Category: Foreign Relations

Obama Just Whitewashed Malaysian Slave Trafficking

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The Obama administration has just upgraded Maylaysia’s human trafficking tier, despite the absence of any evidence of improvement:

The United States is upgrading Malaysia from the lowest tier on its list of worst human trafficking centres, US sources said on Wednesday, a move that could smooth the way for an ambitious US-led free-trade deal with the south-east Asian nation and 11 other countries.

The upgrade to so-called “tier two watch list” status removes a potential barrier to President Barack Obama’s signature global trade deal.

A provision in a related trade bill passed by Congress last month barred from fast-tracked trade deals Malaysia and other countries that earn the worst US human trafficking ranking in the eyes of the US State Department.

The upgrade follows international scrutiny and outcry over Malaysian efforts to combat human trafficking after the discovery this year of scores of graves in people-smuggling camps near its northern border with Thailand.

The State Department last year downgraded Malaysia in its annual “Trafficking in Persons” report to tier three, alongside North Korea, Syria and Zimbabwe, citing “limited efforts to improve its flawed victim protection regime” and other problems.

But a congressional source with knowledge of the decision told Reuters the administration had approved the upgraded status. A second source familiar with the matter confirmed the decision.

Some US lawmakers and human-rights advocates had expected Malaysia to remain on tier three this year given its slow pace of convictions in human-trafficking cases and pervasive trafficking in industries such as electronics and palm oil.

………

In its report last year, the State Department said Malaysia had reported 89 human-trafficking investigations in the 12 months to March 2014, down from 190 the previous year, and nine convictions compared to 21 the previous year.

In the latest year to March, Malaysia’s conviction rate is believed to have fallen further, according to human-rights advocates, despite a rise in the number of investigations. That reinforced speculation Malaysia would remain on tier three.

“I would be stunned if they are upgraded. They have done very little to improve the protection from abuse that migrant workers face,” said Phil Robertson, deputy director of Human Rights Watch’s Asia division.

This decision has the effect of condoning slavery in Malaysia, and throughout the world.

Of course, this does not matter to Barack Obama, because is looking at the TPP in the Pacific, the TTIP with Europe, and TiSA* world wide.

*The TiSA is arguably far worse than the other two deals, and has as one of its goals to make financial, insurance, and investment regulation next to impossible.

This Is an Interesting Analysis of the Social Dynamics among the EU Leadership

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I just came across an interesting analysis of attitudes in the EU, which the author suggests that that something akin to tribalism is poisoning EU-Greece negotiations:

Against all odds, Tsipras obtained a decisive victory in yesterday’s referendum. I agree that the referendum’s question was confusing (but have you ever seen the ones asked in Italian referenda?). I agree that the No was strategically positioned before the Yes (but why should have been the other way around?). I agree that Tsipras continued insisting that a No vote would not mean an exit from the euro, when it might mean exactly that. Yet, the Greek people in spite of the extreme situation – banks closed, massive campaign of the EU leaders in favor of the yes, not-too-vailed threats of what would have happened had the No won – overwhelmingly supported Tsipras.

 Does it mean that now the EU needs to accept all Tsipras’s requests? Of course, not. In an agreement, like in a marriage, it takes two. Unlike in a marriage, however, in an international agreement there is a question of legitimacy of the negotiating delegates. From day one, the EU challenged the legitimacy of Tsipras’s mandate. The kind interpretation is that the EU rejected it because of the ambiguity underlying Tsipras’s mandate: no to the Troika’s conditions, but yes to the euro. The unkind one is that the EU rejected it because Tsipras was not part of the Brussels’ elite (he did not even wear a tie). Even worse, he was challenging the legitimacy of the Brussels’ elite. You can be a crook, you can be an unelected leader and – if you are one of them – your legitimacy will never be questioned in Brussels or Frankfurt. But if you are not, not only your credentials will be challenged, you will be openly undermined even if you had democratically won a clear mandate.

 As a result, from day one – everybody from Junker to the Eurogroup – was trying to make this government fall, flirting with a new coalition between the “moderate” part of Syriza and the more centrist To Potami party and making clear that the conditions offered by the Institutions (ex Troika) would be much better, if Tsipras’s government fell. This was extremely antidemocratic and underhanded. Now it cannot continue any more. Tsipras has a clear mandate. Furthermore, Tsipras’s bargaining position had been boosted by a recently released IMF paper, which confirms that Greece’s debt is not sustainable.

 Now the Institutions do not need to accept Tsipras’s conditions, but they have to negotiate with him in good faith. The no vote does not necessarily mean Grexit, unless the Institutions want so. What it is different now is that the European leaders will have to take responsibility for kicking a country out (something against all the treaties). They cannot hope anymore that Tsipras will do the dirty job for them.

(emphasis original)

I’m not sure if his analysis over ties and the like make sense except as a metaphor, for what is an excess of group thing that permeates the EU leadership, but in that context, it does appear to explain a lot.

Much of what passes for “common knowledge” in the EU, is in fact a mishmash of economic theories that were discredited well before the 2nd World War, and much like the gold standard economics that exacerbated the depression and led to the rise of fascism, it appears that a similar path is being taken.

H/T Brad DeLong

Greece Just Caved

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As Paul Krugman notes, Argentina’s dropping the dollar peg, equivalent to a Grexit,and did not cause widespread economic devastation, it was the flailing around and uncertainty before making the break

Greece has presented a new proposal to the Troika, and it appears to be a complete capitulation to delusional German economics:

Only a day after grim predictions of financial and social collapse in Greece, a scramble appeared underway to work out the details of a new bailout package to bring the country back from the brink of falling out of the euro.

As details of the new offer emerged, it appeared that Prime Minister Alexis Tsipras was capitulating to demands on harsh austerity terms that he urged his countrymen to reject in the referendum last Sunday, like tax increases and various measures to cut the costs of pensions.

But Mr. Tsipras sought a three-year bailout loan totaling 53.5 billion euros (about $59 billion) and asked creditors to commit to discussing restructuring the nation’s massive debt. The amount was more than it would have been without a nationwide banking shutdown that has pummeled the economy. If granted, it would come on top of 240 billion euros in bailout loans Greece has received since 2010. Mr. Tsipras seemed to have gained ground on debt relief, his one bedrock demand. Germany’s finance minister, Wolfgang Schäuble, finally gave a little on that Thursday, admitting that “debt sustainability is not feasible without a haircut,” or write-down of debt, even if he then appeared to backtrack.

