Power & Market
Doubts Raised About Secretary Yellen’s June 1st Deadline
House Speaker Kevin McCarthy (R-CA) and President Joe Biden have nine days left to reach a spending deal before the U.S. defaults on the debt and everything falls apart… or do they? Three weeks ago, Treasury Secretary Janet Yellen announced that the so-called X-date, when the U.S. would begin to default, would be Thursday, June 1st.
As of last week, that projection was widely accepted. Speaker McCarthy told reporters he trusted Yellen: “Whatever Janet Yellen says is the date. I’m not going to argue about that.”
But this week the tune has changed. Today a handful of Republicans voiced skepticism about the accuracy of Yellen’s deadline.
Rep. Matt Gaetz (R-FL): “I don’t believe that the first of the month is the real deadline. I don’t understand why we’re not making Janet Yellen show her work.”
House Majority Leader Steve Scalise (R-LA): “We’d like to see more transparency on how they came to that date.”
Rep. Ralph Norman (R-SC): “June 1st? Everybody knows that’s false.”
In an interview on CNBC this morning, Senator Ted Cruz (R-TX) accused the Biden Administration of trying to “scaremonger” and “threaten default.”
Rep. Chip Roy (R-TX) today called the warnings of default a “manufactured crisis” to force Republicans to step back from some of their demands.
And it’s not just Republicans. Goldman Sachs says the actual deadline is likely June 8th or 9th. Morgan Stanley says June 8th. And the Congressional Budget Office (CBO) states there is an “elevated risk” of payment default in the first two weeks of June.
All this comes one day after a puff piece in Politico celebrated the “civil servants” at Treasury who stand above politics and “whose only real interest is the health of the financial system.” The evidence for this? Secretary Yellen isn’t directly involved in negotiations with Republicans.
The White House is taking a somewhat arms-length approach to how Treasury goes about its work. The two operate closely on messaging, but one White House official told [Politico] that the intention is for Treasury to be seen as having a degree of independence. It’s so Yellen’s default warnings are taken seriously and so the “X-date” — the projection of when the government can’t pay all its bills — doesn’t become politicized.
This is just the latest example of a common cliché in political media whereby some executive agency or federal department staffed primarily with unelected bureaucrats is falsely praised for being “non-political.”
Usually, this depiction is false because it equates being non-political with being non-partisan. But on many of the most important political issues of the day, the two parties are unified. Still, it’s understandable why people fall for the trick.
But here we’re talking about a member of the President’s Cabinet. That’s about as nakedly partisan as it gets.
The debt ceiling showdown is a game of chicken—what in game theory is called a hawk-dove game. The ideal outcome for each player is for the other player to yield, while the worst outcome for all is if neither yields by the time the game reaches a critical juncture—be it a head-on car collision or a debt default.
Thanks to negotiations, the debt ceiling showdown is less binary in its outcomes than two teenagers driving straight at each other. But the basic hawk-dove structure is still at play. As such, it puts one side at a serious advantage if the other side believes the critical juncture will be reached sooner than it actually will.
Is that what Yellen is doing? We can’t know for sure without seeing how Treasury arrived at a June 1st deadline and without knowing what Yellen has been telling Biden’s people behind closed doors. But, at the same time, let’s not pretend the Treasury Secretary—appointed by the President to sit on his Cabinet—is impartial to Biden’s efforts.
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What happened to the comments sections at mises.org? Unfortunately, we had to eliminate the comments, for now. The amount of spam was becoming difficult to manage, it was taking up a lot of staff time, and it was all slowing down the site quite a bit. The spam you did see what just the tip of the iceberg. However, some of our fine readers have put together a site where you can still comment on the articles, and with a lot of the same people who have contributed comments for years. Check it out: misesfans.org.
Don’t Forget the Notes to the Financial Statements!
The notes to the Fed’s Financial Statements read like a disclaimer at the end of an Rx drug commercial. However, a financial statement review would not be complete without a look at the fine print. The question is: How bad is it?
