The Weekly Dispatch


March 5 - 11

Hello, and welcome to the Dispatch for March 5-11!


The Syrian government allowed both the Syrian Arab Red Crescent (the local Red Cross affiliate) and the UN Humanitarian Chief to visit Baba Amr after spending several days blocking access to the city. Rebels accused them of cleaning up signs of bloodshed and atrocities, but even after the army was done, the destruction was evident. The UN also sent a special envoy, former Secretary General Kofi Annan, to try to negotiate a cease fire, a possibility rejected by both Assad and the rebels.

The attempt to clean up the city is a quaint notion in the age of YouTube.

John McCreary, author of NightWatch, has been highly skeptical of reports of the size and strength of the Syrian Rebellion. On Thursday, he wrote a comment which more clearly defines the size of the Syrian uprising (The section on Syria is midway down the page). In trying to assess the uprising, he broke Syria down not as the 14 governates (“states,” roughly) that comprise it but as the 61 districts (“counties”) that make up those states. He found that the rebellion was active in only 12 different districts, and much of the action was small street demonstrations. He points out the level of activity is much, much lower than during the insurrections against NATO forces in either Afghanistan or Iraq: there’s an uprising, but it looks more like a police problem than a legitimate threat to the regime. This is a much different view of events than has been presented in most of the media, and goes some way in explaining both why Assad is still in power and why the US (and many others) have been extremely reluctant to get involved.

This is, of course, only one analysis from one person, but John is an extremely well-respected analyst, and his read on this squares with an awful lot of the reports coming from the region.


The New York Times wrote this week about the incredible levels of graft and corruption in Afghanistan, a problem NATO has found impossible to unroot thanks to complicit courts and political interference. More worryingly were guidelines on the role of women issued by the Ulema Council, Afghanistan’s top clerics. The guidelines are not legally binding, but were published by President Karzai’s office, and later endorsed by the President himself.

Combined with last week’s Koran burnings, subsequent riots, and the deaths of several American and British soldiers at the hands of their Afghani partners (followed by this week’s killing of 16 Afghani citizens by an American soldier), we have a pretty good picture of the Afghanistan we leave behind. After 11 years, untold dead on both sides, and trillions spent, Afghanistan is a country rife with corruption, slipping to the Taliban, and hostile and distrustful of the West. The best one can hope is that this serves an object lesson the next time we consider military adventurism.


The former head of the ISI admitted in court to spending more than $15m attempting to sway the 1990 Parliamentary elections. While the admission doesn’t come as a shock to most Pakistanis, the ISI has long been seen as untouchable, so the trial itself is already quite incredible, and that the ISI has actually been forced to admit and identify its wrongdoings is unprecedented.


The Iranian government made two moves which could be seen as conciliatory: First, the Iranian government agreed to resume talks on its nuclear program, which the international community hopes will help stop Iran’s uranium enrichment programs. The Iranian Supreme Court also overturned the conviction of an American convicted of spying and sentenced to death, another source of friction between the US and Iran. Israeli Prime Minister Netanyahu visited the US, urging President Obama to take a harder line on Iran. Obama, for his part, urged the Israelis to have patience, cautioning against too hasty military action and delivering a stern rebuke to Republican lawmakers who have been calling for harsher action on Iran. Some good news for Israel, though: Hamas declared they would take no part in an Iran/Israel conflict.

It seems that both Iran and the US are working towards the same goal: preventing Israel from engaging in a military strike against Iran. Israel’s stance does seem to be having an effect on Iran, though: the Iranians have been expending a good amount of effort to try to convince the rest of the world they’re not building a nuclear bomb. Iran has a range of reasons for wanting their nuclear program to continue — there are legitimate domestic reasons to enrich uranium — but events of the past few months have severely undermined Iran’s strategic position, and I suspect they don’t want to risk an Israeli strike at the moment. For now, it pays to play the international game, and that means giving the Americans more reasons to keep the Israelis at bay.

The statement from Hamas should help calm some nerves in Israel. There’s a couple items wrapped in that bit of news: most immediately, the Hamas/Iran relationship is clearly over. Israel still has to worry about Hezbollah in Lebanon, but that’s an awful lot better than having to worry about both groups. In the longer run, the statement reinforces some of the other recent promising signs from Hamas, and that’s very good news for both the Israelis and the Palestinians.


The Organization for Security and Cooperation in Europe (OSEC) stated that, while the Russian presidential elections were cleaner than the Parliamentary elections in December, there were still numerous instances of fraud, and, more to the point, no actual opposition. Protests continued on Monday, though at a more subdued pace, and mostly petered out by the end of the week. Still, reports of higher turnout and some local council wins by protestors offered a silver lining to an otherwise dismal display of democracy.

The OSEC’s report cuts to the crux of the matter: Putin may be unpopular in the city, but there’s simply no credible, independent opposition anywhere. Part of this is because Putin’s government has actively opposed dissent, but part of the problem is that Russia is still living in the shadow of the Soviet Union and its collapse. The protest movement in this election show Russia’s politics may be opening up: it didn’t happen this election, and it may not by next election, but there’s enough new blood voting now to generate a legitimate opposition party. In light of this, seeing some of the protestors winning council seats is a very good sign, since it could provide a new party with a “bench” of people with some experience to draw from.


A group of tribal leaders declared a large swath of eastern Libya a semi- autonomous state, rebuking the National Transitional Council which is nominally in charge of Libya. The NTC decried the move, threatening to retake the area by force before later admitting they don’t have the troops necessary to do so.

Fundamentally, the NTC is an unelected group of Benghazis who were the first ones to get the West involved. There’s been conflict even before Gaddafi fell over the NTC’s leadership, and they’ve never been able to really assert themselves as the ruler of Libya. The goal for the group right now needs to be reaching an accord with the other rival tribes on what the Libyan state should look like, holding elections to get there, and then stepping out of the way — and doing so quickly, because they don’t have the authority to hold Libya together by themselves.


The China Development Bank announced an agreement with its counterparts in Brazil, India, Russia, and South America promoting trade in Chinese Renminbi and cross-country loans in each country’s respective currencies.

In search of economic independence, all five countries have been looking for an alternative to the US dollar for trade purposes, and for obvious reasons the Euro’s off the list. The hope is to gain some insulation from the economies of both the US and the Eurozone - the five nations’ economies have all grown far faster than either the US or the EU, and having an alternate trade currency will help maintain some distance from the headwinds against both those economies.


Brazil surpassed the UK to become the 6th largest economy in the world, despite growth slowing to only 2.7% last year.

The news follows a spate of good news from Brazil, and nearly a century of South America being a byword for corruption and economic collapse. I was lamenting the lack of news from Latin America in the Dispatch - I’m pleased to have some rather good news from the region here.


A brief note on the Kony 2012 video, care of Foreign Policy. The cliff notes: Joseph Kony is no longer in Uganda. His supporters number slightly above 100, not 30,000. There’s an international manhunt, supported by the US, against him right now. The US has shown no signs that it’s considering cutting its commitment to the hunt. One can’t but wonder, then, what the Invisible Children group actually intends to do with the Kony 2012 money (which certainly shouldn’t go anywhere near the president of Uganda, Yoweri Museveni, who’s been in power for 25 years amid charges of corruption and human rights abuses).



Greece managed to get 86% of its private lenders on board for the debt swap deal — lower than hoped, but more than enough to invoke the “collective action” clauses to force the deal on the remaining 14%. Because the collective action clause was used, the ISDA voted that the Credit Default Swaps would pay out, a reversal from their stance last week.

The debt swap deal is sufficient to release funds from the IMF that Greece needs to stay afloat, but between a horrific recession, negative growth, and deep austerity measures, there’s good reasons to continue to be pessimistic about Greece’s future. Even after the debt swap (which reduced debt to private holders by around 80%), Greece’s Debt/GDP ratio is still 120%, well in excess of what’s considered ‘stable.’ It still looks like there’s a high probability of a Greek default or an exit from the Eurozone. The upshot to this deal, though, is that it gets a lot of Greece’s debts off the books of outside entities, which means that when Greece does default, the contagion should be far more limited — which, frankly, was probably the entire point of the exercise.


The Spanish government announced its deficit target this year was 5.8%, higher than the 4.4% agreed upon with the European Commission. Spanish Prime Minister Mariano Rajoy asserted the issue was a matter of national sovereignty, saying that given the country’s current economic performance, the previous target was no longer realistic.

