The two essays for this week centered on the Middle East. The first pondered what the geopolitical realities might be if Israel’s promise as a significant energy exporter panned out. In a nutshell, it might mean more deference from other important powers (see: the recent visit to Israel by Vladimir Putin), less of an international focus on what goes on in the Persian Gulf, and even a possible shift in U.S.-Israeli relations. This will be an important story to watch in the coming years, and Via Meadia is on the case.The second essay used the latest anti-Semitic drivel coming out of Iran as a jumping off point for figuring out what the actual mindset of the Iranian leadership must be. We concluded that they are in the grips of a dangerous delusion as to the effectiveness of their unbending hardline stance.
This is how bold they are without a nuclear shield, confronted by a global coalition. How would their behavior change with a stunning diplomatic victory—and a bomb?
Scary stuff to think about. War may be less avoidable than most diplomats think.The other focus this week was the long-suffering world economy, which took it on the chin late this week from a dismal U.S. jobs report. The truth is, we’re in uncharted territory, and our top economists are as clueless as anyone as to what must be done. Central banks are running up against hard limits as to what they can do with monetary policy, the EU’s latest recovery plan was met with skepticism by the markets in record time, and a severe drought in the American midwest may cause a spike in corn prices just when the world needs it least. Hoped-for engines of global recovery, such as India, are facing serious structural and political challenges to growth. And to speak nothing of China, where a housing bubble is just waiting to burst (but may not quite yet).Other important stories we highlighted this week:
- Pakistan finally reopened overland routes to Afghanistan for NATO after the United States apologized for a recent strike which killed several Pakistani soldiers. In the meantime, it appeared that a “legal coup” could be brewing in Islamabad—which could have broad support from Pakistanis.
- A legal coup of sorts occurred in Romania, as the EU’s poor periphery continued to splinter and implode.
- Kevin Drum asked: Why is nothing shovel-ready any more? It’s pretty simple: Relying on the government to do more and more, while also making the government more and more accountable to oversight and review by civil society is a recipe for stagnation and failure. No amount of money will solve this intrinsic contradiction which hobbles government’s efficiency.
- It looks like onerous blue state regulations might be killing Wall Street. New York could use someone like Scott Walker, who’s getting ready to take on yet another sacred cow in Wisconsin.