Shock and Oil: The Hidden Economics of War with Iran

About a month ago on February 28, the United States and Israel launched surprise attacks on Iran that killed Iranian Supreme Leader Ali Khamenei and other military bigwigs. Since then, there have been military strikes from both sides. The fallout from this war and how it will end remains to be seen. We have already seen one of the predictable outcomes come to fruition. 

There is about 20 percent of the world's petroleum and liquified natural gas that passes through the Strait of Hormuz. Because of the Strait being all but closed, oil barrels have already increased from $73 a barrel at the eve of the war to around $113 a barrel. What is interesting here is not merely the magnitude of the spike, but its timing. The market did not wait for a sustained disruption in supply. They moved almost immediately after the war started. 

And because energy is a universal input into the economy, the price movement does not stay confined to the oil market. It feeds directly into transportation costs, manufacturing inputs, agricultural production, and electricity-intensive sectors like artificial intelligence and data infrastructure.

But this is more than the immediate shock of the military escalation. It is uncertainty about the future. A study from the Federal Reserve Bank of Dallas finds that even when the increase in the probability of a worst-case scenario rises, the prices start to rise and the output starts to drop. As the conflict progresses, the probability does not disappear; it intensifies. 

The risk becomes more realized with higher insurance costs, higher shipping costs, and increased precautionary behavior. The risk premium driven by expectations blends into a price increase driven by reality. As this other study from the Federal Reserve Bank of Dallas calculates, the longer the conflict persists, the more permanent those price hikes remain and the bigger the impact on the GDP (see below).

The costs go beyond the energy market. As of March 23, there has been nearly $29 billion spent on this war. The Cato Institute points out that this undefined war has no clear exit strategy, which makes it more like the war in Afghanistan. Then there's the fact that when geopolitical risk rises, companies do not invest; they wait. Research from the Federal Reserve shows that heightened uncertainty about wars and conflicts causes business to delay capital spending and hiring, which leads to a sizable drop in investment.  

Taken together, the economic consequences of war extend beyond headline figures. Higher gasoline prices are the most visible cost, but it one of many costs in a long chain of government expenditures, business decisions, and long-term economic growth. As uncertainty rises, investment falls along with economic growth. 

In that sense, war operates like a hidden tax that shows up in the form of higher prices, larger deficits, and a slower-growing economy. It's amazing because it's a tax that no one in the U.S. voted for, that no one in the U.S. can escape, and will get explained away afterwards as if nothing happened. 

Drowning Out Evil: What the Purim Practice of Noisemaking Teaches About Moral Clarity

The news cycle as of late has been filled with reports of Operation Epic Fury, which is the joint U.S.-Israeli campaign targeting the remnants of Iran's military and nuclear infrastructure, as well as various members of Iranian leadership. Regardless of one's political perspective and whether this attack should have been launched, the operation is unmistakably loud. Not only is it loud in the literal sense with explosions and air power, but also in the figurative sense in terms of the Trump administration's foreign policy and how it views its adversaries. 

The idea that evil should not be ignored and should be actively opposed is not a new concept in Jewish history. In synagogues around the world, Jews will gather tonight in a ritualized form of confronting evil: the reading of the Book of Esther, also know as the Megillah. The biblical narrative describes how a Jewish woman, Esther, rises to the queenship of the Persian Empire and thwarts a genocidal plot against the Jewish people. The antagonist of the story is Haman, a royal official who persuades King Ahasuerus to authorize the extermination of the Jews. Through a dramatic reversal, Haman's plan was thwarted and the Jewish people were saved. 

This is where the noise enters the scene. Every time the name of Haman is mentioned in the Megillah reading, synagogues erupt in boos, stomps, hisses, and the rattling clamor of groggers. Although the first documented instance of this practice is in the 13th century, it is derived from the Torah. In the book of Deuteronomy (25:17-19), the Jews are commanded to blot out the memory of Amalek. Haman was the son of Hammedathah the Agagite (Esther 3:1). Agag was the king of the Amalekites (I Samuel 15:8-9), which is why Jewish tradition (Talmud, Megillah 13a).

In an age where moral categories are inverted, Purim is especially relevant. Hamas carried out despicable acts of kidnapping, rape, torture, and murder against Israeli civilians on October 7, 2023. If an attack that was equivalent to multiple 9/11 attacks happened to any other country, the international community would have sympathized with the attacked. Instead, much of the world sympathized with an anti-Semitic, homophobic, authoritarian terrorist organization. Entire populations now reframe those who call for the extinction of the Jewish state as "oppressed" and "freedom fighters.”

Then there is the new low society has reached in that more and more are of the opinion that disagreeable ideas are the same as actual violence. We see this not simply in rhetorical terms, but in real-world consequences It was that warped logic that got Charlie Kirk murdered and can continue to justify violence as a response to political disagreement.

These are but two examples to contrast the Megillah. Haman is not perceived as "oppressed," "misunderstood," or "dealing with systemic inequity." Haman sought genocide: full stop. There was no "this situation is complicated" or "the relation between Jews and Persians were complex and nuanced at the time." The Purim story insists otherwise. Power can corrupt, tyranny is real, and genocide is evil. The Megillah illustrates the moral categories unambiguously. 

At the same time, the Megillah models a form of pluralism that does not compromise moral clarity. The Jews lived among foreigners under foreign rule and navigated a world of different beliefs and customs. That diversity does not mean that we ignore when clear wrongdoing is taking place. Just like Jews in the Megillah existed in a different world were also able to recognize Haman's evil. We too must insist on certain basic truths in a pluralistic world. Acts like genocide, torture, and kidnapping are unacceptable. Purim teaches that we can live amidst difference without equivocating about what is categorically wrong or drifting into the idea that evil is "just another perspective." 

The uproar at Haman's name is not just about a tradition. It is about not having evil become normalized. It is about making sure we can distinguish between right and wrong, even in a pluralistic, democratic society. Sometimes it takes a loud, jarring noise to make sure we do not succumb to moral atrophy and indifference. 

Iran Is a Legitimate Threat to Israel, But Should the U.S. Have Bombed Iran's Nuclear Facilities?

About two weeks ago on June 13, Israel initiated a surprise attack on Iran known as Operation Rising Lion targeting top military officers and scientists, much like it did when Israel targeted Hezbollah operatives in September 2024. Iran fired missiles on Israel and there have been airstrikes since. These past few days have been an escalation of the animosity that has existed between Israel and Iran since the Iranian Revolution of 1979. 

