Newsletter 5-28-2021

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 edition of No Craic, Mad Craic, and Great Craic.

No Craic

(1) Broadly speaking, microfinance initiatives in the global south--nominally meant to integrate hitherto neglected populations into credit markets and thereby boost incomes for those at the bottom by facilitating the growth of what are typically household enterprises--have proven predatory and socially corrosive. From Jordan to Kenya to India, the annual interest rates on the loans extended by microfinance institutions frequently approach or exceed 50%. The businesses such loans are supposed to finance, meanwhile, rarely have any prospect of generating the cash flow needed to cover any debt service, never mind of the kind of debt service that comes with usury. Once the borrower drifts into default, they can expect liens on assets, a squeeze on their community, or jailtime. Making it all the more absurd, whether these parties can come up with the money or not, their creditors will end up just fine: lending agents get paid based on commissions regardless of loan performance, and the lending institutions themselves are protected from risk by the guarantees and grants furnished them by well-wishing western governments and multilateral development bank. TL;DR: Creditors pat themselves on the back for their pro-poor policies at some conference at the World Bank while already desperate people see debt added to the list of trials they must suffer.

Given the general tendency of the industry, it should be little surprise that microfinance inside of Pharaoh Sisi's Egypt has operated out in the kind of manner discussed above. Per the wonderful research of Sara Seif Eddin over at Mada Masr, Egyptian microfinance is riven with pervasive fraud, perverse incentives, and terrible extortion. Specific to the former, though lending institutions are only legally allowed to finance economic activities, they regularly fudge the books in order to fund wedding expenses and similar consumer purchases for liquidity-strapped families. Regarding incentives, like mortgage lending in the United States in the lead-up to the financial crisis of 2007-2008, the compensation of microfinance loan officers in Egypt depend almost entirely on the number of loans they issue, which suffices to power the supply-side of the credit racket. As for extortion, once borrowers inevitably find themselves unable to cover the principal or the 30-50% interest attached to their loans, off-duty police moonlighting as debt collectors for the lending institutions can be expected to show up and ensure that the desired pound of flesh is ultimately received. As Seif Eddin details, the pressure imposed by microfinance muscle typically forces borrowers to draw upon the resources of family members or neighbors. In so doing, the original debt winds up exerting a negative multiplier effect, draining income and wealth not only from the borrower, but from the poor proximate to them.

Accumulation by dispossession to a T.

(2) The Gray Lady is back at it.

Fresh off its, umm, disappointing coverage of the Israeli state's most recent predations back home, the New York Times decided to launder the anti-Iran agenda of its proxies here in the United States.

Plastered on its front page on Wednesday, the Times' scribes warned that the Biden Administration's reentry into the Joint Comprehensive Plan of Action (i.e. the 2015 agreement on Iranian nuclear program that the Trump Administration unilaterally withdrew from in 2018) might "generate new strains between Washington and Jerusalem" and "pave the way for Iran to have an arsenal of nuclear weapons with international legitimacy."

That the paper had the audacity to suggest one should care about such strains in the current context is really something. We have only just seen, after all, what Israel does in the absence of strain. That it next legitimates the absurd prognostications put forth by the clowns at the Foundation for the Defense of Democracies and the Washington Institute of Near East Policy regarding Iran's potential acquisition of a nuclear weapon via the JCPOA is but the chef's kiss.

(3) Speaking of American bollockses, garnering less attention than the full diplomatic coverage the Biden Administration ran for Israel at the UN as it perpetrated both its war on Gaza and its land grabs/mass arrests of Palestinian dissidents inside the greenline were the weapons that olde Joe furnished the IDF.

Despite Congressional efforts aimed aimed at suspending an arms sale valued at $735 million until Israel's conduct over the past few weeks was subjected to full scrutiny, the State Department quietly quietly bypassed oversight mechanisms by granting the export license needed to greenlight the shipment last Friday.

Moral clarity...a respect for procedural norms...the adults are back in the room!

(4) On Wednesday, Eurodad's Daniel Munevar published a massively important study on the looming public debt crisis now facing the global south.

