barack obama

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What America Really Thinks About Obamacare

When I see discussion of Obamacare in the media and especially on blogs, I often see the impression that Obamcare is a communist scheme to impose socialised medicine in the United States:

Communist

Actually, Obamacare was first dreamt up by the conservative Heritage Foundation, and first implemented at the state level by the Republican former Massachusetts governor Mitt Romney. (And for what it’s worth, I wrongly judged Republican opposition to Obamacare as an immovable obstacle in Romney’s quest to become the Republican Presidential nominee, but I guess Republicans were far more fickle than I thought). So as its origin implies, Obamacare is not exactly a communist, or social democratic idea. A charge of socialism or communism might be more fairly levelled against Obamacare if Obamacare were a law to confiscate all hospitals, drug companies, biotechnology companies and insurance companies from private hands. But it does no such thing. The opposite, in fact. More principled critics of Obamcare might more accurately describe it as corporatist — guaranteeing revenue streams for the insurance industry through the individual mandate — but that has not exactly been the Republican Party’s line of attack.

Given that opposition by the Republican-controled House to Obamacare is the most significant cause of the current government shutdown, it is worthwhile looking over how Americans actually feel about the law, not least to gauge the extent to which Americans may or may not support the Republicans now that their opposition to Obamacare is having real consequences.

It has long been said that Obamacare is unpopular, and the polls bear this out. A September CNN/ORC poll showed that Obamacare was supported by 43% of respondents, and opposed by 51% of respondents. But here’s the catch: 16% of respondents opposed Obamacare for not being liberal enough. Presumably, they would prefer a single payer system, as is the reality throughout most of Europe an Canada. (Of course, a move to such a system might be more fairly described as socialist, but that is another argument for another day). A sizeable number want something more liberal than Obamacare, and so would presumably prefer Obamacare to the status quo, even if they still claim to oppose it. So the consensus is actually against the Republican position by 59% to 35%. And that is why opposing Obamacare in this fight-to-the-death manner will be received negatively by a majority of Americans. Only 35% of Americans are against Obamacare because it is too liberal, and even then a substantial number of those — such as seniors who receive government benefits, or poor rural Republicans receiving food stamps — may be against shutting down the government to fight Obamacare. The Republicans are fighting a losing fight, and as the shutdown grinds on may be doing irreparable damage to their 2014 election prospects.

More generally, I find it rather puzzling that Republicans — convinced Obamacare will fail disastrously — are going to such lengths to oppose it. Like Prohibition once was, it is now law, and if it is destined to precipitate disaster — by increasing unemployment, by increasing healthcare costs, by increasing strain on the healthcare system, or by any other means — then it will be quickly rejected and repealed in the future.

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The Fed Shrugs

Since talk of the taper started, interest rates have been gradually rising. When Bernanke talked about the possibility of tapering QE in mid 2014 so long as growth and unemployment remain on track, rates leapt to their highest level since 2011:

10-year-treasury-1

A simple supply-demand analysis of Treasuries says that if the Fed buys less, ceteris paribus the price will fall and rates will rise. The Fed is implying it will buy less, and lo and behold markets are selling off on expectations that future demand will be lower. The analysis of those who say that quantitative easing is raising interest rates seems increasingly dubious to me.

The alternative analysis is that rates are rising on sentiment that the economy is improving. I wouldn’t rule that out, but the trouble is that the economy is still deeply depressed. GDP is still far below its pre-crisis trend. Broad monetary aggregates are still massively deflated. Lots and lots of working-age people who were working before 2008 still haven’t returned to the labour force:

062013krugman1-blog480

So while equities have returned to their pre-crisis heights — unsurprisingly, after all the financial sector is the Fed’s monetary transmission mechanism — the real economy, broadly speaking, hasn’t.

