The Syrian Conflict Gets That Much Worse

The Syrian Conflict was starting to show some signs of hope after the new ceasefire. Then this happened. 

The Story

Over the weekend, the US-backed coalition directly bombed Syrian government forces, killing 62-83 troops and injuring more than a hundred. The strike occurred in a battle between ISIS and the Syrian forces near Deir Ezzor. The strikes thus directly benefitted ISIS, and Russia and Syria both promptly freaked out (with good reason).

Here’s the link to a write-up on the story from CNN:

Syria, Russia: Coalition airstrike kills regime forces

Why This Matters

Syria already had a lot of problems, with multiple foreign powers involve and competing interests all around. One of the only silver linings so far of the war has been that the US armed forces had not directly engaged Russia or its ally Syria in battle.

This meant the clash of the US and Russia in Syria was an indirect proxy war. That’s still terrible, but it’s somewhat familiar territory. The US and Russia (or its predecessor) have engaged in proxy wars before without the conflicts spiraling into a new global war or a nuclear exchange.

So while Syria was still a dangerous and appalling tragedy, we could previously take some minor solace in the fact that it wasn’t even worse. Now it is worse.

The question is how the US will respond in the aftermath. So far, the US has responded by downplaying the episode and accusing Russia of hysterics. Needless to say, this is probably not the best way to improve relations.

Corrections and Context

The Russians have accused the US of intentionally backing ISIS based on this recent attack. While this claim is understandable, it’s probably not accurate.

Given a choice in explanations between government conspiracy and government incompetence, the latter is usually more compelling. In this case, there’s little doubt that the US would like to overthrow Syria. But it’s unlikely they would want to directly strengthen ISIS in the process.

At least officially, many US policymakers think (hope) that overthrowing Syria would result in some kind of moderate democratic force would rise to replace him.This is nonsense, but it has important implications. Since everyone agrees ISIS is not such a democratic force, the US government is unlikely to directly support them. Indirect benefits accrue to them all the time from US foreign policy, but direct support, with no plausible deniability, is probably a bridge too far.

Also, we should note that the US’s dismissal of Russian concerns over this issue is completely unjustified. To see why, we only need to put the shoe on the other foot for a moment. Imagine if Russia had accidentally bombed and killed nearly 100, say, Israeli soldiers. If such an incident happened, there should be no doubt that the US would rush to make an international incident over it, complete with sanctions and the like.

Indeed, we actually know this conclusively from recent events. Back in 2014, Russia was accused, by the new Ukrainian regime and the West, of arming eastern Ukrainian rebels who then accidentally shot down a civilian airliner. No one alleged that Russia shot this down intentionally; the conventional story does not have Russian troops actually pulling the trigger, and it was not even independently proven that it was a Russian-provided missile system that shot the plane down in the first place. But in spite of this extreme ambiguity, the West rushed to judgment and even imposed sanctions on Russian.

Given this very recent context, it is utterly hypocritical that the US is attempting to downplay Russian and Syrian concerns in this case. But then, there’s nothing new about US hypocrisy in the realm of foreign affairs.

Finally, as an update on this story, it appears this incident was sufficient to break the ceasefire and return Syria to its awful status quo. Chaos 15, Peace 0.

Saudi Arabia Offers Absurd Case for Immunity from 9/11 Lawsuits

This week, Saudi Arabia is trying out a fascinating new argument to avoid accountability for its role in the 9/11 attacks.

The argument boils down to this: If state sponsors of extremism are punished for their actions, this will produce more extremism.

This novel claim comes after both houses of Congress unanimously passed a new bill called the Justice Against Foreign Sponsors of Terrorism Act (JASTA) last Friday. As the name suggests, the purpose of JASTA is to allow the victims of terrorism and their families to sue foreign governments that may have played a role in supporting terrorist attacks. Ordinarily, those governments would be protected from such suits by what is known as sovereign immunity; JASTA will narrow the circumstances in which sovereign immunity applies.

