Category Archives: crude oil

21Donald K. Trump’s new nationalism


 

 

There may be some who will denigrate President Trumps’ inaugural speech to the United Nations as lacking in subtlety. They may have an argument although an examination  indicates that the American chief executive ignored little essential detail in his arguments.

 

What Trump delivered was a a new call to the civilized world for the reevaluation of the nation-state, reminding them that though he spoke favorably about the prospects of the international body he was addressing, it had not fulfilled its promise. That promise, he also reminded his listeners, as President Harry S Truman had said, was the joining together of the world’s political polities through their every accent on the fulfillment of their individual sovereignty.

 

Trump laid out for his readers the three major crisis areas in international affairs which faced the institution’s 193 members. There was no diplomatic falderal in his presentation of the problem of a criminal regime in North Korea has brought the world to near disaster with its development of nuclear and missile weapons. He spelled out individual cases of its unsurpassed cruelty to its own citizens as well as interlopers. Nor did he let the Russians and the Chinese off the hook on their continued support of the regime where UN and USA sanctions were largely irrelevant. He echoes the earlier warning by the Permanent U.S. Ambassador Nikki Haley to the UN that the U.S.’ military option to deal with the problem may have been reached.

 

Trump made no excuse for inadequacy of the Obama Administration’s deal to postpone development of nuclear weaponry by the Iran regime which he reminded listeners had a reputation as black as any historical tyranny. He suggested that his Administration would move to denounce that agreement and curb the export of terrorism through its own and its satellites in the Mideast.

 

Again in language no listener could fail to understand, he pointed out the Venezuelan regime had bankrupted a once prosperous country – one where the dictatorship of Nicolas Maduro has indeed successfully, Trump said, instituted socialism. What Venezuelan democrats know is that U.S. oil refineries have been fitted for import its particularly heavy crude, in 2016 more than 270 million barrels worth about $10 billion.  The decision of whether to close off those imports and further cripple the Maduro regime has to be on the docket at 1600 Pennsylvania Avenue.

 

Trump went out of his way make a demonstration of his own personal support for Israel, and its Prime Minister Benjamin Netanyahu, so often a target of anti-Americanism in the UN. The new emphasis on the American alliance with Israel in the Mideast was not only in sharp contrast to the Obama Administration. But it was also by implication a warning there would be no more American support for a Palestinian movement which refused to accept the existence of a Jewish state and continued to sponsor terrorism and assassination.

 

Trump made short shrift of the Hurricane destruction in the United States which he argued would be overcome by this country’s energy and proficiencies.

 

But inmplicit throughout Trumps message was his theme of “America first”, a new U.S. nationalism based on an emphasis on Washington  – as he urged other nations – to assert their national sovereignty. While promising the U.S. would continue its support of the UN – and lending Sec. Gen. António Guterres help in his effort to reform its bloated and inefficient bureaucracy – he warned that sovereign nations could not pass their obligations to international organizations.

 

Donald Trump’s UN speech will go down in U.S. history as a call for a new American nationalism, one based on its sovereignty as he urged other countries to assert theirs.

sws-09-19-17

 

 

 

 

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16China’s strategy clear


 

In a world of regional conflicts, new fighting in the high Himalayas in Bhutan sheds further significance on Beijing’s world strategy.

Bhutan, an incredibly beautiful retreat in the heart of the highest mountains in the world with only a million inhabitants, was a “protectorate” of British India. It, and a half dozen other frontier states – including Nepal with 30 million – drifted either into incorporation, semi-independence or independence [Nepal’s 30 million] in the new Subcontinent divided basically between predominantly Moslem Pakistan [later Pakistan and Bangladesh] and India [with its Islamic minority almost as large as Pakistan’s population].

In late June Beijing accused India of sending border guards from Sikkim, one of the Himalayan kingdoms that eventually became part of India, on to the Doklam plateau in Bhutan. [Bhutan maintains no formal relations with China.] Historically Bhutan  was linked geographically to Tibet rather than India below the Himalayas.]  China accused the Indians of trying to obstruct road construction. New Delhi did admit it had approached the Chinese crew warning them against disturbing the current status.

Indian and Chinese forces have clashed in various parts of the 3,000-mile frontier – much of it either disputed or indefinitely marked – since 1962. Then as a result of Prime Minister Jawaharlal Nehru’s pushing the Indian demarcation of the British Indian border – apparently with the assurance from his chief foreign policy advisers, V.K. Krishna Menon, a Communist sympathizer, that Moscow would intervene with their Chinese Communist ally to prevent violence. Instead, the Indian military – heirs to the great British Indian Imperial tradition – suffered a devastating blow which brought the Chinese into the lowlands on the south side of the Himalayas but then with a rapid unilateral withdrawal.

Since then, there have been clashes between them– especially after their occupation of Tibet and the flight of the Dalai Lama, its religious-civil leader, to India in 1950, where he leads a government in exile among Tibetan refugees. Despite Pakistan’s one-time alliance and heavy dependence on U.S. arms, Islamabad has drifted into an alliance with Beijing

As American influence and aid has diminished, Beijing’s role in Pakistan – which already had nuclear weapons – has grown. China has been given permission to establish a naval base at Gwadar, on the Iranian border at the entrance to the Persian Gulf. An official announcement came just a few days after U.S. Navy SEALs conducted a secret raid to kill Osama Ben Ladin in Pakistani when relations between Washington and Islamabad took a nosedive.

Beijing plans for Pakistan to play a major role in China’s “Belt and Road”, a $1.4-trillion global trade plan, a rebuilding of the historic Silk Road from China’s west to the Persian Gulf and Europe. If the Chinese are successful, it could shift the global economy and challenge the U.S.-led order. Islamabad is banking on receiving more than $50 billion in Chinese loans and grants including a pipeline to bring Mideast oil and gas to China’s western province of Sinkiang.

Pakistan leadership – always fraught with division and corruption — has just lost its prime minister after a court’s ruling on his massive corruption. Some Islamabad politicians see China as its new “equalizer” with the U.S. and Indian relationship – after the decades of New Delhi’s alliance with Moscow — increasingly stronger. Prime Minister nahrenda Modi, during a two-day visit to Washington in June, called on Islamabad to end its support of terrorism, supporters of the Kashmir state disputed between the two neighbors.

American aid to Pakistan, once the third-largest recipient of U.S. foreign assistance, is expected to total less than $1 billion in 2016, down from a recent peak of more than $3.5 billion in 2011.

The Trump Administration is again face to face with a decision: should it continue military and economic aid to nuclear armed Pakistan in order to win whatever support there is for the West among its elite or throw in the towel to what has become a Chinese ally in Beijing’s strategy to reach around India to extend its political influence based on its rank as the world’s No. 2 economy?”

 

 

Sws-08-04

Hillary’s E-mails, Obama and Common Sense


Not a lot that is being said by The Talking Heads makes sense in the case of Hillary Clinton’s E-mails.
First of all, everything would tell us that any domestic or foreign political figure would be interested in the very fact that a specific subject had reached the Himalayan heights of the Secretary of State’s eyes. She is, after all, in addition to her vast power and influence as the decision-maker after The One in foreign relations matters, one of the most powerful figures in government.. And, of course, the secretary of state is the fifth in line to the presidency in the event a catastrophe eliminates the vice president, the speaker of the house, the majority leader of the house, and the pro temp leader.
It may well be, as many government officials have long argued, that too many documents are “classified”, said to be of lesser importance than their originator believed when he accorded them a secret status. But, as is obvious, that decision must be left with the originator of the document, not to be trifled with by the recipient. And as some of the released e-mails indicate, not only did Clinton disregard the classification, but she instructed subordinates in the State Department to remove the classification, acknowledging that she knew their significance even if she did not agree with its evaluation.
It is probably impossible for third parties, unless they are directly involved and know the subject matter, to evaluate the damage done by Clinton’s purposefully declassification. It is not even self-evident why she did it. But one has to assume that there are such things as state secrets, many of them in fact, and the necessity to prevent their disclosure to enemies foreign and domestic is an obligation all government employees or political appointments take on in their oath of office as well as the commonsensical performance of their duty. This, Clinton did not do.
Again, a good deal of speculation has gone on about whether the continuing inquiry into the matter of her e-mails will result in an indictment by the Attorney General of this Administration. It is, of course, possible that Loretta E. Lynch., who after all was confirmed with a bi-partisan vote based on her record for judicial perspicuity and balance, will proceed to authorize a prosecution after the Federal Bureau of Investigation [FBI] inquiry is completed with evidence for an indictment of Clinton. Its results according to all the speculation in Washington would seem to lie in that direction.
But it appears for her to do so would require great political bravery, and probably self-sacrifice, judging from the President’s TV interview April 10. In that interview, he made it clear that he already has taken a decision that nothing in the investigation would incriminate Clinton. It bears noting, of course, that for a former supposed university law professor – of course, he was instead a part-time instructor and then a rather poor one by all accounts – the President has violated one of the principal axioms of executive conduct. That is that no executive should offer a public appraisal of a future verdict while any judicial or police inquiry is under way. He has done it, of course, repeatedly. Sub judice in the law, means according to the dictionary, “under judicial consideration and therefore prohibited from public discussion elsewhere”. That would include, and above all, by the president of the United States as the chief executive officer and enforcer of our laws.
Last, and perhaps most important, for some time the Mainstream Media have been talking about the Attorney-General’s office and the Justice Department as another branch of what has until now been considered a three part government, executive, legislative and judicial. That still remains the case. The Justice Department and its head under Pres. Obama remains, as it has always been, a part of the president’s cabinet – not mentioned in the Constitution. And, therefore, it is under his jurisdiction and control. Given his now infamous public statement, it seems unlikely that any justified prosecution of Clinton will be pursued for whatever miscarriage of justice. At least not until 2017 at the earliest.
sws-104-12-16

