the Blog Papers of Dr. Michael Sakbani; Economics, Finance and Politics

Dr. Michael Sakbani is a professor of economics and Finance at the Geneva campus of Webster-Europe. He is a senior international consultant to the UN system, European Union and Swiss banks. His career began at the State university of NY at Stoney Brook,then the Federal Reserve Bank of New York followed by UNCTAD where he was Director of the divisions of Economic Cooperation, Poverty Alleviation, and UNCTAD`s Special Programs. Published over 100 professional papers.

Monday, October 12, 2020

President Trump and a Possible Biden`s Victory in 2020

 

 

Dr. Michael Sakbani is a professor of economics and Finance at the Geneva campus of Webster-Europe. He is a senior international consultant to the UN system, European Union and Swiss banks. His career began at the State university of NY at Stoney Brook,then the Federal Reserve Bank of New York followed by UNCTAD where he was Director of the divisions of Economic Cooperation, Poverty Alleviation, and UNCTAD`s Special Programs. Published over 120 professional papers.

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President Trump and a Possible Biden`s Victory in 2020.

by

Dr. Michael Sakbani

 

For the last few months, President Trump has declared that he will look at the situation after elections to decide whether to accept the results of the vote or not. He has also thrown in doubt the integrity and legitimacy of mail ballots and claimed without any evidence that the November election will be plagued with fraud. All of that leaves no doubt about the intentions of the President not to submit to the electorates` will if he were not confirmed in his place. President Trump added that the Supreme Court should have 9 justices to look into the results of the elections, an indication that if all fails, he plans to go to court in the hope that his appointees on the Supreme Court would vote in his favor. 

The President knows that most of the mail vote will be cast by Democrats. Therefore, in line with the Republican effort to suppress voting, especially of minorities, this becomes a calculated effort to refuse the peaceful transfer of power the US has known and has practiced for its 232 years.

The President`s contentions about the mail voting run counter to the actual experience of the USA. it should be recalled that three states vote exclusively by mail, six others have voted predominantly by mail. There is no evidence all these years that electoral fraud has been of any significance in the US. The President knows that because of the epidemic, a historic number of American voters, perhaps as many as 60 % will vote by mail in this election cycle and that most of the mail vote will be cast for the Democrats. Therefore, in line with the Republican efforts to suppress voting, especially of minorities, he has thrown the legitimacy of voting by mail into question and seems to be planning to send “observers” to the ballot boxes in order to intimidate voters. His appointed Post-Master General Mr. Dejoy is trying his best at slowing the mail, reducing mailboxes and mail- sorting machines. so that the mail arrives after election day. And this date of arrival if after election day is what President Trump wants to contest in court.

The Republican Party has been caught in a demographic and sociopolitical situation of its own making. Young voters and non European-origined whites are becoming overwhelmingly Democrats. If election voting is facilitated, the Republicans, as President Trump admitted, will become a minority party for a generation to come. Hence,  they are openly trying to suppress minority voting. The Republican Governor of Texas Greg Abbot reduced ballot- drop- off boxes to one per county. In Harris County, which includes Houston and has a 4.7 million population, some voters might have to travel 100 miles to drop their vote. Other Republican Governors notably in Florida, and Georgia. have done the same 

In the elections of 2020, there will be hundred Republican suits to stop counting the vote after election day even if the mail votes were mailed before election day. This will pose a problem for many states. In the crucial state of Pennsylvania, the Republican legislator has refused to allow processing the mail vote before election day even though much of it was received before election day. The same obstruction is in evidence in Wisconsin and Michigan. In some other states like Arizona and Nevada, mail voting stamped before election day can be accepted several days after November 3. All of that will lead to delays in counting the vote and therefore delays in declaring the winners of the election. There is little doubt that Mr. Trump might demand that he should be declared the winner before sorting and counting the heavily skewed Democrats voting coming by mail since most of his in-person votes will be processed before the mailed vote.

Mail balloting will produce some numbers of rejections for technical reasons. To add to that, different states have different protocols for processing and validating the votes. In 22 states, minor technicalities can be corrected (cured), while in others that would not be possible. To be sure, direct personal balloting is easier to process, but in the year of the pandemic, voting in -person risks catching the virus.

President Trump's threat is not a simple Trump attempt to create public opinion chaos and garner up media coverage. It is a studied step in several maneuvers he is likely to pursue to stay in power and refuse the will of the voters.

Professor Barton Gellman of Dartmouth and Professor Lauence Douglas of Amherst, have both outlined a possible legal attempt by Trump to have the legislators in six battleground states, namely, Michigan, Wisconsin, Pennsylvania, Florida, Ohio and North Carolina, in which the Republicans control both the states Senates and their Assemblies, declare the vote unacceptable and decide to name the electoral college votes of their respective states for Trump. Even if the Governors of some of these states object, the election would go to the US Lower House which will cast one vote per state depending on its current majority representation. This majority stands now in favor of the Republicans at 26.

The Constitution is mute on this aspect but the Supreme Court decided that in cases of doubt about the legitimacy of the ballots, the legislators have such authority. Already, there are media reports that Trump lawyers in Wisconsin are making preparations to do so. A reporter from ”The Atlantic” divulged on MSNBC news show “Morning Joe” that a Republican legislator in Pennsylvania has told him so. Along with Trump and McConnelrush to fill the vacancy on the Supreme Court created by the passing of Justice Ginsburg38 days before the elections, the course of action of Trump to thwart the vote if it does not run in his favor, becomes clear and plausible.

In the New York Review of Books issue of 8 October 2020, Pamela Karlan brings up another possibility of major consequence in the state of Florida, the third most populous state in the Union. In Florida, 1.4 million ex-offenders can vote if they have served their sentences and passed their parole. However, they can do so if they paid all their debts to the state. Of this total, only 85000 apparently know their indebtedness. What would happen then if some of these fellows vote? Trump lawyers can well throw the vote results into the courts.

This would not be the first time that the institutions of Democracy are subverted from the inside. Democracy stands on the goodwill of the players to play by the rules and accept the outcomes of the popular vote. Democratic institutions depend on the public resistance to subversions and the public mobilization in their defense. In recent times, Hitler, Mussolini, Lukashenko, Putin, Urban, Maduro , Sisi and many others have shown how democracies can slide into autocracies by not playing by the established rules.

 So, the question of the hour is what can be done by the Republicans as well as the Democrats about this unusual President who abides by no rules and respects no norms, 

The Republicans are the more crucial players. The Speakers of the respective Assemblies and majority Senates leaders in these states can declare their intentions to accept the vote counts by mail on equal footing with voting in person regardless of how long it takes for the count.  It is to be noted that different states have different rules about the delays in counting the vote and in its acceptability. Similarly, the Republicans in the US Senate, at least four of them, can declare that they will not authorize election results unless all votes are counted regardless of how long it takes to count. So far, only three Republicans in the US ‘Senate have declared so. This means that the Senate can still vote with 51 -majority since VP Pence can vote.

As far as the Supreme Court is concerned, only two Senate Republicans have declared that it is unacceptable for the Senate to move on filling the Supreme Court vacancy on the eve of the elections, just a handful of weeks away. Senator McConnell has made himself the big enabler of Trump`s power plays by rushing a hurried cynical vote to pack the Court with like-minded conservatives. This is the same McConnell who refused even to submit the name of Merrick Garland, President Obama`s nominee, for Senate  consideration, because the elections were 9 months away in 2016.

The Democrats are in a rather hapless form, which is their usual stance in critical situations. While they cannot stop the Republicans on the Supreme court nomination, they can use this cynical power- grab by the Republicans to mobilize voters, on the issues before the Court: the health care of Obama`s ACA which risks losing insurance for 100 million Americans with  preexisting conditions during this pandemic in addition to a loss of insurance for 22 million more, voting down Roe V. Wade and abortion rights, immigration and DACA, voter suppression in many cases coming up, environmental regulations, the right to organize labor unions and the scope of Gun laws. 

Heading towards the November 3 elections, the Democrats should mobilize voters on other issues involved:  the President management of the Coronavirus, the state of the economy, climate change, the tax burden of the middle class, the budget bust, the income distribution problem, the cost of education and the student debt, the nuclear dangers of going out of all the disarmament treaties. There is plenty to incentify voters, to turn them out and to help them in voting.

The results in the Presidential elections must be decisive and unchallengeable. And that would be also helpful in flipping the Senate control to a Democratic majority. All the polls indicate that this is an election for the Democrats to lose ; Mr. Biden is leading in the average of polls at the national vote by 7-8 points and in all battleground states, including Florida and North Carolina. If the polls are correct, a big if, then this election will produce a voting majority and an electoral college one.

Vice President Biden might help by not accepting to debate President Trump unless he declares in advance his acceptance of all legitimate votes whether by mail or in person, regardless of the duration of the count. Since the Democrats are in control of the House, they could consider not passing any appropriations until the results are clear and settled.

 On the Senate side, the Democrats can ask for unanimous quorum calls on all matters since Senators have to be present and some might be infected by the virus. They can propose that every US senator declares where he /she stands on the legitimacy of voting by mail regardless of the duration of count and the acceptance of the peaceful transfer of power

The Democrats are usually timid, divided and not skillful at such procedural maneuvers. However, the stakes this time are so high because the fate of US democracy hangs in the balance. The 2020 elections will mark whether the majority of the US electorates defend the institutions of Democracy and its norms.

 Geneva  25/9/20.

 

 

 

 

 

WEDNESDAY, MAY 20, 2020

A Revisit of the Impact of the Pandemic on the Economic and Political scene

 


A Revisit of the Impact of the Pandemic on the Economic and Political Scene

 

                                 By

             Dr. Michael Sakbani

 

     A version of this paper was  first published on 16/4/ 2020

      Ever since, in the fluid context of the epidemic and the

      US`macroeconomic  policy response, it became necessary 

     to revise and add several parts.

   

The  Pandemic is a manifestation of the good and mal in an interconnected world. In a world we can fly from one end to the other in one day, everybody can be a victim and everybody can be a healer.  The pandemic teaches us that a virus is a common ill, just as is  a climate catastrophe, or an agricultural crop failure as was the disappearance of anchovies in the south American coast in 1970.  Dealing with global problems requires global solutions.

The abilities of countries, however, are not even. There were ones that have the infrastructure of health and social maintenance and ones that do not. There are countries that were well prepared and others that were not. Yet, they all were hit by the same virus and are affected by the same climate problems, almost at the same time. And none of them is protected unless they all are.

An epidemic per se does not change the political or economic order. It presents the society with a mirror picture of its problems and incapacities juxtaposed to its needs. It forces societies and their leaders to undertake changes or reforms which were not on the agenda before. In old Russia WWI produced Communism. In Germany and Italy, it produced  Nazism and Fascism. In more pragmatic societies like the US, it produced the New Deal and the reforms of FDR. In the US this time around, it exposed the deficiencies of the US  health care system and the skimpiness of the social safety net. More profoundly, it exposed the myths of neoliberalism which has ruled the roost since the 1980s and reasserted the vast importance of Governments and their role in economic and political affairs. So, let us see what the mirror has shown.

 

How Did the Liberal Democracies Do

The US, and other liberal democracies, were caught unprepared. That is because public investment was not made in what people essentially need in the crisis,  such as health system preparedness, basic societal support, research and knowledge to cope with emergencies. Instead, public investments were in the military and in pork-barrel appropriations which aid in reelections of politicians and assures the continuation of the support of the military industrial complex and in financing social entitlements. There is no question that the US Administration ignored the warnings by many highly placed officials, including the Secretary of Public Health, Alex Azar, the Director of the  National Institute of Allergies and Infectious Diseases Dr. Antony Fauci, the economic adviser Dr. Peter Navarro, the CDC warnings and the national security officials, as well as the Pentagon. The  President simply was concerned that taking drastic isolation measures would impact badly the economy which in turn would jeopardize his re-election. Many state Governors, followed on partisan lines, the cues set by the President. The federal authorities had the capacity to set uniform standards in action, procurement and testing, but the president chose not to do so. The result was that the most advanced and richest country on earth, stumbled on every step.  According to the investigations of the New York Times, the Trump Administration wasted critical 6 weeks in wishing the epidemic away, making false public announcements about the short disappearance of the virus and the availability of tests for everyone who wants them and shamefullyPresidential pronouncements. denying science (New York Times)[1]

 

The crisis revealed that of all parts of the US Federal Government, the military was the only branch well prepared to meet the crisis. The military had a long experience in logistic preparedness and the resources to simulate crisis and deal with them, while its civilian counterpart had scarcely the wherewithal’s to deal with an epidemic. The Neo-liberal concept of the best government is the least government was responsible for this deficiency of public investment. 

The question then arises as to what power does the citizenry have in influencing decisions regarding the distribution of public funds, and what control they can express regarding critical decisions by elected Governments. It should be recalled that Prime Minister Blair went to war in Iraq when 75% of the British public was against the war. In other words, what is the power of the public outside election times to control government actions in liberal democracies? I know of only Switzerland which has popular participation by the citizenry. In other liberal Democracies, popular movements that have a continuous public opinion mobilization might be the way to control state action.

 

 The Role and Perception of the  Public Sector

The advent of the Covid 19 virus, like the HIV, has some origin in man`s intrusion and encroachment upon the animal and the jungle kingdoms. It is reported that bats transmitted the  Covid -19  to other animals eaten by humans. For longscience has not provided proof or counter proof on cross-species transmission. If this hypothesis is true, then at the bottom of such epidemics is man`s multiplying demography. The world as we still remember it was a planet of 5 billion people in the 1950`s Today, we are about 7.5 billion, polluting and consuming.

