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By Eric Zuesse

Newsmedia effectively ban reporting corruptness of newsmedia — even of media that stand on the opposite side of the political divide.

The ‘news’media in the U.S. and allied countries never report the corruption (including lying) perpetrated by any except the very few non-mainstream media that are authentically pro-democracy (or “anti-Establishment” or “anti-elitist” — which doesn’t necessarily mean the same thing as “anti-elite”) in those countries — and these few pro-democracy sites are the least-corrupt newsmedia, the few ones that are careful to report only truths — no lies, no propaganda at all. They do it even if all the others call such news sites ‘fake news’ — because they are committed, above all, to conveying the truth, and nothing but the truth.

Each of the mainstream ‘news’media is funded by (and advertises) the corporations of billionaires and centi-millionaires (the people who control all of the large corporations and virtually all of the media). These people’s corporations advertise in, and donate to those media, and those mega-business-owners don’t want the public to know that all of the mainstream (and many even of the non-mainstream) ‘news’media are actually propaganda-agencies for what those super-rich want to happen (their governmental agendas). They not only advertise so that you will buy their products and services, but they also report — and exclude from reporting — so that you will vote for their politicians who will impose their governmental agenda in this ‘democracy’, and will vote against their opponents. This is the governmental control-system (which is proven and explained — and shown to function in the U.S.A., by that link to ‘democracy’).

A good example of this phenomenon is the way that the Nunes Memo (about ‘Russiagate’ & Trump), which was released on Friday February 3rd, has been covered in all of the ’news’media.

On the Democratic Party side, which is funded by billionaires who control the Democratic Party and who own Democratic Party ‘news’media, there have been efforts to discredit, or else to minimize the significance of, what the Memo said.

On the Republican Party side, which is funded by billionaires who control the Republican Party and who own Republican Party ‘news’media, there have been efforts to credit, and also to maximize the significance of, what the Memo said.

It’s a Republican memo, so that’s understandable on strictly partisan grounds. If either of those Parties represented the public instead of the billionaires who fund them, then there would be a possibility of overcoming the ugly reality that’s documented in that link about our ‘democracy’ — and actually having a democratic government instead of our existing dictatorship — but unfortunately, neither Party does represent the public (which is why what was reported in that link to ‘democracy’ happened to be the case).

However, when I emailed on February 2nd, to all major and many minor ’news’media in the U.S. and its allied countries, submitting to them a news-report exposing the corruptness of one particular major U.S. ’news’medium’s news-story on the significance of what the Memo said, no mainstream U.S.-and-allied ’news’medium published it, and only two non-mainstream ones did: washingtonsblog, and RINF.

Although I hadn’t seen this tweet from the head of Judicial Watch, I had just explained the basic reasoning that stood behind it — so, here’s the significance of the Nunes Memo, in a nutshell (and my article, which was published only by washingtonsblog and RINF, provides the actual case):

https://twitter.com/TomFitton/status/959481196446183426?ref_src=twsrc%5Etfw&ref_url=https%3A%2F%2Fwww.infowars.com%2Fdeep-state-death-spiral-dems-in-denial-over-damning-fisa-memo%2F

Tom Fitton, President, Judicial Watch

Memo:  No FISA warrant without [Steele] Dossier.  Which means no Russia collusion story without Dossier.  Which means no Mueller special counsel without Dossier paid for by Clinton/DNC.  Shut it down.

9:38 AM – 2 Feb 2018

This happens to be in line with the Republican PR campaign on the matter, but even Republican ‘news’-sites refused to publish the article I wrote, because it exposed the fraudulence of a certain Democratic news-site — and this is unfortunately a journalistic no-no.

In other words: Not only do ‘news’-sites not expose journalistic wrongdoing that’s on their own political side, but they also hide the journalistic wrongdoing that’s on the opposite side of the political divide. Both sides actually work together, to fool the public in ways that are acceptable to — or even required by — the billionaires. This is the phenomenon that’s documented, in that link to ‘democracy’ — documented actually to exist in the U.S., and to control the U.S. Government.

Unless the journalistic taboo, hiding from the public the lies (including all of the easily preventable false and misleading assertions) that are published by other ‘news’media — thereby leaving such lies to pile up in basically the way that please all billionaires (and centi-millionaires) of all political parties — ends, there is no hope for democracy. Not even a hope. There is just the extension of the present real nightmare, into the future.

Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

9 February 2018

Source: https://countercurrents.org/2018/02/09/newsmedia-u-s-allied-countries-never-report/

By Tapan Bose

Photos of grieving women and old men hugging the casket soldier killed on the Jammu and Kashmir border skirmish are appearing on the front pages of newspapers almost every day. Dressed in battle fatigues and bullet proof jackets, Indian army jawans and personnel of the Border Security Forces are constantly moving through border hamlets and paddy fields to take position to fire across the border. Devastation is visible all around — blood stains on the floor, broken windows, injured animals and splinter marks on the walls. By mid -January this year (2018) a chain of hamlets and towns along the Indo-Pak border in R.S.Pura sector have become empty. Over 40,000 villagers have abandoned their homes to escape heavy shelling by Pakistani forces. The BSF had fired over 9,000 rounds of mortar shells across the Jammu IB in the last few days as part of “pinpointed” retaliatory action against this “unprovoked” firing from across the border. In Nichal village in Samba district, an old man waiting to receive body of his son felled by Pakistani bullets appealed to Prime Minister to either engage Pakistan in dialogue, or engage it in a full-fledged war to get lasting peace in Jammu and Kashmir. It is the Prime Minister Narendra Modi who has virtually frozen all high-level contacts with Pakistan and vowed to continue doing so until Islamabad stops providing all logistical support for the anti-Indian insurgency in Kashmir. There is no indication that Mr. Modi is going to change his stance in near future.

Bilateral relations between India and Pakistan has been virtually reduced to soldiers firing at each other across the Line of Control in Jammu and Kashmir. During 2017 there were nearly 860 hostile military actions on the Indo-Kashmir border. According to information in the first month of 2018 there were more than five incidents of exchange of fire every day on the Jammu Kashmir border. Earlier this month, the Press Trust of India (PTI) cited a report from Indian intelligence sources that claimed 138 Pakistan military personnel were killed in the preceding year in “tactical operations and retaliatory cross-border firings” along the LoC. The same sources put the death toll of soldiers on the Indian side at 28. Both militaries are known for boasting of enemy fatalities, while downplaying casualties on their own side.

