Tuesday, March 22, 2016

Would Trump Push Asian Nations Toward China?

Other countries are watching the Republican front-runner.

The National Interest
March 22, 2016

Throughout the past decade, the United States, in the view of most Asians, has gone from acting like an overbearing hegemon to being an enfeebled superpower. For the first time since the end of World War II, America’s primacy in Asia can no longer be taken for granted, especially as an ascendant China rapidly dominates the region’s economic sphere, while aggressively chipping away at American naval supremacy in the Western Pacific. On the one hand, this tectonic shift in the regional geopolitical landscape is part of what pundits like Fareed Zakaria call the “rise of the rest” phenomenon. Amid rapid economic growth and industrialization, gigantic Asian nations like China are beginning to reconstitute their place in the world order. Quite naturally, there will have to be some readjustments in the pecking order.

Yet China’s growing assertiveness is also a reflection of America’s own predicament. The Great Recession of 2008 hasn’t only undermined the economic foundations of America’s power, but it has also been accompanied by a perilous polarization in American politics, which reached a fever pitch in 2013. Senator Ted Cruz orchestrated the shutdown of the nation’s capital amid an ideological squabble over fiscal policy. President Obama, who has been keen on re-balancing America’s foreign policy to Asia, had to nix a series of high-profile summits and state visits in Asia.

Quite uncharacteristically, some of Asia’s most prominent leaders began to vent their frustrations over America’s dysfunctional politics. "While politically we understand the reason for the president's decision, of course it is disappointing for all those involved," a Bruneian foreign ministry official lamented, as it became clear that Obama was cancelling his highly-anticipated visit to the tiny kingdom for the Association of Southeast Asian Nations (ASEAN) summit. Singapore Prime Minister Lee Hsien Loong was more emphatic when declared, “America has to continue to be engaged in this region because it plays a very important role which no other country can replace, not China, not Japan, not any other power."

Asian countries were essentially telling America to get its own house in order lest others will fill in the vacuum. In fact, China, led by President Xi Jinping, made the most out of Obama’s no-show, launching one major economic initiative after the other to woo countries across the region. Quietly, the Asian juggernaut also kicked off a reclamation and construction spree across contested waters, building artificial islands, dual-purpose facilities, and massive airstrips capable of hosting most advanced aircrafts. In the words of Admiral Harry Harris, head of the US Pacific Command, China began “changing the operational landscape" in the South China Sea, the world’s most important waterway.

The Obama administration’s much-vaunted Sunnylands summit with Southeast Asian nations was part of a desperately urgent maneuver to re-assert American leadership in Asia and push back against China’s assertiveness. However, the rise of a demagogic, isolationist leader like Donald Trump, who is cruising towards the White House, is seriously undermining America’s image across Asia. With his policy pronouncements and polarizing rhetoric, the real estate mogul is undermining America’s long-held claim to exceptionalism and benign leadership.

Soft Power Disaster

In Soft Power: The Means to Success in World Politics, Harvard University professor Joseph Nye deftly underlined the centrality of the power of attraction to maintaining American global leadership. In the era of “rise of the rest”, it seems almost inevitable that America’s outsized dominance in the international system is bound to diminish overtime. But America’s relative decline in ‘hard power’ can be more than compensated by its ability to maintain a robust ‘soft power’, that is to say the usage of persuasion and attraction—through pro-active diplomacy and elegant multilateralism—in shaping the international order, Nye argued.

Far from a substitute for actual military and industrial power, soft power operates as a “force multiplier,” allowing America to maintain global leadership without having to constantly brandish and employ its often-overstretched expeditionary prowess. As a cultural-ideological superpower—anchored by the traction of Silicon Valley and Hollywood, the charisma of American presidents and the laudable features of American democratic institutions—America can maintain leadership even when it is no longer a full-spectrum military-industrial behemoth. No wonder then, Nye maintains that the twenty-first century can still belong to America.

Yet, America, to many Asians, no longer inspires the same kind of deference and admiration it used to. America’s wherewithal has been put into question, thanks to sequestration, ballooning debt, anemic recovery, and explosive levels of inequality. Shortly after the Obama administration announced its Pivot to Asia policy, leading Asia hands such as Elbridge Colby and Brad Glosserman warned about Asia’s lingering doubts over America’s wherewithal to remain as an anchor of stability and prosperity in Asia. As the two pundits shared,

“Asian audiences focus on Americans’ inability or refusal to address our budgetary woes, to revitalize an economy that has had its worst decade in generations, and to overcome the seemingly intractable political gridlock that prevents meaningful governmental action even on issues for which broad agreement exists.”

Make no mistake: key rivals such as China are also displaying serious signs of vulnerability. China’s repressive brand of governance is also repulsive to many Asian countries, both established democracies like Japan and India as well as new democracies such as Taiwan and the Philippines. But a huge part of America’s global appeal has to do with its claim to moral leadership and democratic ideals. And it is precisely these pillars of American soft power that are today under assault.

Beyond the foundations of American power, many Asians are worried about the trajectory of American politics and foreign policy. Four years on, the very prospect of a Trump presidency sends chills down the spine of Asian leaders and hundreds of millions of people across the continent.

Trump’s call for a total ban on entry of Muslims to America, on the heels of the San Bernardino terror attacks, has provoked outrage across Asia, home to most of the world’s Muslim population. Some Asian officials couldn’t contain their outrage. Nur Jazlan Mohamed, deputy home minister from the Muslim-majority Malaysia, bluntly characterized Trump as tip of the iceberg of a gathering wave of xenophobia: "[Trump's] proposal reflects the thinking of many people in America, and this is worrying.”

In the world’s largest Muslim-majority nation, Indonesia, a leading politician, Setya Novanto, faced government investigation for supposed breach of ethical conduct when he was spotted attending one of Trump's campaign events in New York. Instead of showing solidarity with America’s besieged allies in Asia, Trump has called for imperial tributes from the likes of South Korea and Japan, while implicitly admiring China for building a great wall of sand across the South China Sea by presenting it as a possible blueprint for his plan to build a similarly ambitious (and controversial) structure along the Mexican border.

While the Obama administration, continuing the efforts of its predecessors, has tirelessly pushed for pan-regional free trade deals such as the Trans-Pacific Partnership (TPP) agreement to augment America’s economic footprint in Asia, Trump has instead called for the de facto end of America’s free trade policy. The New York billionaire has threatened to impose massive tariffs on imported products from Asia, a surely disastrous policy that will be accompanied by trade wars—and the precipitous end of the liberal international order.

It is still too early to say whether Trump can indeed capture the White House. Assuming he secures the Republican nomination, which looks increasingly likely, he will face an uphill battle once he goes against the Democratic candidate. Yet, even if Trump ultimately falls short of becoming the American president—undoubtedly, a nightmare scenario in the view of many people across Asia—his ascent has further shaken confidence in America’s global leadership.

One could even argue that in the event of a Trump presidency, some fence sitters, if not American allies, will quietly contemplate defecting to a rising China, whose leaders’ foreign policy posturing appears preferable in comparison to Trump’s.

Article Link to the National Interest:

Tuesday, March 22, Night Wall Street Roundup: Wall St. down but pares losses after Brussels blasts

By Laila Kearney
March 22, 2016

Wall Street closed slightly lower on Tuesday, inching back from an initial selloff that followed deadly attacks in Brussels, as declines in consumer and telecom stocks offset a jump in healthcare shares.

Islamic State claimed responsibility for the bombings at Brussels airport and a rush-hour metro train that killed at least 30 people and triggered security alerts across Europe.

Global risk markets faltered before limping up, while traditional safe havens gold and government bonds firmed as the events in the de facto capital of the European Union unfolded.

The tepid stock market recovery followed earlier patterns of a selloff in reaction to violent events, such as the November attacks in Paris, then a quick recovery.

"When you have an incident like this, you suddenly have a surge in uncertainty because people don’t know what the scale of it is," said David Kelly, chief global strategist at JP Morgan Funds in New York. "As uncertainty goes down, stocks go up."

The Dow Jones industrial average .DJI closed down 41.3 points, or 0.23 percent, to 17,582.57, the S&P 500 .SPX lost 1.8 points, or 0.09 percent, to 2,049.8 and the Nasdaq Composite .IXIC ha added 12.79 points, or 0.27 percent, to 4,821.66.

Three of the 10 major S&P sectors were higher, with the health index .SPXHC up 0.9 percent, leading the advancers. Consumer staples .SPLRCS, down 0.75 percent, were the biggest loser.

Airline and travel-related stocks took a hit after the Brussels attacks.

Cruise operators Carnival Corp (CCL.N) was down 2.1 percent and Royal Caribbean (RCL.N) dipped 2.9 percent, while travel-website operator Expedia (EXPE.O) was off 1.8 percent at $108.92.

Online travel booker Priceline (PCLN.O) was one of the biggest weights on the S&P 500.

