China’s Economic Growth Slows To Lowest Level Since 1990

January 20th, 2015 Comments off

China’s National Bureau of Statistics released GDP growth figures for 2014, indicating that the world’s second largest economy grew that year by 7.4 percent (http://www.stats.gov.cn/english/PressRelease/201501/t20150120_671038.html), below the planned rate of 7.5 percent but exceeding expectations of 7.2 percent. Even if the figures released by Beijing’s NBS are accurate, they reflect a continuing trend of diminishing rates of growth over the past several years, and are the lowest level of GDP growth in 24 years.

But are the official figures on China’s GDP growth believable? Many elements of China’s macroeconomic performance are shrouded in opacity. The architecture of this vast economy  is formulated from a fundamentally contradictory hybrid mix of private sector capitalism and still overwhelming and largely inefficient state controlled sector, especially in heavy industry. Much of China’s growth in the past, impressive as it seems by overall world standards, was based on massive government spending on underutilized infrastructure; the accounts of entire blocks of apartment buildings that remain unoccupied are well known. There are the dangerous property bubbles, early signs of deflation, and rising debt levels in both the public and private arenas, with growing signs of a future explosion in bad debts held by Chinese financial institutions.

Officially, China’s leadership has resorted to what they call the “new normal,” a more sustainable rate of economic growth. The reality is likely a lot more murkier and volatile than the official statistics and pronouncements would indicate.

The clear trend of diminishing rates of GDP growth in China, whether extrapolated from official figures or derived from a more nuanced assessments of China’s economic performance, are already having an effect on the entire global economy. As with the United States, the massive size of the Chinese economy means that lower GDP growth rates create a head wind for the global economy as a whole. It is therefore no surprise that the International Monetary Fund has just revised its forecast of global economic growth downward by the most substantial margin in three years, to 3.5 percent from the 3.8 percent projected only  three months ago by the IMF (http://www.imf.org/external/pubs/ft/survey/so/2015/NEW012015A.htm). This is a harbinger of what lies in store for the global economy as the formerly massive rates of Chinese economic expansion continue to recede.

 

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Barack Obama, Missing In Action

January 13th, 2015 Comments off

“Showing up is 80 percent of life.”

-Woody Allen

 

It was the non-presence that reverberated around the world. The largest demonstration to be held in the history of Paris, drawing 1.5 million participants in response to the Jihadist attacks in the French capital, was led by a phalanx of world leaders. Standing alongside French President Francois Hollande was German Chancellor Angela Merkel, UK Prime Minister David Cameron and a host of other prominent heads of state and government, representative of America’s closest and most engaged allies in the global struggle that has come to define the opening decades of the 21st century.  But not the head of state of the United States.

Neither Present Obama, nor Vice President Biden, nor Secretary of State Kerry saw fit to be present in this symbolically iconic march of unity. True, the lame duck Attorney General, Eric Holder was in Paris, ostensibly for meetings related to the recent terror attacks in the capital of America’s oldest ally. Yet, even he chose to be absent at the rally that so galvanized the rest of the world. In contrast, even Russia, at the nadir of its relationship with the European Union over the crisis in Ukraine, dispatched Foreign Minister Sergey Lavrov to participate in the rally.

The absence of Barack Obama or any other senior official from his administration on January 11 in Paris is so inexplicable, even the president’s most steadfast defenders are aghast. What rationale can possibly be proffered in defense of so counter-intuitive a non-action?

Undoubtedly, President Obama was acting on the “advice” of his senior national security team, the same clique of sages that counseled Obama to deny the Syrian opposition military assistance on the premise that they were only “pharmacists and doctors” (http://www.politifact.com/punditfact/statements/2014/sep/14/michael-hayden/former-cia-director-obama-said-syrian-opposition-w/), thus opening the way for Al-Qaeda and the Islamic State to fill the vacuum. The same gang of consigliere that suggested a swift withdrawal of American forces from Iraq simultaneous with a declaration that the war was over, ignoring the voices of those that warned of impending disaster, such as departing U.S. ambassador to Baghdad Ryan Crocker (http://www.cnn.com/2009/WORLD/meast/01/22/iraq.withdrawal/). The geniuses that devised a provocative approach towards Russia in Ukraine guaranteed to relaunch the Cold War, on the theory that the United States did not have enough adversaries  to confront in the world.