Never mind the $16 billion dollar loss that was capitalized, let’s start with the $1.2 trillion dollar loss that never happened, as Page 43 explains:
Under the column: Change in cumulative unrealized gains is the total of $1,208,223 (in millions), or $1.2 trillion, in a loss position.
It’s quite tiny but Footnote 3 above refers to the $1.2 trillion loss, as follows:
Because SOMA securities are recorded at amortized cost, the change in the cumulative unrealized gains (losses) is not reported in the Combined Statements of Operations.
This loss represents the decline in fair market value of the Fed’s US Treasuries and Mortgage-Backed Securities (debt) holdings. As a result of the increasing rates, the value of the Fed’s assets has declined dramatically. Consequently, if the Fed wanted to sell these assets today, no one would pay as much as the Fed initially paid for them, in fact they’d pay about $1.2 trillion less.
Of course, it would be next to impossible for the Fed to actually sell its entire $8 trillion portfolio since the pool of buyers is fairly small, so prospective buyers would demand a much lower price in return. This helps explain their Quantitative Tightening (QT) strategy. The Fed must slowly shrink its balance sheet by around $80 billion or so a month, as we’ve seen it do this year, in order to mitigate losses; and so, the mystery of QT is nothing more than the Fed buying time before a system failure occurs.
Since the assets are not written down to market, they remain at cost, so no loss appears on the financial statements. To be fair, so long as nothing catastrophic happens, the Fed will probably not realize the $1.2 trillion loss… conversely, it could always get worse!
The other section deserving of consideration is on Page 24, where the deferred asset (capitalized loss) of $16 billion is explained. It reads:
On a weekly basis, if earnings become less than the costs of operations, payment of dividends, and reservation of an amount necessary to maintain the aggregate surplus limitation, the Reserve Banks suspend weekly remittances to the Treasury and record a deferred asset.
The interest, administrative, and dividend costs were discussed in the review of the Statement of Operations a few days ago.
Page 24 note continues:
A deferred asset represents the shortfall in earnings from the most recent point that remittances to the Treasury were suspended. The deferred asset is the amount of net excess earnings the Reserve Banks will need to realize in the future before remittances to the Treasury resume.
As of Thursday’s release, their deferred asset stood at $50 billion.
With interest rates this high it becomes difficult to imagine when the Fed will start to have positive income and remit money to the Treasury again. It’s almost as if the Fed only makes money when it expands its balance sheet, meaning the only way out of this is to inflate the money supply. Readers will recognize that this is precisely what the Fed has been doing and until they’re stopped, expansion of the balance sheet will continue to be its long run monetary policy.
To answer the initial question: How bad is it?
The notes reveal that all is not well with the Fed, and these heavy losses can be squarely attributed to its own policy. A profitable Fed may be even more dangerous than an unprofitable Fed. Like the money supply, there is no upper limit on how much profit the Fed could make by simply flooding the world with trillions of additional dollars to buy every bond and possibly stock in sight. When the Fed eventually pursues the road to profitability via Quantitative Easing, it will come with devastating consequences.
Denying Western Provocations Risks Prolonging War in Ukraine
The war in Ukraine has become a bloody grind — and there's no end in sight.
As some Western allies express doubt that Ukraine can completely expel Russian forces, Britain, France and Germany have entertained the idea of a defense pact with Ukraine. Their hope is that the prospect of closer ties to NATO will encourage Ukraine to negotiate a peace deal with Russia. While searching for a path to negotiations is a worthwhile endeavor, recent history suggests that the proposal of a post-war defense pact could push Putin even further away from potential peace talks.
Although many in the West don’t want to admit it, it was Ukraine’s growing relationship with the West — threatening to pull the country further from Russia’s sphere of influence — that kindled the conflict in the first place. In other words, Putin’s invasion of Ukraine was not completely “unprovoked” as the media often suggests.
Eastern Europe has been increasingly tumultuous ever since the Bucharest summit in 2008 when NATO declared that Ukraine and Georgia “will become members” of the alliance. Russia’s Deputy Foreign Minister Alexander Grushko asserted that this was a “huge strategic mistake,” and President Putin called it “a direct threat” to Russian security.