Greece’s debt has been unsustainable, and when /the previous government doing what was demanded of it by the Troika, it caused the economy to implode, driving debt higher, both on an absolute basis, and on a debt to GDP basis.

This is a f%$#ing disaster, not just for Greece, but for the Euro Zone.

It’s clear that Greece is going to leave the Euro under these terms, and when the Greek new Drachma era shows the kind of explosive growth that Argentina did post dollar peg, there will be a clamor among the southern tier of the Euro Zone to reestablish their own currency.

The Tears of the Cuban Emigre Dead Enders Will Flavor My Cocktail

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The US and Cuba are opening up embassies in their respective capitals:

President Barack Obama announced Wednesday that the U.S. and Cuba have struck a deal to open embassies in each other’s capitals and re-establish diplomatic relations for the first time in half a century.

“The progress we make today is another demonstration we don’t have to be imprisoned by the past,” Obama said.

Obama emphasized that the U.S. and Cuba have some shared interests, such as strong anti-terrorism policies and disaster response. But he acknowledged that the two nations still have “very serious differences” on issues like free speech.

“We won’t hesitate to speak out when we see contradiction to those values,” the president said.

According to a statement from the Cuban government, officials are aiming to reopen their embassy on or after July 20. White House deputy national security adviser Ben Rhodes told MSNBC that the U.S. will open its embassy in Cuba “shortly after” July 20.

55 years of mean spirited and counter-productive (the Castros still run the place after 55 years of isolation) foreign policy has ended.

The real pity is that it took so long.

I’m looking forward the import of the revolutionary Cuban lung cancer vaccine into the United States.

Óχι* Euro?

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So Greece has now officially defaulted on its IMF loan:

Greece has officially missed its payment to the IMF.

Though this is not technically considered a “default” — the IMF now considers Greece “in arrears” — Greece has now officially not paid the 1.6 billion euros (or about $1.8 billion) it owed the IMF by Tuesday.

IMF managing director Christine Lagarde, however, said in June that she would consider Greece in default if it did not pay.

 This is the largest missed payment ever owed to the IMF.

Greece is now no longer in a bailout program for the first time since 2010.

 In a statement, the IMF confirmed that Greece missed the payment due on Tuesday and added that Greece requested an extension of its repayment, which the IMF’s executive board will consider “in due course.”

 Greek banks and the Athens stock exchange remain closed through this week ahead of a July 5 referendum to vote on the latest bailout proposal from Greece’s creditors.

This is a big deal, but I do not think that the Greek government was left with a choice.

It has become increasingly clear that the goal of the Troika has been regime change ever since Syriza won the last election, primarily because they are a bunch of moralistic† idiots, who do not realize that the alternative to Syriza is not a return to the center-left and center-right parties, but rather the rise of the fascist Golden Dawn party”.

This is why Greek PM Alexis Tsipras felt compelled to call a referendum.

The demands of the Troika have always been about a number of things, none of which have anything to do with the well being of the Greek people:

  • Protecting their own domestic banks from thrie exposureto Greek Debt.
  • Reinforcing German hegemony of the Euro Zone. (Berlin only on this one)
  • Making a public example of Greece as a warning to others.
  • Preventing other “leftist” (social democrat by the standards of the 1960s) parties, particularly Die Linke (The Left) in Germany, from coming to power.
  • Discrediting the modern social safety net.

It should be noted that I do not see any way to a happy ending here:

………

But a former deputy governor of Cyprus’s central bank, Spyros Stavrinakis, has warned that reopening the banks will be hard.

Stavrinakis lived through the 2013 Cyprus crisis, in which capital controls were imposed for almost two years.

He says:

Once you impose capital controls, you immediately send a message that there is something wrong with the banking sector.

It is very difficult to phase down and unwind capital controls, once they are imposed, Stavrinakis adds.

………

Most things in the European Union are designed to actively obfuscate reality. These are called deposit insurance schemes but that is a legal lie. In the United States the FDIC is Federal (its right in the name). The EU imposes a requirement that each country “insure” their deposits but it provides no financing for this. The last data I saw (which I can only verify from 3 years ago) is that the Greek deposit insurance fund has a paltry 3 billion dollars in it. In short there is no current backstop for Greek depositors. This is why they are talking about implementing a European wide deposit insurance union but that isn’t supposed to come until next year at the earliest and who knows if that will really happen and to what extent it will be universal among current Eurozone members. relevant links below.

………

Three-and-a-half billion euros. That is roughly how much cash Greece’s banks need to get through the week if each adult takes out the €60 ($67) they are allowed each day. It isn’t much for Greeks to live on, but it may be more than the banks have.

Also, in the realm of the absurd, there is a  crowdfunding project for the Greek Bailout Fund on  Indiegogo, with about €¾ million raised, out of the €1.6 billion needed raised so far.

The German insistence on Versailles Treaty economics, when juxtaposed with the Greek tradition financial profligacy and corruption, has produced a truly toxic mix, which will probably break up the Euro Zone, if not the whole European Union.

*Greek for no.
†The word for “debt” in German is “Schuld”. This is also the word for “guilt” or “blame”, which explains why the Germans are so fond of Sado-Monitarism. The Germans see this as a morality play, and the last time that Germans tried to enforce a morality on the rest of Europe, it was pretty unfortunate.

And So the Dissolution of the EU Begins

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Greek Prime Minister Alexis Tsipras will be calling for a referendum on the Troika’s proposal:

In a dramatic move that will put Europe on tenterhooks, the Greek prime minister Alexis Tsipras told his fellow citizens last night he would call a referendum on the bailout accord that international creditors have proposed to keep the debt-stricken country afloat.

Following an emergency meeting of his cabinet, Tsipras said his leftist-led government had decided a package of austerity measures proposed by the country’s creditors – made in a last-ditch effort to avert default – would be put to popular vote. The referendum will take place on Sunday 5 July.

“After five months of hard negotiations our partners, unfortunately, ended up making a proposal that was an ultimatum towards Greek democracy and the Greek people,” he said in a national address, “an ultimatum at odds with the founding principles and values of Europe, the values of our common European construction.”