 In all countries, when the crisis struck, people looked to Governments and public bodies for dealing with their problems. Indeed, it was the Government that took command of the situation albeit with various degrees of success. Businesses and voluntary civilian bodies were only organs of supplementary help to the Governments in charge.
For at least four decades, the public, especially in the USA, has been skeptical of the role of Government outside law and order and national defense. President Reagan famously said the Government is the problem and not the solution. So many people find the public sector lacking in a  bottom line. Its bureaucracies are thought of as heavy, cumbersome and lacking efficiency. This widespread belief is based on a stereotype 
that does not stand to careful examination. To be sure, the public sector tolerates failure and needs periodic calling into account. But the record of business is not always better. It is precisely the lack of bottom line that exposes the governments to such criticisms because what they do, are not things and services that have a market price.
In the USA, the size of Government in 1952 was 5% of the 
active labor -force serving less than 180 million residents.  Today, it is only 2% of the employed serving about 330 million residents. The public sector might have incompetents but it is rich with devoted public servants whose best elements are as good as the very best in the private sector.
The public distrust of the Government finds support in the concocted rational justifications offered by the new Macroeconomics taught in the academe over the last forty years. This macroeconomics postulates the rationality of the homo economicus, the rational expectations of the individual, the efficient working of the markets and the multiple lags of fiscal policies and the biased self- interested political calculus of politicians in election cycles. 
( Sakbani, 2009, and 2019.) [2] In the crisis of 2008, all of these postulates proved empirically invalid ( Tooze, 2018, 2019). [3]  Government saved the economies and the financial systems by following the old stuff carrying the insights of John Maynard Keynes. This time again, the macroeconomic policy responses are in the same vein. In a public lecture in 2017 at the graduate institute in Geneva, the eminent economist and public intellectual Paul  Krugman called this “the old stuff”. Another adjective richly deserved is ”the largely valid stuff”.

On April 4, the Financial Times of London,  the leading journal of the prevailing political and economic ideology, wrote in a major editorial that the Covid-19 crisis has shown the wrongheadedness of the maxim" the least government is the best government". The paper rightly said that the modern economy requires a more active role of government in economic life, a governmental effort to stabilize labor markets and lay health and social safety nets for the societies making sure that competitive market rules apply. More profoundly, the Paper advocated that social expenditures should be looked at as justified investments and not as social liabilities. 

The question then arises, how did liberal democracies get into such an ideological stance?
Two things stand out in our opinion: the rise of capitalist power and the revolution of neoliberal ideologies in the West.

Capitalism; the Climb of Corporations Onto Power

In 1989, the American political scientist  Francis Fukuyama predicted the end of history. The triumph of Capitalism over collective Socialism was, to him, final and without appeal.

The triumph of capitalism had two aspects: market competition and the rise of the new regulatory state shaped by the libertarian right. Up to roughly the early eighties, corporate business leadership and government power control were interchangeable; corporate leaders, like James Forestall, Alfred Sloan, Charles Erwin Wilson, Douglas Dillon, Robert McNamara and George Schultz slid into and out of government almost unnoticeable. This is best expressed by Wilson`s  aphorism” for years I have thought what is in the interest of our country is in the interest of General Motors and vice versa " This paternalistic mesh underwent a radical change during the Reagan-Thatcher era. The rise of the ideological right led by William F. Buckley jr, William Rusher, Russel Kirk and many academicians like Milton Friedman, James Buchanan and Fredrich Hayek together with the multiplication of right-wing think tanks like the Heritage, Cato, American Enterprise and Hoover Foundations, all led to a determined climb by business corporate advocates into the power centers in Washington. The late Justice Lewis F. Powell was hired in the early seventies by the US Chamber of Commerce to write a policy memorandum on what business should do and advocate to further its interests in the US capital. His recommendations were gradually fulfilled in the 1980`s as business lobbyists numbers increased dramatically in Washington. DC. From modest budgets of few millions, in the early 1970`s, lobbying was financed to the tune of $3.5 billion in the late 1990`s. according to Professor Robert Reich. ( Reich, Netflix, 2019.)[4).  Reich documents that close to 40% of former House Representatives became lobbyists after retirement and 48% of former Senators entered this business.(Ibid.)[5]. Washington lobbyists exert pressure on elected officials because their campaigns are largely financed by private businesses. The financed elected legislatures payback in skewing legislation in favor of business. The plum is in granting business tax exemption and subsidies and favorable regulations. Examples are exempting bonuses of top executives from tax, barring default on student debt, or on mortgages while business is free to do so, barring the Federal government from using its enormous bargaining power in negotiating drug prices. Reich put such subsidies at the order of $ 100 billion annually.
President Reagan pioneered the practice of appointing to regulatory bodies people who do not believe in and are active adversaries of the mandates of these bodies. This march was crowned by the decision of the US Supreme Court “Citizens United” in 2010, in which corporate businesses were given under the first amendment pertaining to free speech the right to spend their monies on financing election campaigns.

  The paradigm of Capitalism unhinged and free of regulations ruled the landscape after the collapse of Communism. As Thatcher and Reagan put it: "there are no alternatives". This applied not merely to companies, but also individuals, as they scrambled for employment and advancement, investing in their own ‘human capital’ so that they can be picked up by the new globalized businesses.  Public services were increasingly privatized and subjected to market competition with everything from healthcare to higher education to even servicing the military subject to the criteria of profit in the name of ‘choice’ and ‘efficiency’[6]. This is how Bechtel, Black Water and Charter schools came into the news in Iraq and New Orleans. Unions were crushed while social democrats shifted inexorably to the right. In the US the drift towards the right made states like Florida advertise that they are union-free states.

The functions of the state also changed. Early in the post-war era, the state took on the goals of trying to narrow the gap in income distribution and finance social services. But this came to end in the mid 1980`s with the triumph of neo-liberalism.

 

The capitalist system that ruled thereafter, has allowed wealth to be concentrated in the hands of a few individuals, the envied 1 %. The Nobel laureate Professor Joseph Stiglitz` research shows that from 2008 till 2015, 90 % of the growth in the US `GDP went to the top 1 %. (Stiglitz, 2015 ),[7] Global businesses that have no roots and no loyalties except to their own profit line, moved their industrial plants and headquarters to locations where they used their labor-saving technologies on the cheap and where they paid least taxes. Such countries are also outside the norms of the ILO and practically free of environmental restrictions. 

And the trend for the skewed distribution of income gathered momentum after 1985 with the spread of globalization; the share of capital in the GDP increased by 5 to 10 percent over the trend set for close to 80 years in the USA.  Thomas Piketty corroborates this in the  European countries by the rise of the ratio of profit growth to income growth ( Piketty,2014 )[8]. The situation has evolved so badly that the six heirs of the Walton family who own Wall-Mart in the US, have a combined wealth exceeding 140 million Americans. ( J. Harkinson, 2015, W. Domhoff, 2015 )[9] Naturally, capital owns the new  technology which turned out to be labor saving (Sakbani, 2020) [10].

 

 The sins of unfettered capitalism should not, however, obscure the role of the markets in the allocation of resources. There is simply no other and better mechanism. But by markets, it is meant competitive markets free of monopoly, government favoritism and transparency in their information. At any rate, the State should play a compensating role to market outcomes when social goals are at stake because the market does not account for social returns and does not charge social costs.  

 

Wealth and income are not in our era always earned by developing industries or exploiting land or introducing new technologies to old methods of production, but quite often, by the stock-market valuation of newly enlisted enterprises, mostly of information, in the Tech. industries. Millions of Dollars are created overnight just as millions can be destroyed overnight. This casino capitalism has to be regulated, subjected to social purposefulness and taxed fairly and fully. The EU Commission reported that Apple made millions of Euros in various countries but did not pay taxes in these counties where it had its businesses. Similarly, Amazon, the giant mass distributor, pays little US federal taxes. So did most of the cruise liners [11].

 

In the period after the 2008 crisis, Europe in particular, shifted to drastic austerity in the name of correcting the so-called” Problem of Public Finances”. In a bloc of highly interdependent economies, the fiscal austerity of the UK, Germany, the Netherlands and Finish Governments hit the Southern EU  states with full force. Greece, Portugal, Spain, Italy and even France, were dragged down and forced into austerity, born essentially by the poor and working poor. This strange and economically unjustified fiscal conservatism took place when interest rates were at historical lows and investing in building up the economies their infrastructures and in the clean technology was definitely going to bring higher net rates of return (Sakbani, 2020 )[12].

The Covid -19 crisis even stripped the contentious of the right-wing stands of their fig-leaves. Today, the Republican Party in the US and the British Conservatives under the politically itinerant Boris Johnson, have jettisoned off the fear of public finance deficit and the ideological taboo of small government to protect their business constituents and secure their own re-elections.  Fox News editorials are now touting the old leftist planks of deficit spending.

The left, however, has not weened itself off asking for more and more public entitlement spending. Jeremy Corbyn defeat and the failed campaign of Elizabeth Warren and Bernie Sanders in the US. showed the limits of this old adage; the public has no appetite for it. The left has to reinvent itself,  for its advocacies have been taken over by the right  Its hope lies in emphasizing Democracy and its civic participatory core, in advocating social investments, in building robust social safety nets and enforcing competitive transparent market rules.   

 

What Happened to International Cooperation

The international system of cooperation, symbolized by the UN and its specialized agencies are critical for collective action on global problems but do not have the means, because the leading members do not have the political will to act collectively. The UN Security Council could not pass a resolution during the corona crisis because the US and China could not agree on an adjective for the pertinence of the virus: is it a Chinese virus or just a virus. Quite baffling was the refusal of the United States to use the WHO diagnostic testing offered to it when its testing preparedness was woeful. There were countries like South Korea, New Zealand, Australia, Germany, Denmark, Finland and other Democracies in Asia as well as Vietnam, who were successful in combating the Covid-19 and reducing the death toll, all denoting that the countries that acted fast and decisively, were the successful ones.  Yet, the US and the UK, as examples, were unwilling to draw on these comparative experiences.

 

The Covid- 19 has demonstrated the gaps in the WHO mandate in that it could not have demanded China to allow the Organization to send investigative missions early on when the Chinese were not revealing the truth about the epidemic. Similar gaps can be ascertained in various other international bodies. who are not empowered to demand things from their significant budget-contributors. In a world threatened by pandemics, by climate change, by regional water shortages and crop disasters on massive scales, the international cooperation system must be strengthened and given the mandates and resources to carry out their missions.

 

Regional bodies like the EU, have not passed the effective cooperation test. Europe was hit by the virus at roughly the same time. When the agonies of Italy and Spain required help, other countries concentrated on meeting their national needs. Protective apparels, medical equipment like ventilators, and medical supplies were sequestered and denied to exportation. That means the nation-states prioritized first their needs. Furthermore, the idea of issuing EU collective bonds was shut down by Germany, the Netherlands and Austria, and others.

 

Dangers and Opportunities

Looking at collective systems and authoritarian governments, it is clear that China after a month and a half of lies and dissimulation took drastic mitigation measures practically impossible in open societies. China was able to stem the tide and stop the epidemic. The cost it paid will never be known. But the great story is not Chinese, rather that of the Asian Democracies: South Korea, Taiwan , Japan and maybe Singapore, as well as Vietnam, a non-democratic exception. These countries were the real champions. South Korea, tested up to mid -April, 40 times per capita more than the US has done and moved to relax the isolation measure a week ago.

Authoritarians like Victor Orban of Hungry, availed of the crisis to take unlimited powers from the Parliament. There are measures of electronic surveillance and tracing people applied to fight the epidemic in China and South Korea, which can, in authoritarian hands,  really threaten freedom, privacy, and human rights. Authoritarian regimes are not hesitant to exploit such tracing tools.
On the other hand, crises are harbingers of change of opportunities for change. Perhaps it is the turn to restabéish more responsible social and economic solidarity in our societies.

Where Is All the Money Going and What is the Shape of the Recovery

The  Covid -19 crisis has turned on the money printing machine. The money tree, now called QE., will leave the US economy with more than $ 4 trillion new dollars. Similar relative amounts will also feed into the European economies. Until the Covid -19 crisis, China and others in the low- wage international supply chain, have been able to ramp up the aggregate supply with cheap goods. Now, avoiding inflation and structural problems requires turning this liquidity into new investments. The crisis affords the chance to invest in infrastructure and clean technology. It also provides the opportunity to diversify the international supply chain by bringing some such industries to The US and Europe. The crisis demonstrated the perils of high dependence on Asia in the international supply chain. 
One of the unintended results of extra liquidity is boosting investment in the stock market thereby rendering it more of a bubble phenomenon than a manifestation of investment sentiments. 

Looking at the shape of the economic recovery, its recovery curve will depend on how the economies open up. That means when and where various Governments think they have seen the back of the epidemic. Five conditions must be fulfilled before re-opening becomes appropriate. First, having large scale diagnostic testing to know in instant real-time the size of the epidemic spread and therefore the scope of the necessary social distancing to implement. Second, having  wide-scale anti -bodies testing of recovered people to know what immunity they have and their return safely to work. Third, attaining the capacity to trace infected individuals in order to isolate them. Fourth, for each state or locality, the capacity of the health services should be the constraint.  Fifth, eventually, discovering effective remedies and ultimately a vaccine. Any reopening before attaining the first three conditions would risk reigniting the virus and costing more deaths. From what can be known now, we are far from such a state; a couple of months might be needed.

 On 14/4/2020, the IMF predicted a loss of global GDP of $9 trillion in their moderate scenario. That is about 12% of the global GDP. The IMF is forecasting growth in emerging economies at 1 percent and a decline of growth of developed economies of 6 percent. ( IMF, Update,4/14/2020 )[14] . The EU expects a decline in the GDP of 3.8 % and in Germany its biggest economy, a decline of 6 %. In the  IMF`s view, it will be the deepest recession since the great depression of The 1930`s; we might have up to a 20 % decline in the GDP of many countries. Two important new press reports are that China will have through the second quarter a  negative income growth for the first time in three decades. the second is that the US `GDP will have a decline of 6.8 percent in the second quarter of 2020 on top of the 3.8 decline in the first quarter.

