Fake Titles

I recently have had an energetic LinkedIn exchange with someone prancing around New York City claiming that he is "HRH Prince of Yugoslavia".  He voluntarily calls himself that on LinkedIn, a public social media site.  He posted a photo of himself receiving some award from some other "HRH" of Yugoslavia and was quite proud of it.  I had the audacity to comment on his post to say that he should stop using such a title, if for no other reason than because Yugoslavia no longer exists.  And, it is now divided up into various republics which are republics and have no royal families or systems.  He aggressively replied to my comment by claiming that I was an "ignorant American" and didn't know anything about history.  He then professed that "I have ancestors" who were royal family members and, apparently, he thinks that entitles him to continue using a silly title like "HRH Prince of Yugoslavia".  He also said that I needed to better understand "constitutional law".  So, when I asked him to explain exactly why he is entitled to call himself a "HRH Prince of Yugoslavia" and to which constitution he was referring, he continued to throw insults at me, but made no actual arguments for why he should be calling himself by some non-existent title.  Then, he blocked me from his LinkedIn account.  That all was not very convincing.
Next, his cousin (apparently half New Yorker and half "royal family of Yugoslavia") jumps into the discussion.  She argues that I have no business commenting on her cousin's title and that it is a shame that I am so "ignorant" (apparently a favorite word of "royal Yugoslavs").  And, she tried to make a comparison that calling her cousin "HRH Prince of Yugoslavia" was akin to calling Bill Clinton "Mr. Clinton" instead of "President Client.  I told her that there can be no comparison between the titles of democratically elected officials and so-called inherited and unelected titles, especially of a non-existing royal family and royal system.  I also clarified that Bill Clinton is no longer President and so, of course, he is now Mr. Clinton, although ex US officials often love to call themselves by their former positions (e.g., President Clinton, Secretary Clinton, Speaker Gingrich).  When they do that, it is "trafficking in titles" in the same way that "HRH Prince of Yugoslavia" (and countless Prince and Princesses of Nowhere) like to do.  Of course, having no valid argument, she also again called me "ignorant" and blocked me from her LinkedIn account.  This is apparently a favored social media tactic of the "royal family of Yugoslavia".
It is all pretty clear to me.  Any so-called royal system was the result of someone many centuries ago conquering some land, subjugating its people, giving himself and his descendants a bunch of silly titles and declaring that they were the representatives of God on Earth (at least for the area that they controlled).  The fact that someone is a descendent of such a made-up system, especially one that no longer exists, doesn't mean that any of us need to (or should) call them by the silly titles that they have given to themselves.  More to the point, we should oppose that nonsense wherever we find it.

Trump, Russia and China

President-Elect Donald Trump has everyone guessing what his foreign policy will be like, especially in relation to Russia and China.  There is wide-spread concern that a President Trump will be too friendly to Russia.  I find that to be a bit strange in that he has never actually said he liked Russia or Putin or that they are anything other than unfriendly foreign powers. Yes, he may admire Putin's strength or various successes, but there is no evidence that he desires the outcomes of Putin's various activities.  In any event, my calculation is that this "play nice with Russia" approach is one of the biggest head fakes in history. My view is based on a number of realities and then a possible strategy. 
The first reality is that China is a way more important competition to the United States than Russia is.  Russia has a horrible economy, ineffective or non-existent social and other institutions and little prospect for economic growth or global influence outside of its traditional sphere of influence.  Yes, Russia has a capable military to interfere in those areas of traditional influence, but it scarcely has the financial capability to do that, let alone to go beyond those areas.  And, Russia's kleptocratic economy does not bode well for improving Russia's situation, even if Western sanctions are eventually lifted.  China, on the other hand, is a massive economic power with much more room to grow, albeit at a slower growth rate than over the last few decades.  Despite lots of potential pitfalls in China's future (very high levels of debt, inefficiently allocated capital, etc.), there is every reason to believe that China's GDP and GDP per capita will continue to grow. And, consequently, China will be very capable of financing growing political, economic, military and social influences around the world.  Russia and China have no comparison.  The main issue would be that the US would not want to run a fight against both of them at the same time.
As such, my view is that Trump's approach of playing nice with Putin is that Putin and Russia cannot really hurt the U.S. (perhaps other than via cyberspace, which is another thing and I doubt we'll play nice on that front) and so it makes sense to at least pretend to work with Russia for now while the US takes on China on all sorts of issues and levels - South China Sea, North Korea, Chinese cyber attacks, trade, currency, Taiwan and Hong Kong, etc.  The main point is to not be nice to Russia, but to not encourage Russia and China to team up as an anti-US front.  Thus, softening relations with Russia can be explained as preparing for the direct attack on China issues, not anything to do with liking Russia or Putin.

