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Broken Economy

When Lenders Are Not Paid Back

August 21st 2013

Home Foreclosure

Much of the lending done in the United States relies on having both collateral and contractual obligations (loan covenants) that together provide the lender with assurance that the funds lent out will be repaid.  Drivers falling behind on an auto loan, for example, will eventually find themselves without wheels — the car is the collateral.  The house is likewise the collateral for a mortgage; lenders can foreclose on borrowers in default, though with rules that differ across states.

In financial markets, borrowers might pledge instruments like mortgage-backed securities as collateral for cash loans, whether for a term of years or just overnight. Rather than putting up physical assets as collateral, governments often instead promise to repay bondholders out of a dedicated stream of income like the tolls on a bridge or out of unspecified revenue from future taxes. The attraction of such collateralized borrowing is obvious for both sides, since the borrower generally can obtain funds at a lower interest rate than with an unsecured loan, in which lenders would typically find themselves back in the line for recovery in a bankruptcy proceeding if the borrower defaulted. Read more ..

Broken Healthcare

Obamacare's Hidden Battle: Insurance Agents Push State Regulation of Guides

August 20th 2013


Early in the summer of 2009, when lawmakers were starting work on what would become the largest health care overhaul in decades, the industry associations that represent insurance agents and brokers caught wind of an obscure provision.

The plan called for state and federal governments to hire so-called “navigators” — members of social service organizations, advocacy groups, even chambers of commerce — to help people use the new online marketplaces created by the law to choose among insurance plans and enroll in coverage.

The navigator program garnered little attention in the midst of the larger legislative battle. But agents and brokers, worried that navigators would cut into their business, immediately took aim, labeling the initiative “reckless” and “ill-advised.”

When President Obama finally signed the law in March 2010, the Affordable Care Act did include a navigator program — but that hasn’t stopped insurance agents and brokers from fighting against it. Over the past three years, the groups have waged an intense but little-noticed lobbying effort to regulate navigators in the states, leading to the passage of 16 state laws over the past year and a half. Most of the laws contain language that closely resembles recommendations that agents and brokers have been pushing in statehouses nationwide — a push receiving crucial aid from a legislators’ group focused on insurance policy that is supported with industry funds. Read more ..

Israel on Edge

UN Chief Admits Bias Against Israel

August 19th 2013

Human Rights Council Meeting

United Nations Secretary-General Ban Ki-moon met with students at the UN headquarters in Jerusalem on Friday afternoon, and admitted that his organization was biased against Israel. Responding to a student who said Israelis felt their country was discriminated against in the international organization, Ban confirmed that there was a biased attitude towards the Israeli people and Israeli government, stressing that it was "an unfortunate situation." Ban met with the students as part of the UN Model international academic convention initiated by students at the College of Management.

He told them he had come to the region for the sixth time to express his support for the renewed peace talks between Israel and the Palestinians. "I have never been this optimist," he said, adding that the international community had never had such expectations and hope that the peace process would reach a solution. Read more ..

The Battle for Egypt

Egypt Prepares for the Next Wave of Muslim Brotherhood Unrest

August 18th 2013


Egypt's military rulers have threatened to ban the Muslim Brotherhood, after fighting in Egypt has left hundreds dead. The military says it is fighting a "terrorist" group. 'There will be no reconciliation with those whose hands have been stained with blood and who turned weapons against the state and its institutions.'

Violence between supporters of deposed Egyptian president Muhammad Morsi and the military government intensified on Saturday, as the threat of civil war loomed ever larger over the streets of Cairo.

Security forces stormed one of the last major redoubts of Brotherhood activists, who fought running battles with the army throughout the weekend. According to the Telegraph, the al-Fateh mosque was the site of an hours-long gun battle between Morsi supporters and the army, with security forces finally breaking through and clearing the site. The death toll from the fighting is unclear. Read more ..

Broken Borders

Immigration Facts: Deferred Action for Childhood Arrivals (DACA)

August 17th 2013

Amnesty Applicants

As Congress debates the fate of the “DREAMers”—those undocumented immigrants who arrived in the United States as children—the one-year anniversary of the start of the Deferred Action for Childhood Arrivals (DACA) program occurs on August 15. The DACA program—an initiative of the Obama administration—does not provide permanent lawful status to applicants. However, it confers two important advantages to approved applicants: a temporary suspension of deportation and the authorization to work in the United States. The program also provides researchers and policymakers a glimpse into the “DREAMer” cohort. Some 900,000 individuals were estimated to be immediately eligible for deferred action at the date of the announcement. Read more ..