The President of the United States is not only the chief manager of the Federal government bureaucracy. He is also, since World War II, the leading world statesman. His physical presence, even symbolic, has immense impact on the global stage. When President Kennedy flew to the Western zone in Berlin in June 1963 at a time of growing Cold War tension over the future of that beleaguered outpost of freedom, he intuitively understood that importance in a manner that President Obama apparently does not. Addressing a mass rally in that city, Kennedy proclaimed “Ich bin ein Berliner!” (I am a Berliner!) Kennedy’s presence and words energized and inspired millions, and was a watershed moment during the Cold War.

How magnificent an opportunity it would have been if President Barack Obama had joined with his peers he is supposedly in alliance with in the confrontation with radical Islam, and proclaimed to the citizens of the French capital, “Je suis un Parisien! ”

Sadly, the man who was elected as the 44th President of the United States largely on the promise that he would inspire the world with his words, offered only the unseen echo of silence.

 

 

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Oil Prices Continues To Plummet

January 6th, 2015 Comments off

 

The implosion of global oil prices that dominated the last quarter of 2014 will likely set the stage for the major economic news of 2015; the economic destruction wrought by the collapse of petro-economies. With the price per barrel of oil now south of fifty dollars, the stage is set for global economic volatility.

The vast level of price destruction being witnessed globally is only good news in the very short term; lower consumer prices at the pump, and a reduction of fuel expenses for major importers and industrial users of petroleum-based fuels, such as airlines. These short-term benefits will likely be overwhelmed by the fiscal consequences enabled by the implosion of oil prices  that will be faced by economies largely dependent  on oil export income to maintain their balance sheets.

Iran, Nigeria, Venezuela and Russia are among these economies most vulnerable to the collapse in oil prices. Currently, Nicolas Maduro, President of Venezuela, is hopping the globe in a desperate attempt to save his regime from defaulting on its sovereign debt. Countries facing fiscal disaster owing to the collapse of their major source of export income may resort to desperate measures, which may in turn create collateral ripples that afflict unforeseen damage on the global economy.

 

 

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Russia Faces Severe Economic Crisis: Putin, Oil and Ukraine

December 31st, 2014 Comments off

A perfect storm has ravaged Russia’s national economy. With the price of oil imploding, the impact of its decline is inflicting devastating pain on the Russian economy. Fiscally , oil and natural gas revenues account for half of the state budget. The fall in oil prices is compounded by economic sanctions imposed by the European Union and the United States and Canada in response to President Putin’s aggressive polices vis a vis Ukraine.

There is nothing Putin can do about oil prices, especially with stagnant global demand and rising domestic production in the United States due to advances in shale extraction technology. However, he could mitigate the economic crisis through a more restrained policy on Ukraine. I doubt that will happen; it appears that in Russia, as with many other countries, nationalism trumps rational economic considerations.

It appears that bleak times are ahead for Moscow, and Russia’s nascent middle class. Just in the past 24 hours, the ruble dropped in value another five percent, all this in the wake of its earlier freefall when oil prices began to plummet. The erratic actions by Russia’s central bank only point to the inability by Russia’s rulers to arrest what will likely be a long-term period of economic recession and stagnation.

 

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Oil Prices Continue To Contract As OPEC Maintains Production Levels

December 10th, 2014 Comments off

Since mid-June the price per barrel of petroleum has collapsed by a staggering 37 percent. This almost perfectly  mirrors–in reverse- -the steep rise in oil prices  in mid-2008, which was followed by an equally sharp contraction when the Great Recession–the onset of the global economic and financial crisis–struck with full fury.

Only a few years ago, the talk in global investment circles was about the phenomenon of Peak Oil.  However, several factors have converged to precipitate the collapse of oil prices. Not only has the continued slump in the Eurozone  softened global demand for petroleum exports; the production of shale-derived oil in the United States, enabled by cost-effective technological breakthroughs in extraction, has greatly increased the global supply of oil, while dampening demand in the U.S. for oil imports. Furthermore, China’s growing appetite for imported oil has been at least partially retarded by lower rates of economic growth. In addition, OPEC has failed to cut global production, thus maintaining high global output of oil.