The leader, who only hours earlier had rejected the proposed reforms after several days of high-stakes talks in Brussels, said Greeks now faced a “historic responsibility” to respond to the ultimatum.

He said the reforms were “blackmail for the acceptance on our part of severe and humiliating austerity without end and without the prospect of ever prospering socially and economically”.

This is actually the intention.

This is politically motivated sadism.

The Germans want it because the want to demonstrate their power and virtue, and because of memories of  a period of hyperinflation that was caused by the triumphalism of the victors in the First World War.

The French want to be sure that they are not on the losing side of this alone.

The other northern tier EU countries have been relegated to spectator status.

What would seem to be Greece’s natural allies, Ireland, Spain, Portugal, and Italy, are desperate for Greece to fail, because if Syriza succeeds, it bolsters the anti-austerity parties in their countries, which threatens their political elites’ hold on power.

So I expect that Greece will be crushed under what is largely a German boot, and that various neo-facist parties, particularly New Dawn in Greece, will gain power as the center delivers misery, and the left is systematically excluded from meaningful governance.

Tell me that this does not look like 1932.

(on edit)

I read something similar to this, but had neglected to bookmark it.

I have now found who it was who explained the politics of this, it was Paul Krugman:

As a political matter, the big losers from this process have been the parties of the center-left, whose acquiescence in harsh austerity — and hence abandonment of whatever they supposedly stood for — does them far more damage than similar policies do to the center-right.As a political matter, the big losers from this process have been the parties of the center-left, whose acquiescence in harsh austerity — and hence abandonment of whatever they supposedly stood for — does them far more damage than similar policies do to the center-right.

The Problem with the EU in a Few Sentences

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I strongly suggests that you read Katharina Pistor’s essay on how the EU is betraying its ultimate goal, a unified and peaceful Europe, in their dealings with Greece in her OP/ED, The Problem With a Small Europe:

News headlines notwithstanding, the fundamental challenge facing Europe today extends far beyond Greece. The real question is what kind of European Union Greece’s creditors want: a “small” one, comprising only the countries that are prepared to live by their exacting standards, or a “big” one that heeds the Treaty of Rome’s call for “ever-closer union.”

………

European integration was built on the ideal of a united Europe working together to uphold peace, generate prosperity, and advance democracy. At first, cooperation centered on the creation of a common market, with European technocrats, led by the European Commission’s then-president, Jacques Delors, pushing for a common currency, despite deep structural differences. The assumption was that political integration would follow.

That did not happen. Indeed, the approach was tantamount to putting the cart before the horse – with serious consequences, exemplified in the eurozone’s enduring crisis. Yet the technocrats are back, now advocating a fiscal union to support the monetary union, with political union nowhere in sight.

Perhaps European leaders still believe that the needed political integration will eventually occur. But, even in the unlikely event that it does, a political union that emerges from desperation to save the common currency will be very different from one built purposefully, as the Treaty of Rome envisioned, based on shared values and goals. And, in the meantime, a fiscal union without a political union is an anti-democratic nightmare.

………

In this context, it is perhaps understandable that the creditor countries are increasingly promoting a “small” EU that includes only those that are willing and able to meet their high standards. But, while this might make for a stronger euro – and even a stronger EU – it would carry a huge cost, as it would effectively force members to abandon their democratic ideals. Meanwhile, the excluded countries would be forced to engage in competitive currency devaluations and other beggar-thy-neighbor policies. The dream of shared prosperity in Europe would be dead.

This outcome is not inevitable. A common currency is a means to an end, not an end in itself. If European monetary union is not leading toward the desired end, it – not the goal of ever-closer union – should be altered. And, in fact, most Europeans favor a different means, based on greater flexibility for domestic preferences and a bottom-up approach toward further integration. In such an environment, Greece might not only survive, but thrive.

I would note that the founders of the Euro currency said that their goal was to create a uniform standard of living across Europe.

It appears that they may get their goal, but it will be lowering living standards of more prosperous nations, not raising up their less fortunate neighbor.

Not surprising when one understands that Robert Mundell, the “father of the Euro”, is also considered by many to be the “Father of Reaganomics.”

Impoverishing ordinary people is a feature for people like Mundell, not a bug.

The Middle East Is F%$#ed up and Sh%$

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A year after the war that devastated the Gaza Strip, Israel is apparently helping Qatar — which does not have official diplomatic relations with Israel — partner with the Islamist movement and longstanding enemy Hamas to rebuild the the territory.

“Life is full of contradictions and strange things,” Yossi Kuperwasser, former head of research for Israel’s military intelligence, told NPR when commenting on Israel’s recent move to allow Qatar to channel its reconstruction aid through Hamas, which is a US-designated terrorist group.

Israel has always tried to isolate Hamas and has accused Qatar of financing the Islamist movement. Hamas does not recognize Israel’s right to exist, rejects all agreements between the Palestinian Authority and Israel, and calls for Israel’s violent destruction in its founding charter.

………

But there are other reasons why Israel is suddenly more open to cooperation with Qatar. Israel’s deputy minister for regional cooperation, Ayub Carra, mentioned that Qatar, along with other Gulf countries, shares Israel’s concerns about Iran, NPR reported. Kuperwasser also mentioned that Israel has long wanted improved relations with the region’s Sunni Muslim countries because of the threat the country faces from Shi’ite Iran and its various militant proxies.

“So we have a chance, now, to make the relationship better,” said Carra.

My head hurts.

Even the Hawks in the US Congress Are Concerned about the Ukrainian Nazis

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The flag flown by the Azov Battalion


Actual iconography on Azov Battalion helmets

It appears that the behavior of the Ukraine’s far right militias that Congress has explicitly forbidden giving them funding:

It’s easy to see why Representative John Conyers, a Michigan Democrat, would have a problem with the military unit commanded by Ukrainian legislator Andriy Biletsky: Conyers is a founding member of the Congressional Black Caucus, Biletsky is a white supremacist.

The House of Representatives has unanimously approved an amendment to the U.S. military budget, proposed by Conyers and Florida Republican Ted Yoho, banning support and training for “the Ukrainian neo-Nazi paramilitary militia ‘Azov Battalion.'” Azov was set up in May 2014 to fight pro-Russian separatists in eastern Ukraine. Here’s how the group’s Facebook page describes the circumstances:

In the first weeks after the Putin invasion of Donbass began, the authorities and law enforcers were confused and demoralized. Nationalists had to take initiative. The Patriot of Ukraine organization and allied unofficial groups of right-wing youth rallied around Andriy Biletsky and challenged the separatists.

