Central Perk

duminică, 22 iunie 2014

Mish's Global Economic Trend Analysis

Analysis of Obama's Plan to Save the World From Greenhouse Gasses

Posted: 22 Jun 2014 01:06 PM PDT

By executive order, president Obama has acted to cut greenhouse gas emissions in the US, allegedly to halt global warming. However, greenhouse gas production is a global thing so it's important to consider global ramifications of US policy decisions.

Starting with Europe's carbon cap-and-trade, let's take a look at global events and policies to see if Obama's plan has any chance of success.

Collapse of Carbon Price Trading

Europe's cap-and-trade effort is in crisis as a Collapse in EU Carbon Price has rendered the program useless.

The EU Emissions Trading Scheme is in crisis. Yesterday, the European Parliament voted against the backloading proposal which was aimed at increasing the price of carbon permits. After the vote, the price of carbon permits dropped by about 40% to its lowest ever price of €2.63. New Energy Finance predicts that it might fall as low as €1.

Mark Whitaker (BBC): Today, European MPs vote no to a plan to boost the idea of carbon trading as the weapon to combat climate change.

Tamra Gilbertson (Carbon Trade Watch): Perhaps this can be a signal to the rest of the world that emissions trading and market-based solutions are not the solution to climate change.

Mark Whitaker: Not everyone is convinced it actually works, but the cornerstone of Europe's effort to combat climate change is something called carbon trading, which works on the idea that companies are allowed to buy permits to cover any carbon emissions they make. It's based on the principle that the polluter pays.

The trouble is, the price of carbon permits has dropped so low that there was scarcely any deterrent at all to pumping out carbon.

Today, the European Parliament voted not to intervene in the carbon permit market to prop up the price of the permits. MEPs had been invited to vote for something called backloading, that's a plan to delay the issue of any more permits in order to boost the price. It was an invitation that they declined.

Australia Plans to Scrap Carbon Tax

Bloomberg reports Australia's Abbott Revives Proposal to Scrap Carbon-Price Levy

Australia will re-introduce a bill to repeal a carbon-price mechanism brought in by the previous Labor government ahead of a power shift in the Senate, which has previously rejected the levy's removal.

Prime Minister Tony Abbott's government will take the proposed legislation to parliament today, according to an e-mailed statement from his office yesterday. The plan to scrap the levy has been stalled by opposition lawmakers in the Senate, which has the power to block and amend legislation.

The make-up of the upper house will change from July 1 when the Palmer United Party -- led by Clive Palmer -- will hold the balance of power, meaning Abbott will have to negotiate with the mining magnate to pass laws. The government has said that repealing the carbon price will still allow the world's 12th-largest economy to meet its promised 5 percent reduction in emissions by 2020.

"Scrapping the carbon tax is a vital part of this government's economic action strategy because the carbon tax is bad for jobs, it hurts families and it doesn't help the environment," Abbott said in the statement. "We'll save the typical household about A$550 ($516) a year."

"Obama-Air" Forges On Alone

In spite of the face that clean energy schemes are expensive, have been riddled with fraud, and don't work, Obama has decided to carry the global carbon torch alone.

The New York Times reports Using Executive Powers, Obama Begins His Last Big Push on Climate Policy.

Curiously, and as with Obama-Care (Romney-Care) the roots of Obama-Air are from Romney-Air. The Times explains.

In his first term Mr. Obama tried to push a cap-and-trade bill through Congress, but it died in the Senate in 2010. Republicans, Tea Party groups and the coal industry attacked Democrats who supported it, criticizing the legislation as a "cap and tax" that would raise energy prices. Cap and trade is now seen as political poison in Washington. But Republicans said that the new rule has created a back door for Mr. Obama to force through a politically inflammatory policy by reviving it in the states. "This E.P.A. regulation will breathe life into state-level cap-and-trade programs," said Peter Shattuck, director of market initiatives at ENE, a Boston-based climate policy advocacy and research organization.

Many states are already researching how to join or replicate the nation's two existing state-level cap-and-trade plans, both of which bear the signatures of prominent Republicans: Mitt Romney, the 2012 presidential nominee and former Massachusetts governor, and Arnold Schwarzenegger, the former California governor.

As governor of Massachusetts, Mr. Romney was a key architect of a cap-and-trade program in nine northeastern states, the Regional Greenhouse Gas Initiative. He worked closely at the time with a top Massachusetts environmental official, Gina McCarthy, who today is immersed in the Obama administration's new rule as the administrator of the E.P.A. Mr. Romney later disavowed the regional cap-and-trade program.

