- Democratic Congresswoman Destroys CNN Narrative on Syria
Congresswoman Tulsi Gabbard is a combat veteran, and member of the House Armed Services Committee.
She recently introduced a bill to stop funding terrorists (what a novel idea!).
She just came back from a fact-finding mission to Syria … and destroyed CNN’s tired propaganda on “moderate rebels”:
- Abandoned Wal-Mart To Reopen As Shelter For Illegal Immigrants With Tax-Dollar Funding
An abandoned Walmart in Brownsville, Texas will soon be home to 100’s of illegal immigrant “minors”, many of them late in their teen years, thanks to your federal tax dollars. According to a report from a local ABC affiliate in Brownsville, the facility is currently being converted into a shelter by a nonprofit organization called Southwest Key, which receives the majority of its funding from federal tax dollars via the Office of Refugees Resettlement.
A Southwest Key spokeswoman confirmed the facility is set to open on March. They said it’ll be to welcome unaccompanied minors who crossed into the U.S. illegally.
It will be the 4th facility in Brownsville to shelter children, under the age of 17, who have crossed into the U.S. without an adult.
Southwest Key is federally funded by the Office of Refugees Resettlement. The group’s mission is to provide a safe environment for unaccompanied children while they wait to be reunited with a sponsor or relative in the U.S.
Southwest Key officials said children are supervised during their stay. The program ensures youngsters have a safe place to sleep, are fed, educated and also have access to healthcare and counseling services.
Of course, the report drew a lot of criticism from local Brownsville residents, many of whom questioned whether the money shouldn’t be redirected to fund a shelter for veterans and/or the homeless.
As background, according to WND, Southwest Key has an annual budget of $150 million and operates 27 shelters for illegal immigrants in Texas, Arizona and California. Per the Southwest Key website:
Southwest Key Programs is a private, nonprofit organization founded in 1987 to keep young people out of institutions and empower them with the skills, knowledge and tools they need to succeed. Through an exceptionally competent and diverse staff, Southwest Key empowers youth and their families to make positive changes in their lives including at our 27 immigrant children’s shelters in Texas, Arizona and California.
Southwest Key Unaccompanied Minor shelters operate as a self-contained unit, delivering shelter, food, healthcare, education, recreation, case management and legal services to the children in our care. We are required by the federal government to provide everything that a child needs in order to thrive in a humane and homelike environment. As a result, there is little interaction between the children in our services and the surrounding community, save for those businesses and employees engaged in their care on-site.
Healthcare: The overwhelming majority of medical services are done on site by Southwest Key’s fully-staffed, licensed medical professionals who ensure the health of the children in our shelters. Every child receives a full, medical exam by a doctor within 24 to 48 hours of entering our facilities, including receiving all the CDC recommended immunizations and being screened for any infectious diseases.
Education: While in our care, all unaccompanied minors receive educational services. Our presence in a community does not impact children in the local school system as our kids receive all educational services separate and distinct from local children and they never have an opportunity to interact with one another.
If Southwest Key sounds familiar, it’s probably because it’s the same Southwest Key that drew criticism from Senator Chuck Grassley back in 2014 for using taxpayer money to provide a petting zoo and guitar lessons to their illegal immigrant residents at a cost of over $300 per child per day. Per the Washington Times:
One of the contractors housing some of the surge of illegal immigrant children from this summer offers them a petting zoo with miniature ponies, a tilapia fish farm operation and guitar lessons, according to documents released Thursday by a senator who questioned whether the plush accommodations were a good use of taxpayers’ money.
Sen. Charles E. Grassley, Iowa Republican, said it seemed excessive to pay the $329 that Southwest Key Programs, the contractor, charged per child per day at one of its California facilities in Lemon Grove, California. Another facility in El Cajon cost taxpayers $316 per child per day.
Here is the original report from KRGV-TV in Brownsville, TX:
- Bannon Declares War On The Media: "You Are The Opposition; Keep Your Mouth Shut"
Not one to mince words, Steve Bannon, Trump’s Chief White House strategist, eviscerated the mainstream media during an interview last night. Commenting on their coverage of the Trump campaign, Bannon lambasted the disconnect of the media from everyday Americans saying, “They don’t understand this country. They still do not understand why Donald Trump is the president of the United States.” Per Axios:
“The media should be embarrassed and humiliated and keep its mouth shut and just listen for awhile,” Mr. Bannon said during a telephone call. “I want you to quote this,” Mr. Bannon added. “The media here is the opposition party. They don’t understand this country. They still do not understand why Donald Trump is the president of the United States.”
