Thursday, July 16, 2015

Obama's Folly?

The Cosmic Gamble of the Iran Nuclear Deal
When you think about it, throughout history the United States has struck some pretty good deals with foreign adversaries.

In fact, some great ones.

Seward's Folly

On March 30, 1867, "U.S. Secretary of State William H. Seward sign(ed) a treaty with Russia for the purchase of Alaska for $7 million. Despite the bargain price of roughly two cents an acre, the Alaskan purchase was ridiculed in Congress and in the press as 'Seward’s folly,' 'Seward’s icebox,' and President Andrew Johnson’s 'polar bear garden."'

Fortunately for Seward, and everyone in the United States, gold was found in Alaska in 1898 and the massive Prudhoe Bay oil reserves were found in 1968. The original investment of 2.5 cents per acre for an area twice the size of Texas now looks like a 'great deal' in retrospect.

Louisiana Purchase

In 1803, President Thomas Jefferson purchased the Louisiana Territory from France for about 3 cents per acre or $15 million thereby doubling the size of the young republic immediately. That has turned out to be a pretty good purchase, yes?

Note that both the Alaska purchase and the Louisiana Purchase came when both the Russian Czar and France under the leadership of Napoleon Bonaparte were suffering cash shortages from other war efforts and government expenditures that extended both treasuries. Countries under financial stress usually make decisions more beneficial to their adversaries than when they are cash-rich and solvent.

Both were also subject to approval by the US Senate under the Constitutional rules of treaty-making: Presidential negotiations subject to Senate 'advice and consent' and subsequent approval by 2/3rds present.*

Purchase of Manhattan Island by the Dutch

In what has to be the most advantageous deal in American history, "(I)n 1626, the settlement’s governor general, Peter Minuit, purchased the much larger Manhattan Island from the natives for 60 guilders in trade goods such as tools, farming equipment, cloth and wampum (shell beads)"

That translated to about $24 at the time. Advantage to America as it formed later, right?

Which begs the question:

'Just what does the United States of America gain by the negotiation of this Iran Nuclear Deal by President Barack Obama?'

President Obama somewhat sanctimoniously stated that '99% of the world agrees with me' that this deal with the militant leaders of Iran was a good one. He must know something we don't know then about how to poll and then discern the attitudes of 7.3 billion people around the globe overnight.

But what exactly did he gain for the United States in this treaty (Iran Deal text here) other than what he has said was the 'avoidance of war' with Iran, which many experts have some serious doubts about in the first place?

We didn't double our land territory as Jefferson did with the Louisiana Purchase in 1803. We didn't add land twice the size of Texas as Secretary of Seward Seward did in 1867. We didn't force the Soviet Union to its knees through the 'peace through strength' posture used so effectively by President Reagan at Reykjavik in staring down Soviet Premier Mikhail Gorbachev.

When 'Nixon went to China', he was the only American statesman who could have been trusted or believed to negotiate a treaty with the Communist Chinese government and that has led to an enduring economic relationship with China far beyond what anyone could have imagined in 1972. Do you honestly believe Iran will abide by the terms of the agreement President Obama and Secretary Kerry negotiated with them and wind up as compliant with the USA in 40 years as even China has done?

We didn't even secure the return of 4 American journalists now held hostage in Iran even though Obama and Kerry agreed to put many of the violent Iran Revolutionary Guard Corps military leaders on the sanctions relief list somewhere along the way.

Here's what we can glean from the various reports about what IRAN would gain from this negotiated treaty:

  1. Iran will get a lifting of economic sanctions, sanctions that by 2013 had driven internal inflation rates to 35% in Iran and dwindled their dollar reserves to $20 billion (according to Wall Street Journal 'Obama's False Iran Choice').
    -It is estimated that the lifting of economic sanctions will allow $150 billion in frozen Iranian assets to be immediately available to Iran plus untold hundreds of billions of dollars in revenues when trade resumes on the world scale.
    -Remember the example of Czarist Russia and France under Napoleon both of which agreed to negotiated deals with the United States under economic duress that were far more favorable to the US than to them in the short- and long-run.
  2. Iran now has the ability to pursue their 'proliferation' of nuclear power and weapons capability whereas US policy before Obama has always been to keep Iran off the nuclear stage in world affairs. Given that Iran has a stated purpose of sponsoring state-supported terrorism plus the fact that there is not one single treaty or international agreement anyone can point to that Iran has fully complied with 100%, US Presidents have always deferred to see positive actions on the part of Iran first as a precondition to any further discussion or negotiations.
  3. For some unknown reason, at the very end, President Obama and Secretary of State John Kerry decided to give Iran, without any renouncement of their state-sponsored terrorism around the globe but especially aimed at American citizens and the elimination and eradication of Israel, the ability to buy and build conventional weapons and intercontinental ballistic missiles which can one day be used to launch the nuclear weapons Iran wants to deploy. **
(For further information, see below from Nightwatch, a daily summary of news)

As far as we can tell, the hope and prayer that President Obama and Secretary of State John Kerry have after negotiating this deal is that the militant mullahs and ayatollahs of Iran will somehow become friends of The Great Satan, as they call America and we will live in peace and harmony and sing kumbaya forever after.

If that happens, we will sing Obama's praises and recommend he receive a Second Nobel Peace Prize, this time deservedly so. We hope this deal threads the needle for the next decade so that the threat of an aggressive militant Iran is diminished to zero.