Cap and trade was born in 1990 during the administration of President George Bush as a centerpiece of amendments to the 1970 Clean Air Act. Conceived as a business-friendly way to cut pollution without heavy-handed regulation, the idea was that the cap would ratchet down each year, allowing less pollution while market forces drive up the price of permits, creating an incentive for industries to invest in lower-polluting sources of energy. In 2006 in California, Mr. Schwarzenegger signed a pioneering state cap-and-trade law. As the Republican presidential nominee in 2008, Senator John McCain of Arizona pledged to put in effect a nationwide cap-and-trade law.

Officials with the northeastern regional cap-and-trade program that Mr. Romney initially endorsed have played a significant role in shaping the new rule.

EPA Clean Power Proposal

Inquiring minds digging into the EPA's Clean Power Plan Proposed Rule will discover ridiculous hype about global warming.

Our climate is changing, and we're feeling the dangerous and costly effects right now.

Average temperatures have risen in most states since 1901, with seven of the top 10 warmest years on record occurring since 1998.
Climate and weather disasters in 2012 cost the American economy more than $100 billion.

Carbon Tax - A Bad Idea

With the EU Emission Trading Scheme (ETS) struggling and "carbon credit frauds" in the news, many analysts argue we should get rid of carbon trading and opt for carbon taxes instead. But according to Alex Trembath and Matthew Step, carbon taxes will do nothing to cut emissions because they don't lead to innovation. "Steve Jobs didn't develop the PC because the price of typewriters went up."

Energy Post authors Alex Trembath and Matthew Step explain Why a Carbon Tax is a Bad Idea.

Economists' attraction to a carbon tax was on full display recently when economist Greg Mankiw wrote in the New York Times, calling a carbon tax a climate policy "America could live with," compared to the grab bag of regulations and fuel standards targeted by the Obama administration.

Carbon tax supporters believe it will lead consumers to use less dirty energy. Mankiw writes, "When making everyday decisions, people would naturally look at the prices they face and, in effect, take into account the global impact of their choices."

Mankiw's preferred climate solution aims at getting U.S. consumers to buy slightly more fuel efficient cars or turn off light bulbs more regularly because energy prices are modestly higher. This will have little impact on global emissions because virtually all their growth will be in rapidly growing developing nations like China and India.

The only way to get to dramatic cuts in global emissions is by developing significantly cheaper and better clean energy technologies. Current clean energy alternatives cost significantly more than conventional energy. Expecting consumers and businesses, especially in poor developing nations, to pay a large price premium for clean energy is wishful thinking.

Economists have built a cottage industry out of comparing carbon taxes, cap-and-trade, and conventional pollution regulations. But an innovation strategy to develop cheaper, better clean energy technologies doesn't make the cut. Frankly, this shouldn't be a surprise as innovation is not part of neoclassical economists' lexicon. In Mankiw's seminal textbook Principles of Economics, the word "innovation" is barely mentioned in almost 900 pages of text.

But breakthrough technologies like jet aircraft, gas engines, computers and cell phones have never emerged because their competitors' price increased. Steve Jobs didn't develop the PC because the price of a typewriter went up.

Government Not the Answer

Unfortunately, Trembath and Step miss the boat as well, siding with innovation economist Mariana Mazzucato who recently opined, "A quick look at the pioneering technologies of the past century points to the state, not the private sector, as the most decisive player in the game."

"In other words, smart government innovation policy that works with industry is how the world will get cheap clean energy," say Trembath and Step.

For starters, the idea that manmade global warming is the reason "seven of the top 10 warmest years on record occurred since 1998" is debatable, if not outright laughable.

More to the point, the idea Obama can do anything sensible to save the world from global warming in a timely manner, even if it were true, is genuinely ridiculous.

A history of Obama's backing of energy programs riddled with fraud, waste, and eventual collapse is proof enough. Government nearly always backs the worst ideas, requiring the most subsidies, while better technologies are delayed or die on the vine.

Kyoto Treaty Exemptions

Please recall that China and India are Exempt from Kyoto standards. The US opted out because China was not a party.

Canada signed the treaty but in 2012 Canada Leaves Kyoto Protocol, Lets China Buy Into Oil Sands: "Canada's withdrawal from the Kyoto Protocol took legal effect on Saturday, December 15. Canada is the only nation out of more than 180 to legally exit the treaty that governs greenhouse gas emissions."