Iran has financially backed Hamas, Hezbollah, Palestinian Islamic Jihad, and the Houthis. Then there was the Iranian attacks on the Israeli embassy in Argentina in 1992 and the 1994 AMIA bombing in Argentina, the latter of which was the largest terrorist attack in Argentinean history. On top of the proxy conflicts and historical tension, Iran has called for Israel's destruction multiple times over the past few decades. 

Israel attacked Iran on June 13 because Israel reportedly wanted to prevent Iran from developing a nuclear weapon that would annihilate Israel. This would make sense because the UN nuclear watchdog International Atomic Energy Agency (IAEA) submitted a report a day before Operation Rising Lion showing that Iran was in breach of its non-proliferation obligations. President Trump initially said that he will help Israel "if needed." And help he did. 

On June 22, the United States military carried out Operation Midnight Hammer to attack three nuclear facilities: Fordow, Natanz, and Isfahan. The White House is claiming that Iranian nuclear capabilities have been obliterated. Although Trump announced a ceasefire the following day, it is neither clear whether there will be further attacks from Israel or Iran, nor is it clear whether Iran's nuclear capabilities are decimated. As of now, the ceasefire is holding, but it is too soon to tell. Similar to what I pondered three years ago with Ukraine, the question I ask now is whether the United States should have militarily gotten involved in Iran. 

The answer depends in part on how much damage was done to Iran's nuclear facilities. Damage assessments are still preliminary. An initial assessment from the Defense Intelligence Agency (DIA) said that it was only delayed by a few months. On the other hand, the CIA released a statement saying that it would take years for Iran to rebuild. If Iran's nuclear capabilities remain largely intact, it could risk greater regional tension and drag the United States in yet another war in the Middle East. If their capabilities truly were hindered, then this limited military intervention could have prevented World War III. 

Whether the United States should have carried out Operation Midnight Hammer also depends on how the United States, Israel, and Iran will respond. If the United States gets further involved in terms of actual fighting, then it makes Trump look bad since Trump promised in his last presidential campaign that he would not start any new wars. To reiterate, Israel views Iran as an existential threat. While the IDF preliminarily finds that Iran's capabilities have been set back for years, Israel might escalate if it perceives that Iran has not been adequately incapacitated.

As for Iran, the Iranian government has already passed legislation to prohibit the IAEA from entering Iran.  Iran does not have the capability to attack the United States directly. Iran tends to avoid conventional conflict and instead advances its regional operations through propaganda and proxy operations. As such, Tehran could attack the Strait of Hormuz, which could send oil prices soaring. Tehran could also attack U.S. military installations in the Middle East, much like Iran attempted on June 23 with Operation Glad Tidings of Victory when it unsuccessfully sent missiles to the Al Udeid Air Base in Qatar. Domestically, I understand that Iran is militarily weakened and economically pummeled. At the same time, that desperation could encourage the Ayatollah to tighten the screws on its citizens. 

This is a roundabout way of saying that this conflict is very much developing and much is up in the air. Even if Iran has been hobbled, Iran remains a threat. I do not want another war in the Middle East, much like most Americans. Cato Institute calculated that if the war with Iran created displacement at the same rate as Syria, that would mean 23.4 million civilians, which would increase the worldwide refugee population by 76 percent. It would be a tragedy indeed. Ultimately, I hope that further conflict and bloodshed is avoided in the Middle East. Whether that ends up being the case is something that only time will tell.

10-16-17 Policy Digest: Iran, Clean Power Plan, and Obamacare

There was so much that happened last week in the world of public policy that I am taking a slightly different format. Rather than go in-depth on one issue, I will briefly cover three issues: the Iran Deal, the Clean Power Plan, and Obamacare. Aside from the time crunch on my end, the reason for covering it in an abridged digest format is because I have already covered these topics in further detail. With that, let's begin.

The Iran Deal
Last Friday, President Trump announced that he is going to decertify the Joint Comprehensive Plan of Action, more colloquially known as the Iran Deal. This decertification will give Congress 60 days to determine if they want to re-impose sanctions on Iran. This position is a compromise on Trump's end since he despises the Iran deal while his aides like it. The basis of the Iran Deal is to make sure that Iran does not become a North Korea-like nuclear power threatening the world. Trump's assertion is that it is not working. I took a look at the Iran Deal both when it first came out and one year after in 2016. My conclusion? The Iran Deal is doing what it is supposed to be doing. If Congress reimposes sanctions, there is legitimate concern that the United States' trust in the international sphere will be eroded as a result. Not only that, but Iran could shift blame towards the United States since Iran has been complying with the Iran Deal. Since the Iran Deal is succeeding at keeping Iran's nuclear capabilities contained, there is no logical reason for Trump to rattle the cage.  

Clean Power Plan
On Tuesday, October 10, the Environmental Protection Agency (EPA) announced that they would repeal the Clean Power Plan. EPA Administrator Scott Pruitt claimed that CPP repeal will save $30 billion over the next ten years. Personally, I'm glad that the EPA repealed the CPP. I analyzed the CPP three years ago, and I surmised that the CPP would only reduce global temperatures by 0.2º, which is a far cry from what we would need to avert the cataclysmic effects predicted by climate scientists. For more recent analyses on why the CPP is inadequate, you can read from the Cato Institute, Heritage Foundation (also see here), Manhattan Institute, and the U.S. Chamber of Commerce.

Obamacare
If that were not enough, President Trump signed an executive order on the Affordable Care Act, better known as Obamacare. There are those criticizing it as Trump's attempt to unilaterally dismantle Obamacare, which critics argue would roll back health care offerings in the U.S. (see here, here). See analyses from the Cato Institute, Forbes, and Heritage Foundation as to why Trump's executive order is not so bad. In either case, something needs to be done to stop Obamacare. For more on the issues with Obamacare, see my list of 15 reasons as to why Obamacare is poor policy.

The Iran Deal One Year Later: Success or Failure?