In retaliation of heavy Pakistani firing and shelling that killed Border Security Force Constable K.K. Appa Rao, Indian army in August 2017 had initiated “Operation Arjun”, which targeted farms and residences of Inter-Services Intelligence (ISI) officers and retired Pakistani Army officers. An official document accessed by IANS revealed that “Operation Arjun” continued till September 24, with the BSF using small and medium arms as well as aerial weapons, causing heavy casualties and damage on the Pakistani side. According to reports, in January 2018, Indian side has fired around 9000 rounds of mortar shells across the international border in Jammu as part of “pinpointed” retaliatory action against this “unprovoked” firing from across the border.

With both sides accusing the other of “unprovoked firing” across the Line of Control (LoC) the situation is on a knife’s edge. These violations in the Jammu and Kashmir region are significant as these compound bilateral military, political, and diplomatic tensions. These have the potential to escalate into bigger military engagement in the aftermath of terror incidents.

Since late 2008, India-Pakistan “comprehensive peace dialogue” has been in limbo. However, till 2016 the incidents of violation of ceasefire were about 300 per year. On September 28, 2016, India responded to the Uri attack by mounting surgical strikes on militant bases. After the “surgical strike” the incidents of ceasefire violations have increased exponentially. The cross border firings spread to the international border in Punjab as a result of which villages on both sides of Punjab had to be evacuated. The US endorsed India’s Sept. 2016 “surgical strikes” inside Pakistan. While India asserts terrorist infiltration from Pakistan is the primary cause for cease fire violations, Pakistan claims that the outstanding bilateral disputes are the issue. Even if terrorist infiltration were to end, there is no certainty that the ceasefire violations would end. The situation is complicated by the new military belligerency which is behind the massive rise in the cease fire violations during last year.

A further consequence of Washington’s downgrading of relations with Pakistan in favour of India, is that it has emboldened the Indian ruling elite in its dealings with Pakistan. Seizing on the deterioration in US-Pakistani relations, General Bipin Rawat, the Chief of Indian on January 12, 2018, issued a warning to Pakistan. He said that Indian forces were ready to call Pakistan’s ‘nuclear bluff’ and cross the border to carry out any operation if asked by the government. Pakistan Foreign Minister Khawaja Asif responded the next day, with his own warlike message. He said, Indiana army chief’s statement “Amount to (an) invitation for (a) nuclear encounter. If that is what they desire, they are welcome to test our resolve. The general’s doubt would swiftly be removed, inshallah [God willing].” Earlier in the day, Director General of Inter-Services Public Relations (ISPR) Maj Gen Asif Ghafoor had also responded to the Indian army chief’s ‘nuclear bluff’ assertion by warning that India will be given a befitting response if they engage in any misadventure.

Pakistan has been stockpiling strategic nuclear weapons for several years. There are reports that recently it has deployed tactical or battlefield nuclear weapons as its first line of defence against any large-scale Indian invasion or impending invasion. Pakistan claims that Indian has been planning attack them under its “Cold Start” strategy.

Pakistan has long viewed Afghanistan as vital to giving it “strategic depth” in its rivalry with India. Washington’s promotion of India as a major player in Afghanistan is exacerbating tensions in the region. Trump administration’s encouragement of India has helped expand the Indo-Pakistan strategic conflict onto Afghan soil. It has emboldened Afghanistan which, has adopted an increasingly hostile and aggressive policy towards Islamabad. Islamabad frequently accuses Indian intelligence of working in tandem with Afghan intelligence to foment terrorist attacks inside Pakistani territory, including by supporting the separatist insurgency in Baluchistan.

The Pakistan claims that US government’s efforts to upset the “balance of power” in the region has forced them to deploy tactical nuclear weapons and expand its military-strategic ties with Beijing. With the US government providing India access to its most advanced weapon systems, and Pakistan moving to strengthen its strategic ties with China, the region is increasingly being polarized into rival Indo-US and raising the danger that a war between India and Pakistan could draw in the world’s great powers.

As we have seen in the past, when India and Pakistan dialogue process on key disputes is under way, cease fire violations go down. When the governments stop talking to each other, and bilateral tensions go up, the forces deployed on the line of Control, gain autonomy and local factors tend to have a dramatic influence on ceasefire violations. Instead of resuming bilateral dialogue, which is the only way disputes can be resolved, both governments have adopted unsustainable militarist approach which has the potential of engulfing the region in a larger war, which would cause massive bloodshed and enormous damage to both countries.

The fear that under the BJP rule, India will be increasingly drawn into US imperialism’s game plan for extending its hegemony over this region to counter China’s growing economic and military power is real. The USA has always fought their wars in other people’s territories bringing utter devastation to the people and the economy. That continuous localized military clashes, can lead to large-scale war is an established historic fact. We have become so used to this perpetual cycle of instability and constant confrontations, along the Indo-Pakistan border that we have lost sight of the inherent danger that these confrontations pose to peace in South Asia. As a result, despite our best efforts, the next big war in the Asia-Pacific, like most military conflicts, may come as an apparent surprise when we least expect it. For what is clear is that the current instability in the Asia-Pacific cannot endure indefinitely.

The present confrontation and jingoism has to stop, it harms lives of people on both sides. There is grave concern that after 70 years of independence a large proportion of the populations of both countries are still steeped in poverty, hunger, disease and homelessness. It is incumbent that the concerned citizens of both countries lead the way by giving a joint call emphasizing the absolute need for the two countries reestablish the relations that existed at the end of last century or beginning of this century when both governments were talking to each other. The dialogue should however not be limited to politicians, the armies or bureaucrats. Civil society organisations of both the countries must be a party to the dialogue as they alone will persuade the states to alter their course.

Tapan Bose is an independent documentary filmmaker, human rights and peace activist, author and regular contributor leading journals and news magazines in India, Nepal and Pakistan.

9 February 2018

Source: https://countercurrents.org/2018/02/09/india-pakistan-coming-war/

By Rania Khalek

The ease with which American foreign policy “experts” can suddenly reinvent themselves, switching focus as the DC mood changes, exposes the Washington think tank racket as a giant sham designed to manipulate opinion.

When protests broke out in Iran at the end of 2017, Washington think tanks were ecstatic. They saw an opportunity to push for regime change and they went for it. Almost overnight, all of the self-proclaimed “Syria experts” who spent the last several years arguing for the overthrow of Syrian President Bashar Assad shifted their focus to Tehran.
The Hudson Institute, a conservative pro-war Washington outfit funded by major corporations and oil companies, is a case in point. On January 16, Hudson hosted a panel of so-called experts, titled “Iran Protests: Consequences for the Region and Opportunities for the Trump Administration.” The panel featured a who’s who of warmongers discussing how to weaken yet another Middle Eastern state.

