Business in Europe's Leading Maritime City
By Ralph Benko
“Forget it, Jake. It’s Chinatown.” Donald Trump continues to dominate and fascinate. Why? Politics, like comic books, thrillers, detective stories, science fiction, professional wrestling, movies and TV is a pulp medium. We Credentialed Members Of The Media Elite wish to sanctify it (and, thereby, ourselves). But come on. Continue reading “Politics Noir: Donald Trump, Chinatown, Breaking Bad, House Of Cards”
By Ralph Benko
While the Mass Media has been obsessing on the Donald Trump phenomenon, Bernie Sanders has been packing stadiums. Sanders’s Madison speech pulled in nearly twice as many as Mrs. Clinton’s official campaign kickoff event (which The Atlantic dubbed “uninspiring”). Mrs. Clinton’s relaunches and presentations continue to draw tepid reviews. The Sanders phenomenon, so reminiscent of 2008, must make Hillary Clinton nervous. It should. Bernie’s stump speech is a thing of beauty. That said, it is not a joy forever. Continue reading “As Bernie Sanders Dismantles Hillary Clinton Let The GOP Discover Human Capitalism”
By George Friedman
In my “Net Assessment of the World,” I argued that four major segments of the European and Asian landmass were in crisis: Europe, Russia, the Middle East (from the Levant to Iran) and China. Each crisis was different; each was at a different stage of development. Collectively the crises threatened to destabilize the Eurasian landmass, the Eastern Hemisphere, and potentially generate a global crisis. They do not have to merge into a single crisis to be dangerous. Four simultaneous crises in the center of humanity’s geopolitical gravity would be destabilizing by itself. However, if they began to merge and interact, the risks would multiply. Containing each crisis by itself would be a daunting task. Managing crises that were interlocked would press the limits of manageability and even push beyond. Continue reading “The Turkish Enigma”
By Ralph Benko
What if the gold standard is not an antique but, rather, a “timeless classic” (as termed in a speech by Bundesbank President Jens Weidmann in September 2012)? High tech guru George Gilder deploys cutting-edge science to show why this is so, based on Shannon information theory. Gilder’s analysis is neither eccentric nor anomalous. The intellectual pedigree of the classical gold standard runs through two of the greatest scientists in history: Continue reading “High Tech Guru George Gilder Demolishes A Critical Myth About The Gold Standard”
By George Friedman
A desperate battle was fought last week. It pitted Germany and Greece against each other. Each country had everything at stake. Based on the deal that was agreed to, Germany forced a Greek capitulation. But it is far from clear that Greece can allow the agreement reached to be implemented, or that it has the national political will to do so. It is also not clear what its options are, especially given that the Greek people had backed Germany into a corner, where its only choice was to risk everything. It was not a good place for Greece to put the Germans. They struck back with vengeance. Continue reading “An Empire Strikes Back: Germany and the Greek Crisis”
by Ralph Benko
The Revelation: “All we want,” said Kudlow, “is for everybody to get richer.” Therein hangs a tale. And therein, perhaps, hangs the outcome of a presidential race. The Republican Party (much to the astonishment of practically everyone) is composed exclusively of … people. It thus is subject to human nature. It is undeniable that a significant part of the Republican voter base is made up of rich (or at least affluent) people. Rich people (except in California, a parallel universe) vote Republican. So, naturally, Republicans love rich people. And hate the poor. Nothing personal. Poor people vote Democratic. Continue reading “Reagan Economist Larry Kudlow Reveals The Republicans’ Secret Agenda”
By George Friedman
The Greek situation — having perhaps outlived the term “crisis,” now that it has taken so long to unfold — appears to have finally reached its terminal point. This is, of course, an illusion: It has been at its terminal point for a long time. The terminal point is the juncture where neither the Greeks nor the Germans can make any more concessions. In Greece itself, the terminal point is long past. Unemployment is at 26 percent, and more than 50 percent of youths under 25 are unemployed. Slashed wages, particularly in the state sector, affecting professions including physicians and engineers, have led to massive underemployment. Meanwhile, most new economic activity is occurring in the untaxable illegal markets. The Greeks owe money to EU institutions and the International Monetary Fund, all of which acquired bad Greek debts from banks that initially lent funds to Greece in order to stabilize its banking sector. No one ever really thought the Greeks could pay back these loans.
By Ralph Benko
Last month the GOP suddenly awoke. As Michael Tomasky wrote in the March 19 issue of the New York Review of Books:
As matters are shaping up so far, the sense of many people I speak to is that the election appears destined to be about the condition of the middle class, the issue of wage stagnation, and the recognition (finally) that the American economy has been working far better for those at the top than for those in the middle or, obviously, on the bottom.