For many years, Iran has been perceived as a threat to world order. The Iranian government has said on more than one occasion that it wants to wipe Israel off the map. In general, the terrorist organizations it supports destabilizes geopolitical relations in the Middle East, thereby creating a neoconservative boogeyman. One year ago was the signing of the Iran deal that was meant to prevent Iran from becoming a nuclear power. As is customary in U.S. politics, both sides of the spectrum were in full force, from doomsday scenarios to improved diplomatic relations with Iran. When looking at the Iran deal a year ago, I concluded that while the deal does have flaws, it was still better than remaining with the status quo. Now that a year has passed, we can go off of more than mere predictions and speculation. Has the Iran deal worked, or were the naysayers right in that we have simply given Iran what it wants?

Before I even begin, I have to preface by saying that this analysis is preliminary. I used a similar disclaimer when analyzing the effects of marijuana legalization after one year, or when analyzing the central banks using negative interest rates when it only had been in practice for a short while. Even so, there are still initial findings that can be stated. In the case of the Iran nuclear deal, the main question is the capacity of the Iranian government to have a sufficient stockpile to create nuclear arms. Did the deal hasten Iran's nuclear ambitions, did it halt them, or does it ultimately not matter because there is a certain inevitability to the occurrence?

One thing we have to remember is that Iran is still funding terrorist groups. According to the Council on Foreign Relations, the Iranian government is calling the shots in the Iraqi government with regards to dealing with ISIS, perpetuating the Syrian war machine that is causing the genocide in Syria, and is starting covert Shia terrorist cells in the Middle East. It doesn't address human rights violations or the tensions between Iran and Saudi Arabia. Without the use of economic sanctions, the United States has less options to keep the Iranian government in check, although the deal also has sanctions "snapback" in the event that Iran reneged on the deal. While the point has some validity with regards to stabilizing Middle Eastern geopolitics, it is still wanting because it does not answer whether the Iran nuclear deal itself was effective.

Jeffrey Lewis, who is the Director of the East Asia Nonproliferation Program at Middlebury, stated in a recent interview that proponents expected that the Iranians were going to behave like Boy Scouts. When looking at this deal last year, I even said that there was no deal that was going to bring peace in the Middle East because Iran was going to continue to be an instigator, regardless of having a "Deal or No Deal." If Iran was really that nice, there wouldn't be a need for a nuclear deal in the first place. What we have to ask ourselves here whether they have the capabilities to instigate on a nuclear level, particularly with regards to whether they have enough centrifuges and uranium to create the nuclear weapons.

Instead of a "breakout time" of two months, the deal has lengthened that to a year, which would give world powers plenty of time to respond in the event that Iran decides to break the deal. Other major benefits (see Congressional Research Service [CRS] report here) that came with the deal: the number of centrifuges have been reduced two-thirds from about 19,000 to 5,060. Nuclear research has been limited, and Iran's uranium stockpile has reduced about 98 percent. Iran is redesigning the Arak reactor so that it cannot produce weapons-grade plutonium. The International Atomic Energy Agency (IAEA) has been allowed unprecedented access to help ensure compliance. The aforementioned CRS report (p.10) stated that Iran has complied with the major provisions of the Joint Comprehensive Plan of Action (JCPOA). Former Israeli Defense Minister Moshe Ya'alon recently stated that the Iran deal has made it so that Iran is no longer an "immediate, existential threat to Israel." Plus, the U.S. House of Representatives just passed the Lance Amendment, which would not give Iran access to the U.S. dollar.

The concern for naysayers is the sunset provisions and what happens when the deal completely expires 15 years down the road. Iran is, and still very well could be 15 years later, a kleptocratic, theocratic mess of a regime. Figuring out a way to make Iran the country it was prior to the Ayatollah's usurping of Iran in 1979 is a tricky goal, although it would address root issues in Middle Eastern power politics. It is going to have to be a long-term game since the U.S. government tried to install a friendly regime back in 1953, and failed miserably.

That set aside, we can't ask ourselves whether this deal will fix things forever. We also have to remind ourselves that the final verdict won't play out for years to come. The question is whether conditions are better with the deal than they would have been without the deal. The main goal was to block Iran's path to nuclear arms for an extended period of time, and in spite of whatever imperfections exist, the primary goal has been achieved. There is worry as to what happens when the deal expires, and we should prepare for that, although conversely, the deal might show the Iranian government that it is better for Iran to not pursue nuclear weapons. We should also be prepared for more rounds of diplomatic meetings to help mitigate tensions in the Middle East. There is also the issue of whether the Iranian government blames the state of their economy on world powers on delaying the lifting of the sanctions, although Boeing is looking to enter the Iranian market. There is expected to be a bumpy road ahead (see GAO report here), such as the making sure that China also plays ball with regards to securing the proper procurement channels, the 2016 U.S.-Iran Naval Incident, and Iran testing ballistic missiles. Again, Iranian officials are not Boy Scouts, and we can't expect them to be. We have to remind ourselves of what our options were, and which was the best option given what was on the table. There is no guarantee that the deal will play out nicely, but enacting this deal seems to be our best option to move forward.


12-11-2016 Addendum: The Brookings Institution put out a nice article on how the Iran deal is working, and how Trump's attempt to negotiate a better deal would, at the very least, be ineffective.

Should We Be Going Nuclear Over the Iran Deal?

About two years in the making and the deal with Iran has finally been struck (see full text here). I have heard opinions varying from "awesome deal" to "it's the end of the world as we know it," and everything in between. Iran has called for Israel's destruction, so I understandably would be worried if the Iran deal actually hastens Iran's nuclear capabilities. Short of developing clairvoyance, how big of a deal should we make out of it? Have we empowered Iran to build a nuclear bomb? Have we prevented any possibility of Iran gaining the ability to create nuclear weapons?

Before answering those questions, let's make one thing clear: deal or no deal, the Iranian government will still hate on the United States, Israel, and its Sunni neighbors. For me, it's annoying enough when there is an individual who intentionally and utterly shows disregards for others. It's even worse when it's a nation-state not only because of the magnitude, but also because of the lack of a decisive arbitrator. Short of a regime change, there is not much one can do to change the fact that Iran is going to continue with its lunacy. Diplomacy was a tool created to deal with these sort of schmucks. Diplomacy wasn't created so everyone loved each other; it exists to avoid military conflict. War is messy and costly, which is why it is preferable to try diplomatic solutions first. There is the question of whether the diplomatic solution in this case was adequate. At the end of the day, this deal could have one of three basic outcomes: hasten Iran's nuclear aspirations, reduce the possibility of Iran acquiring a nuclear bomb, or the deal will do nothing of value. What are the arguments for each?