FaceBook and China

According to New York Times story today, Facebook is developing a tool to effectively allow China to block content on its news feed.  In return, Facebook would finally get to enter the Chinese market.  Although Facebook does provide blocking of certain content in other countries (e.g., content that is allegedly inconsistent with local culture and laws in places like Pakistan), the apparent willingness to cooperate with China's government to block actual news that helps it blockade information to the Chinese people is a step way beyond what Facebook has done to date.  And, it further reflects that Mark Zuckerberg's consistent statements about facilitating communications for the common good is a lie; he and Facebook clearly are only interested in becoming more profitable, even if that means cooperating with the massive censorship programs of the Chinese government. And, while I'm generally in favor of companies making as much money as possible based on the quality of its services and products in the market, directly cooperating with an oppressive government and developing tools to facilitate that oppression should called what it is: collaboration in censorship and oppression.  The US government should be concerned that US companies are actively supporting and encouraging the oppression of millions of people by a foreign government, especially one that is hostile to the US.  Perhaps the US government should also consider passing laws that prohibit US companies (and Facebook is not the only one; also, Cisco and others) from doing business with or in such countries if their business is used to facilitate such oppression.

"Doing Evil All The Time" Is A More Appropriate Motto

You may recall that Google's initial motto was said to be "Do No Evil" or "Don't Be Evil".  According to the Wikipedia site about this, it was proposed by one or another employee in 2000 and has generally been considered part of Google's Code of Conduct.  That sounds great.  And, other large technology companies that arise out of Silicon Valley tend to make public statements that they are saving the world in one way or the other by increasing global communications, etc.  In some circumstances, the various technologies have, indeed, been crucial towards advancing certain good causes.  For example, the Arab Spring events resulted in several stories of how Twitter essentially facilitated a revolution against dictators.  And, depending on your view of the "main stream media", Donald Trump's use of Twitter was an extremely cost-effective way to get his views into the political consciousness and supported his successful election bid.
I'm sure there are many, many examples of all the good things that Google, Twitter, Snap Chat, etc. have been used for (sometimes even better than sharing funny cat videos).  However, these companies have also been complicit with China in preventing important data from reaching the Chinese people.  More important, what most of these companies have in common is that they capture and devour and then sell your data.  That's really all they do.  Google does it under the guise of providing free search information.  Snap Chat and Facebook do it under the guise that they are helping people share information with each other. Twitter does it under the guise that they are helping people communicate.
They don't charge membership fees to the users.  As such, the business models of all of these companies are driven by one thing and only one thing:  acquiring the public's personal data and selling it to advertisers or other consumers of the data that want to sell things and services to the users.  The sophisticated algorithms and other tools used to acquire, analyze, slice and dice and sell the data to third parties result in "targeted advertising" that has developed into virtual mind control over their user populations (which means nearly everyone).  It results in a all sorts of companies using the massive amounts of data to push consumerism like never before.  For example, I was once looking for a faucet when I was re-doing my kitchen.  When I left the kitchen renovation websites, I was followed around on other sites for days by "targeted advertising" of the same faucets that I had looked at.  I also once heard a Google executive state that gathering all of this information was really good for everyone by explaining that it would be great if when our sneakers were wearing down and we were walking by a sports store then the sports store would know you were close by and would send an advertisement to your phone to sell you those sneakers that you so desperately needed at that moment.  From my perspective, that would effectively a form of mind control; a process by which "free will" is taken away from us but we don't know it.  Even if that sneaker example sounded useful at some level, there is no way the sneaker company is going to wait to push those sneakers on you only when your sneaker is likely to be worn out.  Instead, they'd be constantly trying to get you to buy then earlier than that and to buy multiple styles and colors. 
This omnipresent and rapacious data collection and usage is the only real reason these companies exist.  Their business models are far from living up to the naïve idea that they "Do No Evil".  Instead, the manner in which they are knowing and using virtually everything bit of information about our lives is what I would call "Doing Evil All The Time".
Very recently, some of these tech companies have lost data-usage regulatory law suits in the UK and the EU.  These cases must be very worrisome to the big-data tech companies that are virtually trying to know and track every bit of information about you.  Personally, I think the government should very aggressively limit and regulate these companies' acquisition and usage of the our data.  I would even go so far as to say that the license and usage agreements should be strictly limited by new laws that restrict the data-collection and data-usage provisions the license agreements that we click without reading all the time.  Sure, there may be fewer world-saving technology companies, but at least our world will be less controlled by these companies and the amount of wasteful consumerism would decrease.

Why do People Believe that the System is Rigged? Because it is!!

