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War in the Gulf?

Donald Trump is well known for his desire to cut American military commitments overseas. Indeed, it is one of his most attractive characteristics. But his attention span is short, he plays a lot of golf, and he does not have the knack of choosing good advisers.

His main domestic advisers on the Middle East are Vice-President Mike Pence, Secretary of State Mike Pompeo, and National Security Adviser John Bolton, all hawks on Iran. His closest allies in the region itself are Israeli Prime Minister Binyamin Netanyahu and Saudi Crown Prince Muhammad bin Salman, both of whom can wrap him around their little fingers. And they both want the United States to attack Iran for them.

Donald Trump doesn’t want a war with Iran. He has an extra-strength version of the usual Washington obsession with Iran, as irrational and ineradicable as the parallel obsession with Cuba – the United States will forgive and forget anything except humiliation – but he imagines Iran can be bullied and bluffed into submission. His ‘advisers’ are not that naive.

This is not to say that Pence, Pompeo or even Bolton prefers war to any other outcome of the current confrontation. They would rather see the sanctions they have imposed on Iran, which are strangling the economy and causing great hardship, lead to a popular uprising and regime change. Fat chance.

It’s the ever-popular moral mistake. WE would never yield to such blackmail, because our cause is just and our will is strong. THEY will crumble before the same threats because they are weak and they must secretly know they are in the wrong.

But if the Iranians perversely refuse to overthrow their government, then PP&B would accept war as the next-best outcome. Bolton might actually welcome it, and may already be involved in manipulating the intelligence to justify such a war in the same way he did in the run-up to the invasion of Iraq in 2003. (He called a rather peculiar early-morning meeting at CIA headquarters last week.)

Unfortunately, but unsurprisingly, some players in Iran now appear to be pushing back against the American pressure. They are probably hard-liners associated with the not-so-loyal opposition to President Hassan Rouhani’s ‘moderate’ government (moderate in the sense that he doesn’t want nukes and does want trade with the West), and they may just have given the American warhawks something to work with.

If push came to shove, Iran’s one available counter-weight to overwhelming US military strength would be to threaten the tanker traffic that carries 20 percent of the world’s crude oil and LNG out of the Gulf. The ‘choke point’ is the Strait of Hormuz, between Iran’s south coast and the United Arab Emirates, where the navigation channels narrow to three nautical miles wide in each direction.

On Sunday, there was a ‘sabotage attack’ on four merchant ships at anchor off the UAE port of Fujairah, just outside the Strait of Hormuz, where tankers often wait to be refuelled. Two at least were Saudi tankers.

Something holed all four ships at the waterline, and the instant suspicion was that some Iranian group is reminding everybody that Iran can close down the Strait if it is attacked. Or at least that it could do enough damage to drive insurance rates on cargoes transiting the Strait into the stratosphere.

But it might not be an Iranian group at all. It could be an American or Israeli or Saudi intelligence operation seeking to create a pretext for a US attack on Iran (like the ‘Gulf of Tonkin incident’ created a pretext for the US to start bombing North Vietnam in 1964). You have to keep an open mind on these things, unless you believe that intelligence agencies never lie.

At any rate, an actual war against Iran now seems much closer than it did last week. The long-planned transfer of another American aircraft carrier into the Gulf is now being re-framed as an emergency response to a new (but unspecified) Iranian threat. B-52 bombers that could easily reach Iran from their current bases are being ostentatiously flown into the Gulf. Mike Pompeo makes an unscheduled four-hour visit to Iraq.

If the United States does attack, nobody will help Iran, even though every other signatory to the no-nukes treaty that Trump trashed knows (and says) that Iran has complied with its terms. And the US would only bomb Iran, not invade it on the ground, so the only people who got hurt in the initial round would be Iranians.

But then it would spread: mines in the Strait of Hormuz, missile attacks on Israel by Hezbollah, maybe an uprising by the Shia minority in Saudi Arabia. Lots of death and destruction, and no possibility of a happy outcome.