The Dow Jones U.S. Travel & Leisure index .DJUSCG slipped 0.7 percent. The NYSE Arca Airline index .XAL was off 0.9 percent.

Apple (AAPL.O) rose 0.8 percent at $106.72, becoming the biggest boost to the S&P 500 index.

Oil prices steadied after an initial rush to safer assets, with U.S. crude CLc1 futures off 0.17 percent to $41.45, rebounding from a session low of $40.97.

In corporate news, shares of Lumber Liquidators (LL.N) were up 16 percent at $13.94 after the company settled with a California clean air agency.

About 6.2 billion shares changed hands on U.S. exchanges, below the 8.14 billion average over the last 20 sessions. Volume is expected to stay light ahead of the Easter holiday.

Declining issues outnumbered advancing ones on the NYSE by 1,595 to 1,393, for a 1.15-to-1 ratio on the downside; on the Nasdaq, 1,453 issues fell and 1,337 advanced for a 1.09-to-1 ratio favoring decliners.

The S&P 500 posted 15 new 52-week highs and 1 new lows; the Nasdaq recorded 34 new highs and 20 new lows.

Article Link to Reuters:

Trump backs waterboarding and 'a lot more' after Brussels attacks


March 22, 2016

Republican presidential front-runner Donald Trump said on Tuesday the United States should use waterboarding and other harsh interrogation techniques when questioning terror suspects, and renewed his call for tougher U.S. border security after the attacks in Brussels.

The billionaire businessman said authorities "should be able to do whatever they have to do" to gain information in an effort to thwart future attacks.

"Waterboarding would be fine. If they can expand the laws, I would do a lot more than waterboarding," Trump said on NBC's "Today" program, adding he believed torture could produce useful leads. "You have to get the information from these people."

Waterboarding, the practice of pouring water over someone’s face to simulate drowning as an interrogation tactic, was banned by President Barack Obama days after he took office in 2009. Critics call it torture.

Trump's main Republican rival, U.S. Senator Ted Cruz of Texas, suggested heightened police scrutiny of neighborhoods with large Muslim populations.

"We need to empower law enforcement to patrol and secure Muslim neighborhoods before they become radicalized," he said in a statement.

Trump also called for increased law enforcement surveillance of mosques in the United States.

"You need surveillance. You have to deal with the mosques, whether we like it or not," Trump told Fox Business Network. "These attacks ... they're not done by Swedish people, that I can tell you."

Islamic State claimed responsibility for Tuesday's suicide bomb attacks on Brussels airport and a rush-hour metro train in the Belgian capital which killed at least 30 people.

Trump, who has called for a temporary ban on Muslims entering the country, urged tougher measures to stop the flow of illegal immigrants, particularly Syrian refugees, into America.

"As president ... I would be very, very tough on the borders, and I would be not allowing certain people to come into this country without absolute perfect documentation," said Trump, campaigning to become the Republican nominee for the Nov. 8 election that will decide on Obama's successor.

The Brussels attacks brought national security back to the top of the presidential election agenda, possibly sharpening the division between Trump’s isolationist approach to foreign policy and his Republican rivals’ more traditional interventionist outlook.

On Monday, Trump expressed skepticism about the U.S. role in the North Atlantic Treaty Organization and said the United States should significantly cut spending on the defense alliance.


Cruz criticized Trump's NATO proposal.

"The way to respond to terrorist attacks is not weakness. It’s not unilateral and preemptive surrender. Abandoning Europe, withdrawing from NATO, as Trump suggests, is preemptive surrender," Cruz told reporters in Washington.

Earlier attacks in Paris and San Bernardino, California, have pushed security issues to the forefront of the White House campaign debate.

When 130 people were killed in Paris in November, the threat of terrorism jumped from fifth to first on a Reuters/Ipsos poll list of the country's most important problems and remained there until the economy moved back to the top of the list in mid-January.

Democratic presidential front-runner Hillary Clinton said U.S. military leaders have found techniques like waterboarding are not effective.

"We've got to work this through consistent with our values," she said on NBC, adding officials "do not need to resort to torture, but they are going to need more help."

Clinton's Democratic rival, U.S. Senator Bernie Sanders of Vermont, backed stronger intelligence-sharing and monitoring of social media in the fight against Islamist militants, but opposed bolstered surveillance of Muslim communities.

"That would be unconstitutional, and it would be wrong. We are fighting a terrorist organization, a barbaric organization that is killing innocent people. We are not fighting a religion," Sanders told reporters.

Walid Phares, named by Trump this week as one of his foreign policy experts, told Reuters the Brussels attacks would force Europe and the United States to "reassess" counter-terrorism strategies in "identifying the radicalized elements and also the type of protection soft targets need."

Trump looks to take another step toward winning the Republican presidential nomination in contests in Arizona and Utah on Tuesday, aiming to deal another setback to the party establishment's flagging stop-Trump movement.

He has a big lead in convention delegates who will pick the Republican nominee, defying weeks of attacks from members of the party establishment worried he will lead the Republicans to defeat in November.

In Arizona, one of the U.S. states that borders Mexico, Trump's hardline immigration message is popular and he leads in polls, while in Utah Trump lags in polls behind Cruz.

In addition to the temporary ban on Muslims entering the country, Trump has called for the building of a wall on the U.S.-Mexican border to halt illegal immigration.

Article Link to Reuters:

Canada's stimulus budget aims to revive oil-hit economy


March 22, 2016

Canada's new Liberal government on Tuesday unveiled a stimulus budget to revive growth with infrastructure spending and said it would run a deficit nearly three times larger than promised during last year's election.

The government said the budget was expected to raise growth 0.5 percent in the first year and 1.0 percent by the second after the party of Prime Minister Justin Trudeau warned last month an oil price plunge had weakened Canada's economic and fiscal outlook.

The government projected a C$29.4 billion ($22.5 billion) deficit for fiscal 2016-17, higher than the C$28.6 billion forecast in a Reuters survey, and gave no target date for returning to a balanced budget.

Economists said the stimulus package lowered chances the Bank of Canada will need to cut interest rates again in April.

Trudeau has pledged to break with Group of Seven peers by countering slow growth with fiscal stimulus rather than austerity. Finance Minister Bill Morneau said the government would spend C$3.97 billion on infrastructure projects in the coming fiscal year, ramping that up to C$7.32 billion the following year.

Infrastructure spending, a major plank of the Liberal campaign, will include upgrading public transit.

"We are seizing the opportunity to invest in people and the economy, and to prepare Canada for a brighter future," Morneau said in his budget speech.

But Rona Ambrose, interim leader of the official opposition Conservative Party, said from a taxpayer's point of view the budget was "a nightmare scenario" given the lack of specifics on returning to balanced accounts.

The Canadian dollar was little changed immediately after the budget's release. [CAD/]

The budget, as expected, broke several pledges the Liberals made before the election, including running just three years of deficits of up to C$10 billion before balancing the books by fiscal 2019-20.

Because the Liberals command a majority in the Canadian Parliament's House of Commons, the budget is guaranteed to pass.

The budget forecast the deficit would decrease slightly to C$29.0 billion in 2017-18. But there was no specific forecast for a return to a balanced budget, with the budget still expected to show a deficit of C$14.3 billion in 2020-21.

There was also a C$6 billion adjustment for risk included in each year's deficit figures.

The finance minister told reporters that if the stimulus generated growth at the top range of forecasts, the Liberals should be able to balance the books in five years.

"There is a pretty good chance if the economy performs as expected that the deficit numbers could actually track lower through the forecast horizon," said Robert Kavcic, economist at BMO Capital Markets.

The government said it would set a timeline for balancing the budget when growth was forecast to remain on a sustainably higher track.

"I'd like to have seen a zero in there at some point but there's mention of it, so it's a step in the right direction," said Craig Wright, chief economist at Royal Bank of Canada.

The budget forecast federal debt as a percent of gross domestic product would rise to 32.5 percent in the coming fiscal year from this year's 31.2 percent. It will not get below its 2015-16 level until it hits 30.9 percent in 2020-21.

Markets widely expect the Bank of Canada to stay on hold at its April meeting, when the bank will incorporate the budget into its economic forecasts. The bank cut rates twice last year.

Article Link to Reuters:

The Castro Bros Aren’t Feeling The Bern

President Obama is in Havana today because not even the Castro brothers can cling any longer to the pretense that, somehow, socialism can solve the problems of Latin America.

The American Interest
March 21, 2016

A huge U.S. delegation of officials, led by President Barack Obama, visited Cuba for the first presidential visit since the Coolidge years. The Secretary of State, the National Security Advisor and slew of less exalted officials were all in the entourage—an eyebrow-raising focus on Cuba, especially for an administration that says the U.S. should be pivoting away from Europe and the Middle East because they don’t matter so much anymore.To some, this trip looks like a victory lap for a resurgent American Left. The Sandernistas (led by the Senator from Vermont himself) certainly think so. And some horrified conservatives noted the photo of Obama and his team with a giant image of Che in the background, forgetting past appearances where American presidents have appeared before or even under images of communist leaders like Mao, Ho and even Lenin himself. But if Che loomed in the background in Havana, Obama’s visit is more about the liquidation of Latin socialism than its triumph. With socialist parties in Brazil, Argentina, and Venezuela all struggling to defend their poor economic records and corrupt politicians in the face of centrist opponents, Latin America isn’t feeling the Bern these days.

