ESSAYS FROM THE HEARTLAND
NUMBER ONE
ELECTIONS HAVE CONSEQUENCES
or
10 THINGS THAT WILL HAPPEN
10 THINGS THAT WILL HAPPEN
AS A DIRECT RESULT OF
OBAMA’S 2012 RE-ELECTION
November 13, 2012 and February 28, 2013
There is nothing inevitable about the course of history.
World power does not march inexorably from East to West, the end of the
American century is not certain, and the Marxist dialectic is not a natural
law. Anybody who thinks otherwise has not studied history. However, events do
have consequences, and we can predict some consequences as more probable than
not, and such predictions are of course more accurate the shorter the horizon.
Several things may not be as certain as night follows day, but they are almost
certain to happen as a direct result of the re-election of Barrack Obama as
President of the United
States and the Democratic control of the
Senate. I began writing this the week following O’Bama’s re-election and nothing that I thought then seems less
likely 3 months later – quite the contrary. I invite you to critically examine
my analysis, and refute any of these predictions.
1. Obamacare will go into effect, and will
fundamentally change the structure of health care in the United States:
a. Last
year, the US Supreme Court declined to declare Obamacare unconstitutional. The
last best chance to prevent the enactment of Obamacare died on November 6,
2012. It will begin to go fully into effect in 2013. The winners in Obamacare
are those people who did not have access to healthcare before Obamacare. The
losers are everybody else.
b. The
fundamental premise of Obamacare is to bring more medical care to more people
in lower income groups. Obamacare is designed to neutralize the advantage in
access to goods and services that derives from higher income and wealth, in
favor of “redistributing” that access to people who have less income and
wealth. However, there will not be a radical increase in hospitals, doctors or
nurses. This inevitably means that people and resources will be stretched to
serve more people. It is a simple mathematical equation: the same supply
divided by more demand equals less healthcare for each person so that more
people can get some healthcare. As doctor shortages begin to appear,
appointments to see the doctor will be more difficult to make, and you will
have to wait longer. Appointments will be pushed further down the healthcare
chain to nurses and physician’s assistants.
c. This
is exactly why the law includes a 15 person panel to determine what services
will be provide under Obamacare to what persons. Whether or not you wish to
call them a “death panel,” their indisputable purpose is the rationing of
available health care. It is inescapable that this requires judgments on the
value of medical services to different groups of people. This is triage on
steroids. There have already been reports that there will be “age limits” on
such things as joint replacements. In this competition, older people who are
already consigned to a kind of limbo at the end of their lifespan will lose to
younger people who still have more “value.”
d. Obamacare
will destroy the system of employer provided health insurance. Businesses with
50 or more employees must provide healthcare under this law: the number of
companies with 49 employees will increase dramatically, throwing more people
who would previously have had employer provided healthcare into the public
healthcare system. (In the 1980’s, Italy enacted a law that companies of 50 or
more had to hire as their next employee a disabled person selected by the
government; predictably, the number of 49-person Italian companies
skyrocketed.) Larger businesses either have to provide healthcare or pay a
fine: the $2,000 fine is much less expensive per person than the current cost
of providing healthcare insurance, and the cost of healthcare has been the
fastest rising cost of doing business for years. In a price competitive
environment where overhead and operating costs make the difference between
profit and loss, which includes most businesses, more and more companies will elect
the more predictable and less expensive path, drop healthcare and force their
employees into the public healthcare system. With comprehensive control and
administration, legal ownership becomes irrelevant, because ownership is really
the right to use and control. The government will have “market power pricing”
through Medicare, Medicaid and Obamacare to control both what services are
offered (by what services the government will pay for) and what their prices
will be (by how much the government will pay for the services), with little if
any effective competition from the private sector. When you control both
delivery of services and the price of services, there is no need to be the
owner or employer of the service delivery system – in fact, it is preferable if
you do not, because then you also have a fall-guy to blame for poor delivery of
services.
