21 August 2018   Leave a comment

The Great Recession of 2008-09 damaged many national economies but none as seriously as the Greek economy.  The budget deficits that the Greeks had run up prior to the recession were impossible to manage and Greece was forced into three bailouts financed by the International Monetary Fund, the European Commission, and the European Central Bank (commonly referred as the troika).  These bailouts required Greece to undertake draconian cuts to virtually every aspect of government spending, including pensions, food and housing subsidies, and government employment.  The end result was a dramatic shrinking of the GDP of the country and it does not appear as if the cuts really led to an environment of economic growth as promised by the troika.  But the privation imposed on Greece was also a message to other European states with budget deficits, as noted by James Galbraith:

“But the damage done extends far beyond Greece. The cynicism and brutality of what happened there is for everyone to see. The fact that Europe imposed a policy of privation on one of its weakest members—not for its own sake, and not with any expectation of economic success, but to intimidate the Italians and the French, as the German Finance Minister Wolfgang Schäuble conceded to the Greek Finance Minister Yanis Varoufakis privately in 2015—was not lost on British voters who chose Brexit in 2016. The Greek debacle helped to turn the French left against Europe, and fueled the inchoate coalition now in power in Italy. The German and east European far right is surely not motivated by sympathy—on the contrary, they despise the Greeks. But they do resent the supposed “solidarity”—a fiction if ever there was one—that Germany’s Chancellor Angela Merkel and her allies invoked to sell their parliaments and voters on the idea of the Greek loans.”

Needless to say, the recent improvement in the Greek economy, as well as for the Italian, Spanish, and Portuguese economies, occurred during a period when the global economy was expanding.  It is hard to tell what will happen if the global economy slows down, and the debts of these countries will become more difficult to service.



Malaysian Prime Minister Mahathir Mohamad has cancelled two large infrastructure projects being funded by China to implement the Chinese Belt and Road Initiative. (BRI)  The Malaysian decision is based on two considerations.  First, Malaysia fears the economic costs of the debts involved in the projects.  Second, the Prime Minister has voiced concerns over Chinese influence through the BRI.  According to the Financial Times:

“Malaysian prime minister Mahathir Mohamad has warned against ‘a new version of colonialism’, in a pointed expression of Asian unease about China’s increasing economic and political influence in the region.

“‘We should always remember that the level of development of countries are not all the same. We do not want a situation where there is a new version of colonialism happening because poor countries are unable to compete with rich countries, therefore we need fair trade.’”

An example of what the Prime Minister fears is the way the Chinese took control of a major port in Sri Lanka.  The New York Times describes how the port passed into Chinese hands:

“Over years of construction and renegotiation with China Harbor Engineering Company, one of Beijing’s largest state-owned enterprises, the Hambantota Port Development Project distinguished itself mostly by failing, as predicted. With tens of thousands of ships passing by along one of the world’s busiest shipping lanes, the port drew only 34 ships in 2012.

“And then the port became China’s.

“Mr. Rajapaksa was voted out of office in 2015, but Sri Lanka’s new government struggled to make payments on the debt he had taken on. Under heavy pressure and after months of negotiations with the Chinese, the government handed over the port and 15,000 acres of land around it for 99 years in December.”

The Chinese strategy mirrors the US use of “dollar diplomacy” in the early 20th century to gain control over the economies of several Central American states.

The Chinese Belt and Road Initiative

one belt one road land sea routes


Posted August 21, 2018 by vferraro1971 in World Politics

20 August 2018   Leave a comment

Origins is an online journal for students of history,  In the current issue it asked three historians to examine the historical roots of the rise of populism in three countries:  the US, the Philippines, and Hungary.  The comparative histories make for an interesting read.  But perhaps the most important insight of the essays is that “populism” has deep roots and that its rise in the world today should not have been unexpected.  The editor’s note to the essays explains the reasons why the world seems to have caught unaware:

“After the collapse of the Soviet Union, Western politicians and commentators trumpeted the triumph of liberal democracy. Around the world, it seemed, democracy was on the march—in the former communist regimes of Eastern Europe, in large parts of Africa, and elsewhere in the developing world. Now, even the most optimistic must concede that the democratic wave has stalled and, in many places, is retreating. Voters across the globe have embraced some version of “populism” as a backlash against liberal democracy.”

