The Year of the Dragon

Ask someone on the street about international news and they will most likely tell you about the plethora of conflicts in the Middle East (like those in the Yemen, Iran, Iraq, and Syria) or the crash of the run up to the U.S. 2016 presidential election. However, while the world has been focused on the news in the U.S. and the Middle East a major event has been unfolding in Asia. The world is witnessing the creation of a new global financial institution, based out of China, the likes of which has not been seem since the creation of the International Monetary Fund or the World Bank. This Chinese led institution is called the Asian Infrastructure Investment Bank (AIIB, for short).

The bank was founded in late 2014 with the expressed goal of providing funding to infrastructure projects in Asia. Considering the tremendous growth of Asian economies in the coming decade many of them will need additional capital to fund infrastructure projects to support that economic growth. China is not the only country that feels this way. Many major Asian and European countries like India, South Korea, Germany, and the United Kingdom, are joining the ranks of the AIIB. However, why is China creating a new bank to fund infrastructure projects? Global financial institutions already exist that can meet the challenge to provide the sizable capital that Asian countries will need. The Chinese state that they are simply helping to fill a funding gap and look forward to working in collaboration with the other global financial institutions on funding Asian infrastructure projects. However, there are some who question if this is the only motive for China to support the creation of the AIIB. The AIIB funding of projects has the potential of significantly increasing Chinese influence in Asia. Increased Chinese influence in Asia is not necessarily something to be troubled about. The questions is how China will use that influence.

The United States is one of the countries that is concerned about Chinese governance of the AIIB. Many U.S. allies have been urged not to become members of the AIIB because of this concern. Thus far, the U.S. has been unsuccessful at convincing even its closest allies, like the U.K. to refrain from becoming members of the AIIB. The concerns raised by the United States are not without merit. As early as 2014 China was embroiled in commodity lending fraud. Furthermore, China has also been criticized by some for its use of resource backed funding in Africa.

Despite these issues that China has had in the past the U.S. should consider becoming a member of the AIIB. Due to the multilateral nature of the institution and the significant amount of public scrutiny its actions will receive the AIIB will most likely follow international lending best practices. A great example of this is the fact that recently the AIIB rejected North Korea's bid to join the bank. North Korea is part of China's sphere of influence and for China to reject them demonstrates the potential of the AIIB to become a responsible global financial institution. Furthermore, as a member of the AIIB the U.S. can help play a role, along side the Chinese, to guide the institution to continue being a responsible investor.

China has become a significant economic and political power. Therefore, it is no surprise that they are spearheading the creation of an Asia based investment bank. The issue here is not one of dominance. The Chinese are a major power in Asia. The creation of this bank may seem like a front to expand Chinese influence, however, considering the influence that all of the other members of the bank will have this may not happen as easily as some have insinuated. If anything the creation of this bank may bring more of China's investments into the light and provide more transparency. It is hard to predict what the future may hold but as China continues to grow stronger the U.S. should aid in it's efforts to be a responsible global leader.

Risky Business: US, Iran, and the China Wildcard

     Qom, Iran - Over one million Iranians go about their daily routines in this metropolis. Beyond being home to one of the most important religious sites in Shia Islam it is also home to a plethora of museums and universities. However, the city has become well know in recent years not just for its culture but, also because it lies in the shadow of one of Iran's most fortified uranium enrichment facilities. Uranium that is enriched to the appropriate level is one of the main components for a nuclear weapon. Reports in recent months have indicated that Iran may intend to refine enough weapons-grade Uranium to create a nuclear weapon.          

    The United States and its allies have been in senior level negotiations in an effort to persuade Iran to cease pursing the creation of a nuclear weapon. In the last couple of days the news has exploded with analysis over the leaked details of the potential deal between the United States and Iran. The basic outline of the deal is that in exchange for Iran's reduction in the number of functioning centrifuges (the devices need to enrich the Uranium necessary to create a nuclear weapon) it will be offered certain incentives such as an easing of sanctions that have crippled Iran's economy. 