Tomasky is dead right. Those of us committed to equitable prosperity have been impatiently waiting for the GOP to seize on (and own) its destiny. At last, thanks to Bush and Paul, the GOP emerges from its lethargy. Continue reading “Jeb Bush And Rand Paul Throw The 2016 Presidential Race Into Overdrive”
by Ralph Benko
The New York Times considerately gives us an early look at the Box Canyon into which the 114th Congress, the GOP leading, is riding. In G.O.P. Is Divided as Budget Bills Start Piling Up we discover:
WASHINGTON — In their first major test of governing this year, Republicans stumbled, faltered — and nearly shut down the Department of Homeland Security.
And that vote may have been the easy one.
In April, physicians who treat Medicare patients face a drastic cut in pay. In May, the Highway Trust Fund runs dry. In June, the charter for the federal Export-Import Bank ceases to exist. Then in October, across-the-board spending cuts return, the government runs out of money — and the Treasury bumps up against its borrowing limit.
All will require congressional action, and while many of these measures used to be pushed through in an almost unthinking bipartisan ritual, there is no such thing as simple in Congress anymore.
Militant conservatives are calling for a coup against House Speaker John Boehner. The hard core right is expressing fury toward Senate Majority Leader Mitch McConnell. The real villain, however, is an economic “ice age,” not feckless Congressional leadership. Continue reading “John Boehner, Mitch McConnell, And The Congress Ride Into A Box Canyon….”
By George Friedman
Last week, a coalition of predominantly Sunni Arab countries, primarily from the Arabian Peninsula and organized by Saudi Arabia, launched airstrikes in Yemen that have continued into this week. The airstrikes target Yemeni al-Houthis, a Shiite sect supported by Iran, and their Sunni partners, which include the majority of military forces loyal to former President Ali Abdullah Saleh. What made the strikes particularly interesting was what was lacking: U.S. aircraft. Although the United States provided intelligence and other support, it was a coalition of Arab states that launched the extended air campaign against the al-Houthis.
Continue reading “The Middle Eastern Balance of Power Matures”
By Solange Monteiro
Rio de Janeiro city celebrates its 450th birthday this month amid questions about what permanent gifts the World Cup, Olympics, and discovery of deep-sea oil will leave for the city. Between announcements of huge investments and ambitious revitalization plans on the one hand and inflation above the national average eroding the purchasing power and optimism of both locals and visitors from other countries on the other, there are many questions about how sustainable the recovery of the economy of Rio de Janeiro is. Continue reading “Where does Rio go next?”
By Ralph Benko
The New Republic, in its February 8th issue, carries an article by Danny Vinik entitled Rand Paul Has the Most Dangerous Economic Views of Any 2016 Candidate. It appears that TNR’s fact checkers decamped along with its top journalists. Vinik:
Speaking in front of more than 150 Iowa activists, Paul ripped into the Federal Reserve and promoted his “Audit the Fed” bill, which he introduced earlier this week. “I think there needs to be some sunshine,” he said, according to reports of the event. …
Paul’s bill …would significantly damage the Fed’s independence, which exists so that politicians cannot influence the central bank for their own political purposes. In other words, “Audit the Fed” would lead legislators to interfere with monetary policy matters and put the entire economy at risk.