The histories suggest that the rise of populism will likely not be a permanent feature of future politics, but that is is difficult to predict a turn away from that perspective.  David Bromwich has written a long, but highly intelligent, essay for The London Review of Books about how Trump defines his own unique brand of populism–“rich but not refined”.  There is a strong ring of truth in the essay:

“Yet in two respects, the authoritarian danger does resemble that of the 1930s in Europe. Trump believes that a unitary bond links him to the real people. He is their voice. And Republican moderates have almost extinguished themselves as a political species. Though party grandees as various as McCain, Romney, G.W. and Jeb Bush declined to support Trump against Clinton in 2016, and the Tea Party favourite Ted Cruz postponed his endorsement until the eleventh hour, congressional Republicans have settled on a policy of co-operation for the sake of party political advantage. Should one apply the word ‘collaborator’ to such people? The word has a certain appropriateness, in spite of the incompleteness of the analogy. The Republican Party began by legitimating Trump and has gone on to normalise the extreme aberration in a way that recalls the passive compliance of King Victor Emmanuel III in 1922 and Field Marshal Hindenburg in 1933.”

The Warfare History Network has a short article on the Italian King’s capitulation to Mussolini.  It was also the weakness of the German state that led to Hindenburg’s capitulation to Hitler.  It seems as if accommodating bullies often leads to their seizure of power.

1937 Poster Showing King Victor Emmanuel III and Benito Mussolini                                                      


1933 Photograph of Field Marshal Hindenburg and Adolf Hitler


It seems as if US President Trump’s approach to foreign policy is highly compartmentalized.  That is to say, he does not necessarily see the links between trade policy, strategic policy, or diplomatic strategy.  Instead, he pursues each objective as if it were completely independent from other objectives.  Thus, he imposes tariffs on China, while at the same time asking for Chinese cooperation in sanctioning Iran.  But his policy myopia ignores the way other states perceive US actions as part of a possible coordinated strategy; they tend to link policies as a chess game, not a game of checkers.  Nowhere is this more apparent than in Mr. Trump’s trade policy toward China.  He sees the issue as purely an economic issue.  The Chinese view US policies as part of a larger US strategy to contain the rise of China as a world power.  The South China Morning Post explains the perspective:

“Cheng Li, a China expert at the Brookings Institution in Washington, said that along with trade, a long list of security and other disputes with the US had posed a political dilemma for Chinese President Xi Jinping.

“’If it’s only on the economic and trade front, the Chinese leadership would be willing to compromise,’ Li said.

“The escalating trade tensions had not only hit key engines of China’s economic development – including the Greater Bay Area, the Yangtze River Delta and the Beijing-Tianjin-Hebei Corridor – but also had clear implications for the Chinese stock market and even property prices, Li said.

“’That really undermines Xi’s power base – the middle class, which is the most important stabilising force in China – and therefore we began to see criticism and challenges from the intellectuals and the public about Xi’s foreign policy,’ Li said.”

Foreign policy requires a long-term and systemic point of view, not a short-term bilateral transactionalist perspective.


Floods in the Indian state of Kerala have killed more than 350 people and displaced more than 800,000.  The floods are the worst in a century and the National Reviewnumber of photographs has a documenting the destruction and the misery of those affected.  The rains have begun to subside but it will take years to repair the damage done and millions right now are in desperate straits.


Posted August 20, 2018 by vferraro1971 in World Politics

19 August 2018   Leave a comment

On this day in 1953, the Iranian Premier Mohammed Mosaddeq was overthrown and replaced by the Shah of Iran.  Mosaddeq had been elected in 1951 and one of the first acts of the Iranian Majlis (Parliament) was to nationalize the oil reserves of the country which had been leased to the Anglo-Iranian Oil Company (now know as BP).  Anglo-Iranian prevented other states from purchasing Iranian oil, claiming that it was stolen, and, since oil exports were the primary source of revenues for the government, the Iranian economy slowly declined.  By 1953, after having been rebuffed by the US for economic aid, the Iranian government turned to the Soviet Union for aid.  US President Eisenhower interpreted that request as a move toward a Communist state and he authorized the US Central Intelligence Agency (CIA) to force the Mosaddeq government from office:

“A previously excised section of an internal CIA history titled “The Battle for Iran“ released in 2013, reads: “The military coup that overthrew Mosaddeq and his National Front cabinet was carried out under CIA direction as an act of U.S. foreign policy, conceived and approved at the highest levels of government.”

