USA: withdrawing from world affairs?

It may seem perverse to wonder whether the USA is withdrawing into an isolationist shell only a couple of days after it has orchestrated a rather modest coalition[1] into military action against the Houthis.  World Policeman, or what?  Yet I can't help feeling this may be the reflex action of a former bruiser who was in the process of retreating from the fray ("leave it babe, he ain't wurf it") when somebody rushed up to take another swipe at him anyway.

Well, maybe that will persuade him to get stuck right back in there again.  People inside and outside America have been urging its government since the first few years of the Monroe Doctrine to disengage from the ROTW and concentrate on self-sufficiency and domestic affairs.  That long-lived policy saw American governments intervening all over the place, to no obvious good effect, for many years.  There was always a "leave it babe" faction advocating the opposite[2].  But overseas intervention is a hard habit to break.

But what would getting stuck right back in there entail, in a world of truculent Russians, increasingly confident & capable Turks, Iranians and N.Koreans, an out-of-control Netanyahu, and, errr, China?

For one thing, it would require military spending on an implausible scale.  The USA of Bush / Clinton / Bush / early-Obama not only operated with no serious Russian threat and only the early signs of Chinese (and Iranian) upsurgence, but also with far and away the biggest & best-equipped armed forces on the planet.  Not any more.  The Peace Dividend[3] has been taken in no uncertain terms, and the USA could no more fight the fabled "two big wars and one small one, all at the same time" than fly over the moon.  (And it's not very good at flying over the moon any more, either.)

So what are the voices that will prevail, longer-term, in Washington?  There is certainly a bellicose "pivot to China" lobby, which thinks in terms of defending Taiwan and the South China Seas.  There's another modest coalition of nations behind this one, too (always us and the Aussies, eh?  Us with our two naked aircraft carriers and all.)  But drill down deeper, and the practical measures being advocated by all except the outright headbangers are a great deal less offensively-minded than in years gone by.  The talk is of porcupine defence, stand-off weapons, drone-swarms etc - not marine divisions storming up the beaches under 100% air-superiority.  Just as with the Roman Empire: when you trade in your stabbing sword for a long-sword, you're basically on the defensive, however widely you cast the perimeter. 

And that's the warlike lobby - many of whom would withdraw substantially from the Middle East, too - not to mention looking to Europe for the bulk of support for Ukraine.  The outright isolationists & Trumpists would cheerfully deal with China - perhaps in return for their taking N.Korea out of the equation.

And what will Starmer do then, poor thing?  Some, of course, think he'll rush to Rejoin.  There could conceivably be an intelligent offering from the EU on that score.  But, interestingly, his track record as DPP was of shameful, grovelling obeisance to Washington, which seems to be a deep instinct for him.  

He'd certainly keep the RAF busily bombing on whatever coordinates Biden dictates.  While old Joe is still slugging it out at the bar.

ND

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[1] What were we doing there?  The answer is obvious: the traditional combination of (a) the general policy of sticking with our biggest & most important ally, come what may (not entirely without merit, though Wilson never saw fit to gratify Johnson in Vietnam); and (b) the age-old tradition of us in these islands:  show us a good fight, and we're in!  (a.k.a. oi'll foight any t'ree of yuz!) 

[2] It's been argued that the only thrust under the Monroe Doctrine, broadly conceived, with genuinely strategic justification was the annexation of Hawaii in 1898.  The others, all over Latin America and even beyond, were generally deeply controversial within the USA itself

[3] What peace? - Ed

Some Weekend Reading

(... as a distraction from the subdued performance by England in Dublin yesterday.)  This interesting essay from the LRB is broadly about the Trumpy thing, in wide-ranging aspects.  Some extracts:

"In Leviathan Hobbes said that what we call the ‘deliberation’ of the will is nothing but ‘the last appetite, or aversion, immediately adhering to’ an action. Whatever the general truth of the analysis, Trump’s process of thought works like that. If Obama often seemed an image of deliberation without appetite, Trump has always been the reverse. For him, there is no time to linger: from the first thought to the first motion is a matter of seconds; the last aversion or appetite triggers the jump to the deed. And if along the way he speaks false words? Well, words are of limited consequence. What people want is a spectacle; they will attend to what you do, not what you say; and to the extent that words themselves are a spectacle, they add to the show. The great thing about words, Trump believes, is that they are disposable...