Oil remains a volatile commodity. A new crisis in the Middle East, particularly with Iran, could easily spike oil prices. However, if the economic forces that have propelled the downward  pressure on petroleum prices prove stable, the result could very well be fiscal calamity for several oil-dependent economies, particularly those of Venezuela and Iran, and to a slightly lesser degree Russia. Left uncertain is the long-term impact of shale oil extraction in the United States, which requires prices above the cost of extraction, currently in the mid-forty dollars per barrel range, to remain economically viable. With the current per barrel price of oil below 70 dollars, it is not inconceivable that further declines may place the booming shale oil industry in the U.S. in a serious quandary.

The current collapse of oil prices, combined with other negative economic trends, opens up long-term implications that will further upset the already fragile state of the global economy. The short-term befits of lower prices at the gas pump will be likely offset by the worldwide ramifications of shrinking fiscal resources for major oil-exporting emerging economies, which may place financial institutions and investment firms at risk that are highly exposed to debt by sovereigns that are highly reliant on oil exports.

 

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President Obama Fires Secretary of Defense Hagel: Barack Obama and the Audacity of Failure

November 25th, 2014 Comments off

It is often remarked that the Ship of State  is the one ship which leaks from the top. Thus even before the blatantly theatrical political funeral dirge conducted at the White House in which President Obama announced that Secretary of Defense Chuck Hagel, the sole remaining Republican in his cabinet, would  be leaving of his own accord after serving only 22 months, the usual “unnamed senior sources” representing the administration were already telling their media contacts that Hagel was, in effect, fired.

The New York Times reported that  “officials characterized the decision as a recognition that the threat from the militant group Islamic State will require different skills from those that Mr. Hagel…was brought in to employ.” (http://www.nytimes.com/2014/11/25/us/hagel-said-to-be-stepping-down-as-defense-chief-under-pressure.html?_r=0) The implication was that Hagel was a timid man, originally brought in to implement Obama’s stated policy of withdrawing from first Iraq and then Afghanistan, while downsizing  the Defense Department. With the emergence of the Islamic State in Iraq and Syria, a new policy was called for, and a new defense secretary, the unnamed White House source proclaimed, one more muscular and forceful in confronting the Islamic State.

While the passage of time will undoubtedly provide more leaks, perhaps a book of memoirs by Chuck Hagel and further context, this much is clear; President Barack Obama’s national security strategy in relation to Islamist threats stemming from the Middle East, in particular the Islamic State, has been an unmitigated disaster, and soon-to-be former Secretary of Defense Chuck Hagel, a Vietnam combat veteran and moderate Republican with a strong streak of bipartisanship, has been set up as a scapegoat for the administration’s failures.

What we do know for sure is what both the President and his Defense Secretary had stated on the public record in connection with the Islamic State, also, known  as ISIS, and which President Obama insists on calling ISIL.

In January 2014 Obama told David Remnick of The New Yorker, after Islamist forces in Iraq seized Fallujah and raised the Al-Qaeda flag,  “The analogy we use around here sometimes, and I think is accurate, is if a jayvee team puts on Lakers uniforms that doesn’t make them Kobe Bryant.”  (http://www.newyorker.com/magazine/annals-of-the-presidency)

In contrast, Chuck Hagel had this to say about the Islamic State at a Pentagon press briefing conducted on August 21, 2014:  “They are an imminent threat to every interest we have, whether it’s in Iraq or anywhere else… They are beyond just a terrorist group. They marry ideology, a sophistication of military prowess. They are tremendously well-funded. This is beyond anything we’ve seen.” (http://www.reuters.com/article/2014/08/21/us-usa-islamicstate-idUSKBN0GL24V20140821)

While the President was initially dismissive of the Islamic State, and has remained tentative and uncertain in his at times awkward responses, Hagel was far from the passive and timid defense secretary he is now being portrayed as by the masters of spin in the White House. His very forceful and articulate warning displays an impressive level of sober realism that is sorely lacking within the President’s national security council, and from Obama himself.