So it’s surprising to me that there is any talk of tapering. Headline unemployment is still 7.5%, and core inflation is just 1%, 1% below the Federal Reserve’s self-imposed target. Bernanke referred to disinflationary and deflationary forces in the economy as “transitory”, but any such diagnosis would seem to be the height of naïveté. The deflation of the shadow money supply and broad monetary aggregates is an ongoing structural transformation in the post-shadow-banking-bubble world. There is nothing “transitory” about it. If inflation was 3% or 4% and unemployment was below 6%, then talk of a taper would be expectable. Right now it just makes it seem like the Fed doesn’t have a clear framework. If QE3 was supposed to target unemployment, why is the Fed considering tapering when unemployment is still so high? Yes, the Fed’s internal DSGE models are saying that unemployment will continue to fall. Of course they do — these models have assumptions of clearing labour markets built into them! But right now inflation is below-mandate and unemployment is above mandate. Assuming away current conditions with the term “transitory” is basically saying that when the storm is long past the ocean is flat again.

Of course, at the zero-bound I think the Fed’s transmission mechanisms are relatively powerless in terms of any ability to stimulate employment or growth. It has taken the horse to water, but the horse hasn’t drunk. What the Fed can control with balance sheet monetary policy is interest rates on assets it buys. By shrugging, the Fed is signalling for a rise in government borrowing costs. That may be extremely premature.

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Chinese Treasury Contradictions…

One mistake I may have made in the two years I have been writing publicly is taking the rhetoric of the Chinese and Russian governments a little too seriously, particularly over their relationship with the United States and the dollar.

Back in 2011, both China and Russia made a lot of noise about dumping US debt, or at least investing a lot less in it. Vladimir Putin said:

They are living beyond their means and shifting a part of the weight of their problems to the world economy. They are living like parasites off the global economy and their monopoly of the dollar. If [in America] there is a systemic malfunction, this will affect everyone. Countries like Russia and China hold a significant part of their reserves in American securities. There should be other reserve currencies.

And China were vocally critical too:

China, the largest foreign investor in US government securities, joined Russia in criticising American policymakers for failing to ensure borrowing is reined in after a stopgap deal to raise the nation’s debt limit.

People’s Bank of China governor Zhou Xiaochuan said China‘s central bank would monitor US efforts to tackle its debt, and state-run Xinhua News Agency blasted what it called the “madcap” brinkmanship of American lawmakers.

But just this month — almost two years after China blasted America for failing to cut debt levels — China’s Treasury holdings hit a record level of  $1.223 trillion.  And Russian treasury holdings are $20 billion higher than they were in 2012. So all of those protestations, it seems, were a lot of hot air. While it is true that various growing industrial powers are setting up alternative reserve currency systems, China and Russia aren’t ready to dump the dollar system anytime soon.

Now, the Federal Reserve has to some degree further enticed China into buying treasuries by giving them direct access to the Treasury auctions, allowing them to cut out the Wall Street middlemen. Maybe if that hadn’t happened, Chinese Treasury ownership would be lower.

But ultimately, the present system is very favourable for the BRICs, who have been able to build up massive manufacturing and infrastructural bases as a means to satisfy American and Western demand. In that sense, the post-Bretton Woods globalisation has been as much a free lunch for the developing world as it has been for anyone else. And why would China and Russia want to rock the boat by engaging in things like mass Treasury dumpings, trade war or proxy wars? They are slowly and gradually gaining on the West, without having to engage in war or trade war. As I noted in 2011:

I believe that the current world order suits China very much — their manufacturing exporters (and resource importers) get the stability of the mega-importing Americans spending mega-dollars on a military budget that maintains global stability. Global instability would mean everyone would pay more for imports, due to heightened insurance costs and other overheads.

Of course, a panic in the Chinese mainland — maybe a financial crash, or the bursting of the Chinese property bubble — might result in China’s government doing something rash.

But until then it is unlikely we will see the Eurasian holders of Treasuries engaging in much liquidation anytime soon — however much their leaders complain about American fiscal and monetary policy. Actions speak louder than words.

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Judge, Jury & Executioner

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I’ve criticised Rand Paul in the past on a few issues, but none of my previous doubts and nitpicks can dilute the sheer brilliance of his almost-thirteen-hour filibuster.

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The absurdity of the legal framework built up by the Bush and Obama administrations was a house of cards for Paul to poke at and watch crumble. Paul’s key question is does Obama believe he can order the killing of an American citizen, on American soil, based on nothing more than his own judgment that the person is a threat?