    If you are reading the fine print you may ask that if the deal only reduces the number of centrifuges, can't Iran still pursue the production of a nuclear weapon with enriched Uranium from the remaining centrifuges? The short answer is, yes. Experts state that the passage of this deal would delay the production a nuclear weapon by approximately a year. Based on the details, the current deal would be a stepping stone to a treaty with Iran that would hopefully dissuade them from pursuing the production of a nuclear weapon for the long term.

    However, what are the chances that a greater deal will occur? Many state that one of the reasons that the Iranians have come back to the negotiation table is the drop in oil prices. The export of oil is the major source of revenue for the government of Iran. The drop in oil prices, when combined with the sanctions and the recent drop in the value of their currency, has put strong economic pressure on Iran to negotiate. A year from now, will this perfect storm of strong economics pressures exist, especially after the easing of sanctions gives Iran an economic boost? Moreover, while the West may have sanctioned Iran, Iran has gained a strong partner in China.

    China is one of Iran's biggest trading partners. They purchase a large amount of Iran's oil and provide Iran with technological expertise in a wide range of fields from energy to military. Furthermore, they also provide Iran with military hardware that is used to modernize its defense forces. The relationship between the world power and the regional power may not end at economic cooperation. There is speculation that China's interest in Iran springs from their desire to counter US influence in the Middle East.

     Therefore, for any successful deal with Iran would require either the direct or indirect support of China. This may seem impossible considering the potential conflict of interest, however, the ties that bind China and United States are strong. The United States is China's largest trade partner. Beijing does not always agree with Washington but, they do not want to significantly damage relations with them either. In the current negotiations with the United States Iran has very little to lose (they are already sanctioned) if they do not keep their word. However, with China involved the risk for the Iranians would be damaging trade relations with their biggest partner if they cannot make the deal work.

     There are a multitude of Chinese proverbs from Confucius or Sun-Tzu that I could use to carry the point across and conclude but, I will not use them. Simply put, China has stated that its foreign policy is based on principles of peaceful coexistence and cooperation for mutual benefit. The United States also believes on those principals. The Iran deal is an opportunity for both countries to work together and help bring stability to the Middle East.                                               

Race to Election 2016

The United States presidential election is coming up in 2016. Naturally, the candidates who are planning on running for the elections are preparing now. Both the Democrats and the Republicans have yet to choose which candidate they plan on running (something that will not be decided until the end of the primaries)

Unofficially, the top choice for the Democratic party is Hillary Clinton. The wife of ex-President Bill Clinton, she has developed a strong political career with her last major political office being Secretary of State during the Obama administration. The Republicans have more candidates competing for the ticket but, Jeb Bush (brother of ex-President Bush Jr. and son of ex-President Bush Sr.) seems to be in the man most likely to run for the Office of the President from the Republican party. Jeb has raised significant capital from the major Republican donors. Reportedly, Jeb has absorbed so much of the Republican donor money that Mitt Romney, the last Republican to run for president and a (once) strong contender for the 2016 election, has decided to not run for the presidential election even though he initially announced that he would.

I do not have a crystal ball. Therefore, I cannot guarantee who the Republican and Democratic candidates for president in 2016 will be. However, as previously suggested I predict that it will be a race between Hillary Clinton on the Democratic side versus Jeb Bush on the Republican side. Assuming that that happens I think that it would be useful to have a chart that summarizes their respective positions on major issues. This is a bipartisan blog so the goal is to inform, not to convince readers that one side is better than the other.

(I apologize in advance if any of the information is inaccurate. Please feel free to offer legitimate corrections in the comment section.)