Turning Chuck Hagel into a scapegoat cannot obfuscate the glaring failures cascading out of the ruins of the administration’s inept foreign policy and national security strategy. Obama is a president who loudly proclaims red lines in the sand, such as use of chemical warfare agents by the Syrian regime, and when President Bashar al-Assad defied those red lines with a grotesque massacre of innocents in the Damascus suburb of Ghouta, Obama grasped onto the flimsy straw tossed at him by Russia’s President Putin, rendering his red line invisible. His is an administration which sends presidential letters proclaiming friendship to the tyrannical “Supreme Leader” of Iran, who almost daily dishes out hatred and contempt for America, while permitting–perhaps encouraging–a senior unnamed official to tell journalist Jeff Goldberg of The Atlantic that Israel’s Prime Minster Netanyahu was, in effect, a fool for trusting President Obama’s pledges on preventing Iran from acquiring a nuclear weapon, because what the administration really sought was to delay an Israeli military operation until the Iranian nuclear program progressed to the point where it was beyond the capacity of the Israel Defense Forces to take it out. (http://www.theatlantic.com/international/archive/2014/10/the-crisis-in-us-israel-relations-is-officially-here/382031/) No wonder few world leaders maintain trust in the President’s word and integrity.

Beyond the Middle East, President Obama has “engineered” the radical deconstruction of Russia-U.S. relations. It must be recognized that the President himself bears a major responsibility for the deterioration in ties between Moscow and Washington. In previous blog pieces, I have pointed out what I believe have been President Putin’s miscalculations. But why did the President send CIA  Director John Brennan to Kiev at a sensitive point in the emerging Ukrainian-Russia crisis? Not only did the administration engage in needlessly provocative acts that exacerbated the crisis over Ukraine; President Obama has given evidence that he harbors deep contempt-as well as profound ignorance-towards Russia. In an interview with The Economist conducted aboard Air Force One in August 2014 the President proclaimed boldly, “Russia doesn’t make anything.” (http://www.economist.com/blogs/democracyinamerica/2014/08/economist-interviews-barack-obama-2) Perhaps the President is unaware that America’s Atlas V rockets, the vehicle used by the Defense Department to launch U.S. spy satellites into orbit utilize the RD-180 rocket engine in their first stage–and this component is not made in America, but in Russia, the land Barack Obama believes  “doesn’t make anything.”

Like the good soldier he is, Chuck Hagel stood stoically and with his dignity intact, beside President Obama and Vice President Biden in the White House’s State Dining Room, as his thinly-disguised termination was being ceremoniously performed. In time, just as with his predecessors Leon Panetta and Robert Gates, he may pen a tell-all book of memoirs, highly critical of the President. However, we need not wait for a future book to conclude that it is the President and his tightly-knit national security team–a clique which largely excluded and isolated Chuck Hagel– and not the fired defense secretary–who bear the historical responsibility for a record of disastrous decision-making.

In 2008, candidate-for-president Barack Obama proclaimed the audacity of hope in a time of despair, and wrote a very thoughtful and sensible op-ed piece in The New York Times, entitled “My Plan For Iraq,”  in which Obama advocated the retention of a residual military force in Iraq and warned that,  “we must be as careful getting out of Iraq as we were careless getting in. ” ( http://www.nytimes.com/2008/07/14/opinion/14obama.html?_r=0)

As with so much else connected with President Obama and national security, he has acted contrary to his past words and proclaimed intentions. There is no longer hope; the despair remains. Amid  the debris of a ruined national security strategy, we are left with the audacity of failure, glaring and unhidden, in spite of the best efforts at scapegoating Chuck Hagel.

 

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Japan Officially Back In Recession

November 19th, 2014 Comments off

Tokyo’s release of data for Q3 indicated an economic contraction of 1.6 percent. This was unexpected;  after the previous quarter revealed a massive contraction of 7 percent, economists predicted a rebound back into positive GDP growth of at least 2 percent. Instead, Japan’s economy has incurred two consecutive quarters of negative GDP growth, thus meeting the technical definition of an economic recession.

Japan’s Prime Minster, Shinzo Abe, was supposed to have engineered a recovery from Japan’s two decades of stagnation and recessions through his economic policies, dubbed Abenomics.  Yet, after massive monetary intervention by the Bank of Japan, significant deficit spending and the trashing of Japan’s currency, the Yen, the end result is another recession.

Japan’s recession has led to the calling of new elections in Japan. The repercussions of the recession are not only political. Abenomics was supposed to put Japan back on the path to economic growth, allowing Tokyo to raise sale tax rates so as to begin coping with the nation’s massive structural deficit. With Japan now in recession, any policy measures designed to tackle the nation’s acute fiscal challenges have likely been placed on the back burner indefinitely.