Months after this declaration, a war broke out between Russia and Georgia. In 2014, the U.S. aided a coup that resulted in the ousting of Ukraine’s pro-Russian president Viktor Yanukovych, arousing Russia’s invasion and annexation of Crimea.
After the U.S. and Ukraine co-hosted military exercises with over a dozen nations in 2021, the Kremlin reiterated that NATO expansion into Ukraine is a hard red line. Despite this, weeks later the U.S. and Ukraine signed the U.S.-Ukraine Charter on Strategic Partnership, which doubled down on the 2008 Bucharest Declaration and even explicitly said Crimea is a territory of Ukraine despite being under Russian control.
In January of 2022, an agitated Russia, having amassed troops on Ukraine’s border, demanded a number of written guarantees from the U.S., including that Ukraine would never become a member of NATO. The U.S. refused. Russia invaded Ukraine less than a month later.
The West’s refusal to heed any warnings that courting Ukraine could create serious conflict played a major role in triggering this war. To be clear, this doesn't excuse Putin’s illegal invasion and the devastation that has ensued. But the media’s portrayal of the West’s supposed innocence perpetuates a false narrative.
Foreign policy expert John Mearsheimer, a professor at the University of Chicago, has written about the events leading to the war at length and argues that the West is “principally responsible for the crisis” in Ukraine. Even back in 1998, George Kennan, best known for formulating the U.S. “containment” policy during the Cold War, warned that NATO expansion was the “beginning of a new cold war” and “a tragic mistake” that would provoke adversarial reactions from Russia.
William J. Burns, the current CIA director and once U.S. ambassador to Russia, wrote to Secretary of State Condoleezza Rice in 2008 that "Ukrainian entry into NATO is the brightest of all red lines for the Russian elite (not just Russian President Vladimir Putin). In more than two-and-a-half years of conversations with key Russian players… I have yet to find anyone who views Ukraine in NATO as anything other than a direct challenge to Russian interests."
Admitting the West’s role in the lead-up to this war is necessary as Western governments seek to foster negotiations. Any approach to negotiations that fails to understand the causes of the war is likely to encourage extended Russian aggression.
This war was not solely instigated by a fanatic. Rather Russia viewed Ukraine’s gradual incorporation into the West and the prospect of further NATO expansion as a direct threat to its security.
So, while an agreement for a post-war defense pact between NATO allies and Ukraine might encourage Ukraine to negotiate, it would likely discourage Russia from engaging in conversation. Without an honest analysis of the causes of this war, the West risks pushing Putin further from negotiations and prolonging this brutal conflict.
Don’t Fall for the Fed’s Theatrics
Federal Reserve Chair Jerome Powell will testify in front of Congress on Tuesday and Wednesday this week. Politicians will use the sessions to pressure the Central Bank to adopt their party’s preferred monetary policy and as an excuse to bring up their favorite economic talking points. But these hearings also serve a larger purpose — to frame a recession as if it is possible to avoid.
Like everything in politics, events like this are all about optics. Republicans will call on the Fed to stay the course and fight “Bidenflation.” Democrats will use the meetings to signal how much they oppose unemployment and will also call on Powell to condemn the GOP for using the debt ceiling to force spending negotiations.
But Powell is also there to play the optics game. There are two fronts that he will need to navigate. First, he must make sure to not say anything of substance. Every word the Fed Chair utters or writes is poured over by investors and money managers worldwide. One slip-up or unexpected remark can send global markets spiraling.
But silence isn’t an option. The Central Bank needs to keep up an appearance of transparency. The solution, made famous by Alan Greenspan and adopted by every Fed Chair since, is to use so much jargon that one can appear to offer detailed answers while saying nothing at all—an exercise called Fedspeak.
But the other way Powell is sure to mislead the American public this week, with help from politicians of both parties, is by giving the appearance that, however unlikely, it is possible to avoid a recession.
It is not.
When the Fed slashed interest rates to rock bottom in 2020 to prop up an economy gutted by government-imposed shutdowns, the Central Bank sent a false signal to investors and entrepreneurs.