Continue reading “Rand Paul Draws Liberal Fire As The Left Discovers Its Inner Love Of The Fed”
By Ralph Benko
The Republican Party has an embarrassment of riches in good prospective presidential contenders for next year’s race. Thus Gov. Jeb Bush’s debut speech — on February 4th, in Detroit, the start of of his “Right To Rise” tour — took on heightened importance. Presidential campaigns are about much more than name recognition, résumé, charisma, and money. All of these matter. Yet… Continue reading “Jeb Bush Makes A Grand Supply Side Entrance”
By George Friedman
German Chancellor Angela Merkel, accompanied by French President Francois Hollande, met with Russian President Vladimir Putin on Feb. 6. Then she met with U.S. President Barack Obama on Feb. 9. The primary subject was Ukraine, but the first issue discussed at the news conference following the meeting with Obama was Greece. Greece and Ukraine are not linked in the American mind. They are linked in the German mind, because both are indicators of Germany’s new role in the world and of Germany’s discomfort with it. Continue reading “Germany Emerges”
by Ralph Benko
Rand Paul recently sat with me to share some of his views. The insights on his worldview left me persuaded that he deserves to be considered the most important public intellectual serving in the United States Senate. Time Magazine calls him “the most interesting man in American politics.” The Senate’s public intellectual chair has been vacant since the departure of Daniel Patrick Moynihan. As an M.D. rather than a Ph.D. Paul is less academic than was Moynihan. Yet Paul demonstrates a comparable wit, keen intelligence, and coherent worldview. Continue reading “Exclusive Interview With Rand Paul, Human Capitalist”
By Sim Tack
Last week, the Cuban government declared that for the United States and Cuba to normalize relations, the United States would have to return the territory occupied by a U.S. naval base at Guantanamo Bay. Washington clearly responded that returning the base is not on the table right now. This response makes sense, since quite a bit of politicking goes into the status of the base. However, the Guantanamo Bay issue highlights a notable aspect to the U.S.-Cuban negotiations — one that is rooted in the history of the U.S. ascension to superpower status as it challenged European powers in the Western Hemisphere. Continue reading “Guantanamo Bay’s Place in U.S. Strategy”
Dramatic events in the second half of 2014 transformed the scenario at the turn of the year in Brazil into a big question mark. The fierce presidential race, the deterioration of economic indicators, and allegations of corruption at state-owned oil company Petrobras heightened the already anxious expectations about 2015. Can the course of the country be corrected under the same leadership amid political tensions? Continue reading “Brazil’s 2015 economic outlook: Rebalancing will not be easy” By Ralph Benko
Washington finally shows signs of coming to grips with the importance of money to politics. This is not about mere campaign finance. Recently there was a breakthrough in bringing the money policy issue out of the shadows and to center stage … where it belongs. The real issue of money in politics is about the Fed, not the Kochs. The Fed’s political impact is orders of magnitude greater than all the billionaires’ money, bright and dark, left and right, combined. There was a real breakthrough in the discourse last week. This breakthrough deserves far more attention than it yet has received. Continue reading “The Biggest Money Player In Politics Is The Fed”
By George Friedman
For the past two weeks, I have focused on the growing fragmentation of Europe. Two weeks ago, the murders in Paris prompted me to write about the fault line between Europe and the Islamic world. Last week, I wrote about the nationalism that is rising in individual European countries after the European Central Bank was forced to allow national banks to participate in quantitative easing so European nations wouldn’t be forced to bear the debt of other nations. I am focusing on fragmentation partly because it is happening before our eyes, partly because Stratfor has been forecasting this for a long time and partly because my new book on the fragmentation of Europe — Flashpoints: The Emerging Crisis in Europe — is being released today. Continue reading “The New Drivers of Europe’s Geopolitics”
One, and only one, candidate, Barack Obama, caught the X-factor and improbably got himself nominated and elected, and re-elected, president. Another improbable candidate could catch it again. What is that X-factor? How does it upend things? Peace and personal security continued to flourish in 2014 and are likely to continue into 2015 and beyond. This is important news. It also is news the news media can ill afford to report. But voters sense it. Continue reading “The Unsung X-Factor That Could Upend The Next Presidential Election”
By George Friedman
‘Tis the season to make lists, and a list shall be made. We tend to see each year as extraordinary, and in some senses, each year is. But in a broader sense, 2014 was merely another year in a long chain of human triumph and misery. Wars have been waged, marvelous things have been invented, disease has broken out, and people have fallen in love. Nonetheless, lists are called for, and this is my list of the five most important events of 2014. Continue reading “George Friedman’s Top Five Events in 2014”
By George Friedman
Last week, U.S. President Barack Obama and Cuban President Raul Castro agreed to an exchange of prisoners being held on espionage charges. In addition, Washington and Havana agreed to hold discussions with the goal of establishing diplomatic relations between the two countries. No agreement was reached on ending the U.S. embargo on Cuba, a step that requires congressional approval. Continue reading “The Geopolitics of U.S.-Cuba Relations”
by Ralph Benko
The financial markets are on a hair trigger as to when, and how quickly, the Fed will tighten and raise interest rates. Billions of dollars will be won or lost by investors on this wager. For the rest of us, getting it right — as did Chairman Volcker and (during his first two terms), Greenspan is crucial to the creation of a climate of equitable prosperity in which jobs are created in abundance. 39 million jobs were created during the “Great Moderation.” We haven’t seen anything remotely like that since. Continue reading “The Fed War: Yellen Doctrine vs. Volcker Doctrine”
For more than three decades we have called attention in the Wall Street Journal to what we called the “reserve-currency curse.” Since some politicians and economists have recently insisted that the dollar’s official role as the world’s reserve currency is instead a great blessing, it is time to revisit the issue. Ending the greenback’s reserve-currency role will raise savings and make U.S. companies more competitive. Continue reading “How the ‘Reserve’ Dollar Harms America”
By Thais Thimoteo
If in 2013 producers and consumers split the cost of price increases evenly, in 2014 the cost of inflation has fallen squarely on the consumer. Through November 2013 12-month inflation went up to 5.6% as measured by the General Price Index 10 (IGP-10) calculated by the Brazilian Institute of Economics, Getulio Vargas Foundation (IBRE/FGV); the Producer Price Index (IPA) was 5.2% and the Consumer Price Index (IPC) 5.4%. This year, prices of farm products rose only 1.7% but the cost of the goods on supermarket shelves went up 6.6%. The difference between producer and consumer inflation lies with inflation of services, which has been stubbornly high, and adjustment of controlled prices. Continue reading “Brazil Inflation: Nowhere to go but up?”