By now, though, the Azov Battalion has become a regiment of the Ukrainian National Guard and enjoys the enthusiastic support of Interior Minister Arsen Avakov.

Biletsky had run Patriot of Ukraine since 2005. In a 2010 interview he described the organization as nationalist “storm troops” with its biggest unit in Kharkov, Biletsky’s native city in eastern Ukraine. The group’s ideology was “social nationalism” — a term Biletsky, a historian, knew would deceive no one.

………

The war in the east gave Biletsky’s storm troopers a chance at a higher status than they could ever have hoped to achieve. They fought fiercely, and last fall, the 400-strong Azov Battalion became part of the National Guard, receiving permission to expand to 2,000 fighters and gaining access to heavy weaponry. So what if some of its members had Nazi symbols tattooed on their bodies and the unit’s banner bore the Wolfsangel, used widely by the Nazis during World War II? In an interview with Ukraine’s Focus magazine last September, Avakov, responsible for the National Guard, was protective of his heroes. He said of the Wolfsangel:

In many European cities it is part of the city emblem. Yes, most of the guys who assembled in Azov have a particular worldview. But who told you you could judge them? Don’t forget what the Azov Battalion did for the country. Remember the liberation of Mariupol, the fighting at Ilovaysk, the latest attacks near the Sea of Azov. May God allow anyone who criticizes them to do 10 percent of what they’ve done. And anyone who’s going to tell me that these guys preach Nazi views, wear the swastika and so on, are bare-faced liars and fools.


………

Now, Conyers and Yoho have almost succeeded in making Azov ineligible for any form of U.S. assistance. “These groups run counter to American values,” Conyers told Congress. “And once the fighting ends, they pose a significant threat to the Ukrainian government and the Ukrainian people. As we’ve seen many times, most notably within the Mujaheddin in Afghanistan, these groups will not lay down their arms once the conflict is over.”

As Robert Parry, who was given the Polk award for his work on Iran-Contra observed:


………

The conservative London Telegraph offered more details about the Azov battalion in an article by correspondent Tom Parfitt, who wrote: “Kiev’s use of volunteer paramilitaries to stamp out the Russian-backed Donetsk and Luhansk ‘people’s republics’… should send a shiver down Europe’s spine.

“Recently formed battalions such as Donbas, Dnipro and Azov, with several thousand men under their command, are officially under the control of the interior ministry but their financing is murky, their training inadequate and their ideology often alarming. The Azov men use the neo-Nazi Wolfsangel (Wolf’s Hook) symbol on their banner and members of the battalion are openly white supremacists, or anti-Semites.”

Based on interviews with militia members, the Telegraph reported that some of the fighters doubted the reality of the Holocaust, expressed admiration for Adolf Hitler and acknowledged that they are indeed Nazis.

Biletsky, the Azov commander, “is also head of an extremist Ukrainian group called the Social National Assembly,” according to the Telegraph article which quoted a commentary by Biletsky as declaring: “The historic mission of our nation in this critical moment is to lead the White Races of the world in a final crusade for their survival. A crusade against the Semite-led Untermenschen.”

In other words, for the first time since World War II, a government had dispatched Nazi storm troopers to attack a European population – and officials in Kiev knew what they were doing. The Telegraph questioned Ukrainian authorities in Kiev who acknowledged that they were aware of the extremist ideologies of some militias but insisted that the higher priority was having troops who were strongly motivated to fight. [See Consortiumnews.com’s “Ignoring Ukraine’s Neo-Nazi Storm Troopers.”]

But a rebel counteroffensive led by ethnic Russians last August reversed many of Kiev’s gains and drove the Azov and other government forces back to the port city of Mariupol, where Foreign Policy’s reporter Alec Luhn also encountered the Nazis. He wrote:

“Blue and yellow Ukrainian flags fly over Mariupol’s burned-out city administration building and at military checkpoints around the city, but at a sport school near a huge metallurgical plant, another symbol is just as prominent: the wolfsangel (‘wolf trap’) symbol that was widely used in the Third Reich and has been adopted by neo-Nazi groups. …

“Pro-Russian forces have said they are fighting against Ukrainian nationalists and ‘fascists’ in the conflict, and in the case of Azov and other battalions, these claims are essentially true.”

You can find Conyers’ statement on his amendments banning any aid the Azov battallion, as well as prohibiting the transfer of shoulder launched SAMs (Manpads) to anyone in the Ukraine, here.

I think that the prohibition against the missiles is particularly significant, because it not just a measure of concern about neo-Nazi elements in the Ukrainian establishment, it is a vote of no-confidence in their entire military establishment, and arguably the entire government, with regard to securing portable SAMs.

Dick Waving like This Could Get All of Us Killed

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Because our coup in the Ukraine is not progressing well, the US is looking at forward deploying armor and troops along the Russian border:

In a significant move to deter possible Russian aggression in Europe, the Pentagon is poised to store battle tanks, infantry fighting vehicles and other heavy weapons for as many as 5,000 American troops in several Baltic and Eastern European countries, American and allied officials say.

The proposal, if approved, would represent the first time since the end of the Cold War that the United States has stationed heavy military equipment in the newer NATO member nations in Eastern Europe that had once been part of the Soviet sphere of influence. Russia’s annexation of Crimea and the war in eastern Ukraine have caused alarm and prompted new military planning in NATO capitals.

It would be the most prominent of a series of moves the United States and NATO have taken to bolster forces in the region and send a clear message of resolve to allies and to Russia’s president, Vladimir V. Putin, that the United States would defend the alliance’s members closest to the Russian frontier.

To quote a line from the movie The Hunt for Red October, “This business will get out of control. It will get out of control and we’ll be lucky to live through it.“

When we look at this sort of foreign adventurism, what is almost universal is that it comes back to bite the United States in the ass.

What IS universal is that the target of this sort of crap end up worse off than they were before.

But we keep on doing this, again, and again, and again, and again.