The son of the ousted Shah came to power and stayed in power until he also was overthrown by a popular revolution supporting the Ayatollah Khomeini who established the Islamic Republic of Iran in 1979.  Since that time, US-Iranian relations have been intensely hostile.  The sanctions that the US wishes to impose on the sale of Iranian oil on 4 November are remarkably similar to the legal actions taken by Anglo-Iranian–they are designed to force a change in the government by fostering discontent within the Iranian population.  One could hardly fault the Iranians for believing that the US will also plan to overthrow the government or force a regime change.  Americans may have forgotten the role of their government in 1953, but the Iranian people certainly have not.

Ayatollah Khomeini Arrives in Tehran in 1979

Iran Revolution 1979 photo 1

Posted August 19, 2018 by vferraro1971 in World Politics

18 August 2018   Leave a comment

The bomb that killed 40 school children in Yemen was supplied to Saudi Arabia by the United States.  According to CNN , the bomb was “a 500-pound (227 kilogram) laser-guided MK 82 bomb made by Lockheed Martin”.  These bombs had been used by the Saudis on two occasions during the Obama Administration and both times innocent civilians were killed in large numbers.  President Obama therefore banned the sale of these bombs since the evidence of Saudi carelessness was dramatic and conclusive.  Indeed, the United Nations accused the Saudis and their coalition partners of crimes against humanity.  That ban was overturned by the Trump Administration in March of 2017 which was followed by a $110 billion arms sale to Saudi Arabia.  The US complicity in Saudi war crimes is unconscionable.

Fragments of the Bomb that Killed the School Children

Munitions experts said the numbers on this piece of shrapnel confirmed that Lockheed Martin was the maker of the bomb.


Three weeks ago, Gottfried Waldhäusl, environment minister for the far-right Freedom Party (FPÖ) in the state of Lower Austria. proposed a new law that would have required Jews and Muslims to register if they purchased Kosher or Halal meat.  The proposed legislation led to  strong protests from many groups who compared the registration requirement as roughly similar to the Nazi-law that required Jews to wear yellow stars.  But Austria has also decided to allow driving exams to be taken in Turkish.  Last February. the far-right Freedom Party ordered a raid on its own government’s intelligence agency, an absolutely bizarre act compromising the integrity of the country’s most sensitive secrets.  The Washington Post characterizes the Freedom Party which has control of the Interior Ministry in the current coalition government:

“The Freedom Party came to power in Austria at the end of last year as the junior partner in a coalition with the center-right. The party was founded by former SS officers in the 1950s, and has ridden anti-immigrant and anti-Muslim rhetoric to new heights of popularity in recent years. Some of its members have been revealed to share a nostalgia for Hitler’s Third Reich.

“The party has a formal cooperation agreement with President Vladimir Putin’s United Russia party, and the close ties show. Austria was a notable holdout when European Union nations banded together in March to expel Russian diplomats to protest the poisoning of former double agent Sergei Skripal. Top Austrian officials, meanwhile, have spoken out against the E.U.’s Russian sanctions. On Saturday, Putin is expected to be a guest of honor when Austria’s foreign minister, the Freedom Party-allied Karin Kneissl, gets married.”

The politics of Austria may be extreme, but they represent the clear trend in many societies toward ethnic nationalism and the politics of exclusion.