As a result, new lines of production were started that investors mistakenly believed were valued by the end consumer. These new lines of production bid resources away from other ventures that had been producing things consumers actually wanted.
So our problem is not an economy running too hot or too cold. It’s an economy that has run off course. And economies that run off course need to be corrected. Recessions are that correction.
Talking about the speed of the economy or the relationship between unemployment and inflation obscures this basic underlying reality. But it’s a reality that the Fed must deny if it wants to stick around. That’s Powell’s main job this week.
Don't Forget that Property Taxes Also Create Economic Harm
Understanding taxes is pretty simple. When the government takes a dollar away from a citizen, it makes him and society poorer. When it takes less, the opposite happens.
We have to give it more thought to understand why government pulls in more after cutting tax rates. Moreover, there are different dynamics at play depending upon whether you’re talking about taxes on income, or taxes on property.
When public coffers fill up after income tax rates are cut, it’s usually a sign of good things.
In the immediate sense, economic activity picks up because people have more in their pockets to spend. Even more so if the code is simplified. We then save more money (AND time) on preparation assistance like Turbo Tax.
It bodes even better for the long-term.
These positive actions send a signal: “this administration plans to take less from you.” It allows for more planning into the future. That results in more investing, and risk-taking by entrepreneurs.
Those are the two biggest factors that determine how much prosperity society enjoys. And when we’re more prosperous, we’re earning more. And when we’re earning more, we’re paying more taxes, even if rates were lowered.
A gusher of tax revenue might also be indicative of good things on the local level. The number of households in a jurisdiction could have grown, which would enhance the workforce. It also might be the result of new-business formation.
The governing jurisdiction could even knock a few cents off the tax rate and shield more in home values via increased exemptions.
Why though, would property taxes rise way more than the population and the number of taxable units? Inflation and rising prices. The cause of those? Poor monetary policy and the fallout from the domineering pandemic shutdowns, respectively.
The lack of support for a strong, stable dollar on the federal level has been a regrettable reality this entire century. It makes it more susceptible to weakening, which subsequently means it takes more to buy things.
It also compels investors to seek out safer returns via established assets.
Gold is usually the traditional option. The sneaker resale market arguably emerged as a new, albeit temporary way to preserve value recently. Another reliable way has always been housing, and sure enough, many home sales in the last few years have been to investors.
Enter local and state governments in the age of the coronavirus.
As long as federal ‘aid’ was flowing in (CARES, ARPA), they felt little urge to remove their boot from the neck of productive citizens and businesses. Some of those folks’ work(ed) in the home-building industry, where materials were caught up in the subsequent supply bottlenecks.
These policymakers were/are either oblivious to econ 101, or have been happy to rake in the excess cash produced by the shortages and inflated values they helped create. (The standard retort was “if it saves just one life,” never mind the horrid tradeoffs they ignored.)
But who doesn’t want to see their wealth increase, right? The problem in this case (home values) is that it’s not necessarily linked to an increase in earnings. Therefore, there’s not a corresponding rise in the ability to pay the consequential hike in our property tax bill.
That’s not a problem with our 401K investments, because the growth in their value isn’t taxable, despite the efforts of some. The only time those real investments can be taxed is when they’re sold. Not so with taxes on our homes. That bill comes due every year.
It’s reminiscent of a scene from the classic mob movie “Goodfellas”: “lose your job? Too bad; pay me. Have an expensive emergency? Boo-hoo; pay me. Paid off your mortgage? Big deal; pay me.” That’s paraphrased, but the omitted expletives apply nonetheless.
In a way, the property tax is the most egregious tax. After a day of doling out incentives to big businesses, with what they take from homeowners, local representatives roll up in their driveway, and look their neighbor straight in the eye with a pleasant greeting.
Meanwhile, their actions that day essentially said “Wanna keep being my neighbor? Pay me!”
Did Constitutionalists Gain in the Last Election?
What matters in every election is what progress has been made by constitutionalists.
Constitutionalist voters and politicians have formidable difficulty getting constitutionalists past the Republicans’ Progressives. Progressives are helped by state primary processes, party rules and practices, crony media buys, and legacy-media support.