Finally, a Good Analogy for What Is Happening to Greece

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What the Troika is actually trying to do is not to do the right thing, they are, as Nobel Prize winning economist Amartya Sen notes, trying to go Versailles on Greece:

On 5 June 1919, John Maynard Keynes wrote to the prime minister of Britain, David Lloyd George, “I ought to let you know that on Saturday I am slipping away from this scene of nightmare. I can do no more good here.” Thus ended Keynes’s role as the official representative of the British Treasury at the Paris Peace Conference. It liberated Keynes from complicity in the Treaty of Versailles (to be signed later that month), which he detested.

Why did Keynes dislike a treaty that ended the state of war between Germany and the Allied Powers (surely a good thing)?

Keynes was not, of course, complaining about the end of the world war, nor about the need for a treaty to end it, but about the terms of the treaty – and in particular the suffering and the economic turmoil forced on the defeated enemy, the Germans, through imposed austerity. Austerity is a subject of much contemporary interest in Europe – I would like to add the word ­“unfortunately” somewhere in the sentence. Actually, the book that Keynes wrote attacking the treaty, The Economic Consequences of the Peace, was very substantially about the economic consequences of “imposed austerity”. Germany had lost the battle already, and the treaty was about what the defeated enemy would be required to do, including what it should have to pay to the victors. The terms of this Carthaginian peace, as Keynes saw it (recollecting the Roman treatment of the ­defeated Carthage following the Punic wars), included the imposition of an unrealistically huge burden of reparation on Germany – a task that Germany could not carry out without ruining its economy. As the terms also had the effect of fostering animosity between the victors and the vanquished and, in addition, would economically do no good to the rest of Europe, Keynes had nothing but contempt for the decision of the victorious four (Britain, France, Italy and the United States) to demand something from Germany that was hurtful for the vanquished and unhelpful for all.

The high-minded moral rhetoric in favour of the harsh imposition of austerity on Germany that Keynes complained about came particularly from Lord Cunliffe and Lord Sumner, representing Britain on the Reparation Commission, whom Keynes liked to call “the Heavenly Twins”. In his ­parting letter to Lloyd George, Keynes added, “I leave the Twins to gloat over the devastation of Europe.” Grand rhetoric on the necessity of imposing austerity, to remove economic and moral impropriety in Greece and elsewhere, may come more frequently these days from Berlin itself, with the changed role of Germany in today’s world. But the unfavourable consequences that Keynes feared would follow from severe – and in his judgement unreasoned – imposition of austerity remain relevant today (with an altered geography of the morally upright discipliner and the errant to be disciplined).

Aside from Keynes’s fear of economic ruin of a country, in this case Germany, through the merciless scheduling of demanded payments, he also analysed the bad consequences on other countries in Europe of the economic collapse of one of their partners. The thesis of economic interdependence, which Keynes would pursue more fully later (including in his most famous book, The General Theory of Employment, Interest and Money, to be published in 1936), makes an early appearance in this book, in the context of his critique of the Versailles Treaty.

The purpose of the Versailles Treaty was to break Germany and German spirit, and 20 years later, Europe was at war again.

Now European powers, primarily Germany, are attempting to break Greece and Greek spirit.

This will not end well.

Obama Loses Trade Vote in House ……… and There Was Much Rejoicing

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It’s confusing, but basically the House of Representatives overwhelmingly rejected a key portion of the Fast Track process, and I am doing a happy dance.

Hours after President Obama made a dramatic, personal appeal for support, House Democrats on Friday thwarted his push to expand trade negotiating power — and quite likely his chance to secure a legacy-defining accord spanning the Pacific Ocean.

 In a remarkable blow to a president they have backed so resolutely, House Democrats voted to end assistance to workers displaced by global trade, a program their party created and has supported for four decades. That move effectively scuttled legislation granting the president trade promotion authority — the power to negotiate trade deals that cannot be amended or filibustered by Congress.

 “We want a better deal for America’s workers,” said Representative Nancy Pelosi of California, the House minority leader, who has guided the president’s agenda for two terms and was personally lobbied by Mr. Obama until the last minute.

 The vote that prevented the president from obtaining trade promotional authority now imperils the more sweeping Trans-Pacific Partnership, a proposed trade agreement with 11 other nations along the Pacific Ocean that affects 40 percent of the global economy on goods ranging from running shoes to computers.

 ………

 The Democratic revolt left Republican leaders trying to summon support from their own party for trade adjustment assistance, a program they have long derided as a waste of money and a concession to organized labor. Eighty-six Republicans voted for the program, more than double the 40 Democrats who supported it. But the trade adjustment assistance bill failed when 126 voted for it and 303 against.

 Republican leaders then passed, in a 219-to-211 vote, a stand-alone bill that would grant the president the trade negotiating authority he sought. But that measure cannot go to the president for his signature because the Senate version of the legislative package combined both trade adjustment and trade promotion.

 There is still a possibility that the House will pass the worker assistance bill early next week and send to Mr. Obama, but it would require dozens of Republicans or Democrats changing their votes, a prospect Republicans said was remote.

It’s kind of tough to understand what is going on here, but here is how this was supposed work:

  • In order to pass Trade Promotion Authority (aka TPA or Fast Track), Congress needs to pass displaced worker aid, which provides funds for transition and retraining, for people displaced as a result offshoring
  • Because the Republicans are insisting on offsets for this costs, this measure includes a minuscule cut to Medicare.
  • Fast Track is supposed to be passed.
  • Because Democrats are unwilling to cut Medicare, Democrats were promised a vote to reinstate the Medicare funding.  (but no guarantee that it would pass)

Here’s the kicker:  There were never more than 80 or so Republicans who were willing to support aid to displaced workers, which meant that something like ¾ of the Democratic Caucus need to vote for it, and it meant voting for a Medicare cut, which would have been used by Republicans in the 2016 campaign, just like they did in 2010 over Obamacare.

Additionally, as was observed by Gaius Publius, (the blogger, not the Roman Historian), “Supporting NAFTA Was the Kiss of Death for Democrats — Why Dems Should Think Twice About Voting for TPP.”

Much like Obamacare, Obama is shivving his own party in the hopes of his “legacy”, but this time, they get it, and unlike Obamacare, the TPP, TTIP, and TiSA actually make things worse ……… A lot worse.

They are designed to facilitate the privatization of government functions, encourage IP based rent seeking, and to promote the parasitic financialization of the involved countries.

I am tremendously happy that Obama has lost this, but I expect him to come back again to try and get fast track authority again.

Keep dialing your Congress critters.

