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Newsletter 1-29-2021

Colin Powers
Colin Powers

Hi everyone. Thanks for subscribing. If you have the means, please consider becoming a paying member. If you have the inclination, please pass this newsletter around to others who might enjoy the read. Now, onto this week's special edition of No Craic, Mad Craic, and Great Craic.

No Craic

(1) If one incorporates tax credit phase-ins and phase-outs--specifically, the phasing of the Earned Income Tax Credit, the Child Tax Credit, and the Additional Child Tax Credit--the American families facing the highest effective marginal federal tax rate are those earning between $32,200 and $46,703, per a recent study from the People's Policy Project.

Leaving aside how tax authorities systematically acquiesce to the tax avoidance/evasion schemes of the country's wealthiest, these outcomes shows that gross inequities are more purposefully baked into American fiscal policy, too.

Were it passed, Biden's proposed expansion to the Child Tax Credit would actually represent a massive first countermeasure in the fight against the decadence rotting our society from within. The prospects of his reforms seeing the light of day is likely to depend on budget reconciliation procedures in the Senate, though, as the Democratic caucus' wanton lack of discipline when it comes to the filibuster makes the doing of traditional legislation awfully tricky.

In view of the electoral map in 2022, should the party fail to deliver in a major way these next hundred-odd days, they are certain to get wiped out in both chambers.

(2) America's closest ideological peer, the United Kingdom, is evincing similar symptoms of inequality-driven decay. This can be discerned rather directly via a longitudinal analysis of household income.

The Resolution Foundation in the UK has published such an analysis in the last few days. As their research documents, Britain's poorest 20% had actually seen steady gains in terms of disposable income between 2012 and 2016. Since then, however, what were encouraging trend lines pivoted sharply to the downside. Even prior to Covid, the real spending potential of these folks had declined below 2004 levels. The drop was even harsher for those of working age. Where retirees got some joy from 2015's State Pension reforms, the combination of a benefits freeze and cuts to child tax credits pummeled the young and middle-aged alike.

Given the magnitude and obvious social salience of these cleavages in the income distribution, it is especially funny that Britain's professional middle class still discursively/culturally styles itself as the coal workers of yore.

(3) Facing a profound budget crisis and a secular decline in the demand for oil, the Iraqi government has been forced to turn to the International Monetary Fund, with whom it is currently negotiating a loan package. It is expected they will secure $2 billion from an IMF facility established for the purposes of Covid relief, and another $4 billion in more traditional concessionary loans.

While these dollars will help prop up the country's foreign reserves--given bond yields, it is unfeasible for Kadhimi et al to try to secure greenbacks via debt issuances on international markets--we know the IMF's aid does not come without strings attached. For a society that has been utterly decimated by war and the crude cronyism that was ushered in by the American occupation, such strings may prove deeply consequential.

Unemployment and rampant poverty have, after all, been made into endemic properties of the contemporary Iraqi economy (an economy that has now been crushed by a 12% contraction in GDP). The imposition of traditional IMF conditionalities, even their more woke contemporary variants, in a context like this will only intensify the desperation felt by so many. To the extent that a large share of the IMF's loans will almost certainly be absorbed by the state's vast security apparatus, this borrowing arrangement may wind up subsidizing violent repression as well.

Though the inspiring protest movement of 2019-2020 succumbed to a combination of exhaustion, the assassination of its leadership, and the logistical challenges of organizing in a time of the coronavirus, the conditions that look to be consolidating in 2021 will inevitably reanimate it. God speed to our Iraqi brothers and sisters.

(4) Swamp drainer Donald J Trump used his finals day in office to do lots of shitty things. One act that might might've slipped past unnoticed was his decision to lift sanctions on an Israeli billionaire who the Treasury had targeted as a result of his "corrupt and abusive mining practices in the Democratic Republic of the Congo."

For those who derive some schadenfreude from America's cascading collapse, this story has everything you want: Alan "Little Saint James" Dershowitz lobbying on behalf of an absolutely repulsive human being (Dan Gertler); former federal prosecutors turning into mercenaries for hire and then assisting in the legal degradation of the Treasury Department; and of course a rapacious businessmen looting the natural resources of a poor country with the assistance of a local dictator.

(5) If you've ever tuned into Congressional hearings on C-SPAN, you may have noticed the presence of those external "experts" they bring in to inform our highly competent legislators on the nuances of a particular issue. You may have thought, who are these experts, what are their credentials, how are they selected?

Well, friends, not only is your boy currently working on a project diving into this, just this week, Eli Clifton has published a wee piece on how all the expert testimony sausage gets made. In the case of the House Foreign Affairs Committee, Clifton shows that the pool of experts regularly called upon to enlighten our elected officials is dominated by individuals associated with institutions receiving substantial financing from foreign governments--The Center for Strategic and International Studies, the Heritage Foundation, and the Washington Institute for Near East Policy, to name but the most obvious examples.