The most immediate effect of the legislation would be to allow victims of 9/11 another chance to sue Saudi Arabia for its involvement. Victims have attempted to sue the Saudi government before, but sovereign immunity provisions got in the way. Once that barrier is removed by JASTA, it is likely that the victims would prevail in a lawsuit against the Saudi government.

Naturally, the Saudi government has a strong interest in avoiding this outcome, and they are pulling out all the stops. Earlier this year, they threatened to sell off their holdings of US assets and government debt, which could destabilize bond markets around the world. Now, they are trying to play the terrorism card.

The new narrative was offered by a high-ranking Saudi official, Abdullah Al al-Sheikh in comments to a Saudi state news agency (emphasis added):

[JASTA risks] triggering chaos and instability in international relations and might contribute to supporting extremism, which is under intellectual siege, as the new legislation offers extremists a new pretext to lure youths to their extremist thoughts.

It is difficult to overstate how ridiculous this argument is.

First, extremists are usually defined by their use of violence, not their use of lawyers.

Moreover, it is nearly impossible to imagine a causal relationship whereby suing Saudi Arabia would increase the spread of violent extremism. But it is very easy to see how holding Saudi Arabia accountable is likely to reduce the prevalence of extremism.

Today, Saudi Arabia is one of the leading sponsors of extremist movements. We know this from many different sources. Perhaps the most telling citation is that the late Saudi foreign minister actually admitted to US Secretary of State John Kerry in 2014 that the Saudis were supporting ISIS. To the Saudis, this wasn’t about terrorism, it was about the regional rivalry with Iran. But the end result looks the same.

Saudi policy also contributes to extremism in more indirect ways. The ongoing Yemen War is a perfect example of this. In that conflict, Saudi Arabia is fighting the Houthis, who also happen to be the strongest opponents of ISIS and Al Qaeda in the region. By attacking  the Houthis, the Saudis, with US backing, are effectively fighting on the same side as ISIS and Al Qaeda in Yemen.

Here are just two cases where it is clear that a 9/11 lawsuit against Saudi Arabia could improve matters considerably. Supporting terrorist groups and bombing a foreign country both take substantial financial resources. And with oil prices as low as they are, the Saudis are no longer immune to budgetary considerations. If the 9/11 lawsuit resulted in significant financial damages, this could reduce the amount of funds the Saudis have available for their more nefarious actions of late.

More importantly, the 9/11 lawsuits could bring a new public awareness about Saudi complicity in the 9/11 attacks. This could erode the US-Saudi relationship, and possibly cause the US government to reconsider its current policy of unconditional support. This might mean withdrawing support for the War in Yemen or blocking future US arms sales to the country. There have already been small pushes in Congress to question US support for Saudi Arabia. Imagine how much more compelling these arguments could be if everyday Americans knew that Saudi intelligence agents were paying the 9/11 hijackers.

In the end, it is somewhat surprising that Saudi Arabia would advance such an outlandish claim as the one above. As a leading sponsor of extremist movements, they ought to know perfectly well what contributes to the spread of extremism. But at least for now, they are pretending otherwise.

Vancouver, BC Has Ambitious Plan to Make Housing Crisis Worse

Vancouver has a housing problem. The latest government solution is going to make it worse.

The problem is that Vancouver’s housing prices have been rising at preposterous rates in recent years. This chart from Zero Hedge tells you most of what you need to know. (Things took a sharp down this past month; we’ll get there shortly.)

Part of the price increases are surely due to natural factors–Vancouver, BC is a major metropolitan area and is routinely ranked as one of the most desirable cities to live in. Thus, more people probably want to move to Vancouver than leave it, and that puts some upward pressure on prices. Additionally, loose monetary policies around the globe have created bubbles in many asset classes, and likely contribute to the Vancouver price hikes as well.