Even if this visit is overkill—and is more fanboy gushing than actual diplomacy—the United States actually does have some business to transact with Havana, if Raul is in the mood. Venezuela is a failing state, and Cuba could play a major role in preventing massive suffering in a neighboring Latin American country. It is as clear even to top Cuban communists as it is to Americans to the right of Sean Penn that the Chavez “revolution” was both a massive misadventure and the definitive failure of left-wing ideology in Latin America. If Venezuela, with some of the world’s largest oil reserves, managed to melt down after just a few years of Chavismo, its unlikely, to say the least, that poor Danny Ortega is going to make a go of Nicaragua, or that Haiti can pull itself up by its bootstraps by following the leftie playbook.

The Cubans understand what is happening in Venezuela very well. Not only do they have close intelligence links with Caracas, it was the realization that Venezuela could no longer prop up Cuba that led the Castro brothers to accept the opening with the U.S. in the first place.

As nobody knows better than the Castro brothers, Cuban socialism has never worked without a sugar daddy. From 1959 to 1989 the Soviet Union kept Cuba afloat. Things turned ugly in Cuba when communism collapsed in Moscow, and only the intervention of Hugo Chavez in then-rich Venezuela turned things around. Now socialism has burned through Venezuela’s bank account, and the Venezuelan regime is struggling to feed its own people. Continuing to bail out Havana? Not really an option any more.

Given that the collapse of the Latin Left is the basis of Cuba’s openness to Washington, President Obama should be probing to see whether the Cubans are willing to help clean up the mess that socialism is leaving in its wake. What President Obama, Secretary Kerry, and Susan Rice should be asking President Castro is how the Cuban government can help broker a transition back to some kind of workable system in Venezuela. Will Cuba, in exchange for U.S. help climbing out of its own economic dead end, help the U.S. ensure a stable transition in Venezuela?

If Cuba is willing to be genuinely helpful in this matter, there is a lot it can do. Cuba helped build the dysfunctional thugocracy that now calls itself the government of Venezuela, and Cuba could do a lot to help Caracas move back toward some kind of reality-based politics. The Castro brothers could provide ideological cover for a retreat to realism, and if the U.S. and Cubans worked together, we could significantly increase the odds of a peaceful transition to a workable political system in an important neighbor.

In their closing years in power the Castro brothers seem to have acknowledged that the socialist model doesn’t offer a way out for the Latin world. The question is whether they are willing to play a constructive role in helping to bury the corpse. President Obama, given his own history, is going to be the most sympathetic interlocutor the brothers can hope for in Washington; he won’t rub their noses in the failure of their hopes the way a President Rubio or Cruz would. If they are willing to close out their careers on a note of responsible statesmanship, this is the best chance they have to get that done. And, frankly, if that is the course they choose to follow, we wish them success.

This may be—indeed it probably is—too much to hope. The Castros know that socialism has failed Latin America, but they may not be ready to act constructively on that belief. Their motives in opening the door to American tourists and trade, and their rationale for allowing the Obama state visit are probably nothing more than regime survival. While they suspect that the opening to the U.S. will end up transforming Cuba in ways that will ultimately bring the Castro era to an end, they know that only U.S. tourism, trade, and perhaps investment can provide the hard currency needed to keep the Castro flag flying for a few more years. Certainly, the harsh and unnecessary treatment of dissidents, arresting Elizardo Sanchez, closing down a peaceful march by the Ladies in White, shows that control over Cuba is still what matters most to the communist leaders. The signal to Cubans was not only that the brothers remain firmly in charge, it was also to humiliate Obama, to kick sand in his face.

But reality remains. Socialism has failed both in Cuba and in Venezuela. The Cuban people know just what is happening in Venezuela, and they know, too, that the two excuses that the Castros have always made for socialism’s abysmal record in Cuba (no oil, and the U.S. embargo) simply fall to pieces in the light of the Venezuela catastrophe. They know that the Castros aren’t getting any younger, and they know that integration with the U.S. economy represents the only possible future for their island.

Just possibly, Fidel and Raul have genuinely drawn the appropriate conclusions from more than half a century of socialist failure in the Americas. Just possibly, they want to burnish their legacies by doing something to help Venezuela step away from the abyss, especially if they can get some U.S. help for Cuba by doing so. Investigating that possibility was the most important reason, other than grandstanding, for the President’s visit. Let’s hope the subject came up.

Article Link to the American Interest:

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North Korea’s Next Missile Test Could Kill

Firing back with ‘unprecedented’ provocations against joint South Korean and American annual military exercises, Kim Jung Un could make a dangerously wrong move.

By Gordon G. Chang
The Daily Beast
March 22, 2016

On Monday, North Korea fired five short-range missiles eastward. The projectiles fell into the Sea of Japan, what Koreans call the East Sea. The provocation followed Friday’s launch of two Nodong medium-range missiles, which can put a dent anywhere in South Korea and parts of Japan.

The Democratic People’s Republic of Korea has launched 15 projectiles on four separate occasions since early last month in apparent shows of anger.

Friday’s and Monday’s belligerent acts follow a series of threats to kill all the residents of Manhattan and launch “preemptive and offensive” nuclear strikes. The regime has also taken the unprecedented step of releasing photographs of leader Kim Jong Un standing next to what it implied is a thermonuclear device.

As one friend whose son served on the peninsula in the 1990s told me in the last few hours, we’re “eyeball-to-eyeball” with the North Koreans at the moment.

Tensions are high on the Korean peninsula this month, as approximately 300,000 South Korean and 17,000 American personnel participate in annual military exercises. Every year the Kim regime reacts to the drills, but this year its provocations have been “unprecedented,” as David Maxwell of Georgetown University told The Daily Beast today.

Unfortunately for the international community, Mr. Kim this year has something to prove. As Maxwell points out, his provocations of last August—two South Korean soldiers were maimed in the Demilitarized Zone by land mines—were considered a “failure” because he did not anticipate Seoul’s decisive responses.

And his belligerence since then has only worsened his predicament. Kim authorized the regime’s fourth nuclear test, on January 6, and a launch of a long-range rocket, on February 7. These acts did not divide the international community as they might have in an earlier time. Instead, Mr. Kim managed to create his nightmare scenario, the uniting of the United States, South Korea, Japan, Russia, and China in a loose coalition against him.

Thanks to this coalition, the UN Security Council unanimously imposed a fifth set of sanctions this month, in Resolution 2270, and Japan, South Korea, and the U.S. unilaterally enacted their own coercive measures. As Georgetown’s Maxwell notes, “I think the regime is doubling down after 2270 as it did not expect to get sanctioned harder than it had ever been.”

Maxwell sees Kim having “to demonstrate strength to both internal and external audiences for fear of greater international pressure that will further cut access to resources.” To do that, he thinks Kim will have to speed up his nuclear, missile, and satellite programs “in anticipation of the loss of resources.”

No surprise then that there are reports that the North is getting ready for a fifth detonation of a nuclear device.

A test so soon after the last one would raise young Kim’s standing with the top brass, but it would not be enough for him to get back in the good graces of the flag officers. Since taking over the regime in December 2011 upon the unexpected death of his father, he has been feuding with the generals and admirals while trying to diminish their power inside ruling circles.

As Richard Fisher of the International Assessment and Strategy Center told The Daily Beast in e-mails, recent provocations have been accompanied by purges and executions. The disappearance and reported execution of Ri Yong Gil, the chief of the General Staff of the Korean People’s Army, early last month suggests Kim is losing control of the most important institution in North Korea. Ri, if he was in fact killed as South Korea’s semi-official Yonhap News Agency reports, would be at least the third four-star put to death in 13 months.

In the short term, Kim probably will not do anything other than make threats and fire weapons into the sea. With the ongoing joint military exercises, the U.S. and South Korea are at a high state of readiness.

Yet in May, when the exercises are over, he may engage in another “kinetic” incident. Leading North Korean analyst Bruce Bechtol, who told The Daily Beast that he thinks recent provocations are in response to the new “robust sanctions,” has studied the history of Pyongyang’s belligerence. In an article in Korea Times, he writes that the patterns of the last four decades show the North could very well initiate “a small violent provocation” against South Korea.

Alison Evans of IHS Country Risk told USA Today that “increasing economic hardship in North Korea may well make more provocative action a logical option for the leadership.”

Yet it is not only desperation that Washington has to worry about. Young Kim, for instance, could continue to miscalculate. “They will hold to the mistaken belief that the international community will not call its bluff and will eventually back down to ensure stability on the peninsula,” Maxwell says, referring to the North Koreans. “But I think the times they are a changing and it will not be business as usual as it was for the past six decades.”