“The elite media got it dead wrong, 100 percent dead wrong,” Mr. Bannon said of the election, calling it “a humiliating defeat that they will never wash away, that will always be there.”
But that attacks didn’t end there as Bannon went on describe the media as “the opposition party.”
“The mainstream media has not fired or terminated anyone associated with following our campaign,” Mr. Bannon said. “Look at the Twitter feeds of those people: they were outright activists of the Clinton campaign.” (He did not name specific reporters or editors.) “That’s why you have no power,” Mr. Bannon added. “You were humiliated.”
“You’re the opposition party,” Mr. Bannon said. “Not the Democratic Party. You’re the opposition party. The media’s the opposition party.”
Finally, asked whether he was concerned that Sean Spicer had lost credibility with the press after his debate over crowd sizes, Bannon had a similarly pointed answer:
“Are you kidding me?” he said. “We think that’s a badge of honor. ‘Questioning his integrity’ — are you kidding me? The media has zero integrity, zero intelligence, and no hard work.”
Any remaining questions on what Steve Bannon thinks of the mainstream media?
- White House Misspells UK Prime Minister's Name In Official Memo (Multiple Times)
A White House memo detailing President Trump’s Friday schedule offered what some might call ‘alternative letters’ in the spelling of UK Prime Minister T(h)eresa May’s name… mutliple times.
As The Hill reports, May’s name was spelled “Teresa” three times in the daily guidance and press schedule email, which was sent Thursday evening with an hourly breakdown of the president’s schedule.
The White House sent out an updated guidance with corrected spelling about a half-hour later, shortly before Vice President Pence’s office released its own guidance that misspelled May’s name once. That was also corrected about 20 minutes later.
* * *
Not a great start as Trump’s team put the ‘special’ in “special relationship.”
- "When Will It End?" BofAML's 10-Point Checklist
So "when will it end?" BofAML's best guess remains sometime in the summer.
The current rally started in February 2016 on the 2nd day of Yellen's Humphrey-Hawkins testimony. The inflection was caused by a. uber-bearish Positioning, b. uber-bearish profit expectations, c. Policy easing. And thus BofAML believe the rally will end with a. bullish Positioning, b. bullish Profit expectations, c. Policy tightening.
We’re not there yet.
Here's Michael Hartnett's checklist of Positioning, Profit & Policy data to indicate we are in the Last 100 days of the rally, perhaps also the Last 100 Days of the secular upswing that began in March 2009:
Extreme bullish Positioning would be signaled by…
1. BofAML Bull & Bear indicator (up from 0 in Feb’16 to 5.3 today) >8; VIX approaching all-time low reading of 9.3 (Dec’93)
2. BofAML Global Flow Trading Rule triggering risk “sell signal" following high yield bond & global equity inflows >1% AUM in 4 weeks
3. BofAML Global Breadth Rule signaling “overbought” with 90% of MSCI markets trading >200-day & 50-day moving averages
4. BofAML FMS cash levels <4% (currently 5.1%, down from 5.8% in Oct); BofAML GWIM asset allocation to equities >64%, i.e. at new highs
Extreme bullish Profit expectations would be signaled by…
5. US ISM >58, i.e. a level above which EPS growth normally peaks (e.g. 1997, 1999, 2003, 2014)
6. Surge in wage data (e.g. US average hourly earnings >3%) or producer prices (>2%, PPI’s now positive in developed markets for first time in 2 years) that hurt margins
7. Markets signaling “peak macro” via US high yield bond spreads (currently 400bp) dropping below 350bp; real rates jumping roughly 100bps in the next 6-9 months
Policy hawkishness would be signaled by…
8. Bear flattening of yield curves as markets discount Fed playing catch-up (see Investment Clock analysis Chart 5); rate volatility (MOVE index >90)
9. ECB & BoJ QE tapering announcements
10. Fed announces an end to the "reinvestment" of their balance sheet (Chart 6) which would be the big signal that the QE era had come to a close, and is likely to become a much bigger story for markets as the year progresses
The Big Top
At this stage we see the potential in 2018 for rising rates & falling EPS, a complete reversal of the era of falling interest rates & rising profit margins that has caused risk assets to do so stunningly well since 2009. In the absence of an acceleration in labor productivity, the incoming President will find it tougher to engender the 2nd greatest bull market (2870), or the greatest ever (3504 – although should Trump match the historic 1st term annualized equity gain of 11% p.a. then 4 years of Trump would take the S&P500 to 3480.), or the longest ever (Sept 1st 2018). More likely risk assets will make a major top later in 2017.