Under the Fifth Amendment, suspects are entitled to the due process of law:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

And how can any President claim that his own judgment, or that of his Attorney General counts as the due process of law? The targeted drone killings that have occurred in foreign lands — and which Holder admits could theoretically occur on American soil — are very simply extrajudicial killings. And extrajudicial killings are utterly barbaric, incompatible with modern civilisation, incompatible with any notion of human rights or due process, and incompatible with the Constitution.

The status quo evolved very much out of post-9/11 paranoia, as exemplified by Dick Durbin’s Cheneyesque questions aimed at Paul toward the end of the Filibuster, and by Eric Holder’s initial written response referencing Pearl Harbour and 9/11:

EricHolder

Neither Rand Paul nor myself are suggesting that an attempted violent attack should not be stopped using necessary means (although not excessive means). But if an act of terror has not commenced (and even in many cases where an act of terror has commenced) it should be possible to arrest and question a suspect, rather than killing them. If a suspect can be arrested, charged and tried, there should be no reason why that should not happen.  And unless an act of terror has actively commenced, or unless a suspect can be convicted beyond reasonable doubt in a court of law the government’s suspicion is only a suspicion, and the government has absolutely no business detaining or punishing a suspect.

After 9/11, due process was effectively suspended, and for all of Obama’s lip-service to “change”, this mindset prevailed through his first and into his second administration. Rand Paul’s dogged, tireless questioning — as well as the work of questioners in the media such as Glenn Greenwald, Conor Friedersdorf, Spencer Ackerman, and Micah Zenko —  is acting as a catalyst to break the public and governmental mindset that allowed for the suspension of due process. Due process matters. If it hasn’t been proven that someone has broken the law why should they be punished for it? As humans we have inalienable rights. The fear of terrorism does not trump the right to be tried under the presumption of innocence.

The strength of Rand Paul’s argument means that defenders of the status quo have had to resort to spurious or ad hominem arguments to mount a defence of the President’s position — attacking Paul’s positions on other issues, for example. It was encouraging to see Rand Paul questioning the entire notion of targeted killings and signature strikes altogether, and not just worrying about the prospect of such affairs on American soil. Due process is preferable in all circumstances.  I would have preferred to see Osama bin Laden captured and tried, rather than killed.  Due process is not a sign of moral weakness, but a sign of cultural strength, of sanity, of civilisation.

The Obama administration must eventually understand that their position is untenable. Large swathes of the mainstream media are coming around to the idea that Rand Paul is asking important questions and that due process is more important than national security panic and threat inflation. Paul has struck a blow for the Constitution at the right moment, and to a judicial edifice that has become bloated and corrupt, treating too-big-to-fail bankers with impunity, while coming down like a tonne of bricks on minor intellectual property infractions. He has harnessed the image of a lone filibustering Senator standing up to the machine of the establishment to strike a blow to those who are trying to defend the indefensible. At the very least, Rand Paul has made real oversight of the drone program possible. Hopefully, the days of signature strikes and of targeted killings are numbered. Hopefully, the Constitution and Bill of Rights will reign supreme again in Washington D.C.

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The Real 2013 Cliff

There’s a much bigger cliff than the so-called fiscal cliff. The absolute worst result of the fiscal cliff would be a moderate uniform tax increase at a bad time, resulting in a moderate contraction. It is an obvious — but ultimately rather cosmetic — stumbling block on the so-called “road to recovery”.

The much bigger cliff stems from the fact that the so-called recovery itself is built on nothing but sand. This is a result of underlying systemic fragilities that have never been allowed to break. I have spent the last year and a half writing about this graph — the total debt in the economy as a proportion of the economy’s output:

This is the bubble that won’t go away. This is the zombified mess that the Federal Reserve won’t let dissolve (as happened regularly in the 19th century and early 20th century each time there was an unsustainable debt bubble). This is the shifting sand — preserved by the massive monetary stimulus programs — that the so-called recovery is built upon. During the 1980s and 1990s and 2000s cheap money pumped up the debt level in America. In 2008, the bubble burst, and the hyper-connective fragile financial system was set to burn. Then central banks around the world stepped in to “stabilise” (or as Nassim Taleb puts it, overstabilise) the financial system. The unsustainable reality of debt vastly exceeding income was put on life support.