The aggregate supply recovery will depend on the depth of the recession. Morgan -Stanley has estimated the rise in unemployment in the US  at 13 %. Goldman Sachs estimation is 15% and Morgan- Chase is little higher ( David Kelly, 4/13/2020,[15]. Our guess-estimate informed by the available data places unemployment in the US at a range between 18 % and 20 %. Recent reports of unemployment place the number of workers applying for unemployment benefits at 34 million. However, the unemployment is in reality higher than that, since there are dismissed workers who,  for one reason or another, did not apply for unemployment benefits. These figures suggest unemployment of about one-fifth of the labor force in the USA, i.e. about 40 million*   [15].

 Unemployment, according to the above forecasts, will be high when the economy reopens.  Since unemployment is a lagging indicator, the pace of recovery is likely to be slow. If we add to that the slowness of administrative procedures to put the massive loans and aid in the hands of small enterprises which are the largest employers,  and that many small enterprises will not survive in business, one has to conclude that the number of dismissed workers will have increased relative to rehired workers before reopening.  
At the beginning of the fourth week of April, the $350 billion allocated by the US  for small and mid-size enterprises were exhausted. It turned out that the SBA and the banks to which the funds were given to distribute, missed the small enterprises; banks had favored their big customers and the SBA had faulty computer software for applying and was simply overwhelmed. Consequently, the US Administration asked for an extra $485 billion in aid for small businesses.

The states and local governments have so far been missing. The Speaker of the House Ms. Nancy Pelosi expressed her desire to pass extra fiscal spending to shore up the finances of these bodies. These governmental bodies are crucial in the fight, as they finance health workers and facilities, transport,  police, firefighters, and school personnel. Nevertheless, no matter how good are the written legislative conditions, Congressional oversight over the working of these programs is needed. 

In all countries, the important indicator is the ratio of dismissed workers to those retained. The higher is this ratio, the more difficult and harder will be the recovery. Many businesses will use the crisis to restructure their workforce, and in big business which owns the new labor-saving technologies, they might opt for the robotics if suitable. Therefore, it is fair and prudent in extending taxpayers' aid to big business firms to stipulate that if the number of employed workers turned out to be less than before the crisis, the business in question should not qualify for taxpayers' help. The help should be made loans that have to be repaid.

The ratio of dismissed to still employed workers is not the same across the Atlantic. Europe has labor-employment protection nets far more inclusive and generous than in the US. Consequently, the ratio will be higher in The US.  Unemployment, according to the above forecasts, will be high whe
n the economy reopens. As indicated above, an important factor to consider is the number of small businesses that will go out of business altogether. This is likely to be a significant number; many place this to run around 35% of such businesses. It is well established that small business enterprises are the most important employers. Therefore, the pace of recovery is likely to be slow. If we add to that the slowness of administrative procedures to put the massive loans and aid in the hands of enterprises, one has to conclude that the US economy will face a higher relative share of dismissed before full reopening. However, the depth of the recession and unemployment should be tempered by the contribution of digital technology to the buoyancy of the economy during the closure. Consequently, the curve might be an extended U-shaped with many V- curves embedded in it. Therefore, it will gently rise upward in 2021. In the 2008 crisis, it took the economy 5 years to re-establish growth and bring down unemployment meaningfully. 

In the USA there is the  problem of the ballooning since 2008 of private debt which has accumulated over the years. This includes a huge corporate debt, the heart attack of the $16 trillion mortgage market which has to be reopened given that the majority of small and medium-sized enterprises are involved in a big way in the construction industry, and finding an orderly resolution to the  student debt of $1.6 trillion, involving 45 million Americans, 40% of whom are senior citizens. This debt left untreated, could  bankrupt many financial institutions and deprive the US government budget of a huge amount of interest profits.



The Covid-19 has destroyed the aggregate demand as well. The economy can open up the cruise ships, the airplanes, the factories and all the rest, but people will not go to restaurants, would not travel, build new houses or go out to amusement parks and museums unless the Covid -19 can be tamed. In economies highly dependent on services as it is the case in the USA (70 % of the economy) and Europe, the recovery of aggregate demand depends on wide-scale testing and finding a secure solution to the Pandemic. Thus, the effective recovery most likely will not take the shape of a V curve,  but rather  a wide bottomed U rising timidly over time.

President Trump had agitated for reopening even beginning of May, quite a contrast to his dragging his feet on ordering a closure. It is common knowledge that the US president is very worried about his re-election. and he sees in the economy his best vehicle of approval. First of May would likely be a premature date, since most public polls show that a majority of Americans think this date to be premature. 

In Europe, Austria, Denmark, and Spain are easing closures by opening selected parts of the economy while keeping social distancing. In all probability, the reopening will be rolled out gradually and selectively. Governments are advised to draw lists of priorities of their economic sectors and another list of how various sectors can implement protective measures and social distancing. This would map out matrixes where on the horizontal, one would have the priorities, and on the vertical the capacity to protect and cope. The result is sequential combinations of possibilities that would assure intelligent reopening and protect against igniting a second wave of the epidemic. Since reopening will be rather sequential in time for various countries and various states,  the overall U might have several smaller U`s and V`s within it. This holds hope that the recovery will not be as slow as the one in 2008.
 However, that being said, the resumption of economic activities is crucial but it can fire back if it is done without taking the precautionary measures put forth by the scientists, to wit: testing, social distancing and tracing. Unfortunately, President Trump has set a bad example in refusing to wear a mask, resuming political rallies in close places and calling for a slowdown in testing to reduce the bad statistics. The virus is all around, and the US has done a poor job in meeting it. With less than 5 percent of the world population, the US is registering 25 percent of world cases and 26 percent of the world`s deaths!!!.   

 

 One last development which should somewhat alter the risk calculation of reopening the economy, is the announcement on 29/4 by Dr. Fauci that a drug previously prepared for Ebola “ Remdsesivir ”, has proved effective in shortening the hospitalization period by four days. This drug blocks virus replication. However, it is not a full cure. Nonetheless, it helps in keeping patients four days less on the ventilators, thereby avoiding many internal organ complications. The NIH tested the drug scientifically by taking two random groups:  one given placebo and the other the drug. The result was statistically significant. Unfortunately, the drug is used only clinically in emergency facilities pending the discovery of more effective treatment drugs. The data do not yet permit knowing whether it works in all cases, mild and severe. Its drawbacks are its elevated cost and its intravenous administration.

With this drug in hand, reopening the economy becomes a bit less risky. 

 

( Geneva 18/5/2020)


                                      NOTES

 

[1]  The New York Times, Sunday, 4/12/2020.  (

2)
Michael sakbani, Trade Wars with the World; Can Mr. Trump Approach Work, in michaelsakbani.blogspot.com, 2019, also, Michael Sakbani, the Global Financial Crfisis , Central Bankingand the Reform of the International monetary and Financial Systems, in michaelsakbami.blogspot.com, January 2009.


[3] Adam Tooze, Crashed: How a Decade of Financial Crises Changed the World (2018); also idem, NYReview Of Books, 20019

[4 ] Robert Reich, Saving Capitalism, in Netflix, 2017.

 

[5] Reich ,Ibid.

 

[6]  Examples are found In Bechtel, and Black Water subcontracting for the military during the Iraq war, and the rise of Chartered schools after Katrina in New Orleans.

 

  [7] Joseph Stiglithz, Inequality and Economic Growth, in Sementic Scholar, No.15, 2014.       

 

(8). J. Harkinson, Mother Jones, October, 2015, also, William Domhoff, Who Rules America;  Power, Politics, and Social Change , University of California Santa Cruz, 015.

(9) . Thomas Pikietty, Capital in the Twenty Ffirst Centuary (20/4) Cambridge, Massachusetts, 2014.

(10). Michael Sakbani, Trump, the President that Was Not To Be , in michaelsakbani. blogspot.com, 2017.

 

(11 ) Tax Avoidance,” The Apple Tax Ruling-What This Means for Irland,Tax and multinationals” , the Guardian, 2018.,

 

(12) . Michael Sakbani, Reflections on Karl Marx and the Neo-Classisists  in, michaelsakbani.blogspot.com, 2019.                                              

 

[13) Jeff Fox, “Goldman Sachs Says Downturn Will Be 4 Tmes Worse Than the Housing Crisis , then Unprecedented Recovery”, CNBC, April 14, 2020.

 

[14].  IMF, Transcript of the Press Conferenceon the Release of  the World Economic Developents, 14/4/2020.    

                                                   

(15) Dr. David Kelly, J.B.Morgan, Economic Update , April 13,2020

 

 





 

 

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MONDAY, MAY 11, 2020

ISIS, al Qaeda, the Muslim Brothers and Political Salafists; the Problematique of Political Islam

 

 




 

 

 




the Blog Papers of Dr. Michael Sakbani; Economics, Finance and Politics

 

 

Dr. Michael Sakbani is a professor of economics and Finance at the Geneva campus of Webster-Europe. He is a senior international consultant to the UN system, European Union and Swiss banks. His career began at the State university of NY at Stoney Brook,then the Federal Reserve Bank of New York followed by UNCTAD where he was Director of the divisions of Economic Cooperation, Poverty Alleviation, and UNCTAD`s Special Programs. Published over 120 professional papers.

 

ISIS, al Qaeda, the Muslim Brothers and Salafists; the Problematique of Political Islam.

                  By 

          Dr. Michael Sakbani

Al Qaeda in Afghanistan Moves into Iraq

The origins of ISIS are indeed murky. As far as one can ascertain the origins hail from al Qaeda in Afghanistan, which was created by the US, Pakistan, and Saudi Arabia with the help of Israel. A side of this can be seen in the semi-documentary film "Charlie Wilson`s War".
 After the fall of the Talibans in 2001, elements of the Jihadis in Afghanistan ran away to both Iran and Pakistan. Some important leaders were hosted by Iran; that is where we know now was Bin- Ladden`s family. 


There have been voices among commentators accusing the USA of being the founder of ISIS. This confuses direct founding as an explicit act with preparing the background that enables the emergence of movements like ISIS. While the USA is guilty of founding the Mujahideen outfit in Afghanistan, its role in Iraq was to prepare the grounds for its emergence. The invasion of Iraq on trumped-up grounds resulted in erasing all its governmental institutions and tearing apart the Iraqi social tissue. The US introduced under Proconsul Paul Bremmer, a sectarian political system that excluded the previous regime millions of supporters and collaborators (the Baath eradication law) and marginalized the Sunni Arabs
, who constitute 30% of the population. The ensuing sectarian Governments, especially under Nouri al Maliki drove Iraq into Civil War and created whole strata of aggrieved citizens. This furnished an excellent soil for breeding potential recruits for extremist groups which thrive on exploiting vacuums created by discrimination and chaos.   

After the US invasion of Iraq, Iran was interested for obvious reasons to plant controllable resistance elements in Iraq to pressure the US occupiers and so was Syria. Syria had thousands of imprisoned fundamentalist Islamists (political Islam advocates) and a large number of Saddam`s Republican Guards officers. In 2005, Syria released so many of these fundamentalists knowing full well that their destination will be Iraq. Saddam`s R.G. officers were the natural choice to lead these elements and organize the resistance to the American invasion of Iraq.

Thus, Jihadis started entering Iraq with outside help from Iran and Syria throughout 2005 and 2006. Iranian and the Syrian Intelligence services lent arms and organization to these al Qaeda remnants. In a short time, al Qaeda in Iraq became operational in 2005 under the name " Bands of the Righteous People" and that is when Abu Musaab al Zarkawi emerged as its leader. Zarqawi and his outfit, which later became known as "al Qaeda in Iraq " became a major challenge to the USA and they edged Iraq in 2006 towards a sectarian civil war.  Iraq was so enraged by this Syrian transgression that Prime Minister Maliki publicly threatened to bring the matter to the UN Security Council.

 

General David Petraeus, the US commander in Iraq, succeeded in 2007-2008 in drafting the Arab Sunni tribes to fight al Qaeda. This was done by putting many Arab Sunnis, especially tribal chiefs, on US`payrolls and making some other promises regarding their future in Iraq. The phenomena therein were known as "al Sahawat". The Arab tribes indeed defeated al Qaeda by 2008. The idea of General Petraeus was to merge these forces after the defeat of al Qaeda with the Iraqi security forces. However, being Sunnis, the Iraqi sectarian Shitte politicians, led by Nuri al Maliki, and naturally backed by Iran, did not want that. Even more, Maliki cut off their salaries and put many of them in prison, leaving many of them as unprotected targets for al Qaeda`s vengeance. The US was feeble in its objections to what Maliki did and Petraeus, the father of the idea, was transferred back to The US.

Radicalization in camp Bucca

The Iraqi prisons were notorious for their ill-treatment, and after the scandal of Abu- Gharib, the US decided to establish a new prison for political detainees compatible with civilized norms This was called camp Bucca. Camp Bucca was the place where the US put the Iraqi prisoners transferred from Abu-Gharib and other detainees imprisoned by Maliki. The vast majority of the detainees were Arab Sunnis thrown into jail by arbitrary arrests and sometimes without evidence of wrongdoing. During a couple of years, Sunni prisoners in the camp mingled with the imprisoned remnants of al Qaeda in Iraq and both got indoctrinated by the likes of Abubakre al Baghdadi, who was authorized by the USA to teach religion to the camp prisoners. Camp Bucca was in a sense a radicalization laboratory. Many of its prisoners were gradually released and those that were not,  were involved in the prison escape of 2012 during the post- US `s rule of Mr. Maliki.