So, Donald and Bernie have made a lot of statements about the system being rigged.  Rigged generally towards wealthy people who maintain and increase their wealth. And, rigged politically for those already in power or the wealthy (see above) to control the politicians and the political process.  Just by watching the publicly known activities of the rigged-system's beneficiaries such as campaign finance and lobbying - legal, but better stated as legalized corruption - one should conclude that the system is set up only for a relatively few.  However, unless you are part of the system, mere mortals don't normally get to see the inner workings of that system reflecting exactly how rigged the system really is.  The recent release by WikiLeaks of the Democratic National Committee's emails clearly reflect the elites' coordinated effort to kill off Bernie's campaign for the presidency, but - and even more worrisome - it highlighted the systematic and unabashed effort to sell access to the president and others to donors.  In one sense it is laughable that so many people think that by giving $10,000 or even a $100,000 they are actually being listened to by the party's policy makers; that requires millions that are given by only a few - and they really only want access for business reasons, not to have an effect on policy.  A great example of such ignorance are the fake policy dinners and other events that are held by the political parties to invite such donors to "contribute" to the party's and the government's policy-making process.  I can't imagine people so naive to think that their input at such events matters yet apparently smart enough have made to make the money to begin that they donated in order to be invited to such events.  In any event, now that Bernie's voice is being eliminated from the public space this week through the Democratic Party's Convention and the official nomination of Hillary Clinton, only Donald Trump will be carrying forward the "rigged system" argument.  And, for him, the disclosure of how both parties raise money and rig the system is a gift that will keep on giving because he will be able to use it against Hillary and the Democrats and yet be immune from blowback on him because he was never a beneficiary of such a system on the Republican side (which works in exactly the same way as it does for the Democrats).  If all this resonates with his and Bernie's supporters, I suspect Trump has a very good chance to be the next president.

As a related aside, the WikiLeaks disclosures bring back what I heard Kim Dotcom state last year in an interview on Bloomberg TV about the extradition case against him in New Zealand (the U.S. has requested that New Zealand send Kim Dotcom to the U.S. to stand trial for copyright infringement and other crimes relating to his file-sharing website called MegaUpload).  He said that Julian Assange (the WikiLeaks founder) was going to release so much information about Hillary that she'll likely have to withdraw from the presidential race.  That statement was made before the date of the earliest emails recently released. So, that could mean that WikiLeaks has a lot more (older and more damaging) information to release about Hillary, which could mean even more damage to her campaign and an even greater chance that Trump wins the presidency.

Criminals with a Badge

What is one to think about what is happening in the U.S. with race relations and policing?  I find it incredible that the many, many recent killings of black people by police does not raise even more outrage than it has.  Sure, there have been marches and protests, in particular by the Black Lives Matter movement. And, certainly, some (maybe a large) degree of racism is involved. But, my view is that there is a much bigger problem.  That is, we have way too many policeman who are just "criminals with a badge". 
Only the willingly uninformed will not admit that certain policeman have a character that could have just as easily resulted in them being a street thug.  They have a desire to dominate people and commit violence when someone fails to follow their instructions.  On top of that, many police departments seem to have very flawed hiring practices that allow such persons to become policemen.  And, to make matters worse, some police department training must, obviously, fail to curtail the authoritative and violent nature of such individuals. 
It is not enough to say that the majority (even vast majority) of policemen do not fit into such a category, because there are simply way too many that do.  When you look at the many recent videos of police killings, you cannot not fail to ask why a person, who is following instructions, already detained or otherwise clearly not putting an officer's life in danger, ends up dead. 
Policing is not like military action.  The police should not consider that they are at war with society, or certain segments of society.  If a suspect slips away and is not obviously putting others or the officer in danger, the officer should not be allowed to just shoot the suspect in the back as he runs away.  If the suspect is in handcuffs with multiple officers holding him down, the police should not be allowed to threaten the suspect with a gun and then shoot the suspect because he doesn't stop struggling.  Yet, this type of thing happens way too often.  How to explain these events other than a combination of poor hiring decisions, poor policies and poor training.  Sure, there may be a racism element to these deaths, but a racist police officer doesn't automatically go about killing people.  Bad police officers are who unjustly kill people.  These are essentially just criminals with a badge.

What is the True Record of the Chinese Communist Party?

One of the strongest arguments for the continued control of the Chinese government by the Chinese Communist Party is that the Party has created and well-managed the Chinese economy since the time Deng Xiaoping decided around 1980 that the Chinese economy should open up and a degree of privatization and capitalism should exist in China.  And, it is true that the growth of the Chinese economy since that period has been unprecedented, lifting hundreds of millions of Chinese out of poverty and placing China and its economy as a leader on the world stage.  And, the Chinese Communist Party has consistently presented such economic success as being a creation of the Party and, by extension, could only have been accomplished by the Party.  As such, the argument is, there is no need for political opening of any sort because the country and its economy are on some sort of scientific and inevitable march to higher and higher future success through "Socialism with Chinese Characteristics".