Posted August 18, 2018 by vferraro1971 in World Politics

17 August 2018   Leave a comment

The Washington Post has published an article on the temperature records that were set in virtually every part of the planet from May to July of 2018.  In particular, Scandinavia experienced the hottest temperatures ever recorded.  The ocean temperature near the North Pole is stunningly high: “The image below shows that the sea surface was 22°C or 71.6°F on August 13, 2018, at 77.958°N, 5.545°E (near Svalbard), i.e. 6.9°C or 12.4°F warmer than 47 days earlier and 16.4°C or 29.5°F warmer than it was during 1981-2011”.  Arctic News provides the details of how far from normal the ocean temperature is:

According to the Post:

At the same time, the US is effectively ignoring any scientific research on the problem of global warming.  The Guardian points out how the US Department of the Interior has decided to vet grant proposals:

“Prominent US climate scientists have told the Guardian that the Trump administration is holding up research funding as their projects undergo an unprecedented political review by the high-school football teammate of the US interior secretary.

“The US interior department administers over $5.5bn in funding to external organizations, mostly for research, conservation and land acquisition. At the beginning of 2018, interior secretary Ryan Zinke instated a new requirement that scientific funding above $50,000 must undergo an additional review to ensure expenditures ‘better align with the administration’s priorities’.

“Zinke has signaled that climate change is not one of those priorities: this week, he told Breitbart News that ‘environmental terrorist groups were responsible for the ongoing wildfires in northern California and, ignoring scientific research on the issue, dismissed the role of climate change.


Posted August 17, 2018 by vferraro1971 in World Politics

16 August 2018   Leave a comment

The Economic Policy Institute has released its annual report on how much compensation Chief Executive Officers (CEOs) receive.  As in previous years, CEO compensation continues to rise dramatically: “By this measure, in 2017 the average CEO of the 350 largest firms in the U.S. received $18.9 million in compensation, a 17.6 percent increase over 2016. The typical worker’s compensation remained flat, rising a mere 0.3 percent. ”  The ratio of CEO earnings to the average worker’s earnings is astonishing:

“Average CEO compensation attained its peak in 2000, at the height of the late 1990s stock bubble, at $21.0 million (in 2017 dollars)—344 times the pay of the typical worker. The CEO-to-worker pay ratio dropped to 188-to-1 in 2009, in the wake of the financial crisis but rose to 312-to-1 in 2017, as worker compensation has stagnated in the recovery.

“CEO pay continues to be dramatically higher than it was in the decades before the turn of the millennium. The CEO-to-average-worker pay ratio was 112-to-1 in 1995, 58-to-1 in 1989, 30-to-1 in 1978, and 20-to-1 in 1965.”

The trend in incomes is also mirrored in the trends for the concentration of wealth in the US.  According to the Washington Post:

“The richest 5 percent of Americans have captured 74 percent of the wealth created in the country from 1983 to 2010, according to a report by the Economic Policy Institute. Another report from the Institute for Policy Studies, a left-leaning think-tank, found that the richest 400 Americans control more wealth than the poorest 80 million U.S. households, and similar research has found the top 1 percent now holding 40 percent of the nation’s wealth.”

Remarkably, none of this data reflects the impact of the tax cuts passed by the US Congress recently.  Those changes will undoubtedly aggravate the disparities in wealth and income.



One of the greatest singers of all time has died today.  Aretha Franklin sang for me my entire life and she never failed to lift my spirits.  She epitomized what Martin Luther King, Jr. called “soul” and she made me acutely aware of how important music is to a meaningful life.  Fortunately, her voice will always live on.


Posted August 16, 2018 by vferraro1971 in World Politics

15 August 2018   Leave a comment

Micah Zenko has written an essay for Foreign Policy which is the most honest analysis of the US role in the Saudi Arabian war against Yemen I have yet read.  Most Americans are unaware of the war and even less aware of the US role in supporting Saudi Arabia.  Zenko starts out the essay by pointing out that US support for Saudi Arabia goes back to the Obama Administration:

“Washington’s participation began on March 26, 2015, when a White House spokesperson announced, ‘President Obama has authorized the provision of logistical and intelligence support to [Gulf Cooperation Council]-led military operations.’ On March 26, toward the end of a Senate Armed Services Committee hearing, Sen. Kirsten Gillibrand (D-N.Y.) asked U.S. Central Command commander Gen. Lloyd Austin what the ultimate goal of the GCC air campaign in Yemen was, and for the general to estimate its likelihood of success.