In 2008-2011, Maliki`s sectarian policies reached their peak. He had his own secret prisons where thousands were imprisoned without legal warrants. Hundreds were tortured and scores killed and disappeared. This was in addition to overt discrimination in jobs, opportunities, and public services. The 30 % Arab Sunnis of the population began to think of open rebellion against Baghdad. In 2012 huge demonstrations took place in the six majority Arab Sunni provinces of Iraq. The Kurds, another 16.5 %, of whom 90% are Sunnis, plus the Sunni Turkomans (Another 3.5 %) boycotted Baghdad. Maliki responded with brutal armed suppression and massive arrests of men and women. Thus, when it arrived on the scene, ISIS found receptive grounds for militant Sunni action.

It should be recalled that the remnants of Saddam`s Baath was present throughout Iraq, especially in the Northern areas. Around Mosul, many of the cadres of officers of the old Iraqi army were unemployed and living under constant security chase. Maliki`s government inflicted abject discrimination upon the Sunni Arab population in these areas, and, like in the rest of Iraq, provided no basic services. When ISIS showed up the choice between it and Maliki was for all a Hobbesian choice.


An Islamist outfit as an objective ally of Asad.  

By 2012, after the eruption of the Syrian revolution, Iran and its ally, Maliki, were eager to form fighting forces to support Asad. And it took no genius to think of the remnants of al Qaeda in Iraq as candidates, Maliki further staged a prison escape of some 2500 Jihadis from Camp Bucca in what was perhaps the biggest staged prison evasion in history. In addition, the Syrian securities had thousands of imprisoned Jihadis and several hundreds of Saddam`s Republican Guards ex-officers who fled to and were given refuge by Syria. The Syrian security forces, with Iraqi help, merged all these disparate elements into a fighting force now called “the Islamic State in Iraq and al-Sham”, ISIL. Asad had a genuine interest in implanting a terrorist organization in the midst of the Syrian revolution. It would bolster his claims that he was facing terrorists and not a popular revolution and would split further his opposition and provides him with inside information. In fact, Asad publicly acknowledged in June 2013, to the newspaper al Quds -al -Arabi, that he has agents planted among the armed oppositions.  

Armed and supported by the Syrian intelligence, the new outfit started its activities by attacking the Syrian opposition i.e., the Syrian Free Army`s liberated areas in northern Syria. For a whole year, this pattern continued and there was not a single reported attack on the regime`s units. In perfect symmetry, the regime did not once hit their positions. In short order, this group attacked and captured Raqqa and expanded in North-East Syria without any regime resistance. In 2013, it spilled into Iraq. In their conquest, ISIL began to absorb into their ranks, more of the old Iraqi army officers and many disgruntled Jihadis from Islamists defunct groups as well as disaffected Sunnis from everywhere in the world.

Saddam`s officers gave ISIL a professional military leadership and helped redefine their aims and tactics. From an outfit fashioned by the intelligence services, ISIL morphed into an Islamist independent fighting force capable of attracting thousands of Jihadis from all over the world. Western intelligence estimated their number in mid-2014 at 20,000 to 30,000. Thousands of them came through Turkey, which up to 2015, looked the other way. The guilt in unleashing ISIL is shared by the Gulf States, the US, Turkey, and the Syrian regime. In 2014, the name changed to ISIS, DAISH in Arabic.


Al Qaeda v. ISIS: the Islamists`Problematique

ISIS ideology has the same Salafist-Wahabi fundamentalist roots as does al Qaeda. and both of these movements are ideologically related to the ideology of the Jihdists among the followers of Muslim Brothers. While the MB appeared in the 1990s to accept democratic alteration, the movement in its prevailing condition has been far from cohesive and its organizational structure permits a wide spectrum of views including violent Jihadism. Thus, both ISIS and al Qaeda are essentially evolved products of MB. However, ISIS differs from al Qaeda in many respects. Al Qaeda ideology is an austere Wahabi Islam not contaminated by the historical and sociological developments of the different Muslim communities. In its drastic historical simplicity, it attempts to purge Islam of all cultural and other influences subsequent to its first 40 years under the so-called “Four Successor Khalifs”  of the Prophet. The Salafist understanding of Islam is textual and literal and it takes selective elements of the text regardless of the time and place they addressed. So, there is a dominance of the "Madina" Soras even though they have often a specific and limited relevance.

On the intellectual side, the Salafist intellectual base rests on  the political Islamist thinking of the Pakistani Abualaa al Maududi, which rejects democracy and the concept of a civil state and advocates a Sharia-based state, where the sovereignty “hakimyah”, is for God , These thoughts of al Maudoudi were held at the time of struggle in British India to establish Pakistan. Later on, after Pakistan was founded, he changed some of his old advocacies. But ironically, his Egyptian M.B. followers, Sayed Qutb and AR Yasin, advocated Maudoudi`s old ideas in the Arab context where the societies were essentially Muslim societies. These followers took aim at these Muslim`societies and their respective rulers as the object of Jihad. Jihad, as informed by Islam, is a defensive strategy when Muslims are attacked. However, the Islamists made it a compulsory duty to be discharged against those who do not accept their thought. The Islamists adopted the Takfeeri ideas of the Qotb, who advocated violence and disfranchising from Islam anyone who has a different interpretation than his and he further legalized their killing. 

Salafist thinking suffers many epistemological flaws. In the first place, it mixes up between the biographical virtues of the “righteous predecessors” and their epoch. That the purity and sincerity of those early followers of Islam are admirable, does not in any way furnish grounds to bestow the same admiration upon their period. That period in human history was, of necessity, less developed, and less enlightened than our era. In the second place, what we know about the successors` period are tales whose veracity is largely suspect. The historians of that epoch did not have under the belt, the rigorous standards of historical investigation that we have now. Thus, our knowledge of the historical example set by the epoch is rather mythical and infused with imaginative details. Even if we accept the proposed narrative, that era was troubled and flawed. Three of the four righteous Khalifs were assassinated and the community of believers at the time was not one with exulted history. In the third place, overlooking 1350 years of subsequent evolution in various countries and continents of Muslims is ignoring sociological realities by which we must judge pragmatic phenomena. There is no system of jurisprudence known to man, including that of the Islamic Sharia, that does not take sociological realities as one of the sources of law. Thus, the drastic purification of Islam from its attendant transformations is irrational and deficient in historical jurisprudence logic. In the fourth place, invoking this restricted period as a historical example of success to emulate in our current period is an exercise in pragmatic irrelevance; it is a fantasy to think that we can recreate that epoch and re-establish its circumstances at present. To give one example, re-establishing the “Khilafat” for 2 billion Muslims living on five continents with different backgrounds, languages and cultures is a fantasy, a fiction at best. 

This idea of” Khilafat” has no basis in Islam. The first” Khilafat” which was a succession in a historic sense of the Prophet, lasted only during two successors: Abubaker and Omer.  a short period of years with specific historical circumstances. After that, there was never an accepted Khalifa by all Muslims anywhere at any time. In the early Abbasids era, there were two Khalifs one in Baghdad and one in Cordoba. At the Ottoman time, Sultan Salim declared himself a Khalifa in 1516 when many other rulers in The Islamic world were in control of their own national territories, with a flag, an army, laws, and all other constituents of Sovereignty: “hakimyah”.
 The dominant Islamic theologians and scholars, draw up a distinction between the State and Religion. Religion is in the realm of beliefs and “Ibbadats”, whereas a” State” is in the realm of pragmatic affairs “Muaamalats”. A state has to have Sovereignty, with all the specific attributes of this term: a  frontier, equal citizenship franchise, its own territory, a flag and its own laws. Naturally, the world is composed of numerous states. The Ouran explicitly states in one of the Souras, that God created humans in different ethnicities, different colors, different tribes so as to know and discover each other and live in peaceful coexistence. This constellation of nations is rejected by the Islamists who advocate one Khilafat worldwide with an unequal free franchise for the followers of different  religions

 This stand of merging religion with the state, a  hallmark of Islamists thought, appeared in Islam under The Shiite doctrine of "Willayatul Faqih", fashioned by Ruhulah al Khumayni in the 1960`s, and in similar thought of the M.B. It also emerged in instances of political exigencies such as those that faced Ibin Taymieh at the time of the Moguls invasion, and Maudoudi in British India. Indeed there is nothing in the Quran or the sayings and deeds of the Prophet that calls for this merger. When the Prophet established his state in Madinah, he addressed two basic proclamations, one to Muslims and the other to non-Muslims laying down the basic law of a joint, non-discriminatory state: a state with the equal citizenry and state neutrality in respect of religion. This is the essence of both the civil state in Islam and moderate secularism: the true content of state neutrality. 
All of the above-explained pillars of political Islamist`s thought are, indeed, precepts of an ideology that is essentially alien to Islam.


The Profile and Modus Operandi of the Islamists

In all countries where the Islamists governed, they showed that they have no programs and no expertise in governing. The records of Iran, Iraq, Egypt, Afghanistan, Tunisia and Sudan provide ample proof of that.  The Islamists used Islam to gain power, and after that, they tried to monopolize authority and in all other matters of governance, they were demonstrable failures. Once again, when they tried to claim an economic system, a banking system, a system of governance, or a social order, they had nothing of substance to propose.
    
Despite the common source of their ideologies, the various outfits had significant differences. The M.B. is a multilayered association. There is a public Party in Egypt, an international circuit of Sister- Parties outside Egypt and a secretive underground organization that has an armed, violent manifestation. Al Qaeda` is an armed Jihadist organization. Its international posture is anti-Western, in particular anti-US, on the belief that the West has been aggressing the Islamic World. It does not seek to convert the West, rather avoids its influence and aggression. Bin Ladin actually offered in January 2006 a truce if the West quits Muslim countries and stops its aggression. Al Qaeda did not conquer territory and never faced the problems of running a society. 

ISIS, in contrast, is an international project for establishing an Islamic World Order. It recognizes no boundaries and does not respect any national separation, hence its latest name IS, the Islamic State. ISIS` behavior, is more savage than that of al Qaeda and it has more developed know-how of media and its use. It has also a developed commercial sense of doing business through religion. The organization uses Islam as a recruiting platform for those looking for a spiritual and psychological refuge. In fact, so many of its practices like self-martyrdom and spilling the blood of innocents, violate the basic tenants of Islam, The recruits of ISIS are on the whole thinly educated and most do not even speak Arabic and hardly know much about Islam. 

Many of the recruits are from Western Europe. Some researchers put the total Europeas at 6000. with a Western European majority. The profiles of these recruits, according to intelligence sources, are of social marginals with police records for various minor crimes. Some (e.g. the terrorists of Paris and Brussels attacks) had been drug dealers and owners of bars selling liquor. Unlike those from the Arab world, their known profiles show that they frequent no mosques or other public institutions and drift at the margin of their communities. In contrast, the Arab Jihads in ISIS, are largely unemployed victims of economic poverty and above all blocked futures. The officers and leaders are overwhelmingly Iraqi with many drawn from the ranks of Saddam`s army. Naturally, there are some exceptions to this norm in the presence of some Europeans from not--deprived backgrounds who are revolted by the materialism of their society and equally enraged by the brutality of the Asad regime.. The eastern Europeans are mostly from the Russian Federation, victims of the Chechen prosecution. In conclusion, ISIS is not populated by religious fundamentalists only, but by alienated social marginals, and by young Arabs for whom the future holds neither economic nor personal prospects. Unlike al Qaeda, ISIS is not led from the top; it is decentralized enough to be considered more populist. Thus in its controlled territory, it has a decentralized structure.

These differences are revealed by their operational modes. While the al Qaeda`s affiliate in Syria, Jabhatul Nusra, is willing to fight under the umbrella of the SFA for the purpose of deposing the Syrian regime, ISIS brooks no such alliance and has an Agenda distinct from that of the Syrian revolution and is in complicity with the Syrian regime. Moreover, Jabhatul Nusra is overwhelmingly composed of Syrians, whereas ISIS has a vast majority of non-Syrians.

 In a short period after it came upon the scene, ISIS secured fiscal independence, with the revenues  accruing from levies imposed on local populations and from selling oil after capturing oil wells in Syria and later on in Iraq. Among its black-market customers were the Syrian regime itself as well as Turkish contractors operating with partners in Iraqi Kurdistan and using the Turkish ports to export the oil to third countries, among whom is Israel.
       In June 2014, Mosul was attacked and the Iraqi army led by Malikis`political officers and largely manned by former Shiite militias ran away leaving their arms and supplies. Now, the ragtag elements had 
more arms, more money, and greater numbers. With imparted discipline from Saddam`s officers, they started a rampage in northern Syria and Iraq displaying frightening and unprecedented savagery and killing hundreds of people from all groups, including Sunnis. They culminated this rampage by proclaiming Baghdadi as their Khalif. 

The cascade of events conferred on ISIS new dynamics; it started to feel its own wings for flying independently and developed its own agenda, which cut into both the Iranian and Assad`s plans. When ISIS swept through the Kurdish lines and threatened the survival of the Iraqi Kurdish region, Israel and the US woke up. They realized the uncontrollable character of ISIS and took a measure of its barbarian savagery and danger to their Kurdish allies.

As a new terrorist Islamist outfit, ISIS was exploited by Asad to refurbish his credentials as a state force on the ground opposing Islamists. Iran, the other initial sponsor, now felt that these ragtag forces began to bite into its schemes in Iraq and acquired independence in their action. Each of the initial God.-fathers, now offered their services to combat ISIS: Iran to lubricate its nuclear negotiations and Assad to refurbish his credentials.

The US quickly built up an international coalition against ISIS, Many Arab countries, as well as Turkey and Iran, joined up, even though they have different and contradictory agendas. General John Allen was appointed Coordinator for this 61 -country alliance. It has indeed been an alliance of strange bed-fellows.

 

 

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the Blog Papers of Dr. Michael Sakbani; Economics, Finance and Politics

Dr. Michael Sakbani is a professor of economics and Finance at the Geneva campus of Webster-Europe. He is a senior international consultant to the UN system, European Union and Swiss banks. His career began at the State university of NY at Stoney Brook,then the Federal Reserve Bank of New York followed by UNCTAD where he was Director of the divisions of Economic Cooperation, Poverty Alleviation, and UNCTAD`s Special Programs. Published over 100 professional papers.