e. The
average quality of healthcare in the United States for those who had
healthcare before Obamacare will tend to decline. This is always the effect of
dilution. It has never been otherwise. When you “democratize” something, the
standards never rise, they always decline to the lowest common
denominator. Obamacare itself requires cuts in Medicare and reductions in
Medicare reimbursements. With cuts in reimbursements, more doctors will resist
accepting Medicare schedules, and therefore, Medicare patients. With more
governmental control of pricing, average incomes of doctors and nurses will also
likely decline. I am no expert on running a medical business, but the only way
I can see this not happening is if there are enough new patients who previously
were not paying at all but who will now pay at government mandated rates to
offset those that previously were paying higher than the government mandated
rates but who are now forced into government rate-set programs. And if that
does not happen by itself, physician incomes will likely be reduced by
government fiat. There are already proposals being floated in Congress to
attack this only area of high cost in medical care that Obamacare has not
addressed. As this happens, fewer highly qualified people will elect to
shoulder the sacrifices of decades of education and training necessary to be a
physician, and those that do will likely retire earlier; and/or, the standards of
admission to the medical profession will be loosened to meet the demand, and
the average quality of a physician will decline. On way doctors can try to
protect their incomes from the pressures of increased numbers of patients with
government-controlled fees is to increase the use of “below physician level staff” to see and
treat patients, allowing the physicians to charge higher fees as specialists.
This will result in fewer general practitioners (already in short supply) and
patients seeing nurses and physician’s assistants rather than physicians.
f. Although
the average level of care for those who had healthcare before Obamacare will
decline, the cost of that healthcare will increase. Many of those on Medicare
will forego treatments that are no longer covered. The CBO has already
projected that the average cost for a family of 4 for a private healthcare
premium under Obamacare will exceed $20,000. Hardly anybody can pay that. This
will force more and more people onto the government run plan – which is really
the objective of Obamacare, to have one universal healthcare system run by the
government – and steadily reduce the pool of people available to be insured by
the private sector. No pool, no insurance: the essence of insurance is pooling.
The not-very-much-talked about limit on incomes for executives of health
insurance providers of $500,000 per year should give you a clue of what
Obamacare truly intends.
g. Obamacare
will reduce the incomes of lower income employees. Under Obamacare, coverage is
mandated for all employees who work 30 hours or more per week. Conversely,
coverage is not required for employees who work 29 hours per week. To avoid the
costs of Obamacare, employers will adjust their workforce by reducing the
number of employees who work 30 hours per week, which will mean that many
employees who are now working 40 or more hours per week will be frozen at 29
hours per week, nominally a 25% cut in income. This will begin happening with a
vengeance in late 2013 before the 30 hour rule becomes effective in 2014. It is already happening in the food and
retail sales sectors.
h. The
ultra-rich will not be affected. While the middle class and the upper middle
class will find health care harder to get and probably not as good, those who
have the resources will still demand the highest quality medical care, and
there will be plenty of countries that will gladly capitalize on this
opportunity. Medical centers of excellence will arise outside the United States in the Caribbean
Basin (the Caymans, the Bahamas, etc.), where people with money
can go to obtain the medial care they want without government interference. The
trend that began with things like exotic cancer cures or “experimental”
surgeries to cure diabetes in places like Mexico, and the training of doctors
in secondary medical schools in places like Aruba, will accelerate. Those
extra-US health care centers will become very, very prosperous.
i. Medical
innovation in the US
will tend to reduce. A government run healthcare system will target the
“obscene profits” of pharmaceutical companies. The price of Pfizer’s stock has
already fallen dramatically. Without Obamacare, the average time to bring a new
drug to market has doubled from 6 years to 12 years, and now costs $1.2 billion
(Source: Pharmaceutical Research and Manufacturers of America). Lower drug
prices mean lower profits, and lower profits mean less R&D, and less
R&D means fewer new drugs being brought to market. Obamacare imposes a tax
on medical device manufacturers (hip and knee implants, for example), and the
Obama administration has openly threatened the medical device manufacturers if
they try to pass the tax along to consumers in price increases. If they can’t
pass the price along, they will make less in profits, lower profits mean less
R&D, and less R&D means less fewer innovations in medical devices.
