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The Wrongologist

Geopolitics, Power and Political Economy

Monday Wake Up Call – July 22, 2019

The Daily Escape:

Grinnell Glacier Overlook, Glacier NP, Montana – 2019 photo by e_met

Americans don’t like geopolitics. Columns about the world situation have been Wrongo’s least-viewed since the start of The Wrongologist blog in 2010. Today may be time for Americans to wake up, and think about our evolving and dangerous situation with Iran.

You know the basics: The US pulled out of the Iran Nuclear Deal in 2018. We reinstituted sanctions, the most important of which came into effect in November 2018, covering sales of oil and petrochemical products from Iran.

Since then, Iran has found it difficult to sell its oil, since the payments would be cleared through a vehicle called SWIFT, which is the payments backstop of the international trading system. SWIFT provides a network that enables more than 11,000 financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment.

No one wants to buy oil, and settle the deal through SWIFT because the US will become aware of the deal, and penalize the bank(s) or companies that worked with Iran. Another payment system is emerging, INSTEX, which will circumvent US sanctions, but it may be too little, too late, given the precipitous impact sanctions have had on Iran’s oil sales.

Things have now heated up. First with the seizure of an Iranian-flagged oil tanker by the UK in Gibraltar two weeks ago. It was ostensibly on its way to deliver oil to Syria, and the US asked the UK to seize the ship. What followed was tit-for-tat: On Friday, Iran seized a UK flag oil tanker in the Straits of Hormuz.

The US media is calling Iran seizure an unprovoked “attack” on a British flagged ship. Britain justifies its Gibraltar action as just keeping the sanction regime in place.

Here’s where things become dangerous. The neocons in Washington and in the media are seeking immediate and tough action, portraying Iran as an imminent threat to free trade, and to the West’s oil supply. Trump regrettably, is ignorant of Iran and Middle East history, and may not have the ability to avoid employing military force.

There is a dangerous delusion within the Trump /Bolton/Pompeo National Security team: They believe we are so militarily dominant that Iran will not dare fight us.

That is a strategically dangerous place to land. Our best option is to resolve the current tanker seizures with diplomacy. The UK and Iran could agree to resolve the situation and release the respective ships. All other options involve shooting and possibly, a military escalation involving others, including China and Russia.

If key Iranian infrastructure is targeted, nobody really thinks Iran will sit passively, and let us attack critical targets.

Iran has a robust, if not totally modern, military that could engage in counter strikes on US/UK targets in the Middle East. That would certainly involve our naval assets in the Persian Gulf. Now, suppose US aircraft are downed inside Iran (Iran has Russia’s S-300 antiaircraft system, but not the newer S-400). Trump would come under intense pressure to escalate. Any US pilots that survived being shot down, would give Tehran a big bargaining chip. Would Trump bargain, or would he continue to fight?

Iran would be damaged, but it would survive. The religious leadership’s hold on Iran would be strengthened. Trump’s political fortunes could take a hit from that portion of his base that is against foreign entanglements, as well as the other 60% of America.

The DC neocons are certain we can bomb Iran into submission. That is a fantasy, just as it was in Vietnam and Iraq.

All indications are that the Iranians aren’t going to cave. They’ve proven for decades to be very pragmatic. They may choose to talk. If Trump is smart, he’ll take a sit-down with the Iranians before things get out of control, and before the DC neocons and their Israeli friends push things beyond a point of no return.

He might get a deal that looks suspiciously like the Obama Nuclear Deal. Then, he can come back and claim he got the best deal ever, a deal only The Donald could get!

If he sticks to his “I have to win, I have to be seen as beating the other guy” as his game plan, we are in for a long, dangerous summer.

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Saturday Soother – War With Iran Edition, June 22, 2019

The Daily Escape:

Na Pali Coast, Kauai HI – 2019 photo by Santahickey

It’s tough to wake up on a Friday morning and find out that during the previous night, America almost started a war. On Thursday night, Trump allegedly pulled back from a military strike he had earlier authorized against Iran.

The New York Times wrote: “Trump Approves Strikes on Iran, but Then Abruptly Pulls Back”. The NYT says that Trump’s hawks, Bolton, Pompeo, and CIA Director Gina Haspel, had argued for the strike, while the Pentagon was said to have been against it. The NYT report includes this paragraph: (emphasis by Wrongo)

“Asked about the plans for a strike and the decision to hold back, the White House declined to comment, as did Pentagon officials. No government officials asked The New York Times to withhold the article.”

It’s curious. If Trump was serious about attacking Iran, what purpose was served by the WH giving this story to the NYT? Not everyone bought the claim that a planned attack was called back. Jeffrey Lewis, a scholar on international conflicts, tweeted:

Jeffrey Lewis @ArmsControlWonk – 3:43 UTC – 21 Jun 2019

I don’t buy this. Trump’s team is trying to have it both ways — acting restrained but talking tough. This is pretty much what Nixon did in 1969, too. Why not just admit that sometimes restraint is smart?