- Paul Craig Roberts On "The Demise Of The Left"
Authored by Paul Craig Roberts,
On several occasions I have asked in my columns the rhetorical question: What became of the left? Today I answer my question.
The answer is that the European and American left, which traditionally stood for the working class and peace (bread and peace) no longer exists. The cause championed by those who pretend to be the “left” of today is identity politics. The “left” no longer champions the working class, which the “left” dismisses as “Trump deplorables,” consisting of “racist, misogynist, homophobic, gun nuts.” Instead, the “left” champions alleged victimized and marginalized groups – blacks, homosexuals, women and the transgendered. Tranny bathrooms, a cause unlikely to mobilize many Americans, are more important to the “left” than the working class
All white-skinned peoples except leftists, including apparently victimized women, are racist by definition. Racism and victimization are the explanations of everything, all of history, all institutions, even the US Constitution. This program of the left cuts the left off from the working class, who have been abandoned by both political parties, and has terminated the left’s connection to the people.
The collapse of the left as an effective and real political force followed the Soviet collapse. The underclass had resisted their exploitation before the publication of Karl Marx’s Das Kapital in 1867. But Marx raised the exploitation of labor to a fighting cause on whose side was History. The Bolshevik Revolution in Russia seemed to validate Marx with its overthrow of the existing order and proclamation of Soviet Communism.
Soviet practices deflated left-wing hopes and expectations, but nevertheless an alternative system which continued to speak against capitalist exploitation existed. When the Soviet Union collapsed in 1991, neoconservatives and neoliberals declared that History had chosen capitalism over the working class, and Marx’s prediction of the triumph of the working class had been proven wrong.
The Soviet collapse caused communist China and socialist India to change their economic policy and to open their economies to foreign capital. With no rival, capitalism no longer had to restrain itself and allow widespread access to the growth of income and wealth. Capitalists began collecting it all for themselves. Many studies have concluded that the productivity gains which formerly went mainly to the work force are now monopolized by the mega-rich.
One avenue to the concentration of income and wealth is the financialization of the economy (emphasized by Michael Hudson and by Marx in the third volume of Capital). The financial sector has been able to divert the discretionary income of the working class into interest and fees to banks (mortgages, car loans, credit card debt, student loans).
The other avenue is the offshoring of American jobs to which Donald Trump is strongly opposed. Here is what happened:
Wall Street told US manufacturers to move their production to China in order to increase profits from lower labor and regulatory costs, or Wall Street would finance takeovers of the companies, and the new owners would raise the firms’ profitability by moving production offshore. Large retailers, such as Walmart, ordered suppliers “to meet the Chinese price.”
When the jobs were in the US, most of the gains in productivity went to labor. Therefore, real median family incomes rose through time, and the consumer purchasing power this income growth provided drove the US economy to success for ever more people.
When the jobs were moved to Asia, the growth in real median US family incomes stopped and declined. The large excess supplies of labor and lower cost of living in Asia meant that Asian workers did not have to be paid in wages the value of their contribution to output. The difference between the US wage and Asian wage was large and went into corporate profits, thus driving up executives’ “performance bonuses” and capital gains (rising stock prices from higher profits) for shareholders. In my book, The Failure of Laissez Faire Capitalism published in 2013, I was able to calculate that based on current information at that time, every 1,000 manufacturing jobs moved to China resulted in a labor cost saving for the US company of $32,000 per hour. These hourly savings did not translate into lower prices for US consumers of the offshored production. The labor cost savings translated directly into the incomes of the executives and shareholders.
Thus, jobs offshoring permitted the productivity gains to be monopolized by corporate owners and executives.