2. Taxes will increase: A central plank in
the Democrat platform is to raise taxes to reduce deficit spending – although
they refer to it as revenue enhancement, not taxes. Republicans bluster that
they will stand firm against raising taxes on anybody, but the history of past
government shutdown standoffs teaches that they will likely cave rather than
risk the political consequences of being blamed for the “fiscal cliff.” The
Republican “solution” is pure sophistry: they claim they will not raise tax rates,
but they will close loopholes and reduce credits and deductions. Either way,
more money will be transferred from private individuals to the government, and
that is a tax increase. Regardless, the Republicans have already lost the
battle against tax increases. As part of the “fiscal cliff” compromise, the “Bush
tax cuts” have ended for higher income earners, and taxes on dividends and
capital gains (“passive income”) have been increased. The “holiday” on payroll
tax deductions was allowed to expire on December 31, 2012, and all wage earners
have already been hit with a 2% increase in their payroll tax deductions. On
average that works out to a $960 increase on every wage earner in the country,
or $1,920 on a two income family. The Obamacare “mandate” (which Justice
Roberts characterized as a tax) of 2.5% on an individual’s AGI if they decline
to buy insurance is estimated at an average cost of $3,400. Obamacare also increases
the Medicare payroll tax on those making more than $200,000/year (or couples at
$250,000), the new excise tax on medical device manufacturers and another one
on indoor tanning salons, among many other limitations on deductions such as a
higher threshold for medical expense deductions and new caps on various kinds
of tax reduction devices such as HSA’s. The states also have budget deficits
they need to close. The total tax burden consists of sales taxes, real estate
taxes, income taxes, and fees on everything from license plates to tolls to
park admissions that are not called taxes. If the recessionary environment
continues, there will be pressures to increase all of these sources of revenue
from those who are still paying. Already, 50% of the adults in this country do
not pay federal income taxes. The pressure will only increase on the remaining
taxpayers as more people go on unemployment, disability, government retirement
pensions, and social security. The Republican
Governor, House and Senate of Virginia just passed the biggest increase in
taxes that state’s history. Close to home, the new Governor of Indiana was
elected on a platform of enacting a 10% state income tax cut to spur growth,
but members of the legislature from both parties have declined to move on that
pledge because they fear the looming costs of Obamacare that will hit later in
the year. In the fight over sequestration, Obama has threatened – of course,
you guessed it - higher taxes. Plainly, it is as certain as certain can be that
taxes will increase over the next 4 years. This is not a good thing. Ever since
the Great Depression, it has pretty much been Gospel that raising taxes in a
recession is a very, very bad idea, because it will further depress the
economy. Raising taxes will have the same effect on a barely growing economy
that is teetering on a “double dip” recession.
3. Government spending and deficits will not
be reduced: It is well known that deficits under Obama are already three
times what they were under George Bush – and this is before Obamacare hits. There are no proposals from the Obama
administration to reduce government spending in the next four years – none,
nada, zilch. Instead, they propose to move toward a more balanced budget by
increasing taxation. This administration is an unapologetic devotee of Keynesian
economics, believing that the way out of a recession is government spending to
stimulate the economy. It has been tried twice in the past four years, and the
economy is still lethargic, to be kind, with the slowest recovery from
recession in history. (Growth is currently projected at 2.55 maximum for 2013,
before considering the impact of the payroll tax hikes, which many predict will
shave ½% off that already anemic projected number – and that is if nothing goes
wrong and all goes well!) The administration is discussing the need for a third
“economic stimulus” through “quantitative easing”, which is basically just
newspeak for printing more money. Either way, deeper recession or a third
quantitative easing, it means greater government spending and larger deficits. In
2011, Standard and Poors lowered the rating of the United States debt for the first
time in history, from AAA to AA+. The other two major credit ratings agencies,
Moody’s and Fitch, have recently all but promised that they will also reduce
the US
credit rating in 2013 due to out of control deficits. This problem is not
limited to the federal government. California
is a financial basket case, and other states like Illinois
and New York are
not far behind. Does anybody really believe that these states, all Democrat strongholds,
will be allowed to go bankrupt and default on their pension and other
obligations? And to prevent that, where will they- where must they - turn for
help? The only place possible is the federal government, which will use tax
dollars collected from residents of other states to bail out our profligate
cousins. If you believe spending, taxes OR deficits will be reduced in the next
4 years, you probably also believe in the Easter Bunny and the Tooth Fairy.