The most notorious among them was regime change aficionado Charles Lister, a “senior fellow” (read lobbyist) at the Middle East Institute, an influential DC think tank that receives tens of millions of dollars from the United Arab Emirates, a country whose leadership is committed to regime change in Iran. Before he was an “Iran expert,” Lister rose to prominence agitating for regime change in Syria. He is perhaps best known for cheerleading Salafi jihadist Syrian rebel groups like Ahrar al-Sham and Nour al-Din al-Zenki, which Lister insisted were moderate despite their explicitly stated intention to wipe out minorities in Syria and their open alliance with Syria’s Al-Qaeda affiliate. Anyone who dared to criticize such groups or highlight their genocidal agendas quickly became targets of Lister over the years – he would brand them dictator lovers and Assadists.

It’s unclear whether Lister speaks any Arabic or whether he’s ever spent any significant amount of time in Syria or the Middle East more generally. But he says what the foreign policy establishment wants to hear, and for that, he is quoted extensively in the mainstream press on everything from Syria to Iran to even Egypt, with the New Yorker’s Robin Wright labelling him “an expert on Jihadism.”

During the Hudson panel, Lister argued against the US participating in locally negotiated ceasefires in Syria that have played a major role in de-escalating the violence that tore apart the country. Ceasefires benefit Hezbollah and Iran, warned Lister, who would apparently rather the bloodshed continue if it helps the US and its jihadist proxies. Lister also painted Israel as the ultimate victim of Iran in Syria and suggested the CIA assassinate Major General Qasem Soleimani of the Islamic Revolutionary Guard Corps. Soleimani heads Iran’s elite Quds Force, which conducts operations outside of Iran in both Iraq and Syria. He has been credited with helping to turn the tide in both countries against Al-Qaeda and Islamic State (IS, formerly ISIS) which has led to American fears that he threatens US hegemony in the region.

Blind Eye
Hudson’s in-house counterterrorism expert Michael Pregent, who previously accused Iran of refusing to fight IS while arguing that the sometimes IS-allied Free Syrian Army was the only force capable of defeating the terrorist group, also agitated for the assassination of Soleimani, but he called for Israel to do the dirty work rather than the CIA.

Omri Ceren from the right-wing Likud-aligned Israel Project was also on the panel. Echoing Israeli government talking points, he called for the US to spread a “freedom agenda” in Iran – which is code for regime change.

Another speaker was Brian Katulis from the Center for American Progress, a Democratic think tank that also receives funding from the UAE. Katulis employed empty slogans about supporting “freedom and justice” in Iran. Almost everything he said was forgettable. The UAE funding might explain why these experts continually blasted Iran for supposedly destabilizing Yemen without mentioning a word about the punishing Saudi-imposed siege which has led to famine and a cholera outbreak of epic proportions that kills a Yemeni child every 10 minutes.

The Hudson panel perfectly encapsulates how these establishment experts have no actual expertise, just fancy titles and shady funding that gives them a veneer of scholarly seriousness. They shift from one country to the next and are considered authoritative without any real credentials other than being white men who provide the intellectual backbone to Washington’s permanent war agenda, which all the panelists have a history of supporting. The fact that their policy prescriptions have ended in disaster for the people of the region doesn’t slow them down.

Death Toll  
The war in Iraq killed over a million people and catapulted the region into violent sectarian warfare from which it has yet to recover. The Western intervention in Libya threw that country into chaos, transforming what was once the richest nation in Africa, with the highest literacy rates, into an ungovernable gang-run state home to IS slave markets. And then there’s Syria, where the US poured billions into funding Al-Qaeda-linked rebel groups to overthrow the government, creating the worst refugee crisis since World War Two.

The men who made up the Hudson panel supported all of these disastrous wars, which goes to show that being wrong gets you places in Washington. In fact, being wrong seems to be a prerequisite for promotion in Beltway circles.

No one epitomizes this dynamic more than Peter Bergen, a national security analyst at CNN. Two decades ago Bergen produced a rare interview with Osama bin Laden and he’s been capitalizing on it for 20 years. Since then he has fallen up to expert status on any and all issues pertaining to national security, counterterrorism and the Middle East, no matter how wrong he is. He supported the conflicts in Iraq and Libya. And here he is debating an actual expert, journalist Nir Rosen, and like always, Bergen argues for more war.

Another example is Ken Pollack from the Brookings Institute. He pushed hard for the war in Iraq and US interference in Libya and Syria. Despite the disastrous consequences of these policies, he is still described as an “expert” and recently penned a report for the Atlantic Council on countering Iran.

Destabilizing Iran has long been a policy goal of the US and its Israeli and Saudi allies. But the reality is that Iran is the most stable country in the Middle East and it played a crucial role in protecting the region from IS and Al-Qaeda. Whatever one thinks of the government in Iran, and there are of course many legitimate critiques as is true of any government, Iran’s only crime is that it acts independently of American interests and for that, it must be strong-armed into submission. So, let’s hope the experts don’t have their way.

Rania Khalek is an American journalist, writer and political commentator based in the Middle East.

7 February 2018

Source: https://www.rt.com/op-ed/418132-iran-protests-syria-experts-warmonger/

By Dr Ludwig Watzal

No other world leader is more demonized and slandered by the Western media than the Russian President Vladimir Putin. All the major US media outlets and corporations caricature one of the most rational and thoughtful leaders on the international stage. Compared to Donald Trump, Theresa May, and Emanuel Macron, not to speak of the most overrated Angela Merkel, Putin has a vision of the role of the nation-state in international politics. He can be called the Russian Bismarck. The closest to him, what the role and importance of the nation-state are concerned, is President Trump.

At least, there is still one US voice of reason what Russia and Putin are concerned. Professor Stephen F. Cohen, the best expert on Russia in the whole United States, strikes a blow for Putin with excellent, rational and thoughtful arguments. He contrasts sharply with the created “Russiagate” and Russophobic hysteria, which, up till now, are rumors. So far, there hasn’t been any shown evidence of so-called Russian hacking or Russian collusion, not by the 17 US Intelligence Agencies. Not to speak of the Clinton/Obama mafia that invented this whole myth with the FBI, DOJ, the Intel community, especially Clapper and Brannan, and the other subordinate crooks in the Obama administration. Without Obama’s knowledge and approval, this conspiracy against a newly elected US President could have never taken place.

Without the massive propagandistic support of the mainstream media in the US, the UK, and Australia, not to speak of their scribblers in Western Europe, especially in Germany, this anti-Russian propaganda would have failed. Even more important are people such as Stephen F. Cohen, a voice in the wilderness. Whether the major propaganda outlets such as CNN, MSNBC or the BBC will listen, can be doubted. Too much for their reputation is at stake.

Dr. Ludwig Watzal works as a journalist and editor in Bonn , Germany.