Most Chinese less than 40 years old have never known anything but economic progress and the great decision making of the Party  I recall meeting several years ago with a very successful Chinese businessman who was very supportive of the Party and described how the government policy-making system was so perfect that it really could not make a mistake.   Until possibly recently, most Chinese truly believe that the China economic success story is, in fact, the result of the current political system, in particular the manner in which the Party controls and runs the country and its economy.

However, it is worth considering a very different explanation for how the Chinese economy got to where it is today and the related risks from the generally accepted story being wrong.  I suggest that we need to look at the Chinese economy not over a period of 40-50 years, but more like 500 years.  China has always been a very large country. In the year 1500, China was the leading economy of the world.  Given its size, resources and culture, that was not unusual.  In fact, China had long been one largest and most-successful economies.  Then the industrial revolution happened in the England and Europe and China missed it.  For many reasons, China turned inward and made some very poor decisions that severely weakened the country and its economy.  That continued well into the late 1900s when foreign powers had much control over parts of the Chinese economy and even Chinese territory (e.g., Hong Kong and Shanghai).  Then, there was a short period of a republic and some self-determination to be followed by additional self-imposed weakness by way of poor decisions and then in 1947 the Communists took over and further accelerated the bad decision making by insisting that Marxism was a panacea to success.  Horrific decisions were made such as the Cultural Revolution and the Great Leap Forward that effectively destroyed the Chinese economy to a degree that it could hardly get much worse.  Only after sinking as low as they could possibly be did the fantasy thinking of the Party capitulate and provide the room for someone like Deng Xiaoping to achieve power and commence with reforms.

But, what really happened and who was responsible for it?  One view is that what the Chinese Communist Part largely did was to stop making bad decisions.  That is, the allowed Chinese people to start making some of their own decisions and the state-owned enterprises started to conduct business on rational and international terms.  And, the Party started to operate in a manner that supported, or at least did not so strongly opposed, economic growth.  However, that is some thing quiet different than causing the growth of the economy.  It is more like stepping off a giant balloon and simply allowing it to re-inflate to its normal size.  That Party has squeezed all the air out of the balloon for so long that when allowed to re-inflate it was naturally going to grow fast and for a long time.  During this 30-40 year period, the Party used the economic growth to maintain control and convinced the Chinese that the Party was the instrument of the economic growth.  Even non-Chinese were impressed, wondering if "State Capitalism" was a potential way forward for many economies.  Chavez in Venezuela was a prime example. 

Then, China's economy started to slow in 2008.  And, importantly, the Party stated to implement decisions to prop up the economy, such as flooding the economy with cash that the country has accumulated over the period of its growth,  That stabilized the economy enough that some people were again impressed, but in reality the issues were just being kicked down the road.  Then, more recently, the stock markets collapsed and the Party intervened again and implemented horrible policies that have left many in the financial and economic community wondering whether the Party really knows what it is doing at all.  In my "balloon" theory the last 7-8 years shows that the Party really doesn't know what it is doing and, more importantly, was never the cause of the growth of the Chinese economy.  Instead, it was the result of the re-inflation of the balloon that naturally revived the Chinese economy to its more natural level.  And, once the Chinese people start to realize this and realize that the Party is not only not really in charge of the economy but also was never really responsible for the growth of the economy, the people will then start to ask what the Party and the entire system is about.  Then, social and political unrest will be natural and the entire Chinese entity and political system are at risk.

Who Does the NRA Really Represent?

The gun control debate just rages on, especially during election season.  There are increasingly interesting twists and turns in the debate.  

For example, the "gun control" side has tried to re-brand their argument as "gun safety".  That sounds (at least to the moderate gun ownership sector of the population) a lot less like the government trying to take away someone's guns and a lot more like some sort of reasonable plan to protect people from gun violence.  This was smart and seems to have been borrowed from the "same-sex" marriage proponents who re-branded themselves as "marriage equality" proponents as well as the same-sex marriage opponents who have now moved on to branding themselves under the "religious liberty" moniker.  

Also interesting is the increasingly awareness than a very large portion of gun-related deaths are the result of suicide.  That is tragic, but that is information that the gun-control crowd doesn't really want to be very public because it makes gun-related homicide and mass murders to appear to be less of the problem that it is.  That also allows the pro-gun crowd to more easily argue that their are sufficient laws in place regarding gun ownership and that the real issue is "mental health" (that is, the supposed underlying cause of suicide), which is mentioned regularly now.