Saudi Arabia: It’s time!


With gas [and oil] gushing out of our shale deposits and the Persian Gulf states [now including Iran courtesy Pres. Obama’s appeasement policies and lifting of sanctions], it is time to readjust our policies toward the oil exporters, not least Saudi Arabia.
U.S. policy, rightly or wrongly, has put up with too much guff from the Saudis for decades because it was the arbiter of world oil prices and the cost of our own growing imports.
But all that is a part of the past for the foreseeable future.
In fact, the Saudis – and now the Persians, are pumping like mad, while counter intuitively, attempting to set up agreements to limit the fall in prices. In a recession-prone world economy increases in consumption are severely limited. We doubt that their attempts, now even supposedly including the high-cost Russian producers, will bear any more fruit than such attempts to set up cartels in the past. Even the vaunted Organization of Petroleum Exporters [OPEC] was only partially able to control prices for a short time in a formerly much narrower market.
As American exports grow – they have already started – so will the free for all.
What brings all this to mind is the idiotic report that the Saudis have just zipped off one of their star soccer players’ Mohawk to the consternation of his fellow teammates on the sidelines of an opening sporting event because it was considered “un-Islamic”.
Unfortunately, most of the individual Saudi billionaires’ nefarious actions are not as ludicrous, and indeed are a major menace to world peace and stability. It is no secret that Islamic terrorists often get their financing from Saudis, perhaps even indirectly from the rather fragile and multifarious Saudi government of the ruling family.
The Saudis are already shaking in their boots from the growing thrust of the Tehran mullahs to carve for themselves a Shia regional hegemony. Tehran’s ability to reach across the Shia-Sunni divide to become the sponsor and supplier of Hamas in Gaza, originally a creature of the arch-Sunni Moslem Brotherhood, makes the case. Our former Sunni Persian Gulf allies’ growing suspicions of Obama’s strategic intentions in the area have even driven them into a tacit alliance – as is the case with Egypt – with their old sworn, bitter, blood enemy, the Israelis.
To expect the Obama Administration, with its total absence of foreign policy experience – and now successes in seven years — to subtlety move in on the Saudis to end their Islamic excesses is probably too much to ask. But to do so effectively would go a long way toward defusing the radical Moslem terrorist sects now, unfortunately, coagulating in Daesh [ISIS or ISIL].
With its continuing hold on Syrian and Iraq territory, despite what Obama has called a gradual campaign to unseat them, Daesh is the prime menace to international peace and security. The incremental additions to American force being used against them – the Administration has just quietly moved B52s into closer range in the region – is not the way to go.
Vietnam, Iraq and Afghanistan have all taught us the simple lesson that if you go to war, it must be with the anticipation as so many generals have said, that all war plans are kaput once the first shot is fired. It is, ultimately, as another American general so succinctly put it, a case of who gets there the “fustest with the mostest”. Obama’s “subtleties”, based on his lack of real knowledge of history and experience surrounded by advisers who have even weaker credentials, have retaught us this lesson.
sws-04-12-16

Viva Mexico Libre!


The news that Mexico is moving one more step to break the monopoly of Petróleos Mexicanos [Pemex], the government-owned producer and until now monopoly retailer, is big and good news.
With the world’s tenth largest economy, Mexican growth at between four and five percent over the past few years is considered well below its potential. The World Bank reckons less than 2% of Mexico’s population lives below the international poverty line but the Mexican government estimates a third of its population in moderate poverty and some ten percent of that in extreme poverty.
Competing with Brazil as Latin America’s largest economy, the country has vast disparities of income, including between those more prosperous states bordering the U.S. Mexico City and the south. Growing remittances, largely from the U.S.’ southwest, are an important part of the country’s income, more than $22 billion in 2012. But all this produces tax revenues of less than 20 percent of GDP [2013], the lowest among the 34 OECD countries.
Although Mexico is the sixth largest oil producer in the world, its exports have fallen from just under 62% of total exports in 1980 to just over 7% in 2000. Most observers agree this is a result of the inefficient monopoly over its oil resources and distribution by Pemex which has neither the capital – even though it provides more than 60% of government revenues – nor the technology to expand to meet domestic and foreign demand. But long the holy of holies for Mexico’s left, opening it up to competition and collaboration with foreign oil companies has been fought at every step since the 2014 decision was made to privatize at least some aspects of the monopoly.
Now the government has announced it will allow private companies to import gasoline for the first time since the late 1930s. That will permit the country’s independently owned 11,400 filling stations now all bound to Pemex franchises to link with other companies. The government had already permitted Pemex to form joint ventures with foreign companies to explore for more oil and increase production. But that may be years away given the bureaucracy and the long neglected technological aspects of the company.
Opening service stations to other franchises is going to be the most visible aspect of the new more liberal strategy and, hopefully, encourage faster development of the whole process. London-based Gulf Oil International already has plans to slap its Gulf de Mexico brand on a few stations in the largest cities, to expand to a wide scale national network. Motorists will be enthusiastic because of the poor service of most Pemex stations including shortchanging customers according to widespread convictions by Mexico’s consumer-protection agency.
Still, it is going to be a slow process. Mexico already imports more than half of its daily consumption of gasoline from the U.S. because the country has only six refineries. Pemex controls virtually all of the oil and gas infrastructure — pipelines and storage facilities — and the government is encouraging investors to expand the infrastructure to supply the newly freed stations. .
With trade running at well over $530 billion in 2015, the U.S.’ number three trading partner, American have a special interest in seeing more rapid liberalization and growth of the Mexican economy. Mexico, whose free trade pact with the U.S. produced a trade surplus of nearly $60 billion last year can afford to see an increase of U.S. imports – along with an accompanying investment and technology transfer for what has become its dormant oil industry. Hopefully, the Obama Administration will be pushing these developments ahead of its curious interest in the Cuban Communist dictatorship.
sws-04-01-16

Moslems, Islamists, Terrorists and Islam


 

The time has come, and indeed, has long passed for a frank and open discussion of the growing confrontation between the Western democracies and the Moslem world.

Were there no other issue than the fact that there are some 1.3 billion world inhabitants who consider themselves Moslem, whatever their differences, the issue is moot. Now the combination of the continuing chaos in the Arab and Moslem world and the massive Moslem migration into the formerly non-Islamic societies requires it.

It perhaps goes without saying that the issues are complex and fraught.

Islam, despite its hundreds of millions of peaceful adherents, has never been a “religion of peace” as so many contemporary politicians espouse, including Pres. George W. Bush. From its very origins, Islam – a political as well as a religious movement – has confronted the Judeo-Christian West, more often than not relying on its sword to settle ensuing arguments It is equally false, as Pres. Barack Obama has repeatedly said, that Islam has played a great role in the development of the American ethic; indeed, the opposite is true when the first U.S. armed conflict abroad was a war against pirates espousing the Islamic cause on “The Barbary Coast” of North Africa.