By George Friedman
Last week I flew into Moscow, arriving at 4:30 p.m. on Dec. 8. It gets dark in Moscow around that time, and the sun doesn’t rise until about 10 a.m. at this time of the year — the so-called Black Days versus White Nights. For anyone used to life closer to the equator, this is unsettling. It is the first sign that you are not only in a foreign country, which I am used to, but also in a foreign environment. Yet as we drove toward downtown Moscow, well over an hour away, the traffic, the road work, were all commonplace. Moscow has three airports, and we flew into the farthest one from downtown, Domodedovo — the primary international airport. There is endless renovation going on in Moscow, and while it holds up traffic, it indicates that prosperity continues, at least in the capital. Continue reading “Viewing Russia from the inside”
by Ralph Benko
As noted in my previous column, AEI’s James Pethokoukis and National Review‘s Ramesh Ponnuru — among many others — appear to have fallen victim to what I have called the “Eichengreen Fallacy.” This refers to the demonstrably incorrect proposition that the gold standard caused the Great Depression. Pethokoukis proves exactly right in observing that “Benko is a gold-standard advocate and apparently doesn’t much like the words ‘Hitler’ or ‘Nazi’ to be in the same area code of any discussion of once again linking the dollar to the shiny yellow metal.” “Doesn’t much like” being falsely linked with Hitler? Perhaps an apology is more in order than an apologia. Continue reading “The Gold Standard Did Not Cause The Great Depression, Part 2”
By George Friedman
Twenty-five years ago, a crowd filled with an uneasy mixture of joy and rage tore down the Berlin Wall. There was joy for the end of Germany’s partition and the end of tyranny. There was rage against generations of fear. One fear was of communist oppression. The other fear was of the threat of a war, which had loomed over Europe and Germany since 1945. One fear was moral and ideological, while the other was prudential and geopolitical. As in all defining political moments, fear and rage, ideology and geopolitics, blended together in an intoxicating mix. Continue reading “What the Fall of the Wall Did Not Change”
by Ralph Benko
AEI’s James Pethokoukis and National Review’s Ramesh Ponnuru — among many others — appear to have fallen victim to what I have called “the Eichengreen Fallacy,” the demonstrably incorrect proposition that the gold standard caused the Great Depression. This fallacy is at the root of much confusion in the discourse. Continue reading “The Gold Standard Did Not Cause The Great Depression, Part 1”
By George Friedman
U.S. President Barack Obama has come under intense criticism for his foreign policy, along with many other things. This is not unprecedented. Former President George W. Bush was similarly attacked. Stratfor has always maintained that the behavior of nations has much to do with the impersonal forces driving it, and little to do with the leaders who are currently passing through office. To what extent should American presidents be held accountable for events in the world, and what should they be held accountable for? Continue reading “Principle, Rigor and Execution Matter in U.S. Foreign Policy”
By Ralph Benko
Janet Yellen gave a widely noted speech, Perspectives on Inequality and Opportunity from the Survey of Consumer Finances, at the Conference on Economic Opportunity and Inequality held by the Federal Reserve Bank of Boston on October 17th. The speech presented as a if ghostwritten for her by Quincy Magoo, that beloved cartoon character described by Wikipedia as “a wealthy, short-statured retiree who gets into a series of comical situations as a result of his nearsightedness compounded by his stubborn refusal to admit the problem.” What was most interesting was how political was the speech… and what Madame Yellen didn’t say. Continue reading “Janet Yellen, Politicizing the Fed?”
