28%) than they worry about crime and violence. Where are poverty and social equality? Seventh, with 19%. What about education? Ninth, with 15%. Maintaining social programs are 14th tied with inflation at 7%.

Fear is emotional, it is not driven by logic about actual levels of risk. Assessment of risk is (mostly) a logical process, with a tiny element of emotion. Acts of terror are frightening, but the likelihood of one happening to you is infinitesimally small in the US. It is therefore, an irrational fear.

OTOH, do people worry about being mugged when walking through a sketchy part of the city? Most do. How many actually get mugged? Not many. But that fear has a basis in fact.

And terrorism isn’t about killing as many people as it can. It is about gaining a political victory through terror. Think about the 9/11 attack in NYC. Millions watched the Towers fall. Those in NYC saw the smoke for weeks. That is the end point of terror, and probably explains why so many rank it as their top worry.

In the survey, six countries worried more about terrorism than the US. They are: Turkey (66%), Israel (51%), France (44%), India (43%), Saudi Arabia (40%) and Germany (34%).  Those countries all have more real-world reasons to worry about terrorism than do Americans.

However, our neo-con politicians in collusion with a number of think tanks, and the military-industrial complex, have made a significant portion of Americans believe it is a rational fear. They do this for financial gain and control.

Control keeps the grift going.

And, like Israel, the more Muslims we kill, the more terrorists we create. Where is the virtue in this for anyone except the Defense Department, Lockheed, Rockwell, Northrup, Raytheon, Honeywell and Wall Street?

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Monday Wake Up Call – Russian Hacking Edition, January 9, 2017

“A great deal of intelligence can be invested in ignorance when the need for illusion is deep.” Saul Bellow

Trump had his briefing last Friday by the Intelligence Community (IC), about the Russian hacking. He then released this statement:

I had a constructive meeting and conversation with the leaders of the Intelligence Community this afternoon. I have tremendous respect for the work and service done by the men and women of this community to our great nation.

While Russia, China, other countries, outside groups and people are consistently trying to break through the cyber infrastructure of our governmental institutions, businesses and organizations including the Democratic National Committee, there was absolutely no effect on the outcome of the election including the fact that there was no tampering whatsoever with voting machines…

Whether it is our government, organizations, associations or businesses we need to aggressively combat and stop cyberattacks. I will appoint a team to give me a plan within 90 days of taking office. The methods, tools and tactics we use to keep America safe should not be a public discussion that will benefit those who seek to do us harm. Two weeks from today I will take the oath of office and America’s safety and security will be my number one priority.

He denied nothing that the IC presented, and agreed with several points. His bottom line, that the hacking did not affect the outcome of the election, is important: Trump is all about meme creation and meme destruction. His goal is to prevent the “Russians elected Trump” meme from becoming the next birther movement. If his tweets stay on message, he’ll get by this moment.

For what it is worth, hacking isn’t noteworthy; it’s been going on for years, by the Russians, the Chinese, the US and just about everyone else. There is way more hacking now, since most management systems are online, and few corporations are willing to invest enough to insure real protection from it.

OTOH, disinformation is a big deal. Social media makes Russia potentially a potent force in opinion control in the US and Europe. Hacked information can now be fed into the disinformation machine to great effect. We ignore Russia’s ability to influence US public opinion at our own risk.

Trump’s reaction to the IC briefing is comforting, since there was no histrionics or name calling. He said in this tweet that he will continue to push for a good relationship with Russia:

Having a good relationship with Russia is a good thing, not a bad thing. Only “stupid” people, or fools, would think that it is bad!

This makes him seem reasonable, so he can get on with the work of NOT going to war with Russia over the hack of the DNC.

When you look at the IC Report, it looks like Russian hackers were responsible for the phishing attack against John Podesta. The same accounts were used to hack into the DNC.

The next thing to know is whether it was the Russian hackers who shared this information with WikiLeaks. That appears to be the case, although we are taking it on faith, since the IC hasn’t shown us their work:

US intelligence has identified the go-betweens the Russians used to provide stolen emails to WikiLeaks, according to US officials familiar with the classified intelligence report that was presented to President Barack Obama on Thursday.

We may never see more on how they identified them, since it may be a little too sensitive to divulge.

It pains Wrongo to say this, as a lifelong Democrat, but if Trump manages to beat back the neocon/pro-New Cold War crowd and work cooperatively with the Russians, the world will be a safer place.

Hillary would never had gone there as president.