John Brennan Has a Surprise Attack of Honesty

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John Brennan just said that some American policies may contribute to terrorism:

John Brennan, director of the Central Intelligence Agency, went on “Face the Nation” last Sunday and did something weird: he acknowledged that U.S. foreign policy might sometimes cause terrorism. Of course, he didn’t word it exactly like that, but close enough:

BRENNAN: I think the president has tried to make sure that we’re able to push the envelope when we can to protect this country. But we have to recognize that sometimes our engagement and direct involvement will stimulate and spur additional threats to our national security interests.

This is notable because the people who run our foreign policy usually tell us that terrorists are like zombies, driven by some incomprehensible force to kill and kill and kill until we take them out with a head shot/drone strike. Brennan himself did this five years ago while “answering” questions from the late reporter Helen Thomas about Umar Farouk Abdulmutallab, the 23-year-old Nigerian man who tried to blow up a Northwest flight over Detroit:

………

I’m shocked that Brennan is even capable of telling the truth in such matters.

I Did Not See This Coming

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FIFA President Sepp Blatter has resigned from his position:

Sepp Blatter rocked the world of soccer on Tuesday by unexpectedly saying he would step down as FIFA president in the wake of a corruption investigation that reportedly may include the embattled chief himself.

Citing sources familiar with the case, The New York Times and ABC News reported on Tuesday that Blatter was being investigated by the Federal Bureau of Investigation and U.S. prosecutors. Reuters was not immediately able to confirm the report. Blatter has not been charged with any wrongdoing.

Blatter, 79, announced his decision to step down at a hastily arranged news conference in Zurich, six days after police raided a hotel in the city and arrested several FIFA officials, and four days after he was re-elected to a fifth term as FIFA president.

Blatter said an election to choose a new president would be held as soon as possible, though a FIFA official said it would probably not take place until at least December.

I have to figure that this is part of some sort of deal with either Swiss or US prosecutors.

My guess would be on the Swiss, because he must be desperate for a deal which prevents his extradition to the United States.

The TPP Just got a lot worse

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It turns out that the Investor-State Dispute Settlement (ISDS) kangaroo courts are not the worst part of the TPP.

It turns out that it is set up as what the US Trade Representative calls a, “Living agreement: to enable the updating of the agreement as appropriate to address trade issues that emerge in the future as well as new issues that arise with the expansion of the agreement to include new countries.”

What this means is that the agreement can be changed by the vote of a a foreign bureaucracy with no requirement for Congressional advice and consent.

When one looks at the, where the “Judges” work for the benefit large multinational firms, do their adjudication, and then go back to work for the benefit large multinational firms, one can only imagine the skulduggery that can be done with this.

I Guess Obama Wants to Ensure That There Is Someone Worse with a Nobel

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We now have evidence that the US State Department is pressuring the Nobel Prize committee to nominate Ukrainian President Petro Poroshenko for the Peace Prize:

A leaked letter dated May 19th and sent by the Chairman of Ukraine’s parliament, Vladimir Groysman, to the chargé d’affaires of the U.S. Embassy in Oslo Norway, thanks her for “the efforts you have made to have Petro Oleksiyovych Poroshenko nominated for a Nobel Peace Prize,” but continues: “Still we consider your assurances of support by the two members of the Nobel Committee as insufficient,” because there are five members of the Committee, and the support of 3 of them is necessary.

Thus, “We expect further efforts aimed at shifting the position of Berit Reiss-Andersen, Inger-Marie Ytterhorn and especially that of the Chair of the Nobel Committee Kaci Kullman Five. Regarding the latter, we recommend that you take advantage of the information you are going to receive from Germany. Your colleagues in Berlin have assured us that the dossier will soon be delivered to the U.S. Embassy in Oslo. It is of utmost importance for Mr. Poroshenko to have firm guarantees that he will be awarded the 2015 Nobel Peace Prize, since it could highlight the unanimous support of Ukrainian integrity by the democratic community of the world. Assistant Secretary of State Viktoria Nuland has highly estimated your job during her visit to Kyiv.”

Once again, like a bad penny, every time there is a harebrained neocon scheme at State, Victoria Nuland is at the heart of the skulduggery.

The three mentioned Nobel Peace Prize Committee members are a politcally varied group. Ms. Reiss-Andersen is from the social democratic or “Labour” party; Ms. Ytterhorn is from the libertarian or “Progress” party; and Ms. Five is from the Conservative Party. The two unidentified members are Thorbjørn Jagland from the Labour Party, and Henrik Syse from the Conservative Party. If this letter is correct, those are the two who are referred to by the letter’s phrase, “your assurances of support by the two members.”

 The letter also makes a vague reference to the poor reputation that the Committee has engendered on account of the Committee’s having granted the Prize to Barack Obama in 2009 (a decision that the Committee’s Chairperson, Ms. Five, concurred with and has been criticized for): “We understand the difficulties you face when promoting the candidacy of the President of Ukraine, therefore we ask you to exert additional leverages by engaging those U.S. Senators who effectively cooperated with the Committee in 2009.” Presumably, this means that whomever “those U.S. Senators” were, the Chairman of Ukraine’s parliament thinks that they were “effective.”

 President Poroshenko entered office on 25 May 2014 after a U.S.-sponsored coup in Kiev that installed Arseniy Yatsenyuk as Ukraine’s Prime Minister on 26 February 2014, after the U.S. Assistant Secretary of State for European and Asian Affairs, Victoria Nuland, had instructed the U.S. Ambassador in Kiev on 4 February 2014 to get “Yats” appointed as the junta’s leader; she issued that instruction to him by phone on February 4th and the coup occurred on February 22nd; Yatsenyuk was then appointed on February 26th, and he remains in power today. One pro-Russian part of Ukraine, Crimea, then seceded and joined Russia, and another, Donbass, seceded and was not accepted by Russia; it thus was bombed by the Ukrainian Government during May through December 2014, since Donbass’s repeated requests to be allowed to join Russia were spurned by Vladimir Putin. (Yet, Ukraine accuses Russia of providing the fighters who are actually the men of Donbass, who refuse to be ruled by the U.S.-coup regime. Russia sends them guns, and volunteers have come from Russia and many other countries to help the Donbass defenders.) German intelligence estimates that “up to 50,000” people were killed in that bombing campaign, but U.S. and other official estimates are only around 5,000.

