AEI » Blog http://www.aei.org American Enterprise Institute: Freedom, Opportunity, Enterprise Fri, 19 Dec 2014 20:19:18 +0000 en-US hourly 1 Iran and al Houthi proxies threaten US counter-terrorism policy in Yemenhttp://www.aei.org/publication/iran-al-houthi-proxies-threaten-us-counter-terrorism-policy-yemen/ http://www.aei.org/publication/iran-al-houthi-proxies-threaten-us-counter-terrorism-policy-yemen/#comments Fri, 19 Dec 2014 14:57:49 +0000 http://www.aei.org/?post_type=publication&p=825475 The al Houthi militants' seizure of the al Hudaydah port raises questions as to the rebel group's objectives in Yemen and the sustainability of US-Yemen counter-terrorism cooperation, specifically in light of growing Iranian support for the rebel group.

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Al Houthi militants seized the strategic al Hudaydah port on Yemen’s coast on December 17. The move gives the al Houthis, a Zaydi Shi’a movement that has received Iranian financial and materiel support, direct access to shipping and smuggling routes in the Red Sea. The seizure of the al Hudaydah port fits into what appears to be the al Houthis’ larger scheme of securing key Yemeni infrastructure since the rebel group took power in Sana’a, Yemen’s capital, on September 21. The move also raises questions as to the al Houthis’ objectives in Yemen and the sustainability of US-Yemen counter-terrorism cooperation, specifically in light of growing Iranian support for the rebel group.

Let’s take a step back. The al Houthi leadership has been messaging that the group seeks political reform and will join the government once corruption is routed out of Yemeni state institutions. However, the al Houthis’ continued military presence in Sana’a and their blatant expansion of control over state infrastructure is in opposition to the group’s rhetoric. For example, the al Houthis have taken over the state-run newspaper and Yemen’s primary oil company, and  are also rumored to have set their sights on expanding their geographic influence south in Taiz, Yemen’s third-largest city, and east in Ma’rib, where Yemen’s main gas infrastructure is located.

These recent moves signal the al Houthis may be preparing to dominate the Yemeni state. And it is possible the group may contemplate direct cooperation with Iran to receive further funding and military aid in support of these efforts. Recent reporting indicates that Iran increased financial and materiel support to the al Houthis since September. Port access to the Red Sea could now facilitate even greater movement of arms from Iran. High-ranking al Houthis recently indicated their willingness to work with Tehran, praising Iran as the “axis of resistance” to the West.

What does this mean for US counter-terrorism policy in Yemen? Nothing good. The US strategy relies on a willing partner to combat al Qaeda in the Arabian Peninsula (AQAP). Currently, the Yemeni government serves that role. It’s becoming increasingly possible, however, that the al Houthis may become the only viable power brokers in the country. Which effectively means partnering with Iran, or nothing.

The al Houthis have fundamentally changed the Yemeni political landscape. Yet, US policy remains the same. It’s time the US assesses how the al Houthis’ de-facto control of the Yemeni government affects our current strategy to combat AQAP. Because we are in danger of losing our Arab and Sunni partners by aligning ourselves with Iran’s “axis of resistance” – which Tehran means to resist us.

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The magic and miracle of the marketplace: Christmas 1964 vs. 2014 – there’s no comparisonhttp://www.aei.org/publication/magic-miracle-marketplace-christmas-1964-vs-2014-theres-comparison/ http://www.aei.org/publication/magic-miracle-marketplace-christmas-1964-vs-2014-theres-comparison/#comments Fri, 19 Dec 2014 03:54:44 +0000 http://www.aei.org/?post_type=publication&p=825458 Pictured above are some color TVs from the 627-page 1964 Sears Christmas Catalog, available here at the WishbookWeb website along with many other Christmas catalogs from 1933 to 1988. The original prices are listed ($750 for the Sears Silvertone entertainment center and $800 for the more expensive one), and those prices are also shown converted [...]

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Pictured above are some color TVs from the 627-page 1964 Sears Christmas Catalog, available here at the WishbookWeb website along with many other Christmas catalogs from 1933 to 1988. The original prices are listed ($750 for the Sears Silvertone entertainment center and $800 for the more expensive one), and those prices are also shown converted to today’s 2014 dollars using the BLS Inflation Calculator: $5,700 for the basic 21-inch color TV model and $6,100 for the more expensive model.