In the current explosion of old arguments, Moslems are far more likely – given their inferior military and other effects of stable government – to seek other means than military to win arguments and concessions. In fact, the most powerful transnational organization in the Islamic world today is the Moslem Brotherhood whose origins lie in a strategy of using such Western institutions as representative government to gain influence, power. However, as the brief regime of Egypt’s Pres. Mohammed Morsi proved, the Brotherhood concept is “one man, one vote, one time”.

The cliché that Islam is an “Abrahamic” religion thereby sharing the concepts of Christianity and Judaism today toward the two other beliefs is false. Yes, Islam does borrow from the Jewish and Christian legends but it has never met the test and modifications of the Jews through 19th Century Haskalah [Enlightenment] and the Christian Reformation and the Counter-Reformations. Ironically, the highly influential 12th century Spanish Moslem philosopher Averroes [Ibn Rushd] contributed mightily to the origins of modern syncretic Christianity, but Islam lost the 12th century debate to the fundamentalists from which it has never recovered.

Toleration of all religions is a foundation of modern democratic society. In countries today where Moslems are in the majority, such tolerance is next to zero. Even Pakistan, with its enormous inheritance of British Indian law and pluralism, restricts Christian practice, and there is almost monthly violence – often deadly — against “nonbelievers”. The concept that, sharii, the great and ambiguous body of Islamic law, could have precedence over the American Constitution is unacceptable.

How, then, is the West to respond to these new demands of Moslems as individuals and sometimes as organized entities to participate in the power structures of the nation states created even in Afro-Asia by the European world?

The only response is that Moslems and their faith must meet the requirements of modern tolerant and pluralistic democracy in the same way as other religions and philosophies. The current tendency to accommodate Moslems and Islam through special courtesies is mistaken and can only lead to disaster. This is true not only in legal and political terms but also in the world of culture. When Simon & Schuster create a new imprint called Salaam Reads targeted to young Moslem adults, it is a misplaced effort. The publisher says it is to help integrate these new arrivals into our culture. But Simon & Schuster do not have Catholic, Jewish or Buddhist subsidiaries. And they are abandoning the essence of the American concept that the U.S. was created as a place that welcomes immigrants from all over the world precisely so they can have the freedom to believe what they wish live unbound by birth or class or government restriction – or incentive.

Nor can the great bulk of Moslems be excused from facing the cold fact that Islam, however falsely, is the foundation on which the contemporary world’s greatest threat to peace and security arises. They, above others, must be able to discuss openly and honestly why this is the case, and what concepts remain still unpurged from Islamic belief that give rise to these attacks on the civilized world.

Open covenants openly arrived at was not just a cliché which Woodrow Wilson hoped would be the foundation of the peace after World War I, but is as appropriately applied today to the problem of Islam and Islamic terrorism. Ignoring or obfuscating the problem of Islam in the 21st Century is as much a threat to world peace and stability as the acts of terror themselves.

sws-01-27-16

 

 

 

 

Venezuela, the world – and the U.S.


 

Another chapter in the long and tortured history of Venezuela is being written.

But this time, given the new digital world of communication and interdependence, what happens there is not just a spectacle for occasional American Marine intervention to keep the peace. Not only are U.S. firms being clobbered in a hapless manipulation of currency by government now rapidly going toward chaos. [Goodyear Tire & Rubber reported a $646 million loss against fourth-quarter earnings, mostly the result of the collapse of the Venezuelan Bolivar.]

Most observers expect the Venezuelans will meet the $1.5 billion in debt payment due later this month But after that, the picture gets murky. With oil prices a third of what they were just a few months ago, and apparently to rock along the bottom for some time, the will await a worldwide economic upturn and increasing world consumption. All out Saudi pumping of its super low-cost Gulf reserves has made a dent in the new American shale technologies playing a big role in the lower world wide energy prices. But new technology there has mitigated the blow. And now Iranian [and additional Iraqi oil] is about to enter the market as Pres. Obama’s deal on nuclear weapons with Tehran lifts sanctions, especially for the Europeans and the Chinese.

A Venezuelan default on its $120 billion in government and state oil company loans from overseas investors during the past decade.would go a long way toward creating a new world financial crisis.

Meanwhile, Veneuela’s 32 millions are taking it on the chin. The latest is government trimming electricity to a 100 malls which have been sanctuaries for escaping the growing discomfort and violence in the tropical country. In this latest crisis to hit the country, El Nino has caused a drought and shortages from hydro plants. This, of course, is taking place in a county with some of the largest reserves of fossil fuels in the world, The fact is that Venezeuela has suffered brownouts for decades. One of the reasons is that electricity is virtually free in the country leading to incredible waste. Meanwhile, unlike other oil producers, in the good times Venezuela did not set up a rainy day fund and has now had to dig into its vurrency reserves.

The electricity crisis is only the latest in a bundle of incompetencies and ideological perversions inherited by the Maduro government from its predecessor, the charismatic Hugo Chavez. Chavez ran a regime o bread and circuses, destroying among other things the efficiency of its oil industry which he nationalized.  Now the country’s economy after decades of mismanagement has been one of the worst hit worldwide by oil price fall, accounting 95 per cent of the country’s trade revenue. At the moment, Caracas  has four exchange rates: three official ones and the black market which has been trading at some 1016 a dollar against official rates a quarter of less of that..

Before Chavez took the Caribbean country of 32  millions down the road toward state capitalism, it for many years after the second world war one of the richest in the region, with a vibrant economy buoyed by oil exports, much of this heavy oil to Texas refineries.

But were it to default in the months ahead, its debt failure would ripple through emerging-market economies, many of which borrowed heavily when commodity prices were soaring. China had provided Venezuela with a steady source of financing in exchange for oil but as its economy slows and it tries to staunch a hemorrhage of capital outflow, Beijing is reluctant to lend more.

Venezuela’s story, by and large, is being repeated in the oil-dependent countries scrambling for funding. Nigeria and Angola are already seeking help from international institutions to plug their deficits.

For the moment, the U.S. Treasury appears to be listening and cringing. But here too the world is waiting for an Obama initiative.

sws-2-11-16

 

 

The Shale Revolution [Cont.]


The  Shale Revolution continues to wreak havoc as revolutions are wont to do.

The abundance of U.S. natural gas, in many ways a more satisfactory fossil fuel than either coal or oil because of its lesser emissions, has dynamited the whole worldwide energy market. Whether or not the Obama Administration wants it, the export of oil and gas is going to be a function of the new energy picture with the growing economic pressure to sell off our low priced gas to a world market which hasn’t yet taken advantage of the new mining technologies.

Along with the flagging economies of Europe, and now China, and subsequent lower demand, energy prices are under attack everywhere. The stock markets, long dependent on high energy costs and their very profitable producers, are lurching under the torpedoing of the old price structures. Fuel economies, sometimes at the insistence of government fiat as in the American automobile industry, are also finally having their effect and slowing growing energy demand.

In the long run, there is every reason to hope and believe that lower energy prices will be an enormous fillip for the U.S. and the world economies. But, as Maynard Milord Keyes once quipped, in the long run, we will all be dead. Projections of energy demand and supply have in the past been notoriously wrong. And they may be again. But for the moment, what looks likely for several years if a continuing low price for energy. The U.S. which has always prospered on low energy costs, as compared with Europe, is likely to benefit from this new situation.

Geopolitical developments overseas, for the moment at least, seem to be bolstering this new abundance of energy. Iraq’s fabulous oil and gas reserves are coming back onstream after so many years of war and destruction. Pres. Obama’s “deal” with Iran is likely to see sanctions against its sales of oil lifted with new entries to the market.

Most important has been the effort of our friends the Saudis to regain their role as the marginal producer and dictator of the international market pricing. They have opened all the valves and are producing and marketing at record levels. The intent, without doubt, was to hammer the American shale gas and oil producers with their higher costs than those on the Persian Gulf. But while there have been some difficulties and cutbacks for the U.S. producers, the shale oil entrepreneurs have been adept at coming up with new technological fixes which have in the main maintained their role in this new struggle for prices and markets.

Meanwhile, much propaganda and pure and simple idiocy dominates much of the talk about energy and its application. Electric cars, for example, may eventually become a reality because of new battery developments. But recharging the electric car off their baseboard plug – if that becomes the reality – is going to demand that more electricity be produced somewhere and by someone with some fuel. Coal which has until recently dominated the electrical generating plants, about 60% of the total energy consumption, is fading as more and more quick fix gas generators go into service and environmental constraints demand cutbacks in coal emissions. The pain in the old and often poverty-stricken coal mining areas is something the rest of the country is going to have to be attended [and be paid for].