4. The value of the dollar will decline, and
inflation will increase: Do deficits matter? Aren’t we only borrowing from
ourselves? Surprisingly, among economists there is not a consensus as to
whether government deficits do, or do not matter. There is a school of thought
that increasing the supply of money, including credit – which definitely is
happening, that is what quantitative easing is – increases prices, i.e. is
inflationary. Vietnam-era deficits were certainly blamed for increasing
inflation. While there are those who contend that deficits do not cause
inflation, I don’t know anybody who argues that printing more money reduces
inflation: that result would certainly be counter-intuitive. Lay people have an
instinctive belief that you can’t go on spending without paying your debts
forever. But let me ask you this: if deficits don’t matter, why doesn’t the
government just print whatever it needs? For that matter, why collect taxes at
all, why not just print more money? It’s because deficits do matter at least
when they begin to impact your credit rating or the perceived value of your
currency. If you have any doubt about whether over the long term huge
government deficits matter, please consider what is happening in Greece.
Without getting into the arcanery of when deficits may be good, and regardless
of whether you agree that Obama’s polices cause inflation (I come down on the
side that they do), two things are clear: 1) those policies are going to
continue without change, because they are Keynesians; and, 2) you can’t just
run the printing presses forever because that will eventually affect the
perceived value of the currency and our
credit rating. Paper money has no intrinsic value. Its only value is in its
perceived value as a medium of exchange (that is why some people still argue
for a gold standard). If countries or people lose their belief in a currency as
a medium of exchange because it’s all just “worthless paper money,” the economy
is in deep, deep trouble. So far, the Federal Reserve has (almost miraculously,
in my view) suppressed raging inflation in face of printing bucket-loads of
money through very low interest rates, and because most of the money that has
printed has round tripped without stopping at Go, without ever hitting the
economy in the form of individual spending, and is sitting in bank accounts of
the banks and of large corporations (and to a much lesser degree, individuals)
hoarding money. Despite this, inflation is increasing, and the Fed is also now
talking about increasing the interest rates. The Fed has said that it will increase
interest rates only when the unemployment rate falls to 6.5% and the economy is
growing at 2.5%, which they say will mean the US economy is safely out of danger
from falling back into recession. However, a counter school is pressing for
raising interest rates sooner, fearing that 4.5 years and more of artificially
low interest rates will lead to uncontrolled (read raging) inflation. The
consensus is that the Fed will not raise interest rates any time soon, which is
a major reason why the stock markets are hitting all time highs. The fear is
what happens when the inflation lid begins to come off. But, is the lid already
coming off? Yes. Although our government says that inflation as measured by the
CPI is running at less than 2%, for you and me that is a completely specious
number because the CPI excludes food prices and energy. It would be nice if we
could really run our household budgets without worrying about food and gasoline
prices, wouldn’t it? The reality is that both food prices and energy prices are
increasing much, much faster than 2%. Gasoline costs us double (or more) what
it did 4 years ago. As I write this, the average price of gasoline at the pump
is back up to $3.80/gallon, and moving higher. Have you tried to get out of
McDonalds for less than $8.00 lately? Four years ago, you do it for around $5. Massive
increases in the wholesale costs of food have not fully worked their way into
the weekly grocery bill in part because retailers do not want to be the first
to pass on increases and lose market share – but it is happening. I trust my
own experience at the check out counter more than Labor Department statistics,
which report food inflation from flat to 5% per year, at an average of about
1.6% per year. I want to know where they are shopping! Instead, let’s compare
prices on individual food items as reported by the Bureau of Labor Statistics
year-over-year from 2010 to 2011: hamburger up 11.1%; butter up 27%; coffee up
16%; potatoes up 7.1%; lettuce up 5%; chicken up 4.3%; milk up 2%. This was when the economy was anemic,
supposedly growing at about 2%. The simple fact is that our money is buying
less: that is inflation. Hotel rates are projected to increase this year by
3-9%. Coffee, corn, steel and many other commodities are ready trading at record
highs. Some are predicting a 10% increase in the cost of clothing in 2013
because of the record high price of cotton. That is inflation. The reality is that
the government cannot indefinitely control inflation except by putting us back
into recession, which they are going to avoid like the plague. And if the Fed
adds fuel to the inflation fire by increasing interest rates, what will happen
to the stock market? That is the next nightmare. The market recently dropped 3
figures just on rumors of an increase in the Fed rates. And amidst all
of this comes the administration’s proposed hike in the minimum wage by over 24%! ($1.75/$7.25). This
alone is inflationary, but perhaps not greatly so – but the unappreciated
impact on the economy are escalator clauses in union contracts that require an
adjustment of union pay scales in response to an increase in the minimum wage. That will be hugely inflationary. One thing for certain if the increase in the
minimum wage passes, and right now it seems sentiment is in favor of that
happening – many of those 29 hour a week jobs will become 0 hour a week jobs. In
addition, over the past 10 years, the strength of the dollar against the major
world’s currencies has dropped a median of 24% (exactly that amount against the
Chinese yuan, where so many Americans buy products through Wal-Mart). Over the
past 5 years, that figure is only negative 3%, buoyed by increased value
against the Indian rupee (!), the Mexican peso and the troubled Euro. When the
dollar drops against foreign currencies, our dollar can buy less of their goods
and services – so domestic inflation and a dropping international exchange rate
is sort of a double whammy. It is a virtual certainty that our currency will
continue to lose value. But not to worry, for now at least you can still go to Mexico
and drown your troubles in cheap tequila! It has always been true – always –
that the longer the cure to economic woes is delayed, the more difficult the
recovery becomes. Inflation is coming, like a freight train. The only questions
are how fast and how high, and it could get just plain scary.