China's Soaring Coal Consumption

A 2013 article in the Scientific American discusses China's Soaring Coal Consumption.

In a simple but striking chart published on its website, the U.S. Energy Information Administration plotted China's progress as the world's dominant coal-consuming country, shooting past rival economies like the United States, India and Russia as well as regional powers such as Japan and South Korea.

According to EIA, the 325-million-ton increase in Chinese coal consumption in 2011 accounted for 87 percent of the entire world's growth for the year, which was estimated at 374 million tons. Since 2000, China has accounted for 82 percent of the world's coal demand growth, with a 2.3-billion-ton surge, the agency said.

"China now accounts for 47 percent of global coal consumption -- almost as much as the rest of the world combined," EIA said of the latest figures.

The rising consumption numbers reflect a 200-plus percent increase in Chinese electricity generation since 2000, with most of the new power coming from coal-fired power plants. Chinese growth averaged 9 percent per year from 2000 to 2010, more than twice the 4 percent global growth rate for coal consumption. And when China is excluded from the tally, growth in coal use averaged only 1 percent for the rest of the world over the 2000-2010 period, according to EIA.

U.S. Coal Exports Contribute

Although Chinese coal is largely sourced from domestic mines, EIA figures show that U.S. coal shipments to China have dramatically risen in recent years, punctuated by a 107 percent jump from 2011 to 2012. Chinese imports of U.S. coal surged from 4 million tons in 2011 to 8.3 million tons last year, according to the agency. Only Argentina and Austria saw larger percentage increases in U.S. coal shipments, but on much smaller volumes.

Europe Fires up More Coal

Ironically, and as a direct result of US targeting coal, the price of coal has plunged. US coal emissions may go down, but as we have seen above, China usage is on a rampage.

What about Europe?

Please consider the February 2014 Financial Times report Shell Hits Out at Brussels Energy Policy.

Royal Dutch Shell has launched a broadside against what it says is a "European energy crisis" that could drive a raft of new coal power plants across the continent at the expense of cleaner alternatives such as gas.

Policy confusion in Brussels means as much as 11 gigawatts of coal-fired generating capacity could come on line in Europe over the next four years, according to the company, one of the world's largest natural gas producers.

That would be equal to around a dozen coal plants and it could lead to a situation where coal was locked in as an energy source even though gas is much cleaner to burn, said Dick Benschop, Shell's head of gas market development.

The US shale boom has made natural gas cheaper in that country, triggering an influx of cheap American coal to Europe that has helped make gas plants less economically viable.

Shell says Germany's coal imports rose more than 7 per cent to nearly 44m tonnes in 2013 from a year earlier and the UK saw a similar rise, while carbon dioxide emissions in both countries increased in 2012.

At the same time, large EU utilities estimate at least 30 gigawatts of gas-fired power generating capacity has been mothballed around Europe.

Obama's Plan to Save the World

Europe was mothballing natural gas and importing US coal even before the crisis in Ukraine. Think Europe is going to burn less coal now?

Such is the silliness of cap-and-trade, uneconomical government forays into wind and solar energy, and policies that consume energy (shipping US coal thousands of miles to China and Europe) so they can burn it there, because we cannot burn it here.

The notion Obama is going to save the world from greenhouse gasses and rising temperatures via US government policy to burn less coal and be more fuel efficient here is clearly absurd.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Monday: Join the conversation on working families

Sunday, June 22, 2014

Monday: Join the conversation on working families

The modern family looks different than it has before. More parents are working, and nearly a third of families with children are single-parent families.

It's not 1960 anymore, but you could be forgiven for thinking our workplaces still feel like it: Most moms and dads don't have access to paid leave or a flexible workplace.

It's time for workplace policies that match our reality -- and give all of us the best chance to succeed at work and at home. So tomorrow we're hosting an online conversation on working families and the 21st-century workplace.

If this is an issue that matters to you, tune in to WorkingFamiliesSummit.org starting at 9 a.m. ET tomorrow to join President Barack Obama, First Lady Michelle Obama, Vice President Joe Biden, and Dr. Jill Biden in this important conversation.

P.S. -- This is a national conversation and we need your voice to be a part of it. Tell us how modern workplace policies would help your family.

Stay Connected

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Seth's Blog : The handyman, the genius and the mad scientist

The handyman, the genius and the mad scientist

The handyman brings attention to detail and craftsmanship to the jobs that need to be done. Difficult to live without, but a household name, not a famous name.