But, returning to our original point, progress is rarely achieved without considerable pain – for some part or other of our society. And it is clear that is going to be case as the Shale Revolution with almost daily announcements of increased reserves is no exception. Government subsidies for wind and solar will continue to feed the trendy enviromentalists’ pressure on more innocent lawmakers. That, too, is a burden which the taxpayer appears inevitably going to bear.

sws-01-26-26

 

 

The American Iran disaster


It is hard to exaggerate the strategic disaster that has befallen American relations with the Islamic Republic of Iran.

At a time of increasing acts of terror – unfortunately now “lone wolf” murders that have no central command – the Obama Administration in a series of encounters has emboldened one wing of Islamic terrorism. It may be ironic but hardly laudatory that the U.S. and its allies are now more dependent for their ultimate defense on the conflict between the two wings of Islam, Sunni and Shia, and their terrorist offspring.

The Obama Administration early on lost its strategic bearings in dealing with a fanatical regime in Tehran aiming to become the hegemonic power in the Mideast. That defeat is at every level – strategic and military, economically, and in propaganda. It is true, of course, that much of the difficulties of dealing with the mullahs predates Obama’s seven years in the White House. One might even, at the risk of offending those who quite rightly worship at the shrine of Ronald Reagan, recall his failure to cope with Tehran. It was, after all, Reagan who did not retaliate after calling the suicide bombings which killed 299 American and French Marines in October 1983 in Beirut a “despicable act”. There was circumstantial evidence of Iranian complicity. Contradictorily, Reagan withdrew from the Lebanese peacekeeping force.

When a grass roots movement against the mullahs took to the streets following the stolen president elections of 2009 calling for American assistance, the Obama Administration turned its back on them. For all the talk about moderates and radicals in the Tehran regime, there is little hope that its leaders would modify their regional aggression and worldwide terrorist activity so long as it is successful in increasing Iranian influence. That is very much the case now with full-fledged allies on the Mediterranean: Hezbollah in Lebanon, the reeling but still functioning al Assad regime in Syria, and even the Sunni Hamas terrorists in Gaza.

Instead, Obama has sought to make some sort of pact with the mullahs, apparently believing American concessions would satisfy their hunger for international aggrandizement. It is only likely to feed it. The lengthy negotiations to limit Iran’s pursuit of weapons of mass destruction have turned into a farce. When Tehran objected to inspection of their military installations as part of the enforcement arrangements, the issue was simply dropped by Washington. At the very moment the success of the agreement was being heralded in Washington, Iran launched tests of new intercontinental ballistics missiles in defiance of UN Resolutions which could one day strike the U.S..

It may be a long time before we know why a group of American sailors were captured and then publicly humiliated by Tehran to prove U.S. impotence in the region. We may not know soon whether it was indeed a navigation accident and engine problems which called for a quick and nonconfrontational return, or perhaps even more threatening, Iranian technical capacity to interfere with the ship’s GPS. But the spectacle will highlight the reputation of the U.S. in the region for a very long time, and undermine any American strategy. Again, as in the swaps with the Taliban, Washington has given back a disproportionate number of proven terrorists – including some involved in bombings against Jewish installations in Argentina, and at the very moment a new administration in Buenos Aires has again promised to take up investigations of the incidents. It seems not only possible but likely, that like the released Guantánamo prisoners, most soon will be back at their trade.

The removal of sanctions and return of blocked funds probably exceeding $150 billion will be significant in helping the mullahs through their current economic crisis brought on by heavy military expenditures – including maintaining Iran Revolutionary Guard forces in Syria. Renewed oil and gas sales in the price-gutted world market will help only marginally. But there is little hope for regime change without substantial assistance from abroad. That, obviously, will not come from this American administration, leading from behind to enhance rather than diminish the major threat to peace and stability posed by the Tehran fanatics.

sws-01-18-16

 

Out of this world!


Out of this world!

The mystery of what goes through Pres. Barak Obama’s mind continues to grow apace.

The theme of his latest press conference, before he took off for a Hawaii vacation stopping enroute to console victims of San Bernardino whom he has largely ignored, was delusional. That’s a fierce adjective, and a frightening one, to throw at the president of the United States.

But Obama boasted that “[S]ince taking this office, I’ve never been more optimistic about a year ahead than I am right now.”

It is customary for politicians, even those at the highest echelons, to trim the facts. But Obama’s exposition of the current national and international is phenomenal.

He claims a record of creating jobs through his seven years in office. To what extent Obama Administration’s policies has contributed to the current slow recoveryis at least debatable. But his presentation of unemployment which has undergone Labor Department “creative accounting”is phenomenal. All of us know through personal encounters the vast numbers of people who have withdrawn from the labor market because there are no jobs. The rate of growth of rate of jobs, of course, is a misnomer because of the depth of the financial crisis of 2007-08 and they had no place to go but up.

His claims for Obamacare are equally bogus. One can point to figures for those now required to adhere to health insurance or face penalties. But what about the tens of thousands of employers who limiting employment in order not to be forced into the law. And, of course, there are the hundreds of thousands who have seen their former insurance plans canceled. It is also a moot point whether the growth rate in medical costs – as much a function of growing and expensive technology as the inflation – have decreased for reasons of public policy. Far more important, alas! has been the individual health care recipient’s need to cut back on expenses, even health care.

On the question of climate change, Obama continues to muddle the waters refusing to acknowledge that there are two very complicated arguments. One is of course the possibility as has happened through the ages, that climate is changing. The other, much more debatable, is the extent to which human activity is significantly affecting that change. As an example of the shallowness of many of his partisans’ arguments is the enormous amount vapors thrown into the atmosphere 1500 active volcanoes. The Paris meeting he boasts of did have some 200 nations signing on to a recognition of climate change, but the fundamental thrust of American policy, that is, to get everyone to cut down on emissions, went a–glimmering.

The President continues to insist that he has an agreement with Iran to halt their production of weapons of mass destruction, especially nuclear bombs. Repeatedly various elements of the Iranian regime have stated publicly there is no agreement. And at the very moment he was making the claim again, the UN Atomic Energy Commission which had tried unsuccessfully to ride herd on the Tehran mullahs, admitted it had failed to detect earlier movement toward weaponry. Obama spoke, too, just after the mullahs have tested their intercontinental ballistic missiles, capable if perfected of carrying weapons to the US, one of the prohibitions in the supposed “deal” with the mullahs.

Obama crowed over a compromise he made with the Congress to permit oil exports after four decades of laws forbidding them. To get this past his veto pen, in order to create thousands of new jobs and return Washington’s political as well as economic clout in world energy markets, Congressional Republics had to agree to new billions poured into subsidies for so-called green energies. Yes, that too, creates jobs but at what cost while the national debt continues to skyrocket!

No, Mr. President, your transformation may be a success in your own mind but at the cost of squeezing the taxpayer yet again and imperiling the whole economy.

Sws-12-19-15

 

The energy revolution [cont.]


“You and me we sweat and slave, but that old man energy just keeps rolling along”. Good news to sing about!

In one of that witches ’ brew that come out of the Congress and are called “compromise”, a bill seems to be working its way through the toils of the legislative process to end the four-decades-old ban on oil exports. In exchange, the Republicans and oil companies have agreed to put more money into the so-called green energy subsidies.

It’s not the best of solutions. But the possibility of shoving the growing gas and oil surpluses in the U.S. – a product of the Shale Revolution – on the world market argues well for the American economy. We hope it makes it.

The ban on exports – proving again when a law gets into place it is hard to dislodge even in the face of revolutionary changing conditions – dates back to the 70s. That’s when our growing imports were hit by the price-fixing Persian Gulf and others’ monopoly, the Organization of Petroleum Exporting Countries [OPEC]. But OPEC, despite recent huffing and puffing, has been dying on the vine, or rather swamped by the world energy glut.

The leading OPEC producers are now pumping violently, even though it is tearing the world energy price to shreds, in order to garner more market share. They obviously see the possibility of the Americans reentering the market, particularly in Western Europe. The Saudis, particularly, see their once catbird seat as the arbiter of world oil pricing dissolving in the American technology which has opened up enormous new possibilities in gas and oil in shale deposits worldwide once beyond the bit of the drills. [Don’t look now but that may also affect how the rest of the world views the Saudis’ sponsorship of reactionary Islamic religio-political movements.]