The problem the Eurozone has always faced is the distance between what happens in Brussels and the facts on the ground in its member countries. The EU is fundamentally an economic agreement without the accompanying political alliance, and because of that it has massive internal tensions between member governments, who must answer to their voters, and the strength of the union itself. Spain is the first of the “troubled” countries to test the EU’s new rules, but it’s not likely to be the last: one look at what the EU’s austerity rules are doing in Greece is enough to rouse the populist in any self- preserving politician.


GOP Primaries

Super Tuesday came and went: Romney won 225 of the 416 available delegates to Rick Santorum’s 89.

There’s not much to be said here. I’ve written the last thing I intend to write on the GOP nominations on my other blog. The short version: Mitt Romney gets the nomination and loses to Obama in the elections. Unless something dramatic happens to upset that prediction, I’m not covering this story again.

Women’s Health

The recent controversy over the mandated birth control coverage in the Affordable Health Care act has sparked a spate of action across the country concerning Women’s health and reproductive rights.


Texas passed a rule blocking any of the $35M in federal money earmarked for women’s health under Title X from going to Planned Parenthood because the organization provides abortions. The Federal government declared the rule illegal and has threatened to cut all $35M in funding from Texas; Governor Rick Perry said the state would cover the loss, though he didn’t specify where the money would come from.


Governor Bob McDonnell signed into law a bill requiring women undergoing an abortion to have an ultrasound, though they wouldn’t be required to actually look at the screen. The bill was amended to only require an abdominal ultrasound, not the transvaginal ultrasound required by the original text.

2012 Elections

In the wake of the birth control controversy and other women’s rights issues, the New York Times found rising sentiment against the Republican party among women across the political spectrum. The Obama re-election campaign is eager to take advantage of the Republicans’ rising disfavor among women, planning a nationwide push to attract female voters.

Final Thoughts

In a year full of bizarre politics, the debate over contraception takes the cake. I didn’t live through the original culture wars, but between Rush Limbaugh’s horrendous, invective-filled, and downright creepy attacks on a college activist, the GOP’s non-repudiations of those attacks, the farcical attempts to reframe the issue as one of religious liberty, and the nationwide drive to see who can pass the most offensive bill targeting women, I feel like I’m getting a pretty good review. It seems a bit odd addressing the original contraception question, because the response to the matter shows well that the controversy was only nominally ever about who pays for contraception, but in the interest of addressing anything that could even pass as a reasonable defense of this sort of blatant misogyny, I think it’s worth taking a look at the health insurance issue.

In the US, Health Insurance has typically been treated as part of the overall employee compensation package, along with wages, 401k matching, and vacation time. With the new rule from the Obama administration, the responsibility for providing birth control to employees of religious organizations is placed solely in the hands of insurance companies. The insurance companies are paid in part by the employer, but again, this is considered in the same way as your wages: your insurance plan, for all intents and purposes, is the same as your salary, a payment provided to you as compensation for your labor. The idea that your employer has some right to dictate how you use any part of your compensation would be a dramatic infringement on your rights as a worker: your employer has no more right to tell you not to get birth control than they do to tell you not to eat pork or drink alcohol in your free time. That employees can spend their salary on whatever they please hasn’t been up for discussion at any time in the modern era in this country, and neither the Catholic Church nor anyone else has successfully tried to prevent by legal means its employees from buying condoms or any other manner of sinful product. Either we need to redefine insurance as something other than a form of compensation, in which case we’re opening the door to much larger questions, or we accept insurance for what it is, an inducement to work, and place it in the broader context of the Employer-Employee relationship — which is to say, neither the property nor the tool of the employer, and therefore unaffected by any particular quibbles the employer may have about its usage.

Thanks for joining me, and my best for the week ahead!


February 26 - March 4

Welcome to the Dispatch for February 26 - March 4!

I’m whole and healthy again, and we’re back to a full-length dispatch this week — so, without further ado, let’s get started.


The Free Syrian Army abandoned the Baba Amr district of Homs after nearly a month of bombardment by the Syrian government, calling the move a “tactical retreat” and citing the increasing humanitarian costs to the remaining residents. The Red Cross was barred from entering the district by the Syrian government, drawing further sharp rebukes from the international community.

The stalemate continues: Neither the rebels nor the government can effectively hold territory in Syria. The rebels don’t have the organization, support, or supplies to mount a fully cohesive opposition, while the Syrian regime can’t rely on its own army, limited to security forces which lack the size and strength to put down the rebellion once and for all.


A Uygher attack on a crowd in western China underscored ethnic tensions in the region, where both Uyghers (a Turkic Muslim minority) and Tibetans have been under increased pressure from Chinese state police.

China’s ethnic conflicts — and the government’s preferred method of resolving them — is instructive in parsing China’s reluctance to take a hard line on the Syrian regime.

North Korea

North Korea agreed to suspend its nuclear enrichment and weapons programs in exchange for 265,000 tons of food and a statement of non-aggression from the US.

North Korea tends to vacillate between aggression and famine; the country hasn’t been able to feed itself effectively for more than 20 years. These agreements seem to crop up whenever a harvest fails or the Chinese get angry, and aren’t terribly indicative of policy directions. Still, it’s positive news, and should help defuse tensions on the peninsula.


The Pakistani Supreme Court revived a 13 year old vote tampering case against the ISI, the second challenge to the powerful group by the courts in less than a month. The PPP, the party of embattled president Zardari, won an overwhelming victory in senate election this week, securing 32 of the 49 seats.

It was a good week for civilian government in Pakistan, though observers warn against placing too much stock in the Supreme Court’s case against the ISI. The Senate elections are a clearer victory: the PPP has been under intense pressure by the military, but the decisive electoral win shows the people still support the first civilian government since Musharraf. The military started the year aggressively pushing its way into politics, but both the courts and the civilian government have shown themselves much stronger than expected.


The Iranian government reported a very high turnout for this week’s parliamentary elections, though their claim is disputed by reports from individuals in Iran. Early reports show gains for the ultra- conservatives, though the elections were boycotted by most opposition groups.

Most reformist candidates were barred from running, leading to a contest between the conservatives who support President Ahmadinejad and the ultra- conservatives who support Ayatollah Ali Khamenei, the supreme leader. To the reformists, the election was essentially rigged: most of their candidates were under house arrest for weeks ahead of the election. Gains for ultra- conservative hard liners at a time when Iran is already under extraordinary economic pressure in large part due to Ali Khamenei’s nuclear ambitions are unlikely to contribute to long-term stability in Iran.

Al Jazeera published an excellent editorial on the current state of internal politics in Iran.


Despite several weeks of protests in Moscow, Vladimir Putin won the Russian presidential elections with 65% of the vote, more than enough to avoid a runoff. Opposition leaders promised protests, citing strong evidence of voter fraud.

Putin’s victory was never really in doubt: with strong support from the electorate and a shallow field of opponents, the election was all but a foregone conclusion. Given that, the widespread evidence of voter fraud, with thousands of reports of tampering from around the country, is absolutely bizarre. Russia’s demography at this point seem to be split between those who remember the Soviet Union and the disastrous collapse afterward and those who do not: the former are far more likely to vote for stability, safety, and Putin, and as long as that group continues to vote, Putin and his supporters will continue to hold sway in Russia.


The International Swaps and Derivatives Association decided that Greek bonds had not suffered a “credit event,” and therefore Credit Default Swap (CDS) contracts would not be required to pay out.

In Layman’s terms: The ISDA decided that a 70% loss in the value of Greek bonds was not a default or a loss significant enough to warrant a payout to those who had taken insurance contracts against losses on the bonds. This would be like having the back half of your car taken off by a semi and your insurance company refusing to pay out because they didn’t deem the event an “accident.” By no rational standard at this point can one consider a CDS an effective hedge against loss, a point that should have been abundantly clear after the collapse in 2008. No insurance company in the world can insure against the sort of systemic risk manifest in something like the Greek default, and anyone who assumes they can is either delusional or cares more about what things look like on paper than whether they take a loss or not.


GOP Primaries

Mitt Romney got back into stride, starting with primary victories in Michigan and Arizona and capping the week with endorsements from Rep. Eric Cantor and Sen. Tom Coburn, two highly influential Conservatives.

The endorsement from Cantor deserves note: Cantor is highly influential, extremely conservative, and, for most of the Obama administration, has been the face of the Tea Party in Congress. Romney’s problem so far has been appealing to Republicans like Cantor - his endorsement could signal the GOP is finally coalescing around Romney. This Tuesday, also known as Super Tuesday, 10 states hold their primaries. A strong win could finally cement Romney’s nomination.