Even so, constitutionalist voters are in the majority. And constitutionalist politicians, who would earn Conservative Review Liberty Scores of at least 80 percent pro-liberty, went into this election making up around 27 percent of elected Republicans.
The slow turnover of senates and the results of the Republican primaries each guaranteed that this election would bring little increase in liberty in the near term. But next steps were taken towards improving elections, increasing the number of constitutionalist voters, and improving the choices in constitutionalist politicians.
Progressive Incumbent Politicians
The unfolding Great Inflation II has been brewing for a long time. Since 2008, the true money supply has increased by an astounding 303 percent. This dwarfs the Great Inflation I 1960-1978 increase of 176 percent, the Financial Crisis 1995-2007 increase of 128 percent, and the Great Depression 1921-1929 increase of 62 percent.
The Great Inflation II lockdowns, and the recent covid portion of its true money supply increase, an unprecedentedly rapid 120 percent, came under much the same Republicans as now, and Trump.
Going into the Republican primaries, the future senate’s swing vote could have at-most improved from Susan Collins, who had been voting 20 percent pro-liberty, to Mitch McConnell, who had been voting 44 percent pro-liberty.
Going into this election, the current house’s Republican leadership promised far-too-little, and could be counted on to deliver even less.
Election Problems
This election brought even-more-glaring disparities between reliable polls and the vote counts recorded by election officials in numerous precincts.
A kind of natural selection is in progress. Republican state politicians are ultimately going to have to either use their constitutional powers to ensure that voting is untainted, or go extinct and get replaced by new politicians who will use their powers.
Newly Independent Voters
Various voters in the past had been Democrats but, in this election, supported Republicans.
These voters were motivated by economic factors and social policies. Even if they identify as Republicans for now, most will really function as independents, since what drives their voting is that they are economic and social refugees.
Most such refugees’ backgrounds are from cultures, whether foreign or domestic, that have long accepted bigger governments. Any economic refugee’s vote for a big-government Republican Progressive will be a temporary setback, until the refugee sees the natural consequences of this action and learns how to stop getting burned. That will happen sooner or later.
And meanwhile, many economic refugees already arrive with intuition that will help them recognize Progressives, and determination to choose constitutionalists. Constitutionalist voting is growing.
Constitutionalist Politicians
Toward the end of Trump’s time in office, Liberty Scores of at least 80 percent pro-liberty had been earned by 8 percent of that house and 6 percent of that senate. At mid-2022, these had increased to 17 percent of that house and 14 percent of that senate. Given the favorable retirements and the probable losses by some of the worst newcomers like Dr. Oz, when the dust from this election settles, we will likely see that the proportions of constitutionalists have increased further.
But keep in mind that to even block a veto override takes 33 percent of one house. To enact legislation requires 50 percent of a house and a senate, plus a willingness to stand up and be counted using constitutional simple-majority voting in a senate, plus a presidential signature, or else requires 67 percent majorities in a house and a senate.
Change toward constitutionalist governance can come much faster under Constitution-following, emotionally intelligent executives. On this score, this election brought the clearest improvement.
This election made the next president less likely Trump and more likely Ron DeSantis, Rand Paul, or Thomas Massie.
More evidence on election integrity, new independent voters, and a better future president—in a single mid-term election, constitutionalists made helpful progress on many fronts.
Democratic Hypocrisy in India
I was taught in childhood that Democracy is by the people, for the people, and of the people, maybe it was a goof by my teachers because what I have seen is Democracy has now become Buy the people, for the selective people, and off the people. Why do we like Democracy, what’s so idiosyncratic about this system that distinguishes it from other forms of the political system? Democracy gives us freedom, the system gives us rights, and it gives hope for a liberal society. Democracy is an antonym of a Totalitarian system, maybe.