Egypt’s Second Revolution

Increasing US Irrelevance in Egypt

August 16th 2013

Brotherhood Demo Post-Coup

While the loss of life in Cairo over the past days is deeply to be regretted, President Obama’s tepid statement on the “cycle of violence” in Egypt and cancellation of the biannual U.S.-Egypt Bright Star military exercise evidence a lack of strategic awareness. The result is increasing American irrelevance in Egypt and the broader Middle East.

For the President to demand that Cairo lift the state of emergency and the Muslim Brotherhood engage only in peaceful protest is at best naive. To posit that national reconciliation, respect for the rights of women and religious minorities, constitutional reforms and democratic elections are the immediate American objectives is to ignore the reality of armed conflict between the Muslim Brotherhood and the government.

The Muslim Brotherhood is not a political party, it is a violent, radical transnational movement that used the format of elections to acquire the levers of state power in Egypt. Having been deposed, it is not leaving peacefully. Brotherhood attacks on churches, government assets and individuals require a response from the State. There is no immaculate way to put down an insurrection driven by those for whom death has long term political utility. Read more ..

The Economy Today

US Eyes Competition with Europe for Africa Trade

August 16th 2013


The United States is keeping a close watch on potential European trade deals with African nations as Washington reviews its own preferential trade initiative with the continent. African ministers and U.S. officials discussed trade relations at a forum Monday in the Ethiopian capital Addis Ababa.

The U.S. is considering an extension to the popular African Growth and Opportunity Act, known as AGOA, an American law that allows sub-Saharan African countries to export certain products to the United States duty free. First signed into law in 2000, the act has already been renewed once, and is set to expire in 2015.

U.S. Trade Representative Michael Froman has been meeting with African ministers at an AGOA forum in Addis Ababa to work through the details of a new deal. In a conference call with reporters Monday, Froman said one of the big questions is about the impact of African trade talks with the European Union.

“I do think there is a challenging issue before the African partner countries about how to work with us on the renewal of AGOA and how it relates to the negotiations that are ongoing with the European Union for economic partnership agreements,” he said. Read more ..

Kuwait on Edge

Has Kuwait Reached the Sectarian Tipping Point?

August 15th 2013

Kuwaiti Smokes

Kuwait is perhaps America’s closest Arab ally; it remains the only country in the Middle East on whose behalf the United States went to war. Although the Islamic Republic of Iran has at times tried to leverage Kuwait’s large Shi’ite minority against the Kuwaiti state, it has mostly been unsuccessful. Indeed, Kuwait’s Shi’ite ­community has repeatedly worked to prove its loyalty to Kuwait. Recent political instability, however, is again opening the door for sectarian forces to undermine Kuwait and, by extension, an important pillar of US defense strategy.

Iranian influence has ebbed and flowed in Kuwait, but Kuwaiti Shi’ites have traditionally rejected Iranian excesses because of Kuwaiti rulers’ efforts to treat them as full members of society. Kuwait represents an important US ally in the Middle East, and the United States should recognize that its stability depends upon outreach to Kuwaiti moderates, both Sunni and Shi’ite. Read more ..

The Battle for Syria

The Sunni Divide

August 14th 2013


Watching the Syrians kill each other, one can get the impression from the media that there are two sides—the Assad regime and "the opposition." The latter would be comprised of Arabic-speaking Sunnis who want to overthrow the Alawi-controlled regime, giving the subtle impression that there is a united Sunni opposition. Nothing could be further from the truth. The Arabic-speaking Sunnis may loathe Assad, but they also hate each other. Read more ..

Brazil and Turkey

Protests in Brazil and Turkey and Geo-Political Projections

August 13th 2013

Istanbul Riots June 2013

Since last May there have been large, grassroots protests in both Brazil and Turkey.

There are similarities between both countries in that each   enjoys economic prosperity. In addition, the political parties that both Brazilian president  Rousseff and Turkish president, represent have been ruling with overwhelming majorities for 10 years or more. 

By the same token, the unprecedented period of economic growth both countries share is translated into national pride and a sense of triumphalism. That feeling of victory and glory leads them to also pursue international ambitions and independent foreign policies. Brazil aspires to obtain a permanent seat on the United Nations Security Council, as well as becoming a regional leader and enhancing its world status by deepening relations with the Arab and African world (the South-South alliance).  Brazil’s conduct of foreign policy intentionally opposes the one conducted by the United States and the West. Likewise, Turkey aspires to become a regional leader in the Middle East as it aspires to establish a sort of Neo-Ottomanism.  Turkey would like to become the most dominant and powerful country capable of influencing other countries in the Middle East, particularly the Arab world (which was part of the Turkish-Ottoman empire until WWI). Read more ..