But, in my view, there is another issue that does not get much play, but I'm convinced it is true.  That is, the NRA really doesn't care directly about the Second Amendment and individual right to own guns, etc.  Rather, the NRA's real interest and effort is for the gun manufacturers and sellers to be able to sell guns without significant limitations and to perpetuate the Second Amendment culture by the purchasers of those guns.  There is lots of evidence of this, including that the NRA keeps pushing through legislation to preclude legal liability for gun manufacturers.  Only the most tortured explanation of such legislation can support why such a law supports individual's Second Amendment rights.  Instead, the NRA's main purpose is to convince gun buyers and owners that their rights are constantly under attack and that the more people who own and carry guns the safer we all will be.  That is fundamentally an ignorant position, but it has been sold very effectively and the ultimate winners of such a strategy and mass delusion are the gun manufacturers and the extensive distribution and support network that sells and keeps guns in the hands of all those people that the NRA has been deluding.

Corporate Taxation is a Fraud

Ever since I took Tax I in law school, I have wanted to develop and argument that corporate taxation is really a fraud on individual (i.e., human) taxpayers.  Generally, one view of corporate taxation is that corporations should pay more in taxes (often stated as their "fair share") so that the tax burden on individuals is less.  Another view is that high corporate taxation reduces investment incentive, job growth, etc.  Both views, in my opinion, miss the point because they assume that corporations actually pay taxes.  But, more realistically, it should be understood that corporations actually don't pay taxes (regardless of the level of the corporate tax rate), only individuals pay taxes. 


To present a simple example, let's consider the corporate taxes that might be paid by Coca Cola and where the money for such taxes actually comes from.  Let's assume that a can of Coke sells for 2 dollars and that the corporate profit on the 2 dollars is 20%. So, Coca Cola just made 40 cents on that sale.  And, let's assume that the corporate tax rate is 20% on those profits.  So, that means Coca Cola pays 8 cents in corporate taxes.  But, that does not mean that individual taxpayers now have 8 cents more in their pockets because Coca Cola paid the tax to the government .  To the contrary, what really happened is that the tax was indirectly paid by individuals.  That is, the purchaser of the Coke paid 8 cents more than he otherwise would have if there had not been a corporate tax on Coca Cola.  So, although Coca Cola collected the tax and transferred it over to the government, the tax was mostly paid for by the purchaser of the Coke. 


Depending on what would have happen to the price of the Coke if there had been no corporate tax, it is also possible that the result of the corporate taxation was that the employees were paid less than they otherwise would have been or the shareholders earned a lower return on their investments that they otherwise would have.   The consequence of the corporate tax may hit each of those groups of individuals, but it doesn't really matter for the purposes of the explanation.  What really matters is that the corporation is not really a taxpayer.


So, what does that all mean?  Well, for one thing, we can conclude that corporate taxation is regressive and negatively impacts poor people.  Why?  Because poorer people spend most of their income buying things that are taxed.  Less poor people save more money.  So, because a corporate tax is at least partly like a sales tax, it is a regressive tax and not a progressive form of taxation.  Normally, the pro-corporate tax crowd would argue that increasingly corporate taxation is good for lower income earners, but it is actually very bad for lower income earners.  So, contrary to corporate taxation helping the lower income earners, it is working against them and they don't even know it.  And, more generally corporate taxation is essentially an opaque way of taxing all individuals because (unless they have read this post) they don't realize that they are the ones paying corporate taxation.


As such, corporate taxation is largely a fraud on the individual taxpayers.  So, instead of paying an effective personal tax rate of 30% or so on one's income, there is a huge hidden tax that individuals pay that pushes up their effective tax rate well beyond the 30%.


The solution is simple.  Eliminate the corporate tax rate.  That of course, would mean that the US Treasury would need more money and that would then only come from raising the effective tax rates of individual taxpayers.  But, that's OK because individual taxpayers are already paying those higher taxes, as explained above.  So, the consequences of eliminating the corporate tax rate would have at least two benefits.  One, it would eliminate the fraud that is currently perpetuated on the individual taxpayer and make it more transparent how much in taxes that the individual taxpayers are actually paying.  Two, the regressive consequences of the existing corporate taxation would be changed so that the additional taxes would be paid through the more progressive tax structure of individual income taxation. 

U.S. Businesses Should be Allowed To Do Business in Iran

As most followers of geopolitical issues know, on 14 July 2015 the so-called E3/EU+3 (China, France, Germany, the Russian Federation, the United Kingdom and the United States, with the High Representative of the European Union for Foreign Affairs and Security Policy) and the Islamic Republic of Iran signed the Joint Comprehensive Plan of Action ("JCPOA"), which provides for the lifting of a wide range of economic and other sanctions against Iran in return for Iran agreeing to take certain steps to reduce and degrade its nuclear industry.  The actions required by Iran were quickly implement and verified by the International Atomic Energy Agency (an independent agency created by international treaty and which reports to the United Nations General Assembly and Security Council).  As a result, the sanctions relief outlined in the JCPOA were implemented on 16 January 2016 ("Implementation Day").


