Thursday, February 20, 2014

ESSAYS FROM THE HEARTLAND: COMMENTARY ON THE CURRENT STATE OF AFFAIRS IN INTERNATIONAL POLITICS


COMMENTARY ON THE CURRENT

STATE OF AFFAIRS IN INTERNATIONAL POLITICS

 

How are the trends in international power politics going for the United States?

 

Not so good.

 

Pick a geographic region. How about that perennial hotbed, the Middle East?

 

·         Victory in the war in Afghanistan - the war President Obama christened the “must win” war, supposedly the “right” war as opposed to “Bush’s” Iraq war,  the war to root out Al Qaeda and find Bin Laden – victory in that war is slipping away the same way from us the same way victory in Vietnam slipped away from us, the war in which the US military did not lose major engagement but nonetheless the US lost the prize. Afghan President Hamid Karzai, feted in Washington as a hero under Bush, is reviled under Obama for refusing to sign a status of forces agreement with the US. Karzai refuses to sign unless we meet his pre-condition to help launch serious peace talks with the Taliban. Karzai has some justification: the fight with the Taliban is clearly not over, and he does not want to be left twisting in the wind by a retreating US. My guess is that he is acutely aware of what happened to US allies in South Vietnam when the North took over. The US wants the Taliban defined out of the Afghan Bilateral Security Agreement, defining the US role as only to combat “terrorism” defined as Al Qaeda and attacks on US bases. The Taliban is a “domestic problem”, not terrorism. “Not my problem,” says Obama. The Taliban, remember them? Driven from power in 2001 at the cost of American lives. Brutal fundamentalist Islamists who imposed the burkha and everything it stands for on women, outlawed television and broadcast music, and who assassinate government officials, bomb schools and bazaars, and are now killing Afghan election workers to disrupt the Afghan election  – acts of terrorism by any definition. But limiting the US role to fighting Al Qaeda sounds good to US citizenry tired of all these foreign adventures, and it will be good political cover domestically when things go badly after the US withdraws.  But wait - if the Taliban returns to power, as certainly as night follows day Afghanistan will once again become a haven for Al Qaeda and surrogate training grounds against the US. If that happens, the very purpose of the “must win war” is defeated. A war that does not accomplish its stated objective is a war that is lost. Ahh, but not on Obama’s watch. “Not my problem.” No, it’s our problem.

·         US bungling in Syria has made Vladimir Putin look like a Bolshoi-ballet caliber diplomatic star. Syria is Putin’s wet dream. While Secretary Kerry whines that Putin is not part of “the solution,” Putin is implementing Russia’s own solution. He believes that Russia will be more secure if the Shiites win the Islamic wars convulsing the region, rather than the Sunnis who have caused him so much problem in Chechnya. He has made common cause with Shiite Iran against two mutual enemies, the US and Sunni rebels. With Iran’s and Putin’s backing, Bashar Assad is still in power, has “delayed” delivery of his stockpiles of chemical weapons, is winning the war against the rebels, and is thumbing his nose at the US and the UN. As a result, Russia has regained immense influence in the Middle East. As a bonus, the US has managed to thoroughly piss off all of its traditional allies in the area: when is the last time that Israel, Saudi Arabia, Jordan, Turkey and Egypt have agreed on anything? They all agree that the current policies of the US are dead wrong. That consensus may be the only thing that Obama has accomplished in the region. Well, maybe one other thing: with the assistance of both Turkey and Jordan, Saudi Arabia recently announced that it is supplying mobile anti-aircraft missiles made in China and anti-tank missiles made in Russia to the Syrian rebels. It may be sweet irony that these weapons will be turned on the Assad regime supported by Russia,  but doesn’t it make you just a little squeamish that our allies will use up some of their oil money by becoming Russian and Chinese arms suppliers to Sunni rebels? Doesn’t sound very good to me. About the only viable strategy left in Syria is to hope that the war drags on forever, weakening all the participants equally until something  happens to change situation.

·         Of course, a certainty that could be that something is Iran getting the bomb. It will get the bomb. Soon. This is not all Obama’s fault. Clinton knew this was coming. Bush knew this was coming. Obama knows this is coming. None of them stopped it. The Kerry Iranian “interim” accord to stop it is a farce rivaling Neville Chamberlain’s “Peace in our time.” It has not stopped Iran from a doing anything that will prevent its achieving its nuclear ambitions. In exchange for an agreement to talk, sanctions have already been eased on airplane and car parts, pharmaceuticals, medical equipment and currency transfers. Iran’s economy and currency have both begun to stabilize. In exchange, Iran started the “talks” with a flat (and consistent) position that dismantling any nuclear facilities are not an option. I suppose that is better than arguing over the shape of the negotiating table (for those of you who may not remember, that was the only thing that discussed for months at the beginning of the Paris Peace Talks to end the Vietnam War). The next step will be an agreement that features more concessions by the West and more promises by Iran – and Iran will get the bomb. Iran has medium range missiles, and so does North Korea. For that matter, Russia has been testing and redeploying medium range missiles in violation of its treaties with the US. And they are all working together. No matter how you cut it, not good.

·         Or maybe the collapse of the government in Iraq will be the catalyst that changes things? Aided by the neighboring war in Syria, Al Qaeda is resurgent in Anbar Province, and seized Fallujah in January. Need I say more?