Issue	Jeb Bush	Hillary Clinton
Immigration	·         He supports strengthening the border (not a surprise statement from a Republican candidate) and wants to work with Congress to pass lasting reform (instead of using executive orders). ·         He has demurred when asked if he would repeal the immigration related executive orders that President Obama has passed stating that he prefers to pass laws to executive orders (his speeches have suggested  he wants to provide law-abiding illegal immigrants with a path to legal status so his demurring may be a political move to appease the Republican base but keep the orders in place in case he cannot pass legislation).    ·         He has taken a softer stance than many of his fellow Republicans when he stated that illegal immigration can be "an act of love".	·         She supports the President's executive actions on immigration. ·         However, like Jeb Bush she wants to pass legislation instead of using executive orders. ·         She has highlighted that there was a bipartisan bill in 2013 that failed in the Republican controlled house which led to the President having to act unilaterally to push through immigration reform (this suggests that while she has supported immigration legislation she may use executive actions if progress on legislation stalls - considering that she may have to face a hostile Congress as President she may find the need to may use executive orders).
Foreign Policy	·         He has criticized President Obama's foreign policy as being too weak when it comes to dealing with ISIS in the Middle East and Putin in Russia. ·         Both his father and his brother have been Presidents but, Jeb Bush has vehemently stated that his foreign policy will be his own and, that he is his own man. ·         While he will be responsible for foreign policy as the President, based on his selection of foreign policy advisors he will be advised by many of the same the same individuals (like Paul Wolfowitz) as his brother.	·         She wants to take a more structured approach, insinuating that President Obama's policy of "Don't do stupid stuff" is not enough. ·         Her statements from interviews may suggest that she wants to play a more active role, including putting boots on the ground when necessary (like in the Syrian conflict) instead of relying solely on support type roles like drone strikes. ·         A more hawkish approach combined with open criticism of President Obama's foreign policy has the risk of alienating her liberal base. However, if she is the Democratic shoe-in for 2016 then she may be more concerned about the general election (where a stronger stance may win her more votes) than the primaries.
Healthcare	·         He stepped down from be in the board of directors of Tenet Healthcare Corp. to be able to run for the office of the President which suggests that he has experience dealing with healthcare issues. ·         However, as recently as 2014 Tenet Healthcare has been accused of insurance payment fraud and has been convicted of similar crimes in the past leading the company to pay massive settlement fines. ·         He has not come out in support of Obamacare (aka the ACA), however, in an interview from 2009 (before the ACA roll-out) on CNBC he stated that he did support that the U.S. should have universal insurance coverage. He also speaks about reimbursing medical providers based on the quality of care. These are two major principals of the ACA. ·         He as stated in the past that there are issues with Medicaid expansion under the ACA (Florida has not expanded Medicaid). However, he was part of a healthcare company that has been accused of government healthcare payment fraud.	·         She spearheaded healthcare reform as First Lady during Bill Clinton's administration in 1993. ·         Her 1993 plan is similar to Obamacare today (like requiring that all Americans purchase health insurance) which suggests that she has supported Obamacare style reforms long before Obamacare. ·         She is in support of Medicaid expansion. ·         While Hillary may try to make herself unique from President Obama's healthcare initiatives, she supports solutions that are very similar. However, she does support modifying the current healthcare reforms. ·         One of the reforms she may focus on fixing is the employer mandate where some businesses are moving employees from full-time to part-time positions in order to avoid healthcare costs.
Economy	·         Diverging from the Republican status quo he has stated that he wants to focus on income inequality (instead of focusing simply on tax cuts like his brother). ·         He is in favor of tax reform but he has not provided many details. ·         As Governor of Florida he cut many taxes for businesses and individuals but, he also increased spending by the state which shows that he may be willing to compromise with liberals. ·         He wants to see the middle class grow strong and wants the economy to grow much faster than it is now to support middle class growth. One of the ways that he may help America grow is through increased international trade.	·         Many of her economics ideas are expected to be standard Democratic ones such as increasing the minimum wage, reforming the tax code to close loop holes and, trying to decrease income inequality. ·         She has also suggested some newer ideas such as trying to find ways to increase employee profit sharing. ·         She has a track record of supporting trade agreements but has suggested that as President she would review agreements (including those that have already been made) to make sure that they really do benefit America. ·         She support environmentally conscious energy production so she would oppose projects such as oil drilling at the Arctic National Wildlife Refuge.
Education	·         He support the Common Core - standardization of academics (like in math and English) ·         As Governor of Florida his education policies included "pay for performance" - teacher pay based on student performance, mandating that students met the standards of their grade before being allowed to move forward, increasing choices that parents have on where to send their kids to school (like charter schools and voucher programs).	·         She supports Common Core ·         However, she is against the use of voucher programs to help pay for private schooling since she feels that they divert necessary dollars from public schools. ·         Wants to make higher education more cost effective (however, she purportedly charged a $225,000 speaking fee to give a talk on affordable education).

