27 July 2017   Leave a comment

Foxconn is a Tawainese electronics company that recently signed an agreement to open a new manufacturing facility in the US state of Wisconsin.  It produces most of the iPhones in the world from its factory in China and has long been a source of controversy.  There was a rash of suicides at the factory because of the harsh working conditions, with many of the people committing suicide by jumping off the roof of the factory.  Foxconn’s first response to those suicides was to place nets around the roofs.  Wisconsin beat out six other US states for the factory, and provided huge financial incentives to the company to locate in the state.  The cost to Wisconsin for the tax incentives?  $237,500 per job.

The US House of Representatives has passed a military spending bill amounting to $658.1 billion.  The bill also includes $1.6 billion for beginning construction on a border wall between the US and Mexico.  In 2016 the Rand Corporation found that the total health-related costs for transgender soldiers in the US was between $2.4 million and $8.4 million.  By comparison, the Navy version of their newest fighter plane–the F-35–costs about $337 million for each plane.

World Military Spending 2016

Overview of world military sending in 2016

Posted July 27, 2017 by vferraro1971 in World Politics

26 July 2017   Leave a comment

Many in Europe are strongly opposed to the sanctions bill that the US Congress is close to passing which would impose additional sanctions on Russia (as well as Iran and North Korea) for its interference in the 2016 US elections and for its continued intervention in Ukraine.  The Europeans are especially concerned by the penalties imposed on any group that works with the Russian energy sector, including the building of a natural gas pipeline.  Much of Europe, particularly Germany, is dependent on natural gas from Russia.

Proposed Nordstrom 2 Pipeline

The US Treasury announced new sanctions against Venezuela for its continuing violations of human and democratic rights under the Maduro Administration.  The sanctions are part of a concerted effort by a number of states to persuade Maduro not to hold an election this coming Sunday for a Constituent Assembly to rewrite the Venezuelan constitution.  There have been 4 months of violent protests against the policies of Maduro and few believe that the election on Sunday will create an assembly that fairly represents the interests of the Venezuelan people.

From Today’s Protests in Venezuela

The Taliban has seized the Afghan provinces of Paktia, Faryab and Ghor from government control.  The Taliban have made steady gains against the central government in Kabul, raising powerful questions about the long-term strategy of the US in the country.  The US invaded Afghanistan in October 2001 and after 16 years of war, the Taliban control at least 40% of the country.  At what point does the US concede that the military strategy has not worked?

Posted July 26, 2017 by vferraro1971 in World Politics

25 July 2017   Leave a comment

There are reports that China is building up its military defenses along its border with North Korea.  There is no reason to believe that China wishes to use military force against North Korea so a possible alternative explanation is that China fears a collapse of the North Korean regime which could unleash a flood of refugees into China.  The move suggests that China fears US action against North Korea, either in terms of a military attack against the nuclear sites in North Korea or a possible attempt to change the regime through an assassination attempt against Kim Jong-un.  There is no evidence that indicates that the US is planning either policy although the US military build-up in the Western Pacific is certainly intimidating (three aircraft carrier groups).

Congressman Lamar Smith (R-TX) has written on op-ed on climate change for The Daily Signal, a publication issued by the Heritage Foundation.  Rep. Smith argues that there are benefits to global warming, including increased photosynthesis which would foster greater plant growth.  Additionally, he argues:

“Also, as the Earth warms, we are seeing beneficial changes to the earth’s geography. For instance, Arctic sea ice is decreasing. This development will create new commercial shipping lanes that provide faster, more convenient, and less costly routes between ports in Asia, Europe, and eastern North America. This will increase international trade and strengthen the world economy.”

What is most interesting about the op-ed is that Rep. Smith is not denying that global warming is occurring.  Chris D’Angelo has written a critique of Rep. Smith’s op-ed for Mother Jones

Effects of a Global Temperature Increase of 4ºC

One of the more perplexing characteristics of the US economy is the profound decline in employment in the manufacturing sector over the last 30 years despite a dramatic increase in the value of manufactures in the same time period.  What is also interesting is that while most Americans are well aware of the decline in manufacturing employment, very few Americans are aware of the fact that the US continues to be one of the leading manufacturing countries in the world.  There are two reasons for this unawareness.  First, the share of manufacturing in the US GDP has unquestionably gone down, despite the increase in value.  The increase in the value of services, particularly in the financial sector, has been substantially greater.  Second, much manufacturing is now being done by robots–fewer workers are necessary to produce the same products.  The labor component of manufacturing will undoubtedly continue to decline in the future, not only in the US but in other countries as well.