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SATURDAY, SEPTEMBER 26, 2020

American Democracy Hangs in the Balance

 

President Trump and a Possible Biden`s Victory in 2020 ; An Essay

by

Dr. Michael Sakbani

 

The declaration of President Trump on Thursday 24/ 9/2020, that he will look at the situation after elections to decide whether to accept the results of the vote or not leaves no doubt about the intentions of the President not to submit to the electorates` will if he were not confirmed in his place. President Trump added that the Supreme Court should have 9 justices to look into the results of the elections, an indication that if all fails, he plans to go to court in the hope that his appointees on the Supreme Court would vote in his favor. This comes after several months of his unsubstantiated claims of voters' fraud and attacks on mail balloting. The President knows that because of the epidemic, a historic number of American voters will vote by mail in this election cycle and that most of the mail vote will be cast by Democrats. Therefore, in line with the Republican effort to suppress voting, especially by minorities, he has thrown the legitimacy of voting by mail into question by claiming without any evidence, that it is a big fraud perpetrated by the Democrats.

This threat is not a simple Trump attempt to create public opinion chaos and garner up media coverage. It is a studied step in several maneuvers he is likely to pursue to stay in power and refuse the will of the voters. Professor Barton Gellman of Dartmouth has outlined a possible legal attempt by Trump to have the legislators in six battleground states, namely, Michigan, Wisconsin, Pennsylvania, Florida, Ohio and North Carolina, in which the Republicans control both the states Senates and their Assemblies, to declare the vote unacceptable and decide to name the electoral college votes of their respective states to Trump. Even if the Governors of some of these states object, the election would go to the US House which will cast one vote per state depending on its current majority representation. This majority stands now in favor of the Republicans at 26.

The Constitution is mute on this aspect but the Supreme Court has decided that in cases of doubt about the legitimacy of the ballots, the legislators have such an authority. Already, there are media reports that Trump lawyers in Wisconsin are making preparations to do so. A reporter from ”The Atlantic” divulged on MSNBC news show “Morning Joe” that a Republican legislator in Pennsylvania has told him so. Along with Trump and McConnel’s rush to fill the vacancy created by the passing of Justice Ginsburg on the Supreme Court before the elections, 38 days hence, the course of action of Trump to thwart the vote if it does not run in his favor, becomes clear and plausible.

This would not be the first time that the institutions of Democracy are subverted from the inside. Democracy stands on the goodwill of the players to play by the rules and accept the outcomes of the popular vote. Democratic institutions depend on the public resistance to subversions and the public mobilization in their defense. In recent times, Hitler, Mussolini, Lukashenko, Putin, Orban and many others, have shown how democracies can slide into autocracies. by not playing by the established rules.

 So, the question of the hour is what can be done by the Republicans as well as the Democrats about this unusual President who abides by no rules and respects no norms, 

The Republicans are the more crucial players. The Speakers of the respective Assemblies and majority Senates leaders in these states can declare their intentions to accept the vote counts by mail on equal footing with voting in person regardless of how long it takes for the count.  It is to be noted that different states have different rules about the delays in counting the vote. Similarly, the Republicans in the US Senate, at least four of them, can declare that they will not authorize election results unless all votes are counted regardless of how long it takes to count. So far, only three Republicans in the US ‘Senate have declared so.

As far as the Supreme court is concerned, only two Senate Republicans have declared that it is unacceptable for the Senate to move on filling the Supreme Court vacancy on the eve of the elections, just a handful of weeks away. Senator McConnel has made himself the big enabler of Trump`s power plays by rushing a hurried cynical vote to pack the Court with like-minded conservatives. This is the same McConnel who refused even to submit the name of Merit Garland, President Obama`s nominee for consideration, because the elections were 11 months away in 2016.

The Democrats are in a rather hapless form, which is their usual stance in critical situations. While they cannot stop the Republicans on the Supreme court nomination, they can use this cynical power- grab by the Republicans to mobilize voters, on the issues before the Court: the health care of Obama`s ACA, abortion rights, immigration and DACA, voter suppression in many states, environmental regulations, and Gun laws. 

Heading towards the November 3 elections, the Democrats should mobilize voters on the issues involved:  the President management of the Coronavirus, the state of the economy, the environment, the tax burden of the middle class, the budget bust, the income distribution problem, the nuclear dangers of going out of all the disarmament treaties. There is plenty to incentify voters, to turn them out and to help them in voting. The results in the Presidential elections must be decisive and unchallengeable. And that would be helpful in flipping the Senate control to a Democratic majority. All the polls indicate that this is an election for the Democrats to lose.

Vice President Biden might help by not accepting to debate President Trump unless he declares in advance his acceptance of all legitimate votes whether by mail or in person, regardless of the duration of the count. Since the Democrats are in control of the House, they could consider not passing any appropriations until the results are clear and settled.

 On the Senate side, the Democrats can ask for unanimous quorum calls on all matters, and propose that every US senator declares where he /she stands on the legitimacy of voting by mail regardless of the duration of count and the acceptance of the peaceful transfer of power

The Democrats are usually timid, divided and not skillful at such procedural maneuvers. However, the stakes this time are so high because the fate of US democracy hangs in the balance.

 Geneva  25/9/20.

 

 

 

 

 

WEDNESDAY, MAY 20, 2020

A Revisit of the Impact of the Pandemic on the Economic and Political scene

 


A Revisit of the Impact of the Pandemic on the Economic and Political Scene

 

                                 By

             Dr. Michael Sakbani

 

     A version of this paper was  first published on 16/4/ 2020

      Ever since, in the fluid context of the epidemic and the

      US`macroeconomic  policy response, it became necessary 

     to revise and add several parts.

   

The  Pandemic is a manifestation of the good and mal in an interconnected world. In a world we can fly from one end to the other in one day, everybody can be a victim and everybody can be a healer.  The pandemic teaches us that a virus is a common ill, just as is  a climate catastrophe, or an agricultural crop failure as was the disappearance of anchovies in the south American coast in 1970.  Dealing with global problems requires global solutions.

The abilities of countries, however, are not even. There were ones that have the infrastructure of health and social maintenance and ones that do not. There are countries that were well prepared and others that were not. Yet, they all were hit by the same virus and are affected by the same climate problems, almost at the same time. And none of them is protected unless they all are.

An epidemic per se does not change the political or economic order. It presents the society with a mirror picture of its problems and incapacities juxtaposed to its needs. It forces societies and their leaders to undertake changes or reforms which were not on the agenda before. In old Russia WWI produced Communism. In Germany and Italy, it produced  Nazism and Fascism. In more pragmatic societies like the US, it produced the New Deal and the reforms of FDR. In the US this time around, it exposed the deficiencies of the US  health care system and the skimpiness of the social safety net. More profoundly, it exposed the myths of neoliberalism which has ruled the roost since the 1980s and reasserted the vast importance of Governments and their role in economic and political affairs. So, let us see what the mirror has shown.

 

How Did the Liberal Democracies Do

The US, and other liberal democracies, were caught unprepared. That is because public investment was not made in what people essentially need in the crisis,  such as health system preparedness, basic societal support, research and knowledge to cope with emergencies. Instead, public investments were in the military and in pork-barrel appropriations which aid in reelections of politicians and assures the continuation of the support of the military industrial complex and in financing social entitlements. There is no question that the US Administration ignored the warnings by many highly placed officials, including the Secretary of Public Health, Alex Azar, the Director of the  National Institute of Allergies and Infectious Diseases Dr. Antony Fauci, the economic adviser Dr. Peter Navarro, the CDC warnings and the national security officials, as well as the Pentagon. The  President simply was concerned that taking drastic isolation measures would impact badly the economy which in turn would jeopardize his re-election. Many state Governors, followed on partisan lines, the cues set by the President. The federal authorities had the capacity to set uniform standards in action, procurement and testing, but the president chose not to do so. The result was that the most advanced and richest country on earth, stumbled on every step.  According to the investigations of the New York Times, the Trump Administration wasted critical 6 weeks in wishing the epidemic away, making false public announcements about the short disappearance of the virus and the availability of tests for everyone who wants them and shamefullyPresidential pronouncements. denying science (New York Times)[1]

 

The crisis revealed that of all parts of the US Federal Government, the military was the only branch well prepared to meet the crisis. The military had a long experience in logistic preparedness and the resources to simulate crisis and deal with them, while its civilian counterpart had scarcely the wherewithal’s to deal with an epidemic. The Neo-liberal concept of the best government is the least government was responsible for this deficiency of public investment. 

The question then arises as to what power does the citizenry have in influencing decisions regarding the distribution of public funds, and what control they can express regarding critical decisions by elected Governments. It should be recalled that Prime Minister Blair went to war in Iraq when 75% of the British public was against the war. In other words, what is the power of the public outside election times to control government actions in liberal democracies? I know of only Switzerland which has popular participation by the citizenry. In other liberal Democracies, popular movements that have a continuous public opinion mobilization might be the way to control state action.

 

 The Role and Perception of the  Public Sector

The advent of the Covid 19 virus, like the HIV, has some origin in man`s intrusion and encroachment upon the animal and the jungle kingdoms. It is reported that bats transmitted the  Covid -19  to other animals eaten by humans. For longscience has not provided proof or counter proof on cross-species transmission. If this hypothesis is true, then at the bottom of such epidemics is man`s multiplying demography. The world as we still remember it was a planet of 5 billion people in the 1950`s Today, we are about 7.5 billion, polluting and consuming.

 In all countries, when the crisis struck, people looked to Governments and public bodies for dealing with their problems. Indeed, it was the Government that took command of the situation albeit with various degrees of success. Businesses and voluntary civilian bodies were only organs of supplementary help to the Governments in charge.
For at least four decades, the public, especially in the USA, has been skeptical of the role of Government outside law and order and national defense. President Reagan famously said the Government is the problem and not the solution. So many people find the public sector lacking in a  bottom line. Its bureaucracies are thought of as heavy, cumbersome and lacking efficiency. This widespread belief is based on a stereotype 
that does not stand to careful examination. To be sure, the public sector tolerates failure and needs periodic calling into account. But the record of business is not always better. It is precisely the lack of bottom line that exposes the governments to such criticisms because what they do, are not things and services that have a market price.
In the USA, the size of Government in 1952 was 5% of the 
active labor -force serving less than 180 million residents.  Today, it is only 2% of the employed serving about 330 million residents. The public sector might have incompetents but it is rich with devoted public servants whose best elements are as good as the very best in the private sector.
The public distrust of the Government finds support in the concocted rational justifications offered by the new Macroeconomics taught in the academe over the last forty years. This macroeconomics postulates the rationality of the homo economicus, the rational expectations of the individual, the efficient working of the markets and the multiple lags of fiscal policies and the biased self- interested political calculus of politicians in election cycles. 
( Sakbani, 2009, and 2019.) [2] In the crisis of 2008, all of these postulates proved empirically invalid ( Tooze, 2018, 2019). [3]  Government saved the economies and the financial systems by following the old stuff carrying the insights of John Maynard Keynes. This time again, the macroeconomic policy responses are in the same vein. In a public lecture in 2017 at the graduate institute in Geneva, the eminent economist and public intellectual Paul  Krugman called this “the old stuff”. Another adjective richly deserved is ”the largely valid stuff”.

On April 4, the Financial Times of London,  the leading journal of the prevailing political and economic ideology, wrote in a major editorial that the Covid-19 crisis has shown the wrongheadedness of the maxim" the least government is the best government". The paper rightly said that the modern economy requires a more active role of government in economic life, a governmental effort to stabilize labor markets and lay health and social safety nets for the societies making sure that competitive market rules apply. More profoundly, the Paper advocated that social expenditures should be looked at as justified investments and not as social liabilities. 

The question then arises, how did liberal democracies get into such an ideological stance?
Two things stand out in our opinion: the rise of capitalist power and the revolution of neoliberal ideologies in the West.

Capitalism; the Climb of Corporations Onto Power

In 1989, the American political scientist  Francis Fukuyama predicted the end of history. The triumph of Capitalism over collective Socialism was, to him, final and without appeal.

The triumph of capitalism had two aspects: market competition and the rise of the new regulatory state shaped by the libertarian right. Up to roughly the early eighties, corporate business leadership and government power control were interchangeable; corporate leaders, like James Forestall, Alfred Sloan, Charles Erwin Wilson, Douglas Dillon, Robert McNamara and George Schultz slid into and out of government almost unnoticeable. This is best expressed by Wilson`s  aphorism” for years I have thought what is in the interest of our country is in the interest of General Motors and vice versa " This paternalistic mesh underwent a radical change during the Reagan-Thatcher era. The rise of the ideological right led by William F. Buckley jr, William Rusher, Russel Kirk and many academicians like Milton Friedman, James Buchanan and Fredrich Hayek together with the multiplication of right-wing think tanks like the Heritage, Cato, American Enterprise and Hoover Foundations, all led to a determined climb by business corporate advocates into the power centers in Washington. The late Justice Lewis F. Powell was hired in the early seventies by the US Chamber of Commerce to write a policy memorandum on what business should do and advocate to further its interests in the US capital. His recommendations were gradually fulfilled in the 1980`s as business lobbyists numbers increased dramatically in Washington. DC. From modest budgets of few millions, in the early 1970`s, lobbying was financed to the tune of $3.5 billion in the late 1990`s. according to Professor Robert Reich. ( Reich, Netflix, 2019.)[4).  Reich documents that close to 40% of former House Representatives became lobbyists after retirement and 48% of former Senators entered this business.(Ibid.)[5]. Washington lobbyists exert pressure on elected officials because their campaigns are largely financed by private businesses. The financed elected legislatures payback in skewing legislation in favor of business. The plum is in granting business tax exemption and subsidies and favorable regulations. Examples are exempting bonuses of top executives from tax, barring default on student debt, or on mortgages while business is free to do so, barring the Federal government from using its enormous bargaining power in negotiating drug prices. Reich put such subsidies at the order of $ 100 billion annually.
President Reagan pioneered the practice of appointing to regulatory bodies people who do not believe in and are active adversaries of the mandates of these bodies. This march was crowned by the decision of the US Supreme Court “Citizens United” in 2010, in which corporate businesses were given under the first amendment pertaining to free speech the right to spend their monies on financing election campaigns.