The genius, Thomas Edison, relentlessly tries one approach after another until the elusive solution is found.

And the mad scientist, Tesla or Jobs, is idiosyncratic and apparently irrational—until the magic appears.

Who do you need?

Who are you?

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sâmbătă, 21 iunie 2014

Mish's Global Economic Trend Analysis

US Army Major Emails Mish the "Perfect Solution to This Iraq Thing"

Posted: 21 Jun 2014 11:00 AM PDT

A US Army Major (USAM), whose name I have and have verified writes ...

Hi Mish,

Thought you'd enjoy this in light of your recent "Absurdities, Blatant Lies, Chutzpah, Political Expediency, Odd Couples" post:

Not sure if you ever read the "Duffel Blog," but it's essentially "The Onion" with a targeted military audience. Their satire has been spot on lately. Sometimes humor is the only thing that can temper the unfathomable cost of these wars.

Best wishes,

USAM

The Major did not ask for his name to be left out, but to be safe for him, I left it out.

USAM directed me to Listen Guys, I Have The Perfect Solution To This Iraq Thing, written tongue-in-cheek by former Defense Secretary Donald Rumsfeld.

... It's just been really sad to see, especially when I saw firsthand what a stable and flourishing Middle East could actually look like. When I left my position as defense secretary in 2006, Iraqis — with a love for democracy just like our founding fathers — were refreshing the tree of liberty with the blood of practically everyone, not just tyrants.

At least four or five Iraqis were optimistic about their future, while the so-called elites in our country constantly talked up bad news.

And then Obama came in, and all hell broke loose.

Terrorists have taken over Iraq once again. We know where they are, in the area around Tikrit and Baghdad and east, west, south and north somewhat.

And by God, what happens if these terrorists use nuclear weapons? That's not a world I want to live in.

Now, I didn't say they had nuclear weapons of course, but absence of evidence is not evidence of absence. They could have them. I mean, we just don't know.

Anyway, listen up guys. I have the perfect solution to this whole Iraq thing. ...

If I were advising the president today, I would recommend we go back in there and hunt down these terrorists. It's just that simple. The only way to defend against terrorists is to go after them. We must stay on the offensive and remain engaged, because history has of course shown that radical Islamists eventually stop fighting if we just wait them out.

Donald Rumsfeld is an American politician and businessman. He served as the 13th Secretary of Defense from 1975 to 1977 under President Gerald Ford, and as the 21st Secretary of Defense from 2001 to 2006 under President George W. Bush. He's best known for writing about 40,000 memos only Errol Morris would be insane enough to read, and for forging the "strategy" behind Operation: Enduring Clusterfuck and Operation: Iraqi Shitshow.

What a riot. Thanks USAM, for seeing things as they are.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Bringing Our Workplace Policies into the 21st Century

Featured

Weekly Address: Bringing Our Workplace Policies into the 21st Century

In this week's address, the President previewed Monday's first-ever White House Summit on Working Families where he will bring together businesses leaders and workers to discuss the challenges that working parents face every day and lift up solutions that are good for these families and American businesses. Many working families can't afford basic needs like childcare or receive simple benefits such as paid family leave that are common in most countries around the world.

When hardworking Americans are forced to choose between work and family, America lags behind in a global economy. To stay competitive and economically successful, America needs to bring our workplace policies into the 21st century.

Click here to watch this week's Weekly Address.

You can participate in Monday's Working Families Summit from anywhere. Share how modern workplace policies would help your working family succeed, and be sure to tune in to the full suite of livestream programming at www.workingfamiliessummit.org.

Seth's Blog : Can we talk about process first?

Can we talk about process first?

It's so tempting to get straight to the issue, especially since you're certain that you're right.

The challenge is that organizations and relationships that thrive are built to go beyond this one discussion. They are built for the long haul, and this particular issue, while important, isn't as vital as our ability to work together on the next hundred issues.

So yes, you're probably right, and yes, it's urgent, but if we can't agree on a process to talk about this, we're not going to get anywhere, not for long.

If the process we've used in the past is broken, let's fix it, because, in fact, getting that process right is actually more urgent than the problem we've got right now. Our meta-conversation pays significant dividends. At the very least, it gets us working together on the same side of a problem before we have to be on opposite sides of the issue of the day.