"This is a good deal." The Iran deal reduces the number of Iranian centrifuges from 20,000 to 6,000. That is nowhere enough centrifuges for Iran to construct its own nuclear bomb. The amount of uranium it can have went from 10,000 kg to 300. Inspectors will be monitoring the only two mines where Iran can acquire uranium and the mills where it is processed. Blocking arms inspectors is a bad  idea. Saddam Hussein tried that in 1998 and was bombed shortly thereafter. Arms control and nuclear proliferation experts seem to find the nonproliferation aspects of the deal to be most redeeming. You also provide humanitarian relief to the citizens of Iran because the economic sanctions are lifted. The CIA predicts that the money that Iran would gain from the removal of sanctions would most probably fund the domestic economy. Given the reality of the Iranian government's policies and its domestic politics, this very well could have been the best deal possible.

"This is a bad deal." We could have gotten so much more out of this deal. The nuclear program was not in any way dismantled. If the IAEA inspectors come along, the Iranian government gets a 24-day notice, which will only encourage bad behavior. "Anytime, anywhere" inspections would have been preferable. Iran's defense minister is saying that Iran's military sites are off limits, which means that Iran could simply hide their nuclear weapons there. The deal also doesn't address Iran's ballistic missiles. Plus, if the West were looking to reinstate the sanctions, there is a lengthy review process. What kind of deal is that? The Western world could have upped sanctions or assisted proxy opponents in a Cold War-like "the enemy of my enemy is my friend" fashion. We just handed Iran economic relief so it can fund its terrorist activities throughout the Middle East, and it didn't have to provide anything tangible. Plus, if Iran's neighbors feel threatened, they might build up their nuclear capabilities or even strike Iran.

"Nothing is going to change in the grand scheme." There is a case for "more of the same." As a senior fellow from Brookings Institution pointed out, "Iran's regional troublemaking is likely to worsen, regardless of a deal." It was going to get worse whether we wanted it to or not. What's going on is neorealist balance of power realpolitik: Iran wants to assert regional power and hegemony. To keep balance of power, other nation-states are going to trust Iran about as far as they can throw Iran. People have enough of an incentive to keep Iran in check. Plus, if the Western world is that insulted, the powers that be can always reinstate the sanctions, or even double down. Iran has hidden entire nuclear facilities before, and unless we have a highly thorough inspection regime constantly monitoring Iran, that part isn't going to change. Iran has circumvented IAEA (International Atomic Energy Agency) inspectors, and it can do so again. Lifting sanctions and "normalizing" economic commerce with Iran is going to take time, which gives both sides to strategize and reconfigure its next move.

Iran has also developed the indigenous capacity to produce nuclear weapons, and a "tough on Iran" stance short of decimation is not going to alter that reality. Even if Iran does actually test a bomb (good luck hiding that!) and develops a second bomb for use, do you think that breakout capacity is going to matter? Deal or no deal, one would still have to take further measures to destabilize Iranian meddling in the Middle East. People have been clamoring about Iran as an imminent threat since 1979. To quote the Cato Institute's summary of the deal: "It [The real dilemma of "deal or no deal"] was between a nasty but weak regional power with little power-projection capability, closer or further away from a nuclear weapons capability," not between war and peace.

Postscript: At the end of the day, how you feel about the Obama administration, foreign interventionism, the effectiveness about the international inspectors from IAEA, or Iran will most probably shape the version that you are likely to accept. The funny thing is that all of these arguments have kernels of truth, and I'm sure the Iranian government's opaque decision-making process does not make it any easier to discern which version is most correct. Regardless of which version seems most fitting to the reality of the situation, let's not forget that Iran is a corrupt, theocratic, kleptocratic mess (see IMF report; Transparency International; Economic Freedom Index; Freedom House). No deal is going to fix that, and no deal is going to make things in the Middle East all better. I still think trying to make a deal was better than going to war, even if the deal has flaws. Plus, it is still not over: Not only has the Iranian government not formally accepted the deal, but it still needs congressional approval and the IAEA. It will be interesting to see how it plays out, but in the meantime, we sit back and watch people continue to debate the details of the Iran deal.

Obama’s Nuclear Dream is Going to Go “BOOM!”

A world without nuclear arms sounds lofty. We can all happily live in peace in a care-free world knowing that there is no strife or conflict. But the main problem with Obama’s dream is that that day has yet to arrive. In order for a true, utopian world peace to occur, amicable relations need to precede any disarmament, not the other way around.

This is yet another example of Obama’s backwards view on the world. The world is not filled with liberal democracies. Totalitarianism still exists. America still has enemies. Much of foreign policy is still dictated by Realpolitik, which still implements such axioms as self-interest, balance of power, and national security. Until we can all “get along,” no country is going to [totally] relinquish their nuclear capabilities. In terms of national self-interest, there would be too much at stake if disarmament took place.

Look at this chart below:

First of all, if nobody has to been able to confirm Israel’s nuclear arsenal, I'd like to know how the heck the BBC even knows that Israel has eighty nuclear warheads?! This tangent is beyond me, although if I had to guess, it's probably shotty journalist work where they embellish on numbers just to make themselves look smart. But let us assume, for argument’s sake, that Israel has these warheads. Why would they give them up?? Israel is surrounded by a bunch of Arab nations that have tried to annihilate Israel in the past. You have a despotic Iran run by an absolute loon who has called for Israel’s destruction on multiple occasions. Only a masochist in the Israeli government who has a death wish for the Jewish state would hand over their weapons.

Israel wouldn’t be the only nation with something substantial to lose. After losing the Cold War, Russia has been trying to gain clout in the international field. Why would the Russian government surrender the only asset that gives them an edge? China is building up to be a world power, so it certainly won’t give up a single warhead. Pakistan and Indian have been at each other’s throat about the Kashmiri territorial dispute since 1947, and that is not about to wane anytime soon. And unless North Korea has nuclear arms, no one will pay attention to that authoritarian regime.  Even if there isn't a specific context to the reasoning, the fine point of all of this is that it is nobody's self-interest, not even America's, to totally disarm.  Even if we pretend to in the public sphere, it's very likely that we have another stash in a secret location because as military strategist, you have to think to yourself, "hope for the best, prepare for the worst."