Whether through miscalculation, desperation, or bluff, the North Korean leadership could make a dangerously wrong move. The next batch of North Korean missiles, therefore, could be launched not east toward open sea but south, where 28,500 Americans help guard 49 million South Koreans.

Article Link to the Daily Beast:

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The Fed's Credibility Dilemma

By Narayana Kocherlakota
The Bloomberg View
March 22, 2016

Federal Reserve officials often use two words to summarize their plans for monetary policy over the next three years or so: "gradual normalization," meaning that interest rates will move slowly and in an upward direction. It's a phrase that could prove problematic if economic developments require a different response.

In public statements and projections, Fed officials have suggested that gradual normalization would entail increasing interest rates by less than a percentage point in each of the next three years. Their aim is to provide markets with confidence-building guidance, but the strategy will work only if the economy proceeds along the trajectory that the officials expect.

Imagine, for example, what will happen if inflationary pressures prove stronger than expected over the next year or so. In principle, the Fed can curb inflation by raising its interest-rate target sufficiently rapidly. In practice, however, it faces a dilemma: It must break either its commitment to move gradually, or to keep inflation close to 2 percent. No matter what it does, it will lose credibility.

Worse, suppose that economic growth turns out to be weaker than the Fed anticipates (an adverse shock that I consider more significant than the inflation scenario). As former Chairman Ben Bernanke has explained, the central bank could respond by taking interest rates negative. Again, though, communication becomes an obstacle: By expressing its strong preference for normalization, the Fed has been telling investors that they can safely ignore the possibility of a reduction in rates (at the end of her March 16 press conference, for example, Chair Janet Yellen stressed that officials are not even discussing the possibility of adding stimulus). So to respond appropriately to an adverse shock, the Fed would have to renege on its implicit commitment.

Ironically, the Fed's perceived commitment not to cut interest rates could actually make it reluctant to raise them. Markets will perceive each new, higher interest-rate target as a floor, further limiting the central bank's room for maneuver. So if Fed officials want to maintain flexibility -- because, say, they’re worried about downside risks -- they might choose not to raise rates in the first place. That way they'll run a smaller risk of being forced to go back on their normalization commitment.

So what, if any, plans should the Fed communicate? For one, officials must recognize that their expectations for the economy, like all forecasts, are likely to prove wrong. As a result, they should be much clearer about their willingness to make large and rapid changes in monetary policy. Instead of talking about gradual normalization, they should stress that they are ready to do “whatever it takes” to keep employment up and inflation under control.

Article Link to the Bloomberg View:

The GOP's Desperate Scheme to Steal the Presidency

The stop-Trump set’s latest fantasy: a third-party conservative candidate who could leave Clinton just short of the magic number.

By Michael Tomasky
The Daily Beast
March 22, 2016

Well, now they’re really serious, they swear.

The “they” here are the Republican power people, and the thing they’re now really, really serious about is stopping Donald Trump.

Seen this movie? Yeah, I have too. But we have a new iteration now, since a lot of these folks went on the record to talk to The New York Times about their latest stop-Trump scheme. It’s desperate, it’s daft, and if it’s going to have any impact on the election it will probably be only to make it more likely that Hillary Clinton wins in November.

But there is a chance, just a chance, that it will succeed, and if it does succeed, it will produce what I have thought for some time now would be this election’s ultimate nightmare scenario: The House of Representatives appointing as president the person who finished third—a very, very distant third—in the Electoral College.

Here’s the bleak tale of how that would happen.

The Times article notes that Republicans are hoping to block Trump in Wisconsin on April 5 with either Ted Cruz or John Kasich and then build from there. But if that fails—and it’s likely to—these GOP insiders are prepared to run an “independent conservative” for president on a third-party line.

The first and most obvious question that most people would ask is, “Who is this savior?” That’s actually the least interesting question. The Times article mentions Rick Perry and former Oklahoma Senator Tom Coburn. A twice-failed presidential contender and a retired senator whose with extremely limited appeal beyond the base. Yawn.

But let’s put “who” aside. The more interesting questions here are 1) how would this person get on 50 state ballots and 2) what impact on the actual vote would this candidacy have?

The answer to the first question is that this candidate wouldn’t have to get on 50 state ballots. He’d only need to get on a handful of state ballots, provided they were the right states. This may make no sense to you. How can a person win by getting on only a handful of ballots?

Here’s how. The Times story doesn’t spell all this out, probably because the players didn’t want to talk about it, but: The point of such a candidacy would not be to get 270 electoral votes. The point would be to keep Hillary Clinton from hitting that target. And Trump of course, but mostly Clinton. And if that happened, the election would get tossed to the House of Representatives.

And under the rules, the House can elevate to the presidency any of the top three finishers. You following me?

So let’s play with a scenario. This person gets on the ballot in Florida, Ohio, North Carolina, Missouri, Georgia… just a few electoral-vote rich states. And he somehow manages to win a few states, just enough to come to claim 70 or 80 electoral votes. He’ll be stealing most of these from Trump, so Trump will be down around 190 electoral votes. But he’ll alter the electoral chemistry in weird ways in just enough states (Florida, Ohio, maybe Virginia) that he’ll keep Clinton under 270. So let’s say it’s election night and the totals are — hell, let’s make it maximum-dramatic: Candidate X 79, Trump 190, and Clinton… 269.

One vote short!

What happens next? The election goes to the House of Representatives. Here’s the important thing to know about this. This is not a normal vote, in which the 435 members each have their own single vote. No. Each state delegation has one vote. So Wyoming’s one at-large representative has the same voting power as California’s 53. Further, and more to the point: The Republican Party controls a majority of 33 state delegations. The Democrats control just 14, and three are deadlocked.

So what would the House do? It’s obvious what they’d do. Hello, President Coburn-or-whomever! No matter that Clinton came within one electoral vote of the presidency. No matter that this person finished a distant third, winning only five or six states. Because he is the Republican Party choice, the House will install him as president.

It would be a a coup d’etat by constitutional means. This would be the ultimate definition of that — shoving someone into a race he can’t possibly win just so he can get on a few ballots and keep the leader under 270, finish a distant third with a small percentage of the vote, and then be handed the keys to the White House. Yes, they would do it, in a heartbeat.

Fortunately, I doubt it can work as a practical matter. To the second question I asked above, about how this person would impact the vote, the probable answer is that he’d simply split the Republican-conservative vote and help Clinton. I mean, imagine a three-way Clinton, Trump, Rick Perry race in, say, Georgia. It’s about a 55-45 Republican state, maybe a little less. If Perry got anywhere north of 10 percent, he could hand the state to Clinton. All the important swing states are less Republican than that, meaning that in Florida or Ohio, for example, if Perry took even 5 percent, he’d ensure a Clinton win there.

Now, defenders of this stop-Trump effort might say, oh, Tomasky, you’re being too conspiratorial. We just want to get the person on as close to 50 ballots as possible and maybe then he can even win. But that seems delusional. If anything, two conservative candidates splitting the moderate-to-conservative vote ought to help the Democrat win a lot of states with something like 37 to 44 percent of the vote. Clinton could thus win Arizona, Missouri, Indiana, South Carolina, and maybe others.

That’s why at the end of the day I suspect nothing will come of this. These people leak these things to see if they can gather any momentum. And they’re just desperate to find a way to destroy the monster they created.

That’s the central fact they can’t face up to.

Article Link to the Daily Beast:

The Future of Securing Global Cities

Making cities resilient against both man-made crises and natural disasters is the key to the twenty-first century.

By Raymond Odierno and Michael O'Hanlon
The National Interest
March 22, 2016

The task of securing global cities is becoming a crucial challenge of our day. Already, half the world’s population lives in urban areas; by 2050, the UN predicts over two-thirds of the world’s population will do so. These cities face threats not only from Al Qaeda, ISIL, the Taliban and like groups, but international drug cartels, human trafficking networks, arms traffickers and street gangs.

Scale is a major contributor to this complexity. As cities grow, their vulnerabilities grow—often in nonlinear ways. A megalopolis of 20 million does not simply face ten times the challenges of a city of 2 million. Whole new patterns often emerge, largely because size creates opportunities for criminals and extremists through anonymity in the large and often weakly governed spaces that emerge in these massive places.

Another factor is resource scarcity. As populations (and population density) increase, resources for emergency services don’t always keep up. In 2013, for example, Nairobi had a population of 4 million—and a single working fire truck. Water is increasingly scarce, partly due to climate change effects as well, in large swaths of the Middle East and Africa. In many places, urban migration is marked by the poorest and most vulnerable in society moving into huge slums, not well-heeled neighborhoods.

At the same time, urbanization means that cities are a key engine of global economic growth. Trade, foreign direct investment and globalization enhance prosperity. But the same movements of people, goods and ideas also create vulnerabilities and make it imperative that metro areas collaborate on security.