This is perhaps the silver lining to a Trump presidency, possibly avoiding what looked to be a showdown with Russia and potentially, WWIII.

From a domestic policy perspective, however, the odds have increased that we tear this country apart by 2020.

So, today everybody needs a Wake-Up. The hacking didn’t change the election result, instead, we got this outcome as the result of a successful campaign strategy by Trump, and a failed campaign strategy by Clinton.

No music today, instead, we will watch a short clip from the 1983 movie, “War Games”. Matthew Broderick hacks into a Pentagon computer, assisted by his sidekick, Ally Sheedy. He then plays “Global Thermonuclear War” with the computer, except it isn’t a game. Broderick plays the Russians and the computer plays the USA. Ultimately, the world is saved:

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Sunday Cartoon Blogging – January 8, 2017

Congress returned, and immediately shot itself in the foot by being against ethics before they were for them. That made no sense, even to Overlord Donald I, so Congress backed down. Then Congress got down to business: They revived a rule allowing them to reduce the pay of individual government workers, which was why they were building lists of pro-climate change bureaucrats. Now, they are working on the process for dismantling Obamacare. Dr. Pence nailed the GOP theme:

The GOP will try to baffle the people by guaranteeing “Universal Access”, to health care. That does not ensure that anyone actually has insurance:

The big story of the week was the Russian hacking. Trump was briefed on Friday. Wrongo is skeptical that it made any difference to the election result. Trump’s public skepticism that Russia was behind it is also troubling:

Don’t worry about Trump releasing any secret stuff. The hacking report is 50 pages long, so he’s not reading it. He’ll watch the declassified stuff on Fox News and tweet what he thinks:

The Inauguration is coming. It might look like this:

(This cartoon is by Marian Kamensky, Slovakia)

Once in office, here is Trump’s foreign policy:

(This is from Tom Janssen, The Netherlands)

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Wrongo’s Useless 2017 Predictions

“It’s tough to make predictions. Especially about the future.” – Yogi Berra

Since you have already plunged a stake into the heart of 2016, it is time for some predictions about 2017, which most likely, won’t happen. We can expect the following:

  1. There will be more global political and social turmoil:
    1. The EU could collapse. France is a Marine LePen government away from pursuing an exit from the EU, so there would be a Frexit to go along with Brexit.
    2. China’s economy is wobbling, and China’s president Xi has leaned into a populist message:

On this New Year, I am most concerned about the difficulties of the masses: how they eat, how they live, whether they can have a good New Year…

  1. The US will continue to lose influence globally despite “Mr. Unpredictable” becoming our Orange Overlord: Trump brags about winning when he negotiates. That has been undeniably true in his real estate and name brand licensing. He will find that when the other side doesn’t need access to his brand in order to succeed, he will have to resort to instilling fear. That may work once, but it will not work consistently.
  2. A corollary: Trump arrives in the Oval Office as an overconfident leader, the man with no plan but with a short attention span, and within six months, he will have his first major policy failure. Getting his hand burned will make him more subdued, more conservative and less populist thereafter.
  3. A second corollary: The triumvirate of Russia/Turkey/Iran will elbow the US firmly out of the Fertile Crescent, and secure friendly regimes in Damascus, Baghdad and Tehran. This will push American influence in the Middle East back to just the Gulf States, a weakened Saudi Arabia, and an increasingly isolated Israel.
  4. Domestically, drug abuse, suicide, and general self-destructive behavior will continue to climb and become impossible to ignore.
  5. The Trump stock market rally has already turned into the Santa Selloff. The Dow peaked on December 20 at 19,975, 25 points away from party-hat time. But since then, Dow 20,000 slipped through our fingers like sand. It closed the year at 19,719, down 281 points from 20k.
  6. Regarding the stock market, many people who want to sell stocks waited until 2017 in order to pay lower capital gains tax. Selling in January could lower prices further.
  7. The growing antibiotic resistance to main stream drugs will impact health in the US.

Meta Prediction: It is certain that few Trump voters will get the results they voted for. Some people who voted for Trump have incompatible outcomes in mind, so it’s a virtual guarantee that a sizable minority are going to feel cheated when they fail to get what they were promised.

OTOH, when Trump fails, most of his base will blame anyone but the Donald. The question is, when disillusionment sets in, will the reaction be a turning away, or a doubling down on the anger?

Wrongo thinks anger will win out.

The coming Trump administration will seem like a fractious family outing: Just under half of the family (the “landslide” segment) wanted to go out, but now, the whole family has to go. Those who wanted to stay home will sulk in the back seat while Daddy tells them to stop bitching.