By George Friedman
I returned last weekend from a monthlong trip to both East Asia and Europe. I discovered three things: First, the Europeans were obsessed with Germany and concerned about Russia. Second, the Asians were obsessed with China and concerned about Japan. Third, visiting seven countries from the Pacific to the Atlantic in 29 days brings you to a unique state of consciousness, in which the only color is gray and knowing the number of your hotel room in your current city, as opposed to the one two cities ago, is an achievement. Continue reading “The Similarities Between Germany and China”
By Adriano Bosoni and Mark Fleming-Williams
The European Court of Justice announced Sept. 22 that hearings in the case against the European Central Bank’s (ECB) bond-buying scheme known as Outright Monetary Transactions (OMT) will begin Oct. 14. Though the process is likely to be lengthy, with a judgment not due until mid-2015, the ruling will have serious implications for Germany’s relationship with the rest of the eurozone. The timing could hardly be worse, coming as an anti-euro party has recently been making strides in the German political scene, steadily undermining the government’s room for maneuver. Continue reading “Germany Fights on Two Fronts to Preserve Eurozone”
By Ralph Benko
The Democratic Party has made “income inequality” a signature issue for the 2014 (and, presumably, 2016) election cycle. Democrats, en masse, shout “J’accuse!” at Republicans. There is a very different story to tell. “Income inequality” is a crude, and twisted, heuristic for stagnant median family income. “Income inequality” does not really resonate with voters, as noted by the Washington Post‘s own Catherine Rampell, with a mountain of evidence showing that Americans don’t begrudge the wealthy their wealth, just are frustrated at the lack of widespread economic opportunity. So let’s get down to cases. Stagnant median family income is not the GOP’s fault. It’s the Fed who done it. Continue reading “End the Fed’s War on Paychecks”
By George Friedman
The idea of Scottish independence has moved from the implausible to the very possible. Whether or not it actually happens, the idea that the union of England and Scotland, which has existed for more than 300 years, could be dissolved has enormous implications in its own right, and significant implications for Europe and even for global stability. Continue reading “The Origins and Implications of the Scottish Referendum”
By Ralph Benko
The Tax Revolt has run its course. A Money Revolt is needed. Steve Forbes, with Elizabeth Ames, in Money: How the Destruction of the Dollar Threatens the Global Economy—and What We Can Do About It has thought the issues through. So has, among others, Lewis E. Lehrman (founder and chairman of the Lehrman Institute, whose monetary policy website this columnist professionally edits) in The True Gold Standard and Money, Gold, and History. Continue reading “A Money Revolt is needed: Fix The Dollar With Gold”
By George Friedman
U.S. President Barack Obama said recently that he had no strategy as yet toward the Islamic State but that he would present a plan on Wednesday. It is important for a president to know when he has no strategy. It is not necessarily wise to announce it, as friends will be frightened and enemies delighted. A president must know what it is he does not know, and he should remain calm in pursuit of it, but there is no obligation to be honest about it. This is particularly true because, in a certain sense, Obama has a strategy, though it is not necessarily one he likes. Strategy is something that emerges from reality, while tactics might be chosen. Given the situation, the United States has an unavoidable strategy. There are options and uncertainties for employing it. Let us consider some of the things that Obama does know. Continue reading “The Virtue of Subtlety: A U.S. Strategy Against the Islamic State”
By George Friedman
The United States is, at the moment, off balance. It faces challenges in the Syria-Iraq theater as well as challenges in Ukraine. It does not have a clear response to either. It does not know what success in either theater would look like, what resources it is prepared to devote to either, nor whether the consequences of defeat would be manageable. A dilemma of this sort is not unusual for a global power. Its very breadth of interests and the extent of power create opportunities for unexpected events, and these events, particularly simultaneous challenges in different areas, create uncertainty and confusion. Continue reading “Ukraine, Iraq and a Black Sea Strategy”
by Ralph Benko
For starters, Rand is short for Randal, not an allusion to Ayn Rand, after whom Sen. Paul was not named by his libertarian (not Objectivist) father Ron Paul. Reportedly, growing up he was called Randy … until his wife shortened the diminutive to Rand. Washington, ordinarily, is committed to maintaining the status quo or making, at best, incremental changes. As we struggle with the political consequences of the end of an era of all-out war the old political status quo is ripe for transformation. Continue reading “Who is Rand Paul?”
By Robert D. Kaplan
The beheading of American journalist James Foley by the Islamic State in Syria and Iraq was much more than an altogether gruesome and tragic affair: rather, it was a very sophisticated and professional film production deliberately punctuated with powerful symbols. Foley was dressed in an orange jumpsuit reminiscent of the Muslim prisoners held by the United States at Guantanamo Bay. He made his confession forcefully, as if well rehearsed. His executioner, masked and clad in black, made an equally long statement in a calm, British accent, again, as if rehearsed. It was as if the killing was secondary to the message being sent.