·         And then there’s Egypt. The Arab Spring has led to total turmoil in Egypt. The Obama administration is completely at odds with General Sisi, who kicked out President Morsi and the Muslim Brotherhood, who were rapidly moving the new Egyptian democracy toward an Islamic fundamentalist theocracy. This week General Morsi met Putin in Moscow to negotiate the supply of Russian weapons.  Until now, Russia has had virtually no influence in Egypt since the overthrow of Gamal Abdel Nasser in 19- when? Let’s see, are the Egyptians more impressed by the mullah-bowing bicycle-helmet-wearing Obama who has been remarkably friendly with the Muslim Brotherhood, or the bear-hunting Chechen-rebel-killing bare chested ex-KGB host of the Winter Olympics?

·         Pakistan and Turkey are conundrums uniquely their own. Pakistan continually lurches between Western-oriented secularist and Islamists who support the Taliban. Pakistan was unhappy about the violation of its sovereignty to kill Osama Bin Laden. The US was unhappy that he appeared to was be protected there, and that the doctor who helped us identify his whereabouts is in prison. The Pakistani Taliban have hardened their grip on the commercial city of Karachi, where last month alone they bombed  and killed police officers, shot and killed three journalists, gunned down three polio-vaccination workers, and slit the throats of six people at a shrine. The Taliban “raises” money in Karachi through extortion, kidnapping and outright robbery to support their stronghold home along the Afghan border, also a haven for Al Qaeda and Afghan insurgents. In Turkey, there were anti-government protests nationwide this past summer, and demonstrators again marching in the capital this month. Turkey’s embattled Islamist-tilting  President claims a corruption probe into his regime is a “Western plot” to disrupt Turkish “peace and stability.” Suffice it to say both Pakistan and Turkey have drifted away from the US, and they are both in turmoil albeit less dramatic than Afghanistan, Iraq or Syria.

 

As usual, the Middle East is a mess - only without question the influence and position of the US in this mess has declined dramatically in the past 5 years. No contest, Putin is winning the Obama-Putin diplomatic wars in the Middle East. So what has gone wrong? 

 

For starters, “nation building” does not work on a short timetable: it requires a long term commitment. The United States has never been much on long horizons. Certainly, we have been unable to sustain a long term commitment to much of anything since Vietnam. Remember the Paper Tiger? The inability to be in it for the long haul was the essence of disdain for the paper tiger of American military power.  The Vietnamese lived in Vietnam, they were in it for the long term. Including the war against the French, the Vietnam War spanned 29 years. The US soldiers were newbies to the neighborhood, interlopers who would soon be sent home. The Sunnis and Shiites have been at each other’s throats for centuries, not decades, and they aren’t going anywhere. The Middle East is their neighborhood, their home. The US cannot waltz in with its formidable military power and expect to change people’s religiously based beliefs and traditions in a few years, then pull out. Ain’t  gonna happen. It’s easy to say if we are not committed to the long term we should not go in, but the consensus was that Al Qaeda headquartered in the Middle East had become a direct threat to the security of the United States. Remember 9-11? Thus, Obama’s statements that the Afghanistan wars the war we “must win.” But “limited objectives” in war don’t work very well. Not in Vietnam, not in Iraq or Afghanistan.  Saying we went in to “take out Al Qaeda” or “get Bin Laden” is like trying kill the weeds in your lawn with one application of broad leaf herbicide: the weeds are going to come back, with a vengeance.

 

A broad consensus committed to a long term strategy is what is required to prevail. However, with a culture characterized by fast food, sound bites and attention deficit disorder, the United States seems incapable of maintaining a coherent long term strategy based on immutable interests. The problem nis that the United States is and its major political parties are sharply divided on this as they are on just about everything else. So, Republican in the White House, we lurch one way. Democrat in the White House, we lurch the other way. A house divided against itself cannot stand.

 

What should we be doing?

·         In Syria, stay out. Short of that, do everything that 1) keeps us out of a land war; 2) bogs down and drains Iran and Russia; and, 3) supports our actual allies in the region, who also control most of the oil in the region: Egypt, Israel, Saudi Arabia, Jordan and the Emirates. If that means abandoning “democracy,” so be it. Pure democracy doesn’t even work well in the West. While we should support and encourage more democratic, republican government with respect for human rights, insisting on overnight one-person one-vote democracy from a poverty stricken uneducated and uninformed populace with no tradition of democratic rule is a suicide pact – one that the generals in Cairo chose not to participate in.

·         In Iraq we already screwed up by announcing a timetable and withdrawing after the “surge” achieved control of the country. There is no appetite for going back in, too late for that now. What we can do now is to try to prevent the country from becoming an Iranian puppet. The one positive role Saddam Hussein did serve was as a counter balance to Iran. While the situation in Iraq is improved from the time when Saddam Hussein tortured his own people and invaded his neighbors, if Iraq falls under the sway of Iran, that would be a geopolitical disaster for the US. With Syria on one side and Iran on the other and Al Qaeda gaining strength inside, salvaging even this modest objective will not be easy. To do so, we will have to work with our “allies” who share these objectives, Israel, Jordan, the Saudis, and Egypt. We should support the Iraqi government in the areas in which it actually can govern, and especially we should support the Kurds in the north even if that disturbs Turkey, which has a restless Kurd population of its own). The Iraqi Kurds have proved to be pretty good allies and administrators, and are definitely anti-Shia-Iran. Iraq was one of those make believe countries put together by departing colonial powers, so if it fragments into several pieces, so what? That is better than a unitary Iranian puppet.

·         In Afghanistan, whether or not we like it, we are “in.” We should not make the same mistake as we did in Iraq by snatching defeat from victory with an announcement of withdrawal based on a domestic political timetable with no basis in the tactical situation on the ground. Reduce forces, yes, but not below what is needed to deny the Taliban control, and stabilize Afghanistan. Reduce forces, support the government and stay the course.