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vineri, 20 iunie 2014

Mish's Global Economic Trend Analysis

"Real" and "Unreal" Wages; Five Decades of Middle Class Decline in Pictures

Posted: 20 Jun 2014 12:11 PM PDT

What follows is a guest post from Doug Short at Advisor Perspectives. This post has its roots in a discussion we had about "real" (inflation-adjusted) wages.

Doug took our initial discussion and merged it with the number of hours people work.

Here is the decidedly bleak result: Real weekly earnings were $825 in 1973. Today they are $690.

Doug Short Guest Post

As a follow-up on some collaboration with Mike Shedlock in advance of his recent commentary on wages over time, here's a perspective on personal income for production and nonsupervisory private employees going back five decades.

The Bureau of Labor Statistics has been collecting data on this workforce cohort since 1964. The government numbers provides some excellent insights on the income history of what we might think of as the private middle class wage earner.

The first snapshot shows the growth of average hourly earnings. The nominal data exhibits a relatively smooth upward trend.

here are, however, two critical pieces of information that dramatically alter the nominal series: The average hours per week and 2) inflation.

The average hours per week has trended in quite a different direction, from around 39 hours per week in the mid-1960s to a low of 33 hours at the end of the last recession. The post-recession recovery has seen a disappointingly trivial 0.7 bounce (that's 42 minutes).

What about inflation? The next chart adjusts hourly earnings to the purchasing power of today's dollar. I've use the familiar Consumer Price Index for Urban Consumers (usually abbreviated as the CPI) for the adjustment. Theoretically, the CPI is designed to reflect the cost-of-living for metropolitan-area households.

Now let's multiply the real average hourly earnings by the average hours per week. We thus get a hypothetical number for average weekly wages of this middle-class cohort, currently at $690 -- well below its $825 peak back in the early 1970s.

Note that this is a gross income number that doesn't include any tax withholding or other deductions.
Latest Hypothetical Annual Earnings: $35,000

If we multiply the hypothetical weekly earnings by 50, we get an annual figure of $35,497. That's a 16.4% decline from the similarly calculated real peak in October 1972. I've highlighted the presidencies during this timeframe. My purpose is not necessarily to suggest political responsibility, but rather to offer some food for thought. I will point out that the so-called supply-side economics popularized during the Reagan administration (aka "trickle-down" economics), wasn't exactly very effective for production and nonsupervisory employees.

Footnote for economist geeks: Here is a slightly different look at the data. I've adjusted using the less familiar Consumer Price Index for Urban Wage Earners and Clerical Workers, which among other things, assigns a higher weighting to gasoline (e.g., longer drives to work and the grocery store). Also, this is the series the government uses to calculate Social Security Cost of Living Adjustments (COLAs).

Here is the real hourly history with this deflator.

Here is the real hourly data multiplied by the average weekly hours. The latest data point is 14.1% below the 1972 peak.

For additional perspectives on earnings, see my commentaries on household income.

End Doug Short

Real vs. Unreal Wages and Earnings

I asked Doug if we could factor in social security, disability, and income taxes. Ideally, we would also need to factor in property taxes, sales taxes, and fees.

One might also want to factor in food stamps and other transfer payments.

Unfortunately, there is no realistic way to easily do all that. Instead, let's take a look at Historical Payroll Taxes from the Social Security Administration.

In 1973 the combined Social Security and Medicare payment was 5.850%. Today it is 7.65%.

Given that workers making wages as shown in the charts above would not have hit the FICA limit, it would be reasonable to subtract an additional 1.8% from today's weekly $690 weekly figure.

Each person would need to do sales taxes for their own state. Today the Illinois minimum sales tax rate is 6.25%. Depending on localities, it can be as high as 9.75%.

I cannot find a historical table, probably on purpose. No state would want to publish such a thing, but I seem to recall something like 4%.

Whatever the rate, assuming most people making these wages spend damn near everything, it would be safe to subtract the difference, whatever it is. Do the same for income taxes, which Governor Quinn recently raised from 3% to 5%.

Realistically, there is nothing "real" about "real" earnings and wages. Thus we must look at "unreal" wages (incorporating all of the above ideas) to get the true picture.

It is very safe to say, the decline in "unreal" weekly earnings from $825 in 1973 to $690 today, understates the decline by a huge degree.

"Unreal" wages ignores transfer payments that come out of some else's pocket.

Of course "unreal" is really "real" and "real" is really "unreal", so it's easy to be confused.

Who to Blame?