Iran on Edge

Iranian Public Opinion Polling and Rouhani's Electoral Victory

August 12th 2013

Hassan Rowhani

Last Wednesday, University of Tehran lecturer and University of Maryland doctoral candidate Ebrahim Mohseni presented the results of a series of polls taken before and after the Iranian presidential election of June 14 at the New America Foundation, in a panel moderated by Shibley Telhami, a Saban Center nonresident senior fellow.  Among the highlights of the presentation – which can be viewed in full – was data indicating extremely late-breaking momentum for Hassan Rouhani, who only surpassed Tehran Mayor Mohammad Baqer Qalibaf in the polls the day before the election.  Mohseni noted that 20 percent of Rouhani voters polled said they made their decision on the final day of the election, albeit for a multitude of different reasons.  Economic concerns also overwhelmingly topped the list of respondent’s priorities for the new president, as voters wanted better domestic management and progress against international sanctions. Read more ..

Broken Intelligence

Edward Snowden in Moscow: A Case Study in Diplomatic Mismanagement

August 11th 2013


Since former NSA contractor Edward Snowden arrived in Moscow in late June, he appears to have wreaked havoc on U.S.-Russia relations.  The White House cancelled the planned Moscow summit between Presidents Obama and Putin primarily due to lack of progress on key issues, but many nevertheless think Snowden was the main reason that Washington pulled the plug.

This sorry affair has come to pose an outsized problem for an already troubled bilateral relationship.  While Moscow’s handling showed no particular skill, Washington seems to have forgotten how the game is played in such cases.  The administration unwisely fueled an expectation that the Russians might send Snowden back—which Moscow was never going to do.

Snowden landed at Moscow’s Sheremetyevo Airport on June 23 and took up residence in the transit area.  Initially, President Putin sounded like he wanted Snowden to leave.  He told the press that “the faster he [Snowden] chooses his final destination point, the better it will be for us and for him.” Read more ..

The Iranian Threat

Implications for Rowhani's New Government

August 10th 2013

Hassan Rouhani votes

Before his June election as Iran's new president, Hassan Rowhani promised reform domestically and a new, more "moderate policy" to help establish better foreign relations. But these, as Rowhani's own election, will reflect the will of Iran's supreme leader, Ali Khamenei. The Western educated and sophisticated Rowhani was an excellent choice. His background and familiarity with the West make him more appealing both domestically and internationally. 

Some care appears to have been taken in balancing political interests among the "electorate." How the Mullahs and the president manage the government must have a good deal to do with Iranian social control. Read more ..

Egypt's Second Revolution

The "New Democratic Normal" - The Muslim Brotherhood

August 9th 2013

ProMorsi Demo Post-Coup

As with so many other issues, U.S. policy and diplomacy ("dim-plomacy"?) of the handling of post-Morsi Egypt is reaching to a new low. 

The Jerusalem Post reported on August 6, that President Obama will meet with representatives of Egypt's Muslim Brotherhood at the White House sometime this month, ostensibly, to "hear their opinion."  The JP also says that Turkish diplomats will attend the meeting, most likely to reinforce the Brotherhood's demand for reinstating Mohamed Morsi as Egypt's president.

While the White House didn't publicly invite Egypt's interim government, or the organized opposition to the Brotherhood, or Tamarrod, which represents the people on the streets, it is hard to imagine that the Obama administration considered Morsi's re-instatement a viable enough option to occasion a White House hearing. Whatever Obama's purposes in having the Brotherhood come around to see him, there is little doubt that White House's goal is to assure the Brothers' role in Egyptian politics. Read more ..

The Middle East on Edge

Arab Uprisings Could Redraw Middle East Map

August 8th 2013

Mecca Hajj

With civil war raging in Syria and the conflict threatening to draw in neighboring states, there is speculation about possible geopolitical consequences. Analysts say the map of the Middle East could be redrawn for the first time in a century.

The end of WWI almost 100 years ago signaled the death of the Ottoman Empire.

Even before the guns fell silent, Britain and France agreed to carve up Ottoman lands, including Syria, Lebanon, Jordan and Palestine. That was key to understanding the modern Middle East said Michael Clarke, head of the Royal United Services Institute in London.

“The Arab world as we know it was established effectively in 1916 by the British and the French in the Sykes-Picot agreement. And it hasn’t changed, hardly at all since then. Nothing very strategic has happened apart from the establishment of the state of Israel in 1948. And now, this year, for the first time, the map of the Middle East is beginning to be pulled apart,” he said. Read more ..

Broken Education

Ending Summer Vacation is Long Overdue—Here’s How to Pay for It

August 7th 2013

school kids

Summer is a popular time to write opinion pieces calling for the end of summer vacation as an anachronism that widens achievement gaps between rich and poor students.  The details of the argument vary—see examples from summers 2009, 2010, 2011, 2012 and 2013—but the basic premise rests on research indicating that students from disadvantaged backgrounds experience learning loss over the summer while their more affluent peers often make learning gains.