"Post-election, the liberal argument veered away from Trump and turned to the important question of whom to blame. The initial target was the director of the FBI ... A more popular and reliable target was Vladimir Putin ... It is possible that Trump’s defiance of this multifarious establishment actually helped his popularity with non-political voters. Damage more telling than any emanation from the FBI or Russia probably came from Hillary Clinton’s remark that half of Trump’s supporters were ‘a basket of deplorables’ – an unforced error that was rightly read as an expression of contempt.

"The national security state that Obama inherited and broadened, and has now passed on to Trump, is so thoroughly protected by secrecy that on most occasions concealment will be an available alternative to lying. Components of the Obama legacy that Trump will draw on include the curtailment of the habeas corpus rights of prisoners in the War on Terror; the creation of a legal category of permanent detainees who are judged at once impossible to put on trial and too dangerous to release; the expanded use of the state secrets privilege to deny legal process to abused prisoners; the denial of legal standing to American citizens who contest warrantless searches and seizures; the allocation of billions of dollars by the Department of Homeland Security to supply state and local police with helicopters, heavy artillery, state-of-the-art surveillance equipment and armoured vehicles; precedent for the violent overthrow of a sovereign government without consultation and approval by Congress; precedent for the subsidy, training and provision of arms to foreign rebel forces to procure the overthrow of a sovereign government without consultation and approval by Congress; the prosecution of domestic whistleblowers as enemy agents under the Foreign Espionage Act of 1917; the use of executive authority to order the assassination of persons – including US citizens – who by secret process have been determined to pose an imminent threat to American interests at home or abroad; the executive approval given to a nuclear modernisation programme, at an estimated cost of $1 trillion, to streamline, adapt and miniaturise nuclear weapons for up to date practical use; the increased availability – when requested of the NSA by any of the other 16 US intelligence agencies – of private internet and phone data on foreign persons or US citizens under suspicion... Obama’s awareness of this frightening legacy accounts for the unpredictable urgency with which he campaigned for Hillary Clinton – an almost unseemly display of partisan energy by a sitting president.

"How did America pass so quickly from Obama to Trump?  The glib left-wing answer, that the country is deeply racist, is half-true but explains too much and too little. This racist country voted for Obama twice. A fairer explanation might go back to the financial collapse of 2008 when Americans had a general fear and were shocked by what the banks and financial firms had done to us. ‘In an atmosphere primed for a populist backlash’, as John Judis wrote, Obama ‘allowed the right to define the terms’. The revolt of 2008-9 was against the financial community and anyone in cahoots with them, but the new president declined to name a villain: when he invited 13 CEOs to the White House in April 2009, he began by saying he was the only thing standing between them and the pitchforks, and ended by reassuring them that they would all work together. No culprit would be named and no sacrifice called for. Trump emerged early as an impresario of the anger, a plutocrat leading the people’s revolt against plutocracy.

ND

Obama Still Baiting Putin

Obama has certainly got his teeth into the gritty foreign policy thing, which all feels rather more real-world than the 'hopey-changey' thing.  He is being roared on by, well, almost everyone; and his coalition-building is on a par with that of George Bush Snr 1990-91, which is saying something.  (It can have its downsides: I well recall the chaos of trying to 'coordinate' an Egyptian armoured column in the attack on Saddam's forces in Kuwait ... a story for another time).

This coalition apparently even includes warplanes from Denmark and Holland, as well as Oz and  France, which is beginning to make the UK look like a real laggard.  Step forward Ed Miliband, whose duplicitous dealings with Dave last time around seem to be the cause.  If Mili is in an uncomfortable position, with several of his MPs beholden to Moslem voters, well, there's a thing.  He should note the actions of the aforesaid Danes and Dutch, who have their own very pressing problems in that regard.  The invitation, Ed, is to stand up and be counted.  Sorry about your Conference and that.

Interesting and significant, isn't it, that Obama used his pulpit to berate Putin again.  This is really baiting the man:  I know you have a Security Council veto, but you're going to hear this anyway. This may be very finely judged, or it may backfire, particularly in the longer term: but it wins a bunch of friends across Eastern Europe.