I have outlined on many occasions who is to blame for this sorry state of affairs. The answer is the Fed, fractional reserve lending, and government bureaucrats. Nixon closing the gold window was icing on the cake.

The Fed is hell bent on achieving inflation. Wages did not keep up because it was easier to outsource.

In-sourcing is now the buzzword, but the Fed has cost of money so low that it's easy for corporations to borrow money and invest in technology and software to replace workers. That would be a lot harder to do if wages were $2.50 an hour. And most people would be a lot better off if prices were correspondingly lower as well.

Those with first access to money (governments, banks, the already wealthy) are the only ones who gain from inflation. Everyone else loses. The result is a shrinking of the middle class.

Instead of pointing the finger at the real problem, the Fed blames robots and Democrats blame corporations and Republicans. Meanwhile, Republicans and Democrats alike fund wars and other activities via the printing press that the US cannot possibly afford.

If routine price inflation did not benefit the banks and the wealthy at the expense of everyone else, we probably would not have it. The word that best describes the process is "theft".

For further discussion of the demise of the middle class and the role president Nixon and Congress played, please see Time Lapse Image of Growing US Political Polarization; Root Cause of the Shrinking Middle Class

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Absurdities, Blatant Lies, Chutzpah, Political Expediency, Odd Couples

Posted: 20 Jun 2014 01:04 AM PDT

The mess in Iraq is complicated by absurdities, political expediency, blatant lies, and self-serving accusations.

Everyone involved attempts to absolve themselves of guilt. Some high-profile politicians even changed their minds as a matter of political expediency.

Absurd and Conflicting Realities

The US wants to overthrow Syrian president Bashar al-Assad.
US ally, Saudi Arabia, also wants to overthrow the Syrian president.
The rebels fighting Assad are primarily Al Qaeda and Isis. Thus the US is in alignment with Al Qaeda and Isis.
The US and Iran want Isis out of Iraq.
The US refuses help from Iran out of fear of making Iran and Iraq allies.
Iran supports Syrian president Bashar al-Assad.
Saudi Arabia is ruled by Sunnis.
Isis consists primarily of extreme Sunnis.
Iran is ruled by Shias.
The US overthrew Saddam Hussein, a secular ruler whose party was dominated by Sunnis.
The US helped install Nouri al-Maliki, who is a Shia, even though the US is at severe odds with Iran.
Maliki is politically aligned with Iran.
Under Maliki's regime, extreme Sunnis got fed up with political oppression, giving rise to Isis.
Maliki accuses Saudi Arabia of sponsoring Isis and genocide.
According to The Guardian, Lina Khatib of the Carnegie Foundation says "There is Saudi money flowing into Isis but it is not from the Saudi state. Maliki is trying to shift blame from himself and is echoing Iranian propaganda.".

It is impossible to untangle that mess.

Moreover, arms given to Syrian rebels eventually make their way into the hands of Isis and Iraq.

Nonetheless, many Republicans and some democrats accused Obama of not providing enough assistance to Syrian rebels, most of which are Al Qaeda or Isis connected.

Shia Sunni Divide

A PEW research report discusses the Sunni-Shia Divide

Their shared demographic makeup may help explain Iran's support for Iraq's Shia-dominated government led by Prime Minister Nouri al-Maliki.

Iran also has supported Bashar al-Assad's government in Syria, where only 15-20% of the Muslim population was Shia as of 2009. But the Syrian leadership is dominated by Alawites (an offshoot of Shia Islam). Under Saddam Hussein's regime in Iraq, which was dominated by Sunnis, the country clashed with Iran.

The Sunni-Shia divide is nearly 1,400 years old, dating back to a dispute over the succession of leadership in the Muslim community following the death of the Prophet Muhammad in 632.

Blatant Lies, Self-Serving Accusations, Amazing Chutzpah

In an attempt to whitewash history and absolve himself from guilt, former UK Prime Minister Tony Blair defended his role in the war.

For my takedown of Blair, please see Tony Blair's Disingenuous, Self-Serving Analysis of Iraq

Blair's lies and distortions were followed by an even more nauseating defense of the war by Dick and Liz Cheney in a Wall Street Journal op-ed called The Collapsing Obama Doctrine.

CNN writer Paul Waldman brilliantly took Cheney to task in Dick Cheney's Amazing Chutzpah on Iraq.