The U.S. production boom in Texas and the Dakotas and Montana, is cranking out more than one million barrels of crude a day. Current law does permit the export of half a million barrels a day from Alaska to Asian customers and exchanges with Canada. And as the largest consumer in the world, the U.S. even during an economic downturn is burning 19 million barrels a day according to the U.S. Energy Information Administration.

So far, at least, although the Saudis have oil that can be produced at a few cents a barrel, their gushers have not totally crippled the American shale producers. Good old American technological innovation continues to make leaps in shale productivity – and moderate world demand in a period of economic “malaise” – has so far saved a good part of the new industry.

Still, the glut causing low prices is keeping a lot of rigs from pumping full blast. Luckily for all concerned, the new crudes are mostly light, not the kind of heavy oil the huge Texas refineries were geared to handle from older U.S. fields and Caribbean imports but are welcomed by foreign refineries. The lifting of the export ban would produce an immediate spurt in jobs for the oil transportation systems and suppliers of their equipment needed for the new export capacity. The Aspen Institute says that means adding 630,000 new jobs and an additional $165 billion annually to the Gross Domestic Product for the next six years.

Hopefully, this deal is not going to get sidetracked as the Congress winds down for the holidays.

Not everyone is happy about the new developments, of course. Some investors in oil stocks are holding their heads. But we have always argued that cheap energy is the soul of American economic progress and development and that hasn’t changed, even if some of the players have. [Electricity producers are turning from coal to gas, or combinations of natural gas and coal gas – switches that probably are still in their infancy and too early to judge. But the gains in trimming emissions are already obvious.]

So bring on the oil – and gas [liquidifed natural gas] – exports!

sws-12-16-15

 

 

 

Dangerous Mideast Reality


The volatility of Middle East events notwithstanding, a new picture is emerging of alliances very different from those preceding the outbreak of the Arab Spring and the now five-year-old Syrian civil war.
That new reality is obscured by the Obama Administration, suspended in contradictory strategies of removing the American military option from the table while incrementally increasing U.S. special forces and bombing, adamantly calling for the ouster of Basher al Asaad in Damascus but negotiating for his participation in a “settlement”, and most of all, insisting on talking up an Israeli-Palestinian negotiation which has died.
There are growing signs that the relatively artificial national-states created by Britain and France in the Ottoman Empire breakup after World War II may be crashing.
Central to the new picture emerging is Saudi Arabia’s position. Western pressure and internal reformists are moving against the most egregious aspects of the regime, e.g., its long time allegiance to Wahhabism – an Islamic fundamentalism at the root of much of the current terrorism. Although the Saudis are flooding the world oil markets in an attempt to criiple their competitors, the Shale Revolution in the U.S. has deflated its once pivotal energy role. Saudi movement is occasioned by some internal reform elements, but more importantly the Obama Administration’s flirtation with Riyadh’s chief rival Iran. [Thet have just announced women will be permitted to vote, a revolution in a country which does not permit them to drive.] The Saudis themselves have been forced into direct talks with Tehran in an effort to short circuit Washington-Tehran deals. But at the same time, the Saudis are rallying Sunni allies in Syria against the growing influence – including direct military participation – of Iran. The nomination of a pro-Syrian president in Lebanon and the growing domination of the Iranian ally, the Shia Hezbollah, is a defeat for the Saudis.
Whether traditional family domination and loyalties can withstand this turmoil remains to be seen.
The Israeli-Arab conflict which has dominated Mideast politics may be dissolving in the face of the greater fear of an aggrandizing Iran. The recent announcement that Israel is opening a diplomatic mission in Abu Dhabi, although enmeshed in a number of subterfuges, is the most dramatic recent evidence of the growing new tacit alliances. Jerusalem and Cairo are in a tight security and military alliance against Hamas in Gaza, supported by Iran, and the remnants of the Moslem Brotherhood fighting a guerrilla movement against the al Ssisi regime. But virtual disintegration of the Palestinian Liberation Organization under aging Pres. Mohammed Abbas – under bitter attack from Hamas– means there is no negotiating party on the Palestinian side. The current wave of Palestinian violence –“lone wolf” episodes unorchestrated by any Palestinian organization if encouraged by Hamas – is being met stoically by an Israeli public. It has not slowed a growing French Jewish in-immigration occasioned by violent anti-Semitic episodes in France, Despite American and EU opposition [the latter in a trade offensive], Israel is consolidating its enclaves [”settlements”] in the West Bank and in East Jerusalem.
The Obama Administration’s response to these dramatic reversals in the region is an attempt to find a negotiated settlement to the Syrian Civil War. While Russia’s Pres. Vladimir Putin has nominally joined the effort, he has bid up his hand in the Syrian conflict in support of the al Basher regime which Washington still insists must go. How long Putin, with a collapsing economy facing Western sanctions over the Ukraine issue and a tumbling international oil price for its only export, can maintain the Syrian thrust remains to be seen. But the use of sea-born missiles this week was a dangerous escalation, not the least because some Russian missiles fired earlier from the Caspian earlier had fallen short in Iran
While references to World War III [by none other than Pope Francis himself] are exaggerated, the volatility of events suggests the possibility of miscalculations at any moment with even more escalating violence.
sws-12-11-15

Resovietizing Russia


 

While Vladimir Putin is busy challenging America’s role as leader of the free peoples, the Russian dictator is also refiguring his domestic scene in the Soviet image. In fact, one could make the argument that in many ways he has already accomplished that and to a degree even the old Soviets hands would have been envious. What Putin and his small band of supporters have done at home may in the long run be more important than his aggression against Ukraine, his support f the crumbling the al Bashar regime in Syria, and his feints at the Baltic states.

There are, of course, important historical differences to Soviet times. There is no Communist Party with its monopoly of power and its tentacles throughout the world. But Putin has eliminated, in all but name, any organized political opposition to his one-man coterie of hangers-on, some his old colleagues in the secret police and others profiteers from Russia’s new state capitalism. That too, is a difference: Russia no longer pretends to an oligarchic Soviet economy.

In fact, with 40% of its economy now dependent on oil and gas exports to Europe, Putin’s No. 1 problem is Western sanctions and the dynamite that American shale gas and oil technology has thrown under world energy prices. Supplying one third of the European Union’s energy imports, Putin despite the fall in world energy prices and the sanctions slapped on some of his buddies as a riposte to his efforts to take over Ukraine and Byelorussia, is desperatelyl trying to hang on to those ties.Gasprom, the world’s largest gas distribution network, is trying to expand its Nordstrom line down through the Baltic Sea. A state-controlled company, having squeezed out competitors and grabbed stakes of foreign oil companies in new fields in Sakhalin in the Far East, it is trying to dominate European distribution networks as well..

But Putin’s reversion to and dependence on a government elite which leeches off the economy as did the so-called nomenclatura, the Soviet leadership and bureaucracy, is all too familiar. In fact, Gennady Gudkov claims “there are now five to six times more bureaucrats in a Russia with 140 million population than there were in the entire USSR with its 286 million residents.” Gudkov, himself, one of the vanishing band of Putin’s critics. is a businessman and former member of the Duma [parliament] who has seen his business wither as he has become a victim of Putin’s persecution

Furthermore, the bureaucracy led by the chief bureaucrat, Putin himself, is acquiring more and more power. Even claptrap trimmings of the Soviet system have been abandoned – such as the largely fraudulent elections for regional governors. Even the billionaires who profit from their relationship within this highly personalized rule are vulnerable and can be – as several have in the recent past – fallen into disfavor and purgatory if not exile or jail.

Putin’s rule resembles, more than anything else, the style of a banana republic, with little or no hint of ideology. He does try – and gets cooperation – from the Russian Orthodox Church just as the tsarist regime did for centuries. But he continues to cultivate old Communist talisman, including the reenshrinement of Feliz Dzerzhinsky, the archleader of Soviet internal repression. It was Putin, after all, who said that the fall of the Soviet Union was the greatest catastrophe of the 20th century.