Instead of responding to Trump’s support of the working class and his actions on their behalf during the first week of his presidency – Trump’s termination of TPP and his demand to auto manufacturers to bring manufacturing back to America – the “left” has rallied around a victim group – illegal immigrants. The “left” even elevates non-US citizens above the US working class.
Trump was elected by the working class. If the left is defined historically as the champion of the working class, then Donald Trump is their champion and the “left” is their enemy.
Throughout the contest for the Republican presidential nomination and the contest for the presidency, the “left” was allied with the ruling establishment of mega-rich capitalist oligarchs and the warmonger military/security complex against Trump. As Trump’s presidency begins, it is the “left” that wants Trump impeached and delegitimized, precisely the goals of the war- mongers and the mega-rich and their presstitutes.
Even environmental groups, such as NRDC of which I am a member, have joined the identity politics against Trump. Rhea Suh, NRDC’s president, has just sent me an email in which she declares NRDC, supposedly a champion of wildlife and the environment, to be standing with women in the Women’s March on Washington against Trump “in defense of our most basic rights as women.” “Women matter,” Rhea declares, and proceeds to blame Trump for Flint Michigan’s polluted water.
I am convinced that it is a mistake for Trump to emphasize jobs at the expense of the environment. Whether or not global warming is a hoax, environmental destruction is not. It is real, and the working class, as in Flint, are suffering from it as well as from the offshoring of their jobs.
The Democratic Party died during the Clinton regime when Clinton allied with the Democratic Leadership Council (DLC) founded in 1985 by Al From. I have often wondered who funded the DLC. It could just as well have been the Koch brothers as the DLC turned the Democratic Party into a second Republican Party.
The DLC convinced Democrats that the defeat of the presidential campaigns of George McGovern and Walter Mondale proved that economic populism is not politically viable. Democrats had to turn away from the left and embrace “mainstream values” and “market-based solutions.” The DLC was a big supporter of NAFTA. Reportedly, the DLC’s Will Marshall regarded pacifists and Iraq war protesters as anti-American and advised Democrats to keep their distance.
In short, the message was: compete with the Republicans for the big corporate and financial sector money. It certainly worked for the Clintons, but not for the Democratic Party.
As “market-based solutions” offshored US manufacturing jobs, the Democratic Party’s finances declined with union membership and power. Today Democrats and Republicans are dependent on the same interest groups for campaign funds. Thus ended the Democratic Party’s connection with the working class.
The question is: Can Trump stand for the working class when both political parties and the presstitute media, the think tanks, universities, environmental organizations, military/security complex, Wall Street, and courts stand against the working class?
Who is going to help Trump help the working class?
- White House Reveals How Mexico May Pay For The Wall: A 20% Border Tax
Update 2:
Some more clarity from Spicer, who is now backtracking on his words, telling reporters that slapping a 20 percent tax on imports from Mexico is just one of several options on the table for paying for a wall along the southern border.
Spicer said President Donald Trump has yet to make a final decision about how the U.S. will recoup the costs of his proposed border wall. Earlier Thursday that Trump wanted to slap a 20 percent tax on all imports from Mexico and predicted the tax would generate $10 billion a year.
He had told reporters on Air Force One that Trump has discussed the idea with congressional leaders and wanted to include the measure in a comprehensive tax reform package. But Trump’s chief of staff Reince Priebus said later that the administration has “a buffet of options” to pay for the wall.
Importantly, Spicer said the White House was not ready to roll out any border tax at this time, and that it will will continue to have open line of communication with Mexico after Mexican President Enrique Pena Nieto canceled plans to meet with President Trump; Spicer says cancellation was mutual decision.
It would seem that the Kochs – who are fervently opposed to the BAT proposal – made a few phonecalls.
* * *
Update:
Another story whch needs to be appended, because as NBC’s Peter Alexander tweets, According to Spicer the 20% tax on Mexican imports is not a policy proposal but merely an example of options how to pay for the wall.
BREAKING: Spicer tells me 20% tax on Mexican imports is NOT a policy proposal, but example of options how to pay for wall.
— Peter Alexander (@PeterAlexander) January 26, 2017
* * *
Speaking to reporters aboard Air Force One, White House press secretary Sean Spicer said that as part of its plans to make Mexico “pay for the wall”, the Trump administration is considering a 20% border tax on Mexican imports.