Senate Elections

Senator Olympia Snowe of Maine announced this week she would not seek reelection this fall, citing the hyper-partisan atmosphere of Congress. Snowe is a liberal Republican, and has been one of the few senators to regularly support the Democrat’s bills. Snowe’s withdrawal opens up a seat that was considered secure: she had no credible opposition from either party.

Thanks for joining me, and my best for the week ahead!


February 20 - 26

Hello, and welcome to the Dispatch for February 20 - 26!

I spent the better part of this week with a nasty cold that I’m still shaking off, so this week’s dispatch is rather brief - we’ll be back to full length next week.


NATO troops at Bagram Airbase mistakenly incinerated several copies of the Koran. The incident sparked riots that continued through the end of the week, despite apologies from NATO and President Obama and appeals for calm from Afghani President Karzai.


On Tuesday, Yemenis went to the polls to finally close the door on Ali Abdullah Saleh’s 22-year rule. The election was largely a formality, as the only candidate was Saleh’s vice president Abed Rabu Mansour Hadi, but it paves the way for broader changes in the country.


Hamas announced its support for the Syrian opposition this week, formally denouncing the Assad regime which has supported the group for years.

Hamas is an offshoot of the Muslim Brotherhood, which recently won a majority of the seats in Egypt’s parliament. In snubbing Syria, they also snub Iran - it’s unlikely the group did so without securing other backers first, and it’s likely those backers are in Cairo. This will complicate relations between Egypt and Israel. Once the dust settles in Syria, Israel is likely to face a very different Palestinian situation.


Foreign Affairs published an essay this week about the current state of US national security. Entitled “Clear and Present Safety,” it’s a good, clear- eyed look at the incredibly safe world the United States finds itself in today.

“Clear and Present Safety” By Micah Zenko and Michael A. Cohen

Thanks for reading! My best for the week ahead,


February 13 - 19

Hello, and welcome to the Dispatch for February 13 through 19!

The Dispatch this week is shorter than normal - surprisingly few stories bubbled up, though I’m pleased to say there’s news from Syria, including a link to an excellent interview about the opposition movement.

Let’s get started!


On Monday, a bomb severely wounded an Israeli diplomat in India, and another was discovered attached to an Israeli car in the Eastern European country of Georgia. Another bombing was thwarted in Thailand when one of the bombs detonated prematurely, injuring one bomber, now in custody. The Israeli government claimed Iran was behind the attacks.

Three nearly simultaneous attack attempts in three different countries across the world, targeting Israeli citizens, using the same “sticky bombs” Iran accused Israel of using on its nuclear scientists: it’s hard to conclude this was anything but a message to Israel. Iran has shown it has global reach and it’s not afraid to target Israeli citizens should Israel attack. The other message is that Iran isn’t nearly as good as Mossad yet: not a single person was actually killed in the attacks.

The Guardian’s Middle East editor Ian Black wrote an excellent piece this week about the true danger posed by Iran; I highly recommend a read.


The UN General Assembly voted for a resolution of disapproval against the Syrian government over its continued crackdown, a largely symbolic move. On Thursday, the head of NATO declared that, even with UN support, NATO would not intervene in Syria, stating that the situation on the ground was too complicated for NATO to take action. This assessment was buttressed by US officials’ statements linking al Qaeda to the bombings in Aleppo last week. On Saturday, anti-government protestors marched in Mezze, a middle-class neighborhood in Damascus that sits near the Presidential palace.

The marches in Damascus are a very good sign. Protests in Mezze imply a larger, more stable, and more widely supported movement than what we’ve seen already.

Al Jazeera published two Q&A sessions with a reporter who’s been on the ground in Syria over the last few months. If you’re interested in the Syrian situation, these are a must-read: by far the best, most well-rounded reports I’ve seen about the Syrian uprising. Part One - Part Two


After a day of rioting in Athens in response to Greece’s latest austerity measures, Eurozone finance ministers indicated Greece would have to wait to find out whether the measures were sufficient to secure the loans they desperately need to avoid default. By Thursday, word spread that Wolfgang Schäuble, the German finance minister, was pressing to let Greece default.

Schäuble isn’t the only EU minister pushing for a Greek default, though he may be the only one in a position to make it happen. If the Greeks don’t get the bailout money and are forced into default on top of the austerity measures they just passed, expect things to get very ugly in Greece very fast. Unfortunately, the math doesn’t work an awful lot better for many of the other members of the EuroZone. The EU continues to press fiscal austerity upon its members, an affront to national sovereignty that isn’t playing well anywhere outside Germany.


The Chinese Vice President Xi Jinping, largely expected to be the next President, visited the US this week, meeting with both lawmakers and citizens across the country.

Xi was notable for his openness and charm, a striking contrast to current president Hu Jintao. This may lead to better communication between the US and China, but it’s unlikely to change the relationship much: China and the US have a relationship built on shared interests and mutual respect. Despite the image promoted by both the media and some politicians, the two nations are surprisingly close already, if not in agreement on all issues.



President Obama unveiled his budget proposal for 2013 this week. The plan contains both tax increases on the wealthy and plans to boost infrastructure spending.

Mitch McConnell, the leader of the Senate Republicans, called the budget a “campaign document,” and he’s not off the mark: the budget expresses many of the same themes Obama pushed in the State of the Union and other recent speeches. That said, it’s a good move in a direction that many Obama supporters wish he’d gone much sooner.


The House and Senate passed an extension of the payroll tax cut in a surprisingly bipartisan vote that gave quite a few victories to the Democrats.

This was a rare victory for the Democrats: the extension got passed without accompanying cuts, without cutting insurance, without giving almost anything up at all. The Republicans’ claim to victory is that the Democrats can no longer use this as an election year issue; it takes a lot of effort to call that a silver lining.


A federal law passed this week requires the FAA to create new guidelines allowing the use of unmanned aerial vehicles by both fire and law enforcement groups and by commercial entities. The guidelines for emergency services must be finalized within 30 days; commercial groups should be covered by September of 2015.

Drones have the potential to be one of the most disruptive of the new technologies emerging in the 21st century. The US Army has shown their effectiveness as a force multiplier abroad, and their combination of low cost and high utility bring a suite of capabilities into the hands of the average individual previously restricted to militaries and government agencies. In the hands of law enforcement agencies, drones may help prevent crime and keep officers out of harm’s way, but the same drones can be used by criminal groups to collect intelligence on police movements or border security, and weaponizing a drone can be as easy as attaching some explosives and a remote detonator. As prices get lower (the Parrot drone is down to $300 now) and capabilities expand, drones will become a game-changing technology.

Final Thoughts

In forming our opinions of the world around us, we must always be wary of biased and incomplete information. Recently, the coverage in Syria and Iran have been particularly difficult to navigate. In Syria, until the Al Jazeera interviews mentioned above, it was extremely difficult to find credible accounts of the opposition. Western news sources were almost pollyannaish in their coverage, but that didn’t square with events on the ground, and much of the reports critical of the opposition were of questionable veracity. The same problem has dogged coverage of Iran: much of the media coverage has hewed to a narrative that tacitly endorses the Israeli view of Iran. Again, though, this is a hard narrative to swallow. Most of the Iranian rhetoric has been around national security and sovereignty, and even a cursory look at their history would affirm Iran’s fears in that regard. The Guardian’s editorial is one of a few pieces I’ve seen recently that acknowledges what recent events ought to have made clear about the size of the threat posed by Iran; in the meantime the good money is on the US and Israel attacking Iran sometime this year based largely on the reported Iranian threat.

The problem is that even when a news source intends to promote a balanced view, both the writing process and the editing process are editorial in nature. Every fact that is or isn’t reported, every line that gets cut, every quote used, every word chosen is an editorial decision - and this process can only work from the available information, which suffers its own biases. This makes it difficult, even with outlets that intend to be balanced (such as this one), to find non-biased coverage, and that makes it extremely difficult to form a balanced and well-informed opinion.

I encourage you to read with a critical eye. My golden rule is moderation: If something seems too good, too bad, or too incredible to be true, it normally is. The most reliable fact I’ve found is that people are just about the same everywhere: there’s no such thing as an “other”, and reports claiming such a thing exists deserve a high degree of scrutiny.

Thanks again, and my best for the week ahead! Eric

February 6 - 12

Welcome to the Dispatch for February 6 - 12! There’s no administrative news this week, so let’s get right to it.


The assault on Homs continued this week. With no real prospect of outside intervention, the Syrian Government continued its bombardment of the city.