In it, Munevar details how this crisis--likely to be felt most intensely in 2023, when maturing debts will mandate the harshest austerity--has been fomented principally within the post-pandemic sovereign bond market. It's not all doom and gloom, though. While the workings of said market are certain to bring devastation for many, not everyone will be a loser. Those who underwrote the aforementioned sovereign bonds (Citigroup, Deutsche Bank, and JPMorgan alongside a handful of more minor players) and those who purchased them (Blackrock, PIMCO, and AllianceBernstein, amongst others), in fact, have already made or still stand to make a nice chunk of change.

It can't be emphasized enough that debt repayments in the years to come are poised to render the sustainable development goals laid out by the UN in 2015 wholly non-realizable. Unprecedented debt cancelation combined with the global north actually honoring the aid pledges they made back in the 1970s (.7% gross national income) are the only way to avert the disasters on the horizon.

(5) Stuart Schrader has a really insightful essay at New Republic as concerns the lies cops tell and the broader legitimation strategy that such lies serve. Documenting how cops and police departments lie about their conduct, the dangers they face, the popular hatred they heroically bear, and the critical role they play, Schrader posits the following thesis:

You could call these the sustaining myths of policing, but I think of them as political arguments police make. They are instrumental, a means toward an end. Police attempt to achieve legitimacy through the stories they tell about themselves. Police legitimacy means public compliance. It means power.

It’s thus not simply that cops mislead in their statements to the press after an “officer-involved shooting.” The lie that police tell is not only rendered in deceptive language. It’s not about the words they choose. The lie is baked into the institution. The core of policing is not safety. It is social control. All the other lies obfuscate this function.

(6) Unlike its occasional partner Saudi Arabia, Abu Dhabi has shown itself far more adept at hiding the corrosive role it plays across the Middle East and North Africa today. In the case of Yemen, for instance, Muhammed bin Zayed et al claim they no longer have any involvement in the conflict.

Alas, beyond the fact that AD continues to finance and operate through proxies in the south, the emirate could also be said to be involved in Yemen by virtue of its continued annexations of Yemeni territory. Indeed, recent revelations suggest that Abu Dhabi is currently constructing a military facility on Mayun Island, a Yemeni possession which sits in the middle of the Bab el-Mandeb Strait. This move, like many others taken in the Gulf and along the east coast of Africa, are part of a project whose purpose is to establish hegemony over regional maritime networks.

On the same topic of Emirati strategic infrastructure, the UAE and Israel have just signed a memorandum of understanding to collaborate on "the transportation of crude and oil products between the Persian Gulf and Western markets." The main focus of this particular collaboration is to get the Eilat-Ashkelon pipeline, a legacy of Israel's past romance with another megalomaniac from the Gulf (the Shah of Iran) back running so that oil can again be sent overland to the Mediterranean.

As an aside, one may be curious to learn that the man who secured the financing for the original construction of the Eilat-Ashkelon pipeline back in the day was none other than Herman Abs, who, in a previous life served as the most powerful commercial banker in Nazi Germany.  

Mad Craic

(7) The folks pushing the New York Health Act, which would establish a single-payer healthcare system for New York, have produced a cheeky promotional video in support of the legislation. The premise is what if Fire Departments operated in the same manner as our current health insurance system does?

Worth a watch.

(8) For his next job, Yossi Cohen, the soon-to-retire Chief of the Mossad, is likely to join former American Secretary of the Treasury Steven Mnuchin's investment fund. Former US Ambassador to Israel and long-time settlement advocate/financier David Friedman is expected to join the emergent A-Team as well. Making things even more exciting, the fund in question will be focused on making moves in the Gulf's markets.

Again, ours is not an age of subtlety.

Great Craic

(9) With Wednesday's passage of a motion initially tabled by Sinn Fein, Ireland became the first country in Europe to declare "the building of Israeli settlements in Palestinian territories as de facto annexation." Though a broader measure proposed by Sinn Fein could not secure the necessary votes--the measure sought to expel the Israeli Ambassador; assert that "the Israeli apartheid system through its ongoing ethnic cleansing, brutal state repression and murderous military violence, including four savage military assaults on Gaza in recent years, has no place among the international community of nations"; and impose comprehensive economic, political, and cultural sanctions on Israel--this is still a pretty big if seemingly obvious step for Ireland to take.

Now appropriate all of Facebook's capital in country as punishment for their censorship of Palestinian activists and we'll really be making progress.

(10) Here's a video of pygmy marmoset gently playing with a little bug that looks like a leaf.

Have a great weekend.