In a brief gaggle on the way back from Philadelphia, Spicer said that POTUS has decided how to pay for the border wall: “by imposing a 20 percent tax on all imports from Mexico.”
He did not give any details about that tax, how it would work, and he described it as a beginning of a process that would be part of overall tax reform. But he did describe this as a decision that POTUS has made.
“When you look at the plan that’s taking shape now, using comprehensive tax reform as a means to tax imports from countries that we have a trade deficit from, like Mexico. If you tax that $50 billion at 20 percent of imports — which is by the way a practice that 160 other countries do — right now our country’s policy is to tax exports and let imports flow freely in, which is ridiculous. By doing it that we can do $10 billion a year and easily pay for the wall just through that mechanism alone. That’s really going to provide the funding.”
The proposal, as explained by Spicer, appears to be similar to the Border-Adjustment Tax provision floated previously, that would tax U.S. businesses’ imports included in a House Republican tax plan. The so-called border adjustment provision is part of a broader plan to bring the corporate tax rate down from 35 percent and 20 percent. Trump previously dismissed the plan in an interview with The Wall Street Journal as being “too complicated.” While benefiting exporters, such as U.S.-based aerospace companies, it could hurt retailers and other American companies that manufacture goods overseas to sell in the U.S. That would result in higher prices for American consumer goods.
“This is something that we’ve been in close contact with both houses in moving forward and creating a plan. It clearly provides the funding and does so in a way that the American taxpayer is wholly respected.”
Spicer said that “we are probably the only major country that doesn’t treat imports this way” and added “this gets us in line frankly with the policies that the other countries around the world treat our products.”
The highly sensitive subject of payment for the “wall” is the reason why president Pena Nieto cancelled a trip to the US on January 31 to discusses the renegotiation of NAFTA.
While Nieto has said Mexico will not pay for the wall, Trump has repeatedly said that Mexico will end up paying, even if the US makes the initial payment; as reported earlier, Republicans have estimated the wall will cost between $12 billion to $15 billion.
Since roughly 80% of Mexican exports go to the US, (representing around 13% of US imports, or amounting to $295 billion in 2015) Mexico finds itself in a very difficult negotiating position, in which Trump has all the leverage. On the other hand, since a 20% tax would inevitably result in a similar surge in prices of imported goods, no matter who ends up winning this particular negotiation, it will be the US consumer who foots the bill.
* * *
As a result of the barrage of today’s Mexico-related headlines, peso traders have had a, how shall we put it, stressful day.
- Hedgies Panic As Hamptons Luxury Home Prices Crash 43% Year-Over-Year
As U.S. equity markets continue to surge to new all-time highs with each passing day, something you would expect to benefit the titans of high finance in Manhattan, demand for luxurious, multi-million dollar weekend getaways in the Hamptons has all but completely disappeared.
According to a new 4Q report from Douglas Elliman, the Hamptons real estate market is in full-on crash mode with average prices down 29.7% YoY in 4Q16 and volumes down 14.5%.
Meanwhile, the “luxury” market in the Hamptons, which apparently includes homes with an average price tag of ~$7 million, is faring even worse with prices down 42.6% YoY and volumes down 14.5%.
Seems that New York’s hedge fund billionaires just can’t seem to make money at work or on their homes.
As the Wall Street Journal noted, Jonathan Miller of Douglas Elliman doesn’t expect the carnage in the Hamptons to slow anytime soon as he says there is still ““too much overpriced inventory—and it is rising.”
Brokers said the luxury market was particularly weak in 2016, despite some trophy sales reflecting the last gasp of a stronger market that surged at the end of 2014.
“Softness at the top continues,” Mr. Miller said. There is “too much overpriced inventory—and it is rising.”
Of course, the soft market didn’t stop the hedgies from recording a couple of trophy sales in 2016. Per Douglas Elliman, the most expensive sale of the year was $109.8 million with the second highest sale a mere $70 million…must have been a dump.
The top transaction of the year was the $109.8 million sale of three parcels on Lily Pond Lane in East Hampton by hedge-fund manager Scott Bommer. Mr. Bommer had paid $93.9 million for the properties several years earlier. The buyer, brokers said, was Michael S. Smith, a natural-gas executive and investor.