What characterizes Putin’s strategy, however, is the old role of a bully on the international stage. It was inevitable that U.S. policy, which under former Secretary of State Hillary Clinton, tried to find a “reset” button for American-Russian relations would fail. Reinstituting Moscow’s former glory is Putin’s only strategy to retain what is, alas!, his vast popularity at home and that requires an American enemy. Washington has no options in this situation: it must maintain a quiet, non-bellicose opposition to the Russian leader. Just as with the Soviet Union, the economic soft underbelly of the Putin regime is extremely vulnerable. Nothing would make more sense now than to reverse the Obama Administration’s policy and permit market forces to export American gas, and perhaps even oil, now in overabundance, to continue the disintegration of Russian markets and Europe’s dependence on that supply.

sws-11-14-15.

 

 

 

Xi’s bluffing hand


Next week’s state visit of China’s No. 1 Xi Jinping looks to be all pomp and circumstance. There is little expectation that the long list of critical issues between Washington and Beijing will be addressed in any substantive way. And, in fact, the international Greek chorus which sings a baleful song of American decline will have a new chorus.
That’s despite, ironically, Xi’s own vulnerability. He desperately needs the increased prestige and illusion of gateopening in the face of his ambitious grab for Mao-like power in a domestic Chinese scene filled with growing problems. That Chinese economic miracle of the last two decades that brought a backward Soviet-style economy into worldwide prominence and leadership is sputtering. The overall growth has fallen rapidly and may well be at something like 5% or 6% annual instead of the double digits of the recent past, or the usually fictional statistics of the present claim of 7+%. That means China is longer producing the jobs necessary for satisfying a still growing but rapidly eroding cheap labor pool as a result of the now abandoned bitter one-child restrictions..
Rapid economic growth had become the only prop for the one Party regime. Xi now is in reality replacing it with a grab for the kind of personal power not seen in recent collegiate rule among the Party elders, reinstituting old measures of repression against any hint of feeble dissent. The continuing roller-coaster of the Shanghai stockmarket, while less a part of the economy than its models in Japan and the West with China’s top-down allocation of credit and capital, is a propaganda disaster. Xi and his team have thrown everything including kitchen sink promises of a move toward a consumer economy at the issue with no success. It suggests that, in a sense, the Party has created a Frankenstein, an enormous economy that it fears to turn over to market forces but one it can no longer plan for or control.
The traditional if more spectacle anti-corruption campaign, while revealing new and incredible corruption and malfeasance among the highest echelons of the Party and the start-owned behemoth monopolies, is actually aimed to squelch opposition within the Party. But a struggle continues, critical since it includes a former member of the ruling politburo and his following who ran the so-called security apparatus. [The Soviets learned long ago when you eliminate a secret police chief, the only way to eliminate the snake is to kill it, literally, at the head, and so far Xi has not done that.] Xi, even more than his immediate predecessors who like he did not have a military background such as early Chinese Communists, is stoking the upper military echelons with appointments. But in any internal crisis, he again like his predecessors, if worse comes to worse would be more than ever dependent on the People’s Liberation Army to save the regime from disintegration– and this time the military might not hand it back to Party apparatchiks.
China’s new role as a world power is also facing increasing challenges, many of its of their own making. Claims of a new alliance with Vladimir Putin’s Russia ballyhooed in Western mainstream media does not exist. For example, a decade-old attempt to tie Russian gas and oil to the Chinese economy, despite repeated announcements of its completion, still has not solved the pricing and pipeline funding. Contradictorily, on the eve of Xi’s arrival in the U.S., Putin has laid out a honey trap for the U.S. [speaking from Central Asia where the Russians and the Chinese engage in a contest for influence and raw materials], He suggests an American-Russian condominium – a return to its world superpower, on Moscow’s terms status of course. But it does expose the real relationship between Moscow and Beijing, that is, featuring the historical struggle for the depopulated several times zones of the old Russian empire in Siberia and the Far East.
China’s overseas showpiece deals, particularly in Africa but also in Asia, which were to demonstrate China’s new economic prowess, are under stress. Again ironically, China’s slower economic growth and thirst for raw material imports – along with dramatic explosion of raw material hoarding – is poisoning the swap deals of construction projects for oil and gas and other raw materials. China is still No. 1 trading partner for most of Southeast Asia, of course – and even seducing India into a raw materials for manufactured goods exchange with a huge Chinese balance of payments surplus. But there is growing concern throughout the region, including a tightening of Japanese, Australian and Indian and U.S. military cooperation, in the face of China’s claims and continued building of military bases on coral strips in the South China Sea.
The Obama Administration’s reaction to Xi’s vulnerability has been to offer negotiations on all issues with only rhetorical responses to Beijing’s increasingly aggressive posture. Hillary Clinton’s “pivot to Asia” has stalled midway as the Mideast cesspool deepens. There was apparently the usual bureaucratic dance within the Administration over Obama’s loud leaks of a threat of sanctions against the most grievous recent Chinese violations of cyrberwarfare and intellectual property theft. [Another Obama red line crossed?] But the most blatant recent currency manipulation in which Xi hoped to halt falling exports with even more monetary subsidy has not been challenged by imposing countermeasures. At a time when the whole of the international community sees Obama’s deal with Iran on the Tehran mullahs’ pursuit of atomic weapons as a retreat full of U.S. concessions, Xi is in effect being offered an opportunity to make a deal.
But whether he can and would do that with his own domestic constraints in his grab for absolute domestic control remains a big question with a likely bad answer from Washington’s point of view.
Sws-09-18-15

Turkey’s growing instability


Once NATO’s formidable eastern anchor, Turkey is increasingly becoming a major problem for Washington policymakers and a contributor to the Mideast chaos.
The change is all the remarkable since at the outset of the Obama Administration, the President saw then Turkish Prime Minister Recep Tayyip Erdogan as one of his closest international friends. And, indeed, in 2009 Obama went to Turkey to make the first of two Mideast seminal speeches offering apologies to the Muslim world for what he saw as past U.S. mistakes with an invitation for cooperation.
But in late August Secretary of Defense Ashton B. Carter publicly was calling on now President Erdogan “…to control the border, the long border that they have with both Syria and Iraq …. It’s overdue, because it’s a year into the campaign [against Daesh, or ISIL], but they’re indicating some considerable effort now, including some — allowing us to use their airfields. That’s important, but it’s not enough.”
If truth be told, it took nine months of torturous negotiations to get Erdogan’s permission to the use NATO bases in Turkey for the relatively feeble American bombing campaign against Daesh, now considered a threat to stability in the region and rapidly becoming a coordinating body for worldwide Islamic terrorism.
Traffic through that border has included volunteers for the Daesh [ISIL] forces and a flood of Muslim refugees crossing into Greece and the EU. There are even suggestions that elements in Turkish intelligence aided Muslim groups fighting the shaky government of Syria’s Basher al Assad, sabotaging the faltering Obama’s so far unsuccessful effort to create an anti-Assad Syrian force to counter the growing strength of Daesh and other Muslim groups.
Since Obama’s visit, however, Erdogan has taken Turkey down a divisivepath breaking off Ankara’s longstsanding military alliance with the Israelis. Erdogan has permitted Hamas, the Palestinian group controlling Gaza which Washington calls terrorists, to operate out of Turkey, and Erdogan has made an outrageous anti-Semitic remarks picked up by sympathetic media.
Erdogan – who once said democracy is a train that you get off once you reach your destination – has pushed a creeping Islamization eroding the mandatory secularist heritage of modern Turkey’s founder, Kemal Attaturk. He moved to the presidency, hoping to create an authoritarian presidential system. But in June elections, his Justice and Development Party [AKP] failed to get the necessary majority to change the constitution, and he has now called new snap elections for November – after refusing to negotiate in good faith for a coalition.
Whipping up war hysteria, by abandoning the effort to reach an agreement with Turkey’s huge Kurdish minority – a radical part of which fought a bloody three decades war with the government – he apparently thought to get a new mandate. But the polls indicate he may again fall short. A sagging economy whose liberalization had bolstered Erdogan’s rule won’t help.
His whirling dervish foreign policy – which once saw itself as Neo-Ottoman, restoring the old Turkish empire in the region – is in tatters. And he has become a major deterrent for American goals in the area; not least, since the most effective fighters against Daesh have been the Kurdish minority inside Syria and the Peshmergah, hardened veterans of Iraq’s regional Kurdish government.
Erdogan – and the other countries which split the Kurdish peoples in the region – fear Kurdish military successes could eventually produce an united independent Kurdistan. The Iraqi Kurdish regional government, pumping oil out through Turkey [including to Israel], is already a relatively prosperous and semi-independent. And so long as Obama does not commit more American ground forces against Daesh, is probably the only hope of Washington to contain if not “degrading and eventually destroying” Daesh [ISIL], what he once dubbed “the varsity” team in the area.
Meanwhile, despite optimistic statements out of the Obama Administration, the military situation in the area is deteriorating, almost as rapidly as Turkey’s home front, with Obama’s critics predicting his Iranian negoaitions will produce a nuclear armed Persia, Turkey’s traditional enemy.
sws-08-27-15

Energy: let’s go!