Any attempt at disarmament will turn out to be even more pathetic than the Copenhagen Conference this past December. And it's not that I don't want to live in a world free of nuclear worries.  It's that I know the gap between reality and what we strive for [i.e., world peace], is too wide.  Until such a gap is minimized, we cannot risk our national security based on Leftist, whimsical notions of world peace. 

Another Look at Iranian Nuclear Capabilities

Back in February, I had analyzed that Iran’s economic infrastructure is so poor that they can’t even produce the millions upon millions of gallons of oil, let alone put together a nuclear bomb. The CIA, however, begs to differ. As stated in their recent report to Congress, "Iran continues to develop a range of capabilities that could be applied to producing nuclear weapons, if a decision is made to do so.”

The CIA’s report helps confirm the IAEA’s earlier report confirming their nuclear capabilities. It seems that Obama has even had his dose of reality since his last meeting with French President Nicholas Sarkosy. They are putting up a front to make sanctions against Iran in hopes that other nations will follow suit. As Obama himself stated, "My hope is that we are going to get this done this spring," Obama said. "I'm interested in seeing that regime in place in weeks."

If Obama is truly interested in stopping Iran, he will put pressure to have Congress hammer out the differences in H.R. 2194 as soon as possible. Although this will be a step in the right direction, other nations need to put sanctions on Iran because “the more, the merrier [except if you’re Iran].” The obstacle for multilateral sanctions is China and Russia. The reason for this notion is the simple neo-realist concept of balance of power. In short, China and Russia don’t want the United States exerting its power in Central Asia. Russian-Iranian relations have been at an all-time high, and China finds that Iran will be useful for economic gain, the sole stabilizing force of internal Chinese affairs. Since the United States does not exert enough power to have China obey upon America’s say-so, the only way to change China’s mind is to take the drastic action of the United States to withdraw all of its economic activity out of China.

But I digress….slightly. Before I get too carried away, let’s see if Obama can abandon his foreign policy of “stick it to your friends while kowtowing to your enemies” before we discuss multilateralism.

Iran is Nuclear, And Your Point Is........?

Just when you think things were bad enough, Iran has to go and declare itself nuclear.  It has declared this because it reached uranium enrichment of 20%.  In order to build nuclear weapons, it needs to reach 90%.  Although 20 is nowhere near 90, it still makes me pause about this for a moment. An extremist Islamic country who has declared that it wants to wipe Israel off the map has acquired nuclear capabilities. I wonder what’s going to happen when they reach full capacity. For those of you who have an inkling of how history has this unfortunate tendency to repeat itself, odds are that Iran is going to try to use them. I know this. The Israeli government knows this, which is all the more reason to be nervous about this declaration.

Israel has its back to the corner so badly that it’s one of those “damned if you do, damned if you don’t” moments. I’m sure that the Israeli government has already been considering an aerial attack on Iran, much like the one that they did with the Iraqi reactors back in the 1980s. As James Phillips from the Heritage Foundation points out, Israel might not be able to deal with Iran the same way it dealt with Iran:

An Israeli strike against Iranian nuclear facilities would be a much more difficult and complex oper­ation than the 1981 raid on Iraq's Osiraq reactor. The Iranian dictatorship learned the lessons of Israel's 1981 strike on Iraq's nuclear reactor: The Ira­nian nuclear infrastructure is more decentralized, dispersed, hardened, and protected than was Iraq's nuclear program. Some of the nuclear sites have been located in cities, which would magnify the col­lateral casualties of air strikes. Other sites have been built deep underground with assistance from North Korea, which has developed world-class tunneling technology.

Israel also has to deal with two geographical realities: Iran is further away than Iraq, and Iran is a larger country than Iraq. This also translates into the geo-political reality of being endowed with a better military than Iraq, although I would strongly opine that Israel’s military capabilities are by far superior. To be realistic, Israel alone cannot halt the Iranian nuclear program. It could only delay it. If America entered the stage and attacked Iran, something that should have been done years ago, there would be a chance. But with Obama’s flabby, poorly prioritized foreign policy, it might be a stretch to say that America would do more than just flex its muscles, even when the Iranian threat is self-evident.

The worst-case doomsday scenario is one possibility.  The other possibility is that Iran is bluffing.  That is what the United States government is figuring.  The timing of Iran's declaration is noteworthy because it occurred just one day after Congress enacted the severe sanctions against Iran. Consider this: Iran runs the petroleum sector of its economy poorly.   Just look at how they're handling low oil barrel prices!  In spite of that, for the Iranians, this should be a no-brainer.  Short of Saudi Arabia and Canada, they have more oil than anybody than anybody else.  They should be making a fortune.  But as the Telegraph article above points out, they are highly inefficient in producing it and making a substnial profit off of it like the Saudis.  Now, if they can't handle something as simple as accruing oil, what makes you think they can handle the complexities of nuclear energy?      

As a religious Jew, I believe that HaShem will protect the Jewish people like He has throughout history.  Although Iran looks menacing, I think Iran has more bark than it does bite.  Obviously, Israel cannot take that chance because risking the longevity of the Jewish state is just too high.  Nevertheless, Iran is a backwards nation that is run by fundamentalists of an unenlightened religion.  It might have a lot of anger and resentment towards Jews, but as long as it makes itself a pariah within the international community, it won't make nearly as much progress as it'd like.  However, a bit of aggresive action towards the rogue state wouldn't hurt.

Israeli Hodgepodge for December 28

Apparently, there are some newsworthy items coming from Israel, so here they are:

First of all, the Israeli Defense Forces predict that Iran can build a nuclear bomb by 2011.  I truly wish that Obama would show some resolve on this issue rather than focusing on something as futile as Afghanistan. 

Second, Israel is continuing its settlement expansion by building 700 apartments.  Israelis love it, but as if it were a surprise, the Obama administration is not happy with it.  It makes no sense to chide a longtime ally while you are not dealing with the antagonism coming from east of Jerusalem. Again, the Obama administration lacks a sense of priority in foreign policy.

On a lighter note,  Israel is seeing a rising percentage of those making aliyah the first time this decade.  This particularly positive bit of news, particularly during a global recession, is a more positive note, something which will, G-d willing, hearld the Messiah soon. 