“Gen. Austin answered with refreshing honesty: ‘I don’t currently know the specific goals and objectives of the Saudi campaign, and I would have to know that to be able to assess the likelihood of success.’ Gillibrand replied, ‘Well, I do hope you get the information sooner than later.’ In other words, the military commander responsible for overseeing the provision of support for a new air war in the Middle East did not know what the goals of the intervention were, or how he could evaluate whether it was successful. The United States had become a willing co-combatant in a war without any direction or clear end state.

Zenko’s concluding paragraph says it all:

“The United States has been directly engaged in the civil war since March 25, 2015, and its support has not prevented the killing of innocents. It is time to phase out and terminate America’s support for the Saudi-led component of this civil war, and, more importantly, never again go to war, or support other’s wars, without purpose or objectives.”

The  Yemeni conflict is currently the worst humanitarian crisis in the world. 


The dispute between Turkey and the US over the fate of an American pastor, Andrew Brunson, has quickly escalated and the turmoil has brought the Turkish economy to the brink of disaster.   That the Trump Administration has focused so intently on one US citizen is somewhat inexplicable given that there are 50,000 Turks who have been imprisoned and a large number of foreign nationals, including 12 Americans.  It is clear that the Administration has been willing to compromise its relations with Turkey over the fate of a Christian pastor without mentioning the other prisoners is testimony to the power of the evangelical lobby.  At the White House press briefing today, Sarah Sanders said:

“We feel that Turkey and specifically President Erdogan have treated Pastor Brunson, who we know to be a very good person and a strong Christian, who has done nothing wrong, very unfairly.  And it’s something that we won’t forget in the administration.”

Moreover, there was an interesting exchange in the State Department Briefing today:

QUESTION:  Why is it important, this one American, to put global financial stability at risk, put U.S. base presence in Turkey at risk, put a NATO ally – an alliance with a NATO partner at risk, for one American who’s being put through the Turkish justice system?

MS NAUERT:  So you’re saying this is our fault?

QUESTION:  No, I’m saying why —

MS NAUERT:  This situation is our fault?

QUESTION:  Why escalate it to that level for a single American who has —

MS NAUERT:  I think —

QUESTION:  — not been tortured or treated – he’s being put through the Turkish justice system.

MS NAUERT:  I think that I would take issue with the premise of your question.  In terms of the financial situation in Turkey, we addressed this yesterday, and Turkey’s financial situation has been in the works for quite some time and it dates prior to the imposition of sanctions on August – I believe it was August the 1st.  So this has been in train for quite some time and you cannot blame the U.S. Government for that.

We have a very broad relationship with the Government of Turkey.  Of course, with all nations, as a general matter, we will often have areas where we don’t always agree, where we don’t always see eye to eye, but we also have areas where we do work together and cooperate, and Turkey would be one of those governments where we sometimes have areas where we disagree and we certainly sometimes have areas where we cooperate as well.  Okay.

QUESTION:  But this isn’t one thing that you simply disagree one area.  This has been put to the forefront of everything.

MS NAUERT:  And your question is?

QUESTION:  So why is this one more important than all the others, it seems?

MS NAUERT:  You’re trying to single out one individual, and I have stood here repeatedly, as have many of my colleagues, to speak about other people who have been detained in that country.  Our chief mission is the protection of American citizens.  That would obviously include Pastor Brunson.  We also have three locally employed staff.  I spoke about them just yesterday and was very clear with all of you that that is a major concern of ours.  There is also a NASA scientist who has been detained by the Turkish Government; that is important to us as well, and you’ve heard that come out of the State Department, you’ve heard that come out of the White House, and from our other colleagues as well.

The Turkish economic turmoil continues to rattle the world financial markets.  Inflation in Turkey is running at a 101% annual rate and capital will continue to flow out of the country unless the currency stabilizes. The European banks that have investments in Turkey are at a clear risk of losing a great deal of money.

Posted August 15, 2018 by vferraro1971 in World Politics

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