8 February 2018

Source: https://countercurrents.org/2018/02/08/demonization-president-vladimir-putin-must-stop/

By Mehdi Hasan

She did try and warn us.

“Imagine, if you dare … imagine him in the Oval Office facing a real crisis,” Hillary Clinton said in her speech to the Democratic National Convention in 2016, referring to her then-Republican opponent, Donald J. Trump. “A man you can bait with a tweet is not a man we can trust with nuclear weapons.”

Yet four months later, in November 2016, almost 63 million of her fellow Americans voted to put the short-tempered, thin-skinned former reality TV star in charge of their country’s 6,800 nuclear warheads. Never forget: As president of the nuclear-armed United States, Trump — Trump! — has the power to destroy humanity many times over, while rendering the planet uninhabitable in the process.

If that wasn’t terrifying enough, last week, less than 72 hours after the State of the Union speech, in which Trump ramped up his war of words with North Korea, his administration announced that it wanted to make it much easier for the president to start a nuclear holocaust.

You might have missed that rather important piece of news. Last Friday, while cable news channels rolled on the Nunes memo, the Pentagon published the latest Nuclear Posture Review, or NPR, which includes two pretty alarming new components.

First, while Barack Obama’s 2010 NPR for the first time ruled out a nuclear attack against non-nuclear weapon states that are in compliance with the Nuclear Non-Proliferation treaty, Trump’s NPR goes in the opposite direction and suggests that the U.S. could employ nuclear weapons in “extreme circumstances” to defend the “vital interests” of the United States and its allies. The document states:

Extreme circumstances could include significant non-nuclear strategic attacks. Significant non-nuclear strategic attacks include, but are not limited to, attacks on the U.S., allied, or partner civilian population or infrastructure, and attacks on U.S. or allied nuclear forces, their command and control, or warning and attack assessment capabilities.

Got that? Trump wants to be able to retaliate against a non-nuclear and perhaps even non-military attack on U.S. infrastructure — say, a cyberattack on the power grid? — with a nuclear strike that could kill hundreds of thousands, if not millions. To call such a move disproportionate would be a severe understatement.

Second, the new NPR calls for the development of a new generation of so-called low-yield nuclear weapons. These smaller nukes, the document suggests, would be tactical, not strategic; deployed to the battlefield, rather than dropped on a city. The problem with this argument is that the atomic bombs used against Hiroshima (200,000 dead) and Nagasaki (70,000 dead) could also be considered low-yield nuclear weapons, in terms of their explosive capacity.

There is also the clear lowering of the threshold for nuclear weapons use: It becomes easier to justify the launch of a small nuclear weapon on the basis of a supposedly lower explosive force. Yet “a nuclear weapon is a nuclear weapon,” as Ronald Reagan’s former Secretary of State George Shultz testified in front of the Senate Armed Services Committee the day before the release of Trump’s NPR. “One of the alarming things to me is this notion that we can have something called a small nuclear weapon … and that somehow that’s usable,” Shultz added. “Your mind goes to the idea that, yes, nuclear weapons become usable. And then we’re really in trouble, because a big nuclear exchange can wipe out the world.”

It would be a worrying development if any president of the United States announced, with little debate or discussion, a plan both to build more tactical nuclear weapons and use them in response to non-nuclear attacks; a nuclear strategy that makes the use of nukes more, not less, likely. But when that president is Donald J. Trump, it should be deemed a national, if not a global, emergency.

Lest we forget, this is a president who, during his election campaign, displayed complete ignorance about the “nuclear triad”; called for an “unpredictable” nuclear weapons policy, while refusing to rule out using nukes against the Islamic State or even in Europe (because “it is a big place”); and asked a foreign policy adviser three times, during a single hourlong briefing, “Why can’t we use nuclear weapons?” This is a commander-in-chief, who since coming to office a year ago, has demanded a tenfold increase in the number of U.S. nuclear weapons; casually threatened North Korea “with fire and fury like the world has never seen”; and began 2018 by bragging on Twitter about his “much bigger & more powerful” nuclear button.

“Giving Trump new nukes AND new ways to use them is like giving matches and gasoline to Curious George,” wrote nuclear weapons expert Tom Collina of the Ploughshares Fund on CNN’s website last Friday. “It will not end well.” Or as one retired senior Army officer told the American Conservative, the NPR provides Trump with “a kind of gateway drug for nuclear war.”

Indeed. And even prior to the publication of this hawkish nuclear strategy document, a Washington Post-ABC News poll in mid-January revealed that 60 percent of Americans did not trust Trump to responsibly handle his “authority to order nuclear attacks on other countries,” while 52 percent of them were “very” or “somewhat” concerned the president “might launch a nuclear attack without justification.”

Remember: The courts may be able to strike down his executive orders as unconstitutional, and Special Counsel Robert Mueller may be able to indict him over collusion or obstruction of justice, but there are no checks or balances on the president’s authority to wage nuclear war. None. Zero. To quote Bruce Blair, a former nuclear missile launch officer and research scholar at the Program on Science and Global Security at Princeton University: “We all need to confront the fact that [the U.S. political system] gives one person the God-like power to end the world.”

The questions, therefore, that matter far more than any other in 2018: Does the narcissist-in-chief plan on using this “God-like power?” Will an impulsive and aggressive Trump get us all killed by launching a nuclear war? Everything else is noise.

Mehdi Hasan is an award-winning British columnist, broadcaster, and author based in Washington, D.C. He hosts UpFront on Al Jazeera English and has interviewed, among others, Edward Snowden, Hamid Karzai, Ehud Olmert, and Gen. Michael Flynn.

8 February 2018

Source: https://theintercept.com/2018/02/08/donald-trump-nuclear-war/

By Ishaan Tharoor

When President Trump addressed the World Economic Forum in Davos last month, his jabs at the “nasty,” “vicious,” “fake” media earned him audible groans and hisses — even from some non-American reporters in the room. It may have been a new experience for them, but journalists in the United States have become rather depressingly inured to Trump’s diatribes.

That wasn’t always the case.

“At the end of 2016, ‘fake news’ had a clear meaning. It referred to stories that were fabrications — the Clinton Foundation paying for Chelsea Clinton’s wedding or a child sex ring run out of a D.C. pizza shop,” noted The Washington Post’s Fact Checker. “The phrase was popularized after Google, Facebook and Twitter vowed to eliminate the phony content that some have speculated helped tilt the 2016 election in Donald Trump’s favor.”

But, starting early in his presidency, Trump seized upon the words “fake news” and shaped them into a cudgel he incessantly wields. He has routinely tweeted against the “fake news” media when it has the temerity to fact-check a multitude of erroneous claims he has made; doled out “fake news” awards to outlets whose coverage he thinks is helplessly biased against him; and looked on as a series of autocrats and strongmen abroad aped his rhetoric, invoking “fake news” to argue away documented reports of ethnic cleansing, torture and war crimes.