30 years ago, Bashir al-Assad’s father ended an Islamist uprising by shelling the city of Hama to the ground, killing more than 20,000 people. His son is continuing in his tradition. Last week, it was unclear how strong the rebellion actually was. Reports conflicted on the cohesiveness of the group, its support among the general populace, its accomplishments, and its resources. The question as of a week ago was whether this was a movement that reflected the will of the people or an isolated uprising. None of that matters this week. This week, the Syrian army moved in on Homs, and this may well be the last we’ll hear of Syrian opposition for another 30 years. I sincerely hope I’ll have something new to write about Syria next week, because there’s nothing good about “no news” in this case.


After a week of tense negotiations, increasing demands, and riots in the streets, the Greek government voted in favor of a package of austerity measures demanded of them as a condition of receiving $33Bn in IMF loans. The loans will help Greece avoid a default, but come with extremely harsh conditions, including a 22% cut in private sector wages.

I previously asserted that the EU would find some way to keep Greece solvent and in the Eurozone, but it appears that was predicated on the EU actually wanting Greece to stay. The Guardian’s Larry Elliot thinks Germany wants them out, a conclusion that’s hard to escape in the face of the incredible austerity demands. At some point, one must wonder what exactly the Greeks gain by both staying in the EU and not defaulting; it’s hard to see a scenario in which a 20% wage cut leads to the sort of growth needed to allow the country to pay its bills without outside assistance. In either case, the situation is far from over: the Greeks are out in the streets for the sixth day, there have already been several resignations from the Greek government, and the unemployment rate is already 21% - and that’s before the austerity measures kick in. The Greek debt is unsustainable, but the political situation is increasingly so as well.


The Pakistani Supreme Court called the ISI, the Pakistani Intelligence Service, to account on two cases this week. The first case centers on eleven suspected militants who disappeared shortly after their trials, the second around charges of vote-rigging from the 1990 elections. The court also rejected the Prime Minister’s appeal to avoid a contempt of court charge, stating proceedings will begin on the charges on Monday.

My original prediction minimized the role of the court, but that looks to be inaccurate. The Court seems intent on putting itself back as the third center of power in Pakistan. The charges against the ISI are welcome by many, and are certainly an interesting challenge to an organization seen as outside the law. This represents an interesting change in the dynamic in Pakistan: the story thus far has largely been of conflict between the military and the civilian government. The Pakistani courts have a long history of respectability and integrity; their involvement in what’s been a rather sordid affair all around may offer some welcome news.


Hamas and Fatah announced progress this week in forming a unity government: Mahmoud Abbas, the president of Fatah, would become the Prime Minister of a joint Hamas/Fatah government. The agreement is another step in the fulfillment of an agreement signed in May 2011, and removes a particularly sticky roadblock from the process.

Israel is understandably upset: much of the world considers Hamas a terrorist group, and the group has been the driver of many of the attacks against Israel. Despite its checkered history, there’s reason to believe the group can be negotiated with. It has offered long-term truces in the past, and has indicated its willingness to work within the peace process in recent years. The biggest concern, however, is the cohesiveness of the group and its ability to control other militants in the region. As the largest and most active group in Palestine, Hamas is frequently held to account for any attacks against Israel, but its control over the territory is not absolute: it may be impossible for the group to fully stop attacks on Israel from Gaza, and that could severely undermine the peace process.


The Guardian this week reported on a widespread campaign to pay bloggers and internet users to push pro-Kremlin and pro-Putin articles, comments, and videos. The campaign was revealed in hundreds of emails obtained by a Russian group under the Anonymous umbrella.


The Financial Times reported that the Chinese government has instructed its banks to roll over nearly $1.7Tn (Rmb10.7tn) in loans issued as part of the country’s stimulus plan.

It’s long been known that the skeleton in China’s closet is the outstanding municipal loans used to fund the enormous boom in construction and development over the last decade. China’s hope is that it can grow fast enough to wipe out the debt before its banks are forced to acknowledge the size and scale of the outstanding loans. The pattern is the same as was faced by Korea, Japan, Hong Kong, and many others: Growth, fueled by debt, followed by a financial crisis, and eventual recovery. The size of China’s economy, though, gives one pause when considering a potential financial crisis.



A federal court this week ruled that Proposition 8, the prohibition against same-sex marriage, was unconstitutional, stating in their decision that, “Proposition 8 serves no purpose, and has no effect, other than to lessen the status and human dignity of gay men and lesbians in California.”

This is the second court ruling against Prop 8. In both cases, the courts have ruled that the law serves no purpose except discrimination, and such laws are plainly unconstitutional. The next step, should Prop 8’s defenders choose to appeal, is a Supreme Court challenge.

GOP Primaries

Rick Santorum won the Minnesota, Missouri, and Colorado primaries this week in a stunning victory. Mitt Romney came back with a win in Maine, avoiding a completely devastating week, but Santorum’s three victories mean the GOP race is far from over.

It’s still extremely likely that Mitt Romney will be the GOP nominee, but Santorum’s wins show how far the GOP is from consensus. As the Guardian’s Michael Cohen put it, the big winner so far is Obama.


The Senate and House this week both passed the STOCK act, designed to outlaw insider trading by members of Congress. The House’s version of the bill, however, strips a provision requiring “Political Intelligence Consultants,” professionals who collect information from Congress members to sell to hedge funds and other clients, from registering their activities in the same way that lobbyists do.

Final Notes

History repeats itself: The Syrian President shelled a city like his father did, the Chinese flirted with a financial crisis like the one that took down the Asian Tigers, and the Greeks got hit with a modern Treaty of Versailles. The sense of inevitability in some cases can be overwhelming. That said, Martin Luther King’s long arc of history bent a bit closer to justice in California, and the trend across most of the world still seems to be towards democracy: in Russia, the existence of a paid government propaganda group was unveiled by an avowedly pro-democracy group, and in the US, popular outrage lead to Congress voting away some of its own power. It’s easy to get discouraged, but there’s hope for us yet.

Thanks for joining me, and my best for the week ahead!


January 30 - February 5

Hello, and welcome to the Dispatch for January 29 through February 5!

First, a quick administrative note: The Dispatch now has a mailing list - if you’d prefer to receive the week’s Dispatch by mail, sign up for email delivery here.

This was a big week, though by the end of it, not a lot seems to have changed. Actions are built on foundations, though, and much of this week’s news feels foundational: what seem like small changes here or there can affect the space in which decisions can be made, and spark larger changes in the future.

With that said, let’s get started!


UN Inspectors toured Iran’s nuclear sites over three days this week. Iran’s professed hospitality notwithstanding, the inspectors said many of their questions went unanswered, and they will return in February. Meanwhile, the rhetoric between Iran and the West continued to heat up: on Tuesday, James Clapper, the Director of US Intelligence, declared that the Iranians were increasingly targeting the US and its allies abroad, citing the alleged assassination plot against the Saudi ambassador as evidence. His assertions were given further weight by Ayatollah Ali Khamenei, who pledged continued Iranian support to militant groups targeting Israel and reaffirmed Iran’s commitment to its nuclear program. Israel, meanwhile, declared Iran was working on a missile with a range of over 6,000 miles - long enough to hit the US - though the US downplayed the Israeli statement as speculation.

Iran’s overtures to the inspectors are a maneuver to buy time. Barring an incredible Iranian screwup, the inspectors simply won’t find any incriminating evidence. Similarly, the statements by Khamenei shouldn’t be taken for much worth. Iran’s supported proxy groups in the region for decades and will continue to do so.

Clapper’s statements are more concerning: Iran targeting US assets and allies is a foundation for military action. The combination of Clapper’s statements and the Defense Department’s downplay of Israel’s statements suggest an internal conflict over the Iranian situation. The Israelis are extremely concerned: they consider a nuclear Iran an existential threat, and are seriously considering a military strike. The US, on the other hand, is weighing the cost of another war against whether or not they can live with Iran as a nuclear state. Clapper’s statements indicate a military strike is a very real, very serious possibility.

As a side note, the alleged plot against the Saudis that Clapper mentioned was both extremely sloppy and highly out of character for the Iranians - absent extremely compelling evidence yet to come, it’s as hard to take the accusation at face value now as it was when it was first made.


After a week’s worth of negotiations, Russia and China vetoed a Security Council resolution intended to pressure Assad into standing down. The Syrian army meanwhile launched a large counterattack against the rebels, ending with a bloody assault on Homs that took more than 200 lives.

Attacks on Iranian citizens accused of being military personnel increased, prompting Iran to warn against travel to the country. The announcement is a black eye for Iran and its aspirations of regional power: Assad has been one of Iran’s most steadfast allies.