Posted July 25, 2017 by vferraro1971 in World Politics

24 July 2017   Leave a comment

Over the last ten years, the US has increasingly relied upon drones to pursue and kill individuals it believes are involved in terrorist activities.  President Obama significantly increased US reliance on these new weapons because they offered the possibility of degrading the ability of terrorist and rebel groups to carry out their activities with limited exposure to danger for American soldiers.  There have been claims that these strikes have been effective, but we actually know very little about hoe the drones are used and how effective and ineffective they have been.  Jacqueline L. Hazelton has written an essay on how to think about the use of drones and the dangers they pose to an effective foreign policy.  Her conclusion is that drones are of limited value:

“….the role of drone strikes in assuring U.S. security at home and abroad is quite limited and likely to become more so as counter-drone efforts and others’ acquisition of drones reduce U.S. air supremacy, as seen with the Islamic State in Syria and Iraq and as the United States again faces state rather than non-state adversaries.”

It is, unfortunately, too late to put this genie back into the bottle.

Amnesty International has released a report on sexual violence on a “massive scale” in South Sudan.  The violence is being committed by both sides in a civil conflict pitting President Salva Kiir, from the Dinka ethnic group, against the opposition leader, Riek Machar who is from the Nuer ethnic group.  The conflict has been going on  years and shows no sign of abating.  South Sudan is desperately poor and relies heavily on funds from nongovernmental organizations and wealthy nation-states.  That aid could be used as a lever to force the combatants to halt the sexual violence, but the price of withholding that aid would be a worsening of an already horrific situation.  Humanitarian interventions are never as clear-cut as they appear.

Israel is removing the security detectors around the al Aqsa Mosque in hopes of defusing the tensions in Jerusalem and the West Bank.  The decision was made after a telephone conversation between Israeli Prime Minister Netanyahu and Jordanian King Abdullah II.  The metal detectors were viewed by many Muslims as an assertion of Israeli sovereignty at the site.  Israel will try to employ security measures that do not suggest ownership of the site.


Posted July 24, 2017 by vferraro1971 in World Politics

23 July 2017   Leave a comment

The Trump Administration is trying to figure out how to respond to the crisis in Venezuela.  As the economy crumbles and President Maduro takes an increasingly hard line against protesters, the US has a very strong interest in seeing such a close and important neighbor avoid a catastrophic collapse.  But that objective is difficult to attain since many would view American intervention as a self-interested intrusion.  Additionally, some interventions might be counterproductive.  One sanction currently being advanced in Congress is to embargo Venezuelan oil, a step that would undoubtedly crash the economy.  But a Russian oil company, Rosneft, owns 49.9% of CITGO, the Venezuelan oil company.  If an embargo were to occur, it would probably lead to a Russian takeover of CITGO which would give Russia an important foothold in the economies of the Western Hemisphere.

The US Congress is close to passing, by a substantial majority, new sanctions on Russia, Iran, and North Korea.  If the bill passes, we will have to see if President Trump vetoes the bill.  Mr. Trump has been opposed to new sanctions on Russia (not to Iran and North Korea) because he believes that the law intrudes upon his authority as Chief Executive to determine foreign policy.  Congress does have authority to regulate international trade, but the bill is also a test of Mr. Trump’s willingness to confront Russia on the charges of electoral interference.  It is not clear whether the Republican majorities in Congress will support a veto, but doing so would also be a test of the Republican Party’s stance on the issue of interference.

Violence continues in Jerusalem and the West Bank over the issue of Israeli controls over the al-Aqsa Mosque.  The leader of the Palestinian Authority, Mahmoud Abbas, declared that security cooperation with Israeli authorities would cease until the security measures were removed.  There was also an attack on the Israeli Embassy in Amman, Jordan, which some fear is related to the situation in Jerusalem.  Jordan serves as the custodian to the Mosque even though Israel physically controls the site.  The issue over the Mosque is essentially symbolic, but the violence indicates how important the symbolism is to many.