That’s why, together with colleagues at Brookings and JPMorgan Chase, we have launched Securing Global Cities, a project of the Global Cities Initiative, a joint effort by Brookings and JPMorgan Chase.

Our year-long project is just beginning, but a few principles are already emerging.

First, like counterterrorism and counterinsurgency, the security of cities involves far more than armed forces. Not only military, intelligence and law enforcement organizations, but also law and criminal justice systems, schools, businesses and NGOs are crucial players. Cities need to coordinate how they handle immediate crises, how they anticipate and preempt future challenges, and how they improve conditions in places that are breeding grounds as well as transportation and communications hubs for the world's criminal and extremist movements.

Second, most of the world's natural disasters of the last twenty years, as terrible as they have been, have affected “finite-sized” populations—theHaiti earthquake of 2010, the Japanese tsunami of 2011, the Philippines typhoon of 2013, the Ebola outbreak in West Africa in 2014, and recent Pakistani and Nepalese earthquakes. Even the terrible tsunami of 2004, as tragic as its effects were, primarily demolished small cities and fishing villages in Indonesia and South Asia. The next “big one” could hit Karachi or Lagos or Rio or some other city with multiple times as many people. Even those cities that may seem to have the capacity to handle a future disaster or other type of security challenge on their own could be overwhelmed if their infrastructure fails and millions are left in the dark or cold, without water or food or medical care. Major natural disasters could easily hit cities already engulfed in various kinds of violence.

Third, changes in technology provide new opportunities for securing cities. Alas, they also provide new, secret ways of doing business for transnational criminal and extremist organizations. Cities will need to be supple, and evolve best practices as technologies and political conditions change. Even as they do so, they must remember that securing cities will remain manpower-intensive.

Of course, even as cities are getting bigger, and a higher fraction of the world's population is moving into them than ever before, the globe is also getting smaller. That leads to the fourth point: communications and transportation technologies connect us in unprecedented ways. The very manifestations of much of the planet's growing wealth and sophistication leave us vulnerable in new ways—with San Bernardino, the opioid and meth drug crises and the Zika virus being just three of the latest examples to affect Americans directly.

A fifth and final principle is this: collaboration is central to our research strategy and to solutions to the underlying problem. Cities around the world have already developed many best practices. Much of the challenge is to disseminate them, while sharing insights on how to adapt core principles to various specific circumstances from one region and one metropolitan area to another. Doing so is an important step for strengthening urban security and economic development across the globe.

Article Link to the National Interest:

Breaking Down Today's Democratic Map: Arizona, Idaho, Utah

Two of the three states voting Tuesday are in Bernie Sanders' wheelhouse. Arizona is looking a lot tougher.

By Daniel Strauss
March 22, 2016

This was supposed to be the beginning of Bernie Sanders’ comeback.

But if the Vermont senator fails to win the big prize Tuesday — Arizona, where polls show him facing a double-digit deficit — his expected string of victories in the caucus states that follow won’t make a dent in Hillary Clinton’s daunting delegate lead, or erase the impression that his campaign can’t win in states with diverse Democratic electorates.

Still, after losing all five March 15 contests, the primary calendar is suddenly looking better for Sanders. Two of the three states voting Tuesday are in his wheelhouse — Idaho and Utah, both largely white states holding caucuses. Then, on Saturday, come three more Western caucus states where the Vermont senator could run the table.

A successful run of five wins over the next five days doesn’t solve Sanders’ delegate math problem, but it would serve to prime his powerhouse small-donor fundraising machine and enable him to justify continuing his longshot campaign deep into the primary calendar -- perhaps even through June.

Here's the state-by-state Democratic breakdown for Tuesday:

Arizona: 85 delegates

Of the three Democratic contests on Tuesday, Arizona looks the most promising for Clinton. She’s won there before in 2008. And it’s a closed primary, which hurts Sanders since it means independent voters can’t cast ballots.

On Monday, Clinton dispatched Secretary of Labor Tom Perez, a dark horse vice presidential prospect, to the state, the same day that she campaigned there for the first time. Former President Bill Clinton has been there to campaign on his wife's behalf.

"President Bill Clinton has visited on multiple occasions to campaign on behalf of Democrats for the last two, four cycles," Arizona Democratic Party chairwoman Alexis Tameron said, pointing out that the Clintons are "very popular" in the state and have longstanding ties.

Those connections have paid off. Clinton's campaign is full of top Arizona Democratic operatives; she’s also been endorsed by The Arizona Republic and has touted her support from top Hispanic lawmakers, like Arizona Rep. Ruben Gallego and Illinois Rep. Luis Gutierrez in a state where Hispanics make up roughly 30 percent of the population.

There’s been a dearth of Democratic primary polling but what little polling there is shows Clinton with a big lead that has local Democrats speculating that Clinton could trounce Sanders on a wave of support from minorities -- especially Hispanics.

The Sanders campaign has countered with support from Arizona Rep. Raul Grijalva and some other prominent Latino officials, in addition to ads aimed at minority voters.

"[Clinton] does have the advantage among the Latino establishment politicians," said Arturo Carmona, the Sanders campaign's Latino outreach director and Southwest political director. But, Carmona continued, "when it comes to Latino voters" or Democratic voters under 40 "there's no question that we have the momentum."

Idaho: 27 delegates

A caucus state which voted for Barack Obama over Clinton in 2008, Idaho is built for Sanders. Clinton hasn't been to the state recently while Sanders campaigned in Idaho Falls on Friday -- according to the Vermont senator's campaign, the event attracted 3,200 supporters.

"People are wondering, 'how come Hillary doesn't visit Idaho?'" Pete Gertonson, an Idaho Democratic National Party committeeman, said. "Bernie's getting points for visiting Idaho, Hillary is not."

Still, neither Sanders nor Clinton have focused much attention to Idaho in the last few weeks. Sanders spent less than $100,000 on ads there in the final week before the caucuses while Clinton didn’t spend anything at all.

Polling of the Democratic primary has been rare: In the most recent public poll, fielded in late February, Sanders held a narrow 47 percent to 45 percent lead over Clinton.

A mock caucus held a few weeks ago had a similarly close result, according to Gertonson.

"A mock caucus I attended a couple weeks ago in Boise, Bernie won that mock caucus of the state delegates by just a slim margin -- like 55 to 45 percent," Gertonson said.

Gertonson cautioned that the state isn't a slam dunk for Sanders.

"The enthusiasm is for Bernie Sanders but Hillary Clinton is I think more organized," Gertonson said. "So will that organization pay off? Because they have been in the state, they have been set up at our state central committee meetings -- the Bernie Sanders people just couldn't quite get there in time. So Hillary's organizational skills have been set up and obvious in the state and they've been working the state. But personally she hasn't showed up. Now will that personal difference, will Bernie just actually stopping in Idaho make the difference? It may. It may."

Utah: 37 delegates

Utah has the hallmarks of a state that looks good for Sanders: It's a caucus state with a predominately white Democratic electorate. But it’s largely gone under the radar.

Polling in the state has been scant, but the sense among Utah Democrats is that Sanders has the edge – a feeling validated by a recent Dan Jones & Associates poll that showed Sanders with an 8-point lead over Clinton.

"Hillary Clinton is not well-liked as a whole in Utah. Bernie Sanders is basically an unknown except for his label as a socialist, so people in Utah don't dislike him as a whole but the socialist label is what he carries on his back," Utah Democratic Party chairman Peter Corroon said.

Polling, Corroon pointed out, backs up the slight but significant Sanders lead.

"What I've seen from our polls is that if it's just the Democrats polling then Bernie Sanders would win by a small margin but when you include the Independent and other voters Hillary Clinton is the favored candidate," Corroon added.

The Sanders campaign has proudly touted the large turnouts in his appearances in the state -- according to the campaign, a Salt Lake City rally on March 18 attracted 14,000 people.

Clinton's been endorsed by the state's top highest ranking Democrats: Salt Lake County Mayor Ben McAdams and Salt Lake City Mayor Jackie Biskupski, coveted endorsements in a state where the most liberal Democrats are mostly clustered in Salt Lake City.

For the most part, Sanders and Clinton campaigns have focused their attention on Arizona or other Western states that vote later in the primary calendar -- like Washington and California. The Sanders campaign has spent just $234,000 on ads in Utah; the Clinton campaign has not spent any money at all.

"There has not been a massive amount of presence for either campaign — Sanders or Clinton in Utah," former Utah Rep. Jim Matheson, who's backing Clinton, said. "I mean you see occasionally in the paper an article about a group getting together for Clinton or Sanders but there's not this overt campaign that's really been obvious out there."

Article Link to Politico:

Breaking down the Democratic map: Arizona, Idaho, Utah

As Cuba Rises, Puerto Rico Falls

By James Gibney
The Bloomberg View
March 21, 2016

President Barack Obama dangles U.S. dollars before the Castros while Congress stonewalls Puerto Rico’s pleas for debt restructuring. The Tampa Bay Rays take the field in Havana as San Juan fends off New York hedge funds wielding legal baseball bats. The Rolling Stones play a free concert for Cubans; Puerto Rico can’t get no satisfaction.