5. The economy will hardly grow, and unemployment
will remain high: Even the most aggressive prognosticators are projecting
growth only in the 2% range. Any world upset could reduce that rate. Increased
taxes will tend to reduce that rate. That kind of economic growth cannot
generate jobs fast enough to significantly reduce the unemployment rate. Touted
increases in jobs created each month have not been large enough to cover the net
increase in new people entering the workforce each month. The true unemployment
situation is much worse than the +/- 8% “unemployment rate” that is reported
each month. The reported unemployment
rate excludes those who have stopped looking for work (dropped out of the job
seeking market because they cannot find a job). It does not include retirees
who would like to (need to) keep working as “unemployed.” It does not include
those who have taken part time jobs as “unemployed.” It does not include those
who have taken any job, despite having had and/or being qualified for a much
better paying job, the so-called under-employed, as “unemployed.” This will not
change until the economy begins growing again at about twice its current rate.
That is just not going to happen any time soon. See points 2 and 3 above.
6. Constitutional
rights under the 2nd Amendment will probably erode: The movement
to limit the right of US citizens to keep and bear arms took a hit when the US
Supreme Court ruled a scant few years ago that yes, that is what the 2nd
Amendment protects. But, a renewed assault on the 2nd Amendment was virtually
guaranteed by the slaying of 26 school children in Newton,
Connecticut by a deranged whack job, coupled
with the return of Congressman Gabrielle Giffords to Congress (shot in the head
in Tucson in
2011). In the infamous words of Rahm Emmanuel, “Never let a good crisis go to
waste.” Heeding his advice and leading the charge, Obama issued 23 Executive
Orders and has proposed other gun ownership controls. The apparent target of
this renewed effort is “assault weapons.” Ms. Giffords has started a new
organization “to raise money to fight gun-rights groups” and do something about
“weapons designed for the battlefield” on our streets. No less than the Vice President
of the United States
has opined during a televise interview that home shotgun is adequate for
self-defense, so there is no need for citizens to have an assault weapon. Mayor
Bloomberg of New York is funding pro-gun
control advertisements in 20 markets including Tucson,
Roanoke, Denver, Milwaukee and Washington
DC, calling for a ban on guns
that have certain cosmetic features and high-capacity magazines. Governor Cuomo
has already signed legislation in New
York State
that bans military-style semi-automatic firearms and magazines that hold more
than 7 bullets. Ironically, no assault weapon was used at Newton
or Tucson.
Those killings were accomplished with pistols. Further, automatic weapons
(which include “assault rifles”) have been regulate since 1934. And, anybody who knows anything about
firearms recognizes that a shotgun is probably a better weapon choice for close
quarters mass mayhem than an assault weapon. Regardless of which side of the
“gun debate” you are on, these are all facts. It is also a fact that there is
now an enormous effort underway to additionally restrict and limit the
availability of guns to American citizens. How it will all turn out is open to
question, because there are already Constitutional challenges to these measures
making their way through the courts, a future President could roll back (or ad
to) the Executive Orders, and many states have already passed or have
legislation pending to invalidate any similar federal laws or regulations.
However, history teaches that in a power struggle between the federal
governments and the state governments, the federal government is likely to
prevail.