I wonder if he is going to take the Chinese up on their offer of a few weeks ago ?

Meanwhile, back in his Caledonian fastness, Alex Salmond would like it to be understood that everything's jolly unfair ...

ND

Obama is not very popular

US is today preparing for Government shutdown. It is an interesting concept when the lawmakers will not vote to keep paying the staff. I cannot imagine in the UK for a minute how it would even be possible for the Government to stop paying the staff in the NHS, there would be a march on Parliament to burn the place down again.

America though, is a foreign land, and there the needs of party political point scoring rise even to the level of not paying peoples' wages. It is very peculiar and breaks the first and most important rule of business too, always pay the staff. So why he shutdown, well it comes down to Obama being a lame duck President without control over congress and so their being able to stop his key initiatives, such as Medical Insurance reform - Obamacare.

He is in the position of leading a minority Government in UK terms. All this will have the side effect of crashing the markets this week, how far I am not sure, but enough as the toppy markets are always looking in September and October for reasons for a nice old correction, prior to accelerating into the year end.

It is also interesting to see just how far Obama's star has fallen, the man is a fantastic orator but a poor decision maker and in many ways not even a very good politician. Ed Milliband should take note of Obama and also President Hollande in France; indeed I think he has already. He can see that making wild populist anti-capitalist statements can get you elected. I wonder though how he plans to change the end of the story, where the wild ideas prove impossible to implement and instead the populism dies?

The Fall of Barack Obama

Obama offered Americans a free and easy pass to a better future: now they see it was an empty promise

Interesting piece on obama's woes on the First post here. Unusually for a U.S. President Obama has dissapeared from the radar here. I believe that's partly what this piece is alluding too. He set the bar too high and has now disappointed everyone. While I only agree with some of the post there are some comparisons about the different approaches the two new governments have taken getting to, and being in office.

Obama promised change. Change from the past. And hope. Hope for a better world. He didn't really say how he was going to do that, but then he didn't have to. He was left an even worse situation than Cameron's coalition. 10% unemployment, two seriously expensive wars, manufacturing shut downs and a housing and bank collapse, and all the other financial catastrophe that that brings.
When Gordon said it started in America he was right. The USA has been about six-nine months ahead of us in the credit crunch. So the Bluey-yellers should be watching what is going on there very carefully. US GDP +3.2% Q1, third solid growth 1/4 in a row, for example was bound to have influenced Osborne's optimistic treasury forecasts.

But, as the article says, Obama has not done the hope and change that people wanted. They wanted jobs. Jobs and credit. Not stimulus jobs, but real jobs. They haven't materialised.
The unemployment rate in the United States was 9.50 percent in June of 2010.

Where I really do agree with the article is that the economy should have been the number one priority for his first term. That, and that alone, will win him a second term. You can't offer 'more change and more hope,' from yourself. You must deliver.

In contrast the Tories, almost alone, tried to discuss the recession and the debt. So when they sort of won, they already had set expectations of bounty at nought. They are mentally well placed to carry out necessary reforms to the state and spending. the public expects them to do it.

But they should focus on achieving growth FIRST.The credit crunch must be ended before the campaigning begins. If it isn't, then its all over.
Obama wanted health Care reform. It was necessary, it was fairer,possibly end up cheaper and it has been a Democratic platform for decades. But it was a big fight. Ideological as well as politically. As Alexander Cockburn wrote;

Obama had his window of opportunity last year, when he could have made jobs and financial reform his prime objectives.
That's what Americans hoped for. Mesmerised by economic advisers who were creatures of the banks, he instead plunged into the Sargasso sea of "health reform", wasted the better part of a year and ended up with something that pleases no one.

The lesson for the coalition is clear. Interesting as Vince's 'university fairly paid for by all' and Gove's very welcome new school schemes, they are distractions now. The schools policy, one I wholeheartedly support, is in particular a second term policy.

Economy and debt first. Because if it isn't fixed, there won't be a second term, no matter how many new schools are opened.

Obama and the Banker quick shuffle

Let's start with the basics. Politicians spend other peoples' money freely. When it comes to looking after themselves we have the expenses scandal. Bankers' are equally wreckless with clients money, investing in risky assets and trying to make big profits but not worried about losing too much. However, with their own money, i.e. bonus's recent days have shown that no matter how bad the effect, the money will be paid to the bankers.