                    

The Death of Capital Punishment

Salt Lake City, Utah - The state is announcing the possible use of firing squads as a form of capital punishment. The increasing scarcity of the lethal injection drugs that are typically used to cause death have opened the door to the potential resumption of such an archaic and, what many would consider an anachronistic method of punishment.     

The United States is one of the more progressive countries in the world. However, the justice system still allows capital punishment. A polite euphemism for killing an individual. The individuals who are sentenced to death by lethal injection are given, what some would argue, a humane death. However, is sentencing an individual to death for a crime humane to begin with? Does death bring justice?

The answer to the question begs one to define what justice "is". The simple definition of justice is achieving that which is just, as defied by society. A simple search on Google will provide the statistic from the Pew Research Center that, as of 2013, a majority of Americans (55%) support the death penalty. A little more research and you find that while a majority still support the death penalty, that support is shrinking. In 1996 approximately 78% of the American people supported the use of the death penalty. Over 15 years, from 1996 to 2013, the support for the death penalty has declined by 23%. While the death penalty may have been considered just in the past, opinion seems to be changing.  

The argument against the death penalty is not only a philosophical one but also an economic one. Take the case of Utah, where the Legislative Fiscal Analyst's Office estimates that a death penalty punishment costs the state $1.6 million more than if the state gives the guilty a punishment of life in prison without parole. Utah is not the only state in which this is the case. According to Amnesty International - USA, in Maryland the death penalty cases are estimated to cost three times more than non-death penalty cases and, in Tennessee the death penalty trials can cost approximately 48% more when compared to cases where the punishment is life in prison. Overall, Amnesty International - USA found that the majority of the cost of a death penalty trial is incurred before and during the trial itself. Therefore, even if there are no appeals allowed death penalty cases are more expensive than cases that seek an alternative form of punishment.

Clearly the death penalty is declining in popularity, it can be prohibitively expensive, and with states potentially resorting to methods like firing squads it is no longer humane. The time has come to consider a Federal ban on the use of the death penalty. The United States would not be one of the first countries to ban the use of the death penalty. According to Amnesty International the use of the death penalty has been abolished in 140 countries. As of 2013 some of the countries with the greatest number of executions were North Korea, Somalia, and the United States. Are these the countries that the United States wants its justice system compared to?      

The discussion thus far has centered on the macro-level issues related to capital punishment. To the victims of the crimes that are considered worthy of the death penalty, any sentence less than death for the guilty may seem like injustice. For the victims, justice can become blind to the economics of capital punishment. However, an individual once said that an eye for an eye will only make the whole blind. That individual was not a saint or superhero but, a man. That man was Gandhi. After he was fatally shot, he said with his dying breath that his assassin should not be killed. Forgiveness (life in prison instead of death) seems like a "pie in the sky" solution to the issue of capital punishment but, it is not a preposterous as it seems. Killing the guilty will not undo a crime but, forgiveness (life in prison instead of death) allows everyone to move on with their lives. In the long term, life in prison is a far more effective punishment than death. The guilty will have to live with the crime that was committed. It is much more difficult to live than it is to die.

Capital punishment is not only economically unviable but, it can also be inhumane. Let the last death sentence be for capital punishment.

Boris Nemtsov - The Man Who Knew Too Much?

Moscow, Russia - Thousands gathered this week in solidarity to mourn the loss of Boris Nemtsov and demand an investigation into his death. Mr. Nemtsov was shot multiple times in the back and died in Moscow on February 27, 2015. Why was Mr. Nemtsov killed?

Boris Nemtsov has been heavily involved Russian politics since the time that President Yeltsin was in power in the 1990s. He has served in high level positions such as first deputy prime minister. Various accounts indicate that he was a reformist politician and an opponent of Vladimir Putin, who was also involved at high levels in the Yeltsin government in the 1990s. Nemtsov was extremely popular with the Russian people during the Yeltsin administration and was considered a potential replacement for Yeltsin as President of Russia. However, Putin was Prime minister at the time that Yeltsin prematurely left office and became interim President. With Yeltsin's departure Nemtsov was pushed out of the Kremlin's inner circle. The once rising star of Russian politics became part of an opposition that was slowly becoming irrelevant as the Kremlin, under the guidance of Valdimir Putin, began to increasingly consolidate power. He spent the next decade attempting to build a pro-democracy, pro-reform party in a country where it was increasingly difficult to do so. Though, there are many who say that Nemtsov's greatest challenge was not his opposition to corruption of the Russian system but that he was openly critical of President Valdimir Putin. But why was he murdered now?