To put that in perspective, the pictures below illustrate what about $5,700 in today’s dollars (actually only $5,600) would buy in the 2014 marketplace using current prices from the Sears and Best Buy websites:

appliances2014

Bottom Line: For an American consumer or household spending $750 in 1964, they would have been able to purchase the 21-inch color TV/entertainment center from the Sears Christmas catalog pictured above (includes phonograph and AM/FM radio). An American consumer or household spending that same amount of inflation-adjusted dollars today (about $5,600) would be able to furnish their entire kitchen with 5 brand-new appliances (refrigerator, gas stove and oven, washer, dryer, and freezer) and buy 7 state-of-the-art electronic items for their home (a Toshiba Satellite 14″ laptop computer, a Garmin 5 Inch GPS, a Canon EOS Rebel T5 DSLR Camera, a Sony 1,000 Watt, 5.1-Channel 3D Smart Blu-Ray Home Theater System, a Sharp 50 inch LED HDTV, an Apple iPod Touch 32GB MP3 Player, and an Apple iPhone 6). And of course, even a billionaire in 1964 wouldn’t have been able to purchase many of the items that even a teenager can afford today, e.g. laptop computer, GPS, iPhone, digital camera.

As much as we might complain about a slow economic recovery, the decline of the middle class, stagnant median household income, rising income inequality and a dysfunctional Congress, we have a lot to be thankful for, and we’ve made a lot of economic progress in the last 50 years as the example above illustrates, thanks to the “magic and miracle of the marketplace.”

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On the left’s dream of turning America into Scandinaviahttp://www.aei.org/publication/lefts-dream-turning-america-scandinavia/ http://www.aei.org/publication/lefts-dream-turning-america-scandinavia/#comments Thu, 18 Dec 2014 22:25:17 +0000 http://www.aei.org/?post_type=publication&p=825452 Many left-liberals have a real thing about the social democracies of Scandinavia. As University of Arizona sociologist Lane Kenworthy has put it, “Over the course of the next half century, the array of social programs offered by the federal government of the United States will increasingly come to resemble the ones offered by [the Nordic welfare states]." And he might be right, if Democrats have their way. No sooner the arrival of universal healthcare did Democrats move into their next project: universal preschool. And next perhaps a universal basic income. ...

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Many left-liberals have a real thing about the social democracies of Scandinavia. As University of Arizona sociologist Lane Kenworthy has put it, “Over the course of the next half century, the array of social programs offered by the federal government of the United States will increasingly come to resemble the ones offered by [the Nordic welfare states].” And he might be right, if Democrats have their way. No sooner the arrival of universal healthcare did Democrats move into their next project: universal preschool. And next perhaps a universal basic income. (Hey, where is the VAT to pay for all this stuff?) There are fans in the media, too. Again, here is New York Times reporter Neil Irwin on what lessons America can learn from Scandinavia’s high labor force participation rates  in creating a pro-work safety net:

In short, more people may work when countries offer public services that directly make working easier, such as subsidized care for children and the old; generous sick leave policies; and cheap and accessible transportation. If the goal is to get more people working, what’s important about a social welfare plan may be more about what the money is spent on than how much is spent. If correct, it could have broad implications for how the United States might better use its social safety net to encourage Americans to work. In particular, it could mean that more direct aid to the working poor could help coax Americans into the labor force more effectively than the tax credits that have been a mainstay for compromise between Republicans and Democrats for the last generation.

AEI’s Mike Strain, quoted in the Irwin piece, has a response here. So too does AEI’s Stan Veuger. Let me pull out a few of their insights. First, Strain:

I’m quoted in an article in the New York Times on the paper, and as the article reports I do think that we can learn some things from Scandinavia — better transportation, better public education — and I oppose expanding the government’s role in child care (we have enough middle-class entitlements, thank you very much). … I would make two other points as well. Americans might be willing to fork over more of their hard-earned cash to the government if they had more confidence that the government would spend the money in a productive way. … And, as I have written, very high marginal income tax rates would likely be very damaging to the long-term future of the United States. Why would a young person want to be a surgeon or an entrepreneur if the government will take seventy cents of her top dollars of income? Like Scandinavian culture, the longer-term reactions to high top rates — skill acquisition, occupational choice, general attitudes about work — are much harder to measure. And it is fine for economists to focus on what they can measure when writing their papers. But it is not fine for the public debate to assume that these effects are zero just because economists can’t measure them.