I really don’t think this is what Donald Trump wants. Maybe somebody should tell him.
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To shorten to 725 words, omit paragraphs 5 and 11. (“It’s…wrong”; and “But…lie”)

Trade War and More

Donald Trump is playing hard-ball with China over trade, and the worry-warts are fretting that he’s going to start a real trade war by accident. The bigger threat, however, is that he will push first China, and then the whole world, into a deep recession.

It’s been ten years since the last recession (2008-09), and that one was a doozy. Recessions tend to come around once a decade, so one is due about now anyway – and the Chinese economy is so shaky that almost any serious shock could topple it into the pit. The rest of the world would follow.

A week ago, according to both sides, the US-China trade deal was almost done, but then (according to Washington) China started to “renege” on parts of the deal they had earlier agreed to. Washington is probably telling the truth about that: it’s practically standard in the closing stages of any negotiation with the Chinese government.

So Trump responded by imposing heavy new tariffs on Chinese exports, to come into effect in less than a week’s time unless they back off. On Friday, according to his twitter-storm last Sunday, the existing tariff of 10 percent on $200 billion of Chinese exports to the United States will more than double to 25 percent. Another $325 billion of currently untaxed Chinese exports to the US will face 25% customs duties “shortly”.

Decades of experience in the Manhattan real estate market have taught Donald Trump to recognise the smell of fear, and he is right: the Chinese are terrified. But he knows nothing about trade or the Chinese economy, so he doesn’t understand the implications of that. (This is a guy who boasts that the Chinese are having to pay these new tariffs. It is, of course, the American importers who pay.)

The Chinese leaders are terrified because their economy is already trembling on the brink of a major recession. They dodged the last one in 2008 by flooding the economy with cheap credit and setting off an investment boom that kept employment high, especially in construction. But that trick only works once.

All four corners of almost every major intersection in the hundred biggest Chinese cities is now occupied by ‘dark towers’: 40- or 50-storey apartment buildings with few or no occupants. It would take an estimated four years with no new construction whatever to sell off the currently unsold housing stock.

And the building is still going on, albeit at a somewhat slower pace. The vaunted 6% annual growth in the Chinese economy is just creative accounting. At least half of that is actually spending on white elephant projects like the dark towers that create employment, but will never produce an adequate return on investment.

Meanwhile the real Chinese economy (annual growth rate between 2% and 3%) is slowing to a near-stall. Last year, for the first time in a quarter-century, new car sales in China actually fell, by almost 6 percent. A big hit to its exports to the US, its biggest single customer, could tip it over the edge.

China is now such a big player that the rest of the world economy would probably follow it into a recession – and it would be much worse than the usual couple of years of slow or no growth, because none of major players has really recovered from the last recession yet.

The main way governments fight recessions is by cutting the interest rate, but that is still near zero in most big economies from the drastic cuts in interest last time round. Moreover, government debt is much higher than it was a decade ago, and there would be no public support for bailing out the banks with taxpayers’ money again.

“We’re in much worse shape to deal with whatever shocks come along than we were ten years ago,” said Nobel Prize-winning economist Paul Krugman in a recent Bloomberg interview. China is in particularly bad shape. Its total debt, even according to the untrustworthy official figures, is nearing three times its GDP, which is when the alarm bells usually start ringing.

So what happens if Trump’s huge tariff hikes do not force an immediate Chinese surrender on whatever issues remain in contention in the trade talks? What if Xi Jinping and his people decide to tough it out rather than lose a lot of face?

What is quite likely to happen is that China slides into a huge recession, dragging the rest of the world behind it. Maybe not as bad as 2008, but very bad, and probably very long.

And something else might happen too. The Chinese version of the ‘social contract’ is that the power and privileges of the post-Communist autocracy that runs the country will be tolerated as long as people’s living standards rise rapidly. But they are already stagnating. How would the Chinese public react if living standards actually begin to fall?

Really badly, in all likelihood. We live in interesting times.

To shorten to 700 words, omit paragraphs 11 and 12. (“The main…ringing”)

Venezuela: Taking It Slow

Juan Guaidó returned to Venezuela on Monday after almost two weeks doing the rounds of Latin American capitals that recognise his claim to be the ‘interim president’ of the country. He defied a government ban in order to leave the country, so he should be arrested any minute now. Or maybe not.