You have to hand it to Dick Cheney. How many people, knowing what has happened in Iraq over the last 12 years, would dare to write an op-ed in The Wall Street Journal containing this line: "Rarely has a U.S. president been so wrong about so much at the expense of so many" -- and not be talking about George W. Bush? The man has chutzpah.

Cheney was the war's chief propagandist, who told the American public more spectacular falsehoods than anyone, including Bush himself. Cheney was the one who told us in 2002 that "Simply stated, there is no doubt that Saddam Hussein now has weapons of mass destruction. There is no doubt he is amassing them to use against our friends, against our allies, and against us."

He's the one who tried to convince us that Saddam Hussein might have helped engineer the September 11 attacks, and who said in 2005 that the insurgency in Iraq was "in its last throes." (The war went on for 6½ more years.)

Cheney had a central role in bringing on a war in which 4,500 Americans gave their lives, tens of thousands more were gravely injured, we spent a couple of trillion dollars, and somewhere between 100,000 and 500,000 Iraqis died.

Would "some residual American forces" have been able to keep a lid on the unending Iraqi civil war that Bush and Cheney so effectively unleashed? We'll never really know, but here's what we do know: The agreement mandating that all American troops leave Iraq by the end of 2011 was signed by one George W. Bush, before Obama took office.

Informed Comment

University of Michigan history professor Juan Cole makes some very interesting observations on Sectarian Blowback in an interview exchange with Amy Goodman of Democracy Now.

I truncated some of Cole's responses.

AMY GOODMAN: Explain, Professor Cole, who the forces are. Who is ISIS? Who is ISIL? Where does al-Qaeda fit into all of this?

JUAN COLE: Well, the Islamic State of Iraq and Syria is also called the Islamic State of Iraq and the Levant in English. It's just a matter of how you translate one of the words. So they're the same organization.

Isis is al-Qaeda affiliate, although recently the core al-Qaeda has displayed discomfort with it because it attacks other al-Qaeda affiliates. It's an extremely nasty organization. It blows up soft targets, children at ice cream shops. It'll blow up a marriage and then come back and blow up the funeral that evening. It's the worst of the Sunni resistance groups. The Sunnis were in power before the U.S. invaded in 2003, and they've been dethroned and made unemployed and marginalized, and so there is various kinds of discontent, civil and demonstrations, but also a turn to terrorism.

AMY GOODMAN: Juan Cole, can you respond to Secretary of State John Kerry and also talk about the Bush role in this, in fueling this kind of sectarianism, if you feel he did?

JUAN COLE: Well, the Bush administration very explicitly sided with the Shiites and wanted to create a Shiite-dominated government and enthusiastically cooperated in the de-Baathification or the firing of thousands and thousands of Sunni bureaucrats and teachers from their jobs. So this—this was a policy of the Bush administration, and it is, in some large part, responsible for the current crisis.

AMY GOODMAN: What about the talks the U.S. is having now with Iran? And can you talk about whether its interests, the U.S. government now, is—are allied when it comes to Iraq with Bashar al-Assad of Syria?

JUAN COLE: Well, I think the U.S. interests are in fighting this kind of extremist group. After all, it was this kind of hyper-Sunni extremism that hit the United States on 9/11. The al-Qaeda kind of organizations in the Middle East typically despise Shiites as wretched heretics, and there have been many massacres of Shiites by the Taliban in Afghanistan, by al-Qaeda groups and their affiliates.

Shiite power like Iran would be a natural ally. And so, I think it's likely that the United States will develop some relationships with Iran in this regard on this issue. And I think it's a good thing. I think it's crazy that in 2001, when the Iranians were having candlelight vigils for the United States and sympathized with the U.S. as victims of this kind of terrorism that Iran had also suffered from, that suddenly the Bush administration and David Frum, the speechwriter for Bush, put Iran in an "axis of evil" with a country like North Korea and alienated Iran.

AARON MATÉ: I wanted to turn to comments made by former British Prime Minister Tony Blair over the weekend suggesting the current crisis is not linked to the 2003 U.S. and British invasion of Iraq. Blair was speaking to the BBC. ... Juan Cole, as we wrap, your response to Tony Blair?

JUAN COLE: Well, Mr. Blair—you know, it would take hours and hours to refute everything that he said, all of which is false, but you should be—remember that he was perfectly willing to leave dictators in power. He took the British Petroleum officials to Libya to meet with Gaddafi, so it's simply not true that he went around overthrowing dictators in the Middle East.

