Just in case war breaks out over the weekend… for the past 10 days or so, the court rulings on President Trump’s travel ban have dominated the news out of the United States. At the same time, a more serious threat has been gathering in intensity.
Iran and the Trump administration are on a collision course over Iran’s testing of ballistic missiles, which Iran maintains are a valid part of its domestic defence planning. The US, via Trump’s national security adviser Michael Flynn, has put Iran “on notice” and imposed fresh sanctions. Undaunted, Iran has continued to test more missiles. As the world nervously awaits the next American response, the international deal via which Iran agreed to halt its nuclear expansion (in return for the lifting of economic sanctions) is now threatening to unravel.
Already, the hardliners in the Iranian government – who was always sceptical that the US would keep its side of the bargain – have used the threats from the Trump White House to justify their opposition to the original deal. The immediate casualties of the Trump policy have been the liberals within the Iranian government of Prime Minister Hassan Rouhani, who have been further undermined by the fact that the economic benefits of lifting the sanctions have been very slow to materialise. With presidential elections due in Iran in May 2017, the current round of bickering with the US over the nuclear ban could hardly have come at a worse time for Rouhani and his liberal allies.
So….not only have the Trump/Flynn threats played right into the hands of the Teheran hardliners. At home in the US, a confrontation with Iran would a useful and diverting flexing of muscle by Trump and his own band of extremists. Time and again, Trump has mocked the imperfect deal that US President Barack Obama (and the other UN Security Council permanent members and the European Union) negotiated with Iran.
If the US hardliners treat the Iran deal as the West pandering weakly to the bad guys, the Iranian hardliners likewise see it as a humiliation for Iran, one imposed by US fanatics who could never be trusted to allow the economic rewards promised to Iran for its compliance. From the outset, the West’s insistence on Iran not developing nuclear weapons has been widely seen in the Middle East as a double standard, given Israel’s nuclear stockpile. In a further double standard, the global community has quietly allowed Pakistan and India to become nuclear powers, despite their long history of enmity.
By testing their short to medium range Mersad missiles, the Iranians are not in breach of either the Joint Comprehensive Plan of Action of July 2015 – the official name of the nuclear deal – or of the related UN Resolution 2331. As even Fox News has conceded:
U.N. Resolution 2231 calls upon Iran not to conduct ballistic missile tests — but does not forbid the nation from doing so. The resolution went into effect days after the landmark nuclear deal with signed with Western nations including the U.S.
Back in mid 2015 Iran had made some significant concessions:
Under the agreement, Iran agreed to eliminate its stockpile of medium-enriched uranium, cut its stockpile of low-enriched uranium by 98%, and reduce by about two-thirds the number of its gas centrifuges for 13 years. For the next 15 years, Iran will only enrich uranium up to 3.67%. Iran also agreed not to build any new heavy-water facilities for the same period of time. Uranium-enrichment activities will be limited to a single facility using first-generation centrifuges for 10 years. Other facilities will be converted to avoid proliferation risks. To monitor and verify Iran’s compliance with the agreement, the International Atomic Energy Agency (IAEA) will have regular access to all Iranian nuclear facilities. The agreement provides that in return for verifiably abiding by its commitments, Iran will receive relief from U.S., European Union, and United Nations Security Council nuclear-related economic sanctions.
While its subsequent compliance has been less than perfect, Iran has abided by the central tenets of the deal. As mentioned, the limited range missiles Iran tested last Wednesday week do not violate the terms of the deal. Besides, Iran can hardly use such missiles to deliver a nuclear warhead, given that it lacks the means to create such a warhead in the first place, and international monitoring would detect its intentions to do so, long before that risk became a reality in the decade or so that Iran would require to go down that road in any meaningful fashion.
Unfortunately, the aggressive signals from the Trump administration indicate that Washington believes Iran needs to be punished for its impertinence, and brought to heel. This attitude is what makes Trump such a risk in the Middle East, and in the South China Sea. Every test of strength, it seems, has to result in submission.
Bigger swamp, same alligators
Daily, the fallout from Trump’s presidency generates another round of hair-raising headlines. His ongoing refusal to separate his presidency from his family’s personal profiteering? Check. His appointment of an industry flunkey to gut Net neutrality and an affordable Internet? Check. An ignoramus and charter school zealot put in charge of public schools? Check. A racist confirmed as Attorney-General? Check. Trump proceeding to gut the FDA, the world’s most reliable agency on the safety of medicines, and allow Big Pharma to ramp up its prices free of many of the existing safety constraints for consumers? Check.
And the key driver in this attack on the FDA and related generosity to Big Pharma appears to be New Zealand’s old pal, Peter Thiel.
Oh, and after the slack to non-existent US banking regulations that culminated in the Global Financial Crisis, Trump is also now gutting the regulatory apparatus that Obama enacted to try and prevent such a catastrophe from happening again. Moreover, he has put the same people in charge of the self regulatory mechanisms, as brought us the last global disaster. The White House has launched a review of both the Dodd-Frank Wall St Reform and Consumer Protection Act and the fiduciary rule that requires investment advisors to act in their clients’ interests. In future, such advisers will be allowed to overcharge, mislead and otherwise rort their clients with virtual impunity.
To finesse this process, Trump met last week with leading CEOs, including JPMorgan’s Jamie Dimon, Blackstone’s Steve Schwarzman, and BlackRock’s Larry Fink. The planned review will co-ordinate their inputs under the guidance of former Goldman Sachs deputy CEO Gary Cohn, now Trump’s chief economic advisor. As this article argues:
Dimon, Schwarzman, Fink and Cohn collectively represent a rogues gallery of the creeps most responsible for the 2008 crash. It would be hard to put together a group of people less sympathetic to the non-wealthy. Trump’s approach to Wall Street is in sharp contrast to his tough-talking stances on terrorism. He talks a big game when slamming the door on penniless refugees, but curls up like a beach weakling around guys who have more money than he does.
Indeed, this laissez faire approach to banking regulation makes for a striking contrast with his tough attitude – security first! protect America’s borders! As Rolling Stone says, the GFC cost America alone some 8.7 million jobs, and had a huge impact on the nation’s wealth and wellbeing. Now, the perps are being invited to regulate themselves, once again:
This makes Trump’s embrace of the Mortgage Crash Dream Team as his advisory panel for how to make Wall Street run more smoothly all the more preposterous.The crisis was caused by the financial equivalent of open borders. Virtually no one was monitoring risk levels or credit worthiness at the world’s biggest companies.
So, we’re all being steered back to the pre-2008 future by those who run the world’s most powerful economy:
Trump – a man who doesn’t want you to see what’s going on underneath his hair, let alone in his books – naturally sympathizes with Wall Street’s efforts to keep the markets opaque. The obvious conclusion is that these orders will eventually lead us back to ballooning risk, overheated markets (the NYSE is already soaring) and speculative bubbles. If we’re very lucky, it won’t crash soon. But can we at least put an end to the “drain the swamp” nonsense?
Songs sung blue
A 1976 album by the Japanese singer Hako Yamasaki has been a useful soundtrack for the recent news headlines, for me anyway. Here’s one of the album’s loveliest cuts, called “Wandering”
If you’re more in need of an EDM escape, the duo called Teengirl Fantasy have always been visually and sonically diverting. The video for their new single “Star-Arise” makes simple but brilliant use of a car wash.
And from 2011, here’s TF’s cheesily psychedelic epic “Cheaters”