Russia and China are still upset over the Libyan resolution: they feel duped (and perhaps not unfairly) after the resolution, which authorized a no-fly zone, was used as cover to intervene in Libya. Neither country feels it is part of “the West,” and both harbor concerns about such a resolution being targeted against themselves or their allies - it’s not that many years since the end of the Cold War. The US and its allies expended a lot of political capital in deposing Qaddafi, and as a consequence the negotiations over Syria are suffering.


Protests continued against the Military ruling council this week. The Muslim Brotherhood briefly sided with the military, standing against the protestors, but that changed by mid-week: On Wednesday, a bloody soccer riot broke out, claiming more than 74 lives. The military and the police were accused of everything from incompetence to complicity, and reports from the incident about police inaction were damning. Riots broke out the next day outside the Interior Ministry in a conflict that left at least 12 protestors dead.

The riots have been led by soccer hooligans known as Ultras, militant groups somewhere on the spectrum between a social club and a gang. During the protests at Tahrir Square, it was the Ultras who fought off Mubarak supporters during the “Battle of the Camel,” and there are accusations that the riot on Wednesday was sparked as retaliation. The Ultras on the street will do nothing good for Egyptian stability.


Vladimir Putin found himself increasingly on the defensive, and allowed this week that he may not win a decisive first-round victory in the march elections. Despite sub-zero temperatures and reports of police pressure, tens of thousands of protestors marched against Putin in the center of Moscow. Putin’s spokesperson said the march was the work of “foreign powers.”

Once seen as the Dictator of Russia, Putin is increasingly under fire by a middle class that’s tiring of his strongman antics. It’s extremely unlikely he’ll lose the election, but he will return to office far weaker than in the past. The Russian people want Democracy, not a Dictatorship.


The African Union inaugurated its new headquarters this week, a $200M structure built and paid for by China as a sign of the country’s increased trade and involvement in the region. That involvement carries risk, though, as the Chinese learned this week when 29 Chinese workers were abducted by Sudanese rebels over an oil dispute. Also in China this week, the Wukan village held free elections as part of an agreement that ended the village’s protests in December.

It’s too early to call a democratic movement in China, but some of the rising leaders in China are notably more open to democratic practices than their predecessors. The experiment in Wukan will be closely watched, but the trend towards democracy has long been predicted as China grows wealthier and more connected to the rest of the world. A more democratic China will be less able to endanger its citizens, which may force China to re-evaluate some of its partnerships in Africa.


The Toureg rebels, former supporters of Qaddafi, have brought the arms supplied by the Libyan dictator back to Mali and are using them to wage an increasingly violent campaign in the north of the country.

Qaddafi’s money and weapons cast a long shadow over Africa, and they’re likely to continue doing so. Mali is the first place these weapons are showing up; it’s not likely to be the last. In Qaddafi’s last days, Libyan transports were seen heading to Algeria, Niger, and Zimbabwe.


A leaked NATO report painted a bleak picture of the organization’s progress in the country. The report is largely drawn from interrogations of Taliban and al Qaeda detainees, and describes Pakistani backing as the lifeblood of a spiritually reinvigorated Taliban. Most damningly, the report asserts that corruption in the Afghani government has gotten bad enough that many Afghani citizens prefer life under the Taliban.

It’s worth noting that similar circumstances allowed the Taliban to take over the country in the mid-1990s.


Despite rumors to the contrary early in the week, the 27 EU leaders confirmed their commitment to Austerity in Brussels on Monday. By Tuesday, however, a set of horrible unemployment numbers - including a rate of 22.9% in Spain and 19.2% in Greece - led at least one IMF official to press for plans beyond just austerity.

The numbers coming back from Greece, Spain, Ireland, Portugal, Italy, and others are clear: Austerity isn’t leading to Prosperity. More concerning, though, is that the unemployment rate among 16-24 year olds is nearing 50% in Spain and Greece - a sure recipe for social unrest.

US Politics

GOP Primaries

Mitt Romney appeared back in control in Nevada, garnering 47% of the vote, more than double Newt Gingrich’s 22.7%. The win puts Romney in a strong position for the next major contest on March 6th, Super Tuesday.


The Senate voted this week to take up a resolution prohibiting members of Congress from trading on non-public information. Previously the practice had occupied a legal gray area; the bill would ban it outright.

An optimist’s viewpoint here is that Congress, responding to poor polling numbers and increasing mistrust by the public, is taking steps to both quash corruption and to improve the institution’s badly damaged image. A cynic would gauge the likelihood of Congress actually cutting off a significant stream of income to be very low, and might be tempted to conclude Congress is getting most of its money through other, less public means. A realist might decide that power and money are always linked one way or another, and that, for better or for worse, persons in positions of power will wind up wealthier than before - the best one can hope for is they’ll make good policy in the meantime.

US Economy


The New York Times analyzed five major US banks, and found that, while they have $80Bn in exposure to the Eurozone, they’ve insured against all but $50Bn of it using Credit Default Swaps.

That phrase ought sound familiar: CDSs were the theoretical hedges most banks had against the mortgage markets, and are a big reason why AIG is all but state-owned right now. It’s extremely doubtful that any insurance policy will be effective in the face of a full collapse of the Eurozone, and to assume otherwise would be unwise.


The unemployment rate dropped to 8.3%, as low as it was when President Obama took office, according to the Labor Department on Friday.

Unemployment numbers are always fraught. They’re subject to revision, they don’t capture discouraged workers, and there are various other tricks involved that make it difficult to take the number as canon. That said, the report is extremely positive, and should give Obama a good boost in the polls. It’s still too slow, there’s still too many discouraged people, it still doesn’t cover people with jobs that are worse than what they had before, but it’s an awful lot better than before.

Final Thoughts

The most interesting news to me this week was from China. China has long been held up as the alternative to the western way - the country that disproves the link between democracy and success. My position on that for some time has been that it’s simply too early to tell: China’s economy has been growing rapidly, and it is already massive, but it’s still in a reasonably early stage of development. I harbor strong doubts about China’s ability to have both a comfortable middle class and a strong authoritarian state, and I suspect hand- wringing or self-doubt on behalf of liberal democracy is premature at best.

My best for the week ahead, and thanks again for reading!


January 23rd - 29th

Welcome to the Dispatch for January 23 through 29!

Most of the Dispatch this week centers on the Middle East. This isn’t due to lack of activity in other parts of the world. Europe continues to deal with economic woes, Boko Haram is making life miserable in Nigeria, and opposition to Putin continues to grow in Russia. Much of the week’s events seemed to be a continuation of the prior week: movement in one direction or another, but no real change in the narrative. The general rule for inclusion in the Dispatch is that a story must be significant (“likely to be remembered in a decade”) and have changed from the prior week. That second criteria is why Syria is making its first appearance in the Dispatch: While the uprising’s been ongoing, this week seems to have been a watershed week, and it’s the first time I’ve felt enough has changed to warrant an entry.

With that in mind, let’s get started!


The unrest in Syria deepened as the opposition arrived at the outskirts of the capital Damascus. The deteriorating security situation hamstrung the Arab League’s mission, leading the group to pull its monitors out of the country, and the leadership of Hamas has also fled the country. Meanwhile, Russia reaffirmed its commitment to the Assad regime in the face of international pressure, thwarting UN action against Syria.

The uprising in Syria has been building since March of 2011 amid serious and severe crackdowns. Until recently, though, the government still seemed firmly in control of the country, and it was fair to ask if the media was overstating the extent of the protests. In recent days, though, something changed: the protestors are more violent, better armed, and seem capable of taking and holding territory. The failure of the Arab League’s mission and Russia’s staunch refusal to allow sanctions or other UN resolutions against Syria means the situation can only be resolved by the factions on the ground. For all intents and purposes, this is now a civil war.


The EU agreed to an embargo on Iranian oil starting July 1. The Iranians responded by threatening to cut off European oil preemptively, but the damage to the Iranian economy is already starting to show.

Iran has stated that an embargo would be tantamount to a declaration of war, and it’s hard to see what else the US and EU can do to Iran at this point. The goal of the sanctions is to get Iran to negotiate over its nuclear program, but it’s unlikely the Iranians will make any serious concessions on that point. Iranians want a bomb because it’s the only iron-clad security guarantee they’re going to get. To put it mildly, the Iranians don’t trust the US - again, a position not without historical merit.