Morgan Stanley allocated 62% of its income to staff remuneration this week - the highest ever in the history of investment banking!

So on the surface today's huge announcement by Obama that effectively Glass-Steagall was back and that banks had to be split up to reduce risk seems like a victory for the little guy.

However, Wall Street paid for the Presidency and the senior economic advisers are always ex-bankers.

What I think today's announcement is about is protecting the income of the wealthy. Investment Banks will now get out of the TARP and regulated system, where senior management remuneration is monitored and controlled by the US Government. Instead, the prop desk guys get to go to hedge funds where the remuneration is orgasmic beyond their dreams.

The Investment bankers can become partnerships or private companies and remuneration and bonus payments will disappear from public view. The public is left looking at utility banks where earnings are not so astronomical, although high.

Look at Goldman, I bet it can't wait to not be a bank holding company anymore, it never wanted to be in the first place.

All this US action will affect the UK banks, HSBC and Barclays will have had a blow to their strategies, especially the latter which bought the US Lehman operations.

This is a great cover for bankers keeping their earnings through a populist measure. Wall Street ain't stupid after all....

Green shoots; in your dreams Obama

Obama says he sees the green shoots of recovery. it is nothing of the sort, what we are seeing now is the levelling out of the crash phase of the recession.

Now if there were green shoots, it would be into a strong bounce. The stock market is in a nice rally, that is about it. Rallies have a habit of petering out this decade in the US stock market.

As for everything else, the case-shiller index is still looking bad, company credit is bad. The only thing recovering are the banks and they have been bailed out with more money than it took to beat Hitler and Tojo.

Why talk about Obama? Well he is a model for our own Cameron. Obama's Presidency is unlikely to go down as a great success as people tire of the depression. Instead he will slowly lose credibility; partly by constantly saying things are getting better when reality says they are not.

I hope our own Tories have learned the two key lessons here:

1) (Unlike Major and Lamont) Don't spy green shoots that don't exist, it grates on the electorate
2) Don't push Brown out now, let him deal with the coming year of fall and stagnation.

To this end, the UK electoral cycle is more in favour of Cameron than the US is for Obama. Unless Guido gets his way of course....

Lucky post 888 or Disaster Capitalism?

This is post number 888; which if I were Chinese would be very lucky indeed. However, capitalists tend to deal in cold hard facts rather than wishful thinking.

Instead, the report today is that a very gloomy week has taken a decided turn for the worse; and I am not talking about the mist and fog covering the City of London today.

The DOW closed down at a new bear market low last night of under 7445. This effect of this has dragged the FTSE down 2% this morning so that it sits at just under 4000.

7 weeks into the new year and we are already 12% down on the main market; by contrast Gold shoots ahead up by 25% (huge overshoot on the upside but still...).

The main reason for all of this a combination of government hyperactivity across the world coupled with total ineffectiveness of said activity. Brown, Obama all of them need to calm down and start announcing thought through policies rather than knee jerk reactions; the current medicine is not working. There are seeds of good ideas in bank recapitalisation, regulating CDS, cutting interest rates...let's hope they get done properly.

Republican dreams gone with the wind

Above are the states results for Obama's comprehensive USA Presidential election victory.
Here is the 1860 election results. Note: Lincoln's republicans are modern day Democrats. Breckenridge's Democrats are the Republicans There is no West Virginia yet. Ignore the west, hardly anyone lives there. when Abe Lincoln won this there was a horribly bloody and protracted civil war that consumed the country and changed it forever.

And the 1861 breakaway rebel states of the new Confederacy. Virginia was a really big win for Obama, but in 1861 it only narrowly decided to side with the rebels. Florida was mostly swamp back then, and not the major win that it was for the modern Democrats. Maryland and Delaware were slave states but sided with the union in 1861 as war broke out between North and South.

So, this means war..? No.Of course not. But it shows how hard it is to change historical voting.
Factors that play well in one area may not in another.