 

Pick another region. How about one in which the United States does have immutable interests, the Western Hemisphere, known as the Americas? Any student of geography or the history of world politics will quickly come to the conclusion that maintaining dominant influence in your own neighborhood is critical to power, and sometimes to survival. There is even a word for it: hegemony. In other words, what happens in Mexico and Venezuela is more important to the United States than what happens in the Ukraine or even China. So how are we doing in our own backyard? Not so well , but here it is more a matter of passive neglect rather than active bungling.

·         Venezuela, blessed with some of the largest oil reserves in the world, used to be a stable, prosperous democracy, and a pretty good ally of the United States. However, the country’s elite became increasingly corrupt, and most of the people lived in poverty despite the country’s prosperity. In 1999, during the last years of the Presidency of Bill Clinton, the Venezuelans elected Hugo Chavez as President under the banner of the United Socialist Party of Venezuela. Chavez promised to eliminate both corruption and poverty. A clue to Chavez politics: he once claimed that capitalism had killed life on Mars. He set about to fundamentally transform Venezuela, and he succeeded. In the tradition of Adolph Hitler, Salvador Allende and yes, Mohamed Morsi, this freely elected socialist never intended that there ever would be a subsequent election that could remove his party from power. One of the first things he did was to implement habilitating laws in both 1999 and 2000, for a combined 18 months, that allowed him to perform functions reserved for Congress under Venezuelan law. The United States, under Clinton, Bush and Obama, has done virtually nothing to reverse this situation. Venezuela is now a close ally of Cuba (which trained the Chavista intelligence service), and a leader of the anti-American “pink tide” that has led to socialist governments in Bolivia, Nicaragua, Brazil and Argentina. I5 years after the socialist Chavistas took power in Venezuela, the country is in an absolute shambles. It admits to an inflation rate of over 56%, economists state the reality is much worse than that. Shortages of basic foodstuffs are endemic, they are running out of medicines and supplies, and inventories of such things as car batteries and parts are depleted and can’t be replaced. Toyota and General Motors have both closed assembly plants indefinitely. A Chavista militia known as the 23rd of January 23 Collective roams the streets on motorcycles to intimidate political opponents, and recently gunned down protestors – sounds chillingly like the Nazi Brown shirts. Characteristic of socialist states, freedom of the press is a memory. The new “President” is once again ruling by decree, with the consent (by bare majority) of “Congress.” Maduro has blasted anti-government politicians as “coup plotters”, and of course, branded them as fascists. He issued warrants for their arrests, and just this week a key leader of the resistance turned himself in in a courageous political gamble to galvanize the opposition. People, mainly middle class high school and college students, are being shot and killed in anti-government protests in the streets. Another socialist workers paradise.

·         Brazil’s economy is in a tailspin. The performance of the supposed emerging engine of South America, not long ago the darling of the emerging market countries,  is now far below that of its emerging market peers, China and India. The country witnesses mass street protests over inflation and poor public services.

·         Argentina is going through another of its bi-decennial financial collapses, brought on by its socialist government that spends more money than it has, borrows what it needs, and then predictably devalues its currency and defaults on its debt, then repeats the cycle. The Argentine peso recently fell 15% in only one week. As usual, this is entirely of the Argentines own doing.

 

OK, South America is a mess, but at least we didn’t cause it, even if we are blamed for it. In fact, maybe it will work to our favor because it is the most socialist countries that are most in turmoil. Mexico and Chile are doing pretty well. Chile’s economy is growing at about 4%, a figure the US should envy, and despite concerns over income inequality and continuing battles over the practices of General Augusto Pinochet 20 + years ago, the President was just elected with 62% of the vote. Like Chile and the rest of Latin America Mexico also struggles with severe income inequalities (3000 to 1 vs the US at 16 t0 1), but it is also consumed by its intense civil war against drug cartels and organized crime. Despite this, its economy is growing at about 4% and many economists predict that it will soon become the largest economy in Latin America, eclipsing Brazil. The country has the time to worry about preserving the habitat of the Monarch butterfly. Relations with the US are not remarkably worse. Maybe there is a message here: US butt out and things will be better than if you stick in your unwanted big nose? Sad to say, if Latin America is Exhibit A, perhaps no strategy is better than a bungled strategy.

 

What about Europe? How is the US doing there? Europeans do tend to like Obama better than they did Bush. However, starting with the much disputed but won’t-go-away claims that Obama returned the White House bust of Winston Churchill to the United Kingdom as one of his first acts in office, to revelations of NSA spying on the private telephone conversations of German Chancellor Angela Merkel, and most recently the “open mike” recording of a conversation between Victoria Nuland, Assistant Secretary of State for European Affairs, and Geoffrey Pyatt, the U.S. Ambassador to Ukraine plotting to “Fuck the EU” – well, maybe not so good. The biggest issue in Europe today is the fate of the Ukraine:

·         Following the Orange Revolution in 2004, the Ukraine tried to move to the West and out of the Russian orbit. This was to have been completed with Ukraine joining the EU this year. Diplomatic ballet star Putin managed to torpedo that earlier this year, propping up a pro-Russian regime with billions of rubles. There have been demonstrations and riots in the streets since last November as the future of the Ukraine -  Russian or European – hangs in the balance. According to Mikheil Saakashvili, President of Georgia from 2004 until 2013, the protests in Kiev are at root about “two visions of the world and two choices of life: independent, Western democracy or Vladimir Putin’s Russia,” or Western freedom vs. Putin’s vision of a restored Russian empire. The Ukraine was the jewel of the Russian empire. By comparison of importance, Syria is a side show. ”A triumph for the protestors would mark the end of Putin’s dream of a restored Russian empire. Their defeat would mean a huge rollback of European influence and values. The credibility of the U.S., already eroding in the region, would vanish. Putin knows this.” At the moment, the smart money has to be on the Russians, who are likely to send in Russian soldiers if invited by their beleaguered friend, the current Ukrainian President. Naturally, he is blaming neo-fascists and the West, especially the US, for his problems. Unless the protestors in the streets are supported by more than expressions of concern by Biden and hints of “sanctions” and vague “consequences” by Obama, they will fail. I agree with Mr. Saakashvili, “The expression of concern by Western governments is not enough.” Failing to support the Ukraine would put Obama in the company of George Bush the First, who in 1991 in a speech dubbed “Chicken Kiev” told Ukrainians not to seek independence and integration with the West. It was wrong then, it is more wrong now.

·         Georgia. The original Georgia, not the one next to Alabama. Georgia, that belligerent, threatening country east of Turkey that Russia invaded in 2008 to peel off the provinces of Ossetia and Abkhazia in response to Georgia’s stated intention to join NATO. You may not remember this, but I guarantee you the Ukrainians in the streets of Kiev do. Georgia is desperately trying to keep its independence from Russia and join the EU in August – unless that is torpedoed by Putin in the same manner that Russia has  forced both Armenia and the Ukraine to abandon their plans of joining the EU. So goes the Ukraine, so likely goes Georgia. And Moldova. The stakes could not be much higher.

 

So overall, although much is still in play, since 2008 the trend in Eastern Europe has been against the Western democracies and in favor of Russia. Our attention has been elsewhere. It should not be. But we cannot be everywhere. There is an old military maxim, defend everything and you defend nothing. You have to prioritize.  Between the Ukraine or Syria, the math is easy: the Ukraine.  Bring the Ukraine into the EU and Russia’s ability to influence Syria and the rest of the Middle East, and anywhere else for that matter, takes a severe body blow. Lose the Ukraine and Russia’s power to do mischief to our country is immensely enhanced. Despite the trappings of the Sochi Olympics, Russia is not our friend. Probably less than 5% of the U.S. electorate can tell you where the Ukraine is, let alone what’s going on there, so political opinion polls will tell us to pay attention to Syria and Afghanistan, which are in the headlines daily. Stupid. What leaders are supposed to do is lead: determine what the priorities should be and act accordingly. Not react to opinion polls. I suppose one could say that is exactly what Obama is doing with respect to Obamacare. But in this case, there are no second chances, there is no opportunity to grant selective waivers or extensions.  Rather than plotting for ways to fuck the EU, the US should be working hand in hand with the EU. The EU should be taking the lead here, it’s in their “hegemony,” but we should be right behind them, actively pushing and providing support – boatloads of it.

 

                OK, that leaves Asia and Africa. Is China a friend or a rival? Definitely it is a rival. Whether or not it is a friend depends on the issue, and increasingly the US and China seem to be on opposite sides of most issues.

·         Last year, China unilaterally declared an extension of its “territorial waters” into the East China Sea way beyond international norms, claiming several islands also claimed by South Korea and Japan. A US Navy intelligence analyst concluded from recent Chinese military training exercises that the China’s People’s Liberation Army (PLA) is practicing scenarios in which the military takes the Senkaku Islands in a brief war with Japan – not that anybody expects a war, China has conducted similar exercise for a long time aimed at Taiwan, this is more of a gloved fist to exert diplomatic pressure. The recent report by the UN on the “crimes against humanity” routinely perpetrated by North Korea also not insignificantly implicated China as North Korea’s enabler. China supports the Assad regime in Syria. China has reacted to Secretary Kerry’s calls for more internet freedom in China as “naïve.” All sounds pretty good!

·         Riots in Thailand, traditionally one of Asia’s strongest economies and most stable democracies. Interestingly, as in Venezuela and the Ukraine, it is middle class protestors that are in the streets, trying to bring down a populist, socialist government they claim is corrupt, and is ruining the economy and the country. There does not a seem to be outside agitators involved, this appears to be a purely domestic squabble, but it is another example of a world in turmoil, and least in part caused by a global economic downturn.

·         India – where the likely new President will be a person who has been denied a visa to even enter the United States because the US deemed he did not do enough to curb ethnic religious riots in his Province that resulted in the deaths of Muslims. My guess is we will be trying to back our way out of that one.

·         Central Africa is engulfed in seemingly interminable tribal-religious civil wars. Much the same, only Chinese inroads into Africa with an aim at access to its mineral wealth are well known.

 

So how are the trends going for the US? Clearly, the world is a very nasty place right now.  When has it not been? The Middle East, where we have been actively involved, is a mess and it’s not going well for us mainly because we do not have the national stomach to finish what we started. The jury is still out on Eastern Europe, but Russia is making a strong power play and the smart money is on them. We have to do more if we are to put the bear its cage, which is important for the freedom of Europe and the peace of the Western world.  Ironically, closer to home in Latin America, all but ignored for the past decade, there are some bright spots. There are storm clouds gathering in Asia, driven by a nationalistic and expansionist China. Africa is wallowing. Overall, not so good. Not terrible, yet. Certainly not hopeless. But, not so good.

By now, we all are familiar with the observation that insanity is doing the same things and expecting different results. We need to change what we are doing in order to change the trends.  Radical changes are not necessary. After all, the people driving the ship of state are not complete idiots. Nonetheless, the change must be big enough to make a difference. Minor tweaks won’t cut it. We are still the most powerful economy in the world, and the leader of the free world. We are not using those levers sufficiently to achieve our objectives. We also have undoubtedly the most powerful military in the world, but we are misusing it, abusing it and too much on our over-extended military to achieve our objectives. And we must be sure that we are committing our resources to the right objectives. Part of change is reprioritizing.