A new study, though, restores a bit of clarity to what “fake news” actually represents. Researchers at Oxford University’s Internet Institute spent 18 months identifying 91 sources of propaganda from across the political spectrum on social media, which spread what they deemed “junk news” that was deliberately misleading or masquerading as authentic reporting. They then did a deep analysis of three months of social media activity in the United States, studying 13,477 Twitter users and 47,719 public Facebook pages that consumed or shared this fake news between November 2017 and January 2018.

What they found was a profound imbalance.

“Analysis showed that the distribution of junk news content was unevenly spread across the ideological spectrum,” the institute said in a news release. “On Twitter, a network of Trump supporters shared the widest range of junk news sources and accounted for the highest volume of junk news sharing in the sample, closely followed by the conservative media group. On Facebook, extreme hard right pages shared more junk news than all the other audience groups put together.”

Right-wing critics of mainstream media in the United States would likely recoil at this characterization and point to what they see as anti-Trump hysteria in mainstream or liberal outlets. But the study shows there is no symmetrical equivalence.

“We find that the political landscape is strikingly divided across ideological lines when it comes to who is sharing junk news,” said Oxford researcher Lisa-Maria Neudert in a statement. “We find that Trump supporters, hard conservatives and right-wing groups are circulating more junk news than other groups.”

The phenomenon is not limited to the United States. Late last year, a team of German researchers at Hoffenheim University created a fake far-right news site that shared fabricated, sensationalist stories on Facebook about refugees and immigrants. These pieces reached thousands of far-right supporters in Germany, many of whom recirculated the stories. It reflected the willingness of people in ideological echo chambers to believe what they want to believe rather than check or evaluate sources.

It also exposed a problem with social-media sites such as Facebook and Twitter, which critics have lambasted as not doing enough to curb the scourge of fraudulent content and “bots” that amplify fake news. “It was striking that our Facebook profile was never questioned — not by Facebook, that is, the institution itself, nor by other users,” said Wolfgang Schweiger, the lead researcher in the project, to the BBC.

Studies like this and the Oxford Internet Institute investigation may add to the pressure on tech companies to do better at fighting misinformation spread through their platforms. Facebook and other companies are working to better identify fake accounts and stem the damage they might cause. In Italy, Facebook has contracted a team of independent fact checkers to monitor and debunk fake news ahead of elections next month. On Tuesday, Facebook agreed to a similar arrangement with Mexico’s National Electoral Institute.

But while social media may help reinforce tribal divisions, the “fake news” moment reflects a deeper, intensifying polarization in the United States and elsewhere, one that predates Trump’s political rise or even the era of social media as a prime vehicle for delivering information. As Vox’s Matt Yglesias writes in a gloomy essay on the prospect of a looming crisis in American democracy, the country’s political system is being fundamentally weakened by intensifying ideological divisions. Those gaps have made compromise more difficult and emboldened presidents to expand their executive powers.

“Over the past 25 years, it’s set America on a course of paralysis and crisis — government shutdowns, impeachment, debt ceiling crises, and constitutional hardball,” Yglesias wrote. “Voters, understandably, are increasingly dissatisfied with the results and confidence in American institutions has been generally low and falling. But rather than leading to change, the dissatisfaction has tended to yield wild electoral swings that exacerbate the sense of permanent crisis.”

In this climate, the proliferation of “fake news” — and the arguments over it — are a mark of a dangerous political degradation. For Trump, it serves as an extension of the same demagogic mind-set that saw him labeling Democrats who did not clap during his speech as “un-American” and “treasonous.” Analysts point to how such unravelings led to coups and chaos in countries as disparate as Chile and Turkey.

“Some polarization is healthy, even necessary, for democracy. But extreme polarization can kill it. When societies divide into partisan camps with profoundly different worldviews, and when those differences are viewed as existential and irreconcilable, political rivalry can devolve into partisan hatred,” wrote Harvard political scientists Steven Levitsky and Daniel Ziblatt, authors of the new book “How Democracies Die.” “Parties come to view each other not as legitimate rivals but as dangerous enemies. Losing ceases to be an accepted part of the political process and instead becomes a catastrophe.”

Ishaan Tharoor writes about foreign affairs for The Washington Post.

7 February 2018

Source: https://www.washingtonpost.com/news/worldviews/wp/2018/02/07/fake-news-and-the-trumpian-threat-to-democracy/?utm_term=.8f8b4ae413c1

By Ishaan Tharoor

A number of recent reports have appeared to confirm one of the worst-kept secrets in the Middle East. In coordination with Egyptian authorities, Israel has for months been conducting clandestine airstrikes against jihadist groups operating in northern Sinai. The Israelis used unmarked drones, helicopters and jets to launch at least 100 strikes on the peninsula, all with the apparent blessing of Egyptian President Abdel Fatah al-Sissi.

Both the New York Times and The Washington Post on Saturday ran stories, sourced to former U.S. and British officials, that confirmed the Israeli strikes. They come as Egypt is struggling to control a devastating insurgency in Sinai, and they mark a striking secret alliance between two countries that have fought three wars against each other and then presided over a fragile peace.

“The covert alliance between Egypt and Israel on counter­terrorism shows how the rise of the Islamic State and other Islamist militant groups has helped forge quiet partnerships between Israel and its longtime Arab adversaries,” wrote my colleague Greg Jaffe. But it’s not just about the Islamic State.

“Behind the scenes, Egypt’s top generals have grown steadily closer to their Israeli counterparts since the signing of the Camp David accords 40 years ago, in 1978,” noted the Times. “Egyptian security forces have helped Israel enforce restrictions on the flow of goods in and out of the Gaza Strip, the Palestinian territory bordering Egypt controlled by the militant group Hamas. And Egyptian and Israeli intelligence agencies have long shared information about militants on both sides of the border.

Authorities in both countries are not publicly admitting to the strikes. As part of its sweeping counterinsurgency in Sinai, Egypt has blocked journalists from reporting in the peninsula. Israel’s military imposes its own form of censorship on local journalists covering matters of national security. One analyst likened Israel’s treatment of the affair to its perennial silence over the existence of its covert nuclear weapons program.

“The Israeli strikes inside of Egypt are almost at the same level,” said Zak Gold, an expert on Sinai affairs, to the Times. “Every time anyone says anything about the nuclear program, they have to jokingly add ‘according to the foreign press.’ Israel’s main strategic interest in Egypt is stability, and they believe that open disclosure would threaten that stability.”