Despite all the ferocious rhetoric from both Guaidó’s camp and Nicolás Maduro’s ‘elected’ regime, there is a curious lack of urgency in their actions.

Maduro has still not arrested Guaidó, although in the past he imprisoned other opposition leaders for much lesser offences than claiming to be president. And Guaidó has not yet appointed an ‘interim vice-president’ to take over if he goes to jail– which suggests that he doesn’t really expect to be arrested either.

Given the fragmented nature of the Venezuelan opposition – four major parties that have a fragile power-sharing agreement called the Democratic Unity Roundtable (MUD) – Guaidó’s reluctance to pick a vice-president from one of them is understandable. He only became president of the National Assembly last year because it was the ‘turn’ of his party, Popular Will.

He can’t choose his potential replacement from Popular Will too, but there is no agreement in place for which other opposition party should provide that leader instead. So to avoid a struggle within the MUD coalition in the midst of his confrontation with the Maduro regime, Guaidó simply hasn’t chosen an interim vice-president.

On the other hand, if Guaidó were arrested now without having appointed a deputy, there would be an equally great risk of a squabble breaking out between the four parties in MUD over who should succeed him. Conclusion: he calculates that he probably won’t be arrested. Of course, he could be wrong, but so far this is a very slow-moving crisis.

The lack of urgency even extends to the US armed forces, which are making no visible preparations to invade Venezuela. Connoisseurs of America’s foreign wars know that they almost always clank around for several weeks or months moving forces into place before they actually cross a defended border. They are not doing that.

Why is everybody moving so slowly? Because they are all still hoping that there can be a peaceful outcome, if nobody pushes too hard right now.

Guaidó’s big disappointment came on Saturday, when he had promised that hundreds of thousands of people would go the borders to bring in the US-supplied ‘humanitarian aid’ that the Maduro regime has been blocking. It didn’t go very well. The masses didn’t show up, and the Venezuelan soldiers who are keeping the aid out didn’t defect in significant numbers.

But Maduro can’t be very confident either. He knows that the desperate shortages of food and medicine (which have caused three million Venezuelans to leave the country in the past few years) have severely eroded the regime’s popular support.

Maduro got only one-third of the seats in the 2015 elections to the National Assembly, and responded by trying to replace it with a rival ‘Constituent Assembly’. (The National Assembly is still in business, however, and Guaidó is its president). He had to rig the voting and imprison opposition leaders to ‘win’ last year’s presidential election. The best estimate is that he retains about 15% popular support.

And the US army really doesn’t want to invade Venezuela. It’s looking forward to being released from seventeen years of unwinnable guerilla wars in the Middle East, and the last thing it needs now is a new counter-insurgency campaign in Venezuela.

That’s probably what it would face if it invaded. Maduro’s regime has certainly lost majority support, but even if only fifteen percent of the population remain loyal to the ‘revolution’, there would still be a guerilla and terrorist resistance that might last for years.

The Maduro regime is slowly unravelling, mainly because of its spectacular incompetence. Every major oil-exporting economy has been hurt by the drop in oil prices, but only in Venezuela are large numbers of people facing severe malnutrition, and only in Venezuela has oil production fallen – by an astonishing two-thirds.

It’s not because of US sanctions, which only began in a serious way in 2017, and it’s not because of ‘socialism’. (Cuba came through a cash-flow crisis just as profound after the collapse of the Soviet Union, and nobody starved.) It’s because words like ‘re-investment’ and ‘maintenance’ are not part of the Chavista vocabulary.

If the regime is probably heading for collapse anyway, it’s in nobody’s interest to unleash major and long-lasting violence by pushing too hard now. Amnesties and other deals could ease a peaceful transition, and there’s still time to see if that would work.

That doesn’t mean that this confrontation can’t have a violent conclusion, but it does explain why all the major players are taking it slow.

To shorten to 725 words, omit paragraphs . (“On…crisis”)

Gwynne Dyer’s new book is ‘Growing Pains: The Future of Democracy (and Work)’.

The Kurds: Betrayed Again

The Kurds are like Kleenex. You use them, and then you throw them away.