And Veuger:

But might policy and politics be downstream from culture? Well, that certainly appears to be the case once we look at Scandinavian culture. Scandinavians trust their fellow citizens. They think poor people have typically been unlucky instead of lazy. They vote actively and participate in civil society. They respect the rule of law, and they donate to charity. Professor Kleven recognizes all of these things, and ultimately chooses not to guess what causes what. Yet for the ambitions of American progressives, that distinction matters very much. If all of these things are so precisely because the Scandinavian countries are small and homogeneous and have been that way for quite some time, then there is not much to be learned from this Scandinavian business. The Scandinavians themselves seem quite confident that they know the answer: culture matters and that their countries are small and homogeneous matters. They are the most Euroskeptic peoples of the continent. Norway is not a member of the European Union, Sweden joined only recently, and none of the three adopted the eurozone’s common currency. They seem to like their small, homogeneous countries just fine. And perhaps that’s what Scandinavia ultimately teaches us: the value of subsidiarity, not of subsidies.

Other economists wonder if Nordic-style capitalism is as conducive to innovation. Certainly they file fewer patents and generate fewer superrich entrepreneurs. (Recall Strain’s remarks on taxes.) As economists Daron Acemoglu, James Robinson, and Thierry Verdier explain in their paper “Can’t We All Be More Like Scandinavians?”: “We cannot all be like the Scandinavians, because Scandinavian capitalism depends in part on the knowledge spillovers created by the more cutthroat American capitalism. … Some countries will opt for a type of cutthroat capitalism that generates greater inequality and more innovation and will become the technology leaders, while others will free-ride on the cutthroat incentives of the leaders and choose a more cuddly form of capitalism.”

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Negative interest rates: The Swiss Central Bank joins inhttp://www.aei.org/publication/negative-interest-rates-swiss-central-bank-joins/ http://www.aei.org/publication/negative-interest-rates-swiss-central-bank-joins/#comments Thu, 18 Dec 2014 22:02:31 +0000 http://www.aei.org/?post_type=publication&p=825451 Negative interest rates keep happening although economists generally assured us they couldn’t. They will soon apply to large deposits with the central bank of Switzerland, as today (December 18), the Swiss National Bank (SNB) joined the European Central Bank in the negative interest rate club.

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Negative interest rates keep happening although economists generally assured us they couldn’t. They will soon apply to large deposits with the central bank of Switzerland, as today (December 18), the Swiss National Bank (SNB) joined the European Central Bank in the negative interest rate club.

The SNB announced that starting January 22, 2015, demand deposits over a certain threshold held with it by banks and financial institutions will have a negative interest rate of -0.25%. Further, said the SNB, “we aim to take the three-month [Swiss franc] Libor into negative territory.”  Its target range for this rate will be -0.75% to -0.25%.

As it was in the 1970s, when the Swiss imposed negative interest rates on Swiss franc deposits by foreigners, the cause of this action is the unwanted pressure for further appreciation of the Swiss currency. “We are introducing negative interest rates,” they explain, “to support the minimum exchange rate.” More clearly stated, this phrase means: to cap the maximum appreciation of the Swiss franc.

How widespread can negative interest rates become? How negative can they get? Nobody, including economists, knows.

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‘Cuba the Morning After’http://www.aei.org/publication/cuba-morning/ http://www.aei.org/publication/cuba-morning/#comments Thu, 18 Dec 2014 21:15:02 +0000 http://www.aei.org/?post_type=publication&p=825440 Yesterday, President Obama announced a decision to reestablish diplomatic relations with Cuba. Discussions to reopen the relationship will begin immediately and will include efforts to reestablish an embassy in Havana.