There’s clearly a slam-dunk case for eliminating—or at least dramatically shortening—summer vacation, which fits into a broader push to lengthen the school year beyond the 180 days that is typical in the U.S.  Many high-performing charter schools have longer school days and years.  President Obama has called for a longer school year, pointing to the fact that students in countries such as South Korea attend school for many more days than their American counterparts. The school year in the U.S. is shorter than in most other countries for which the OECD collects data. Read more ..

Turkey on Edge

Erdogan's Presidential Plans Linked to Turkey's Economic Fortunes

August 6th 2013


Turkish Prime Minister Recep Tayyip Erdogan’s handling of recent anti-government demonstrations and his public quarrel with the country’s banks and business leaders could delay needed economic reforms until after next year’s presidential elections and possibly a year after that, political analysts say.

The analysts also say those two factors could affect Erdogan’s plans to run for president in those elections. When the prime minister returned from talks in North Africa in late June, he was welcomed by massive demonstrations protesting government plans to convert Istanbul's Gezi Park into a sort of monument to the old Ottoman Empire. In a nation that has looked to the secular West instead of the Islamic Middle East for much of the past 90 years, Erdogan's park conversion plan was predictably provocative. Read more ..

The Edge of Terrorism

With Embassy Closures, the U.S. Errs on the Side of Caution

August 6th 2013

Libyan riot at US consulate Sep 2012 #3

Most attacks against embassies have involved a large vehicle bomb, an armed assault or a combination of a vehicle bomb and armed assault. Such was the case with the U.S. Embassy in Sanaa, Yemen, in September 2008. To mitigate the impact of a perceived threat, the United States will close an embassy, increase security and request that the host country bolster its security presence at the compound.

Many of the posts that were closed in response to the August threats happen to have very good physical security measures in place due to their locations in the Middle East, which poses higher threat levels to U.S. facilities. For example, the U.S. Embassy in Sanaa was built in accordance with the security standards established by the Inman Commission. Therefore, it is designed to withstand bomb attacks and armed assaults. Still, even well constructed buildings are vulnerable to mob attacks like the one directed against the U.S. Embassy in Tunis in September 2012. Only the host country security forces can provide protection against such threats. Read more ..

The Edge of Terrorism

White House: 'Core' of al Qaeda Has Been 'Greatly Diminished'

August 5th 2013

Ayman al-Zawahiri

White House press secretary Jay Carney dismissed questions Monday about whether the Obama administration had taken its eye off the threat of terrorism since the killing of Osama bin Laden.

Carney said that the “president has been clear that the threat from Al Qaeda very much remains,” and said officials were particularly concerned about affiliates of the terror group outside its main “core” in Afghanistan and Pakistan.

“As Al Qaeda's core has been diminished through the efforts of the United States and our allies, affiliate organizations, including in particular, Al Qaeda in the Arabian Peninsula, have strengthened. We have here in Washington have identified AQAP in particular as the dangerous threat,” Carney said. Carney added that the affiliate groups had been a point of focus “for some time now,” and said the U.S. had “focused a great deal of attention on those affiliated organizations.” Read more ..

Broken Healthcare

Democrats Own Obamacare, and its Political Costs Keep Rising

August 5th 2013

Obamacare Protest

Nothing is free in politics, but there is some question when you pay the price.

That's been a saying of mine for many years, though I may have unconsciously plagiarized it from someone else. I think it applies to Obamacare.

My American Enterprise Institute colleague Norman Ornstein has been shellacking Republicans for trying to undercut the implementation of the Obama health care legislation. He calls it "simply unacceptable, even contemptible."

He points out that Republicans in the past haven't tried to undercut or derail major legislation of this sort. That's correct, as a matter of history. You won't find any concerted drive to repeal and replace Social Security after it was enacted in 1935 or Medicare after it was passed in 1965. In contrast, Republicans proclaim they want to repeal and replace Obamacare. Read more ..

The Iranian Threat

The Challenges Facing Rohani

August 4th 2013


Taking over the presidency in a country where decisions are ultimately made by the supreme leader is challenging enough. Having to begin that task by clearing colossal hurdles left by your predecessor is nearly mission impossible.

Immediately upon being sworn in as Iran's president at a public inauguration on August 4, Hassan Rohani must scale a mountain of challenges inherited from Mahmud Ahmadinejad's eight years in office, including an ailing economy, crippling international sanctions, troubled international relations, tricky nuclear negotiations, and an increasingly repressive and politically intolerant domestic atmosphere at home.

On his way to winning the presidency, Rohani pledged to tackle such big-ticket issues head on. But, in doing so, he risks suffering the same fate as his predecessors, whose aims conflicted with the conservative establishment and ultimately undermined their efforts to enact changes and implement their plans. Read more ..