In this light, the sanctions have two fundamental flaws. The first is that, as mentioned, it’s awful difficult to see what the next step is. What’s left on the table after this set of sanctions fails shy of all-out war? The second, and potentially larger, issue is that these sanctions are having serious economic bite. A prosperous country is a peaceful country, but a country in dire economic straits is a country prone to violence and upheaval. This may be what the US is hoping for, but history doesn’t warrant much confidence in uprisings born of economic depressions, especially economic depressions caused by outside forces. An unstable, ultra-nationalistic country on the cusp of getting a nuclear bomb is perhaps not the ideal outcome.

The New York Times published an in-depth article on Israel’s position on attacking Iran, drawn from interviews with top Israeli officials including the Defense Minister, head of Mossad, and others. It’s a great read and includes a lot of backstory on Israel’s actions in Iran - I highly recommend it.


The Deputy Chief of Libya’s National Transition Council resigned in response to growing protests from across the country. Bigger news came from Bani Walid, where a group of fighters from the Warfalla tribe, previously strong supporters of Qaddafi, forced the NTC Militia from the city. The NTC Defense Ministry said their aims were not counter-revolutionary, but by the end of the week the NTC had yielded control of the city to the tribe.

Outside of a few areas, Libya is still an intensely tribal country, and the fighting in Bani Walid is best read in this light. The Warfalla tribe were supporters of Qaddafi, but so far they’ve made no move except to expel the NTC Militias to take back what they consider their city. This isn’t the first tribal conflict to emerge in the post-Qaddafi era, and it won’t be the last. The most likely outcome for Libya is a limited national government and local control in the hands of whatever group can claim the mantle of a regional government. This is a good blueprint to keep in mind for Yemen as well.

United States


The Federal Reserve announced it will keep interest rates near zero through late 2014 amid extremely low growth and inflation forecasts.

The Fed acknowledged some of the recent growth in the economy, but still feels the economy isn’t growing fast enough. This is true. Not only do we need to get back to positive growth and increased job creation, but we need to make up for the lost output from four years of nearly zero growth. Until then, it’s going to feel like a recession for an awful lot of people.

State of the Union Address

President Obama gave his State of the Union address this week, concentrating mostly on the economy and issuing a call for economic fairness. Included in the speech were calls for tax policies to stimulate manufacturing and more investigation into unfair trade practices, and a more general call for a sense of shared responsibility.

The speech gives a better preview of the Obama 2012 campaign than any specific policies: the administration has basically written off any grand policy movements until the election. Still, it’s good to see a more assertive side of Obama.

GOP Race

The Romney campaign unleashed a withering string of attacks that have pushed Newt Gingrich back to second place in Florida polls. The payoff comes on Tuesday at the Florida Primary, where Mitt Romney is favored to win by more than 10%.

Newt Gingrich this week discovered what Romney’s been spending all his money on this week. Mitt’s campaign is extremely well-run and well-funded, and while so far Romney has been able to spend most of his efforts on attacking Obama, the performance this week in Florida showed what kind of teeth his campaign can have. Obama’s campaign is in swing and has collected an enormous sum already. This campaign season is going to get ugly.

Final Thoughts

I touched briefly on the moral and political aspect of the economy when talking about Iran, but it’s incredibly important to recognize the importance of economic prosperity for peace and stability. A country in which the average person has the means to provide for themselves and their family tends to be a stable and peaceful country. In countries where this is not the case, we see extremism and violence; desperation makes fools of reasonable people. Al Qaeda and its offshoots are born of the economically disadvantaged, as were the fascist movements in Germany and Italy - the memories of which should be at hand as we work our way through the aftermath of the financial crisis. Justice is a cornerstone of free society, but it’s a double-edged sword: it’s no more just for a man to die penniless in the street by no fault but chance than it is for him to die by another man’s hand. Justice is not a concept confined to criminality, and societies in which men die injust deaths tend to be short lived and violently undone.

Thanks again for reading this Dispatch, and all my best for the week ahead!


January 15th - 22nd

Welcome to the Dispatch for January 15th through the 22nd. It’s been a big week, but first, a couple quick notes:

First, you probably already noticed the new theme. Do let me know if there are any problems, but I find it rather more readable than the old one. I’ve decided the Dispatch will now cover from Monday through Sunday - a decision born largely of events of this week. It’s a bit tougher catching changes on the day of publication, but I think it’ll be an improvement. I’ve also included notes from a talk I attended this week - I often get the opportunity to see interesting speakers, so I’ll try to share a few more in the future. Finally, I’m omitting the “Comment” heading now - I think the divide is fairly self-evident.

That about covers the changes, so let’s get to the news.


On Monday, the Nigerian government announced a partial retreat on the fuel subsidy in response to both widespread protests and a massive spike in prices across the nation after just two weeks. Boko Haram added to the country’s woes with one of its largest attacks to date, a series of eight coordinated bombings killing more than 100 people.

Promises on the part of the government to use the subsidy money to improve infrastructure ring hollow to much of Nigeria’s population. As mentioned last week, the government is, and has been, notably corrupt. The Nigerian people have no reason to believe that any savings will come back to them – and good reasons to believe the contrary. The government has claimed the subsidy imposes an unsustainable fiscal burden. If that’s the case, this government’s days are numbered: the people simply won’t stand for the subsidy’s removal, and by all impressions the economy can’t sustain its removal either.


In response to pressure from the military, the courts, and the opposition, the Pakistani People’s Party agreed this week to call early elections. Prime Minister Gilani appeared in court to answer questions about corruption charges against President Zardari, though the court was adjourned to February without making any decisions.

The specifics of the case against Zardari are fairly inconsequential: the point of the proceedings is to remove the Zardari government without using tanks. Gilani’s court appearance serves to de-escalate the situation, and the offer of early elections should serve to keep the military satisfied for now. The most likely outcome looks to be early elections, probably late in summer, that end in Zardari’s party, the PPP, out of power one way or another.


The new round of sanctions against Iran caused fears over oil prices around the world. Saudi Arabia indicated it would increase its production to keep oil at a target price of $100 per barrel, while the Chinese met with the Saudi government to secure access to non-Iranian oil supplies. The mission appeared to be a success: later in the week, the Chinese Prime Minister issued a strongly worded condemnation of Iran’s nuclear program. Israel announced this week they had made ”no decision” on a military strike against Iran.

The turmoil in Iran comes at a very bad time for the oil markets. Prices are already under pressure due both to uncertainty from the Arab Spring and massive spending on the part of Arab countries attempting to keep their populations quiet. The US Sanctions on Iran are supposedly contingent on oil prices staying stable, but that seems nearly impossible: the US is relying largely on Saudi Arabia to make up the lost production, but there are serious doubts about Saudi production capacity. Iran’s contributions to the world oil supply are around 3.5 Million barrels per day, nearly a third of Saudi production. Any significant increase in oil price could be a severe drag on the already fragile world economy - the choice could soon be between putting pressure on Iran and preventing a global recession.


The Muslim Brotherhood won 47% of the seats in Parliament, with another 25% going to a coalition of ultra-conservative Islamists. Egypt requested a $3.5Bn loan provision from the IMF to shore up the economy, which has been reeling since the uprising. The economic uncertainty this week lead to a gas shortage prompted by fears the gas subsidy would be suspended.

The Muslim Brotherhood’s victory surprised no one. They’re the only party that had any sort of existing organization, and they’ve been operating in Egypt for nearly 85 years. The Brotherhood is a relatively moderate party these days, and they’ve promised to promote ideals of individual liberty. The party is not particularly well aligned with the more conservative Islamists. With only 47% of the seats in Parliament, they’ll still need to form a coalition government, but it’s not at all certain with whom they’ll partner. Of note, though, is that this first Parliament will be responsible for drafting Egypt’s new constitution, so the makeup of the group is likely to bear heavily on Egypt’s identity for years to come.


After an attempt at delaying elections earlier this week, Yemeni President Ali Abdullah Saleh left Yemen to head to the United States for medical treatment. While elections are scheduled for Feb 21, the year-long turmoil in the country has allowed militant groups in the south to gain more traction; this week they claimed control of a city within 100mi of the capital.

Saleh’s final departure is a pleasant surprise given the length and ambiguity of the negotiations preceding it. While an agreement on elections has been in place for some time, Saleh has made several contradictory statements on his intent. His departure address was met with some relief.


The New York Times reported that the Burmese military is intensifying its campaign against the Kachin ethnic group in the north of the country. This comes as an unfortunate followup to last week’s news on Burma’s rapid liberalization, and stands as a reminder of the length of the road left ahead.