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Yesterday, President Obama announced a decision to reestablish diplomatic relations with Cuba. Discussions to reopen the relationship will begin immediately and will include efforts to reestablish an embassy in Havana. The president’s announcement makes particularly relevant a book by AEI emeritus scholar and Latin American expert Mark Falcoff.

In “Cuba the Morning After: Confronting Castro’s Legacy” (AEI Press, 2003),  Falcoff surveys  the damage that decades of Communist rule have done to the people of Cuba including a prostrate economy, widespread poverty and political repression. Falcoff  argues that it will be difficult, perhaps impossible, to reverse the decades-long devastation and that to expect an instantly revitalized dynamic Cuba to emerge is unrealistic.

For more on Obama’s move to change the diplomatic relationship with Cuba, read Roger Noriega’s recent piece on the matter.

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The oil price collapse may end the ‘Texas Miracle’ — at least for nowhttp://www.aei.org/publication/oil-price-collapse-may-end-texas-miracle-least-now/ http://www.aei.org/publication/oil-price-collapse-may-end-texas-miracle-least-now/#comments Thu, 18 Dec 2014 18:08:11 +0000 http://www.aei.org/?post_type=publication&p=825418 The energy sector gives, and the energy sector takes. The stunning drop in oil prices looks like bad news for the "Texas Miracle." This from JPMorgan economist Michael Feroli: "As we weigh the evidence, we think Texas will, at the least, have a rough 2015 ahead, and is at risk of slipping into a regional recession." ...

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The energy sector gives, and the energy sector takes. The stunning drop in oil prices looks like bad news for the “Texas Miracle.” (Texas is responsible for 40% of all US oil production — vs. 25% five years ago — and all of the net US job growth since 2007.) This from JPMorgan economist Michael Feroli: “As we weigh the evidence, we think Texas will, at the least, have a rough 2015 ahead, and is at risk of slipping into a regional recession.”

So perhaps a minor key replay of what happened in the Lone Star State back in 1986 when oil prices also collapsed. The oil patch bust caused Texas unemployment to rise, housing prices to fall, and, eventually, a nasty banking crisis. On the positive side, natural gas prices have not fallen along with oil — unlike in 1986 — while the Texas  employment share from oil is less today than back then. But there are reasons to worry as well:

While these are all valid, they are not so strong as to signal smooth sailing for the Texas economy. Financially, oil is a fair bit more important than gas for Texas, both now and in 1986, with a dollar value two to three times as large. Moreover, while energy employment may be somewhat smaller now, we are not talking about night and day: the current share is about 3/4ths what it was in 1986. (And given the higher capital intensity there are some reasons to think employment may be greater now in sectors outside the traditional oil and gas sectors, such as pipeline and heavy engineering construction).

As we weigh the evidence, we think Texas will, at the least, have a rough 2015 ahead, and is at risk of slipping into a regional recession. Such an outcome could bring with it the usual collateral damage that occurs in a slowdown. Housing markets have been hot in Texas. Although affordability in Texas looks good compared to the national average, it always does; compared to its own history, housing in some major Texas metro areas looks quite dear, suggesting a risk of a pull-back in the real estate market.

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It’s always Christmastime for farmershttp://www.aei.org/publication/always-christmastime-farmers/ http://www.aei.org/publication/always-christmastime-farmers/#comments Thu, 18 Dec 2014 17:28:36 +0000 http://www.aei.org/?post_type=publication&p=825406 At every Christmas time, we should genuinely be thankful for all the farmers and ranchers who help us enjoy better lives. But we should also expect Congress and the Administration to deliver federal farm policies that focused on real needs and do not spend tax payers’ funds on programs that, for the most part, transfer incomes to the relatively wealthy in ways that waste society’s scarce resources.

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It is Christmas time once again and in my part of the world, southwestern Montana, the snow has arrived and will be with us until early March.  Most nights the temperature will fall well below 20 degrees Fahrenheit; some days the thermometer won’t rise above zero.

That’s winter time in the Northern Great Plains and the eastern Rocky Mountains, where cabin fever is a real phenomenon and ranching becomes truly hard work. In this world, cattle can be inconvenient. They need water and calories in places where they can feed and drink, and cows often calve on bitterly cold February and early March nights.