As Cuba rises and Puerto Rico falls, it’s worth considering the diverging trajectories of these two ex-Spanish colonies that the Puerto Rican poet Lola Rodríguez de Tió described more than 100 years ago as “two wings of the same bird.” Even as the resumption of diplomatic ties with the U.S. opens new possibilities for Cuba, Puerto Rico’s current status as a U.S. commonwealth has turned into an ugly dead end.

Puerto Rico is defaulting in slow motion on $70 billion worth of debt. Its economy has shrunk 9 of the past 10 years. A few hundred miles to the west, meanwhile, economic reforms are creating new livelihoods for self-employed Cubans, whose material conditions are improving. Buoyed by the arrival of new tourists, remittances, and foreign investments, Cuba’s economy grew by 4 percent last year.

And when the U.S. embargo is lifted, Cuba – which for much of the 19th and 20th centuries was the Caribbean’s predominant economy -- is likely to take a growing bite out of Puerto Rico’s fortunes, in tourism, manufacturing and services. And that's before accounting for Puerto Rico's existing fiscal straits, which will lead to shrinking government services, higher costs imposed by utilities under siege from creditors and a string of broken social promises and busted pensions.

True, Cubans don’t have democracy. Then again, at the national level, neither do Puerto Ricans: Despite being U.S. citizens, they can't vote for president or in Congress, which these days mostly ignores them. Cubans may face the threat of arbitrary detention and abuse. But they’re much less likely than Puerto Ricans to be shot dead on the street, or to be victimized by drug traffickers or other criminals.

In fact, by many other yardsticks, you’re better off being born in Cuba than Puerto Rico. Don’t take my word for it. Look at the World Factbook put out by those raving socialists at the Central Intelligence Agency. Lower infant mortality? Check! Same with lower unemployment, higher literacy, and a lower overall death rate.

Things weren’t supposed to turn out this way for the island that President John F. Kennedy touted three months after the Bay of Pigs invasion as “a source of hope and inspiration to those of us deeply concerned with charting new courses of social progress for our Hemisphere.”

The proximate cause of Puerto Rico’s current distress is its crushing debt, which has tripled since 2000. And yes, irresponsible and corrupt legislators and executives (and the voters who elect them) deserve much of the blame.

But the larger problem has been Puerto Rico’s relationship with its federal overlords, who have oscillated between patronizing micromanagement and malign neglect -- devising ill-suited development strategies, granting and then revoking economic benefits, imposing regulations that undermined the island’s competitiveness and creating disincentives for work.

Consider the Washington-backed effort to turn Puerto Rico into a manufacturing hub. During the late 1940s, U.S. companies were given federal and local tax breaks to locate on the island. But U.S. minimum wage laws and trade agreements with other nations gradually eroded Puerto Rico's competitive advantages. Moreover, instead of investing in the island, U.S. companies brought their profits back to the mainland.

In 1976, the U.S. tried again, sweetening the pot for companies with Section 936 of the Federal Tax Reform Act. That created new jobs in chemicals, pharmaceuticals and electronics, but at huge fiscal cost as mainland corporations gamed tax laws. When the U.S. phased out the tax breaks, the island's manufacturing employment took a big hit -- a blow that Puerto Rico's legislators are quick to blame for the island's decline, not least because it conveniently absolves them for their own bad decisions.

The Republican-controlled U.S. Congress is now debating what to do about Puerto Rico’s fiscal mess. The island's top officials have all but begged for the ability to restructure the debt of its municipalities under Chapter 9 of the U.S. bankruptcy code – a power Puerto Rico had for decades until Congress took it away. Better yet would be the ability also to restructure its general obligation debt, which it can’t realistically pay.

Congress seems unlikely to allow restructuring. Instead, the Republican majority wants to impose a fiscal control board that takes over Puerto Rico’s fiscal affairs. Analysts at Puerto Rico’s Center for a New Economy have argued against this approach's "colonial and imperialistic overtones," which also contradict the GOP's devolutionary, small-government philosophy. Instead, they advocate passing a "fiscal responsibility law" with strict enforcement provisions.

As smart as this idea looks on paper, the island’s repeated failures to put its own fiscal house in order undermine that case. On the other hand, imposing a control board without granting debt relief risks accelerating Puerto Rico’s downward spiral.

That brings us back to the central question of Puerto Rico’s sovereignty. A control board for Puerto Rico would be all-too-consistent with its quasi-colonial status: Its legislators and executives behave irresponsibly in part because the buck doesn't stop with them. The island depends on the federal government for a quarter of its revenues, on terms that Washington sets, while it's straightjacketed by federal regulations that hurt its competitiveness and estrange it from neighboring economies.

Making Puerto Rico a state wouldn't necessarily cure it of bad fiscal behavior (see: Illinois). And independence would bring huge challenges. But remaining a commonwealth isn't working either. More than a half-century after JFK called Puerto Rico a "source of hope and inspiration," its predicament should be a source of shame for every American. Its U.S. citizens have rates of poverty and unemployment that dwarf those on the mainland, and diminishing prospects that make a mock of the American Dream. They don't even enjoy the full benefits of the U.S. Constitution.

Their lot won't fundamentally improve until they seize control of their own destiny and choose between statehood or independence. And when they finally make that choice, Congress should honor it, either welcoming Puerto Rico as the 51st state or allowing it to be independent.

Once Cuba gained its independence from U.S. control in 1902, it became theoretically free to make its own mistakes, notwithstanding the colossus to the north looking over its shoulder. And Lord knows Cuba made plenty of them, even before its current detour through socialist privation and repression. Over the years, Cuba has nonetheless delighted in tweaking Uncle Sam in the United Nations over Puerto Rico’s "colonial" status, and is doubtless enjoying some quiet schadenfreude over its neighbor's troubles.

Yet these two islands can lift each other up. In addition to their shared history and culture, they face some similar demographic and economic challenges, and have some complementary strengths -- Puerto Rico's pharmaceutical industry and Cuba's nascent biotechnology sector, for instance. An unlikely partnership, perhaps. But as President Obama has noted about Cuban policy, we know what hasn't worked. Maybe it's time to try something different for Puerto Rico too.

Article Link to the Bloomberg View:

President Obama’s Che Moment

By Rich Lowry 
The National Review
March 22, 2016

President Barack Obama inadvertently found the perfect photo-op for his Cuba visit at a wreath-laying ceremony at the Jose Marti Memorial in Havana.

A news photo at Revolution Square caught Obama standing together with American and Cuban officials, with an enormous mural of the iconic revolutionary Che Guevara looming over his shoulder on the adjacent Ministry of the Interior building.

Che is, of course, ubiquitous on dorm-room walls and T-shirts in the United States, and a hero of the Cuban revolution. He also was a cold-blooded killer who set up the Cuban gulag and presided over summary executions of political prisoners (trials were, per Che, “an archaic bourgeois detail”). No doubt, he would have been astonished at the Yanqui president coming to Revolution Square to pay his respects — and exceedingly pleased.

President Obama’s trip is self-consciously historic. As the president’s introducer at an event at the U.S. Embassy put it, Obama often said, “Yes, we can,” and now we can say, “Yes, we did.”

But did what? The trip ensures that the first visit to Cuba by an American president in almost 90 years will be part of Obama’s legacy, and it seeks to make his opening to Cuba, announced in December 2014, irreversible. If that means extending credibility and a financial lifeline to a Castro regime that has no intention of reforming, so be it.

The regime made it clear that it wouldn’t bother with maintaining a pretense of relaxing its grip, with the arrest of protesters at a march of the dissident group Ladies in White while President Obama was en route to the country. A reporter with a government news outlet told the New York Times that he and colleagues had been warned not even to discuss Obama’s visit with friends.

At a press conference with President Raúl Castro on Monday, Obama spoke in euphemistic terms of our “two different systems,” eliding the fact that one system is open, democratic, and prosperous, while the other is closed, dictatorial, and economically ruinous. Castro railed against alleged human-rights abuses in the United States — Obama obligingly said he welcomed the dialogue — and El Presidente denied holding any political prisoners when reporters dared ask about it.

There is no sign of greater openness in Cuba since President Obama forged his break with long-standing U.S. policy. Political arrests have accelerated. There were more than 8,000 in 2015, four times as many as in 2010. The exodus of desperate Cubans to the United States has picked up. And the country still ranks below Zimbabwe and Iran on Internet connectivity.

But Obama’s opening has produced a financial windfall for the regime. The Cuban military occupies the commanding heights of the economy and controls the tourism business, which has been thriving with the influx of American tourists. Starwood Hotels and Resorts just got special permission from the U.S. Treasury to operate three hotels in Havana, in a boost, not for the free market, but for the Cuban government.