Clifton's brief also notes that up until this current Congress, experts testifying as individuals (rather than as a representatives of their employer) have not needed to disclose any conflicts of interest related to their standing as a fiduciary of a foreign state. While recently installed changes to Truth in Testimony rules have plugged this loophole, mechanisms for punishing violators and ensuring compliance are still lacking, meaning that the whole diggy will rely on the honor system in the final instance, a dangerous proposition given that those who have chosen to work for the Washington Institute for Near East Policy and the like have already established that they do not consider honor a priority in life. In addition, as Think Tanks can and do shroud those paying their bills (advantaging themselves of legal exemptions granted to non-profit organizations), the rule changes, even if enforced perfectly, will only have a limited effect in illuminating which experts are bought and to what degree.

For their part, the Senate Foreign Affairs Committee doesn't have any rules regarding Truth in Testimony.

Anyway, as I was saying about decadence and rot in the heart of the empire...

(6) The press has reported that the Biden administration froze those weapon sales to Saudi and the UAE which Trump had pushed through in December.

This is not an entirely accurate framing of things. What the new administration has done is put those sales under review. Such a review could lead to the canceling of contracts, but that is by no means a foregone conclusion. Indeed, between the Vice President's foreign policy team being filled with staffers from the Center for New American Strategy--one of the Think Tanks that was generously patronized by the Emirati ambassador to the United States, Yousef al-Otaiba, during the era of the big, wet, orange man--and the Secretaries of State and Defense both being up to their eyeballs in conflicts of interest related to American defense firms, my money would be on the weapons getting transferred in the final instance.  

Mad Craic

(7) The World Bank and its peer institutions have spent decades evangelizing on the necessity of granting total independence to central banks. Huffing on the paint of public choice theory, they and others claimed that sequestering the moneymen away was the only way of stopping the greasy politicians from using monetary policy for political purposes and, by extension, the only way of ridding the world from the scourge of inflation.

Now, the old WB has just put out a paper acknowledging these independent Central Banks actually might stink pretty bad, especially when it comes to inequality. Merits not withstanding, authors Michael Aklin, Andreas Kern, and Mario Negre posit that this independence fetish has constrained fiscal policy choices, incentivized governments to deregulate financial markets (leading to booms in asset prices), and encouraged policies that wound up weakening the bargaining power of workers.

Yowza. And this was published in the same week that the reddit boys (briefly) took down NYC's financial elites, mostly for the laugh? 2021 is clearly the year everything goes bottom up.

(8) Though I am loathe to compare Long Island high school basketball legend Danny Green to the dunce Andrew Cuomo, one cannot help but notice the close correspondence between photo shoots that each man staged:

Green, to his credit, at least seems to understand the absurdity of what he is doing in a place like Auschwitz. This other moron, though.

Issa Christ.

Great Craic

(9) The Algerians look likely to hold out on the whole normalization rush with Israel. With anti-colonialism fundamental to the state's (fraying) legitimacy and the population, like most regional publics, resolutely pro-Palestine (and anti-Abu Dhabi), the confluence of principle and domestic calculations make it extremely unlikely that the Tebboune government will risk any involvement with the Arab states' grand capitulation.

Speaking of Palestine, elections are scheduled for July, and Marwan al-Bargouthi appears to be mulling a run for the PA Presidency. Polling data from December suggests that he would be likely to win in a fair election (*the elections will almost certainly not be fair), regardless of whether he ran as an independent or as a Fatah candidate.

This would be some achievement because as you may know, al-Bargouthi is currently serving the first of five life sentences in an Israeli prison. (Al-Bargouthi, who Israeli authorities asserted was the founder and lead commander of the Al-Aqsa Martyrs' Brigade, was charged with mulitple counts of murder and attempted murder in relation to operations carried out by the Brigade during the Second Intifada. After being captured in Ramllah, he was transferred to Jerusalem and convicted on these charges by an Israeli civilian court. Al-Bargouthi never offered a defense and refused to participate in the trial in any way on the grounds that the court had no legal legitimacy. While a major figure prior to his imprisonment, his stature within the Palestinian national movement has risen even higher across the past two decades. Al-Bargouthi is highly respected by people across the ideological spectrum, Hamas included, and has played a significant role in the organizing of prison protests of different kinds, hunger strikes included.)

As we are coming up on the 40 year anniversary of Bobby Sands' remarkable election to the UK parliament, I say the tides are with Marwan.  

(10) Ahmad Gatnash has penned an agonizing though beautiful retrospective on the decade of the Arab Spring. It is one of the best things I've read in a while, and I really recommend that you give it a look.

Have a great weekend.        


Colin Powers

Colin received his PhD from Johns Hopkins School of Advanced International Studies in 2020. He is a two-time Fulbright Fellow.