  The paradigm of Capitalism unhinged and free of regulations ruled the landscape after the collapse of Communism. As Thatcher and Reagan put it: "there are no alternatives". This applied not merely to companies, but also individuals, as they scrambled for employment and advancement, investing in their own ‘human capital’ so that they can be picked up by the new globalized businesses.  Public services were increasingly privatized and subjected to market competition with everything from healthcare to higher education to even servicing the military subject to the criteria of profit in the name of ‘choice’ and ‘efficiency’[6]. This is how Bechtel, Black Water and Charter schools came into the news in Iraq and New Orleans. Unions were crushed while social democrats shifted inexorably to the right. In the US the drift towards the right made states like Florida advertise that they are union-free states.

The functions of the state also changed. Early in the post-war era, the state took on the goals of trying to narrow the gap in income distribution and finance social services. But this came to end in the mid 1980`s with the triumph of neo-liberalism.

 

The capitalist system that ruled thereafter, has allowed wealth to be concentrated in the hands of a few individuals, the envied 1 %. The Nobel laureate Professor Joseph Stiglitz` research shows that from 2008 till 2015, 90 % of the growth in the US `GDP went to the top 1 %. (Stiglitz, 2015 ),[7] Global businesses that have no roots and no loyalties except to their own profit line, moved their industrial plants and headquarters to locations where they used their labor-saving technologies on the cheap and where they paid least taxes. Such countries are also outside the norms of the ILO and practically free of environmental restrictions. 

And the trend for the skewed distribution of income gathered momentum after 1985 with the spread of globalization; the share of capital in the GDP increased by 5 to 10 percent over the trend set for close to 80 years in the USA.  Thomas Piketty corroborates this in the  European countries by the rise of the ratio of profit growth to income growth ( Piketty,2014 )[8]. The situation has evolved so badly that the six heirs of the Walton family who own Wall-Mart in the US, have a combined wealth exceeding 140 million Americans. ( J. Harkinson, 2015, W. Domhoff, 2015 )[9] Naturally, capital owns the new  technology which turned out to be labor saving (Sakbani, 2020) [10].

 

 The sins of unfettered capitalism should not, however, obscure the role of the markets in the allocation of resources. There is simply no other and better mechanism. But by markets, it is meant competitive markets free of monopoly, government favoritism and transparency in their information. At any rate, the State should play a compensating role to market outcomes when social goals are at stake because the market does not account for social returns and does not charge social costs.  

 

Wealth and income are not in our era always earned by developing industries or exploiting land or introducing new technologies to old methods of production, but quite often, by the stock-market valuation of newly enlisted enterprises, mostly of information, in the Tech. industries. Millions of Dollars are created overnight just as millions can be destroyed overnight. This casino capitalism has to be regulated, subjected to social purposefulness and taxed fairly and fully. The EU Commission reported that Apple made millions of Euros in various countries but did not pay taxes in these counties where it had its businesses. Similarly, Amazon, the giant mass distributor, pays little US federal taxes. So did most of the cruise liners [11].

 

In the period after the 2008 crisis, Europe in particular, shifted to drastic austerity in the name of correcting the so-called” Problem of Public Finances”. In a bloc of highly interdependent economies, the fiscal austerity of the UK, Germany, the Netherlands and Finish Governments hit the Southern EU  states with full force. Greece, Portugal, Spain, Italy and even France, were dragged down and forced into austerity, born essentially by the poor and working poor. This strange and economically unjustified fiscal conservatism took place when interest rates were at historical lows and investing in building up the economies their infrastructures and in the clean technology was definitely going to bring higher net rates of return (Sakbani, 2020 )[12].

The Covid -19 crisis even stripped the contentious of the right-wing stands of their fig-leaves. Today, the Republican Party in the US and the British Conservatives under the politically itinerant Boris Johnson, have jettisoned off the fear of public finance deficit and the ideological taboo of small government to protect their business constituents and secure their own re-elections.  Fox News editorials are now touting the old leftist planks of deficit spending.

The left, however, has not weened itself off asking for more and more public entitlement spending. Jeremy Corbyn defeat and the failed campaign of Elizabeth Warren and Bernie Sanders in the US. showed the limits of this old adage; the public has no appetite for it. The left has to reinvent itself,  for its advocacies have been taken over by the right  Its hope lies in emphasizing Democracy and its civic participatory core, in advocating social investments, in building robust social safety nets and enforcing competitive transparent market rules.   

 

What Happened to International Cooperation

The international system of cooperation, symbolized by the UN and its specialized agencies are critical for collective action on global problems but do not have the means, because the leading members do not have the political will to act collectively. The UN Security Council could not pass a resolution during the corona crisis because the US and China could not agree on an adjective for the pertinence of the virus: is it a Chinese virus or just a virus. Quite baffling was the refusal of the United States to use the WHO diagnostic testing offered to it when its testing preparedness was woeful. There were countries like South Korea, New Zealand, Australia, Germany, Denmark, Finland and other Democracies in Asia as well as Vietnam, who were successful in combating the Covid-19 and reducing the death toll, all denoting that the countries that acted fast and decisively, were the successful ones.  Yet, the US and the UK, as examples, were unwilling to draw on these comparative experiences.

 

The Covid- 19 has demonstrated the gaps in the WHO mandate in that it could not have demanded China to allow the Organization to send investigative missions early on when the Chinese were not revealing the truth about the epidemic. Similar gaps can be ascertained in various other international bodies. who are not empowered to demand things from their significant budget-contributors. In a world threatened by pandemics, by climate change, by regional water shortages and crop disasters on massive scales, the international cooperation system must be strengthened and given the mandates and resources to carry out their missions.

 

Regional bodies like the EU, have not passed the effective cooperation test. Europe was hit by the virus at roughly the same time. When the agonies of Italy and Spain required help, other countries concentrated on meeting their national needs. Protective apparels, medical equipment like ventilators, and medical supplies were sequestered and denied to exportation. That means the nation-states prioritized first their needs. Furthermore, the idea of issuing EU collective bonds was shut down by Germany, the Netherlands and Austria, and others.

 

Dangers and Opportunities

Looking at collective systems and authoritarian governments, it is clear that China after a month and a half of lies and dissimulation took drastic mitigation measures practically impossible in open societies. China was able to stem the tide and stop the epidemic. The cost it paid will never be known. But the great story is not Chinese, rather that of the Asian Democracies: South Korea, Taiwan , Japan and maybe Singapore, as well as Vietnam, a non-democratic exception. These countries were the real champions. South Korea, tested up to mid -April, 40 times per capita more than the US has done and moved to relax the isolation measure a week ago.

Authoritarians like Victor Orban of Hungry, availed of the crisis to take unlimited powers from the Parliament. There are measures of electronic surveillance and tracing people applied to fight the epidemic in China and South Korea, which can, in authoritarian hands,  really threaten freedom, privacy, and human rights. Authoritarian regimes are not hesitant to exploit such tracing tools.
On the other hand, crises are harbingers of change of opportunities for change. Perhaps it is the turn to restabéish more responsible social and economic solidarity in our societies.

Where Is All the Money Going and What is the Shape of the Recovery

The  Covid -19 crisis has turned on the money printing machine. The money tree, now called QE., will leave the US economy with more than $ 4 trillion new dollars. Similar relative amounts will also feed into the European economies. Until the Covid -19 crisis, China and others in the low- wage international supply chain, have been able to ramp up the aggregate supply with cheap goods. Now, avoiding inflation and structural problems requires turning this liquidity into new investments. The crisis affords the chance to invest in infrastructure and clean technology. It also provides the opportunity to diversify the international supply chain by bringing some such industries to The US and Europe. The crisis demonstrated the perils of high dependence on Asia in the international supply chain. 
One of the unintended results of extra liquidity is boosting investment in the stock market thereby rendering it more of a bubble phenomenon than a manifestation of investment sentiments. 

Looking at the shape of the economic recovery, its recovery curve will depend on how the economies open up. That means when and where various Governments think they have seen the back of the epidemic. Five conditions must be fulfilled before re-opening becomes appropriate. First, having large scale diagnostic testing to know in instant real-time the size of the epidemic spread and therefore the scope of the necessary social distancing to implement. Second, having  wide-scale anti -bodies testing of recovered people to know what immunity they have and their return safely to work. Third, attaining the capacity to trace infected individuals in order to isolate them. Fourth, for each state or locality, the capacity of the health services should be the constraint.  Fifth, eventually, discovering effective remedies and ultimately a vaccine. Any reopening before attaining the first three conditions would risk reigniting the virus and costing more deaths. From what can be known now, we are far from such a state; a couple of months might be needed.

 On 14/4/2020, the IMF predicted a loss of global GDP of $9 trillion in their moderate scenario. That is about 12% of the global GDP. The IMF is forecasting growth in emerging economies at 1 percent and a decline of growth of developed economies of 6 percent. ( IMF, Update,4/14/2020 )[14] . The EU expects a decline in the GDP of 3.8 % and in Germany its biggest economy, a decline of 6 %. In the  IMF`s view, it will be the deepest recession since the great depression of The 1930`s; we might have up to a 20 % decline in the GDP of many countries. Two important new press reports are that China will have through the second quarter a  negative income growth for the first time in three decades. the second is that the US `GDP will have a decline of 6.8 percent in the second quarter of 2020 on top of the 3.8 decline in the first quarter.

The aggregate supply recovery will depend on the depth of the recession. Morgan -Stanley has estimated the rise in unemployment in the US  at 13 %. Goldman Sachs estimation is 15% and Morgan- Chase is little higher ( David Kelly, 4/13/2020,[15]. Our guess-estimate informed by the available data places unemployment in the US at a range between 18 % and 20 %. Recent reports of unemployment place the number of workers applying for unemployment benefits at 34 million. However, the unemployment is in reality higher than that, since there are dismissed workers who,  for one reason or another, did not apply for unemployment benefits. These figures suggest unemployment of about one-fifth of the labor force in the USA, i.e. about 40 million*   [15].

 Unemployment, according to the above forecasts, will be high when the economy reopens.  Since unemployment is a lagging indicator, the pace of recovery is likely to be slow. If we add to that the slowness of administrative procedures to put the massive loans and aid in the hands of small enterprises which are the largest employers,  and that many small enterprises will not survive in business, one has to conclude that the number of dismissed workers will have increased relative to rehired workers before reopening.  
At the beginning of the fourth week of April, the $350 billion allocated by the US  for small and mid-size enterprises were exhausted. It turned out that the SBA and the banks to which the funds were given to distribute, missed the small enterprises; banks had favored their big customers and the SBA had faulty computer software for applying and was simply overwhelmed. Consequently, the US Administration asked for an extra $485 billion in aid for small businesses.

The states and local governments have so far been missing. The Speaker of the House Ms. Nancy Pelosi expressed her desire to pass extra fiscal spending to shore up the finances of these bodies. These governmental bodies are crucial in the fight, as they finance health workers and facilities, transport,  police, firefighters, and school personnel. Nevertheless, no matter how good are the written legislative conditions, Congressional oversight over the working of these programs is needed. 

In all countries, the important indicator is the ratio of dismissed workers to those retained. The higher is this ratio, the more difficult and harder will be the recovery. Many businesses will use the crisis to restructure their workforce, and in big business which owns the new labor-saving technologies, they might opt for the robotics if suitable. Therefore, it is fair and prudent in extending taxpayers' aid to big business firms to stipulate that if the number of employed workers turned out to be less than before the crisis, the business in question should not qualify for taxpayers' help. The help should be made loans that have to be repaid.

The ratio of dismissed to still employed workers is not the same across the Atlantic. Europe has labor-employment protection nets far more inclusive and generous than in the US. Consequently, the ratio will be higher in The US.  Unemployment, according to the above forecasts, will be high whe
n the economy reopens. As indicated above, an important factor to consider is the number of small businesses that will go out of business altogether. This is likely to be a significant number; many place this to run around 35% of such businesses. It is well established that small business enterprises are the most important employers. Therefore, the pace of recovery is likely to be slow. If we add to that the slowness of administrative procedures to put the massive loans and aid in the hands of enterprises, one has to conclude that the US economy will face a higher relative share of dismissed before full reopening. However, the depth of the recession and unemployment should be tempered by the contribution of digital technology to the buoyancy of the economy during the closure. Consequently, the curve might be an extended U-shaped with many V- curves embedded in it. Therefore, it will gently rise upward in 2021. In the 2008 crisis, it took the economy 5 years to re-establish growth and bring down unemployment meaningfully. 

In the USA there is the  problem of the ballooning since 2008 of private debt which has accumulated over the years. This includes a huge corporate debt, the heart attack of the $16 trillion mortgage market which has to be reopened given that the majority of small and medium-sized enterprises are involved in a big way in the construction industry, and finding an orderly resolution to the  student debt of $1.6 trillion, involving 45 million Americans, 40% of whom are senior citizens. This debt left untreated, could  bankrupt many financial institutions and deprive the US government budget of a huge amount of interest profits.