Obama's Quick Stop to Oslo

While Obama was in the area, he came by to Oslo to pick up his Nobel Peace Prize.  And I thought that his trip to Copenhagen was hypocritical enough!  Here we have a man who campaigned on an anti-war platform and ends up approving more troops for the war in Afghanistan. Obama stated that "[a] nonviolent movement could not have halted Hitler's armies. Negotiations cannot convince al-Qaida's leaders to lay down their arms.  To say that force is sometimes necessary is not a call to cynicism, it is a recognition of history."  It sounds like the same argument Bush used to justify his war in Iraq.  I guess the reasoning only works if Obama uses it.  I'm not disputing that there are times for war and times for peace.  Nor will I dispute the fact that war is sometimes necessary to usher in peace.  However, I wish that he would be consistent in his thinking.  Rather than be in Afghanistan, we should occupy a country that is developing nukes and is threatening to throw off the balance of power, let's say, a country like Iran.  That sounds like a good blog post, but I guess I'll have to do that when my Hanukah vacation is over...  

12/4 Hodgepodge

-If you thought that Obama's approval rating wasn't low enough, here's Matt Towery's take on why it's going to take another nosedive in 2010.

-Apparently, Obama's scientists are sticking for Obama in the fight against global warming.  Here's my mystery question of the day: if the book is closed on the global warming argument, why do you need scientists to do research on it?  I guess lining your wallets at the expense of the taxpayer is preferable to the scientific method.

-Iran has declared once again that it will not be cooperating with the UN.  The psychoticness of Iran doesn't seem to bother Obama.  He'd rather head off to Copenhagen next week to fight a fictitious enemy rather than deal with a definable, realistic one.

-Finally, who cares about Tiger Woods' alleged affair?!  People need to stop obsessing over this just because it's a celebrity. Adultery is unfortuantely an everyday, common occurrence.  Either try to make a positive difference in reducing incidence rates or move on.   

The Middle East: The Israeli Perspective

This was the title of a speech I heard Dr. Josef Olmert, brother of former Prime Minister Ehud Olmert, give last night at my alma mater.  I loved that he prefaced his speech with "there are 7 million Israelis and 15 million opinions," just because it so accurately portrays how opinionated Jews are.  Dr. Olmert's two main focuses were on Iran and on the Israeli-Arab conflict.  A brief summation of his speech:

Prior to the Iran Contra Affair, Iran was ruled by the Shah.  Although the Shah was portrayed as a dictator, he was nevertheless pro-Western and pro-democracy.  By usurpuring his position, Islamic Fundamentalism had been given legitimacy in the form of a nation-state.  Ever since, Iran has been vehemently anti-Israel.  Iran just doesn't have a problem with the current PM or some of Israel's policies.  Iran has a problem with Israel's very existence!  When Iran's head of state makes statements like "Israel needs to be wiped off the map," Israel cannot afford to take these threats lightly.  A third of Israel's youth (yes, youth, not the elders that actually suffered the Holocaust) fear a Second Holocaust being imminent.  The issue is that Israel is a Jewish state because its population is predominantly Jewish.  As Martin Luther King Jr. said, "And what is anti-Zionist? It is the denial to the Jewish people of a fundamental right that we justly claim for the people of Africa and freely accord all other nations of the Globe. It is discrimination against Jews...because they are Jews. In short, it is antisemitism."  When you talk about criticizing Israel, that's one thing.  Some of the most critical people of Israel's policies are Israelis themselves.  But when constructive criticism become distored and needlessly disproportionate demonization, to the point where Palestinians do not receive an iota of chiding, then something is terribly wrong.  That's the point where anti-Israel sentiment becomes anti-Semitism.  Iran has essentially declared jihad against the Jews, which is why Iran's nuclear developments are all the more disturbing.  Fear not, says Olmert, because Israel is not the only country that needs to worry about a nuclear Iran.  For many centuries, there has been discord between the Sunnis and Shi'ite Muslims.  Iran, being Shi'ite, scares all the Sunni countries, i.e., the rest of the Arabian Peninsula, as well as Northern Africa. 

Peace between Israel and Palestine is possible, says Olmert.  He established precedence by pointing out peace treaties with Egypt and Jordan (although I would point out that they are considered "cold peaces").  After a brief overview of the history of the modern Israeli state, he explained that the Gazan War (aka Operation Lead Cast) occurred because Fatah was in the process of creating a peace treaty, and Hamas decided to provoke in order to detract Israel from the peace process.  Although Hamas had indiscriminately fired nearly 8,000 rockets into southern Israel (only 8,000!), there were two reasons why Israel waited as long as it did.  1) It didn't want to show that it made the mistake of withdrawing from Gaza back in 2005.  2) Israeli military was worried about too many Palestinian casualties! After visiting Sderot in 2008, Sen. John McCain said that being in a border state, if Mexico were firing rockets on Arizona, he'd instinctually retaliate.   What ultimately caused Israel to attack was because they were provoked into attacking, and that is what Hamas intended.  The only thing that makes Israel unique in this regard is not that they attacked, but ratherthat they waited so long to attack in hopes to gain peace.  Olmert stated that ultimately, the war was a success because since Operation Lead Cast, there have hardly been any rockets shot at Israel.

Dr. Olmert concluded on two levels.  The first is to deal with Iran.  He was optimistic about economic sanctions working, presuming that multilateral pursuit was in play.  Iran has the potential to cause an arms race in the Middle East, thereby making it even more volatile of a region than it has been in the past.  The second is how to deal with Palestine.  "Donate energy to optimism and your daily life.  By letting it phase you and take such a toll on you, you let the terrorists win," opined Olmert.  If one lives his daily life as normal in an optimistic fashion, you stick it to the terrorists because you let them know that their tactics aren't effective.  This would thereby diminish their resolve to combat Israel.  Also, Olmert said that he doesn't need approval from the Palestinians for the right to a Jewish homeland.  He contrasted that assertion by stating that although he believes in a Jewish land, he is willing to give it up because peace is more important.  And that peace will come when a Hamas spokesman says that they want peace.  Although he tried to remain optimistic, such as the 7.6% unemployment in Israel and its realtively resilient economy, he is still apprehensive because of Iran.