The markets – including old-fashioned American technological know-how – has almost turned the Obama Administration’s original energy policies 180 degrees.
But there is still a lot to be done. And it will require the cooperation of a Congress, too long besotted with narrow-minded subsidies for powerful lobbies.
The Obama Administration which started out six years ago calling for outrageous gasoline prices to force the country into so-called new, green energies, has lost the game. That’s been acknowledged by several recent quiet White House decisions along the way toward an enlightened energy strategy, the basis, of course, of all economic and most of our social activity.
With the growing technological breakthrough in shale gas and oil, the U.S. again has the potential to be a net exporter. And letting the markets – rather than government fiat – decide which and where would be a major step in energy rationalization is obviously the way to go. Along the way, we would joint Gov. Rick Perry and others who have called for dismantling the Energy Department, which, where effective, duplicates other federal government activities.
New and hugely important developments are popping up everywhere:
The White House has just okayed a swap of lighter American crudes for Mexican heavier petroleum for which we have refinery capacity in the southwest [designed originally and still working on similar Venezuelan imports]. That’s not the lifting of all export controls which ought to be a high priority, their heritage going back to the 1970s embargos and our dependence on foreign oil.
The Sabine Pass, Texas, liquified natural gas facility, originally designed for imports, has signed a deal on 2011 permits to ship LNG to France. With U.S. domestic gas prices a fraction of LGP delivered prices in East Asia, there are a dozen applications for the expensive export facilities to cash in on the global market, now Europe too reinforced with the US-EU sanctions against Vladimir Putin’s machinatioins in Ukraine menacing his high-cost oil and gas exports..
Dutch Shell, which has already spent $7 billion looking for oil and gas off the Arctic coasts of Alaska, has now received permission for offshore deep drilling for gas. Later this month Alaska Governor Bill Walker argue in a personal session with Obama l that his state’s LNG and natural gas development is a main strategy to cut carbon emissions and lower energy costs. With proposals for his state to take 51% of some new oil and gas developments, he has a sheaf of proposals for a huge boost for Alaska’s revenues, impacted by the general economic downturn.
Looking back, luckily there were enough private shale holdings to develop the technologies which have brought about the whole energy revolution. And kudos again go to the industry for meeting – at least so far – Saudi efforts to undercut American shale production by going full blast in their own production and export to keep world prices low.
Yet several factors have so far defeated the Saudis in their effort to sabotage American selfsufficiency: the increasing skills of American technology, the cutbacks in China’s imports because of a rapidly declining economy and a moderation in the anticipated Indian takeoff, and the cutback in American imports because of the shale bonanza.
The Obama Administration has even timidly announced what could be one of the most important reforms in the domestic economy: removing the forced use of grain alcohols [ethanol] in gasoline sold gasoline sold at domestic pumps. Although ethanol has been a hallowed icon for some enviromentalists, its actual application has been a $10 billion a year bill for the taxpayer. Furthermore, the process distorts the food chain: making ethanol of corn requires huge tracts of land, fertilizers, pesticides, tractor and truck fuel, and natural gas for processing. That’s even a pretty strong argument against forcing the motorists to use it for the dedicated enviromentalist.
There is a worldwide economic and moral issue as well. Turning corn into ethanol raises feed prices and thereby the cost of beef, pork, chicken, eggs, fish and international food aid. It raises world food prices, a critical problem for many in the backward parts of the world who are food importers. So in addition to other concerns, there is a humanitarian aspect as well.
Ethanol is a bobanza of course, for the auto repairman. It wreaks havoc on the automobile itself, especially older cars. It can cause gaskets and other rubber parts to fail, causing fuel leaks and even engine failure or fires. With every prospect of American fossil fuel surpluses for the foreseeable future it is time to step back to the market and end required ethanol additives for gasoline and diesel fuel.
sws-09-18-15

China’s shaky economy


China’s shaky economy
The Shanghai stock market is dipping again.
Three weeks ago, it fell by nearly a third in total value wiping out some $3 trillion. The cavalry arrived with Communist Party leaders throwing everything they had to stop the hemorrhaging.
But like so many other parts of the Chinese economy, the names are the same but the function of the Shanghai market is not what stock markets are to economies in the West and Japan. Like the rest of the miraculous development of the last two decades, the stock market has been built from top down. So rather than represent the accumulation of capital from private investors for the growth of companies, it really represents an indirect function of government credit – with a large group of gamblers [90 million or more than the membership of the Communist Party] along for the ride.
When some smart operators decided they knew how to manipulate the market, they tripped what would otherwise have been the crash earlier. Beijing’s Communist rulers dived in to shore it up. They had no choice because the market had become a showpiece whatever its real nature, and with growth dropping rapidly in the overall economy, its dive for propaganda purposes couldn’t be tolerated.
The rescue operation was extensive and intensive: Beijing pulled one-third of the stocks off the market. The central bank went into the market to buy. A state pension put funds into equities for the first time. Beijing told investors holding more than 50% of a company they couldn’t sell for six months. Brokerage firms were underpinned by the government banks to hold stock inventories off the market.
For a while that looked like it would save the day, although no one was sure what would happen when any of these “props” were removed. No one seems to know exactly why less than a month later, again, the market plunged knocking the pins out from under the rally the government had been able to create. Perhaps it was information leaked from government sources that the withdrawal of the extraordinary supports was under way.
One further consideration all along was what is left for the government to do if the slump continues. There’s been general agreement the present setup cannot continue indefinitely
Again, the significance of this new collapse may be less its economic effects than its political implications. If it proves true, as now seems the case, that the government cannot even by pulling out all stops, “save” the stock market, what, one may well ask, is the government going to be able to do to stop the general slowdown? That’s’ now the case. Furthermore, the speed of the decrease in total economic activity as represented by the gross domestic product [GDP] has been seen by some observers as less significant the rapid rate at which it has fallen. .
Dropping from the record double digit figures of the last two decades, the GDP rate of growth officially dropped to 7% in the first quarter. Some observers, using the government’s statistics which are more than a little suspect, believe the GDP dropped even more. When the government came up with the surprising figure of a 7.6 growth in the second quarter, it was called “unexpected” by some and a downright lie by others.
. Although at least one major investment counseling firms in the West has warned its clients to “China-proof” their portfolios, the majority of observers are still clinging to the notion that the Communist government has all the tools necessary to prevent “a hard landing” for the economy. Again, that’s despite the evidence already presented in the case of the Shanghai market, even though it occupies a less important role than would be assigned it by superficial observers making comparisons to New York, London, Frankfurt and Tokyo.
But the slowing of the Chinese economy and its demand for raw materials has already had an effect on the worldwide commodities market, contributing in part to the fall in oil and gas prices as well. One suspects that some of the more optimistic talk about the China markets is wishful thinking as much as anything else. The cutback in growth has already taken its toll of some speculators – in copper, for example – and has had an effect on such major raw materials exporters as Australia.
Unfortunately, the world cannot be “China-proof”. And some of the more optimistic souls in the Obama Administration had better be thinking hard about what happens if the Chinese economy continues to sour.
sws-07-27-15