Broken Borders

What New Immigrants Could Mean for American Wages

August 2nd 2013

Immigration Protest

Employers added 162,000 jobs in July, according to today’s employment report from the Bureau of Labor Statistics, and the unemployment rate edged down to 7.4 percent. Job gains were led by increases in employment in the private service-providing sector, which added 157,000 employees, as they have been since the start of the recovery. In contrast, job gains for employers in goods-producing sectors, including manufacturing and construction, have remained low, and government employment, which has fallen considerably since the onset of the Great Recession, has continued to trend down over the last three months. The broadest measure of employment—the employment-to-population ratio—remained at 58.7 percent, slightly above its level a year ago, but within the range that has prevailed over the last three years. Read more ..

The 2016 Vote

Ready for Hillary? Not in Middle America

August 1st 2013

Hilary Clinton

Scores of New Yorkers and Californians — but relatively few folks in Middle America — are already backing a super PAC designed to boost Democrat Hillary Clinton should she run for president in 2016.

Residents of New York, which Clinton represented in the U.S. Senate, and California have combined to give more than $500,000 to the Ready for Hillary super PAC over the first six months of the year, according to a Center for Public Integrity analysis of Federal Election Commission reports filed today.

That’s more than 40 percent of the $1.25 million Ready for Hillary reported raising since it was launched in January. Both states are frequently targeted for campaign cash by politicians on both sides of the aisle.

While super PACs are legally allowed to collect donations of any size, Ready for Hillary has voluntarily capped its contributions at $25,000. Ready for Hillary collected two-dozen contributions at this level, and they account for nearly half of the funds that the Democratic group received during the first six months of 2013.

Of these two-dozen “maximum” contributions, seven come from Californians and five from New Yorkers.

They include:
Jack Bendheim, president and chairman of the board of Phibro Animal Health Corp., a leading manufacturer and marketer of animal health pharmaceuticals, who raised more than $100,000 for Clinton’s 2008 presidential campaign

Scott Bessent, the chief investment officer at the Soros Fund Management, the family investment vehicle of liberal billionaire George Soros* Read more ..

America on Edge

Warrior Cops

July 31st 2013

NYPD and flag

In an excellent July 19, 2013, Wall Street Journal essay entitled "Rise of the Warrior Cop," author-journalist Radley Balko described the alarming militarization of police forces across America. He cited myriad cases of innocent citizens being killed by over-zealous police officers, particularly Special Weapons and Tactics (SWAT) teams serving warrants for alleged, often petty, offenses. 

The WSJ essay, which is based on Balko's newly released book, "Rise of the Warrior Cop: The Militarization of America's Police Forces," details several egregious cases, where gunned-up, overzealous SWAT forces executed citizens in the name of enforcing gambling laws and mere regulations. "In 2006," the author writes, "38-year-old optometrist Sal Culosi was shot and killed by a Fairfax County, VA, SWAT officer," after an undercover detective overheard Culosi betting on college football games. "The department sent a SWAT team after Mr. Culosi, who had no prior criminal record or any history of violence. As the SWAT team descended, one officer fired a single bullet that pierced Mr. Culosi's heart. The police say that the shot was an accident." Read more ..

Broken Healthcare

Implementing the Affordable Care Act: Why Is This So Complex?

July 30th 2013

No Obamacare

Last week, the Obama administration made a sensible, pragmatic decision to postpone until 2015 the implementation of the employer mandate under the Affordable Care Act (ACA). The postponement allows the government to simplify the reporting requirements, which companies alleged were unnecessarily burdensome, and gives employers more time to figure out how they want to adjust their health insurance coverage to the ACA environment. No postponement is without cost, but delaying the employer mandate allows the Administration to concentrate its energies on implementing the most important part of the ACA—the on-line market-places or exchanges being set up in each state to facilitate purchase of health plans by the uninsured. Getting the exchanges running—along with a way to determine the subsidies that make those purchases affordable—is a daunting, complicated task and should be given highest priority. Read more ..

Israel and Palestine

The JTA Gets it Wrong on Settlements

July 29th 2013


A recent Jewish Telegraphic Agency (JTA) news brief quoted Christine Quinn’s campaign as saying she “believes the West Bank is a disputed territory and that the Israelis and Palestinians must sit down and negotiate a solution.”

According to the JTA, “Quinn’s position runs counter to that of the U.S. government, which considers the West Bank Israeli-occupied territory.” Actually, Quinn was restating a long-held U.S. position. If the status of territories weren’t legitimately disputed, there would be nothing to negotiate.