 Even before Poroshenko took office, the new Ukrainian government of “Yats” Yatsenyuk invaded Donbass, using bombers, tanks, rocket-launchers, and everything it had; and, when Poroshenko gave his victory speech in the ceremonial Presidential election on May 25th, he promised, and it was very clear from him, that: “The anti-terrorist operation [he called the residents there ’terrorists’] cannot and should not last two or three months. It should and will last hours.” (Another translation of it was “Antiterrorist operation can not and will not continue for 2-3 months. It must and will last hours.”) But it did last months — Poroshenko’s prediction was certainly false; and, moreover, he lost first one round of the war, and then another — his prediction of its outcome was likewise false. And recently, he said that the war must be resumed for yet a third round, in order that Ukraine win back both Crimea and Donbass. However, U.S. Secretary of State John Kerry warned him on May 12th that he must not do that, and that if he did he’d be violating the Minsk II ceasefire accords which had been arranged by France’s Francois Hollande and Germany’s Angela Merkel. Then, three days later, his Assistant Secretary Victoria Nuland, who had arranged the February 2014 coup, told both Yatsenyuk and Poroshenko to ignore what Kerry had just said, and that, “We continue to stand shoulder to shoulder with the people of Ukraine and reiterate our deep commitment to a single Ukrainian nation, including Crimea, and all the other regions of Ukraine.”

(emphasis mine)

The important thing is not that this is absurd, nor is it why Victoria Nuland has a job at the State Department and a security clearance.

The important thing here is that this is a graphic example of just how f%$#ed up and failed our policy in the Ukraine has proved to be.

We went for a color revolution by funding and supporting Ukrainian Fascists (not hyperbole, the Pravyi Sektor party and its associated paramilitaries are Fascists who idolize Nazi collaborators) for no particular reason, and Russia reacted to what it saw as an existential threat, because it was an existential threat, and we have slavering war mongers in Kiev, and a civil war in which the Russian aligned rebels are winning.

Heck of a job, Brownie Victoria Nuland.

Well, Now We Know What You Have to Do to Make an American Interested in Soccer

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I love New Yorker cartoons


Note that John Oliver did this a year ago

It appears that the juxtaposition bribery, money laundering, and tax evasion is is enough to pique the interest in soccer of some people in America:

With billions of dollars at stake, Morocco, Egypt and South Africa jockeyed in 2004 for the privilege of hosting soccer’s most prestigious tournament, the World Cup. The outcome hinged on a decision by the executive committee of FIFA, soccer’s governing body, and a single vote could tip the decision.

And at least one vote, prosecutors said Wednesday, was for sale.

Jack Warner, a committee member from Trinidad and Tobago, shopped his ballot to the highest bidder, federal prosecutors said. In early 2004, he flew to Morocco, where a member of that country’s bid committee offered him $1 million. But South Africa had a sweeter deal, offering $10 million to a group that Mr. Warner controlled, prosecutors said. He voted for South Africa. South Africa got the 2010 World Cup. And Mr. Warner got his  $10 million payout, much of which prosecutors said he diverted for his personal use.

For decades, that was how business was done in international soccer, American officials said Wednesday as they announced a sweeping indictment against 14 soccer officials and marketing executives who they said had corrupted the sport through two decades of shadowy dealing and $150 million in bribes. Authorities described international soccer in terms normally reserved for Mafia families or drug cartels, and brought charges under racketeering laws usually applied to such criminal organizations.

Hours after Swiss authorities arrived unannounced at a Zurich hotel and arrested top FIFA officials early Wednesday morning, the Justice Department and prosecutors for the Eastern District of New York forcefully declared that their investigation had only just begun and pledged to rid the international soccer organization of systemic corruption.

“These individuals and organizations engaged in bribery to decide who would televise games, where the games would be held, and who would run the organization overseeing organized soccer worldwide,” said Attorney General Loretta E. Lynch, who supervised the investigation from its earliest stages, when she was the United States attorney for the Eastern District of New York. “They did this over and over, year after year, tournament after tournament.”

It’s been common knowledge that FIFA is so deeply corrupt that it makes the International Olympic Committee look like Bernie Sanders, so I am not at all surprised that allegations of corruption have finally been made public, though I am a bit surprised that it was the US that led the investigation.

As it stands now, the FIFA president, Sepp Blatter is not among those arrested, but given that these indictments include the FIFA statutes, which cast a very broad net (the phrase “corrupt pattern” comes to mind), if only a few of these people roll, I imagine that he could be a defendant as well.

It appears that these arrests are the proverbial good news for the Jews, as it looks like this will side-track for a while efforts to expel Israel from FIFA:

Israelis were expecting some big news to come out of the annual FIFA Congress this week. But they probably weren’t expecting this.

In a bombshell operation, a Swiss law enforcement team showed up at the Zurich hotel hosting the annual gathering of the international soccer organization — and arrested nine senior officials.

The arrests come after decades of corruption allegations aimed at FIFA. (If you’re unfamiliar, comedian John Oliver’s got you covered.) The arrested officials face charges of taking money in exchange for World Cup hosting bids, as well taking bribes in exchange for media and marketing rights for major international tournaments.

The allegations are damning, but frankly, they couldn’t have come at a better time for Israel. Until Wednesday, much of the coverage of the FIFA Congress surrounded whether delegates would vote to suspend Israel from world soccer.

The Palestinian Football Association is introducing the motion to suspend Israel, accusing it of unjustly restricting Palestinian soccer players’ freedom of movement and claiming that Israel’s West Bank settlement teams violate FIFA rules. Israeli officials have called the effort blatantly political and said that the Palestinians’ complaints all concern Israel’s security forces — not Israel’s soccer teams.

Needless to say, some people are already blaming  the “international Zionist conspiracy” for the arrests.

Personally, I’m hoping that we eventually see similar arrests directed at the NFL, and its head Roger Goodell.

And Yes, the TTIP, in All Its Bee Killing Glory, Sucks Too

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The US, acting on behalf of Monsanto and its ilk, pressured the EU into revoking its common sense pesticide regulations using the TTIP to coerce regulatory forbearance:

EU moves to regulate hormone-damaging chemicals linked to cancer and male infertility were shelved following pressure from US trade officials over the Transatlantic Trade and Investment Partnership (TTIP) free trade deal, newly released documents show.