The violence in northern Sinai, stoked by years of Egyptian misrule and the emergence of radical extremist groups in the region, shows little sign of waning. In November, militants linked to the Islamic State attacked a mosque there, killing more than 300 people. Israeli air power and technical know-how may be increasingly necessary for Sissi’s government to keep pace.

“It’s a symptom of how close the two countries have become in security cooperation,” a former U.S. official familiar with the campaign told The Post. “But it illustrates how poorly the Egyptians have done dealing with the terrorist threat. Both Israel and the United States have complained about the fact the Egyptians have not taken advice and recommendations the United States have been offering for some time.”

Egypt, of course, is not alone in finding common cause with a former nemesis. Most conspicuously, the Israelis and Saudis have been deepening their security ties and contacts, joined by their mutual antipathy for Iran. But their growing cooperation is still officially covert; tightening bonds with the country that still holds millions of Palestinians under military occupation would be politically problematic for any Arab country.

“Palestine is not an easy issue,” a senior Saudi official recently told the Wall Street Journal. “Saudi Arabia is expecting to hold Islamic leadership and will not let it go easily. And, if you need Israel in anything, you can do it anyway, without having a relationship.”

It’s clear also that Palestine is not the all-encompassing, emotive issue it once was. The Times published reports of secret calls between Egyptian military intelligence officials and prominent broadcasters that took place in the wake of President Trump’s decision to recognize Jerusalem as Israel’s capital, a move Egypt had publicly warned against.

In the phone calls, an Egyptian officer urges the journalists to not stir outrage over Trump’s decision and even advises them to find a way to convince the Egyptian public that the Palestinians should let go of their claim to East Jerusalem.

“How is Jerusalem different from Ramallah, really?” the officer says on the taped call, referring to the West Bank town where the beleaguered Palestinian Authority is headquartered. Moreover, according to the Times, Saudi Crown Prince Mohammed bin Salman has pressed Palestinian officials to accept an extremely curtailed version of statehood with a capital in East Jerusalem. (Though sourced to Western and Palestinian officials, the Saudis deny these reports.)

Arab leaders, of course, still voice their disquiet over Israel’s expansion of settlements in the Palestinian territories. At an interview at the World Economic Forum last month, King Abdullah II of Jordan said Palestinians no longer see the United States as an honest broker in the moribund peace process. He also made a polite attack on Israeli Prime Minister Benjamin Netanyahu.

“I reserve my judgment,” he said, when asked whether Netanyahu is committed to the establishment of an independent Palestinian state. “I have my skepticism.”

“The Israeli-Palestinian conflict is not as important for them as it was before, but they are afraid of making official relations with Israel without any major movement on the Israeli-Palestinian issue,” said Israeli Brig. Gen. Udi Dekel, referring to other Sunni Arab states in the region. He was speaking at a recent security conference in Jerusalem where he also described Israel’s “strategic situation” as “almost the best” since the founding of the state.

“Without that movement, the people on the street will ask them, ‘for so many years you told us that the Israeli-Palestinian conflict is the most important problem,” Dekel said. “How can you accept that Israel is controlling the West Bank and is not giving Palestinians any rights?’”

But as attention shifts even further away from the Palestinian plight, the Israelis are possibly banking on the Egyptians, Saudis and others finding new ways to live with that status quo.

Ishaan Tharoor writes about foreign affairs for The Washington Post.

5 February 2018

Source: https://www.washingtonpost.com/news/worldviews/wp/2018/02/05/israels-growing-ties-with-former-arab-foes/?utm_term=.9c82b205f7c7

By Ishaan Tharoor

Without a trace of irony, Turkey has dubbed the military offensive it is waging across its southern border with Syria “Operation Olive Branch.” It’s hardly an apt name, given both the bloody nature of the offensive and the wide-reaching geopolitical havoc it has caused.

Since Jan. 20, Turkish forces and Turkish-backed militias have been engaged in battles with Syrian Kurds holding an enclave called Afrin, northwest of the Syrian city of Aleppo. Turkish authorities say they are fighting units that are an extension of the PKK, a violent Kurdish separatist group in Turkey that’s seen by both Ankara and Washington as a terrorist organization.

Reports suggest Turkish air and artillery strikes have damaged villages and killed civilians there, in addition to killing dozens of Syrian Kurdish fighters. Images are circulating online of the destruction wrought by a Turkish airstrike on an ancient temple complex dating back to the first millennium B.C.

“Step by step, we will clean our entire border,” Turkish President Recep Tayyip Erdogan declared over the weekend. But the operation has created an international mess.

The Turkish campaign followed an announcement by Secretary of State Rex Tillerson that the United States would commit to an open-ended troop presence in Syria and endorse the creation of a permanent Kurdish-dominated border force in northeastern Syria. (Turkish officials described such a force as a “terrorist” entity.) Both the Obama and Trump administrations have leaned heavily on Syrian Kurdish factions in waging the ground war against the Islamic State, despite Turkish objections.

While Washington says it does not back the Kurdish factions in Afrin, it is much more involved further to the east, where it has helped arm and train Syrian Kurdish units that are part of a coalition known as the Syrian Democratic Forces, or SDF — and sometimes fought along with them. U.S. Special Forces have been conducting patrols in the most bitterly contested areas in a bid to keep the SDF and Turkish-backed forces from clashing, but that may soon become a much harder task.

With Erdogan “intensifying his threats to extend the Turkish offensive to the areas farther east, where the U.S. military maintains troops, a larger conflict looms,” my colleagues wrote, “A Turkish attack on Manbij [a strategic border town] would present the United States with a major dilemma,” forced to pick a side between their allies on the ground and a historic NATO partner.

The U.S.-Turkey relationship has been in free fall over the course of the Syrian war. Erdogan grew furious with the Obama administration for not doing enough to challenge the regime of Syrian President Bashar al-Assad while also emboldening Kurdish factions on Turkey’s doorstep. President Trump’s arrival offered hope for a reset, but that, too, quickly faded.

A phone call last week between Erdogan and Trump did nothing to resolve the simmering grievances. Turkish officials challenged a White House readout of the conversation, denying that Trump had “expressed concern” about anti-U.S. propaganda coming out of Ankara or the escalation of violence in Afrin.

In Turkey, the offensive has let loose a new tide of nationalist feeling. Erdogan once championed a historic opening with Turkey’s long-suppressed minority Kurdish population. Now he casts himself as the merciless enemy of Kurdish separatism, rallying right-wing Turks to his banner. Pro-Erdogan media outlets belt out a steady stream of vitriol against both Kurdish separatists and their supposed puppet masters in the West. Meanwhile, Turkish authorities have clamped down on dissent or opposition to the military offensive.