Although considered by many to be a success from a diplomatic and security perspective (of course, there are voices that disagree with that conclusion), the global business community was also excited to enter into the Iranian market without the threat of sanctions (enforced mostly by the U.S. and the E.U).  Such excitement was justified based on the size of the Iranian market - nearly 90 million people, many of whom are well educated in areas of businesses, engineering, etc., and a wide range of industries that are in dire need of equipment upgrades and investment from the outside world.


However, that initial excitement turned to caution when it became known that, unlike the E.U. and the U.N. sanctions relief, the U.S. sanctions relief agreed to in the JCPOA was very limited.  In fact, a wide range of U.S. sanctions still apply.  Some of those remaining sanctions are the same sanctions that might apply with respect to any country, such as the restriction against doing business with persons on the SDN List (i.e., the Specially Designated Nationals and Blocked Persons list sometimes referred to as the "bad guy" list which precludes business transactions with known or suspected terrorists, money launderers, etc.).  However, there are also a large number of so-called "non-nuclear" related sanctions which limit doing business with Iran because of Iran's support for terrorism, human rights violations, etc.  Prior to Implementation Day, such non-nuclear sanctions were enforced by the U.S. on a global basis.  After Implementation Day, those sanctions are now only enforced against U.S. Persons.


So, although there are several U.S. sanctions that apply globally after Implementation Day, including sanctions that make it hard conduct business in Iran in U.S. Dollars, the most significant U.S. sanctions remaining in place after Implementation Day are those that largely prohibit U.S Persons (i.e., U.S. Citizens and green card holders and U.S businesses) from doing business in Iran or with Iranian businesses or residents.  That's right - the U.S. negotiated for many, many years to get agreement on the JCPOA and the lifting of Iranian sanctions and the U.S. has intentionally prohibited U.S. businesses from seeking opportunities in the huge Iranian market.  Effectively, the U.S. government spent significant time and effort to get to an agreement that gives away the Iranian market to non-U.S. businesses.


At first, many U.S. businesses were shocked that, except for previous exceptions for food and medicine and the new exception for passenger aircraft, they were not going to be able to pursue projects in Iran following Implementation Day.  The arguments for the continue enforcement of the various sanctions (which are part legislative and part from executive orders) are several.    Let's review some of those arguments.


One, that Iran continues to support terrorism and abuses human rights.  It is often repeated that Iran is the largest sponsor of terrorism in the world.  Unfortunately, such arguments are typically made by uninformed people.  The reality is that Iran is no more, and certainly less of, a supporter of terrorism than many other countries in the region.  Iran certainly does not have a tradition of Jihad whereby it sends militants to attack U.S. interests.  Certainly, Iran's activities can't compare to the negative impact of the multi-decade effort by other Middle East powers in to spread extreme religious and cultural thinking by way of funding and controlling schools, mosques, militants and other institutions.  And, Iran's human rights story, while not laudable, is no worse than many other countries, which are often stated to be a U.S. "friend" or "ally". 


Two, that Iran is a totalitarian state with no respect for democracy.  There are very few other Islamic-majority countries in the Middle East that have any aspect of democracy.  But, just on 26 February 2016, Iran had elections for its national and local representatives.  Although those elections are flawed in many respects, they do result in some degree of popular representation, something few other countries in the region can say.  And, in this case, it is generally considered that the "moderates" made significant advances in the election.


Three, Iran is a threat to the U.S. ally of Israel.  This tired argument misses the point that many other countries in the region have actually had wars with Israel, but Iran never has participated in those wars.  And, the U.S. commitment to the defense of Israel is so unqualified that any attack on Israel would be suicide by Iran.  Not going to happen.


There are other arguments, but they also have little foundation in reality or history and can largely be rebutted, including by noting that U.S. companies are allowed to do business in many countries that actually conduct the activities that are attributed to Iran.  Perhaps more important, there are many arguments that would support a U.S. policy of business engagement with Iran.


First, everyone who has any actual knowledge of Iran knows that the Iranian people are big proponents of doing business with Americans.  My personal experience with regular Iranians and every person I've known who has visited Iran comes away with stories of how hospitable the Iranian people are and how much they say they love America and Americans.  To not allow U.S. businesses to operate in Iran risks diminishing the positive attitude that Iranians have of Americans and America.


Second, allowing U.S. businesses to be present in Iran and engage with more Americans can only increase the positive view of the U.S. inside Iran.  In fact, the hardliners in Iran are quite happy that the U.S. is preventing most U.S. companies from doing business in Iran because they are very concerned that the image of the U.S. is a threat to the hardliners' control of various aspects of Iranian life, many businesses in Iran and the overall propaganda effort that the U.S. and Americans are the Great Satan.


Third, without any U.S. engagement in Iran, the U.S. government will have almost no access to first-hand knowledge of what is happening in Iran.


Fourth, the European and Chinese companies will excel in Iran without U.S. competition, leading to the strengthening of the non-U.S. companies and the loss of jobs and income in the U.S.