If Cuba were a repressive, small-minded military dictatorship of the right, Obama’s visit and accommodationist attitude wouldn’t be considered so broad-minded. But a patina of revolutionary romance, embodied by that image of Che looking down on President Obama, still hangs over Cuba. It makes its human-rights abuses, theft, and lies an afterthought, or even excusable, for the American Left.

After the Cuban missile crisis, Che said that in the event of a U.S. attack, “if the rockets had remained, we would have used them all and directed them against the very heart of the United States, including New York, in our defense against aggression.” It would have been beyond his imagining that so many decades later, with the revolutionary regime cash-strapped and decrepit, the imperialist Goliath would come bearing gifts and asking for nothing substantial in return, except a line in President Obama’s Wikipedia entry.

Article Link to the National Review:

Did Russia Win in Syria?

Moscow's incursion was a political victory, if not a total military one.

By Ari Heistein
The National Interest
March 22, 2016

That the Russian bombing campaign in Syria continues is a subtle acknowledgment that its military objectives have yet to be achieved. While it is clear that Russian intervention helped turn the tides of war in the Assad regime's favor, it is also important not to overstate the recent military success of pro-regime forces. In contrast to the pro-regime forces' modest territorial gains on the battlefield, however, Russian intervention has done a great deal to undermine U.S. foreign policy in the diplomatic arena.

Experts were predicting the Assad regime's fall every year since the beginning of the uprising against him in 2011, but in 2015 the situation began to deteriorate quickly. In the first eight months of that year, the Assad regime lost 18 percent of its territory. In light of the powerful momentum pushing back pro-Assad forces in September 2015, Russia decided to intervene directly with an aerial campaign. The aim was clear: reversing the tides of the war and preventing the collapse of the Syrian government. By November 2015, the pro-Assad coalition of Russia, Iran, Syria and Hezbollah had managed to hold off Assad's enemies and even gain a very small amount of territory.

Despite the thousands of Russian sorties, however, the pro-Assad forces in Syria succeeded in doing little more than stabilizing the regime. From the start of Russian military involvement in Syria until January 11, 2016, according to IHS Jane's 360, the amount of territory under the Syrian government's control grew by just 1.3 percent. It is also worth noting that despite Putin's contention that he sent Russian forces to fight in Syria against Islamic State (IS), all of the government's territorial net gains were made at the expense of non-IS rebel forces while the Syrian government actually had territorial net losses to IS.

It is true that not all territory is equal, as conquering area around a major city like Aleppo would be more strategically advantageous and likely more ferociously contested than the Syrian Desert in the east. It is also true that some of the major victories of the Assad regime since the Russian intervention have been in conquering areas around Aleppo. However, one need only look at a pre-intervention map from July 2015 and compare it with a map drawn to reflect the realities on the ground after six months of Russian intervention to see a lackluster picture of the Syrian regime's territorial gains—it has managed to hold on, but little more than that.

Off the battlefield, Putin's victories were more decisive.

First, Putin's intervention on behalf of Assad further undermined U.S. credibility as an ally. The autocrats of the region watched President Obama demand that Egypt's President Mubarak step down in 2011, and then stand idly by as his successor Mohamed Morsi was overthrown. In light of that, it is hard to believe that President Sisi of Egypt or King Salman of Saudi Arabia, despite the fact that they are among the most important U.S. allies in the region, maintain any illusions about American support in times of crisis. Meanwhile, Russia demonstrated dedication to its only ally in the Arab world by continuing to support the Assad regime throughout the Syrian civil war and ultimately intervening on its behalf. This certainly increases Moscow's appeal as a potential partner for autocratic Middle Eastern regimes in the future. (It is worth also keeping in mind that with the exception of Tunisia, there are no democracies in the Arab world.)

Second, Russia exploited tension between critical partners in the U.S.-led anti-IS coalition and turned them against each other. For example, in the case of Turkey and the Syrian Kurdish YPG, the Russians supported the U.S.-backed YPG and enabled it to conquer large swaths of territory along the Turkish border. This annoyed the Turks, because the YPG forces on its border belong to a subsidiary of the Kurdish separatist group known as the PKK, which Ankara considers a terrorist organization. In response, the U.S.-allied Turks started to shell the U.S.-backed Kurds. A similar scenario unfolded when Moscow supported the YPG in its fight against CIA-backed Sunni Arab rebels. With the help of Russian air strikes, the U.S.-backed forces clashed against each other, causing one headline to declare, "America is in a proxy war with itself in Syria."

Third, Russian participation in the Syrian civil war defied the Western notion that foreign policy should be guided, at least in part, by moral principles. As Putin often criticized the U.S. for the chaos it caused in Iraq and Libya due to its desire to replace dictatorships with democracies, he demonstrated the benefits of unabashed opportunism and maintaining the autocratic order. Indeed, the low cost and neatness of Putin’s campaign was probably quite frustrating for a U.S. government that had spent trillions on wars in the region and democracy-building efforts with little to show for it. Yet the Western media continues to heap admiration on the new and more assertive Russian policies in the region, and Putin paid no political price for ruthlessly bombing hospitals in support of the autocratic Syrian regime.

Despite the fact that pro-regime forces in Syria have reconquered only a minute fraction of Syrian territory since the start of the Russian intervention, Putin’s political maneuverings have done a great deal to undermine U.S. foreign policy. However, the failure to reach a long-term ceasefire between the warring parties could wear down the tattered Syrian regime and force Russia to either give up on Assad or dig in and fight. Putin’s decision to launch an air campaign indicates that he has learned one lesson from the blunders of America’s Middle East policy from the last fifteen years—but whether this is his “mission accomplished” moment remains to be seen.

Article Link to the National Interest:

Tuesday, March 22, Morning Global Markets Roundup: Global stocks fall, gold and govt bonds rise after Brussels explosions


March 22, 2016

European stocks fell on Tuesday and safe-haven assets, gold and government bonds rose in price after two explosions at Brussels airport killed at least one person and left several others injured.

Travel sector stocks including airlines and hotels fell the most, pulling the broader indices down from multi-week highs as reports on the scale of the carnage in the Belgian capital unfolded.

The cause of the blasts was unknown, but they occurred four days after the arrest in Brussels of a suspected participant in November militant attacks in Paris that killed 130 people. Belgian police had been on alert for any reprisal action.

"Anything like the events we're seeing in Brussels this morning is going to weigh on risk sentiment and risk appetite," said Michael Hewson, chief market strategist at CMC Markets in London.

"Coming up to the Easter holiday, people are going to be very reluctant to put more money into these (stock) markets. If anything, they will be more likely to take money out," he said.

In early European trade the FTSEuroFirst 300 index of leading shares was down 1 percent at 1,326 points .FTEU3. Germany's DAX was down 1.2 percent and Belgian stocks were down 0.8 percent .BEL20.

The STOXX Europe 600 Travel & Leisure index .SXTP was the top sectoral faller, down 2.2 percent. Shares in major European airlines were down as much as 4 percent (EZJ.L) (AIRF.PA) (LHAG.DE), and hotel company Accor (ACCP.PA) fell 4.1 percent.

Gold rose more than 1 percent to $1,257 an ounce XAU=, and the yield on benchmark 10-year U.S. Treasury and German government bonds both fell around 4 basis points to 1.88 percent US10YT=RR and 0.19 percent EU10YT=RR.

Earlier in Asia, stocks edged lower as hawkish comments from U.S. Federal Reserve officials indicated that interest rate hikes could be on the way sooner rather than later.

Article Link to Reuters:

Awful News: Explosions hit Brussels airport, several killed: Belgian media


March 22, 2016

Explosions tore through the departure hall of Brussels airport on Tuesday morning killing up to 10 people and injuring 30 others and a second blast struck a metro station in the capital shortly afterwards, the Belgian public broadcaster RTBF said.

The Belga agency said shots were fired and there were shouts in Arabic shortly before the blasts at the airport. Pictures on social media showed smoke rising from the terminal building through shattered windows and passengers running away down a slipway, some still hauling their bags.

The blasts at the airport and metro station occurred four days after the arrest in Brussels of a suspected participant in November militant attacks in Paris that killed 130 people. Belgian police had been on alert for any reprisal action.

British Sky News television's Alex Rossi, at the airport, said he heard two "very, very loud explosions".

"I could feel the building move. There was also dust and smoke as well... I went towards where the explosion came from and there were people coming out looking very dazed and shocked."

"The thinking here is that it is some kind of terrorist attack - that hasn't been verified by any of the authorities here at the airport."

Video showed devastation inside the departure hall with ceiling tiles and glass scattered across the floor.

RTBF said the metro station hit by the explosion was close to European Union institutions. Authorities closed all metro stations in Brussels, but there were no details immediately available of any casualties in this second incident of the day.

A local journalist tweeted a photograph of a person lying covered in blood among smoke outside Maelbeek metro station, on the main Rue de la Loi avenue which connects central Brussels with the EU institutions.


The agency cited hospital sources as saying up to ten people were killed at the airport.

Belgian Prime Minister Charles Michel said on his twitter feed: "We are following the situation minute by minute. Our priority concern is for the victims and those present in the airport."