The Covid-19 has destroyed the aggregate demand as well. The economy can open up the cruise ships, the airplanes, the factories and all the rest, but people will not go to restaurants, would not travel, build new houses or go out to amusement parks and museums unless the Covid -19 can be tamed. In economies highly dependent on services as it is the case in the USA (70 % of the economy) and Europe, the recovery of aggregate demand depends on wide-scale testing and finding a secure solution to the Pandemic. Thus, the effective recovery most likely will not take the shape of a V curve,  but rather  a wide bottomed U rising timidly over time.

President Trump had agitated for reopening even beginning of May, quite a contrast to his dragging his feet on ordering a closure. It is common knowledge that the US president is very worried about his re-election. and he sees in the economy his best vehicle of approval. First of May would likely be a premature date, since most public polls show that a majority of Americans think this date to be premature. 

In Europe, Austria, Denmark, and Spain are easing closures by opening selected parts of the economy while keeping social distancing. In all probability, the reopening will be rolled out gradually and selectively. Governments are advised to draw lists of priorities of their economic sectors and another list of how various sectors can implement protective measures and social distancing. This would map out matrixes where on the horizontal, one would have the priorities, and on the vertical the capacity to protect and cope. The result is sequential combinations of possibilities that would assure intelligent reopening and protect against igniting a second wave of the epidemic. Since reopening will be rather sequential in time for various countries and various states,  the overall U might have several smaller U`s and V`s within it. This holds hope that the recovery will not be as slow as the one in 2008.
 However, that being said, the resumption of economic activities is crucial but it can fire back if it is done without taking the precautionary measures put forth by the scientists, to wit: testing, social distancing and tracing. Unfortunately, President Trump has set a bad example in refusing to wear a mask, resuming political rallies in close places and calling for a slowdown in testing to reduce the bad statistics. The virus is all around, and the US has done a poor job in meeting it. With less than 5 percent of the world population, the US is registering 25 percent of world cases and 26 percent of the world`s deaths!!!.   

 

 One last development which should somewhat alter the risk calculation of reopening the economy, is the announcement on 29/4 by Dr. Fauci that a drug previously prepared for Ebola “ Remdsesivir ”, has proved effective in shortening the hospitalization period by four days. This drug blocks virus replication. However, it is not a full cure. Nonetheless, it helps in keeping patients four days less on the ventilators, thereby avoiding many internal organ complications. The NIH tested the drug scientifically by taking two random groups:  one given placebo and the other the drug. The result was statistically significant. Unfortunately, the drug is used only clinically in emergency facilities pending the discovery of more effective treatment drugs. The data do not yet permit knowing whether it works in all cases, mild and severe. Its drawbacks are its elevated cost and its intravenous administration.

With this drug in hand, reopening the economy becomes a bit less risky. 

 

( Geneva 18/5/2020)


                                      NOTES

 

[1]  The New York Times, Sunday, 4/12/2020.  (

2)
Michael sakbani, Trade Wars with the World; Can Mr. Trump Approach Work, in michaelsakbani.blogspot.com, 2019, also, Michael Sakbani, the Global Financial Crfisis , Central Bankingand the Reform of the International monetary and Financial Systems, in michaelsakbami.blogspot.com, January 2009.


[3] Adam Tooze, Crashed: How a Decade of Financial Crises Changed the World (2018); also idem, NYReview Of Books, 20019

[4 ] Robert Reich, Saving Capitalism, in Netflix, 2017.

 

[5] Reich ,Ibid.

 

[6]  Examples are found In Bechtel, and Black Water subcontracting for the military during the Iraq war, and the rise of Chartered schools after Katrina in New Orleans.

 

  [7] Joseph Stiglithz, Inequality and Economic Growth, in Sementic Scholar, No.15, 2014.       

 

(8). J. Harkinson, Mother Jones, October, 2015, also, William Domhoff, Who Rules America;  Power, Politics, and Social Change , University of California Santa Cruz, 015.

(9) . Thomas Pikietty, Capital in the Twenty Ffirst Centuary (20/4) Cambridge, Massachusetts, 2014.

(10). Michael Sakbani, Trump, the President that Was Not To Be , in michaelsakbani. blogspot.com, 2017.

 

(11 ) Tax Avoidance,” The Apple Tax Ruling-What This Means for Irland,Tax and multinationals” , the Guardian, 2018.,

 

(12) . Michael Sakbani, Reflections on Karl Marx and the Neo-Classisists  in, michaelsakbani.blogspot.com, 2019.                                              

 

[13) Jeff Fox, “Goldman Sachs Says Downturn Will Be 4 Tmes Worse Than the Housing Crisis , then Unprecedented Recovery”, CNBC, April 14, 2020.

 

[14].  IMF, Transcript of the Press Conferenceon the Release of  the World Economic Developents, 14/4/2020.    

                                                   

(15) Dr. David Kelly, J.B.Morgan, Economic Update , April 13,2020

 

 





 

 

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MONDAY, MAY 11, 2020

ISIS, al Qaeda, the Muslim Brothers and Political Salafists; the Problematique of Political Islam

 

 




 

 

 




the Blog Papers of Dr. Michael Sakbani; Economics, Finance and Politics

 

 

Dr. Michael Sakbani is a professor of economics and Finance at the Geneva campus of Webster-Europe. He is a senior international consultant to the UN system, European Union and Swiss banks. His career began at the State university of NY at Stoney Brook,then the Federal Reserve Bank of New York followed by UNCTAD where he was Director of the divisions of Economic Cooperation, Poverty Alleviation, and UNCTAD`s Special Programs. Published over 120 professional papers.

 

ISIS, al Qaeda, the Muslim Brothers and Salafists; the Problematique of Political Islam.

                  By 

          Dr. Michael Sakbani

Al Qaeda in Afghanistan Moves into Iraq

The origins of ISIS are indeed murky. As far as one can ascertain the origins hail from al Qaeda in Afghanistan, which was created by the US, Pakistan, and Saudi Arabia with the help of Israel. A side of this can be seen in the semi-documentary film "Charlie Wilson`s War".
 After the fall of the Talibans in 2001, elements of the Jihadis in Afghanistan ran away to both Iran and Pakistan. Some important leaders were hosted by Iran; that is where we know now was Bin- Ladden`s family. 


There have been voices among commentators accusing the USA of being the founder of ISIS. This confuses direct founding as an explicit act with preparing the background that enables the emergence of movements like ISIS. While the USA is guilty of founding the Mujahideen outfit in Afghanistan, its role in Iraq was to prepare the grounds for its emergence. The invasion of Iraq on trumped-up grounds resulted in erasing all its governmental institutions and tearing apart the Iraqi social tissue. The US introduced under Proconsul Paul Bremmer, a sectarian political system that excluded the previous regime millions of supporters and collaborators (the Baath eradication law) and marginalized the Sunni Arabs
, who constitute 30% of the population. The ensuing sectarian Governments, especially under Nouri al Maliki drove Iraq into Civil War and created whole strata of aggrieved citizens. This furnished an excellent soil for breeding potential recruits for extremist groups which thrive on exploiting vacuums created by discrimination and chaos.   

After the US invasion of Iraq, Iran was interested for obvious reasons to plant controllable resistance elements in Iraq to pressure the US occupiers and so was Syria. Syria had thousands of imprisoned fundamentalist Islamists (political Islam advocates) and a large number of Saddam`s Republican Guards officers. In 2005, Syria released so many of these fundamentalists knowing full well that their destination will be Iraq. Saddam`s R.G. officers were the natural choice to lead these elements and organize the resistance to the American invasion of Iraq.

Thus, Jihadis started entering Iraq with outside help from Iran and Syria throughout 2005 and 2006. Iranian and the Syrian Intelligence services lent arms and organization to these al Qaeda remnants. In a short time, al Qaeda in Iraq became operational in 2005 under the name " Bands of the Righteous People" and that is when Abu Musaab al Zarkawi emerged as its leader. Zarqawi and his outfit, which later became known as "al Qaeda in Iraq " became a major challenge to the USA and they edged Iraq in 2006 towards a sectarian civil war.  Iraq was so enraged by this Syrian transgression that Prime Minister Maliki publicly threatened to bring the matter to the UN Security Council.

 

General David Petraeus, the US commander in Iraq, succeeded in 2007-2008 in drafting the Arab Sunni tribes to fight al Qaeda. This was done by putting many Arab Sunnis, especially tribal chiefs, on US`payrolls and making some other promises regarding their future in Iraq. The phenomena therein were known as "al Sahawat". The Arab tribes indeed defeated al Qaeda by 2008. The idea of General Petraeus was to merge these forces after the defeat of al Qaeda with the Iraqi security forces. However, being Sunnis, the Iraqi sectarian Shitte politicians, led by Nuri al Maliki, and naturally backed by Iran, did not want that. Even more, Maliki cut off their salaries and put many of them in prison, leaving many of them as unprotected targets for al Qaeda`s vengeance. The US was feeble in its objections to what Maliki did and Petraeus, the father of the idea, was transferred back to The US.

Radicalization in camp Bucca

The Iraqi prisons were notorious for their ill-treatment, and after the scandal of Abu- Gharib, the US decided to establish a new prison for political detainees compatible with civilized norms This was called camp Bucca. Camp Bucca was the place where the US put the Iraqi prisoners transferred from Abu-Gharib and other detainees imprisoned by Maliki. The vast majority of the detainees were Arab Sunnis thrown into jail by arbitrary arrests and sometimes without evidence of wrongdoing. During a couple of years, Sunni prisoners in the camp mingled with the imprisoned remnants of al Qaeda in Iraq and both got indoctrinated by the likes of Abubakre al Baghdadi, who was authorized by the USA to teach religion to the camp prisoners. Camp Bucca was in a sense a radicalization laboratory. Many of its prisoners were gradually released and those that were not,  were involved in the prison escape of 2012 during the post- US `s rule of Mr. Maliki.

In 2008-2011, Maliki`s sectarian policies reached their peak. He had his own secret prisons where thousands were imprisoned without legal warrants. Hundreds were tortured and scores killed and disappeared. This was in addition to overt discrimination in jobs, opportunities, and public services. The 30 % Arab Sunnis of the population began to think of open rebellion against Baghdad. In 2012 huge demonstrations took place in the six majority Arab Sunni provinces of Iraq. The Kurds, another 16.5 %, of whom 90% are Sunnis, plus the Sunni Turkomans (Another 3.5 %) boycotted Baghdad. Maliki responded with brutal armed suppression and massive arrests of men and women. Thus, when it arrived on the scene, ISIS found receptive grounds for militant Sunni action.

It should be recalled that the remnants of Saddam`s Baath was present throughout Iraq, especially in the Northern areas. Around Mosul, many of the cadres of officers of the old Iraqi army were unemployed and living under constant security chase. Maliki`s government inflicted abject discrimination upon the Sunni Arab population in these areas, and, like in the rest of Iraq, provided no basic services. When ISIS showed up the choice between it and Maliki was for all a Hobbesian choice.


An Islamist outfit as an objective ally of Asad.  

By 2012, after the eruption of the Syrian revolution, Iran and its ally, Maliki, were eager to form fighting forces to support Asad. And it took no genius to think of the remnants of al Qaeda in Iraq as candidates, Maliki further staged a prison escape of some 2500 Jihadis from Camp Bucca in what was perhaps the biggest staged prison evasion in history. In addition, the Syrian securities had thousands of imprisoned Jihadis and several hundreds of Saddam`s Republican Guards ex-officers who fled to and were given refuge by Syria. The Syrian security forces, with Iraqi help, merged all these disparate elements into a fighting force now called “the Islamic State in Iraq and al-Sham”, ISIL. Asad had a genuine interest in implanting a terrorist organization in the midst of the Syrian revolution. It would bolster his claims that he was facing terrorists and not a popular revolution and would split further his opposition and provides him with inside information. In fact, Asad publicly acknowledged in June 2013, to the newspaper al Quds -al -Arabi, that he has agents planted among the armed oppositions.  

Armed and supported by the Syrian intelligence, the new outfit started its activities by attacking the Syrian opposition i.e., the Syrian Free Army`s liberated areas in northern Syria. For a whole year, this pattern continued and there was not a single reported attack on the regime`s units. In perfect symmetry, the regime did not once hit their positions. In short order, this group attacked and captured Raqqa and expanded in North-East Syria without any regime resistance. In 2013, it spilled into Iraq. In their conquest, ISIL began to absorb into their ranks, more of the old Iraqi army officers and many disgruntled Jihadis from Islamists defunct groups as well as disaffected Sunnis from everywhere in the world.

Saddam`s officers gave ISIL a professional military leadership and helped redefine their aims and tactics. From an outfit fashioned by the intelligence services, ISIL morphed into an Islamist independent fighting force capable of attracting thousands of Jihadis from all over the world. Western intelligence estimated their number in mid-2014 at 20,000 to 30,000. Thousands of them came through Turkey, which up to 2015, looked the other way. The guilt in unleashing ISIL is shared by the Gulf States, the US, Turkey, and the Syrian regime. In 2014, the name changed to ISIS, DAISH in Arabic.


Al Qaeda v. ISIS: the Islamists`Problematique

ISIS ideology has the same Salafist-Wahabi fundamentalist roots as does al Qaeda. and both of these movements are ideologically related to the ideology of the Jihdists among the followers of Muslim Brothers. While the MB appeared in the 1990s to accept democratic alteration, the movement in its prevailing condition has been far from cohesive and its organizational structure permits a wide spectrum of views including violent Jihadism. Thus, both ISIS and al Qaeda are essentially evolved products of MB. However, ISIS differs from al Qaeda in many respects. Al Qaeda ideology is an austere Wahabi Islam not contaminated by the historical and sociological developments of the different Muslim communities. In its drastic historical simplicity, it attempts to purge Islam of all cultural and other influences subsequent to its first 40 years under the so-called “Four Successor Khalifs”  of the Prophet. The Salafist understanding of Islam is textual and literal and it takes selective elements of the text regardless of the time and place they addressed. So, there is a dominance of the "Madina" Soras even though they have often a specific and limited relevance.