Meanwhile, once we are out of the driveway, it dawns on everyone that Daddy hasn’t decided yet where to go. Everyone pipes up with suggestions, but Daddy again tells everyone to shut up, because it’s his decision alone. There will be the usual “are we there yet?” complaining, some motion sickness and incessant fighting over who is touching whom.

Daddy won’t reveal the destination, but insists everyone will love it once they get there, even those who wanted to stay home, those who wanted to go the beach, and those who wanted to head over the cliff like Thelma and Louise.

Time for our Monday Wake Up Call, “Wake Up Everybody”, originally by Harold Melvin and The Bluenotes, featuring Teddy Pendergrass. Teddy left the group for his solo career after this album.

But, today we will hear and watch John Legend’s cover of the tune, backed by the Roots Band along with Melanie Fiona, and Common. The song is as strong as it was 42 years ago when it was released:

Those who read the Wrongologist in email can view the video here.

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Trump’s Nuclear and Israel Policies

2016 is ending on a somber note: We elected Donald Trump. We have confirmed his modus operandi, his lack of tweeting impulse control. We’ve seen his appointments to senior positions.

2017 will be an abrupt shift from the policies and guiding principles of the post-Reagan era. This will be true for the social safety net, tax policy, and several other primarily domestic policies, some which had their genesis in FDR’s New Deal. Then there is the Supreme Court.

It is doubtful that Trump can undo the Iran nuclear deal, but two other international policies will change.

First, America’s nuclear weapons policy: Donald Trump has recently tweeted that the US needs to “greatly strengthen and expand its nuclear capability.” We have had a 50-year period of nuclear arms control with Russia, mostly delivered by Republican presidents. It tamed and then downsized the nuclear arms race. But Trump’s national security appointees and Republicans in Congress now want to throw away their inheritance. They will try their best to bankrupt Moscow again. They will seek to chip away, if not walk away, from the New START and INF treaties. They will try to remove the CTBT from the Senate’s calendar and reduce funding for that Treaty’s global monitoring system.

Trump has shown little interest in intelligence briefings. This is reminiscent of Ronald Reagan’s first term. Recently declassified documents from the Reagan presidency show how slowly Reagan was brought up to speed on national security issues. Reagan took office in 1981, and was not fully up to speed by 1983, preferring to let his national security team handle those details. This is from the National Security Archive: (Emphasis by the Wrongologist)

Sharper understanding at high levels of the grave danger of nuclear war was one consequence of a Defense Department nuclear war game that occurred in mid-1983. In the “Proud Prophet” game…the lead players were JCS Chairman John W. Vessey and Secretary of Defense Caspar W. Weinberger… during the game Vessey and Weinberger followed standard policies constructed for crises; as a U.S.-Soviet conflict escalated, their actions initiated a major nuclear war. “The result was a catastrophe” in which “a half billion human beings were killed in the initial exchanges and at least that many more would have died from radiation and starvation.”…Proud Prophet had a chastening and moderating impact on the Reagan administration’s rhetoric and thinking about nuclear war….but…The Proud Prophet report remains massively excised and it is unknown even if or when Weinberger briefed Reagan on it.

(h/t Booman)

This history shows that the (unelected) national security apparatus thinks it prudent to keep newly elected presidents in the dark for a long time after they are elected. In the case of Harry Truman, he didn’t even know we had nuclear weapons until he was asked for permission to use them!

Our only hope with nuclear is that Trump seems to want to forge a working alliance with Russia. We know that a renewed nuclear arms race is not in either country’s interest. It’s possible that Trump will surprise us by doing deals with Vladimir Putin, who cannot afford an arms race.

Second, is Israel’s out-of-proportion reaction to the UN Security Council’s Resolution 2334, which passed with the US abstaining, rather than exercising its veto. The resolution condemns Israel’s construction of settlements within the occupied Palestinian territories. Benjamin Netanyahu didn’t take the Resolution well. He vowed revenge on everyone, except Trump. Netanyahu said that Israel will “re-evaluate diplomatic relations” with all 14 countries who voted yes, including permanent Security Council members Russia, the UK, China and France. “Re-evaluation” will have no meaning to them, but for the other nine, who knows? Bibi singled out Senegal and halted Israeli aid. He recalled Israeli ambassadors from some of the countries that voted for the resolution, called for re-evaluation of Israel’s relationship with the UN, including its funding commitment.