7. Organized labor will have increasing
influence: Considering that organized labor represents a smaller and
smaller proportion of the population, and considering that more and more states
are enacting “right to work” legislation, that directly hits unions in their
pocket books, this prediction is down right weird. However, it is fair to say that the heavily unionized urban
populations of New York, Pittsburgh,
Philadelphia, Chicago,
Los Angeles and
similar large cities provided Obama his margin of victory. Unions spent
hundreds of millions of dollars electing Democrats at the state and federal
level in 2012 (over 91% of union political contributions went to Democrats),
and its payback time. Especially after they lost the fight (and the recall, and
the court battle) in Wisconsin stripping public sector employees of certain bargaining
rights, and several more states have passed Right to Work legislation, I would
expect the unions to resume trying to push through “card check”, eliminating
the secret ballot, and for that mater, elections, in union organizing
campaigns. Pro-business forces seemed to win a victory when the Circuit Court
of Appeals unanimously invalidated as un-Constitutional President Obama’s
recess attempt to pack the National Labor Relations Board with pro-union
activists, but the NLRB has (amazingly) chosen to simply ignore that ruling
pending appeal and conduct “business as usual.” Regardless of how that turns
out, Obama will eventually get some more pro-union members appointed to the
NLRB. The bare knuckles gutter fights
over union power at the state level will continue, but at least at the federal
level, the unions have the edge – at least until the next election.
8. American military power will decline: Already,
48% of the American people think the US is weaker than it was 4 years
ago; 24% think we are stronger, which leaves 28% in the duh category. Stating it differently, 67% of those
who have an opinion think the US
is weaker now than it was 4 years ago: that’s called consensus. Regardless, in
the next 4 years, US
military power will get weaker (still?). Our current policies will accelerate
this trend. During and since the Clinton Presidency, the Democrat Party has
consistently (tried to) cut the budget of the American military to pay for
social programs. That is also part of their 2013 agenda. In the age old debate
between guns and butter, the Democrats are opting for butter. The new Secretary
of State is John Kerry, the new Secretary of Defense Chuck Hagel: need I say
more? The Navy has the fewest ships in service than it has had in decades, it
has already cancelled the deployment of the aircraft carrier Harry S. Truman to
the Persian Gulf and the carrier Abraham Lincoln sits next to it at the Naval
Station in Norfolk instead of beginning its past due scheduled 4 year overhaul
and refueling, sequestration cuts will hit the Defense Department budget hard, Obama
has reversed the decades old US military doctrine of being prepared to fight
war on two fronts, and Obama famously “whispered” to the Russian President that
he would be able to be more “flexible” in arms control negotiations (read, US
reductions in force) after the election. In fact, within the first day after
the election, Obama personally contacted the United Nations to urge fast
commencement of arms control treaty talks. Obama is implementing a pullout of Iraq and a draw down in Afghanistan,
based on a domestic political timetable regardless of the situation on the
ground over there. The mullahs in Iran have to be very happy. This
and Hagel, too? Allah Akbar! Patton
famously said, “There is no substitute for victory.” Did we win? I must have
missed it. In the past 6 months, 3 of our acknowledged very best generals have
stepped down, one in “disgrace” over an extra-marital affair, one to take care
of his ailing wife, and the most recent for unspecified reasons. What’s really
going on here? It is impossible to compare defense budgets for a clue as to
where we are headed as our federal government under this administration has not
passed or adopted a budget in years, but what actually is being spent can
provide that clue. In his 2010 Nuclear Posture Review, President Obama stated
that nuclear reductions under the 2010 New Start Treaty depended on a
modernized nuclear infrastructure, and specific funding targets were
established to modernize and replace the nuclear triad over the next 10 years.
Going into the third year, that funding is already $770 million short of what
was promised. Senator Corker says, “It’s likely that additional cutbacks will
appear in the fiscal year 2014 budget request. Indeed, virtually all
nuclear-modernization programs are now delayed by at least two years, or in the
case of a new ICBM, have yet to be announced.” Military power is not an
absolute thing: it is a relative thing, in comparison to our rivals. While the US is reducing is navy and is not modernizing
its nuclear force, and it’s acknowledged best-of-the-best generals are
disappearing, North Korea
and Iran
are collaborating in their race to develop ICBMs - and so far nothing we have
done has deterred them. China is steadily building its military along with its
growing economy, and making increasingly noisy claims to islands owned
variously by Japan, the Philippines and Vietnam. The news today is full of stories
about Chinese cyber attacks against the US,
and the lack of US
response. Russia has also
been flexing its muscles: they invaded Georgia (during the Bush
administration) and stole two provinces, and they are still there. The list can
go on. Relatively speaking, the US
is not a strong as it was just a few years ago. I don’t see any indication of
anything reversing that trend.