Posted July 23, 2017 by vferraro1971 in World Politics

22 July 2017   Leave a comment

Poland is worrying many in Europe.  Under the leadership of President Jaroslaw Kaczynski  and his Law and Justice Party, Poland has systematically abandoned some important democratic principles.  Most recently, there is a bill, which has passed the lower house of the Parliament, which will give the President and the party the power to appoint justices which few restrictions, including justices on the Supreme Court. The departure from traditional liberal checks on the concentration of political power threatens Poland’s commitment to the European Union.  The European Commission is investigating Poland’s vote in the Union, but all its decisions require unanimous votes and Hungary, led by Viktor Orban, himself no friend to liberal values, has indicated that it would veto any sanction against Poland.

Humanity has developed through three phases of material production:  hunting/gathering; agriculture; and industrialization.  There is increasing evidence that the human role in industrialization is becoming more and more circumscribed as manufacturing has automated, and is seems as if humanity is entering a fourth phase which is as of yet unnamed but which will rely on digitization and robotization.  As this process unfolds, the role of labor in human society will dramatically change.  Right now, everyone has to produce something (a good or a service) to sell in order to secure an income.  What will happen when every good and service is produced by a machine or a robot?  How will people earn an income?  That future has always seemed remote, but the future is now in the most important human activity: food production, historically the most labor intensive of all activities.

Jobs and Automation

Citi automation

Violence broke out in Jerusalem and the West Bank as tensions rose over Israel’s decision to place metal detectors at the entrance to the al-Aqsa Mosque.  The violence was predictable, but what is not clear is whether the impasse can be resolved.  Israel responded to the violence by banning all men under the age of 50 from entering the Mosque, but that policy is not sustainable over the long run.  Al Jazeera  published a video of the violence and raised questions about the long-term security arrangements at the Mosque.

Protests outside the al Aqsa Mosque

Posted July 22, 2017 by vferraro1971 in World Politics

21 July 2017   Leave a comment

In the discussions about the role of Russian interference in the 2016 US elections, there have been many references about the Magnitsky Act.  The Magnitsky Act has a very complicated history and Foreign Policy has a very good article describing how it came about and its effects on US-Russian relations.  The critical part of the Act is that it identifies specific Russian individuals who are barred from using certain financial institutions for international transactions and that feature limits the ability of those individuals to launder money out of Russia.  The new head of White House communications, Anthony Scaramucci, is on record as believing that US sanctions against Russia are bad policy (Scaramucci was the managing director of the hedge fund, SkyBridge Capital).  The policy on Russian sanctions are an incredible lens into the Trump Administration.  Just on Tuesday, the Treasury Department levied a $2 million fine on ExxonMobil for violating sanctions by investing in the Russian oil company, Rosneft.  The investments were made when the current Secretary of State, Rex Tillerson was the CEO of ExxonMobil.  ExxonMobil is suing the Treasury Department for imposing the fine and has named the current Treasury Secretary, Stephen Mnuchin, as the lead defendant.  You know that something is wrong when a country has two Cabinet Secretaries suing each other.

US Sanctions Against Russia

BI Graphics_Russia Sanctions


The conflict in Syria has exposed certain contradictions in US foreign policy.  On the one hand, the US shares the same objective of defeating Daesh (the Islamic State) in Iraq and Syria as its sworn enemy Iran. Despite having a common objective, the US imposed new sanctions on Iran despite certifying that Iran is in compliance with the nuclear agreement forged with Great Britain, France, Germany, China, and Russia. The evidence suggests that President Trump was adamantly opposed to this certification, but was overridden by his National Security Adviser, his Secretary of Defense, and his Secretary of State. The new sanctions are in response to Iranian support for Hezbollah and for the Iranian missile program, issues which are clearly unrelated to the nuclear agreement.  It seems clear that the US seems intent on provoking Iran to break the nuclear agreement since none of the other signatories would join the US in breaking the agreement.

The US has also indicated that it changed its policy on Syrian President Assad.  Former President Obama wanted Assad to leave, but President Trump seems inclined to allow him to stay, a policy that strengthens the Russian position in Syria.  But the US is also building bases in southern Syria which directly challenge Russian and Iranian moves in that region.  The US, Russia, and Iran are all rushing to fill the vacuum caused by the slow disintegration of Islamic State control in Syria.

Posted July 21, 2017 by vferraro1971 in World Politics

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