Draft EU criteria could have banned 31 pesticides containing endocrine disrupting chemicals (EDCs). But these were dumped amid fears of a trade backlash stoked by an aggressive US lobby push, access to information documents obtained by Pesticides Action Network (PAN) Europe show.

On 26 June 2013, a high-level delegation from the American Chambers of Commerce (AmCham) visited EU trade officials to insist that the bloc drop its planned criteria for identifying EDCs in favour of a new impact study.

Minutes of the meeting show commission officials pleading that “although they want the TTIP to be successful, they would not like to be seen as lowering the EU standards”.

The TTIP is a trade deal being agreed by the EU and US to remove barriers to commerce and promote free trade.

Responding to the EU officials, AmCham representatives “complained about the uselessness of creating categories and thus, lists” of prohibited substances, the minutes show.

The US trade representatives insisted that a risk-based approach be taken to regulation, and “emphasised the need for an impact assessment” instead.

On 2 July 2013, officials from the US Mission to Europe visited the EU to reinforce the message. Later that day, the secretary-general of the commission, Catherine Day, sent a letter to the environment department’s director Karl Falkenberg, telling him to stand down the draft criteria.

“We suggest that as other DGs [directorate-generals] have done, you consider making a joint single impact assessment to cover all the proposals,” Day wrote. “We do not think it is necessary to prepare a commission recommendation on the criteria to identify endocrine disrupting substances.”

The result was that legislation planned for 2014 was kicked back until at least 2016, despite estimated health costs of €150bn per year in Europe from endocrine-related illnesses such as IQ loss, obesity and cryptorchidism – a condition affecting the genitals of baby boys.

A month before the meeting, AmCham had warned the EU of “wide-reaching implications” if the draft criteria were approved. The trade body wanted an EU impact study to set looser thresholds for acceptable exposure to endocrines, based on a substance’s potency.

“We are worried to see that this decision, which is the source of many scientific debates, might be taken on political grounds, without first assessing what its impacts will be on the European market,” the chair of AmCham’s environment committee wrote in a letter to the commission.

These could be “dramatic” the letter said.

In a high-level internal note sent to the health commissioner, Tonio Borg, shortly afterwards, his departmental director-general warned that the EU’s endocrines policy “will have substantial impacts for the economy, agriculture and trade”.

The heavily redacted letter, sent a week before the EU’s plans were scrapped continued: “The US, Canada, and Brazil [have] already voiced concerns on the criteria which might lead to important repercussions on trade.”

The series of events was described as “incredible” by the the Green MEP Bas Eickhout. “These documents offer convincing evidence that TTIP not only presents a danger for the future lowering of European standards, but that this is happening as we speak,” he told the Guardian.

Even without a signed deal, it appears that the two big “Free Trade” deals being negotiated have already been used to subvert consumer and environmental safeguards.

Of course, this is precisely what Obama said wouldn’t happen, but I guess that he’s looking forward, not back.

Bob Menendez Shafts Barack Obama on TPP

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He managed to get an amendment in the Senate’s TPP bill, which has the effect of toughening human trafficking requirements of member countries, which means that Malaysia’s horrific human trafficking record would make the treaty ineligible for fast track:

Remember, passing Fast Track in the Senate was supposed to be the easy part. Not only did Fast Track get rejected on its first try — “Welcome aboard the S.S. Lame Duck, Mr. President!” — now we get this. Ryan Grim explains:

The Senate approved a bill to “fast-track” trade agreements negotiated by the president. The agreement will prevent Congress from amending or filibustering Obama’s controversial Trans-Pacific Partnership agreement. The TPP deal would have a hard time surviving without fast-track authority.
But a key crackdown on human trafficking survived the legislative jujitsu. The White House considers the provision a deal-breaker, as it would force one of the nations involved in the TPP talks — Malaysia — out of the agreement.

From the US State Department:

Malaysia (Tier 3 [the worst]) is a destination and, to a lesser extent, a source and transit country for men, women, and children subjected to forced labor and women and children subjected to sex trafficking. The overwhelming majority of trafficking victims are among the estimated two million documented and two million or more undocumented foreign workers in Malaysia.
Foreign workers typically migrate willingly to Malaysia from other countries in Asia—primarily Indonesia, Bangladesh, the Philippines, Nepal, Burma, Cambodia, Vietnam, India, Thailand, and Laos—in search of greater economic opportunities.

Here I pause to note that somebody decided that it would be a good idea for the US to take in the Rohingya, the Muslim boat people who have turned to traffickers to escape a slow motion Burmese genocide, after which the Malaysians offered temporary, one-year status to such Rohingya as actually reach their shores.

………

 Complicating any efforts to “fix” the bill, however, is the possibility of an alliance between feminist factions in the Democratic party, and Christianist factions among the Republicans, both of whom take strongly principled positions on human trafficking.

 Complicating the picture even more, when you think about it, is the potential for agita in 2016. Suppose Obama, very ironically, gets the anti-slavery provisions “fixed,” i.e. removed, and the bill passes in time. The campaign ads practically write themselves. “A vote for TPP is a vote for human trafficking.” “Why does Senator X support slavery?” Cue the ominous music. Cue pictures of skeletal women and children. Cue the die-ins on the trail. I’m sure campaign shops on both sides are practically drooling with joy, because the only way TPP will pass is with bipartisan support. Getting that amendment in there was GENIUS, and we’ll get to how that happened in a moment.

So what we are seeing here is a pissing contest between Menendez and Obama.

The time line is:

  • Menendez does his level best to submarine any potential nuclear deal with Iran, including politically attaching himself to Benyamin Netanyahu.
  • Menendez is indicted for corruption. (BTW, good luck getting a conviction under recent Supreme Court rulings)
  • Menendez inserts an amendment to Fast Track which basically excludes Malaysia from the treaty.

Note also the consequences of excluding Malaysia, the most populous Muslim majority state in the world the only sizable majority Muslim state in the TPP, so its exclusion would leave the rump state of Brunei (population 415,717) as the only majority Muslim nation in the agreement.

I cannot believe that I am actually on Menendez’ side on all of this, but the TPP is clearly bad news, as the TTIP with Europe, (more on that later) so to the degree that these treaties can be stopped, the better it is for everyone but the multinational business for whom this is a big government subsidy.