A high pre-existing residual debt level makes growth challenging, as consumers and producers remain focussed on paying down the pre-existing debt load, they are drained by pre-existing debt service costs, and they are wary about taking on debt or investing in a weak and depressed environment. It’s a classic Catch-22. The only true panacea for the depression is growth, but the economy cannot grow because it is depressed and zombified. That’s where a crash comes in — the junk is liquidated, clearing the field for new growth. That is what Schumpeter meant when he talked of “the work of depressions”, something that many mainstream economists still fail to grasp. (In fairness, a similar effect can probably be achieved without a depression through a very large scale debt relief program.)

Japan has been stuck in a deleveraging trap for twenty years, to no avail, all that has really occurred is that the private debt load has been transferred onto the central bank balance sheet — there has been very little net deleveraging) and while the Japanese central bank has completed round after round of quantitative easing — sustaining and preserving the past malinvestment and high debt load — the Japanese economy is still depressed.

Japan-Debt-Hoisington-27

That is the road America and most of the West are now on. And just as Japan’s bank stocks did multiple times even after the Japanese housing bubble burst, American banking stocks — even in spite of a year of fraud, abuse, mismanagement and uber-fragility — have been shooting up, up, up and away:

1220sp_data

The zombie financial sector is the real cliff — as interconnective as ever, as corrupt as ever, and most importantly, nearly as leveraged as ever:

Margin Debt November 2012

This is a reinflated bubble built on foundations of sand. I don’t know which straw will break the illusion (middle eastern war? Hostility between China and Japan? Chinese real estate and subprime meltdown? Student debt? Eurozone? Natural disasters? Who knows…) but this bubble poses a far greater threat in 2013 than the fiscal shenanigans and the Boehner-Obama “Boner-Droner” snoozefest.

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Weapons of Mass Destruction Redux

Fool me once, shame on you. Fool me twice, shame on me.

That’s what I’d say to the Western governments currently planning an invasion of Syria under the pretense that Bashar al-Assad is readying the use of chemical weapons in the Syrian Civil War.

The Telegraph reports:

NBC News quoted an unnamed US official as saying there was evidence that the bombs, loaded with the chemical weapon, could be dropped on the Syrian people from fighter planes once president Basah al-Assad gives the order.

If it proves to be true, the move would be a dramatic escalation in the conflict in Syria, which could lead to US involvement.

Earlier this week, US officials said the regime had begun mixing the chemicals to make the deadly sarin gas.

Sarin, used in two terrorist attacks in Japan in the 1990s, is a man-made nerve agent which can cause convulsions, respiratory failure and death.

The Syrian regime has never overtly admitted having chemical weapons, though it is believed by western analysts to have the biggest stocks in the Middle East. It has also denied it would ever use chemical weapons against its own people.

Western intelligence agencies never had to publicly display their evidence for the invasion or Iraq — their wrong claims that Saddam Hussein was in possession of weapons of mass destruction which could be deployed against Western countries at 45 minutes notice.

And now they expect us to take it at face value that they have evidence that Syria is ready to use chemical weapons? Talk about the boy that cried wolf.

Want to commit blood and treasure to fight another middle eastern war? (Even though the most recent interventions have all ended in Islamists and even groups affiliated with al-Qaeda coming to power)

To be taken seriously, Western intelligence agencies need to prove these claims with hard evidence open to public scrutiny. If the claims are based on second-hand reports, circumstantial evidence and bad guesswork (as was the case in Iraq) then Western taxpayers deserve to know the truth.

But they won’t. Governments are already massing armies to intervene. The politicians and bureaucrats making these decisions won’t have to pay for it. They will leave that up to taxpayers.

CostofWar

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Bush 3 vs Bush 4

The point of my writing has never been to tell others how to vote, especially not in elections in countries like the USA where I cannot myself vote.

But even if I was a voter in this election, there is no candidate with a chance in hell of winning who I could support. Obama and Romney are standing on the shoulders of George W. Bush.