“At least 300 people have been detained for social media posts opposing Operation Olive Branch, deemed by authorities ‘terrorist propaganda,'” noted Al-Monitor’s Amberin Zaman. On Tuesday, a Turkish prosecutor order the detention of 11 senior members of the Turkish Medical Association, including its chairman, after the organization denounced the cross-border raid and called for “peace immediately.”

It’s the latest indication of the deepening authoritarianism of Erdogan’s rule, which indeed extends beyond Turkish borders. As Nate Schenkkan of Freedom House noted, Turkish officials have pursued an astonishing “global purge” in the wake of a failed anti-Erdogan coup attempt in 2016, revoking thousands of Turkish passports, while achieving “the arrest, deportation, or rendition of hundreds of Turkish citizens from at least 16 countries.” Thousands of ordinary Turks languish in prison in vague connection to the coup plot, including many figures from human rights organizations and other civil society groups.

“Despite his best efforts to build a stable majority as the foundation of his new regime, his policies of demonizing the opposition have created a deeply polarized society. Half of Turkey despises him and will never accept him as its leader,” wrote Soner Cagaptay, a senior fellow at the Washington Institute for Near East Policy, for The Washington Post. “But Erdogan has failed to grasp this fact, becoming even more authoritarian since the 2017 referendum that granted him sweeping presidential powers. Erdogan’s current trajectory will deepen Turkey’s crisis, potentially even triggering civil conflict.”

Cagaptay said NATO allies like the United States need to walk Erdogan back from his hysteria by slowing support for the Syrian Kurds and siding more clearly with Turkey’s geopolitical interests in Syria over those of Russia and Iran.

But that’s not an easy sell. Foreign-policy and national-security elites in Washington have soured on Erdogan, while the Kurds command a great deal of affection. The Trump administration seems to have no choice but to grapple with the growing contradictions underlying its Syria policy.

“We are asking the Western powers to act on their principles. Why are you not condemning a flagrant and unprovoked assault on the very men and women who stood shoulder to shoulder with you against the darkness of the Islamic State?” wrote Nujin Derik, a female Kurdish commander in Afrin, in the New York Times. “Now a different evil, that of Mr. Erdogan’s increasingly undemocratic Turkey, aims to destroy our fledgling democracy. And this time, it’s claiming to act in your name.”

Ishaan Tharoor writes about foreign affairs for The Washington Post.

31 January 2018

Source: https://www.washingtonpost.com/news/worldviews/wp/2018/01/31/turkeys-erdogan-wages-a-dangerous-war-on-many-fronts/?utm_term=.b07988d7d228

By Harold James

Unless a currency has been authenticated by a government, it is unlikely to be fully trusted. But that does not mean that it cannot become a plaything for the naïve and gullible, or a weapon of financial mass destruction for political belligerents around the world.

LONDON – The extraordinary volatility of Bitcoin and other cryptocurrencies has become a threat not just to the international financial system, but also to political order. The blockchain technology upon which cryptocurrencies are based promises a better and more secure payment method than anything seen before, and some believe that cryptocurrencies will replace electronic currency in traditional bank accounts, just as electronic transfers replaced paper money, which succeeded gold and silver.

But others are rightly suspicious that this new technology might be manipulated or abused. Money is part of the social fabric. For most of the history of human civilization, it has provided a basis for trust between people and governments, and between individuals through exchange. It has almost always been an expression of sovereignty as well, and private currencies have been very rare.

In the case of metallic money, coins typically bore emblems of state identity, one of the earliest examples being the owl symbolizing the city of Athens. Usually, however, there was some confusion about whether the emblems on coins represented sovereignty or divinity. Whose head is on this coin? Is it Philip of Macedon or Alexander the Great, or is it Hercules? Later, Roman emperors would exploit this ambiguity, by stamping coins with their own “divine” visage. And even today, British coins have embossed words linking the monarchy to God.

Whatever the case, there is a clear pattern throughout history: bad states produce bad money, and bad money leads to failed states. During periods of inflation or hyperinflation, radical currency devaluation would destroy the basis of political order. For example, the Thirty Years’ War in Central Europe during the seventeenth century was fueled in large part by social disintegration following a period of monetary instability.

Similarly, during the French Revolution, speculation in a paper currency pegged to “national” property that had been confiscated from aristocrats and the church undermined the Jacobins’ legitimacy. In the twentieth century, periods of inflation during and after the two world wars destroyed Europe’s political institutions and fanned the flames of radicalism. In fact, Vladimir Lenin regarded the currency press as the “simplest way to exterminate the very spirit of capitalism” and bourgeois democracy.

In addition to being one of the main factors behind the disintegration of states, bad money has also been a key feature of interstate conflicts. For belligerent states, creating or exploiting monetary turmoil has historically been a cheap way to destroy opponents. Even in peacetime, some states have responded to deteriorating relations by planting fake money to sow discord beyond their borders.

The best-known example of such monetary warfare is Nazi Germany’s scheme to print the banknotes of Allied powers during World War II. Counterfeit notes could of course be used to purchase scarce resources or pay spies. But Germany also envisioned using long-range bombers to drop forged banknotes over Britain. Just imagine the demoralization and chaos that would have followed. Anyone with a large amount of money would automatically be suspect, and public trust would quickly erode. Dropping money could very well be more devastating than dropping bombs.

Money is even easier to manipulate when it is internationalized. In the modern era, rogue states such as North Korea have regularly forged banknotes, particularly those of the United States. And cross-border electronic transfers between banks are often used for malign and criminal purposes. So far, though, there have not been any globally devastating monetary attacks outside the realm of cinematic fantasy.

Of course, there have long been political efforts to undermine or replace the dollar as the dominant global currency. The most seductive alternative seems to have been gold. Russian theorists of “Eurasia” often tout traditional Russian iconography’s use of the fine metal. In 2001, then-Malaysian Prime Minister Mahathir Mohamad tried to introduce a “gold dinar” as an answer to the US-based currency system. And in 2005, al-Qaeda’s security chief, Saif al-Adl, suggested using gold to topple the dollar.

Bitcoin looks like a twenty-first-century version of gold, and its creators have even embraced that analogy. It is produced – or “mined” – through effort. And just as the price of gold once reflected the human exertion needed to extract it from the ground in remote locations, creating Bitcoins takes an exorbitant amount of computing power, driven by cheap energy in remote areas of Asia or Iceland.

But the rise of Bitcoin represents a shift in how society perceives fundamental value. Whereas pre-modern metallic currencies served as a basis for the labor theory of value – whereby goods and services are worth the amount of human labor put into them – blockchain technology assigns value to a combination of computing power and stored energy, none of it human.