He goes on to link to the 1969 NYT piece referenced above:

The @nytimes ran the same story Nixon in 1969. Nixon was not going to retaliate but he wanted people to think he almost did — and the Gray Lady obliged. —> Aides Say Nixon Weighed Swift Korea Reprisal

On May 6th 1969, the Times carried a story that Nixon decided not to escalate when the NoKo’s shot down a US Navy plane. So, this current storyline of “a strike was ordered, but Trump held back and saved the day” might also have been coordinated by the WH and the NYT.

If the threat of another Middle East war wasn’t bad enough, a new IMF study shows that US $5.2 trillion was spent globally on fossil fuel subsidies in 2017. The latest available country breakdown is for 2015. In that year, the US was the third-largest subsidizer of the fossil fuel industry, providing $649 billion in subsidies. China and Russia ranked first and second, respectively.

You should be outraged that the $649 billion we spent in 2015 is more than 10 times the 2015 federal spending for education. America has to change its priorities. The true costs to America of using fossil fuels has to include these subsidies.

These two stories about fossil fuels show our government’s fealty to the oil industry.

The average person didn’t notice that on the day the American drone was shot down in the Straits of Hormuz, the price of oil jumped 10%. Trump surely was told this, and the risk of higher oil prices caused by his risky foreign policy may have reduced his desire to strike at Iran.

For whatever reason, we’ve finally seen a prudent move by Trump. It’s a face saving gesture: he appears both tough and reasonable simultaneously. Also, it is encouraging that he used the concept of proportionality, saying that the planned strike would have been too harsh a retaliation for losing one drone.

We can expect his neo-con advisors and the FOX fringe to try to undercut his decision. Maybe then he’ll understand it’s time to clean house.

So, on this Saturday, it may be difficult to get soothed, but let’s try our best. Wrongo and Ms. Right are on Cape Cod with daughter Kelly, where rain is dominating the weather. In honor of being here, today we’ll brew up a large cup of Wellfleet’s Beanstock Coffee Roasters’s old reliable Wellfleet Blend ($11.99/12oz.).

Now, settle back and listen to “The Hebrides”, Op. 26 “Fingal’s Cave” by Felix Mendelssohn. It is played by the San Francisco Conservatory of Music Orchestra, conducted by Scott Sandmeier.

Mendelssohn actually visited the west coast of Scotland in 1829. It was part of Mendelssohn’s three-year Grand Tour, a common excursion taken by young men of wealthy families as a part of gaining cultural literacy. Here is “The Hebrides”:

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

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Trump and Bolton Screw Up Geopolitics

The Daily Escape:

Sunrise, Reflection Canyon, Escalante arm of Lake Powell, UT – 2019 photo by Aaryeh95

(Reminding readers that this is the last column until Sunday when cartoons will be back on the menu. We are attending our second college graduation of the spring.)

The Week reports that President Trump is having second thoughts about sending troops to Venezuela. He complained to aides and advisers that:

“he was misled about how easy it would be to replace the socialist strongman, President Nicolás Maduro, with opposition leader Juan Guaidó, The Washington Post reports. ‘The president’s dissatisfaction has crystallized around National Security Adviser John Bolton and what Trump has groused is an interventionist stance at odds with his view that the United States should stay out of foreign quagmires.’”

“He was misled about how easy it would be to replace the socialist strongman”! Who could’ve seen that coming? Just about everyone but Trump, and the neocons around Trump. The Neocons are batting 1.000, again proving themselves to be miserable failures at geopolitics. They continue to mess up geopolitical foreplay on the way to their real goal: Regime change and war.

By listening to Bolton and Pompeo, Trump has placed Venezuela more directly in the hands of Russia. It seems that Trump’s 90-minute phone call last Friday with Vladimir Putin was meant to talk Trump out of regime change in Venezuela. A secondary benefit for Putin may turn out to be that Trump handed Moscow a permanent Atlantic military presence in South America.

What’s the upshot? It looks like Maduro was pushed into Putin’s arms. Maybe Trump and Putin can cut a deal to sort this out without a crisis.

It looks possible that Maduro got an offer from a smarter, stronger player in the geopolitical game: Vladimir Putin. Republicans are bound to be disappointed. Blowing up Maduro’s regime was high on the Bolton and Republicans’s list.

Of course, regime change is always on their list. They want regime change in North Korea. In Syria. In Venezuela. And in Iran. It would be the perfect distraction from all the talk about Mueller and impeachment. They think war is a great campaign issue for 2020.

Now, Bolton and Pompeo have shifted their focus to Iran.

On Sunday, the National Security Council announced that we were sending another carrier strike group and a bomber task force to the Persian Gulf in response to “troubling and escalatory” warnings from Iran. Bolton discussed the intelligence, saying that Iran appeared to be gearing up for war.

Help me. We all know that Russia is also more friendly with Tehran than we are. And Putin has already achieved near-total victory in Ukraine and Syria, and possibly has already bagged Venezuela. We were never going to be buddies with Iran, but will Tehran now move completely into Russia’s orbit?

To date, it looks like the worst thing Donald Trump has done is to hire John Bolton as his National Security Advisor. Of course, Bolton’s track record as a war-monger preceded him, so what’s happening now was predictable. The Neocons, including Bolton, want a war with Iran, to remake the Middle East.