The second-most-expensive sale was a waterfront home just down the street, at 199 Lily Pond Lane. The price was $70 million.
Oh well, on the bright side, all of these real estate losses can quickly be wiped away with less than 1 year of management fees charged to America’s insolvent pension funds in return for below-S&P performance…life is good!
- War Gaming – Part 1: Nukes & Terrorism
Submitted by Bill O'Grady via Confluence Investment Management,
One of the key elements of global hegemony is the ability of a nation to project power. Ideally, this means a potential hegemon needs local security. In other words, a nation that faces significant proximate threats will struggle to project power globally. As a general rule, it’s easier to attack via land compared to the sea.
Rome’s power base was the Italian peninsula. It only needed to defend the northern part of the land mass. Spain had a similar situation. The Netherlands was the global hegemon for a while but was always facing a land threat from France. Britain, being an island, was geographically ideal for superpower status; the last successful invasion of the British Isles was in 1066. Finally, the U.S. has managed to create an island effect on a larger land mass giving America more access to natural resources compared to Britain, making the U.S. a nearly ideal hegemon.
In Part I of this report, we will examine American hegemony from a foreign nation’s perspective. In other words, if a nation wanted to attack the U.S. to either replace the U.S. as global superpower or to create conditions that would allow it to act freely to establish regional hegemony, how would this be accomplished? This analysis will begin by examining America’s geopolitical position. As part of this week’s report, we will examine the likelihood of a nuclear attack and a terrorist strike against the U.S. In Part II, we will examine the remaining two methods, cyberwarfare and disinformation, discussing their likelihood along with the costs and benefits of these tactics. We will also conclude in Part II with potential market effects.
America’s Geopolitics
The Americans are truly a lucky people. They are bordered to the north and south by weak neighbors and to the east and west by fish.
— Otto von Bismarck
(Source: Wikipedia)
Although Bismarck’s quote is accurate in terms of borders, this circumstance was less due to luck than design. Successive presidents took great care to expand U.S. territory in such a manner as to leave Canada and Mexico with less hospitable border environments. This can be observed on a map of North American population density. The map below shows population density in North America. Note the low density along most of the Canadian/U.S. frontier as well as the lack of density along the Mexican border.
(Source: Wikipedia)
The U.S. pushed its northern border into areas that were less conducive to human development. Canada’s population mostly rests along the border with the U.S. and rapidly declines the further north one travels. The U.S. population is over nine times larger than Canada’s; Canada has 9.4 persons per square mile compared to 85.6 persons per square mile in the U.S. The opposite situation occurs with Mexico. Most of Mexico’s population lives in the southern parts of the state, with the northern desert region relatively unpopulated.
Essentially, the U.S. is surrounded by two neighbors that are no military threat and two oceans. Any nation attempting to launch a conventional military attack on the U.S. would not have any element of surprise. Attacking through either Mexico or Canada would be relatively easy to see coming and force the invader to cross difficult territory on the way to the battle theater. Coming by sea requires a long voyage that would likely be detected as well.
Since 1812, the U.S. has been able to engage the world without significant concern about an attack on the mainland. Japan was able to successfully attack Hawaii and also capture islands that were part of Alaska. But, neither event was enough to seriously threaten the mainland. In the two world wars, the U.S. was able to launch sustained military operations against its enemies with little fear that its industrial base would be attacked.
The isolation of the U.S. makes it an ideal superpower. The U.S. can focus on power projection and use fewer resources for homeland defense. This gives America great power to influence the world and reduces potential enemies’ ability to prevent the U.S. from becoming involved in thwarting their goals.
So, if a foreign power wanted to dethrone the U.S., or, probably more likely, establish itself as a regional hegemon without U.S. interference, what attack options are available to such a power and what are the odds of success? We will examine four different options, assuming that a conventional attack isn’t possible, at least for the foreseeable future.
#1: Nuclear Strike
Since the U.S. used atomic weapons on Japan at the close of WWII, no other power has launched a similar attack. The world came close on a few occasions to a nuclear war—the Cuban Missile Crisis was a near miss—but, for the most part, global leaders have refrained from using these weapons.