In India, politicians have so much power that they can give a person a job and can also take away his job. This is Democracy in India, the leaders here are worshipped, the normal people have to respectfully greet the politician, and people can’t speak within their rights in front of any leader too, they have to speak within the ceiling set by the “people’s” leader. Above all you a common man can’t even reply anything to swear words of that person if you want to reach home alive. People beg in front of leaders for their basic requirements and they will act like they have done some favor by spending money on the people which is taken from the system! India isn’t a democracy it tries to make itself look like one. After 75 years since independence all you will see is the rallies of politicians, the divide and rule of people in name of ethnicity, snatching people’s liberty, laws applied only to common people, large assets of politicians and their money and the list can go further.
This had to happen. This will keep continuing if the system keeps giving power more and more to the government thinking that it will uplift the people. The collectivist fallacy and people still have got some hopes for improvement.
Ironically in a dictatorship, there’s one dictator; a totalitarian, but in a democracy like India we have many dictators sitting. The netas who live a luxurious life, assassinate those that go against them, abuse their subordinates, make cronies fatter, can acquire as much wealth without facing consequences, steal the liberty of people, fund gangsters, etc…. The emergency of Indira Gandhi, Meat shop bans, demonetization, reservation, tax on cryptocurrency, and more examples can be given to prove the country’s grip on authoritarianism.
To make it very clear, Democracy doesn’t guarantee individual liberty. Democracy is one of the mediums of it. The main aim is Liberty, which is the freedom, rights, and independence of citizens. People are manipulated in such a way that they are more and more dependent on authority. The authority decides our life in many ways and one can have no clue about it. Mises and Hayek rightly rejected the concept of differentiating Political Freedom and Economic Freedom because in India there is so-called Political freedom in name of Democracy which nowadays just means voting. Mises said:
But as Hayek pointed out in 1944 in his book The Road to Serfdom, economic control is not merely control of a sector of human life that can be separated from the rest; it is the control of the means for all our ends.
It’s funny when the communists of the country who are only good to show their activism on the streets and causing a disturbance in day to day life of people are seen protesting in the current system. But, what’s your solution to this problem? Increase the role of the same corrupt government? No wonder, why their influence on the country is reducing which is quite a positive development in the country. But, socialism is still regarded as moral here and capitalism means evil, coming from a country that was saved by Capitalism in 1991!
Democracy is very important to the people of the country but what they don’t understand is, Democracy is means but not ends. Democracy is means of Liberty and Democracy solely cannot grant freedom. Democracy is for Liberty, not the other way around! Something similar was said by Hayek in The Road to Serfdom:
Democracy is essentially a means, a utilitarian device for safeguarding internal peace and individual freedom. As such it is by no means infallible or certain. Nor must we forget that there has often been much more cultural and spiritual freedom under an autocratic rule than under some democracies and it is at least conceivable that under the government of a very homogeneous and doctrinaire majority democratic government might be as oppressive as the worst dictatorship.
Many intellectuals are seen criticizing the current party in power in India for becoming authoritarian but when wasn’t the system authoritarian? Privatization in present or “equality” approach in past, whether from Left or Right, the country has always been authoritarian in the truest form, no need to distinguish from one another because you all are collectivist in a Brotherly Conflict!
Diversity, Equity, and Inclusion Goals Are Illogical and Harmful
Does society really need, and can it benefit from goals designed to achieve statistical "Diversity, Equity, and Inclusion" metrics? The answer, of course, is "no" on both counts, i.e., society neither needs these goals and cannot benefit from attempting to achieve these goals. There are two illogical assumptions embedded in the DEI movement.
Illogic assumption number one: If superficial characteristics really are meaningless, then those individuals who possess these characteristics do not need goals for them to be fully included in society. For example, I am certain that a person's eye color has no bearing upon one's ability to function fully in society; therefore, there is no need for a goal to ensure that individuals with all possible eye coloring are represented on an equitable basis in whatever enterprise is being measured. The same undoubtedly is true for height, hair color, and other random characteristics of birth.
Ah, but you may say, the very fact that people with noticeable characteristics are in fact underrepresented in desirable societal classes is prima facie evidence that dark forces are at work. And here we have the crux of the matter, i.e., that government coercion is needed to defeat these dark forces.