Putting it all together, in order of our priorities, we should be making these changes: 

1) The Caribbean Basin, acting on our own to create economic prosperity and recognition of human rights with and among our neighbors. At is fundamentals, it’s all about  jobs, education and human rights. Economic prosperity does amazing things to engender domestic tranquility, international peace, and stability.

2) Europe, a bedrock of democracies and the second strongest economic powerhouse in the world, working in partnership with the EU to regain the economic footing of both our economies, and actively working together against the resurgence of an aggressive Russian empire by aggressively supporting the true independence of former Soviet Republics that are trying to join the EU;

3) we don’t need to  build nations in the Middle East; we need to prevent Al Qaeda from regaining bases and to prevent Iran from dominating the oil fields of the Middle East, militarily staying the course in Afghanistan for the foreseeable future, and elsewhere joining arms with our allies, with no litmus test of their democratic performance, letting them do the heavy lifting while at the same time encouraging steady improvements in human rights. In the meantime, we need to cut out the b.s. lip service and implement a real and aggressive no-holds-barred program to make the US independent of Middle Eastern oil in the very near term. Sorry, windmills and solar farms aren’t going to get that done in my lifetime.

4) Containing China in conjunction with our allies in Asia, forging strong economic ties with them while simultaneously taking steps to wean our economic health as quickly as possible from dependence on the Chinese economy.

5) I disagree with Obama on most things, but at times his restraint or timidity, whichever it is, in committing our military has been admirable. We can’t save all the puppies in the pound. We should not be committing our soldier’s lives except as a last resort. But we should resting and rebuilding, rather than cutting,  our military capability in order to be able to respond as necessary when things go wrong, as they will. In the meantime we should resist the urge to use it just because we have it, and refrain from militaristic adventurism to intervene and “fix things” elsewhere. Walk softly but carry a big stick – but use that stick only when it is clearly in our interests to do so. Whether we should have gone into Iraq the second time was hotly debated, and still is; whether we ever should have been in Kosovo and Serbia and Somalia and Nicaragua should have been. Such debate is not just healthy, it should be mandatory. Come to think of it, under our Constitution, it is – or at least, was.

 

Thursday, January 2, 2014

ELECTIONS HAVE CONSEQUENCES REVISITED; Looking Back at 2013


 

 

ELECTIONS HAVE CONSEQUENCES, REVISITED

Looking Back at 2013

 

Just about a year ago, I wrote a series of predictions resulting from the election of President Obama to his second term in 2012. How did I do? Pretty much spot on.

 

1.       Obamacare will go into effect, and will fundamentally change the structure of health care in the United States. Correct. Obamacare has gone into effect, and so far it has been an unmitigated disaster. There is still plenty of time before the final chapter is written on this gigantic experiment in government intervention in social engineering and government control of the health care system, but the results so far do not bode well. Obamacare was to reduce the average cost of an American family’s health care premiums by $2,500. FALSE. My own personal experience is that the monthly premiums plus deductibles (ignoring co-pays) for my wife’s coverage under a Bronze plan (the least expensive alternative under Obamacare) was $13,000 per year before insurance kicked in: that is a 40+% increase over what she was paying under COBRA from my last employer. The prediction by the CBO that the average cost for a family of 4 for a private healthcare premium under Obamacare for a family of 4 will actually exceed $20,000  does not seem so fantastical anymore, does it? Medicare premiums have increased and benefits curtailed, even for the supplemental plans, reducing the benefits of government subsidies for healthcare to the population segment that needs it the most, the elderly. Many drugs have been dripped from Medicare covered lists. Reimbursements are reduced under Medicare with the result that more and more doctors are no longer taking Medicare covered patients. “If you like your doctor, you can keep your doctor.” FALSE. All but the most expensive medical plans offered on the government run exchanges have their own network of medical providers, and if you go outside that network, you get NO (not reduced) coverage. There are innumerable news stories of doctors who find themselves no longer included in those networks, whose patients will have to go elsewhere. What will the doctors do to replace the lost revenue from those patients? The most obvious answer is reduce their fees. My  own personal experience? My wife’s OBGYN is not included on any network offered by any policy offered in our area. Two of my prescription drugs are no longer covered by my supplemental Medicare policy (I will now buy them from Canadian pharmacies, which get them from suppliers in places like Turkey and India – not the most comforting source but what choice do I have?).“If you like your current health care plan, you can keep it.” FALSE. The final figures for 2013 are in: 4,700,000 policies have been cancelled so far. The number of people affected is closer to 10,000,000 because many of these policies were family coverage policies. Many, many more will be cancelled in 2014 on policy anniversary dates. What does the other side of the ledger look like? The final figures are in: just over 2,000,000 people “enrolled “ (i.e. signed up on line, not paid premume, not covered: enrolled) for Obamacare through all the “exchanges”, state and federal. It is no surprise that Obamacare did not meet its stated objective of getting 3,300,000 enrollees by December 31, especially because of the website problems.  They will also fail to achieve the 7,000,000 projected for March 31. Yes, the debacle of the rollout of the website contributed to this, but anybody who knows anything about marketing could see this coming. People are not going to willingly pay for a product that they don’t want which is more expensive than what they had with coverages they don’t need  and provisions that exclude doctors that they want – while at the same time exposing their most sensitive private information on a website that even the administration has admitted was designed without adequate security measures, in the age of identity theft. There are only  two groups of people who will willingly sign up: those getting Medicaid who pay no  premiums (which by all reports is the vast majority of those who have signed up so far), and those who desperately need health care and have no other choice – this is adverse selection on steroids, by premium and by health condition. In time, this will cause the economic basis of the program to implode. Advice: sell your stock in companies that have a big stake in offering Obamacare mandated health insurance. Step one in the socialist plan to destroy the private sector health insurance system in the name of income inequality. Meanwhile, as I predicted part time employees have proliferated as employers keep employees below the 30 hour per week threshold for mandatory employer-provided health care coverage. Unions and big businesses (oh, and of course, Congress!) have been (illegally) granted exemptions from the law for 2014 –but not, also of course, individuals with no political clout). What will happen when these exemptions expire in 2015 is anybody’s guess at this point. Everything else I predicted about Obamacare seems to be in process but have not yet fully come to pass: less healthcare for each person so that more people can get some healthcare; rationing of medical services according to  federal government guidelines; together, resulting in a decline of the average level of health care provided. What I did not predict (but which was entirely predictable) was the depressive effect of all this on retail sales during the critical Christmas shopping season. If you were the head of a family with their health care costs going up by 25-50% in 2014, and/or facing becoming a 30 hour part- time employee, the prudent thing to do is to spend less money on Christmas presents. En masse, individuals left to their own decisions tend to make individually prudent choices. Look for final retail sales figures for the 2013 Christmas season to be anemic. And, Obamacare is not out of the legal woods yet. Aside from the extra-legal adjustments, extensions and exemptions that have been granted unilaterally by the executive branch contrary to the express provisions of the law, there are still legal challenges to the law working their way through the court system, the two most significant being that the mandate on contraceptive devices is a violation of the Constitutional right to freedom of religion, and that the law itself is un-Constitutional in its entirety because (as the Supreme Court ruled) it is a tax law, which did not originate in the House of Representatives as required by the Constitution. Although I do not believe that the Supreme Court has the guts to declare the entire law un-Constitutional, because it is so wildly unpopular, and its economic basis is so suspect, there is very little chance that Obamacare will ultimately survive in the form in which it was passed. Nonetheless, Obama will have succeeded in fundamentally changing the US health care system simply because nobody ever will be able to put Humpty Dumpty together again. The question now is what will finally emerge as our health care system.