Ranching is also risky in the winter time; herds can be decimated by blizzards and what seem like mile high snow drifts. And ranchers, on the whole, are genuine risk taking entrepreneurs who, for the most part, neither seek nor receive substantial federal bailouts. Most of them also know that country of origin labelling is a bad economic idea that has reduced the prices they are paid by meatpackers and feedlots. The National Cattlemen’s Beef Association, for example, has recently argued that the US should “reform” and essentially terminate that program rather than appeal a recent WTO finding that the program violates US WTO commitments.

The federal support ranchers do get is modest and comes mainly in three forms. They receive relatively small scale disaster aid payments for excessive cattle losses caused by bad weather or disease and moderate compensation for loss of feed on the lands their cattle graze in the summer because of exceptional drought.

Ranchers also have access to federally subsidized cattle price related insurance products that are generally poorly designed and, happily from the taxpayer’s perspective, rarely used, and a heavily subsidized rainfall index insurance product associated with forage production that is more extensively exploited. But livestock insurance programs account for less than 2% of the more than eight billion dollars in annual average taxpayer funded subsidies that underwrite the US federal agricultural insurance program.

In addition, through publicly funded research and development programs, USDA and the nation’s Land Grant and other universities generate much of the science on which new medical, production and land management technologies are developed that improve the efficiency of the livestock industry. The result is that meat prices at the supermarket are lower than would otherwise be the case, though that may be hard for some to believe given the current record high prices we are paying for hamburger. The reason for these current high prices is complex, but derives from recent increases in global demand relative to global supply for meat based protein.

Many crop producer organizations have a different view about how their world should be managed, as do milk producer organizations.   The corn, wheat, soybean, peanut, rice, milk and cotton lobbies have been highly successful in obtaining substantial subsidies from the federal government over the past sixty years.  And, having enjoyed those subsidies, like Oliver Twist with respect to his daily allotment of oatmeal (but with much less justification), they want more.  By and large, they were successful in getting their “more” in the 2014 farm bill.

Of course, the difference between Oliver and most of the farmers served by those organizations is that poor Oliver was genuinely poor, in fact starving. In contrast, as was recently pointed out in The Economist, most federal crop subsidies go to farm households that have much higher incomes and are far wealthier than the average US household.

So, as at every Christmas time, we should genuinely be thankful for all the farmers and ranchers who help us enjoy better lives. But we should also expect Congress and the administration to deliver federal farm policies that focused on real needs and do not spend tax payers’ funds on programs that, for the most part, transfer incomes to the relatively wealthy in ways that waste society’s scarce resources.

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Congress creates another tax-preferred savings accounthttp://www.aei.org/publication/congress-creates-another-tax-preferred-savings-account/ http://www.aei.org/publication/congress-creates-another-tax-preferred-savings-account/#comments Thu, 18 Dec 2014 15:56:21 +0000 http://www.aei.org/?post_type=publication&p=825383 All income tax systems, including our own, impose a penalty on saving. A worker who consumes today pays tax on her wages; a worker who saves to consume in the future pays the same tax on her wages plus a second tax on the return earned on her savings, resulting in a higher percentage tax burden. The saving penalty interferes with Americans’ decisions about the timing of their consumption and slows the capital accumulation that drives long-run economic growth.

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All income tax systems, including our own, impose a penalty on saving. A worker who consumes today pays tax on her wages; a worker who saves to consume in the future pays the same tax on her wages plus a second tax on the return earned on her savings, resulting in a higher percentage tax burden. The saving penalty interferes with Americans’ decisions about the timing of their consumption and slows the capital accumulation that drives long-run economic growth.

Over the years, Congress has displayed considerable ambivalence about the saving penalty. It has created dozens of tax-preferred accounts that allow savers to escape the penalty by removing either the first tax (making contributions to the account tax-deductible) or the second tax (making account withdrawals tax-exempt). Each type of account has its own, often complicated, contribution limits and eligibility rules. And, each account requires that savings be used for a different purpose, such as retirement (traditional and Roth IRAs and 401(k)s), education (Coverdell and 529 accounts), health care (HSAs), and so on.