9. American influence in the Middle East will continue
to decline correspondingly with the increase in power of fundamentalist
Islamists: The Obama administration Middle Eastern policy has been
characterized by distancing the US
from Israel,
courting the surrounding Islamic states, and reducing military commitments to
the region. This will continue. How is it working so far? Syria
is in the midst of a civil war. Hamas and Israel
are shooting at each other, Israel
is again threatening to invade the Gaza Strip and Hamas is trying to bring in Egypt. Hamas is the dominant ruling faction in the
Gaza Strip, is supported by Iran,
and has reportedly been emboldened by the rise of the supposedly “moderate” Islamic
Brotherhood in Egypt,
which replaced Mubarak as the governing faction there. Facts: Hamas is
designated by the United States as Foreign Terrorist Organization; Hamas was
founded in 1987 and according to its founding charter is a branch of the
Islamic Brotherhood; the Brotherhood was founded in 1928 by an admirer and
supporter of Adolf Hitler, and actively supported the Nazis in World War II;
and, all the founders of Al Qaeda, including Osama bin Laden, were members of
the Islamic Brotherhood. Moderates? Compared to what? The Islamic Brotherhood
President of Egypt, Mohammed Morsi recently called on the US to release the
“Blind Sheik” who was the mastermind of the first World Trade Center bombing,
issued the fatwah that justified jihad against the US and inspired Osama Bin
Laden. Whatever the Egyptian Brotherhood ultimately turns out to be, Mubarak and
his predecessor, Sadat, both clearly supported the US. Sadat was assassinated after
making peace with Israel, and
under his successor, Mubarak, it was clear that Egypt
was not going to war with Israel.
This is no longer so. On September 11, 2012 there were riots directed at the US
Embassy in Cairo (and in Yemen and other
places in the region, as well). Speaking of Al Qaeda, the US consulate in
Benghazi was attacked by an Al Qaeda affiliate, was burned and the American
ambassador and three other Americans were murdered; nobody has been forthcoming
about what really happened in Libya, but now arms from Libya have turned up in
the hands of Al Qaeda insurgents in Mali. Since the assassination of Osama bin
Laden, relations with Pakistan
appear to be at an all time low. Meanwhile, during the Obama administration Turkey’s secular government has tilted toward an
Islamic state, is no longer working closely with Israel,
and is taking a more assertive role with regard to Syria. Even where the US stands with respect to Israel no
longer clear. Recently Israel’s
status as an “ally” has been openly questioned. The US
has put itself between the proverbial rock and a hard place: if it backs Israel, any progress from Obama’s overtures to
the Islamic states will be trashed; if it does not back Israel, US relations with Israel will be
trashed. There really is no middle ground. Given history, straddling the fence
is a move toward Hamas. The US
has attempted to stop Iran
from developing nuclear weapons through sanctions through the UN, but is
opposed in that effort by both Russia
and China.
The US has announced a pull
out from both Iraq and Afghanistan
without having achieved stability or even a secure clearly pro-Western
government in either country. During the past four years, the Obama
administration took a hands-off approach to protestors in Iran, declined to put “boots on the ground” in Libya, and has not taken an open position on the
civil war in Syria
other than “Assad should go.” God knows what is actually going on behind the
scenes. However, it seems clear that the position of the US has not
improved over the past 4 years and that these policies are likely to continue
for the next four years. Couple that
with a (documented) perception that Obama is a weak President, with the undeniable
reality of declining US military power, with the withdrawal of US forces from
the region, and with a continuing weak American economy, and the only
reasonable conclusion can be that the waning of American influence in the
Middle East will accelerate.
10. The American standard of living will
decline: Higher inflation, reduced quality of health care, and a slow
growth economy. QED.
During the 2008 election, Barrack Obama promised to
“fundamentally transform” America.
Welcome to the dawning of the new America.
I think I have depressed myself…
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