My two cents: Although Dr. Olmert is a fellow Jew and I appreciated his visit, not to mention his historical accuracy in presenting Israel, I would have to say there was quite a bit I disagreed with, particularly how to approach the conflicts in the Middle East.  First, with regards to Iran.  I don't share Olmert's optimism on the feasibility of economic sanctions simply because economic sanctions historically work when they're backed up by military action.  Second, his take on how to deal with Gaza and the West Bank is very soft.  Olmert said that peace wouldn't come around until a Hamas leader stood for peace, but Olmert fails to provide with a means of making that pipe-dream happen.  Golda Meir said it best: "Peace will come when the Arabs love their children more than they hate the Jews."  This anti-Semitism is the obstacle for peace.  It's so embedded within the Palestinian psyche that martyrdom becomes their raison d'être.  "Israel will exist and will continue to exist until Islam will obliterate it, just as it obliterated others before it."  It's part of the introduction of the Hamas Charter.  If you don't believe me, read it for yourself.  All of the negative, innacurate stereotypes of the Jew are taught in schools.  Secretary of State Hillary Clinton even called Palestinian textbooks a form of child abuse.  I can go on, but the point is that evil cannot be talked to, it cannot be reasoned with.  Daniel Pipes speaks the truth when he says that we're truly not treating this like a war, and that we're not breaking the Palestinian will to fight.  Did talking to Hitler stop anything?  Not at all; just ask Neville Chamberlin.  The day that Israel stops strangling itself with political correctness, the day Israel shows some true resolve, much like we saw at the birth of the modern state, then, and only then will we see an end to all the bloodshed.  But until Israel grows a pair, I'm afraid that the instability and violence will be perpetuated in a cyclical fashion.

Why Leopards Don't Change Spots: Weighing in on Russo-American Relations

"A leopard can't change its spots."  It's what I keep in mind when I think of Russo-American relations. It doesn't matter if it's portraying itself as Communist or "democratic," Russia is still antagonistic towards American interests.  Forget the Cold War, SALT Treaties, or when the Berlin Wall fell (although that was a pretty good time!).

Two recent issues come into mind when I think of Russo-American relations.

1) Russia is not helping when it doesn't want to put pressure on Iran.  I'm not advocating for economic sanctions....at least unto themselves.  I did a research paper on this in college, and without military backing, economic sanctions don't do squat.  It's why Iran has been unaffected by sanctions for the past thirty years.  But when Putin says we shouldn't anger Iran, it makes me think one of two possibilities.  A) He is even more naive on foreign policy than Obama because he doesn't realize that Iran has the potential to disrupt the balance of power on his borders, or B) he is in cohorts with Iran because he wants to restore the glory of Mother Russia.  Either way, standing by idly while Iran gains nuclear power is more of a global catastrophe than the so-called "climate change."

2) There are plans, albeit tentative, to let Russian officials inspect American nuclear sites.  In all sincerity, Obama bent over any further to the international community, his back would be parallel to the ground.  Why are we giving Russia access to sites that are pertinent to national security?  Russia's not our friend!  While we're at it, we should give them a tour of the Pentagon, top security clearance included, of course, just to make sure we appease our comrades.

I don't expect Russia to change its spots, really, I don't.  But at the same time, Obama needs to stop kowtowing to anti-Americanism and actually learn how to grow a pair.  Historically speaking, Russia hasn't played ball with the US since WWII.  Sure, they gave us Alaska (big mistake!), and we even fought together against the Boxer Rebellion, the Kaiser, and the Nazis.  Every time, though, Russia was always looking out for #1--it just happened that a relationship with America was mutually beneficial.  When Russia became a superpower along with America after World War Two, tensions rose, and ultimately Russia lost.  Russian ego hasn't been the same since, and I severely doubt that anyone with an iota of Russian pride, even Putin, is going to let that go anytime soon.  We would have better luck having China help us pressure Iran, or heck, we can ally with India to put pressure on Pakistan.  But this isn't Obamanomic foreign policy--kissing toches of every antagonistic state while angering allies seems to be the way to go, which is why we will only see more and more examples of weak foreign policy and apologetics of the worst kind.    

Obama & The Ill-Treatment of International Coersion

"Trade war with China."  That's the jist of some headlines I have read today.  This, of course, is in response to President Obama enacting a 35% anti-dumping tariff on China recently.  Although I'm not sure if China will invetiably implode because it will push its economy, people, and environment beyond its threshold, what I can predict with fair certainty is that China will, at least for a decade, be a major player in international politics.  Many predict that it will increase its international influence, and even maybe surpass the United States as a world power, G-d forbid.  Either way, China is not going away anytime soon.  Why anger a giant that is getting bigger every day?  This is not a concession towards appeasing to an authoritarian state.  It is, however, warning of a degree of prudence that we should show within our economic relations.  Globalization has caused economic interdependence amongst nations.  The interdependence is so much intertwined than it was during the Smoot-Hawley tariff in the 1930s.  When other countries have economic downfalls, yes, we feel it.  It happened in 1997 when the Four Asian Tigers took an economic tummult.  It was a short-term recession for America, but it was still felt.  It's amazing that the two worst economic disasters in the past century (the Great Depression and now) have two things in common: they originated from the U.S., and they were both caused by protectionism.  Does Obama need to embody the worst of ex-Presidents Hoover and FDR?  Does he think he's going to score political points by winning back some pro-protectionist factory workers because they're starting to develop a negative opinion about him and this health care bill?  Obama already got off to a bad start when Secretary of Treasury Timothy Geithner accused China of manipulating its currency.  Whether or not this will start an outright trade war with Beijing, it's not wise for America to enact protectionism that will surely agitate the country whose economy is so intertwined with ours that most "American" products say Made in China.

Speaking of agitating allies, Obama is doing this to Israel, as well.  Since when is it wise to chastize and humiliate your longest-lasting and one of your strongest allies?  Settlements aren't the issue here; read the blog I wrote: http://libertarianjew.blogspot.com/2009/09/we-should-just-talk-to-them.html.  Obama has P.O'ed 96% of Israelis, which is quite a feat, considering the fact that Israelis can't agree on anything else in politics with such unamity.  It should be no shock, then, that Israel trades military weaponry to China and India.  Israel might be the size of New Jersey, but considering its size, it is a disproportionate powerhouse. 

Also, Obama even managed to agitate Cuba, as well, by extending the trade embargo for another year.  Consiering we're in a recession, and that Fidel Castro is still alive and kicking, maybe it's not the worst idea for the US to open its economy up a bit to Cuban goods, such as cigars, sugar cane, and tourism.