Brussels airport said it had canceled all flights and the complex had been evacuated and trains to the airport had been stopped. Passengers were taken to coaches from the terminal that would remove them to a secure area.

Police did not give any confirmation of the cause of the blast. But there has been a high state of alert across western Europe for fear of militant attacks backed by Islamic State, which claimed responsibility for the Paris attack.

European stocks fell after the explosions, particularly travel sector stocks including airlines and hotels, pulling the broader indices down from multi-week highs. Safe-haven assets, gold and government bonds rose in price.

French citizen Salah Abdeslam, the prime surviving suspect for November's Paris attacks on a stadium, cafes and a concert hall, was captured by Belgian police after a shootout on Friday.

Belgium's Interior Minister, Jan Jambon, said on Monday the country was on high alert for a revenge attack.

"We know that stopping one cell can ... push others into action. We are aware of it in this case," he told public radio.

French investigator Francois Molins told a news conference in Paris on Saturday that Abdeslam, a French citizen born and raised in Brussels, admitted to investigators he had wanted to blow himself up along with others at the Stade de France on the night of the attack claimed by Islamic State; but he later backed out.

U.S. says it may not need Apple to open San Bernardino iPhone

By Joseph Menn
March 22, 2016

U.S. prosecutors said Monday that a "third party" had presented a possible method for opening an encrypted iPhone used by one of the San Bernardino shooters, a development that could bring an abrupt end to the high-stakes legal showdown between the government and Apple Inc.

A federal judge in Riverside, California, late Monday agreed to the government's request to postpone a hearing scheduled for Tuesday so that the FBI could try the newly discovered technique. The Justice Department said it would update the court on April 5.

The government had insisted until Monday that it had no way to access the phone used by Rizwan Farook, one of the two killers in the December massacre in San Bernardino, California, except to force Apple to write new software that would disable the password protection.

The Justice Department last month obtained a court order directing Apple to create that software, but Apple has fought back, arguing that the order is an overreach by the government and would undermine computer security for everyone.

The announcement on Monday that an unnamed third party had presented a way of breaking into the phone on Sunday - just two days before the hearing and after weeks of heated back-and-forth in court filings - drew skepticism from many in the tech community who have insisted that there were other ways to get into the phone.

“From a purely technical perspective, one of the most fragile parts of the government's case is the claim that Apple's help is required to unlock the phone," said Matt Blaze, a professor and computer security expert at the University of Pennsylvania. "Many in the technical community have been skeptical that this is true, especially given the government's considerable resources.”

Former prosecutors and lawyers supporting Apple said the move suggested that the Justice Department feared it would lose the legal battle, or at minimum would be forced to admit that it had not tried every other way to get into the phone.

In a statement, the Justice Department said its only interest has always been gaining access to the information on the phone and that it had continued to explore alternatives even as litigation began. It offered no details on the new technique except that it came from a non-governmental third party, but said it was "cautiously optimistic" it would work.

"That is why we asked the court to give us some time to explore this option," a spokeswoman for the Justice Department, Melanie R. Newman, said. "If this solution works, it will allow us to search the phone and continue our investigation into the terrorist attack that killed 14 people and wounded 22 people."

It would also likely end the case without a legal showdown that many had expected to reach the U.S. Supreme Court.

An Apple executive told reporters on a press call that the company knew nothing about the Justice Department's possible method for getting into the phone, and that the government never gave any indication that it was continuing to search for such solutions.

The executive characterized the Justice Department’s admission Monday that it never stopped pursuing ways to open the phone as a sharp contrast with its insistence in court filings that only Apple possessed the means to do so.

Nate Cardozo, staff attorney at the Electronic Frontier Foundation, a civil liberties group backing Apple, said the San Bernardino case was the "hand-chosen test case" for the government to establish its authority to access electronic information by whatever means necessary.

In that context, he said, the last-minute discovery of a possible solution and the cancellation of the hearing is "suspicious," and suggests the government might be worried about losing and setting a bad precedent.

But George Washington University law professor Orin Kerr, a former Justice Department computer crime prosecutor, said the government was likely only postponing the fight.

"The problem is not going away, it's just been delayed for a year or two," he said.

Apple said that if the government was successful in getting into the phone, which might involve taking advantage of previously undiscovered vulnerabilities, it hoped officials would share information on how they did so. But if the government drops the case it would be under no obligation to provide information to Apple.

In opposing the court order, Apple's chief executive, Tim Cook, and his allies have argued that it would be unprecedented to force a company to develop a new product to assist a government investigation, and that other law enforcement agencies around the world would rapidly demand similar services.

Law enforcement officials, led by Federal Bureau of Investigation Director James Comey, have countered that access to phones and other devices is crucial for intelligence work and criminal investigations.

The government and the tech industry have clashed for years over similar issues, and Congress has been unable to pass legislation to address the impasse.

Article Link to Reuters:

Congress setting new bar for doing nothing

It's gotten so small-ball that one congressman introduced a bill to recognize the significance of magic.

By Lauren French
March 21, 2016

The biggest achievement in the House last week was a party-line vote to file a brief in a court case. In other action, GOP leaders all but conceded they won’t be able to pass a budget, the party’s first order of business, this year.

Over in the Senate, lawmakers have been busy debating whether it’s good or bad to sit on the president’s Supreme Court nominee for the next nine months.

Call it the Seinfeld Congress — all about nothing. It's gotten so small-ball that one congressman, a chairman of a highly influential committee, introduced legislation last week to recognize the national significance of magic.

“It doesn’t surprise me at all. They are going to need magic to save their party,” joked Rep. Steve Israel of New York, who heads the House Democrats’ messaging arm. “The American people are used to a Republican do-nothing Congress, they are now getting used to a Republican ridiculous Congress.”

All this non-activity comes as the House is set to take a nearly three-week vacation. The Senate skipped town last week.

"This is my eighth year here, and by far this is the thinnest of thin gruel years," said Rep. Gerry Connolly (D-Va.). "We're in session, I think, less than 111 days (for all of 2016) and the time we've been in session, we haven't done much."

House members have griped that their major legislative work a few weeks ago was naming post offices. Last week’s win for Republicans was passing a resolution giving the House authority to file an amicus brief in US v. Texas, the Supreme Court case challenging President Barack Obama's executive orders on immigration. Senior Republican aides say the brief is a big win for House Republicans who've been fighting the president's executive orders for years.

The big action before the House adjourns this week is to keep the Federal Aviation Administration running for another four months — a lowest-common-denominator outcome brought about by Congress' inability to do anything more.

When it comes to more substantive bills — like helping Puerto Rico avoid default, tackling the Zika virus or finding money to help Flint fix its corroded water system — there's been hardly any movement.

Democratic leaders formally urged Speaker Paul Ryan (R-Wis.) to cancel the upcoming recesses until the House passes emergency funding bills to deal with the Zika crisis and opioid addiction. A typical tactic employed by the minority to make the party in charge look bad and pressure it to act, it unsurprisingly went nowhere.

“It is simply unconscionable that the House Republican leadership plans two weeks of recess without acting to address these public health crises and without passing a budget blueprint for next year,” Minority Leader Nancy Pelosi (D-Calif.) said Monday.

Senate Majority Leader Mitch McConnell insists the Senate will continue pursuing bipartisan legislation the rest of the year, but 2016 politics are already getting in the way. A bipartisan energy bill has been stuck for more than a month amid Democratic demands for money to help Flint. Senate Democrats also rejected even debating a food labeling bill before the recess.

Senior GOP aides say it's not all bad. They point to a resolution that was just approved calling for the U.S. to declare that ISIL is committing genocide, legislation to boost sanctions against North Korea, and a bill requiring the EPA to notify the public of unsafe drinking water.

"We've had a number of bills on the floor in recent weeks that reflect important priorities of this conference," said a GOP leadership aide.

Party leaders are still looking to forge an agreement on Puerto Rico in the coming weeks, a Republican staffer said.

It's not unusual for legislative progress to slow during presidential election years as lawmakers turn their attention to politics. The focus on the campaign is even more intense this year with the Senate up for grabs in November.

But even by those standards, though, Congress seems to be setting a new bar for unproductiveness.

The most ambitious task on McConnell's to-do list this year is to pass individual appropriations bills, a task that would likely eat up the Senate’s entire calendar before the party conventions in July.

Democrats, needless to say, don’t think much of that agenda. At an event at the liberal Center for American Progress last week, Senate Minority Leader Harry Reid (D-Nev.) said he didn’t mind lingering for extra questions from the press.

"We have a lot of time to do nothing in the Senate,” Reid said with a grin.

The House will likely have to scrap the effort to pass a budget after GOP leaders spent six weeks trying to craft one. 

That would prevent Ryan from moving ahead with the appropriations process, and increase the odds that lawmakers will be forced to pass a patchwork spending bill in September — just to keep the government open.

Article Link to Politico:

Congress setting new bar for doing nothing