Archive for the 'economy' Tag


Today’s extended episode is a chat on future threat projection with Dennis Smith of the Project on International Peace and Security from William and Mary, Chris Peterson of the Fletcher School’s Neptune Group, and Alexander Clarke of the Phoenix Think Tank. We talk about the next 5-10 years in maritime security, concentrating on global human security, china, and the economy. Please enjoy Sea Control 21- Threat Projection (download).

Remember, we are available on Itunes, Stitcher Stream Radio, and a bunch of other places my Google data can’t identify. Please, leave a comment and a five-star rating so we can get on the front page one day.

Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.

Bulls make money. Bears make money. PIGS GETS SLAUGHTERED!

Bulls make money. Bears make money. PIGS GETS SLAUGHTERED!

Jim Kramer, madman behind CNBC’s Mad Money, always says, “where’s the pin-action?” or rather, “what are the wide-ranging domino effects of events.” The deal announced this weekend over Iran’s nuclear program is the axis of a massive strategic wheel which, if the deal is successful, will begin to turn. This article is not a debate on the durability of the coalescing Iran deal, but rather on its wide-ranging diplomatic, military, and economic effects if executed satisfactorily.

Reviewing the Facebook Friends List

In order to counter Iranian influence in the Gulf, the United States has unfortunately had to shackle itself with Saudi Arabia, of whom FDR may have well said, “may be a son of a bitch, but he’s our son of a bitch.” Unfortunately, this particular SOB isn’t an SOB to just the enemy. While purportedly a significant source of intelligence aid and support in the GWOT, entities in Saudi Arabia are also suspected of providing significant funding to Al-Qaeda associates, and the country is often a very clear human rights nightmare. Walking the diplomacy, human rights, military operations, and public image line is difficult enough before adding “balancing” Iran with folks who act like the Saudis to the mix. Any working deal with Iran frees the US’s hands to play a tougher game with Saudi Arabia, who is terrified of being left out in the cold of increased Iranian influence in the region.

Standards and Practices/ Money, Money, Money

Actually just on their way to the grand opening of the first Best Buy.

Actually, bothering the neighbors got boring. They’re actually just on their way to the grand opening of Bandar Abbas’ first Best Buy.

Iran continues to be a severe problem in areas of conflict outside the nuclear weapons question, like in Syria and in material of terrorism, as in the case of Hezbollah. Israel still rightfully worries about their non-nuclear activites. However, any practitioner of negotiation would tell you that you can’t get everything you want from the beginning. You need a starting point. If played correctly, the un-freezing of funds and potential increased business relationships/profits from opening trade based on good continuing behavior may create a virtuous cycle. With the potential strategic calculus of the new leadership, Iran may be discouraged from it’s bad behaviors in those far-flung arenas. The opportunity to develop domestically and fulfill the failed economic promises of a decade will hopefully pull attention away from more destructive enterprises and towards the domestic infrastructure programs Iranians have been calling for. Perhaps the US has facilitated Iran’s “Burma Moment.”

Oh, did I mention long-term lower oil prices adding a boon to a stagnating global economy that no longer needs to fear Iranian nuclear weapons or conflict in the gulf?

A Real Pivot

Turn this beast around. We have other fish to fry.

Turn this beast around. We have other fish to fry.

In a time of sequestration, resources are going to be stretched thin. Facility development in Qatar, Dubai, Bahrain, etc… in response to Iranian threats and the massive project of ballistic missile defense will in the immediate term continue to be important, but if successful in changing Iran’s strategic calculus from military to economic success, those efforts can give way to the bigger projects of presence in Asia and projection in Africa. Decreased threats from Iran will help lighten regional carrier presence calculations, for example. Imagine, the resources spent to move the fleet of Cyclone-class PC’s to Bahrain spent elsewhere (PC’s to Singapore, perhaps) if the Iranian threat didn’t loom so large. Lightening that demand signal will give the U.S. military important freedom and flexibility to meet future goals.It is a simple and intuitive point, but one with massive impact.

Verify, then Trust

Ronald Reagan is often known for saying the Russian proverb, “trust, but verify.” In the case of Iran, there is no extended relationship of engagement upon which to base any trust, “verify, THEN trust.” Any deal, as stated by the President and Secretary Kerry, will need to be heavily monitored and enforced by the united front of negotiating parties. Skepticism is an important part of a deal being a success. That said, the perils are many, but the benefit are huge. It’s a long shot, but so worth a shot.

Dig down in the comments on another post and you’ll find some strong arguments being made for drastic cuts in the Navy and other services to help improve America’s balance sheet for the long haul. Clearly, restoring the health of the economy is a national security issue, but reports on the economy are vulnerable to hyperbole and predictions on how long the current downturn will last vary.

While the economy is in fact weak, in an environment where bad economic news makes good headlines, sells newspaper and drives traffic to media outlets, and economic issues and proposed remedies are highly politicized, it is challenging to objectively weigh economic issues against other national security issues. Unemployment is rising, several major industries are in genuine crisis and consumer confidence is low, but many of the key metrics grabbing headlines have been worse in the post-Depression period, yet did not require massive government intervention or austerity measures to correct. The less politicized economists seem to be predicting the recession will last another 12-18 months, with a few predicting as long as 24-36 months.

We also appear to be seeing a rebalancing in security challenges. The war in Iraq is drawing down, and while resources must be shifted from Iraq to Afghanistan, it’s not unreasonable to believe America’s commitments to “boots on the ground” in far away lands will decrease on the order of 30 to 50 thousand troops over the next two years. Meanwhile, maritime challenges are on the upswing and global maritime presence and engagement is becoming a more pressing requirement to maintain the free flow of trade and regional stability.

So, given the situation America faces at home and abroad, three questions come to mind:

  1. Are the current economic problems significant enough to make the economy America’s #1 security problem and warrant substantial reductions in defense spending?
  2. Does the current plan to build the end strength of the Army and Marine Corps need to be reconsidered?
  3. Should defense dollars be reallocated among the services to give higher priority to resurgent naval threats and maritime security initiatives?

What say you?

[Update1] Looks like somebody at CBO may already be saying “yes” to question #2:

The Congressional Budget Office prepared some budget alternatives for Congress to deal with defense budget shortfalls.

The alternative budget…proposes increasing enrollment fees and copayments for military retirees using the defense health care system and a reduction in Army and Marine Corps personnel.