Soon, there will be one more tax-preferred savings account. Congress has passed, and President Obama will soon sign into law, the Achieving a Better Life Experience (ABLE) Act, which will create a new ABLE account. The account is a good idea within the context of the current income tax system, but highlights the system’s inherent limitations.

The Act will allow annual contributions of up to $14,000 (rising with inflation in future years) to be made to an ABLE account by, or on behalf of, an individual who became blind or significantly disabled before age 26. Contributions will not be tax deductible, but the money will grow tax-free inside the account. Withdrawals used to meet the beneficiary’s education, housing, transportation, and certain other expenses will be tax-free. (Withdrawals for other purposes will trigger income tax, plus a 10% penalty, on the portion of the withdrawals attributable to tax-free earnings rather than the original after-tax contributions.) Also, if the beneficiary applies for Medicaid or Supplemental Security Income, the account balances will often not be counted against the programs’ asset limits.

The new ABLE accounts will allow disabled individuals and their families to save for their future needs without facing the income tax’s saving penalty. The accounts fall short of a complete solution for the challenges facing individuals with disabilities, for reasons explained by Howard Gleckman of the Urban-Brookings Tax Policy Center. But, numerous disability advocacy organizations welcome the accounts as a step forward.

More broadly, the new law should prompt us to rethink our tax treatment of saving. We have an array of complicated rules to measure and tax the income from saving and another array of complicated rules to remove the tax from dozens of types of savings that Congress has singled out for favorable treatment. Meanwhile, the large portion of national saving done outside tax-preferred accounts faces the income tax’s saving penalty, impeding economic growth.

Rather than continuing to identify, one by one, the “good” types of saving that should be spared the income tax penalty, Congress should remove the penalty from all saving and let Americans decide for themselves which kinds of saving are best. In short, we should replace the income tax with a progressive consumption tax. One such tax is the personal expenditure tax, in which individuals are allowed to deduct all of their saving from their income. Another is the Bradford X tax, in which individuals pay tax only on labor income and businesses pay a cash flow tax that doesn’t affect marginal investment incentives.

ABLE accounts will help many people by removing the income tax’s saving penalty in one more situation. Now, let’s take the next step and end the saving penalty for everyone.

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The ruble and Russia’s food imports: More than Putin’s life sourcehttp://www.aei.org/publication/ruble-russias-food-imports-putins-life-source/ http://www.aei.org/publication/ruble-russias-food-imports-putins-life-source/#comments Thu, 18 Dec 2014 14:28:20 +0000 http://www.aei.org/?post_type=publication&p=825273 Russia's plummeting ruble and skyrocketing food prices should have the Kremlin seriously concerned about the social and political implications of a weakening economy.

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Following the downward trajectory of the price of oil, the Russian ruble continues to plummet. And amidst this currency free-fall, it is the political ramifications of the country’s skyrocketing food prices, caused by heavy dependence on food imports that are most troubling. An increase in the price of food that outpaces inflation has the potential to threaten citizens’ access to food and, consequentially, fuel social unrest, alienating Putin’s political base among lower income Russians and threatening his political legitimacy.

In a 2009 essay titled, “Oil-for-Food” When Oil Is Down (and the Ruble Is Weak), Leon Aron argued that from 2000-2008, domestic food production had been increasingly depressed by the overvalued ruble, corruption, and the creeping state takeover of the economy. As a result, Russian food prices became hostage to the price of oil. Aron warned:

Superimposed on the already substantial inflation in food prices,…Russia’s inordinate dependence on imported food may yet become an explosive issue when the economic crisis and the falling oil prices increase unemployment and further weaken the ruble. Alongside other key economic and political certainties of Putinism, the “oil-for-food” structure is very likely to deteriorate rapidly and even collapse.

In early 2007, Vladimir Putin, recognizing this vulnerability, warned that 45% of Russian food overall, and up to 85% in larger cities, came from abroad. In his 2009 essay, Aron outlined a scenario, in which the Russian people may take to the streets:

In one such hypothetical development, in a small to medium-sized Russian city of the kind in which most Russians live, supermarkets are closed and only the “most elemental” products–bread, buckwheat, cheap sausage, and milk–are available at kiosk-like “trading points” or sold by old women on the streets. As the situation continues to deteriorate and people grow desperate, the local administration, which used to rely on the Kremlin’s “vertical of power” for any decision, waits for orders from Moscow. No directives are forthcoming, and spontaneous demonstrations break out.