 

 

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Twenty-Four European Banks Fail EBA Stress Test: Is a Major Banking Crisis Looming?

October 27th, 2014 Comments off

The European Banking Authority, in conjunction with the European Central Bank, conducted a stress test of 123 leading banks within the European Union. A total of 24 banks failed the stress tests, which gauges the ability of a bank located within the EU to withstand macroeconomic pressures, which are rapidly accumulating not only in Europe but throughout the global economy. This represents a full 20 percent of all the major banks subjected to the stress test by the EBA and ECB. (http://www.eba.europa.eu/documents/10180/669262/2014+EU-wide+ST-aggregate+results.pdf)

Nine of the banks with failing grades are Italian; three are Greek and another three are Cypriote. Though only one of the banks  on the list of vulnerable banks is Irish (Ireland had previously been afflicted with a major banking crisis, requiring a massive bailout), that institution, Permanent TSB, is one of Ireland’s largest financial institutions. Permanent TSB was found to have a massive €854.8 million hole in its reserves. Overall, the EBA found that the banks surveyed in the stress test were short of 24.6 billion euros in capital reserves–the amount required in their modeling to withstand a three-year recession. This is the equivalent  of 31.17 billion U.S. dollars at current exchange levels.

Since the global economy imploded into systemic crisis in 2008, central banks and regulating authorities in major economies throughout North America and Europe have held periodic stress tests, apparently in an effort to reassure the public in those countries that their banks are in generally good financial condition. There is a suspicion among many that those stress tests are often rigged in a manner designed to present the most favorable indication possible regarding those banking institutions. The fact that this most recent stress tests undertaken by the EBA reveals that 20 percent of the European Union’s major banks are in trouble, and this at a time of economic stagnation throughout Europe, with increasing indications of looming recession, should serve as a warning klaxon on how fragile Europe’s financial health remains a full six years after the onset of the global economic and financial crisis.

 

 

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Global Economy Shows Increasing Signs of Fragility: From Wall Street to Berlin, the Warning Lights are Flashing

October 10th, 2014 Comments off

In the past few days the equity markets, in particular the Dow Jones index, have displayed wild gyrations. One day stocks fall sharply, followed by a near equal climb the following day, only to shortly afterwards swing down sharply again. The sentiment-driven swings on the world’s bourses display extreme nervousness  by investors. Increasingly, they are beginning to catch on that the “recovery” was no secular recovery following the  global economic and financial crisis of 2008, but a short-lived stabilization. Now, reality is catching up fast.

For the past few months, there have been indications of stagnation in the world’s fourth largest economy, Germany, which has been the sole force holding together the debt-ridden Eurozone. Now comes the August figures on German exports: a decline of 5.8 percent (http://www.dw.de/german-exports-take-a-deep-dive-in-august/a-17983575), the worst contraction in Germany’s critical export sector since January of 2009, at the worst point of the global economic crisis.

The German export contraction is merely a hint of what is happening globally. Trade growth is slowing, inhibiting the ability of sovereigns to finance their massive structural deficits and cope with record high levels of unemployment. The geopolitical situation is very bad and getting worse, pointing to further erosion in economic confidence. It may be that the global economy is only one major crisis away from another catastrophe, as in 2008. And the sources of that next crisis are everywhere around us: the Islamic State war in the heart of the Middle East; looming tension with Iran over the nuclear issue; border tensions between India and Pakistan;  a territorial dispute in the Far East that pits China against Japan and Vietnam. Then there is the Ukraine crisis, pitting Russia against most of Europe and the United States. On top of the geopolitical flashpoints, there is now the emerging global health crisis involving the Ebola virus. Any one of these flash points can trigger a “Black Swan” event that could plunge all major economies into a severe recession.

While all those negative indicators envelope our world, central banks across the globe are giving increasing signs that sooner rather than later the policy of essentially zero-interest rates will have to be reversed, as the distorting effects  of artificially low rates cannot be maintained in perpetuity. Yet, it has been largely those low rates, in combination with the unleashing of a flood of liquidity, that are largely responsible for the limited economic growth that has occurred since 2008, along with the recovery of the world’s stock markets from their worst losses  incurred during the onset of the crisis.