Their project to remake the ME saw America destroy Iraq and Afghanistan. It fueled American regime change aspirations in Syria. It brought about the destruction of Libya. It’s also underway in Yemen.

What the Neocons are doing helps a new alliance to form. Its key members are China and Russia, but Iran is a part of it as well. The Chinese Belt and Road Initiative (B&R) is meant to create routes to Europe and a Chinese-led trade zone. It is meant to bypass sending ships through the straits of Malacca (which the US can shut down any time to strangle China’s trade). It looks like the land parts of the B&R will move goods more quickly to Europe, but not as cheaply, as sea transport.

So the question is: Can Bolton talk Trump into war with Iran? Will Trump lead us into a fatal miscalculation? Trump is walking a tightrope without a net.

Even without a war, the US’s continued abuse of its privileged position in the world payments system to sanction countries like Iran and Venezuela implies that China and Russia will develop an alternative payments system. It’s inevitable.

It’s only a matter of time before international payment alternatives become viable enough that major countries will simply ignore US sanctions.

The US looks to be the big loser in the geopolitical game of chicken that Trump is playing.

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Iran: Trump Is All Gambit, No Plan

The Daily Escape:

The Mitten Buttes, Monument Valley, UT – photo by Nathan Fitzgerald

Here we go, a new gambit on Iran. The Trump administration moved on Monday to isolate Tehran economically and undercut its power across the Middle East by not extending the waivers of sanctions against countries purchasing Iranian oil.

Secretary of State Pompeo announced that the waivers which allowed eight countries to import Iranian crude oil without being subject to US sanctions will expire on May 2nd. The eight countries included are China, India, Turkey, South Korea, Japan, Greece, Italy and Taiwan. From the NYT:

“Secretary of State Mike Pompeo said in announcing that current sanctions waivers…would expire on May 2, clearing the way for American economic penalties against all companies or financial institutions that continue to take part in transactions linked to buying Iranian oil.”

This decision to stop Iran’s biggest customers (China, who buys half of Iran’s oil exports) along with Japan, South Korea, India and Turkey, is a strike at Tehran’s lifeline. They export one million barrels of oil daily, and it accounts for 40% of their GDP.

Immediately, there were repercussions. Bloomberg reported that Iran threatened to close the Straits of Hormuz, a choke point in the Persian Gulf, while the Washington Examiner reported that the US has positioned a second aircraft carrier in the region.

What Trump seems intent upon is regime change. He campaigned against further wars in the Middle East, but now is catering to Saudi Arabia and Israel, both of whom, along with National Security Advisor John Bolton, are intent upon toppling the Iranian regime.

Trump’s Iran obsession makes us look terrible. Taking pages from the Iraq War playbook, Trump and Pompeo paint a picture of a rogue, outlaw, terrorist regime bent on acquiring nuclear weapons and whose “malign activities” are the cause of all the chaos in the Middle East.

This is straight from the neocon playbook: The one they’ve used before. They are building a case for war. America wants Iran out of Syria. We condemn their support for Hezbollah. We say that Iran supports the Houthis in Yemen, against our great friends, the Saudis.

This latest move is called the doctrine of “Maximum Pressure”. The goal is to cut Iran’s oil exports to zero. Will this gambit force the capitulation, or collapse, of the regime? That seems difficult to believe, but Trump and Bolton may have teed up a war.

Think about this: America is now decreeing to the rest of the world that only we decide which countries get to trade with whom. We’re telling China, the second largest economy in the world, that it lacks the sovereign authority to buy oil from Iran if it so desires.

Which do you think China will do? Both Iran and China appear to hold a better hand than the US. We can’t invade Iran and win. We can’t force China to do anything they refuse to do.

The rest of the world will have trouble understanding what Trump thinks the US can gain from this gambit, because there is no plan behind it. If Iran closes the Straits of Hormuz, will we bomb, bomb, bomb, bomb, bomb Iran?

If China, Turkey, India and Japan continue to purchase Iranian oil, will we freeze their dollar-denominated assets in the US? If this leads to the creation of a non-dollar global payments system, what happens to the dollar as the global reserve currency? Has anyone in the Trump administration thought about that?

Once, the US used its reserve currency status and clout (largely) for good. Now, it’s just more bullying by Trump. In the end, the Trump administration may achieve a new level of worldwide cooperation against a common enemy: the USA.

Aren’t Americans sick of this neocon warmongering? Americans don’t want to be drawn into yet another ME action. It isn’t an accident that Trump’s National Security Advisor John Bolton, declared unequivocally in November 2002:

“We are confident that Saddam Hussein has hidden weapons of mass destruction and production facilities in Iraq…”

Is now the chief strategist behind Trump’s drive towards war, with Secretary of State Pompeo, happily riding shotgun.

It doesn’t matter that US intelligence, along with Israeli intelligence and the International Atomic Energy Agency confirm that Iran is complying with the Iran Nuclear Agreement. Or, that the US invasion of Iraq is the principle cause of Middle East chaos today.

Trump officials will cherry-pick information, package it, and amplify it, exactly as the Bush administration did in the lead-up to the Iraq war.

The real question is whether American voters will fall for this again.

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