While a quick rebound in oil prices in the aftermath of the 2008-2009 crisis temporarily alleviated this danger, Russia’s current economic outlook is far gloomier today. With Kremlin-enforced import-bans on food products, Western sanctions and the low price of oil, Putin’s oil-for-food foundation of the Russian economy is coming to haunt its creator.

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Can Arab states take the next step against ISIS?http://www.aei.org/publication/can-arab-states-take-next-step-isis/ http://www.aei.org/publication/can-arab-states-take-next-step-isis/#comments Thu, 18 Dec 2014 13:20:47 +0000 http://www.aei.org/?post_type=publication&p=825317 Overt US pressure on regional partners might backfire, yet in absence of broader participation from the coalition, the United States should plan to assume much of the operational burden going forward.

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Following a visit to Jordan last month, Rep. Rob Wittman (R-VA) argued the campaign against the Islamic State (ISIS) “needs an Arab face.” Saudi Foreign Minister Saud Al-Faisal agreed, declaring success “requires the presence of combat troops on the ground.” It is a notion shared by Jordan’s King Abdullah as well. During an interview with PBS’s Charlie Rose, Abdullah said, “We, as Arab and Muslim countries…need to take ownership of this.”

Rhetoric comes easily, but implementation does not. When pressed by Rose about deploying Jordanian troops the King demurred, noting “at the end of the day, whether it’s in Iraq or in Syria, it has to be done by the local populations themselves.” Here lie the limits of the anti-ISIS coalition: US partners in the region are unable or unwilling to do more.

Key reasons for this reticence include limited capability, Iraq’s uninterest in foreign troops, regional tensions, and fear of domestic blowback. US allies in the region invest heavily in air power, but their conventional land forces remain limited (Saudi Arabia, UAE, Qatar, and Bahrain), or outdated (Jordan). The coalition’s contribution to date is limited: of 1,219 air strikes conducted in Iraq and Syria since August, coalition partners contributed 208.

Second, Iraq’s leaders have dismissed the idea of foreign troops. Saudi Arabia has stationed 30,000 troops along the Saudi-Iraq border since July and reports from September hinted at possible Jordanian deployment, but Iraqi Prime Minister Haider al-Abadi has emphasized “Not only is it not necessary,” he said, “We don’t want them. We won’t allow them. Full stop.”

Third, existing regional tensions make a cohesive coalition unlikely. While Qatar and the United Arab Emirates (UAE) both joined NATO operations in Libya in 2011, they are now on opposite sides of a regional proxy war, with Qatar backing the parliament in Tripoli, while the UAE, other Gulf states, and Egypt back the parliament based in the eastern Libyan city of Tobruk. Qatar supports Egypt’s Muslim Brotherhood, while Saudi Arabia backs Abdel Fattah al-Sisi’s regime. Amid these competing regional rivalries, even the backdrop of a growing ISIS threat may not be sufficient to create unity among Arab League or GCC members.

Finally, the potential for domestic blowback concerns regional leaders. Most ISIS fighters appear to be Iraqi or Syrian, yet the top three states of origin for foreign fighters joining ISIS are Tunisia and Saudi Arabia, followed closely by Jordan. ISIS’s continued advance threatens neighboring states, and returning fighters could destabilize regional governments, but with many citizens distrustful of US policy in the region further participation in the coalition could spark domestic protest as well.

Could the coalition ever overcome these challenges? It is difficult to imagine how. Short of an about-face by Iraq’s leadership, or a sudden thawing of tension in the Gulf, the dysfunction will likely continue. Overt US pressure on regional partners might backfire, yet in absence of broader participation from the coalition, the United States should plan to assume much of the operational burden going forward.

Tara Beeny is a Research Assistant at the American Enterprise Institute.

Follow AEIdeas on Twitter at @AEIdeas.

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