President elect Obama had a clear campaign strategy and he won where he needed to win. He campaigned extensively in enemy territory and forced McCain to spend time and energy and money shoring up the core vote. He also proved that his message of "change" was stronger than McCain's of "experience". Seeing that he also used "Change" to triumph over Clinton's "experience" this is a tactic that has worked twice, and one Cameron has been using for a while.

The London mayoral victory and Crewe and Nantwich were very very significant wins, showing that the Tories can attack the weakened Labour heartlands. A bold strategy may well be to not just play the marginals but to campaign on a much broader front. A cash poor Labour can't be strong everywhere. If nothing comes from the heartlands attack strategy it doesn't much matter. Look at the map. FL and VA were the targets but the Republicans had to defend the whole South. the 40 electoral college votes for FL/VA wipe out Texas and Alabama for the Republicans.

Lots for Mr Cameron to look at over the next few weeks as he begins to focus his challenge.

Obama is still coming

Pretty likely that Obama is going to be the next President of the United States of America.
And a lot of conservatives don't like it.

They point out that he has a somewhat chequered history, is not immune to the lure of giving and receiving "financial favours." Has shifted his position on issues that he has publicly endorsed. Has deeply religious convictions, is inexperienced, mouths empty platitudes about 'change' and 'welfare' and 'A new way of government' and on and on.

In fact it appears that many are worried about
Education Education Education
tough on crime , tough on the causes of crime
The Third Way
Cool Britannia
bringing the mechanisms of government into the 21st century.
End to Boom and Bust

and all the other Blairite slogans that came to mean

SATS tests and a massive spending program that delivered little education improvement
Student tuition fees
3000 new imprisonable offences but no new prisions.CCTV and Special constables but no police
Unlimited immigration, worship of celebrity culture , Spin any story, abandonment of personal responsibility unimaginable regulation of britain except where it was necessary.
Pointless Wars, selling peerages and taking cash for exemptions
Stealth taxes, impossible borrowing and debt, unfunded spending, off balance sheet accounting
and as many other examples as you wish to point too.

So I admit it looks bad.
But missing from all this new BLAIR talk is the fact that Anthony Charles Lynton "Tony" Blair was elected THREE times. Three times the public rejected the other parties and voted for a Prime Minister that offered a change. In 1997 you could say it was all new and so people were fooled. In 2001 we already had minimum wage, had had the Ecclestone affair, Fox hunting fuel protests and licensing laws on the cards, a mental transport policy of neither building nor repairing roads etc
2005 you had the big war, education, health, spending, tax, foot and/in mouth Sleaze and corruption and yet...

The Americans are facing their own version of the evil Tories. They want to believe in someone who will change the way USA pork barrel politics and unaccountable Washington Politicians behave. They want to no longer be the War mongers and, most importantly, they want their economy back.

Obama may or may not be able to achieve some of these. To stick with McCain would make as much sense as sticking with Brown. More of the failed policies that got the UK into the mess is the best way out?

So let the Americans vote in Obama and become ecstatic with hope for a new era.
Just learn the UK's lesson that if he doesn't deliver he is booted out, however smiley and friendly and "you know, Pretty straight kinda guy" he appears.

Obama is the American Tony Blair

Maybe the arrival of Obama in the UK tonight will distract attention from the media story of Brown's disaster. Notably Obama is keen to meet with Blair and tolerating a meeting with Brown.

Says it all really.

However, my own view is that Obama is the US Blair. He has little to say, this excellent post by mark Wadsworth sums up his position on many things. He is has an everyman appeal and ticks all the right boxes. After George W. Bush he can be the unity candidate for America.

But he is not the leader for tough times, he is a leader for a Clinton era. I can't see his experience and leadership helping the US through the middle of the recession and potential war.

Back home is is well in hock to protectionist unions for example; no real free trade expansion, perhaps even a repeal of Nafta.His other plans such as using Government funds to pick manufacturing winners and such like is straight out of a 1970's socialist playbook.

The only area he has a good view on is predatory lending which is a scourge in both the US and UK and is a nasty development from the past few years of ultra-cheap credit.

Like Blair, some of his words are grandiose and he has the common touch, but like Blair I don;t think he has the convictions to follow-up on to make real change. Blair talked of renewal and making Britain a young country - what did he achieve - huge debts and little real improvement in public services, mass immigration and a huge public sector.

What will Obama do in his 4 years?