However, we think David Ignatius has condensed this entire deal into the best line yet when he called it a 'cosmic gamble'. Somehow, someway, President Obama and Secretary Kerry seem to believe this agreement will turn the the militant leaders of Iran into business and political partners of the US, where peace prevails through increased economic ties and cultural exchanges, supposedly along the lines taken by the Soviet Union and now Russia post-Reagan and China post-Nixon.

Given the history of Iran, not only in modern times, but throughout the extent of their history all the way back to ancient Persia, we think the chances of Iran fully complying with this deal makes it one of the most dramatic and dangerous gambits yet taken by any American president without a whole lot of tangible benefits to the US to see.

There is an alternative to this deal and it would be for the US Congress to vote their disapproval of this agreement and then  to override the expected Presidential veto of that disapproval. That would be a far better option than giving Iran the green light under their current militant leadership to become a nuclear power in our lifetime and 'hope' they become a responsible member of the community of nations.

At least President Jefferson and Andrew Johnson (in whose administration Seward served) didn't fully arm France and Russia with the world's most dangerous ultimate weapons, respectively, in return for purchasing Louisiana and Alaska. They would have recognized that as simply a cosmic gamble to do.

* ([The President] shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur, Article II, Section 2, Clause 2)

** See Elliott Abrams 'Iran Got A Far Better Deal Than It Had The Right To Expect'

from Nightwatch:
Iran-US:  Special comment: The Joint Comprehensive Plan of Action (JCPOA).  A number of Readers sent special requests for NightWatch comments on the JCPOA, the title of the nuclear agreement between Iran and six powers. NightWatch is a commentary on foreign threats to the US and its interests. That focus normally excludes most developments involving US negotiators, but not always.

As for the JCPOA, a few obvious points have been missed in most news coverage of this plan of action. The comments that follow are judgments based on the language of the public text, in context.  They are not value judgments.

First, the agreement is not a non-proliferation agreement. It is an agreement that approves limited proliferation of nuclear technology.  This characterization means that the US and others states surrendered or abandoned their longstanding position of banning any Iranian nuclear program, peaceful or not.

It also is not a nuclear containment agreement. At most, it postpones some aspects of Iranian nuclear infrastructure development. In other areas, Iran can continue to develop and modernize to keep up with technology.  At the end of 15 years at most, Iran has no more restrictions on its nuclear program, with the approval of the UN and the other powers, by implication.

This compromise of the longstanding programmatic ban for Iran is curious because that remains the US objective for North Korea. The US insists that North Korea, which already has nuclear weapons, must dismantle its nuclear program, not just its weapons program. That is the premise of the Six Party Talks.

The difference in the negotiating positions is even stranger because the Iranian and North Korean weapons programs appear to be essentially variants of the same program. The North Korean variant is more advanced. Nevertheless, North Korea has assisted Iran’s ballistic missile programs since the Iraq-Iran War.  Iranians have been reported as observers at North Korean missile and nuclear tests. The cooperation continues as does the North Korean program.

The second point is that it is a very one-sided deal. It lacks mutuality. By an overwhelming margin the burden of performance is on the UN, the European Union and the US.  Its economic implications far exceed its nuclear restrictions. From the Iranian viewpoint, the JCPOA is primarily an economic agreement.

In return for some reduction in the Iranian nuclear programs, the UN and the US will remove the entire architecture of sanctions imposed by any party on any Iranian party. In addition, they will allow Iran to buy and sell conventional weapons and they will help Iran get access to trade, technology, finance and energy. According to the text, this is one paragraph in which Iran “agreed” to the actions by the UN and the US.

One of the implications of this is that Iran stands to emerge quickly as a regional economic power. Using Germany as a model, that condition is far more enduring and consequential than a delayed nuclear program. 

Once Iran’s economy starts to rebound, it will be free from the threat of sanctions to ensure compliance.  There is no credible enforcement mechanism.
A third point is that the text is a plan of action, as it is entitled. Significant by their absence in the text are the words “promise” and “agree” which are the cornerstones of enforceable agreements.  

The text uses the formulation that the parties “will” do things. Those could all be done independently or not. There is no bargain evident.

An enforceable agreement is an exchange of promises of performance.  A plan of action implements those promises. The performance of one party is conditioned on the performance by the other party, by the language of the agreement. The terms of the JCPOA are independent.

This plan of action implements no agreement because no such document exists.  An agreement can be implied from the language of the plan, but the language must establish a “meeting of the minds.” 

Fourth, a strong argument can be made that there is “no meeting of the minds,” a classic term of contract law that is the basis for every agreement.  The awkwardness of the structure makes clear that the intentions of the parties are not congruent and the goals are even farther apart.

Fifth, the JCPOA text contains no definition of terms, such as explanations for the various time terms. A plan of action requires some agreed definitions of terms. One plausible theory for a ten year time period, for example, is that Iranian strategists might have concluded that Iran faces no existential threat for at least a decade, as long as Iran did not provoke a regional nuclear arms race.

They also might have judged that after ten years Iran must be prepared for an even more uncertain strategic environment than the present. If this theory is accurate, Iran gave up little in return for a chance to be the regional economic hegemon. The emergence of an economically powerful Iran would alter strategic power relationships.

Finally, the six powers did not include a term requiring Iran to affirm or promise that it possesses or has access to no nuclear weapons now, in Iran or elsewhere. That seems to be a significant omission in crafting. If Iran already has nuclear weapons, the JCPOA would be a strategic victory for Iran.  

Assuming Iran abides by the JCPOA to the letter, the JCPOA will empower Iran economically and that will shift the balance of power in the region, regardless of the nuclear program. The Iranians do well to celebrate.

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