2.       Taxes will increase. Correct. The Obamacare individual mandate to purchase insurance or pay a penalty of 2.5% of their AGI  was ruled to be a tax by our illustrious Supreme Court.: your taxes went up. The “2% “holiday” on payroll tax deductions was allowed to expire: your taxes went up. The Bush Tax cuts for higher income earners are no more, and taxes on capital gains and dividends went up. The Medicare payroll tax went up, and fifty-five (55) deductions formerly available were eliminated. Here are just a few by way of example: the states sales tax deduction; the education expense deduction; the mortgage insurance premium deduction for homeowners. If you a have a short sale on your underwater house and the bank forgives the difference in what you owe them, that is now income and taxable. If you hire a veteran, you no longer receive any tax credits. If you contribute to a charity directly from your IRA, you now have to pay a tax on the distribution from your IRA. There are 49 more tax hikes disguised as deduction eliminations. Your tax bracket may not have changed, but your taxes went up. That is, of course, if you pay taxes. 50% of the adults in this country no longer pay federal income tax.

3.       Government spending and deficits will not be reduced. Correct and incorrect. The total US budget deficit went up by $680 billion in 2013. This was actually a dramatic improvement in the rate of the deficit increase because of increased taxes, low interest rates on government borrowings, a slight improvement of the economy (resulting in increased tax collections) and restrictions on spending imposed by the “sequester.” For similar reasons, total federal government spending actually decreased slightly in 2013 from 2012 – I was wrong on that one. Frankly, I did not think that the Republican leadership had the guts to stick to their guns on the sequester, but they did, goaded by the Tea Party Republicans elected in 2012 – at least until this December, when they backtracked on some of the budget cuts mandated by the sequester in order to make a budget “compromise” for 2014. But hold on to your seat: 2012 will be an aberration, not a trend.  The sequester wall has been breached. Unless checked, Obamacare alone will increase federal health care spending by $1.8 trillion by 2023 (and if you don’t like that number, substitute your own, it’s still massively huge), and by 2015 (!) will overtake Social Security as the single largest budget item. Hey , you haven’t heard of any credit rating agencies upgrading United States debt back to AAA, have you? Not gonna happen any time soon.

4.       The value of the dollar will decline, and inflation will increase. Correct and incorrect. One British pound sterling will buy 1.65 dollars today. A year ago, one pound would only get you 1.62. One Euro will buy 1.38 dollars today. A year ago, one Euro would only get you $1.32. QED. Of course, it’s not the same for all currencies: contrary to the trend, for example, the Looney has gotten back in line. One Looney would get you just over$1.00 in January. But overall, slow but steady, the trend is pretty clear: the dollar is worth less. Domestically, the official inflation rate in the US for 2013 is about 1.2% vs. 2.1% in 2012 – a decline! I was wrong in predicting an increase, if you are willing to exclude food prices and energy. All I know for certain is that my European vacation will cost more, my actual cost for a gallon of gasoline was higher this year than last (nationwide, the average today is $3.32 vs. a year ago of $3.29), and my cost for a bottle of vodka and my lobster for Christmas eve dinner was much more this year than last. Regardless,  whatever the “right” inflation number is, it is clear that inflation has been kept pretty much in check. The  question now is “For how long?” So far, the effect of federal spending increases has been muzzled because the fed has required higher reserves to be held by banks, and has kept a very low cap on long term interest rates. Banks are not lending because their potential profit margin (the difference between what they can lend money for and what that money cost them) is too slender for them to take the risk. Private corporations have also been hoarding cash instead of spending. They have enormous amounts of cash on their balance sheets. As a result, little of the money spent by the US government has actually made it into the general US economy for a “multiplier” effect. So what happens when the fed begins to “loosen up” by stopping the sale of government bonds at very low interest rates, as everybody is now predicting will happen very soon (and in fact has already begun)? I hope they can continue to keep the inflation tiger tamed, but the longer the cure of low interest narcotics, the harder the withdrawal. Nevertheless, the stock market has voted its confidence that the fed will be able to pull this off, up an improbable 27%  in 2013.