No Arab entity held clear title and exercised peaceful sovereignty over the territory prior to the 1967 Six-Day War. If one had, Israel’s conquest would have been an act of aggression and it would have been obligated to clear out decades ago. Read more ..

Broken Banking

Mortgage Lender Owned by Dole Foods Magnate Accused by CFPB of Abusive Practices

July 28th 2013

Home Foreclosure

As the financial overhaul known as the Dodd-Frank Act turns three this week, the law’s most controversial creation, the Consumer Financial Protection Bureau, is for the first time cracking down on mortgage lenders for encouraging loan officers to put borrowers in high-cost loans.

The agency filed a federal lawsuit Tuesday against Castle & Cooke Mortgage LLC and its president, an accomplished rodeo performer who professes to be “a big fan” of new rules aimed at helping consumers.

It’s the first time the new consumer cop — a creation of Dodd-Frank that drew sharp opposition from the financial industry — has taken action against the practice, which was pervasive in the years leading up to the housing meltdown and then banned under Dodd-Frank.

Castle & Cooke, based in Utah, is a privately held, non-bank lender of the sort that largely escaped the federal government’s scrutiny before the financial crisis focused attention on abusive lending. Its president, Matthew Pineda, founded it in 2005 for eccentric fruit billionaire David Murdock. (Murdock owns Castle & Cooke, Dole Food Company Inc. and collections of “animals, orchids, Chippendale mirrors and Czechoslovakian chandeliers.” He is the 190th-richest person in America on the latest Forbes list.) Read more ..

Egypt's Second Revolution

Facing One's Demons: The Egyptian Military and the Brotherhood at a Crossroads

July 27th 2013

Security Forces Riot Gear

Events in Cairo have all the hallmarks of a return to the repression under ousted President Hosni Mubarak that prompted millions of Egyptians two years ago to camp out on Cairo's Tahrir Square for 18 days until the military forced him to step down after 30 years in office. Little in the unfolding drama in Egypt genuinely responds to the demands put forward by the protesters two years ago: an end to the police state, greater political freedom, respect for human rights, an end to corruption, and justice and dignity. Is Egypt going to change? Or is this a return to Mubarak-style politics?

Egypt was seemingly united two years ago when Mubarak was ousted. There were no mass demonstrations against the ousting of the president. This time round, the Muslim Brotherhood's mass protests against the removal of President Mohammed Morsi, post-revolt Egypt's first democratically elected leader, complicates things for the military that sees itself as the guarantor of the state. Read more ..

The Battle for Syria

Is Syria Finished?

July 26th 2013

Bomb Damage

What was supposed to be the Syrian phase of the so-called “Arab Spring” has evolved into one of the greatest tragedies of the 21st century.

The once-peaceful opposition to Syrian President Bashar al-Assad’s deeply entrenched and powerful Ba’ath Party regime has escalated into armed resistance and, finally, a brutal civil war – one that has now claimed close to 100,000 lives. This escalation poses a serious threat, not just to Syria’s neighbors, but – given the existence of chemical weapons in Syria – to the international community as well.

The United States, like other nations supportive of the Syrian opposition, has chosen to act, but to do so primarily through diplomatic and economic means. Its hesitancy to take more direct action is understandable given the fractious nature of the opposition, but the cost of failing to influence the balance of power between the opposition and the Syrian regime could be high. Read more ..

After the Arab Spring

The Resurgence of the Regimes in the Arab World

July 24th 2013

Jump at Cops

The toppling of the Muslim Brotherhood power in Egypt by the army is an event of historic importance. It is important chiefly because it represents an enormous setback in a process which only a few months ago looked inexorable and unstoppable. That process was the replacement of the military-republic regimes in the Arab world by new regimes based on Sunni Islamism, with franchises of the Muslim Brotherhood most prominent among them.

The setback suffered by the Muslim Brotherhood in Egypt was preceded by an earlier rallying of one of their chief enemies. In the course of this year, the Assad regime in Syria succeeded in reversing rebel gains and ending the threat to Damascus.
Since then, Assad’s forces, assisted by Hizballah and advised by Iran, have been turning the Sunni Islamist rebels back in the west of the country. Read more ..

Israel and Palestine

Israeli Deputy Minister Slams Possible Involvement of New Israel Fund Figure in Peace Talks

July 23rd 2013

Jerusalem flags

Media reports that former United States Ambassador to Israel Martin Indyk has been selected by the Obama administration to lead new negotiations between Israel and the Palestinian Authority announced Friday, have elicited strong opposition, including from an Israeli deputy minister, The Algemeiner has learned.

Deputy Defense Minister Danny Danon penned a letter to Prime Minister Benjamin Netanyahu opposing a scenario whereby Indyk would take on the pivotal role in the talks, citing the veteran politician’s chairmanship at the New Israel Fund, an organization which has been criticized for supporting organizations that seek to harm the Jewish state. Read more ..