Three stories out of the Eurozone this week:


The Greek government is getting close to a deal with private bondholders on debt restructuring. The two remaining sticking points are the interest rate, which the IMF wants below 3.5%, while creditors prefer above 3.8%; and a proposed exemption from the restructuring for bonds held by the European Central Bank, which private investors are not likely to accept.

European Central Bank

The ECB’s new bank lending program appears to be showing fruit. The program combines low interest rate loans to private banks with a strong recommendation that the banks buy sovereign debt. Italy and Spain’s interest rates have already improved.

Basel III Bank Regulations

France and Germany are trying to soften some of the language in the new Basel III banking regulations to prevent, in their words, ”negative effects on grow th.

Overall, the Eurozone leaders appear to have gotten serious about dealing with the crisis. The moves from the ECB are in keeping with the letter of the Euro treaty, but are fairly aggressive, on the order of what economists have been saying are needed, and France and Germany’s attempts to soften the Basel regulations are essentially a backdoor bailout for their banks. What separates the Greeks and their borrowers are a couple tenths of a percentage point and a technicality about the ECB’s role - given the Euro leaders apparent adroitness with paperwork, it would be shocking if a deal weren’t reached.

US GOP Primaries

Early this week, Jon Huntsman, Jr. and Rick Perry dropped their bids. Romney was dogged by demands to release his income tax statements. After eventually doing so, he was criticized for paying a comfortable rate of 15%. The primary on Saturday capped a terrible week for Romney with a crushing defeat: Newt Gingrich won 40% of the vote to Romney’s 28%, dragging out an already tortuous primary season.

The Florida primary is held on the 31st, and we’ll find out if Newt’s challenge can stick. Gingrich remains the least popular candidate in the race among the general populace. At this point, it would be shocking to see the nomination go to anyone but Romney. The only real potential challenge could be a new contender - it’s obvious the GOP is not thrilled with its current options.

US Economy

The Times this week ran a fantastic article on Apple’s Chinese manufacturing. It’s a must read if you’re interested in the future of American manufacturing - be warned, the prognosis is grim.


Sandwiched as I am between UC Berkeley and Stanford here in San Francisco, I have frequent opportunity to attend exceptional talks and lectures. This week, I took in a talk by Shmuel Rosner, an Israeli journalist who’s been covering the peace process for a number of years. He spoke on the Obama administration’s attempts at advancing an Israeli-Palestinian peace, and the missteps made along the way.

Note, the opinions expressed below are those of Mr. Rosner - I make no claim to their veracity or neutrality.

In Mr. Rosner’s opinion, the Obama administration’s biggest misstep was attempting to dramatically accelerate the process at the absolute wrong time. The Israelis don’t feel like the current Palestinian government is capable of either coming to the table or upholding a bargain if one should be reached - as such, they’re extremely reluctant to invest much in the current negotiations. The Israelis feel they got very little in return for agreeing to freeze settlements for nearly a year, and feel they were unfairly pressured by the Obama administration after making considerable concessions. Between that and the insistence on a 2-year timeline for an agreement, the Israelis feel they do not have a strong partner in the Obama administration.

Mr. Rosen states that the Israelis are already aware they cannot keep the West Bank; the question has become tactics, not strategy. Hamas continues to pose a problem, and without significant changes in the group, the Israelis would be unwilling to negotiate with any government that includes Hamas.

His final assertion is that it behooves the US to be a friend to the Israelis. The best progress on the peace process has come when the US has stood close at hand with Israel. He cautions, however, that no good treaties can be made during troubled times, and the Middle East right now is incredibly unstable. For the time being, Israeli sentiment is focused on domestic affairs, as it seems little progress is to be made elsewhere for now.

Final Notes

The two big trends this week were around the Iranian sanctions and the Eurozone. Both show the hand of technocratic intervention: in the case of the Iranian sanctions, the US is hard at work trying to invent away a rise in oil prices; in the Eurozone, the ECB and the governments of Germany and France are using complicated schemes and indirect action to reshape the financial situation. Complexity, to me, is not a virtue. These plans feel over- engineered, and I’m extremely suspicious of clever solutions to problems of this sort. It’s entirely possible the efforts on both parts will succeed, and my concern certainly isn’t born of any perceived deficit of talent on the part of the architects of either plan. The devil, though, is always in the details, and I’m highly suspicious of the ability of anyone to truly predict the outcome of a plan with so many moving parts. The history of the world is one of unintended consequences, and many of our stickiest problems today began as side effects of earlier efforts to solve the problems of yesterday.

Thanks again for joining me - my best wishes to all for the week ahead!


(My thanks to Des (@scholarus) for editing)

January 8th - 14th

Hi all, and welcome back to the Dispatch. This is the second dispatch for 2012, and I’ve made some changes to the format. You’ll notice the summary of the news and the comments are more clearly divided, and I’ve embedded links to the relevant news stories. It’s difficult to summarize the news without adding slant, so I’ve opted to keep my summary to a minimum, which has the bonus of allowing more space for commentary and analysis. Again this week the dispatch took longer than expected, but I think my organization is getting better. It’s still a work in progress, and I thank you all for coming along.

My special gratitude to Harlan and Desiree for their consultation - you guys are awesome. As always, comments are welcome.


The US opened communication directly with Ali Khamenei, the supreme leader of Iran, for the first time in 30 years this week. US diplomats warned against closing the Strait of Hormuz, stating that a closure would result in military action. The Iranian threat follows another round sanctions aimed at stopping Iran’s nuclear program. Meanwhile, another Iranian nuclear scientist was assassinated, the latest in a series of assassinations and explosions targetting Iran’s nuclear program. In response to the attacks, Iran opened another heavily-fortified nuclear site this week.


Iranian-US relations have never recovered from the CIA-backed coup in 1953. The Iranians feel the US and Israel are a threat to their sovereignty, an opinion not without evidence. The Israelis have all but admitted responsibility for a series of accidents, assassinations, explosions, and other setbacks to Iran’s nuclear program. Further rounds of sanctions and military threats are unlikely to deter the Iranians: the current regime feels the only guarantee of security they have is in the form of a nuclear bomb. The real question at this point is how far the Iranians will go: even testing a bomb could be seen as sufficient provocation for either the US or Israel to launch military action.


Pakistani Prime Minister Gilani this week fired the Defense Secretary, provoking a strong rebuke from the Pakistani military. The move further escalates tensions between the civilian government and the military, which have been high since the revelation in December of a memo from the Pakistani ambassador seeking US military aid in preventing a military coup.


So far the Pakistani military has not shown signs that it will attempt a coup, the end of four prior Pakistani civilian governments. They have, however, been pressing the Pakistani Supreme Court to take action against Zardari’s government, hoping to remove the Pakistani People’s Party before elections in 2014. The Guardian put it best: this looks like “a coup by other means.”


Adding to the Nigerian government’s woes this week were nationwide protests over the end of the 50% subsidy on gasoline. One of the world’s largest oil producers, its shoddy infrastructure means Nigeria still has to import most of its gasoline, and the government has declared it cannot afford to continue the subsidy.


Nigeria is the poster child for the Resource Curse: it produces a fantastic amount of oil, but widespread corruption and very poor infrastructure means poverty and inequality are rampant in the nation. The gas subsidy is said to be costing the Nigerian government upwards of 25% of its national budget, but without the subsidy, a gallon of gas now costs $3.50 in a nation where the majority live on less than $2 per day.

Seun Kuti, one of the leaders of the protests, summarized the movement: “We, the people, subsidise electricity for the government by buying generators. We subsidise water by digging boreholes in our homes. We subsidise telephones by owning three mobile phones because we’re not sure which network will be working on which day. Fuel subsidy was our only welfare, and it cannot be taken away.


Note: Burma is also known as Myanmar. The name is disputed. The US and Burma will exchange ambassadors for the first time since 1990 in response to the freeing of 800 political prisoners. The prisoner release is a dramatic move that continues a spree of surprisingly rapid liberalization in the country, which has been ruled by a military junta for 50 years.


After 50 years of repressive rule, the Burmese government has nearly completely reversed course in barely a year, with no motive apparent. The pace of the change and its opacity have left observers wary, but there’s no indication so far that this is anything but a positive development. The US is normalizing relations, but it hasn’t lifted sanctions yet.

European Union

Standard & Poor’s downgraded the sovereign debt of nine different European countries this week. Among those downgraded was France, which lost its Triple-A rating (the highest possible rating), leaving Germany and the UK as the only countries with AAA ratings in Europe. Spain, Italy, and Portugal also got downgrades, with Portugal being relegated to junk status.