Republicans, emboldened by their love of Israel, have made threats to defund the UN, something we haven’t heard since John Bolton was relevant.

Almost certainly, Netanyahu’s strategy is to exploit the UN vote to convince Trump and his team that Israel needs to be compensated in some way for what the UN, and especially the US, has done.

More compensation. How Republican of them. America has given Israel $124 billion in aid, and Obama just authorized another $38 billion over the next ten years.

It’s time to cut Netanyahu adrift. What we have here is a US client state that thinks it’s in charge. The question is how bad do Israel’s policies have to be before it provokes some sort of reassessment by Congress? Or is everything to be swept under the rug of “existential necessity”?

The Trump and the I-love-Israel-more than-life-itself crowd in Congress are on track to do severe damage to the UN and to our ME strategy during the next four years.

Trump’s foreign policy is giving Wrongo the year-end blues.

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Winter Reading List

The following are books that Wrongo hopes to finish by spring. They are all supposed to be good for you, like vitamins, or exercise. A few more may be added to the pile, but it is already an ambitious list to get through in the next quarter:

Sapiens: A Brief History of Humankind by Yuval Noah Harari. Harari asks how Homo sapiens evolved from an unexceptional savannah-dwelling primate to become the dominant force on the planet.

The Sympathizer by Viet Trang Nguyen won the 2016 Pulitzer Prize for fiction. It describes a Viet Cong agent undercover with the Republic of Vietnam forces and the US military. He is bi-racial, with a Vietnamese mother and a French GI father, making him a “man of two minds”. He escapes after the Fall of Saigon, and lives in the Vietnamese refugee community in LA, while secretly reporting back to his communist superiors in Vietnam.

The First Congress by Fergus M. Bordewitch. America’s beginnings have been enjoying new popularity. The play “Hamilton” shows that better than any book. This interest has been sparked by a recognition that the American Revolution was a beginning, not an ending, of the story of our nation. And today, we need big ideas and role models more than ever.

The Populist Explosion by John Judis. Did an unstoppable wave of Populism give us Donald Trump? This is a 184 page book that may tell us.

The Undoing Project by Michael Lewis. Israeli psychologists Daniel Kahneman and Amos Tversky changed our assumptions about decision-making. Their work created the field of behavioral economics, for which Kahneman was awarded the Nobel Prize (Tversky had already died). The book is about their work, their incredibly close relationship, and how it went sideways.

The General vs. The President by HW Brands.

Wrongo just finished this highly readable book. In 1950, South Korea was invaded by the North, and our troops were nearly forced to abandon the peninsula.

Harry Truman was president. After WWII, America was not interested, or able to fight another war. We had demobilized our troops, and had limited numbers of planes, ships and equipment that were combat ready, but the thinking was that holding Korea was necessary to protect Japan from invasion by the Soviets and the Chinese.

General MacArthur was the greatest military hero of his time, and was in charge of America’s interests in Asia. In the Korean conflict, he had an early brilliant success, launching a counter-attack against the North Koreans at Inchon that led to the North Koreans being completely routed. MacArthur pursued them into North Korea, all the way to the Chinese border. China saw MacArthur on their border as an existential threat, and joined the conflict in huge numbers, pushing the allied forces back again into the south.

MacArthur had constantly lobbied (and actually took steps) to extend the war into China. He based that on advising Truman that the Chinese would never enter the war. He further insisted that the battle against communism should be fought in Asia, while Truman and the administration felt certain that the real trouble spot was Europe. We had already engaged Russia in the Berlin airlift in 1948. In fact, the CIA had warned that:

The Soviet Union may seize upon the present crisis [Korea] to precipitate general war with the United States.

MacArthur offered an unauthorized ceasefire to the North Koreans while threatening the alternative of nuclear war with China. He wanted to use Taiwan’s military to help defeat China’s troops in Korea, which would have left Taiwan unprotected, and would have re-started the war between the mainland and Taiwan that had just ended in 1949. He also wrote an inflammatory letter to a Republican congressman, contradicting his Commander in Chief’s strategy for Korea.

His actions caused his firing in April, 1951. Afterward, Truman came under withering attack from Republicans. MacArthur was hailed as a hero. He addressed a joint session of Congress, and had ticker tape parades all across the US. But, at Congressional hearings called to justify Truman’s strategy, the tide gradually turned against MacArthur.

The author does a fantastic job sourcing now de-classified portions of the hearings to demonstrate the danger in MacArthur’s ideas. Because of the hearings, all in Congress finally understood what America was facing globally, how ill-prepared we were at the time, and the folly of MacArthur’s plans.