The War on Terror

Critical Distinctions Between Islam and Islamism

July 23rd 2013

Death to infidels

Since 9/11 the West has been confounded with the question whether Islam and Islamism are one and same, or if there is a critical distinction to be drawn between the two. How this question is answered has profound implications for understanding and explaining the immense convulsion seizing the Muslim world, and on how best to frame a proper response without undermining or eroding the secular and liberal democratic culture of the West.

Islamism is -- from the perspective of someone born and raised within the mainstream majority Sunni Islam -- an ideology fascistic and totalitarian in impulse and action, masquerading as religion. The proponents, advocates, activists and apologists of Islamism, irrespective of whatever guise these Islamists assume in public, are engaged in the sort of radical politics the West became acquainted with in the early decades of the twentieth century with the rise of Communism, Fascism and Nazism. Read more ..

Iran's Nukes

Courts Unravel Sanctions on Iran

July 22nd 2013

Iran Nuclear Equipment centrifuges

Supporting sanctions against Iran is understood to be a position designed to moderate Iranian behavior regarding the acquisition of nuclear capability. It is the position of people and countries that do not want to contemplate military action by either the United States or Israel. It is the position of the European Union, the UN, Congress, the U.S. President, and Israel. As such, giving sanctions as much backbone as possible seemed an unassailable position -- until Iranians began to sue in European courts to see the evidence against them. In a pattern of behavior disconnected from the possibility that they are aiding the Islamic Republic 's nuclear programs, European courts are obliging them.

If Iran's acquisition of nuclear technology is a legal problem, the theory is, Iran has the same rights in Western courts as an accountant accused of stealing from the firm. But if, as many believe, Iran is planning to acquire nuclear weapons for the war in which it claims it will engage with Israel and the West, its use of the Western legal system is Lawfare (coined by Maj. Gen. Charles Dunlap; meaning "the use of the law as a weapon of war"). The Lawfare Project defines it as, "The abuse of Western laws and judicial systems to achieve strategic military or political ends." Those ends appear to include using Western companies as a conduit for technology and financing. Read more ..

Drug Trafficking on Edge

A State-building Approach to the Drug Trade Problem

July 21st 2013

Drug War


The Growing Dissensus on How to Combat Drug Trafficking.
The United Nations Security Council has increasingly highlighted organized crime, particularly drug trafficking, as requiring the coordinated focus of various United Nations bodies and the Secretary-General.

The escalation of drug trade-related violence in Mexico and Central America where inadequate rule of law institutions have been overwhelmed by intense organized crime; the emergence of drug smuggling in West Africa, which contributes to its cauldron of other illegal economies and poor governance; and the deep penetration of drug trafficking into the political and economic life in Afghanistan and Pakistan have all captured policy attention.

Yet many existing policies to combat the illegal drug trade and associated organized crime have not been highly effective. Premature eradication of drug crops, interdiction too narrowly preoccupied with stopping illicit flows, and imprisonment of drug users have proven to be ineffective and even outright detrimental to key policy objectives, such as weakening criminal organizations and their linkages to militant groups, improving security and rule of law and reducing consumption. These policies have also often been counter productive with respect to other important goals, such as mitigating violent conflict, fostering good governance and promoting human rights. Read more ..

Israel on Edge

Israel Sets New Military Priorities Amid Budget Cuts

July 19th 2013

IDF tanks

Confronted with a staggering $11.2 billion budget deficit, the Israeli government passed a new budget earlier this year with sweeping spending cuts in a nearly unanimous vote. Israel's military is facing a significant transformation in the wake of the budget shortfall at home and the Middle East's changing security challenges.

The most ambitious reform since the 1990s, the five-year plan to reduce the military budget by approximately $830 million entails extensive monetary and personnel cuts to the ground, air, and naval forces. Even with the reductions, balancing the budget is still far from achieved; the Israeli army is projected to retain a $5.6 billion deficit. New fiscal priorities will mean less procurement of tanks, but an increase in intelligence gathering and cyber warfare capabilities. Israeli Defense Forces (IDF) Chief of Staff Benny Gantz said he is "not happy about the cuts," but that "We'll see the rewards in two to four years. Our forces might be diminished but will be stronger and better equipped." Read more ..

Broken Economy

Strengthening Employment Pathways to Prosperous Careers

July 18th 2013

Employee applications

Persistently high unemployment rates among Americans aged 18 to 24 reveal a generational divide in workers’ access to employment opportunities and, by extension, economic prosperity.

At the same time, employers throughout the country—particularly those in production-intensive industries—consistently report that they are unable to find workers possessing the skills that their firms need as something of a “manufacturing renaissance” begins.