5.       The economy will hardly grow, and unemployment will remain high. Correct. But 2014 looks like it will be marginally better for the fourth year in a row.. Over 84 years, from 1929 to 2013, the average growth rate of the US GDP has been 3.3%. At the end of 2012, the BEA reported that the US economy stumbled badly and the GDP rate actually fell for the first time in 3.5 years, by 0.1%. Even with that number, the economy grew slightly faster in 2012 than in 2011. However, three months later, the 2012 numbers were “revised” to a positive 0.1%, and annual growth for 2012 was pegged at 2.2% - well below average, but still positive and better than 2011. Then growth accelerated beyond what had been predicted in the first and second quarters, and the third quarter was better still. Long  story short, 2013 was a positive growth year for the economy, better than projected and better than both 2011 and 2012. The final numbers are not in yet but I expect them to end up around 3.0% for the year. Better but not by much, and not great – but still positive (which I believe is why the stock market is soaring). According to the BLS, the unemployment rate dropped to 7.0% in November and has been below 8% all year – again, better but not great. Especially with the bias toward low numbers in the way this statistic is kept, this still way too high. So far, at least, it appears the recovery will continue in 2014. Slow better is still better. The Fed has said it will increase interest rates when the US economy is growing at 2.5% and unemployment is at 6.5%, indicating that we are “safely out of danger from falling back into recession.” It appears that one half of that formula has been satisfied. Interest rates will be allowed to rise in 2014.

6.       Constitutional rights under the 2nd Amendment will probably erode. Correct. Definitely. The fight is on, in earnest. Obama issued Executive Orders to restrict the rights of gun owners. Many states passed legislation with the same purpose. Other states have enacted legislation to strengthen those rights. So far, the courts have seemed to side with gun owners, and have struck down many of these provisions. It will end up in the Supreme Court. How it ends up will depend on who is on that court when these cases finally arrive there.

7.       Organized labor will have increasing influence. In the short term. Correct. In the longer term, maybe not. As I predicted, Obama did eventually find a way to get his pro-labor appointees onto the NLRB and the federal bench. In concert with Harry Reid, he eliminated the Senate filibuster, and with it 60-vote de facto requirement for confirmation of appointments. So in the short term, organized labor will have friendly federal forums for pushing  their agenda, and their influence should increase. However, that may be short lived, especially if the Senate change hands in 2014 – not a probability as of now but a distinct possibility. If that happens, Obama’s ability to pack agencies and courts with those friendly to his ideology will abruptly end. However, he will pack them plenty in the interim. The key to the power of organized labor is the union shop, whereby they can force employees to pay union dues, which is under assault by the passage of right to work laws in most states; the public sector unions, which even FDR opposed and are now under assault by laws such as Wisconsin passed to limit public sector union collective bargaining; and, union elections, which the unions hope to rig in their favor thorough “card check, which became stalled in Congress when the Republicans took control of the House. If the Democrats maintain control of the Senate in 2014, the union agenda will continue to advance. If the Republicans take control, no way. Union membership in the private sector is very small and diminishing. Union power in the public sector is extraordinary, but maintaining that power depends on the future of these three “keys.” It will also be interesting to watch the political fallout when the (illegal) temporary exemption to Obamacare for collectively bargained contracts expires.

8.       American military power will decline. Correct. Pax Americana is dead under this President. The US military is pulling back everywhere. The defense cuts under the sequester have not been restored. Military pensions have been cut. The exodus of senior officers that do not agree with Obama continues. China has been emboldened sufficiently to unilaterally claim a larger ocean defense zone, challenging the US, South Korea and Japan all at the same time.

American influence in the Middle East will continue to decline correspondingly with the increase in power of fundamentalist Islamists. Correct, in spades. Who could ever have predicted that the US has so antagonized and so lost influence with its allies in the Middle East that Egypt, Israel and Saudi Arabia are all united in opposition to his policies in the region? Egypt is involved in what is really a smaller civil war of its own. The US is now at odds with its former allies, the secularists  who are trying to rescue the country from the Islamic Brotherhood by military intervention (much the same way Chile was rescued from communism and Salvador Allende by General Pinochet).  Saudi Arabia is now providing military aid to the Lebanese army to counter Hezbollah and its Syrian-Iranian allies. Secretary of State Kerry touts a settlement with Iran over its nuclear “ambitions” that is anathema to Israel, and even the French oppose. Nothing has been done about the Benghazi attack. The Russians are once again fully invested in the region as an ally of Syria. The Syrian civil war continues with the US on the sidelines, our apparent strategy being to hope that it becomes another 100 years war without resolution so both sides exhaust themselves against each other (actually not a bad strategy, given the opponents!). Turkey continues to drift away from the West, and is increasingly under semi-dictatorial control of an Islamist President (although at this moment there is strife with Turkey as some secularists are trying to remove him). The US has left Iraq and the country is descending into increased sectarian strife. The US is leaving Afghanistan and is engaged in rather nasty withdrawal negotiations with the Afghan government that it helped create.  Relations with Pakistan, well, suck. Is there any place in the Middle East where the US has better relations or more influence than when Obama was first elected? Further north, the Ukraine is being prevented by an increasingly belligerent Russia from having closer ties with Western Europe. To the south, the government of Sudan that the US helped to establish is on the brink of being toppled by a renewed civil war. I am not and never have been a fan of sending US troops to intervene everywhere. However, it is not a strategy to stand by with our hands in our packets and just withdraw from problems. Influence lost is harder to regain. Pax Americana may be dead after this President.