In summary, the arguments against allowing U.S. companies to do business in Iran are weak, at best, and certainly are illogical given how the U.S. doesn't have such restrictions for doing business in other countries whose actions are much worse by comparison.  And, there are many strong policy arguments to allow U.S. companies to do business in Iran.  Congress does not seem to have the sense or the will to make the right decision on this.  U.S. business interests need to join efforts to pressure Congress and the president to change the law and eliminate most of the remaining sanctions so that U.S. business competitiveness and U.S. jobs are a priority.

The Apple-DOJ Case Is Not What It Appears To Be - On Either Side

Does anyone really believe that the NSA, FBI or other government agency could not hack an iPhone?  Apparently Apple can do it, otherwise they would be saying so.  Surely, the NSA or FBI has equal or better capability.  Most likely, the FBI/DOJ are simply using this case to get the legal authority to force cooperation by tech companies generally.  And, Apple certainly "doth protest too much" when they pretend they are standing up for a moral principal instead of its business model, which is what they are really trying to defend.  Apple is not a legal think tank or foundation, it is a business.  Otherwise, Apple would also not be taking advantage of the legal but morally doubtful tax and intellectual property laws that benefit their business.   In any event, the approach is surely going to backfire because, regardless of whether it is the best policy, most every day Americans are going to side with the argument that security overrides data privacy (especially in a terrorism-related case, which is why the FBI chose this case to be so public) and Congress is probably going to pass legislation that limits or prohibits "warrant proof" software and devices.  Then, Apple and others in the Silicon Valley bubble will wish they had not started this fight at all.

How to Fix Iraq and Defeat ISIS

There seems to be great doubt about what to do about “ISIS” or the “Islamic State”.  Few think that the United States has a coherent or winning short-term or long-term approach.  Many fear a creeping increase of U.S. involvement that will eventually involve more and more U.S. and other allied soldiers on the ground in Iraq and Syria.  We see this fear being realized with the recent news of U.S. Special Forces now being deployed to Syria.  Others fear that Russia or Iran will gain increasing influence through their growing actions against ISIS as compared to the overall limited action by the United States.  The U.S. policy has been to “degrade” and then “destroy” ISIS is doing neither.  Here is what needs to be done:

First, we need to take into account that Iraq, like many other nation states in the region, was artificially created from the line-drawing of outside powers.  In this, case the British were in charge of restructuring the Middle East after World War I.  And, what is known as Iraq today was never a political or social unit that should have been lumped together into a state. Rather, it was created out of Ottoman provinces that had previously reflected the distinctions between the Shias and Sunnis in the region (if not fully the Kurds).  The post-WWI created boundaries of Iraq met the then goals of the British, but had nothing to do with any sort of natural relationships among the peoples of what is now called Iraq.  That is not a new analysis and certainly professional historians have more to say about this than I can.  But, it is fair to say that this brief of Iraqi history is generally accepted as correct by knowledgeable observers.

Second, we need to acknowledge that, practically, Iraq is broken into three distinct regions.  The current reality is that the Kurds are, for all intents and purposes, running their own country in northeast and much of the north of Iraq.  And, the Shias clearly dominate the south and southeast and the Sunnis are dominant in the west, including the Anbar province and other areas in the northwest of the country.  For convenience, we can call these areas Kurdistan, Shiastan and Sunnistan. 

Third, we need to recognize the reality of the impossibility of these three areas ever being put back together.  The Sunnis, under Saddam Hussein were in control of the country and the levers of power.  As is common in the region, there was little room for other ethnicities or any sort of “loyal opposition”.  As such, the Shias, despite being a majority, were significantly discriminated against and oppressed.  Quite naturally for this area of the world, once the Shias became dominate after elections following the fall of Saddam Hussein, the Shias then turned on the Sunnis.  The previous Shia Prime Minister al Maliki could have been a leader against such secular division, but instead he significantly worsened it.  The current Shia Prime Minister Al Abadi is less secular in his approach, but it is too late.  The damage is done.  The Kurds are never coming back into the fold (most likely they never were) but the Sunnis have concluded that there will never be justice and fair treatment under a Shia-dominated Iraqi government (and given the demographics of Iraq, the Shias will always dominate).  For this reason, the Sunnis are hesitant to fight with the Shia-dominated Iraqi military against the Islamic Nazis because even a successful fight would result in greater Shia dominance and control in Sunnistan.  So, although the Sunnis generally don’t favor ISIS, many Sunnis conclude that if they can’t govern themselves they may be better off under the ISIS than under the Shia-dominated Iraqi government.