Together these realities suggest that the educational and employment training systems currently in place in U.S. states and regions must evolve if they are to meet the task of preparing workers for success in the years ahead.

How might they begin to do that? This past October the Brookings / Living Cities State and Metropolitan Prosperity Collaborative —an 18-month old peer learning forum for top state and local leaders—brought together senior economic development and workforce officials from 14 states to explore the question. With promising case studies from the state of Kansas, the Wichita region, Washington state, and the Seattle-King County region  before them, the attendees spent the better part of two days exploring how to better attune educational and training pathways to private-sector needs. Read more ..

After the Arab Spring

Mideastern Nations Don't Need Any More Islam than They Already Have

July 16th 2013


During the decades when Egypt’s Muslim Brotherhood was a barely tolerated opposition party, it campaigned against the reigning secular autocrats under the banner “Islam is the solution.”

With the military’s removal on July 3 of the Brotherhood president, Mohamed Morsi, the region’s oldest exemplar of political Islam has lost its best and perhaps only chance to validate that slogan. Indeed, the rise and abrupt fall of the Morsi presidency are a timely comeuppance for a world view that, starting with Iran’s 1979 revolution, seemed to be gaining adherents throughout the Muslim world.

Political Islam has had a long arc, reviving in the modern era with the founding of the Brotherhood by Hassan al Banna in 1928 in opposition to a monarchy largely controlled by Western interests. Over the decades, monarchs and military-run governments of assorted Arab nationalist, socialist and capitalist hues have suppressed the Brotherhood and its various offshoots. Then came spring 2011. Read more ..

Broken Banking

The 21st-Century Glass-Steagall Act

July 15th 2013

JP Morgan Chase

Hollywood knows nostalgia sells. That’s why cineplexes are stuffed with sequels, remakes, and reimagined versions of 1960s TV shows. But can Washington use nostalgia to break up America’s megabanks? Senators John McCain and Elizabeth Warren are giving it a shot. The Arizona Republican and Massachusetts Democrat last week unveiled their “21st-Century Glass-Steagall Act,” which would restore the barrier between commercial banking and investment banking first established by the Banking Act of 1933. That prohibition, known as the Glass-Steagall “wall” after congressional sponsors Senator Carter Glass of Virginia and Representative Henry Steagall of Alabama, was repealed by the Financial Services Modernization Act of 1999, legislation signed by President Bill Clinton.

McCain and Warren, through both the title and substance of the bill, are playing off the widespread public belief that the repeal of Glass-Steagall was a monumental mistake, effectively ending seven decades of financial calm and contributing greatly to the Great Recession and Financial Crisis. So it follows, at least according to McCain and Warren, that bringing back Glass-Steagall would go a long way toward returning us to that post-Depression era of stability and finally ending Too Big to Fail.
As McCain puts it, “Since . . . shattering the wall dividing commercial banks and investment banks, a culture of dangerous greed and excessive risk-taking has taken root in the banking world.” And Warren says the bill would “make our financial system more stable and secure, and protect American families.” Read more ..

America on Edge

Young, Violent and Aggressive in America's Murder Capital

July 15th 2013

Click to select Image

They're young. They've been injured in an assault – so badly they went to the emergency room. And nearly one in four of them has a gun, probably an illegal one. What happens next?

A new study by the University of Michigan Injury Center provides data that could be important to breaking the cycle of gun violence that kills more teens and young adults than anything except auto accidents.

In the new issue of the journal Pediatrics, the team from the U-M Injury Center reports data from interviews with 689 teens and young adults who came to an emergency department in Flint, Mich. for treatment of injuries from an assault.

In all, 23 percent of the patients reported they owned or carried a gun in the last six months – and more than 80 percent of those guns were obtained illegally. Of those with guns, 22 percent said it was a highly lethal automatic or semiautomatic weapon. The study excluded guns used for recreational hunting and target practice. Read more ..

Egypt's Second Revolution

Tehran's Take On Egypt's Revolutionary Coup

July 14th 2013

Egypt Protests

Iranians have been following the dramatic denouement of the Egyptian revolution with keen interest. Although Tehran ranks as merely an ancillary actor in the Egyptian drama, recent events have highlighted the profound – if imperfect – historical resonance in each state’s revolutionary upheaval. That historical perspective informs Iran’s view of events in Egypt, and compounds the impetus for circumspection that can be discerned in its leadership’s recent behavior.

Viewing the world through the lens of Iran is a tricky business. It can be tempting to make too much of the Iranian place in the world or to impose a preferred narrative as the overarching interpretation of all its actions and rhetoric. In Washington, Iran is perpetually judged as either emboldened or on the run – almost never anything in between. On Egypt today, as I’ll argue below, neither extreme is quite correct. Read more ..

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