Dribling, drabling …toward defeat


There is almost a childlike innocence to the foreign policy initiatives of the Obama Administration, to be admired for their insouciance — were it not that they are contributing to world instability and promising even greater disaster for the U.S.!
The President, almost off the cuff [or at least off the teleprompter] acknowledges that there is no strategy for taking down the Daesh [the Islamic State of Iraq and the Levant, ISIL or ISIS]. That’s despite the fact that only a few months ago he announced he intended “to degrade and destroy ISIL” with a full fledge strategy underway .
But at the same time, the Pentagon announces that it is sending another 450 trainers into Iraq to try to restructure Baghdad’s badly tattered government military, joining another 3,000 or so American military already in-country. In a sense, it is a repetition of the President’s initial strategy in Afghanistan where simultaneously he announced reinforcements at the same time he announced a future total withdrawal.
It does not take much street smarts to know that such announcements are not only contradictory but reveal to even the dumbest and weakest of enemies just what opportunities await them and suggest how to exploit them.
It is no secret, of course, that the President does not want to admit – and never will perhaps – that his 2008 campaign “strategy” proposal which he immediately implemented, demanded a complete withdrawal from Iraq. It certainly helped bring on new regional disasters and, politically, suggested to the American people the huge sacrifices of the two Iraq wars had been for naught.
Now, alas! it appears that he is not going publicly to admit [one has to ask, to himself as well?] that Washington has few options but to move back into Iraq with substantial forces. Not to do so would embolden all those forces lined up, ironically, with both the Sunni Islamic terrorists who support Daesh and the Shia Islamic terrorists allied with Iran who dominate the Iraq government and whatever resistance it is able to mount to its enemies.
Whatever the shortcomings of Daesh – not excluding its continuing contest with other Islamic terrorist groups including Al Qaeda, particularly in Syria – it has been on a roll. The capture of Ramadi was not the relatively minor “setback” that White House was able to coax even outgoing Chairman of the Joint Chiefs Martin Edward “Marty” Dempsey into saying.
It places Daesh in a position, if nothing else, to mount a continuing campaign of terror including the almost unanswerable weapon of suicide bombings against the two million Iraqis inside the capital less than 60 miles away. It also has been instrumental in aligning Iraqi Sunni forces with it, or neutralizing them, and in a surprisingly successful campaign to enlist foreign volunteers, even some from the U.S.
We don’t for a moment suggest that we have the necessary strategy for what needs to be done. Nor do we, on the other hand, believe that such strategies have not been proposed and elaborated – and thus far rejected at 1600 Pennsylvania Ave. – by the Pentagon.
But as amateur historians, what we do remember is one of the lessons of American engagements overseas during the whole postwar period – especially the terrible echo of “Vietnam” with its 54,000 American dead.
That lesson was pure and simple: if you are going to fight a war, you must fight it anticipating all the worst possibilities for as generals have always said, the battlefield changes the moment the first shop is fired. If you are to push a failing Vietnamese military aside, then send in the forces you need for the worst of situations. If you are to bomb Hanoi, do it immediately with maximum strength, not increase it incrementally and gave your enemy the ability to meet it. If you are enforcing a naval blockade, then mine the Haiphong harbor instead of chasing small craft up and down a 500-mile coastline, etc., etc.
Much has been made by our fellow talking heads of the American public’s fatigue after the long years of seemingly nconclusive war in the Middle East. That is certainly true.
But it is the primary obligation of leadership to examine current situations with more information than the average citizen and to anticipate the problems ahead. Then the necessary decisions, however difficult they are, have to sold to the American people with whom this president still has considerable support.
Dribs and drabs is not the way to go.
sws-06-11=15

Obama’s Iranian deadend


The growing absurdity of Pres. Barack Obama’s arguments in favor of his negotiations with the Tehran mullahs grows ever more self evident.
The International Atomic Energy Agency, itself at best never much more than a token effort to enforce anti-proliferation agreements, has revealed that Iran’s nuclear fuel stockpile is growing. In fact, the AIEA says, it has grown 20% during the last eighteen months. During that period Washington has been insisting the preliminary November 2013 Joint Plan of Action Agreement between the Islamic Republic and the West, had put a cap on Iran’s nuclear activities, and perhaps had the makings of a final agreement to halt any Iranian move toward nuclear weapons.
But only a month before the proposed completion of that constantly postponed final agreement, the IAEA calculations completely give the lie to Obama’s continued insistence his negotiations at leasdt temporarily had reigned in Iran’s nuclear developments.
Furthermore, the proposed final deal is supposed to reduce the Iranian fuel stockpile to 300 kilograms of nuclear fuel, less than requirements for a single bomb. That means Tehran would have to get rid itself of nine tons of enriched uranium fuel. No one really knows how that would be done. [The mullahs long ago ignored their agreement when Moscow sold them a reactor with the proviso fuel byproducts from its generating capacity would be shipped back to the then Soviet Union.]
Having backed off the whole concept of restricting Iran’s capability to make nuclear weapons to a position where the mullahs would have the capacity to do so but would foreswear it, Obama’s critics now have a new concern. Obviously, the size of its nuclear fuel stockpile would be decisive in any calculation – now ridiculously the new major issue in the whole discussion – of how long it would take the mullahs to make bombs. That “breakout” calculation, foolishly enough, has become a central argument between Obama and his Congressional critics. Obviously, a political judgment, an estimate, of whether the mullahs would and could be trusted to abide by any such self-imposed schedule, is the more demanding and paramount issue.
The IAEA report matter of factly pointed out that no progress has been made in its efforts to implement UN Security Council resolutions calling for information from the mullahs on possible movement toward “weaponization” .Needless to say, the IAEA report also says Tehran has made no suggestions how it might move to conform to the UN demands.
The IAEA report sums up that given the missing intelligence, it is not able to make a judgment on whether Iran is moving toward producing weapons.
The combination of Washington having lifted some economic sanctions – apparently the only weapon in its effort to restrain the mullahs short of military intervention – and the White House bogus claims on progress in restraining Tehran, already has led to diplomatic disaster. Washington’s nominal allies in the Persian Gulf and a disgruntled Egypt and Turkey are increasingly showing every evidence of abandoning the U.S.’ traditional leadership and looking to their own security calculations.
Israeli Prime Minister Benjamin Netanyahu continues to scold, but he most of all, will have to decide what happens in the absence of what he has called “a good agreement”. Israel is after all a continued target for the mullahs’ threats to wipe it off the map.
Apparently the Obama Administration will continue to issue preposterous statements on progress of the negotiations – or ask for further extensions — as the region and the world slide toward crisis.
sws-06-01-15

When is a Thug not a Thug


Thug, noun, pronunciation: /THɡizm/ [Early 19th century (sense 2): from Hindi, hag ‘swindler, thief’, based on Sanskrit sthagati ‘he covers or conceals’.
One of the footnotes to the postmortem on the rioting in Baltimore has been an argument over the use of the word “thug” to describe the mostly young rioters, sackers and arsonists.
The city’s African-American mayor, Stephanie Rawlings-Blake, used the term, though she later backed away from her earlier comments. In uncharacteristically strong language, Pres. Barack Hussein Obama used it too when he denounced the Baltimore violence.
Megan Garber, in an article in The Atlantic, writes that “thugs” “are [seen as] both victims and agents of injustice, they are both the products and producers of violence, and mayhem, and outrage”. Some of the media, muddling the argument even more, has trotted out arguments for excusing behavior which brought the city to near chaos. CNN has spread a clever piece of wordsmithery, “Rioting is the voice of the unheard”, when its interviewers court dissident and inflamatory reactions..
The fact is that young hoodlums [“a person who engages in crime and violence; a hooligan or gangster”] broke the peace of one of largest and once most prosperous American cities, burning and looting. Furthermore, their action did not elicit from the city’s leadership the kind of response for which a city’s police force is dedicated. It was only luck that there was not major loss of life.
That is why it is incumbent on the State’s Attorney for Baltimore City, Marilyn J. Mosby, now that she has quickly brought forward an indictment of the policemen involved in the death in custody of Freddie Gray, to go after these young miscreants. There is apparently yards of video taken during these violent acts from which the perpetrators can be identified.
Just as one mother, Tonya Graham, took the responsibility for her son when she caught him joining the mob, the Baltimore authorities now have a duty to bring the other delinquents to justice.
That won’t be easy.
There are already many voices arguing that they are victims, that they need help, that they have to be forgiven for their acts of violence against civilized society. Baltimore Councilman Carl Stokes has what he sees as their case. “It’s not the right word to call our children ‘thugs’. These are children who have been set aside, marginalized, who have not been engaged by us.”
All that may be true and must be considered if justice is to be served. But identifying these young people, naming their criminality, and bringing them before a court to have their actions explained is necessary if real peace is to be reestablished in Baltimore.
Without the rule of law, no civilized society can exist. Respect for the law has to begin in childhood. And without an attempt to bring these youngsters to justice – for their families’ sake if nothing else – the confidence that is going to be necessary if the destruction of Baltimore’s reputation [and livelihood] is to be restored will not be forthcoming..
Sws-05-03-15