Being a reformer in Russia no doubt created many enemies for Mr. Nemtsov. However, he managed to survive in such a system for years. What was different now? There are rumors that Mr. Nemtsov was working on a report documenting President Putin's involvement in Ukraine. He was afraid for his life but he felt that his high level involvement with the Russian government in the past would protect him from such lethal action. The document that Mr. Nemtsov was supposedly working on detailed the connection between President Putin's government in Moscow and the Separatists in Ukraine. In the days before his death he is rumored to have been gathering evidence on the presence of Russian servicemen in Ukraine. He may have been talking with the families of Russian servicemen who had died in combat in Ukraine. Reportedly, he was close to the completion of the report and even had a title, "Putin and the War". The Russian government denies supporting the Separatists therefore a report documenting such a connection would irreparably damage the government's credibility at home and abroad.

Mr. Nemtsov is not the first popular critic of President Putin's government that has perished under mysterious circumstances. On October 7th, 2006 Anna Politkovskaya was killed and found in the elevator of her apartment building in central Moscow. Ms. Politkovskaya was a harsh critic of President Putin's government and its involvement in the Second Chechen War as well as its stifling of Russian civil liberties. Another widely known Putin critic to die under mysterious circumstances was Alexander Litvinenko. Mr. Litvinenko was an ex-Russian spy and, a vocal critic of Mr. Putin and the FSB (the Russian Federal Security Service). He accused them of various crimes such as supporting terrorist attacks inside Russia. Alexander Litvinenko died on November 23, 2006 from complications caused by Polonium-210 poisoning. Polonium-210 is a highly toxic and very rare substance that is said to be an effective assassination method. Investigations were conducted in both of the deaths mentioned above and in both cases there is no international consensus on who really killed them.

Boris Nemtsov is the latest in a long list of critics of President Putin's government that have been permanently silenced. These were individuals who may have known too much about Russia's involvement in Chechnya, the stifling of Russian civil liberties, and its potential involvement in Ukraine. In the coming weeks the Russian government that Mr. Nemtsov was rallying against will conduct an investigation into his death. Whatever, the outcome the investigation the world has to ask, according to political scientist and Russia expert Karen Dawisha, is Russia a democracy that is failing, or a authoritarian state that is succeeding?        

Teaching Ukraine to Fish

Initial reports show that the ceasefire in Ukraine may be holding. Large artillery pieces are being pulled back from the front lines by the separatist and Ukrainian government forces. Yet there is still sporadic fighting between government and separatist forces along the front lines of the conflict. The question on everyone's mind is if this lull in the conflict is step towards peace or are the separatists using this time to resupply so that they can push further into government controlled territory?

The movement of heavy artillery by separatists and the Ukrainian government forces away from the front lines would indicate that the ceasefire may be working since the heavy artillery is giving the separatists the upper hand against Ukraine's government forces. However, sources indicate that the separatist commanders still have the intention of capturing a few more areas in Eastern Ukraine with strong pro-Russian leanings. Therefore, the separatists may be using this lull in the fighting to regroup and resupply.

A renewal in the fighting may be a boon to the Russian President Vladimir Putin. The intervention of Russia in the conflict has made Putin increasing popular in certain segments of Russian society. Furthermore, renewed fighting would pull some of the media spotlight from the recent assassination of a vocal critic of President Putin, Boris Nemtsov.

The Russian President is not the only one who benefit from the renewed conflict. The Ukrainian government has effectively lost control of the far eastern half of their country and they want it back. The Ukrainian government has already requested arms assistance from its Western allies, a topic which is discussed in detail in the previous article "War and Peace in Ukraine". While the request was made at a time when ceasefire was not initiated, the request has not been yet been publicly withdrawn. No political leader wants to preside over the break up of his country.