You'd think Obama would stop at enraging allies and potential allies.  But no, no, no, he has to go a step further by appeasing enemies.  Since when has diplomacy done us any good against people who are out of their minds?  I'm not worried that North Korea is ever going to have enough capabilities to strike the U.S., although their abilitity to strike South Korea or Japan are a whole different story, especially since Japan doesn't have nukes.  But it makes you wonder what gives.  Iran, though, is a whole other story.   On the 8th, Tehran stated that it would partake in bilateral talks with America, but only if its about general international concerns.  That means they're not halting their quest for nuclear power.  It should not only be disturbing for Israel, or even Sunni Muslims that Ahmadinejad would love to destroy because their version of Islam doesn't line up with Iran's.  It should be disturbing because Iran, if not stopped, will disturb balance of power politics if it manages to get its hands on nuclear power. 

I can continue on a criticism of Iran, but the point I want to drive home is this: Obama has no sense of prioritization when it comes to diplomatic relations.  Burning bridges with friends while pursuing failed attempts at consolidating relationships with faux amis is not only harmful to our international relationship--it becomes borderline idiotic.  It makes some our peacenik European counterparts happy, and I'm sure the Arabs are loving the part where Obama chews out Israel while patting the "Palestinians" on the head.  But this makes us look weak and morally confused.  Even though I would like to be hopeful that Obama doesn't perform any more international idiocies, I'm sure that Obama chairing the UN Security Council meeting on the 24th will just be more of the same.

Operation Enduring Freedom Should No Longer Endure

"War, what is it good for?  Absolutely nothing!  Say it again...."  It's a lousy song, not to mention the fact that the conlcusion Edwin Starr comes to is incorrect, but it does make one wonder about the costs and benefits of what's going on in Afghanistan.  Like everything else in life, everything should be a cost-benefit analysis.  If the benefits outweights the cost, do it!  And vice versa if it's not the case.  After taking a look, it seems as if we should cease operations in Afghanistan, but for argument's sake, let's take a look at what is going on:

• Current state of Afghanistan: After nearly eight years of occupation, I am sorry to say that Afghanistan is the failed state that it was beforehand.  There's no centralized government, the political corruption there makes Mexico look wholesome, it still has a highly illiterate, uneducated, rural, and decentralized population, and the only real industry they have is opium.  This nation sacrificed nearly 800 American soldiers in a failed attempt to turn Afghanistan into a democracy, which has lead to the unintended result of preserving the status quo over there.  This brings me to another point.....
• Nation-building: Why is it America's job to partake in nation-building?  A better question is "Why Afghanistan?"  In terms of geo-political status, Central Asia gives the American military no strategic advantage.  Even if you don't agree with that conclusion, let's analyze the initial reason to go over there in the first place: capturing those responsible for 9-11 and bring them to justice.  We couldn't even capture Bin Laden and his cohorts because they went over the Pakistani border, and now are enjoying the protection of the Pakistani government.  The Pakistanis, our supposed allies, aren't going to help us.  As a matter of fact, the turmoil caused by the Taliban is better for the Pakistanis because it levels out the balance of power with India in that region of the world.  And then you want to throw nation-building on top of that failure?!  If you're just left with nation-building and "those poor Afghanis," what about Darfur?  You've been hearing about that for years.  Or what about Somalia or Sierra Leone?  If we over-extend ourselves to help transform every nation into a democracy, America's soldier would be overburdened, foreign aid would inveitably have to be rationed, and our grandchildren would have to pay for it.  Funny how that sounds like the same argument used against ObamaCare!
• America Looking Weak: This, I'm sure, is an argument that many of my conservative friends use to support it.  "We need to stay the course and support our troops because if we don't stay, we'll look like we chickened out and that we're too weak to handle a puny nation like that."  Wait a moment!  American military, weak?  Did you just use those two words in the same sentence?  Even with Obama in office, America has a military that parallels no other.  We are responsible for approximately half of the world's military spending, we could knock out an entire nation-state with the click of a button if we wanted to, and with our military prowess, we have a strong influence over the four corners of the globe.  America won't look weak--it'll actually look quite intelligent because the world will realize that America is actually thinking with its head rather than with right-winged emotionalism of fervent patriotism (yes, conservatives can be guilty of emotionalism, but it's just that liberals do it a lot more often).  
• War on Terror:  Many neo-conservative friends I have will tell me that by relinquishing Afghanistan, we lose face with the terrorists.  Let's face it, most Americans could not succinctly tell you what the War on Terror is about.  And even if they could, they're focused on domestic issues, such as unemployment, health care, and the recession.  If the American people and government want to fight "terrorists," three things have to occur: 

1. Stop calling the problem "terrorism."  Call it out for what it is--Islamist radicals perpetuating jihadism throughout the world.  By identifying the enemy, we already have part of the problem solved.
2. Prioritize!  Afghanistan is a lost cause, move on.  Plus, they're no longer (if they were in the first place) in this "War on Terror."  Two enemies (out of a myriad of enemies) that could use some emphasizing are Pakistan and Iran.  Pakistan is protecting Bin Laden and Al-Qaeda, not to mention supporting the Taliban.  Obviously, the big problem is that they have nuclear arms, and odds are that Obama isn't going to tackle that anytime soon.  But let's look at an enemy that doesn't quite have nuclear arms--Iran.  Ahmadinejad said he wants to wipe of Israel off the map, but surprisingly enough, Israel isn't the only one worried about Iran.  Many of the Sunni countries, including Iraq, Morroco, and much of the Arab world is worried about Shi'ite retaliation.  Or if we really want to prioritize our foreign policy, let's worry about the growth of China, because if they succeed, America in deep.
3. This war against Islamists will not merely be won with military might.  It ultimately needs to be fought and won internally.  This is one arena that a Jew such as myself cannot enter.  It has to be done by moderate and traditionalist, non-violent Muslims who realize that the very essence of Islam is at stake, and if they don't win, Islam will always be a reactionary, antagonistic force in American foreign policy.

These fundamentalists won't disappear with wishful thinking.  I'm sure that's a lesson Neville Chamberlin realized sometime after the "peace in his time."  But to be stubborn about something that cannot be done or won is nothing more than a malignant form of obstinate pride that would make America look foolish and idiotic in the history books.  That's precisely why if we're going to have any hope of eradicating this kind of evil in the world, we need to learn how to prioritize in such a way that the benefits greatly outweigh the cost.