Obama renewed Bush’s PATRIOT Act, which gutted the Fourth Amendment, Obama signed into place (and went to court to defend) the NDAA Act that creates a legal framework  for the indefinite detention of American citizens, Obama has engaged in six middle eastern wars (two more than Bush), and Obama maintains a kill-list of suspected terrorists including American citizens who — without trial, and alongside their families — are targeted for assassination by drone strike. Romney signs on to all of those initiatives, and boasts the endorsements of both George W. Bush and Dick Cheney. Both candidates promise to strike first against Iran. Neither candidate talks of downsizing the American Empire, that — at huge cost to the taxpayer — maintains bases in over 150 countries, creates huge blowback, and leaves the American military thinly stretched. And this misallocation of capital means that in areas where central government plays a useful role — infrastructure, space exploration, disaster relief and scientific research — too little is left to invest.

On the economy, both candidates are avowed interventionists who endorse bank bailouts and the bailouts of failed and unsustainable industries. Bailouts result in the malinvestment of capital, labour and productivity — giving too-big-to-fail banks and crooked and fraudulent banksters the opportunity to continue profiting from mountains of central bank liquidity, while small businesses and new entrepreneurs starve from a lack of credit. And neither candidate has any intention of implementing a solution — like Glass Steagall, which worked relatively well for over sixty years —  to end the tyranny of public bailouts. Additionally, neither candidate seems aware of the real cause of depressions — excess and unsustainable total debt. Both candidates seem intent to pursue policies of reinflating debt bubbles, only for them to burst again later rather than try to address the underlying problems. This approach is likely to render social spending pledges unsustainable, as the only thing that can pay for Social Security and present welfare commitments is strong organic productive growth, not endless bailouts of crooked banksters, mobility scooters, new social networks and the pointless reinflation of unsustainable businesses.

Both candidates are committed to one-sided free trade deals that end up shipping productive American jobs half way around the world, and rendering Americans dependent on the output of other nations. And while (much like George W. Bush) both candidates have paid lip-service to the idea of energy independence, they also support the idea of a resource-sapping global military empire, which leaves few resources remaining for the task of creating energy independence.

And both candidates promise to continue the expensive, wasteful and liberty-sapping war on drugs — even though Obama was a proud and boastful drug user in his youth.

One candidate will be elected today, and their supporters will surely go wild, while the other side will be despondent. But sadly, both sides will have lost. The only winners under Obama-Romney will be crooked too-big-to-fail banksters, and the military-industrial complex.

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The Burden of Government Debt

There has been an awful lot of discussion in recent months about whether government debt is a burden for future generations. The discussion has gone something like this: those who believe government debt is a burden claim that it is a burden because future generations have to repay taxes for present spending, those who believe that it is not claim that every debt is also credit, and so because the next generation will inherit not only the debt but also the credit, that government debt is not in itself a burden to future generations, unless it is largely owed to foreign creditors.

It is relatively easy to calculate what the monetary burden of government debt is. Credit inheritance and debt inheritance are not distributed uniformly. The credit inheritance is assumed strictly by bondholders, and the debt inheritance is assumed strictly by taxpayers. Each individual has a different burden, equalling their tax outlays, minus their income from government spending (the net tax position).

For an entire nation, everyone’s individual position is summed together. In a closed economy where the only lenders are domestic, the intergenerational monetary burden is zero. But that is by no means the entire story.

First, debts to foreign lenders are a real monetary burden, because the interest payments constitute a real transfer of money out of the nation. Second, while there may be little or no debt burden for the nation as a whole, interest constitutes a transfer of wealth between citizens of the nation, specifically as a transfer payment from future taxpayers to creditors. This adds up, at current levels, to nearly half a trillion of transfer payments per year from taxpayers to creditors. So while the intergenerational burden may technically add up to zero for the nation, it will not for individuals. The real burden is huge transfers from those who pay the tax to those who receive the spending, and those who receive the interest. So who loses out?

Here are the figures for 2009 showing net tax position for each income quintile:

Bottom quintile: -301 percent
Second quintile: -42 percent
Middle quintile: -5 percent
Fourth quintile: 10 percent
Highest quintile: 22 percent

Top one percent: 28 percent

The negative 301 percent means that a typical family in the bottom quintile receives about $3 in transfer payments for every dollar earned.