So, the only realistic approach to resolving the secular division in Iraq and creating a situation in which the Sunnis will fight against ISIS is to formally divide the country into what is already the fact on the ground.  That is, have the people on the ground and the world agree to the division of Iraq into three truly independent countries - Kurdistan, Shiastan and Sunnistan – each formally recognized by all major and regional powers and the United Nations.  Details of this may be difficult, especially with respect to certain cities and regions where the ethnic majorities have been diluted based on political considerations of whoever was in charge of Iraq from time to time.  And, there may well be some aspects of a new partition with some of the negative consequences that happened in 1947 when India and Pakistan came into being.  However, those negative consequences and difficulties could hardly be worse than what has been happened on the ground in Iraq over the last several years. There is also the question of the oil.  But, the simple answer has to be that Kurdistan, Shiastan and Sunnistan each will own and control the natural resources in their respective territories.  Sunnistan would have less oil that Kurdistan and Shiastan, but the Sunnis see virtually no benefit of the oil in Iraq as it is.  A secure and functional Sunnistan would be more valuable to the Sunnis that any share of the oil that might come about from some three-way agreement about how to share the oil (which probably could never be reached or complied with anyway).

The formalization of this reality would have the general benefit of significantly reducing the secularism that has been destroying people’s lives in Iraq.  But, it would also provide the best framework for a realistic strategy for defeating ISIS.  The reasoning for such a conclusion is based on the history of the Awakening Movement that was largely responsible for defeating Al Qaeda in Sunnistan in 2005.  At that point, the Sunni tribes in Sunnistan realized that living under Al Qaeda rule was not acceptable and so instead of fighting U.S. forces the tribes agreed to fight with U.S. forces to defeat Al Qaeda.  Unfortunately, instead of being recognized by the Shia-dominated government as part of the overall solution in Iraq, the courageous and successful efforts of the Sunni tribes during the Awakening Movement worked against the Sunnis because the Shia-dominated government then was able to further oppress the Sunnis in Sunnistan after Al Qaeda had been defeated and was no longer a threat to the Shia-dominated Iraqi military.  As such, the Sunnis this time around have little incentive to fight and defeat ISIS because their experience has shown that such an effort will not ultimately benefit them.  One might argue that it would be different now under Prime Minister Al Abadi, but the Sunnis are not going to believe that in the short term and ISIS will continue its murderous ways.

The formal division of Iraq would have the Kurds controlling the current region already known as Kurdistan. Sunnistan would include the entire Anbar province and some points north. That would need to be negotiated some with the Kurds.  But, with both Kurdistan and Sunnistan formally being recognized as nation states, the Kurds and the Sunnis would have a strong incentive to come to an agreement.  That leaves Shiastan, which would cover all other areas of Iraq, including Baghdad.  Kurdistan already has its own capital and doesn’t need Baghdad.  Sunnistan would need to declare its own capital, but that is likely to be Ramadi, which is already the provincial capital and has the benefits of being close to Baghdad, the Shiastan capital.  The recognition of the three countries would need to be conditioned on fully negotiated treaties on trade, security and other matters.  Sure, Iran, Turkey and others have some reasons to not support this approach, but they have more reasons to agree to it.  In any event, the members of the United Nations Security Council do not need Iran’s and Turkey’s consent to such recognition.

In addition to resolving the secular issues that are essentially incurable under the current ethnic, political and geographical concept that is called Iraq, this then leads to a credible strategy for defeating the ISIS.  That is, if the Sunnis in Sunnistan see that fighting ISIS means that the Sunnis actually are fighting for themselves and not for a Shia government, the sentiments that led to the Awakening Movement and the successful defeat of Al Qaeda in Iraq can be repeated.  The international community would also need to provide all military and economic support to defeat ISIS and to re-build Sunnistan into a functional society with a responsive and functional government.  An important part of the international community’s support from Sunnistan would need to come from the Gulf Cooperation Council states, especially Saudi Arabia and the United Arab Emirates.  Those states have the financial strength and the military muscle to significantly support both the fight and the rebuilding of Sunnistan.  They also have the desire to defeat ISIS and to see a stable Sunni-dominated country carved out of Iraq.

Finally, if the Sunnis and the international community could defeat ISIS in what is now known as Iraq, then the remaining threat from ISIS would be focused only in Syria, a much smaller territory.  At that point, the ISIS becomes a much smaller issue geographically, its resources diminished, the recruitment of foreign fighters likely significantly reduced as the movement is falling apart and Sunnis in the region see an international commitment to the fair treatment of Sunnis in the region of Sunnistan.  It would also offer an opportunity for Iran and the Sunni-dominated Arab states to work together, which could then lead to more trust and confidence to work on other regional issues. 

What is now needed is for the United States, the United Nations and the Gulf Cooperation Council to make such a proposal and present it in the United Nations and to the parties in Iraq so that negotiations and planning can start in order to end the secular divisions in Iraq and at the same time have a plausible strategy for defeating ISIS.