The mood swings on Wall Street and elsewhere appear to be the tracing of a fiscal and economic electrocardiograph, delineating that not all is well with the global economy, and the warning signals are flashing red. Underlying and reinforcing those fears is the knowledge within the financial community that sovereigns expended so much of their capital in coping with the last worldwide economic crisis, there is little left for policymakers to react with when the next big financial and economic tsunami  strikes the global economy.

 

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President Obama Wages War on the Islamic State, aka ISIS and ISIL: Anatomy of a Disaster in the Making

October 5th, 2014 Comments off

A  full-blooded war in its early stages is now underway, involving two antagonists, the Islamic State led by Abu Bakr al-Baghdadi, known to his followers as Caliph Ibrahim, and the United States of America, led by President Barack Obama. The former, creator of the world’s first Islamic caliphate in nearly a century, is strong-willed, determined, persistent and utterly ruthless. The latter, by contrast, is a reluctant warrior, tentative, incoherent in his understanding and articulation of the threat posed by his nemesis, and prone to missteps. It is the distinction in the capacities of these two leaders far more than the relative military potential of the two opposing actors that will determine the outcome of this potentially epochal struggle. The present trajectory revealed in the leadership style and substance of the President leads me to a pessimistic assessment of this evolving military conflict . The following comprises my diagnosis of why President Obama is leading the United States towards a potentially cataclysmic outcome for his nation:

1. President Obama has consistently underestimated–and misunderstood– his opponent. Hubris is one of the most fatal afflictions that can undermine a national leader engaged in a great struggle. Unfortunately, Obama has time and again demonstrated an inability to accurately gauge his opponent’s capacity.  The intelligence failures and abject unwillingness to comprehend the emerging threat posed by al-Baghdadi and his Islamic State by the President  are already well recognized, such as his reference in January 2014 to the Islamic State as a “JV team.” Recent formulations by the President display continued misconceptions regarding the leader of the Islamic State.

In a nationally televised statement made by President Obama on September 10, 2014 he said, “ISIL is not Islamic. No religion condones the killing of innocents.” (http://www.whitehouse.gov/the-press-office/2014/09/10/statement-president-isil-1) Considering that neither the President nor his principal national security advisors are practicing Muslims, while Abu Bakr a-Baghdadi holds two advanced degrees in Islamic studies from the Islamic University of Baghdad, including a PhD, it is an astonishing display of naiveté for America’s Commander-in-Chief to engage in a contest on the relative expertise of the two leaders in the field of Islamic jurisprudence and Koranic exegesis. The brutal truth is that the Caliph of the Islamic State has the credentials and expert knowledge to base all of his military decisions on Islamic principles, and that is a defining strength of al-Baghdadi that enables him to inspire his followers to a fanatical religious devotion. The President’s ill-founded characterizations reveals a lack of ability to comprehend the glue that binds together the military prowess that defines the Islamic State. Furthermore, history repeatedly reveals that religion (and rigid secular ideologies)–not only Islam, but all three monotheistic faith traditions–have scriptures and theological precepts that can and have been used to justify the slaying of non-combatants.

By attempting to turn the conflict  that has been initiated by the Islamic State into a contest in defining the true nature of Islam, President Obama arouses contempt and ridicule from the enemy while achieving nothing on the battlefield.

 

2. The Commander-in-Chief is attempting to wage war on the cheap. One gets the impression that President Obama believes he can determine the course of a military conflict by edict. For example, he can decide to withdraw troops from one operational theatre, and declare no ground forces will be deployed to another arena, as though politically-determined polices are a substitute for careful, long-term strategic and operational decision-making. Clearly, Obama hopes to contain the Islamic State through airpower and drones, primarily American but supposedly involving a large coalition of allies.

If massive aerial bombing and the deployment of hundreds of thousands of troops could not defeat the Vietcong during the Vietnam war, what historical parallels is the President turning towards to instill confidence that airpower alone will bring the forces of the caliphate to their knees? As for the military contribution by several NATO and Arab allies, the miniscule number of combat aircraft being offered by these nations is irrelevance in the broader context of the struggle. The farcical nature of this contribution was illustrated by the British Ministry of Defense highlighting the deployment of a mere two aircraft and their subsequent destruction of a single Islamic State Toyota pickup truck as a major “triumph” on the battlefield.