During the Cold War, nuclear war doctrine evolved into one where the weapon became purely defensive. Essentially, nuclear powers can never be forced into unconditional surrender. If a nuclear power was facing defeat in conventional warfare, it could prevent complete capitulation though a nuclear attack.
The primary concern of nuclear powers was to ensure that they had systems that would allow for a “second strike” capacity. Thus, if a nuclear power found itself facing a first strike, the goal was to have the ability to retaliate in kind. This model, known as “Mutually Assured Destruction,” required that no side could reliably win a nuclear exchange.
Nuclear powers usually have at least two of three delivery systems: missiles, submarines or bombers. A nation relying solely on land-based missiles could be vulnerable to a first strike. Usually, if a nation only has land-based missiles, they develop mobile launch systems that make conventional attacks on nuclear facilities more difficult.
The key deterrent to a first strike nuclear attack is the second strike response. At the same time, a full-scale nuclear exchange could have catastrophic effects on human life. The spread of radiation could poison the atmosphere. Some scientists theorize that even a modest exchange could trigger a nuclear winter that could have serious effects on the climate; recent studies have suggested it might even trigger a “little ice age.”
The decision process for an American president is fairly straightforward if facing an attack from a major nuclear power such as China or Russia. One would expect a first strike of such magnitude that the ill effects would be global; thus, the damage to the global ecology would probably already be done, prompting an American president to retaliate in kind. In addition, the desire for revenge would be very strong and likely bring a retaliatory second strike. Where the decision becomes difficult is if a minor nuclear power launches a limited nuclear strike on the U.S. The most likely candidate for such an attack would be North Korea. If the Kim regime launched a limited strike on the Western U.S., would an American president risk ending human life on the planet to retaliate, especially if he feared that China or Russia would defend North Korea? On the other hand, allowing the U.S. to be attacked without retaliation seems unlikely due to the loss of American lives and the precedent it would set that may encourage other smaller nuclear powers (e.g., Iran) to engage in their own limited strikes.
Overall, any foreign power attacking the U.S. with nuclear weapons is probably ensuring they will face retaliation that ends the existence of the attacking nation. Thus, this isn’t a likely option.
#2: Terrorism
Terrorism, a form of asymmetric warfare, is a constant threat. However, it has serious limitations as a strategy if used by a foreign nation state. Although terrorism can take many forms, the goal is to “terrorize” a population. If successful, the fear paralyzes a power and renders it incapable to respond to a foreign threat. In other words, a terrorist act can force a nation to focus inward, spend resources on security and perhaps change its foreign policy.
However, this tactic for a foreign government is risky. It can be a bit like bringing a knife to a gunfight. Terrorism generally won’t lead to a regime change. It harms the target and often can force the target nation to retaliate strongly. In other words, a nation can launch a terrorist strike against the U.S. only to then find itself facing a significant conventional attack.
This is why terrorism tends to be the preferred tactic of non-state actors. Al Qaeda’s attacks on the U.S. were a clear tactical victory. In fact, they probably succeeded far beyond expectations. However, the Bush administration reacted strongly with both conventional warfare and Special Forces, severely restricting the group. President Obama eventually attacked Osama bin Laden’s compound, killing al Qaeda’s leader.
There is a temptation for nation states to support non-state actors in attacking a superpower. However, even this cover has hazards. First, the state supporter of terrorism has to take great care to ensure that it has no obvious ties to the terrorist group. Otherwise, it invites retaliation by the superpower. Second, terrorist groups can be difficult to control. They usually have their own agendas which may not coincide with the state sponsor’s objectives. Even Iran, who sponsors Hezbollah, has tried to guide the group into fewer terrorist acts and toward a focus on political control in Lebanon and more conventional fighters in the Syrian conflict. This adjustment has not always been smooth.
Attacking the U.S. using terrorist tactics is a viable option. However, it has two serious drawbacks. First, it could invite a disproportionately harsh response. For example, we doubt the Taliban anticipated that the U.S. would oust its government because it didn’t turn over Osama bin Laden. Second, it is highly unlikely that terrorism would either lead to a regime change in the U.S. or deter America from a key foreign policy goal.
In Part II, we will examine the two remaining tactics for attacking a superpower, namely, cyberwarfare and propaganda.
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