What this data does not show are the reverse transfers via interest payments. There is no data (that I can find) on treasury interest payments received by income quintile, but assuming that the top quintile dominates income from interest (as they dominate ownership of financial assets, owning over 95% of all financial assets) this leaves the lower income quintiles benefiting from transfer payments, the top quintile benefiting from interest (as well as policies like bank bailouts, corporate subsidies, and quantitative easing, whose benefits overwhelmingly benefit the top quintile), and squeezing the taxpaying middle quintiles who receive neither the benefits of interest payments, nor significant welfare transfers.

To misquote George Orwell, when it comes to the national debt and who takes its burden, some pigs are definitely more equal than others.

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Spending Problem? Paul Ryan is the Spending Problem

Paul Ryan talks like a small government conservative:

Too much government inevitably leads to bad government. When government grows too much and extends beyond its limits, it usually does things poorly.

And the WSJ is pumping up Ryan as an antidote to the growth of government:

Ryan represents the GOP’s new generation of reformers. More than any other politician, the House Budget Chairman has defined those stakes well as a generational choice about the role of government and whether America will once again become a growth economy or sink into interest-group dominated decline.

But Ryan himself has been responsible for a lot of that government growth. He loyally voted for all the big government programs George W. Bush ensconced into law — Medicare Part D, often described as the largest expansion of the welfare state since Lyndon Johnson’s Great Society; the Department of Homeland Security and the TSA; the wars in Iraq and Afghanistan; the PATRIOT Act and the NDAA; the TARP bailout of Wall Street; the bailout of General Motors. So long as it was debt-fuelled spending authorised by a Republican (and during the Bush years, there was an awful lot of debt-fuelled spending authorised by Republicans) Ryan was out voting for it. 

Ryan’s voting record establishes firmly that Ryan is as much for bailouts and the expansion of government as Obama. He talks like a small government conservative on the deficit, too, but dig into the details and he promises to balance the budget on the back of closing loopholes in the tax code that he refuses to specify, while completely ignoring the severe problem of excessive total debt that is keeping the economy depressed today.

Does Ryan have an explanation for his voting record? Why did he put party loyalty above loyalty to the principles he now claims to espouse? Or did he forget his small government principles during the Bush years? Did he only discover Ayn Rand in 2008?

Ryan was forced to try and explain. Here’s the exchange between Ryan and ABC News’ Christiane Amanpour.

AMANPOUR: Congressman Ryan, you actually voted for the Wall Street bailout, and indeed the auto bailout as well.RYAN: Right. The auto bailout in order to prevent TARP from going to the auto companies, because we already put $25 billion aside in an energy bill, which I disapproved of, to go to auto companies.

What? Ryan later tried to clarify his remarks in an interview with the Daily Caller:

The president’s chief of staff made it extremely clear to me before the vote, which is either the auto companies get the money that was put in the Energy Department for them already — a bill that I voted against because I didn’t want to give them that money, which was only within the $25 billion, money that was already expended but not obligated — or the president was going to give them TARP, with no limit. That’s what they told me. That’s what the president’s chief of staff explained to me. I said, ‘Well, I don’t want them to get TARP. We want to keep TARP on a leash. We don’t want to expand it. So give them that Energy Department money that at least puts them out of TARP, and is limited.’ Well, where are we now? What I feared would happen did happen. The bill failed, and now they’ve got $87 billion from TARP, money we’re not going to get back. And now TARP, as a precedent established by the Bush administration, whereby the Obama administration now has turned this thing into its latest slush fund. And so I voted for that to prevent precisely what has happened, which I feared would happen.

Ryan should take a leaf out of Mr T.’s book and quit his jibber-jabber. He voted for TARP, as well as the auto bailout, and he has no reasonable explanation beyond fierce loyalty.

Republicans had two choices — Ron Paul and Gary Johnson — who are both consistent fiscal conservatives with no record of supporting bailouts or expansions of government, and no record of supporting costly pre-emptive wars. The Republican Party rejected both candidates, and instead went with two defenders of bailouts, two expanders of government, two believers in pre-emptive war and a large, powerful security state. That decision says an awful lot about the Republican Party.