To date, America’s leader and his key allies are thinking small and short-term, while the looming struggle will be massive and enduring. Conducting this warfare through minimalist means will only guarantee a far lengthier and costly struggle with the forces of the Islamic State.

3. President Obama lacks a grand strategic vision for confronting the Islamic State. The President’s external priorities have been all over the map, diluting the ability of the U.S. to comprehensively and effectively confront the challenge being posed by the Islamic State.  While al-Baghdadi was building up strength, training his cadres and formulating his strategy, America’s  foreign policy and national security agenda has been globally dispersed. Obama and his key advisors, in particular John Kerry, were simultaneously retreating from the Middle East while seeking to have the other anti-American Islamic theocracy in the region, Iran, serve as a substitute for protecting U.S. regional interest through concessions on the nuclear issue; devoting massive allocations of time and effort towards “resolving” the Palestinian-Israeli issue when  all the known facts indicated that this was at present a fool’s errand that was also a marginal factor in the continuing disarray  in the region; pivoting towards the Asia-Pacific region in  a manner that signaled that China, America’s principal financial creditor, was being viewed as a future threat; and restarting the Cold War with Russia through miscalculations and ill-advised intervention in the political turmoil in Ukraine.

If the Islamic State was an insignificant threat, perhaps the United States would have the luxury of engaging in multilateral policy endeavors that would add to Washington’s list of adversaries and estranged allies. However, in the kind of contest of wills that the Caliph has unleashed, I don’t think a wise policymaker would characterize the threat being posed as insubstantial. That being the case, a more coherent presidency would be focused on defeating the threat, and building the alliances that would maximize the ability to crush the Islamic State. Russia and China are both viewed as enemies by the Islamic State, along with the United States. Obama should be reaching out to Moscow and Beijing as potential and powerful allies in the war against the Islamic State, rather than engaging in policies that create tension in the relationship with these two counties, while diverting attention and resources away from the confrontation with the Islamic State.

4. Thus far, the President does not appear to fully recognize the nature and scope of the threat being posed to America by al-Baghdadi and his army. In essence, everything that President Obama has said and every decision he has made in connection with the Islamic State reveals that Obama views it as a phenomenon in continuity with the general “War on Terror,” which actually began prior to September 11, 2001. The very conceptualization labeled as the “War on Terror” betrays the strategic disconnect and intellectual vacuum within the decision-making apparatus in Washington. Terror, per se, is a tactical means employed by a hostile entity, and not the entity itself. Obama apparently sees the conflict as one involving a  confrontation with “terrorists” as opposed to a structured entity, the Islamic State, with an army, battlefield commanders, an effective military staff and strong leadership. Furthermore, this structured entity is clearly at war with the United States, and there is no ambiguity or lack of clarity by Abu Bakr al-Baghdadi and his leadership regarding their intentions towards the United States. This is made clear in a propaganda film released by the Islamic State, “Flames of War,” which concludes with a message from the Caliph aimed directly at the American people:

“Finally, this is a message we direct to America. Know, O defender of the cross, that a  proxy war won’t help you  in Sham [Syria] just as it didn’t help you in Iraq. As for the near future, you will be forced into a direct confrontation, with Allah’s permission, despite your reluctance. And the sons of Islam have prepared for this day, so wait and see, for we too are also going to wait and see.” (https://www.youtube.com/watch?v=0XZ3ovDxhw4&bpctr=1412479968)

The Islamic State wants the United States to once again deploy a large field army in the heart of the Arab world, and will seek to provoke President Obama to undertake what his enemy knows he is reluctant to do. How will they achieve their objective? In all probability, by launching a massive attack on American soil, at the level of September 11, 2001, at a minimum. And why do they seek the return of large ground forces from the U.S. to the Middle East? In the short term, this will aid in their recruitment. Long term, the leadership of IS are convinced that they can wear down the U.S. Army in grinding battles of attrition in urban combat, in the process crippling America militarily and economically.

A President who truly understood the threat facing the nation would not be expending time on the golf course or fundraising expeditions; he would be devoting every waking moment he has available in defending the United States from perhaps its most dangerous enemy since the Second World War.

 

If Hillary Clinton runs for President of the United States  in 2016, see the video about the book that warned back in 2008 what a second Clinton presidency would mean for the USA:

 

CLICK ON IMAGE TO VIEW VIDEO

Hillary Clinton Nude

Hillary Clinton Nude