9.       The American standard of living will decline. Correct.  Higher income taxes, higher inflation, reduced quality of health care, and a slow growth economy. QED.

 

So I give myself 8.5 out of 10, so far. God, I hope my score declines by this time next year!

Saturday, December 21, 2013

LIFE IS A POEM - Write Your Own



 

 

LIFE IS A POEM

Write your own

 

 

“What do you want to do when you grow up?”

“Be a cowboy,” I once said…

 

Later like you I asked

“Where am I going in life?”

“I don’t know,” I said.

Again and, again.

 

Some early have

A definite direction,

Single minded focus,

Like a laser.

Are they the lucky ones?

I wonder what they miss along the way?

 

One sunny Saturday

Driving to a game in Indianapolis

With my high school lacrosse team,

Two generations grooving to each other’s music,

A player asked

“Coach, what do you want to do?

You know, like when you grow up?”

There it was again.

She was perceptive -

Me, CEO of a big company,

Why was I coaching her team?

But she wasn’t really asking me about me -

She was asking me about her

About all of us

She expected an answer like to

“Be an engineer”

“Go into business”

“Make a lot of money ”

Straight forward answers

Like her career counselor gave her -

Straight forward, and

entirely unsatisfactory.

This time “I don’t know” would not help.

 

 “To be an artist at living,”

I told her,

“To discover who is Me,

And be

Me.”

 

“But how do I do that?” she asked.

 

“Write your own poem.

By indirections,

Find directions out.” [i]

 

Explore. Experiment.

Taste. Try.

Look through random prisms

See life from

Unexpected points of view

Different angles

Accidental promontories

Consider what you see

And begin to discover your life’s dimensions

 

Been to the Grand Canyon?

Which one?

The one at night - or at dawn?

In winter snow or in summer heat?

During a fall breeze

Or a spring thunderstorm?

The Grand Canyon looks different

                Up close

                                Or far away

From the North Rim

Than the South Rim

Looking down midway in a hike

Or up

Feels different when you are

 Lonely

Or happy, sharing

Or remembering through a photograph

Sounds different

When you are really there

At the river bottom

Or either rim

Or hearing it through Grofe’s Suite [ii]

Yet it’s all

“The Grand Canyon”

But every canyon teaches something

Of who you are

And so,

where you wish to go…

 

I have discovered things I don’t like to do

And so avoid them

I carve away what does not belong

Until only me is left

I have found things I like to do

Or, which intrigue me

And so pursue them

Wherever they may lead

And share them with those I love.

 

More canyons =

More learning.

Time is precious

Cannot be made

Once lost

Cannot be recovered

Do not wait.

No paralysis by analysis.

No point in planning way far ahead –

“Life plans” do not go as planned.

The slings and arrows of misfortune[iii] do not allow it.

 

No battle plan survives contact with the enemy.[iv]

Life is not the enemy

But life is the enemy of plans.

Socialists fear free market chaos,

                Make “5 Year Plans” for their economies

Private equity MBAs demand

5 year profit projections

5 years out it is all the same -

Resemblance with real results

Is mostly fantasy and happenstance.

5 years after any point in my life

Was I ever where I had planned I would be,

 5 years back?

Not hardly.

Usually instead

At an unimagined location,

Or in an unimagined situation,

Even an unimagined avocation.

 

That said

Before setting on an aimless wander

It’s mo’ bettah

To have some idea of where you are going -

You have a so much better chance

Of actually getting there!

So first consider -

Just for a moment -

What past canyons have taught?

And contemplate

                Who you are so far -

Are we not whom

We pretend to be?

 

For me, if life is a game

I wish only to do as I taught my players -

To give everything I’ve got,

So “at the end of the day”

When it’s all over,

I have left nothing between the white lines.

Having done the best I could,

To be me

Because that is all I ever can be,

                Just me.

 

And wherever I end up

There

 is my true destination.

 

Life has but one measure.

It is not dollars.

Not toys.

Not any numbers,

none at all.

Experience is life’s currency.

Life’s measure is only your satisfaction

With that you have

Done -

Seen -

Heard -

Tasted –

Loved.

“Not what we have, but what we enjoy

Constitutes our abundance.”[v]

 

While I hope it may be said of me

That everywhere I lived

Is better for my having lived there.

 

“What do you want to do when you grow up?”

 “Be a cowboy,” I once said…




[i] William Shakespeare, Hamlet, Act 2
[ii] Ferde Grofe, The Grand Canyon Suite
[iii] William Shakespeare, Hamlet, Act 3
[iv] Prussian Field Marshal Helmuth  Von Moltke the Elder
[v] Epicurus






[1] William Shakespeare, Hamlet, Act 2

[1] Ferde Grofe, The Grand Canyon Suite

[1] William Shakespeare, Hamlet, Act 3

[1] Prussian Field Marshal Helmuth  Von Moltke the Elder
[1] Epicurus