When reading polling it is often reported that “jobs and the economy” are a top issue for voters. This is an interesting phrase and while it could be argued an appropriate grouping I have noticed an unintended feedback to the practice. While surveying voters I have noticed how many will say that “jobs and the economy” are the most important issue to them when prompted with an open ended question. I wonder how many voters grouped this phrase before political sciences and practitioners did so. Before I imagine most people would have simply said “jobs” I think it is a small example of how following and reporting on polls influences polls themselves.
The broader question I believe is worth exploring.
US Carrier Group Position
A few months ago with alarm I noted how according to open source data compiled by Stratfor the US had only one carrier deployed. Currently about half of the carriers are at sea with three of the carriers in port undergoing scheduled maintenance.
Reigniting the US - EU trade talks by including Ukraine would be a beneficial proposal for all the interested parties. It would reinforce economic ties between the US and Europe, provide a pathway for greater Ukraine - EU commerce, may aid in passage of the existing talks, and provide a meaningful avenue for support of Ukraine during this challenging time. This trade deal would be an economic NATO. This text will outline the internal and external dynamics within each of the principle negotiating parties, as well as how this may interact with Russian interests.
Most of Ukraine desires to be a part of the European Union economic system, but it’s overtures to the EU until recently were unrequited. The EU is primarily focused on its internal fiscal and monetary problems. They view the recent struggles as a result of EU expansion into countries that have budgetary problems. These struggles would only be confounded by inviting the problems within Ukraine’s budget. This makes Ukraine’s EU membership in the future an unlikely prospect. But, as illustrated by the March 21st association deal, the elements of an EU and Ukraine trade relationship could be palatable for the EU because it would be less exposed to the most fragile elements of Ukraine. The burden and risk of the debt risks Ukraine poses would be shared indirectly by the US and EU countries through the IMF. Ukraine would likely accept the prospect of being more closely aligned with the two largest economies of the world. The greatest drawback of this proposition would be an in globalization politics if the existing weight between the EU and the US on bilateral issues were to weigh down the overall proposal. Lack of movement on that proposal and/or failure would be a significant global loss.
Within the US, especially in the Senate, there are considerable barriers to approving the trade talks between the EU and US. The inclusion of Ukraine in these talks may provide a degree of increased support for the overall deal. Including Ukraine in the deal for the House would likely strengthen the vote margin and final passage. Also, some of the protectionist members of the Republican party who would oppose the deal, but who are also hawkish concerning opposition to Russia, could potentially find the benefits of approving the deal overall. Likewise, a few of the hawkish Democrats who routinely oppose trade deals could find enough reason to support the measure, especially if they are covered by the White House. The stronger vote margin in the House would provide increased pressure for the Senate to bring it up for a vote. Even though, Majority Leader Reid has indicated trade deals won’t be considered in the Senate the body has historically been more supportive of trade deals than the House. This can provide interesting but strange bedfellows of hawkish members and pro-trade members closely aligned in this deal. Neither grouping in Congress is likely strong enough alone, but could be infused by natural gas export prospects. Also, it would be an avenue of recourse for Members seeking a more long term response than targeted sanctions and sending MRE’s to Ukraine. Notably, there are a number of Senators who have expressed passionate support for Ukraine from all spectrums of both parties. This includes Senator Durbin who has not ruled out sending Ukraine military aid.
On the economic level in 2012 the total value of trade between the US and Ukraine was $3.3B driven by energy, raw materials, vehicles, and aircraft. The US imports chemicals, fuels, iron and steel from Ukraine. The volume of trade between Ukraine and the EU is unsurprisingly greater value in 2012 at 38.4B Euro with primary goods including iron, steel, mining products, agricultural products, and machinery. These numbers do not encapsulate the relative economic stagnation that has existed in Ukraine, when comparing them to other former soviet states as shown by data graphed by the BBC. Ukraine, which became a WTO member in 2008, possesses vast resources and capabilities, but has significantly underperformed the regional average. http://www.bbc.co.uk/news/world-europe-14489883
Russia will obviously not respond favorably to this proposal and will consider it an extended encroachment upon its near abroad. Potential Russian responses include increased military exercises near Ukraine’s border, troop incursions, stimulated unrest within eastern Ukrainian cities, unrest in other Russian populated states that are NATO members, increased dialog between Russia and other members of the common market, and Russia cutting back on its natural gas and petroleum sales to Europe and Ukraine. While these risks are real, to not act on trade and economic opportunities will ensure longterm instability in Ukraine from internal and external forces.
Tomorrow the Obama Administration will announce its approval of the Keystone pipeline.
The two main reasons for the delay in approval for the pipeline were election 2012 concerns and legislative bargaining. With the Presidential election over delay has much less political value. Second and perhaps most importantly the White House like any other administration has held a few negotiating objects for exchange. Obviously with fiscal policy matters driving much of the division in DC there have been a number of stand off scenarios and the chip would likely come into play. This also may in part explain how the House and Senate were able to more quickly consider the debt ceiling,
Kerry’s recent robust statements on Climate Change could actually be a response to the word of approval working through the administration.
Also for optics the President can’t announce this behind Democrats (who wont show) and Republicans which would anger Democrats and have the appearance of a quid pro quo. He will be meeting with Harper tomorrow where the story can be instead about great US Canada relations. Also holding on to this chip for too long actually loses its bargaining influence because of the likelihood of his successor approving it.
I have held this KXL theory for some time and it seems to be in line with others:
During the debt ceiling negotiations Republican Leadership were hinting at a deal like this in Sunday talk shows. By not demanding spending offsets they were implying they would be open to policy proposals like this.
Predictions obviously run the risk of being wrong and the author having egg on his face, but my certainty is well above 50%.
The Upside of Down: Why Failing Well Is the Key to Success by Megan McArdle is a wonderful book that, as the title explains, shows that making a mistake isn’t always bad. The real mistake is failing to learn from the experience. McArdle’s blog on Bloomberg often looks at current economic events in a way that dissects the issues insightfully. In the same way this book looks at everything from bankruptcy, business cycles, failed movies, criminal probation, and hospital diagnosis, to poor reporting,
She makes a point that the US bankruptcy system compliments the social stigma of bankruptcy by a code that is less punitive than some. This she believes encourages risk taking and entrepreneurship. She also cleverly points to past relationships and compares them to the GM bail out with the underlying argument that, in both cases, individuals were too guided by past achievements to understand changes. As McArdle points out, “A resilient society lets you fail, and even lets the failure sting, but only for a moment. Then it helps you get back on track, and everyone reaps the benefit.”
Her insights are both honest and well-reasoned. Much like writers such as Gladwell and Taleb she is willing to question conventional thinking in an insightful and approachable manner that is tangible. Admirably she does not distance her life from examples of personal and professional mistakes and what she learned encourages all to look within themselves to help explain our world. These qualities make for an excellent read and I look forward to diving into her next work.
Bombshell: Gates Says Hillary Admitted Her Position On Iraq Surge Was Purely Political -
In his new book, ‘Duty,’ former Defense Secretary Robert Gates wrote that in a private meeting Hillary Clinton admitted her opposition to the troop surge in Iraq was purely an attempt to gain political advantage ahead of the 2008 Iowa Caucus.
Hillary told the president that her…
Another Problem Obamacare Won't Solve: Health Costs -
Megan McArdle has another thorough overview of healthcare costs by again considering the study out of Oregon that showed that government assistance influenced individual finances but did not alter key health metrics. One of the arguments for passage of ACA was that increasing insurance coverage will decrease ER usage. According to this data as McArdle points out, “People who got access to Medicaid used doctors more than people who didn’t. But they also used the ER more.”