He did help to invade Iraq. And there, I mean, I think the outcomes are less of an indictment of him than the methods. Mr. Blair repeatedly lied to the public about this enterprise. He was advised by his attorney general that the whole thing was illegal in international law initially. He didn't share that memo with his own Cabinet. He hid it from the British public. He said it wasn't about oil, but we now know he was cooperating with BP officials to make sure that they got bids after the war was over. He just violated international law repeatedly, and British domestic law, in pursuing this war of aggression.

AMY GOODMAN: Juan Cole, we want to thank you for being with us, professor of history at University of Michigan. His blog, "Informed Comment," at JuanCole.com. He's written many books. His most recent one is The New Arabs: How the Millennial Generation Is Changing the Middle East; it'll be out July 1st.

Political Expediency

Politics USA wrote on June 6, 2014, For The First Time Hillary Clinton Admits That She Was Wrong To Vote For The Iraq War.

In her upcoming book, Hard Choices, Hillary Clinton completely admits that she made a mistake by voting for the Iraq War in 2002. Her admission that she got it wrong is a complete 180 from her defense of the vote during her previous presidential campaign in 2008.

While running for the Democratic nomination in 2008, she defended the vote on Meet The Press.

Mrs. Clinton always avoided saying that her vote was wrong. She paid a heavy price with Democratic primary voters, because Barack Obama was a clear and constant critic of the war. The Iraq vote was one of the genuine differences between Clinton and Obama in 2008, and it looks like she isn't going to let that vote be a problem in 2016.

Genuine Change of Opinion or Political Expediency?

Politics USA writes "Part of this is a likely fence mending with some primary voters who were turned off by her legalistic defense of her vote for war in 2008, but some of it is possibly insight gained from her time spent as Secretary of State."

What insight did Clinton gain as Secretary of State?

For the answer, please consider the June 5, 2014 CBS report Hillary Clinton's "Hard Choices": Bergdahl, Benghazi and more.

On whether to arm Syrian rebels: [Clinton stated] "I returned to Washington reasonably confident that if we decided to begin arming and training moderate Syrian rebels, we could put in place effective coordination with our regional partners."

There you have it. Hillary sides with John McCain and Dick Cheney and against President Obama on sending weapons to Syria, even though Saudi-supplied weapons made it into the hands of Al Qaeda and Isis terrorists, then on to Iraq.

So what did Hillary learn about sponsoring war? Nothing. But she did learn that it is politically expedient to distance herself from Obama.

Leap of Faith Cannot Fix Iraq

Financial Times correspondent Gideon Rachman says The West Cannot Fix the Puzzle of Iraq Through War.

Well-meaning liberals try to square the circle by arguing that military aid should be channelled to the more liberal forces fighting both the Assad regime and Isis, simultaneously. There is no doubt that there are some brave and admirable people in the Syrian opposition. But it is a huge leap of faith to believe that, if only the west piles in behind them, things will get better. On the contrary, there is plenty of evidence to suggest that "liberals" have very little chance of holding on to power, after the fall of a Middle Eastern dictatorship. From Iraq to Libya to Egypt, the pro-western liberals have been swept aside.

The history of the past decade in the Middle East suggests that western military force, while capable of achieving swift victories on the battlefield, has a dismal record of securing lasting and acceptable political outcomes. President Barack Obama seems to have learned that lesson, even if his political opponents choose to forget it.

The Odd Couple

Curiously, Hillary Clinton has sided with leap-of-faith "expert" Dick Cheney. They deserve each other.

I side with CNN Opinion writer David Wearing who says Ignore neo-cons, the last thing Iraq needs is more war.

International jihadis had no real presence in Iraq before the U.S.-led invasion of 2003. Now, in no small part due to the ironically titled "war on terror" waged by Cheney, Wolfowitz and Blair, those forces now exert joint control over a huge swathe of the country. All in all, now would be a good time for the neo-conservatives and liberal interventionists who helped bring us to this point to commence a prolonged period of silence.

I also side with Ron Paul. For details, please see Democrat Quotes on Iraq; Ron Paul Asks "Haven't We Already Done Enough Damage in Iraq?"

Winning Action

The only winning action has always been to not get involved. But we got involved and made a huge mess. Nonetheless, warmongers cry for still more involvement.

With the situation this messy, with conflicts going back 1,400 years, and with a history of blowback after blowback, both political parties need to take a lesson from the 1983 film War Games in which a computer learns "the only winning move is not to play."

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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