MacArthur flirted with running for president, and Truman was weakened after his 1948 election. So MacArthur moved to kill the king. He called Truman an appeaser, someone who did not understand the global threat of communism. Truman did not run for reelection.

Eisenhower became president in 1952, having pledged to bring peace on the Korean peninsula.

Today, Truman is vindicated, and is considered a near-great president, while MacArthur is viewed as a brilliant military man who let politics ruin him.

Read the book!

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New OPEC Deal Puts Saudi Arabia On The Sidelines

The new OPEC deal to cut oil output, the Cartel’s first since 2008, gives OPEC what it wanted: higher oil prices. It was difficult for the Cartel to achieve an agreement. Russia, a major oil producer that isn’t even a member of OPEC, brokered a deal between Saudi Arabia and Iran. From Oil Price:

The interventions ahead of Wednesday’s OPEC meeting came…from Putin, Saudi Deputy Crown Prince Mohammed bin Salman and Iran’s Supreme Leader Ayatollah Ali Khamenei and President Hassan Rouhani…According to Reuters, Putin’s role as intermediary between Riyadh and Tehran was pivotal, and is a “testament to the rising influence of Russia in the Middle East since its military intervention in the Syrian civil war just over a year ago.”

Prior OPEC meetings failed to deliver consensus, because nobody wanted to cut production. Tehran argued OPEC should not prevent it from restoring the output lost by years of Western sanctions, but the Saudis wouldn’t agree. The animosity between them didn’t help: Proxy wars in Syria and Yemen have exacerbated decades of tension between the Saudi Sunni kingdom and the Iranian Shi’ite Islamic republic.

The brokering started when Putin met Saudi’s Prince Mohammed on the sidelines of the G20 meeting in China. Both felt they could benefit from cooperating to push oil prices higher, and agreed to work together to cut excess production that had more than halved oil prices since 2014. Lower prices had created large budget deficits for both Russia and Saudi Arabia.

Financial pain made cooperation possible, despite the huge political differences between Russia and Saudi Arabia over the civil war in Syria. But Iran also had to agree. Prince Mohammed had repeatedly demanded that Iran participate in any production cuts. Saudi and Iranian OPEC negotiators had debated the point without compromise for months.

Putin stepped in: He established that the Saudis would shoulder the lion’s share of cuts, as long as Riyadh wasn’t seen as making concessions to Iran. A deal was possible if Iran didn’t celebrate a victory over the Saudis.

Reuters reports that a phone call between Putin and Iranian President Rouhani smoothed the way. After the call, Rouhani and oil minister Bijan Zanganeh went to Iran’s supreme leader for approval. During the meeting, leader Khamenei approved the deal. He also agreed that Iran wouldn’t take a victory lap once the deal was announced.

And so the deal got done. OPEC is trimming output by 1.2m barrels per day (bpd) starting January 1st.

The deal is contingent on securing the agreement of non-OPEC producers to lower production by 600,000m barrels per day. Russia says it will contribute half of that, 300,000 bpd. Iran was allowed to slightly boost its output, while Iraq slightly lowered theirs.

We’ll see if the deal holds, and/or, who cheats.

Pundits like to chalk up winners and losers in this type of deal. Since OPEC now accounts for less than half of all energy output in the world, it is a weakened cartel, dependent on the kindness of outsiders (like Russia) to hold together.

Saudi Arabia looks like the biggest loser. First, it cut production by 500,000 bpd. Second, it has presided over a momentous shift in global power, one that is as stunning as Brexit or Trump’s victory.

Saudi’s capitulation to Russia and Iran ends OPEC’s domination of the world’s energy market. The Saudis also made the US shale oil market more powerful in the global energy market, since US shale will produce more oil whenever oil prices are high. However, Saudi oil remains far cheaper to produce than American shale oil, since it requires far less energy to extract and refine.

Russia emerged as the biggest winner. Its economy did not buckle under the Saudi effort to drive oil prices down via increased production. Putin is now the indispensable power broker in the Middle East, something that was unthinkable even 12 months ago. The Syrian civil war will soon end with Russia winning, Assad staying in power, and Saudi Arabia as the regional loser.

And so, this year truly has seen the death of one world order, along with the birth of another. The US and Saudi now have very little to show for their 50+ year joint effort to dominate the Middle East. The EU looks far from stable as a force in Western Europe.

And Saudi Arabia has just become the third dinosaur to be felled by the asteroid called 2016.

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