On the intellectual side, the Salafist intellectual base rests on  the political Islamist thinking of the Pakistani Abualaa al Maududi, which rejects democracy and the concept of a civil state and advocates a Sharia-based state, where the sovereignty “hakimyah”, is for God , These thoughts of al Maudoudi were held at the time of struggle in British India to establish Pakistan. Later on, after Pakistan was founded, he changed some of his old advocacies. But ironically, his Egyptian M.B. followers, Sayed Qutb and AR Yasin, advocated Maudoudi`s old ideas in the Arab context where the societies were essentially Muslim societies. These followers took aim at these Muslim`societies and their respective rulers as the object of Jihad. Jihad, as informed by Islam, is a defensive strategy when Muslims are attacked. However, the Islamists made it a compulsory duty to be discharged against those who do not accept their thought. The Islamists adopted the Takfeeri ideas of the Qotb, who advocated violence and disfranchising from Islam anyone who has a different interpretation than his and he further legalized their killing. 

Salafist thinking suffers many epistemological flaws. In the first place, it mixes up between the biographical virtues of the “righteous predecessors” and their epoch. That the purity and sincerity of those early followers of Islam are admirable, does not in any way furnish grounds to bestow the same admiration upon their period. That period in human history was, of necessity, less developed, and less enlightened than our era. In the second place, what we know about the successors` period are tales whose veracity is largely suspect. The historians of that epoch did not have under the belt, the rigorous standards of historical investigation that we have now. Thus, our knowledge of the historical example set by the epoch is rather mythical and infused with imaginative details. Even if we accept the proposed narrative, that era was troubled and flawed. Three of the four righteous Khalifs were assassinated and the community of believers at the time was not one with exulted history. In the third place, overlooking 1350 years of subsequent evolution in various countries and continents of Muslims is ignoring sociological realities by which we must judge pragmatic phenomena. There is no system of jurisprudence known to man, including that of the Islamic Sharia, that does not take sociological realities as one of the sources of law. Thus, the drastic purification of Islam from its attendant transformations is irrational and deficient in historical jurisprudence logic. In the fourth place, invoking this restricted period as a historical example of success to emulate in our current period is an exercise in pragmatic irrelevance; it is a fantasy to think that we can recreate that epoch and re-establish its circumstances at present. To give one example, re-establishing the “Khilafat” for 2 billion Muslims living on five continents with different backgrounds, languages and cultures is a fantasy, a fiction at best. 

This idea of” Khilafat” has no basis in Islam. The first” Khilafat” which was a succession in a historic sense of the Prophet, lasted only during two successors: Abubaker and Omer.  a short period of years with specific historical circumstances. After that, there was never an accepted Khalifa by all Muslims anywhere at any time. In the early Abbasids era, there were two Khalifs one in Baghdad and one in Cordoba. At the Ottoman time, Sultan Salim declared himself a Khalifa in 1516 when many other rulers in The Islamic world were in control of their own national territories, with a flag, an army, laws, and all other constituents of Sovereignty: “hakimyah”.
 The dominant Islamic theologians and scholars, draw up a distinction between the State and Religion. Religion is in the realm of beliefs and “Ibbadats”, whereas a” State” is in the realm of pragmatic affairs “Muaamalats”. A state has to have Sovereignty, with all the specific attributes of this term: a  frontier, equal citizenship franchise, its own territory, a flag and its own laws. Naturally, the world is composed of numerous states. The Ouran explicitly states in one of the Souras, that God created humans in different ethnicities, different colors, different tribes so as to know and discover each other and live in peaceful coexistence. This constellation of nations is rejected by the Islamists who advocate one Khilafat worldwide with an unequal free franchise for the followers of different  religions

 This stand of merging religion with the state, a  hallmark of Islamists thought, appeared in Islam under The Shiite doctrine of "Willayatul Faqih", fashioned by Ruhulah al Khumayni in the 1960`s, and in similar thought of the M.B. It also emerged in instances of political exigencies such as those that faced Ibin Taymieh at the time of the Moguls invasion, and Maudoudi in British India. Indeed there is nothing in the Quran or the sayings and deeds of the Prophet that calls for this merger. When the Prophet established his state in Madinah, he addressed two basic proclamations, one to Muslims and the other to non-Muslims laying down the basic law of a joint, non-discriminatory state: a state with the equal citizenry and state neutrality in respect of religion. This is the essence of both the civil state in Islam and moderate secularism: the true content of state neutrality. 
All of the above-explained pillars of political Islamist`s thought are, indeed, precepts of an ideology that is essentially alien to Islam.


The Profile and Modus Operandi of the Islamists

In all countries where the Islamists governed, they showed that they have no programs and no expertise in governing. The records of Iran, Iraq, Egypt, Afghanistan, Tunisia and Sudan provide ample proof of that.  The Islamists used Islam to gain power, and after that, they tried to monopolize authority and in all other matters of governance, they were demonstrable failures. Once again, when they tried to claim an economic system, a banking system, a system of governance, or a social order, they had nothing of substance to propose.
    
Despite the common source of their ideologies, the various outfits had significant differences. The M.B. is a multilayered association. There is a public Party in Egypt, an international circuit of Sister- Parties outside Egypt and a secretive underground organization that has an armed, violent manifestation. Al Qaeda` is an armed Jihadist organization. Its international posture is anti-Western, in particular anti-US, on the belief that the West has been aggressing the Islamic World. It does not seek to convert the West, rather avoids its influence and aggression. Bin Ladin actually offered in January 2006 a truce if the West quits Muslim countries and stops its aggression. Al Qaeda did not conquer territory and never faced the problems of running a society. 

ISIS, in contrast, is an international project for establishing an Islamic World Order. It recognizes no boundaries and does not respect any national separation, hence its latest name IS, the Islamic State. ISIS` behavior, is more savage than that of al Qaeda and it has more developed know-how of media and its use. It has also a developed commercial sense of doing business through religion. The organization uses Islam as a recruiting platform for those looking for a spiritual and psychological refuge. In fact, so many of its practices like self-martyrdom and spilling the blood of innocents, violate the basic tenants of Islam, The recruits of ISIS are on the whole thinly educated and most do not even speak Arabic and hardly know much about Islam. 

Many of the recruits are from Western Europe. Some researchers put the total Europeas at 6000. with a Western European majority. The profiles of these recruits, according to intelligence sources, are of social marginals with police records for various minor crimes. Some (e.g. the terrorists of Paris and Brussels attacks) had been drug dealers and owners of bars selling liquor. Unlike those from the Arab world, their known profiles show that they frequent no mosques or other public institutions and drift at the margin of their communities. In contrast, the Arab Jihads in ISIS, are largely unemployed victims of economic poverty and above all blocked futures. The officers and leaders are overwhelmingly Iraqi with many drawn from the ranks of Saddam`s army. Naturally, there are some exceptions to this norm in the presence of some Europeans from not--deprived backgrounds who are revolted by the materialism of their society and equally enraged by the brutality of the Asad regime.. The eastern Europeans are mostly from the Russian Federation, victims of the Chechen prosecution. In conclusion, ISIS is not populated by religious fundamentalists only, but by alienated social marginals, and by young Arabs for whom the future holds neither economic nor personal prospects. Unlike al Qaeda, ISIS is not led from the top; it is decentralized enough to be considered more populist. Thus in its controlled territory, it has a decentralized structure.

These differences are revealed by their operational modes. While the al Qaeda`s affiliate in Syria, Jabhatul Nusra, is willing to fight under the umbrella of the SFA for the purpose of deposing the Syrian regime, ISIS brooks no such alliance and has an Agenda distinct from that of the Syrian revolution and is in complicity with the Syrian regime. Moreover, Jabhatul Nusra is overwhelmingly composed of Syrians, whereas ISIS has a vast majority of non-Syrians.

 In a short period after it came upon the scene, ISIS secured fiscal independence, with the revenues  accruing from levies imposed on local populations and from selling oil after capturing oil wells in Syria and later on in Iraq. Among its black-market customers were the Syrian regime itself as well as Turkish contractors operating with partners in Iraqi Kurdistan and using the Turkish ports to export the oil to third countries, among whom is Israel.
       In June 2014, Mosul was attacked and the Iraqi army led by Malikis`political officers and largely manned by former Shiite militias ran away leaving their arms and supplies. Now, the ragtag elements had 
more arms, more money, and greater numbers. With imparted discipline from Saddam`s officers, they started a rampage in northern Syria and Iraq displaying frightening and unprecedented savagery and killing hundreds of people from all groups, including Sunnis. They culminated this rampage by proclaiming Baghdadi as their Khalif. 

The cascade of events conferred on ISIS new dynamics; it started to feel its own wings for flying independently and developed its own agenda, which cut into both the Iranian and Assad`s plans. When ISIS swept through the Kurdish lines and threatened the survival of the Iraqi Kurdish region, Israel and the US woke up. They realized the uncontrollable character of ISIS and took a measure of its barbarian savagery and danger to their Kurdish allies.

As a new terrorist Islamist outfit, ISIS was exploited by Asad to refurbish his credentials as a state force on the ground opposing Islamists. Iran, the other initial sponsor, now felt that these ragtag forces began to bite into its schemes in Iraq and acquired independence in their action. Each of the initial God.-fathers, now offered their services to combat ISIS: Iran to lubricate its nuclear negotiations and Assad to refurbish his credentials.

The US quickly built up an international coalition against ISIS, Many Arab countries, as well as Turkey and Iran, joined up, even though they have different and contradictory agendas. General John Allen was appointed Coordinator for this 61 -country alliance. It has indeed been an alliance of strange bed-fellows.

 

 

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Friday, September 25, 2020

American Democracy in the Balance

 

President Trump and a Possible Biden`s Victory in 2020 

by

Dr. Michael Sakbani

An Essay.

The declaration of President Trump on Thursday 24/ 9/2020, that he will look at the situation after elections to decide whether to accept the results of the vote or not leaves no doubt about the intentions of the President not to submit to the electorates` will if he were not confirmed in his place. President Trump added that the Supreme Court should have 9 justices to look into the results of the elections. This comes after several months of his unsubstantiated claims of voters fraud and attacks on mail balloting. The President knows that a historic number of American voters will vote by mail in this election cycle because of the epidemy and that most of the male vote will be  caste by Democrats. Therefore, in line with the Republican effort to suppress voting, especially by minorities, he has thrown the legitimacy of mail voting into question by claiming without any evidence that it is a big Demorats fraud.

This threat is not a simple Trump attempt to create public opinion chao and garner up media coverage. It is a studied step in several manoeuvres he is likely to pursue to stay in power and refuse the will of the voters. Professor Barton Gellman of Dartmouth has outlined a possible legal attempt by Trump to have the legislators in six battleground states, namely, Michigan, Wisconsin, Pennsylvania, Florida, Ohio and North Carolina, in which the Republicans control both the state Senates and their Assemblies, to declare the vote unacceptable and decide to name the electoral college votes of their respective states to Trump.

The Constitution is mute on this aspect but the Supreme Court has decided that in cases of doubt about the legitimacy of the ballots,  the legislators have such an authority. Already, there are media reports that Trump lawyers in Wisconsin are making preparations to do so. A reporter on MSNBC news show “Morning Joe” divulged that a Republican legislator in Pennsylvania has told him so. Along with Trump and McConnel’s rush to fill the vacancy created by the passing of Justice Ginsburg on the Supreme Court before the elections, 38 days hence, the course of action of Trump to thwart the vote ifit does not run in his favor, becomes clear and plausible.

This would not be the first time that the institutions of Democracy are subverted from the inside. Democracy stands on the goodwill of the players to play by the rules and accept the outcomes of the popular vote. Democratic institutions depend on the public resistance to subversions and the public mobilizing for their defence. In recent times, Hitler, Mussolini , Lukashenko, Putin and many others, have shown how democracies can slide into autocracies. by not playing by the established rules.

 So, the question of the hour is what can be done by the Republicans as well as the Democrats about this unusual President who abides by no rules and respects no norms, 

The Republicans are the more crucial players. The Speakers of the respective Assemblies and majority Senates leaders in these states can declare their intentions to accept the vote counts by mail on equal footing with voting by person regardless of how long it takes for the count.  Similarly, the Republicans in the US Senate, at least four of them, can declare that they will not authorize election results unless all votes are counted regardless of how long it takes to count. So far, only three Republicans in the US ‘Senate have declared so.

As far as the Supreme court is concerned, only two Senate Republicans have declared that it is unacceptable for the Senate to move on filling the Supreme Court vacancy on the eve of the elections just a handful of weeks away. Senator McConnel has made himself the big enabler of Trump`s power plays by rushing a hurried cynical vote to pack the Court with like-minded conservatives.

The Democrats are in a rather hapless form, which is their usual stance in critical situations. While they cannot stop the Republicans on the Supreme court nomination, they can use this cynical power- grab by the Republicans to mobilize voters, on the issues before the Court: the health care of Obama?s ACA,  the abortion rights, the immigration and DACA , the environment, the tax burden of the middle class,  the budget bust, the income distribution problem. There is plenty to intensify voters, turning them out and helping them in voting. The results must be decisive and unchallengeable in the Presidential elections and in a possible Democrat Senate majority.

Vice President Biden might help by not accepting to debate President Trump unless he declares in advance his  acceptance of all legitimate votes whether by mail or in person, regardless of the duration of the count. Since the Democrats are in control of the House, they could consider not  passing  any appropriations till the results are clear and settled.

 On the Senate side, the Democrats can ask for unanimous quorum calls on all matters, and propose that every US senator declares where he /she stands on the legitimacy of voting by mail regardless of the duration of count and the acceptance of the peaceful transfer of power

The Democrats are usually timid, divided and not skilful at such procedural manoeuvres. However, the stakes this time are so high because the fate of US democracy hangs in the balance.

 

 Geneva  25/9/20.

 

 

 

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