The downgrades largely confirm what the market has been saying for some time, and as such are unlikely to have a large effect. Politically, the downgrades could be an issue, but as far as bond-buyers are concerned, the downgrades change very little. Note the S&P was the ratings agency that downgraded US debt recently; yields on US Treasuries barely moved. More interesting than the downgrades is the S&P’s explanation, which noted in part that the austerity measures were doing more harm than good - a sentiment born out by the terrible recent performance of European economies.

For further commentary on the intractability of the Eurozone problem, I’ll defer to John Maudlin, a writer and analyst, who provided some of the best analysis I’ve seen on the matter in his newsletter this week.

US GOP Primaries

Note: For obvious reasons, US domestic matters are the hardest to write neutrally about. I’ll do my best.

The New Hampshire primaries were held this Wednesday, and to little surprise, Romney came in first - this time by a margin of nearly 15%, with 39% of the vote to Ron Paul’s 25% finish. John Huntsman, who had largely skipped Iowa to focus on New Hampshire, grabbed third with 16% of the vote. Rick Santorum and Newt Gingrich shared fourth at 9.4% of the vote, and Rick Perry took the remaining 0.7%, having essentially skipped the primary.

All eyes are now on South Carolina, the next primary on the 21st. Romney is favored to win, but Gingrich and Santorum are both expected to make a strong showing.


As I mentioned last week, everything up until Super Tuesday is just field clearing, so the current results should be taken with a wary eye. Romney continues to be the favorite to win the nomination, but that’s not out of any great swell of support from the GOP. At the moment, he’s the only man in the race who the party thinks could realistically beat Barack Obama, which is why he continues to win the primaries, but the Conservatives, the Evangelicals, and the Tea Partiers are still not particularly thrilled with Romney.

I’m still predicting Romney, though again, until Super Tuesday, it’s still up in the air. Of the remaining candidates, I think the only one that can give a legitimate challenge is Newt Gingrich - it’s possible he could perform as viable candidates in a general election, and the party might just vote for “Anyone But Romney.” (note: an earlier draft included Jon Huntsman as the other “Not Romney”)

US Politics

Obama’s chief of staff William Daley stepped down this week, ending a controversial year-long tenure. As Rahm Emanuel’s replacement, Daley never seemed to connect with either Congress or the White House, and his departure was foreshadowed by a dramatic reduction in responsibilities in November.

His replacement, OMB Director Jacob Lew, is a widely respected technocrat who served as budget director under Clinton and has strong ties on capital hill.


Daley wrote in 2009 that the Democrat’s road to success was through bipartisan deals with the Republicans, and that seems to be the policy he pursued. I’ll leave it to the poll numbers to assess that legacy.


I think the strongest piece of good news this week was from Burma: any occasion to see an end to repression and brutality is welcome, and to me, that outshines an awful lot of the rest of the tensions in the world.

My feeling is that Pakistan will be the country to watch for the next week, as I think it has the most potential for imminent change. Tensions with Iran are getting extremely high, and the buzz growing, but the main driver at the moment are the new sanctions, and until they really start to bite, I suspect that situation will stay on simmer - I don’t expect to see radical new developments in the next week.

That’s the dispatch for this week. Unlike last week, it should still be Sunday for most of you reading this - an auspicious sign for future Dispatches.

Thanks again for reading,


January 1st - 7th

Hello all, and thanks for reading! This is the first real dispatch for 2012, for January 1st through the 7th. I’m still working on the tone and formatting, as well as my organization and schedule on the back end, so please do stick with me. As always, the “Ask” link is at the top and comments are at the bottom, so let’s get started!


The top story comes from the Taliban, who announced this week they’ll be opening a political office in Qatar. Long seen as a necessary step for peace and an orderly NATO departure, negotiations with the Taliban have faced numerous setbacks, including impostors masquerading as Taliban representatives, resistance from all parties (including the Afghan government), and rumored interference from Pakistan. The move to open an office, especially in a neutral country like Qatar, is therefore a huge positive step: even if it bears little short-term fruit, an open official line of communication could well be crucial to Afghanistan’s future.

As part of the arrangement, the US will apparently be releasing several Taliban prisoners. Whatever else the deal may contain, it’s worth noting that this isn’t a one-sided deal or a move of desperation on the part of the Taliban. Over 11 years, the mission in Afghanistan has evolved to the point that success now rests on reaching an agreement with a group whose removal was once Goal #1.


Ripples of the Arab Spring arrived in Palestine this week as a philosophical divide manifested within Hamas. The group’s exiled leader in Damascus announced a strategic shift towards non-violent protests and popular uprisings — an announcement quickly disputed by leadership on the ground in Gaza. The dispute shows the tension between the group’s ideological leadership and the practical concerns of the people on the ground: Political overtures aside, Hamas still feels itself a group under siege.


The Muslim Brotherhood won a plurality of seats in the parliamentary elections, and the United States has backed away from a longstanding opposition to dialogue with the group, a policy dating to the Mubarak era. The elections in Egypt should provide a template for how to engage with Middle Eastern governments which actually reflect popular will.


A less positive note from Iraq this week, as Prime Minister Nuri al-Malaki began reaching out to Asaib al-Haqi, a violent militant group allegedly tied to Iran. The latest in a series of discouraging moves from the Malaki government, it seems to be a response to moves by Moktada al-Sadr, formerly of the Madhi Militia, to capitalize on popular concerns over the Malaki government’s attempts to marginalize the Sunnis in Iraq. The move is particularly disheartening coming less than a month after the US departure.


Our second negative story this week comes from West Africa, where Boko Haram capped a 10-day spree of attacks with a bombing of a Christian church, killing 14.

Editor’s Note: Boko Haram is a hard group to pin down. Originating in Nigeria’s predominantly Muslim north, the group was relatively peaceful until their leader was killed in 2009. Their identity and the constitution of the group is ill-defined and highly disputed, and tensions in the northern region are extreme, with rumors of widespread police violence. Boko Haram’s capabilities are increasing, though, suggesting ties with other groups in the region and a more solid group identity - a dangerous trend.


Fallout from the Euro crisis continues to dominate Europe, with Spain this week reporting an unemployment rate of 22.9%. While potentially mitigated by a large ‘grey’ economy, the number is still deeply troubling. Spain must continue the austerity track, and growth estimates for the next year vary from 0 to -1.5%.


Hungary’s new constitution, pushed through by the ruling party, took effect this week, to the chagrin of both domestic protestors and outside observers, including the UN, European Commission, State Department, and IMF. Among the controversial provisions are restrictions on the media and the dissolution of key checks on legislative power.


Chinese president Hu Jintao reiterated this week concerns about western cultural dominance in China. Describing the proliferation of western culture as an international attempt to weaken and divide China, the president indicated both increased state support for Chinese cultural projects and further restrictions on media the government finds “unacceptable.” Among the restrictions are regulations affecting microblogging sites, which have become a popular forum for discussing government policy and popular opinions.

US Elections

The Iowa Caucus was held this week on Tuesday. To little surprise, Romney won, though far less expected was Rick Santorum’s second place finish, losing by only eight votes. The strong finish effectively establishes him as the candidate of the evangelical wing of the Republican party; Michele Bachmann suspended her campaign, and Rick Perry is preparing to make a last stand in South Carolina. The New Hampshire primary is this week, and while Santorum is far less likely to succeed as he did in Iowa, it remains to be seen how strong a showing Mitt Romney can make. The 2008 election wasn’t clinched until Super Tuesday, and McCain was hardly the frontrunner in Iowa. The GOP field is still open.

US Politics

President Obama made four recess appointments this week, most notably Richard Cordray as director of the Consumer Financial Protection Bureau. The move is noteworthy because the Senate is technically “in Session” – continuing a practice started by Harry Reid during the Bush years, Mitch McConnell has been using a procedural loophole to keep the Senate “in session” to block just such appointments. The appointments appear to be legal, but they’re likely to face a strong challenge, and in either case they certainly won’t help mend fences.

US Employment

We’ll end the week on a more positive note: the economy added more than 200,000 jobs in December. The numbers are preliminary, and still far, far lower than ideal, but they extend a good run on jobs recently. We need more, but it’s a good trend.


In the future I’ll be using this section for some closing commentary and a few predictions, but other than some commentary on organizational methods or perhaps some platitudes on rocky starts in new ventures, I simply don’t have a lot to offer tonight, I’m afraid.

Thanks for reading, and I hope the week to come sees you well! Eric