That claim leads us to illogic assumption number two: If superficial characteristics are meaningless, then those enterprises who discriminate based upon these meaningless characteristics will fail. Those who discriminate AGAINST people with certain personal characteristics discriminate in FAVOR of lesser talented people who do not possess these characteristics. The iron rule is that discrimination always has a flip side. If an enterprise refuses to include people with brown eyes, then it must discriminate in favor of lesser talented people with blue, green, or grey eyes. Since the pool of talented people is roughly the same for brown eyed people, then very talented brown eyed people will outperform their lesser talented blue, green, and grey eyed competitors. In an open society with free entry for competition, the cream will always rise to the top.
In conclusion, discrimination based on superficial characteristics, if it really does exist, is self-correcting in a free labor market. Any perceived statistical aberrations are meaningless or there are other explanations at work. Insisting on fighting unnecessary battles are extremely harmful to society for the simple reason that there is nothing that society can do. DEI warriors will be persecuting the innocent, exactly the type of injustice they wish to stop. My advice is this: Instead of searching for dragons to slay, just mind your own business and set a good example. You will be happier, and you will accomplish more good for yourself and the society around you.
D.C.’s Dangerous Consensus: We Hate Iran!
With Republicans and Democrats in Congress having openly expressed their united opposition to the Biden administration reentering the nuclear agreement with Iran (the JCPOA), it should come as no surprise that negotiations have gone nowhere.
The reason?
Beneath all the bluster about nefarious Iranian activities in the Middle East and the back and forth over lifting the sanctions Trump’s team imposed on Tehran after unilaterally ripping up the JCPOA in the first place, Joe Biden is a wimp afraid of facing political backlash for undoing one of Trump’s worst foreign policy decisions.
Afterall, it was Biden’s own current team of Malley, Blinken, and Sullivan who worked out the nuclear deal with Iran while working for Obama.
So even though Biden has admitted Trump pulling out of the deal was a "gigantic mistake," he won’t agree to lift sanctions neocon Trump officials like Elliot Abrams admitted were only put in place to try and prevent Biden from reentering the deal in the first place.
This includes the labeling of the Iranian Revolutionary Guard Corps as a terrorist organization, which though Biden had been using it as an excuse not to get back into the deal Tehran has recently dropped it as a demand in negotiations – this while the Wall Street Journal openly reports the Israeli military and intelligence services are assassinating Iranians left and right, including inside Iran itself.
The truth, unfortunately, is that Biden lacks the courage of his convictions and is no longer serious about getting back into the deal. As a consequence, war with Iran looks increasingly likely – and over nuclear weapons our own CIA director, William Burns, says publicly the Iranians aren’t pursuing making.
Despite the fact that every U.S. intervention in the Middle East over the past twenty years, from Afghanistan, to Iraq, to Syria, to Yemen, has strengthened Iran’s position in the region, the groundwork for the next disastrous war has already been laid – building on the foundation of the Abraham Accords to bring India on board with Israel, Egypt, the UAE, and Saudi Arabia to gird for direct conflict with Iran. Speaking in Israel, Biden has already gone so far as to threaten the use of force to prevent the Iranians from getting the bomb they aren’t pursuing, but which, if they were wise, Tehran would start building as a deterrent immediately.
Apart from the pressure from our “allies” in Riyadh and Jerusalem, the former a regime so despotic Freedom House ranks it lower than China, while the latter simply needs an enemy to keep the billions in annual U.S. aid flowing, the Abraham Accords already have their own caucus in Congress, and the military industrial complex salivates at the prospect of a Middle East NATO to buy even more of their products.
Poor Iran – not so bad as to prevent Ronald Reagan selling them weapons through Israel during the 1980s, as Gareth Porter has convincingly documented, after the first Cold War ended Tehran found itself picked out as one of the new threats that would continue to justify the empire.
So as increasingly delusional screeds by walking disasters like John Bolton populate the opinion pages of the major papers and Republican and Democrats unite to bully a weak President already inclined to serve the interests of our ostensible client states, who benefits from our Iran policy is as obvious as who doesn’t: the American people.