The Kurds of Syria are now frantically digging trenches around their cities and towns just south of the Turkish border, because Turkish President Recep Tayyib Erdogan said on Monday that President Donald Trump gave a “positive response” to his plan for an invasion of Kurdish-controlled territory in Syria. On Wednesday Trump confirmed it by announcing that he will pull all US troops out of Syria within 30 days.

Erdogan would have invaded long ago if the US army and air force were not protecting the Syrian Kurds, but at that time the United States depended heavily on the Kurds in its campaign to eliminate Islamic State. IS controlled the eastern third of Syria, and from 2015 on it was the Kurdish ‘People’s Protection Units’ (YPG) who provided most of the ground troops for that campaign.

There were some 2,000 US troops in eastern Syria too, but it was the Kurds who bore the brunt of the fighting and the casualties. Indeed, a principal role of the US forces was to deter Turkey from attacking the Kurds, because Turkey, at war with its own big Kurdish minority, strongly opposed the Syrian Kurds’ ambition for independence.

But now Islamic State has been destroyed (or at least so Donald Trump believes), and the US has no further need of the Kurds. Time to throw them away.

Deprived of US air support, the Syrian Kurds have little hope of resisting a Turkish invasion. As Turkish Defence Minister Hulusi Akar said on Thursday: “They can dig tunnels or ditches if they want. They can go underground if they want. When the time and place come, they will be buried in their ditches.” So where can the Kurds turn?

Only to Damascus, where Syrian dictator Bashar al-Assad has sworn to recover “every inch” of Syrian territory from the various rebel militia forces that controlled different parts of the country. All that remains to fulfill that ambition is the recovery of Idlib province in the northwest, still held by Turkish-backed Islamist extremists – and of the Kurdish-controlled north-east of the country.

For the Syrian Kurds, reeling from the American betrayal, the urgent, unavoidable question has become: would you rather be conquered by the Turks or by Assad? There is no third option: the dream of independence is dead.

When Turkey conquered the much smaller Kurdish-majority enclave of Afrin in north-western Syria last February, almost every Kurd in the territory was driven into exile. Assad’s rule is unattractive, but the Syrian Kurds have carefully avoided fighting his forces (they only fought IS), and they might be able to cut a deal that left them some local autonomy. After all, Assad doesn’t want the Turks taking control of eastern Syria either.

The Kurds aren’t fools, and as the likelihood of an American defection grew in the course of this year they sent several delegations to Damascus to see what Assad would offer.

They came back disappointed, because Assad did not want to do anything that would open the door to a federal state in Syria, and he quite rightly thought that he had the upper hand. But now that the US pull-out from eastern Syria and the Turkish invasion of the same region have both become imminent realities, he may want to think again.

This is a part of Syria rich in oil, water and wheat. Assad needs its resources to rebuild the country, and a Turkish occupation could be a long-lasting affair. It’s therefore possible that he will make a deal with the Syrian Kurds to keep the region in Syrian hands.

The return of the Syrian army would be tricky to manage, since it would have to arrive in each part of the region after the Americans left (to avoid clashes) but before the Turks arrived. Moreover, the Syrian army is seriously short of manpower, and this operation would require a lot of it.

All the more reason to give the YPG a continuing role in the region’s security, the Kurds might argue, and it’s not impossible that Assad might buy that argument provided that the Kurdish militia became (at least in theory) a part of the Syrian army.

So the Russians may be right. When Trump revealed via Twitter that he was going to pull all American forces out of Syria, Russian foreign ministry spokeswoman Maria Zakharova responded that the US decision could result in “genuine, real prospects for a political settlement” in Syria. And it’s true.

Turkey could be convinced (by the Russians) that letting Assad take control of Kurdish-majority parts of Syria is enough to end the alleged Kurdish ‘threat’ to Turkish security. Then only the single province of Idlib would remain beyond Assad’s reach, and that’s not really a critical issue.

In fact, the fix could be in already. We’ll know shortly. But no matter what, the Kurds lose again. Of course.
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For Kleenex use “tissues” if that is your usage. This article replaces the one that would normally be sent on Sunday.

To shorten to 700 words, omit paragraphs 7 and 9. (“Only…country”; and “When…either”)