People who want to see government play a smaller role in the economy and society should look elsewhere; outside of rhetoric both of the two major tickets have a track record of increasing the size and scope of government, increasing debt levels and bailing out favoured corporations.

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The National Attack Authorization Act?

We all know that the National Defense Authorization Act (NDAA) signed by President Obama on New Year’s Eve contained a now-struck-down provision to authorise the indefinite detention of American citizens on US soil.

But did you know that the NDAA also paves the way for war with Iran?

From Dennis Kucinich:

Section (6) rejects any United States policy that would rely on efforts to contain a nuclear weapons-capable Iran. Section (7) urges the President to reaffirm the unacceptability of an Iran with nuclear-weapons capability and opposition to any policy that would rely on containment as an option in response to Iranian enrichment.

This language represents a significant shift in U.S. policy and would guarantee that talks with Iran, currently scheduled for May 23, would fail. Current U.S. policy is that Iran cannot acquire nuclear weapons. Instead, H. Res. 568 draws the “redline” for military action at Iran achieving a nuclear weapons “capability,” a nebulous and undefined term that could include a civilian nuclear program. Indeed, it is likely that a negotiated deal to prevent a nuclear-armed Iran and to prevent war would provide for Iranian enrichment for peaceful purposes under the framework of the Non-Proliferation of Nuclear Weapons Treaty with strict safeguards and inspections. This language makes such a negotiated solution impossible.

At the same time, the language lowers the threshold for attacking Iran. Countries with nuclear weapons “capability” could include many other countries like Japan or Brazil. It is an unrealistic threshold.

The Former Chief of Staff of Secretary of State Colin Powell has stated that this resolution “reads like the same sheet of music that got us into the Iraq war.”

The notion of a “nuclear weapons capability” seems like a dangerously low standard. Let us not forget that Mossad, the CIA and the IAEA agree that Iran does not have a bomb, is not building one and has no plans to build one.

But the bill clearly spells out its intent:

SEC. 1222. UNITED STATES MILITARY PREPAREDNESS IN THE MIDDLE EAST.

Section 2 (A) pre-positioning sufficient supplies of aircraft, munitions, fuel, and other materials for both air- and sea-based missions at key forward locations in the Middle East and Indian Ocean;

(B) maintaining sufficient naval assets in the region necessary to signal United States resolve and to bolster United States capabilities to launch a sustained sea and air campaign against a range of Iranian nuclear and military targets, to protect seaborne shipping, and to deny Iranian retaliation against United States interests in the region;

(D) conducting naval fleet exercises similar to the United States Fifth Fleet’s major exercise in the region in March 2007 to demonstrate ability to keep the Strait of Hormuz open and to counter the use of anti-ship missiles and swarming high-speed boats.

As Kucinich notes:

This is an authorization for the use of military force against Iran. It ignores the warnings of both current and former U.S. top military brass who have spoken in opposition to the use of military force against Iran, including former Secretary of Defense Robert Gates, and current Secretary of Defense Leon Panetta. A February 2012 poll demonstrated that less than 20% of the Israeli public supports an Israeli strike on Iran if approved by the United States. Congress must avoid the same mistakes it made in the Iraq war and reject any language that can be construed as authorizing war against Iran.

It seems like the framers of the bill are exceptionally keen on striking Iran as quickly as possible. Maybe they are receiving lots of money from defence contractors?

Unsurprisingly, the biggest Congressional recipient of donations from defence contractors was Howard “Buck” McKeon, the chairman of the armed services committee who also happens to be the sponsor of the NDAA:

The fact that Ron Paul is the number two recipient is a sign that not all defence contractors are keen to hit Iran. But some are.

Still, even though the bill hints very strongly toward it, it doesn’t mean that it is going to happen. Congressmen might be hungry for a war but the military — already overstretched — isn’t. Admiral Fallon was reportedly the force that kept Bush from hitting Iran, and it would not be surprising to see the Pentagon put up fierce opposition to a future war with Iran. It would be a long, expensive war, with the potential of massive negative side-effects, like dragging in other regional powers, disrupting global trade, and squeezing the US economy by spiking the oil price.