At the same time, cryptocurrencies like Bitcoin have made it all but impossible to distinguish between state and private-sector criminality. North Korea has been suspected of continuing its attempts at monetary manipulation by mining and creating Bitcoin, which has led China and South Korea to start closing down Bitcoin exchanges. Major cryptocurrency platforms such as Coincheck in Japan have also put a halt to trading.

And yet we have already reached the point where a Bitcoin crash could have serious global implications. Financial institutions’ current exposure to the cryptocurrency is unclear, and probably would not be fully revealed until after a financial disaster. It is eerily reminiscent of 2007 and 2008, when no one really knew where the exposure to subprime-mortgage debt ultimately lay. Until the crash, it was anyone’s guess which institutions might be insolvent.

Just as one cannot instantly tell whether a news report is “fake news,” nor can one immediately discern the validity of new monetary forms. Unless a currency has been authenticated by a government, it is unlikely to be fully trusted. But that does not mean that it cannot become a plaything for the naïve and gullible, or a weapon of financial mass destruction for political belligerents around the world.

Harold James is Professor of History and International Affairs at Princeton University and a senior fellow at the Center for International Governance Innovation.

2 February 2018

Source: https://www.project-syndicate.org/commentary/bitcoin-threat-to-political-stability-by-harold-james-2018-02?utm_source=Project+Syndicate+Newsletter&utm_campaign=4bf9c5d8e0-sunday_newsletter_4_2_2018&utm_medium=email&utm_term=0_73bad5b7d8-4bf9c5d8e0-104996581

By Carmen M. Reinhart ,  Vincent Reinhart

The decline in the dollar’s exchange rate seems to have gathered momentum, in part because the person who has his signature on US currency, Treasury Secretary Steve Mnuchin, seems unperturbed by its weakness. If it continues, will energy costs spiral upward?

CAMBRIDGE – The price at the pump for premium gasoline topped $3 per gallon in much of the United States over the past few weeks, which is surprising to consumers but not to analysts of the world’s oil markets. From its local low two years ago, the price of oil has more than doubled. As with any market, where you stand on this price increase depends on where you sit.

Higher oil prices buttress the fortunes of producers abroad and at home. The International Monetary Fund upgraded the GDP growth outlook of all six of the top ten oil producers that were shown separately in its 2018 forecast update, and the projected growth of world trade volumes was raised half a percentage point this year and next. Increased oil revenues improve the fiscal positions of most producing economies, and some have taken advantage of global investors’ hardier appetite to issue sovereign debt.

In the US, the five states with the largest gains in oil production this decade recorded employment growth of 2.75% in 2017, double the national average. Meanwhile, the number of oil rigs nationwide increased by roughly 50%.

At the same time, a doubling of energy costs takes a significant bite out of US households’ budgets, with energy costs directly accounting for about 6.5% of consumer spending. Even more problematic, this is a regressive tax, disproportionately draining lower-income households’ discretionary spending power. Last year, energy represented 8.7% of spending by the bottom 20% of households, compared to 4.9% for the top quintile. Moreover, the bottom group lacks net assets to tide them over bad outcomes.

This tax effect partly underlies the robust association between spikes in world oil prices and US economic downturns documented by James Hamilton of the University of California San Diego. Hamilton’s sobering results show that, over the long sweep of history, every recession but one was preceded by an increase in oil prices, and every oil market disruption but one was followed by a recession.

But that does not mean that we should hunker down and await a downturn. As already noted, the oil price rise has been associated with an uptick in growth, and, whereas the events Hamilton examined related more to supply disruptions, the story of the past two years represents a combination of supply and demand forces.

Most important, over the course of this energy-price run-up, the dollar’s exchange rate depreciated by about 10% on a trade-weighted basis. With oil priced in dollars on a world market, this has had a material effect on the incentives of market participants on both blades of the supply-demand scissors.

A weaker dollar increases the purchasing power of US trading partners (the so-called Dornbusch effect, named for the late MIT economist Rudi Dornbusch), some of which spills over to increased demand for energy. Non-US oil producers sell a good denominated in dollars but consume a basket of dollar and non-dollar items. For them, a weaker US dollar lowers the price of exports relative to imports, and so they restrict supply. The scissors close with more demand and less supply, implying a higher dollar price of oil.

The decline in the dollar’s exchange rate seems to have gathered momentum, in part because the person who has his signature on US currency, Treasury Secretary Steve Mnuchin, seems unperturbed by its weakness. If it continues, could the result be a spike in energy costs? Our tentative answer is no, for three reasons.

First, the dollar has depreciated against most currencies, but less so against those of important emerging-market partners, such as China.

Second, some of the increase in oil prices is apparently due to supply restraint by the members of the Organization of the Petroleum Exporting Countries and their friends of convenience (particularly Russia). Not accidently, oil prices started their ascent with the production curtailment by “OPEC+” at the end of 2016, and now seem high compared to other industrial commodities.

Further dollar depreciation eroding supply and enhancing demand might just change that. Saudi Arabia dearly wants a stable, balanced market for petroleum in advance of the sale of a 5% stake in Saudi Aramco, the national oil company. For a healthy market consistent with longer-run capital investment, an oil price that is too high can be as challenging as one that is too low. In such circumstances, officials in OPEC+ may well jump on the chance to expand supply while maintaining prices in their current channel.

Third, when it comes to supply, do not look exclusively abroad. The increase in US production, thanks to technological advances in shale oil production, has been breathtaking.

The US is on track to pump more oil this year than at any time in its history. Nonetheless, domestic producers have been moderate thus far in ramping up supply, reportedly owing to their equity owners’ desire for more profit and less capital spending. But production technology advances, and higher prices beckon.

On balance, it is likely that the economy-wide effects of the energy shock, though unpleasant, will not derail growth. We are tentative, however, because commodity markets are volatile. In recent work with Christoph Trebesch of the Kiel Institute, we counted more than twice as many boom-bust cycles in commodity prices than in capital flows since 1820. The global economy looks to be riding a roller coaster.

The views expressed here are the authors’ own.

Carmen M. Reinhart is Professor of the International Financial System at Harvard University’s Kennedy School of Government.

Vincent Reinhart is Chief Economist and Investment Strategist at BNY Mellon Asset Management North America Corporation.

31 January 2018

Source: https://www.project-syndicate.org/commentary/oil-prices-rise-as-dollar-depreciates-by-carmen-reinhart-and-vincent-reinhart-2018-01?utm_source=Project+Syndicate+Newsletter&utm_campaign=4bf9c5d8e0-sunday_newsletter_4_2_2018&utm_medium=email&utm_term=0_73bad5b7d8-4bf9c5d8e0-104996581