The violation of Ukrainian sovereignty by the Russian government, both through the their direct and indirect support of the separatists, is an act that should not go unchallenged by the rest of the world. The sanctions on Russia are not a stand alone solution to the problem just like the the ceasefire is not a lasting peace. Even with a ceasefire, which was hailed in the West as a victory, Ukraine still lost ground to the separatists. The separatist victory in Eastern Ukraine showed the Russians that they could intervene with virtual impunity in Eastern European countries they share a border with.

Whether or not the separatists resupply themselves during the ceasefire, the Ukrainian government should resupply and, the West should help. Ukraine is a country with a democratically elected government that is being bullied. The West may not be able to fight Ukraine's battle but, they can provide Ukraine with the necessary assistance to help them defend their democracy.

There are those who would argue that by providing weapons to Ukraine the West is providing fuel to the fire. However, this scenario is different. The West would be supporting a democratically elected government. This is different than Syria, for example, where the rebels have no clear leadership and in some cases are colluding with religious fundamentalists.

The West is a beacon, not just for immigrants looking for a better life but, also for countries that want to be democracies. If Ukraine is not supported in its time of need it will send the wrong message to other pro-democracy governments around the world. As the old saying goes, give a man a fish and he will feed himself today but, teach a man to fish and he will never go hungry again. Giving Ukraine a ceasefire will provide them with a temporary peace but, providing them with with the support they need to earn their peace themselves may prove to be the long term solution.

Please Walk Calmly Towards the Grexit?

With Germany's denial of the extension for Greece's deadline on loan payments this week, it is becoming increasingly likely that Greece will exit from the Euro. The Greek debt talks have stalled on one question. Will Greece abide by the austerity terms that are a condition of its bail-out?

Earlier this week The True Blue Conservative published an article called "Death and Life in Greece" about the public health problems that austerity has contributed to inside Greece. When combined with the problems of unemployment (the Greek government is a major employer inside Greece) that austerity has already contributed to, the Greek public is unwilling to continue suffering austerity measures that are a condition of their bail-out. This sentiment was made clear when the people of Greece voted in the government of Alexis Tsipras, who ran on a platform that was strongly against austerity.

If the Greeks do not follow the austerity measures and Germany continues with its economic brinkmanship then Greece's exit from the Euro is very likely. However, this does not have to be the case. The terms of sovereign loans are often renegotiated. The original terms on which Greece was loaned money are not set in stone, especially when one of those terms, austerity, is the only major obstacle. The alternative to renegotiating the terms is to allow the Greek government to default, which is not in anyone's interest.

The one point that most parties involved in the negotiations agree on, including Germany and Greece, is that Greece needs to honor its debts. This is a solid foundation on which the terms of the bail-out can be re-negotiated. The first step to a possible solution is for Germany to reverse their position and grant Greece a short term extension on the loan deadline. The extension does not have to be a full six months, it can be shorter. This move allows all those involved in the negotiations a moment of calm that will allow cooler heads to prevail. A temporary extension will allow for the talks to continue and, increase the chances that Greece will pay its debts and, avoid default and exit the Euro.

Of course, both sides could maintain the status quo which will lead to the obvious result. However, Greece's default and exit from the Euro is only the short term effect. The long term consequences could be disastrous for the European Union and other global economies. Also, allowing Greece to exit from the Euro may send the wrong message, to other struggling economies in the Euro-zone, that the Euro-zone is a fair weather organization. Countries are welcome to it when their economies are doing well but, everyone is on their own when they need assistance.

Furthermore, weakness in the European Union at this time is deleterious for foreign policy. A strong European Union is key to preventing or countering any future aggression by Russia (the kind seen in Georgia and Ukraine) in European affairs.

The Euro is the first currency union in Europe that has been successful. Multiple previous attempts have been made and they failed. To risk the potential break up of the currency over debt repayment terms would be unfortunate, not only economically but, also geopolitically. The crisis with Greece is a significant challenge for the Euro-zone but one that they have the ability to overcome. The alternative to succeeding together is failing alone.