But while this explains some of the increases, many observers see foreign investors as the primary cause. Reportedly, many of these investors are from China. Given the troubling signs weakness in the Chinese economy in recent years, it appears that many well-to-do Chinese investors have sought out Canadian real estate as a safe asset in a more financially stable country.

In fact, the concern about foreign investor demand jacking up home prices has already led the government in Vancouver to take action. In August, they implemented a 15% tax on any foreigner’s purchase of real estate. This policy appears to have been very effective at its stated goal, for better or worse. Demand for Vancouver real estate appears to have evaporated almost immediately–resulting in the steep drop seen in the chart above.

All of that catches you up to the present. Housing prices are plummeting, but the rent is still too damn high, at least for the government’s liking. And here again, foreign investors are taking the blame.

The idea is that many people bought Vancouver properties as investments, but are not actually occupying them or renting them out. Rather, the properties function more as a vacation property at the moment. This reduces the supply of available rentals in the city and would help drive up rent prices, all things equal.

Thus, the government has come up with a new solution to punish the investors anew: a 2% tax on vacant properties.

Like most bad economic policies, this one appears to make sense at first glance. As the story goes, the problem is caused by a bunch of owned but unoccupied properties in the city. So we tax people for holding unoccupied properties to force them to rent them out. What could be easier?

The flaw in this line of thinking is that it only considers the short-term effects of the policy, without accounting for the unintended long-term consequences.

In the short-term, a vacancy tax may indeed encourage more property owners to rent out their properties. And it might also convince existing landlords to accept lower rent payments, now that having a vacant property is that much more expensive.

Thus, the short-term effect will probably increase rental unit supply and lead to lower rents, as intended.

But notice what else is happening here. A tax on vacant properties is going to make owning and renting out residential properties much less profitable.

Most of us probably won’t shed a tear if our own landlord happens to lose money next month. (I certainly won’t–indeed I’ve made it a small personal campaign of mine to convince people not to rent from my current landlord for precisely this purpose.)

However, if all landlords are beginning to make less money or even suffer losses, that is going to be a big problem in the longer term. Let’s trace through these effects.

Lower profits in the residential rental business means that fewer companies and investors will want to participate. In turn, this means there will be less construction of new rental houses and apartment complexes–fewer investors will choose to invest in the heavily taxed rental real estate market when they can pursue other business opportunities instead. This means that relatively little new housing will be built, and in the case of Vancouver, it probably won’t keep pace with the influx of people to the city.

And finally, we end up back where we started. There will be too little supply and too much demand. Rent prices will be soaring again, but this time they will be even harder to solve since the government has actively discouraged new housing development with the vacancy tax.

So we see that although the vacancy tax could possibly reduce rent prices in the short-run, it sows the seeds for even higher rent prices in the long run by distorting the market. It will end up exacerbating the very problem it intends to solve–which frankly, is a good description of most government policies.

September 14, 2016

At Least One Thing Is Growing in the US Economy – the Debt

Yesterday, the Treasury Department released its monthly summary of receipts and outlays. The result: an impressive $107 billion shortfall. And that was just for the month of August.

To be fair, results for individual months can fluctuate so it’s more telling to look at a longer time range. Unfortunately, that doesn’t make it look much better. The cumulative deficit for this fiscal year so far is $621 billion, compared to a $530 billion cumulative deficit this time last year, a 17% increase.

This growth is well-timed because President Obama is about to leave office, and incredibly, some partisans like to paint him as fiscally responsible. Their argument was never that convincing, mind you. Basically it comes down to, “Look how much worse President Bush was!”

You won’t catch us defending President Bush, of course. But that’s not much a compliment now is it? Imagine you told someone they looked very fit… compared to Chris Christie or perhaps a Snorlax. It’s just confusing really.

In any case, the argument also comes with a pretty chart to make the point a bit better:

We’ll have to wait until after September for the official deficit numbers for 2016. But given the most recent numbers, the odds are very good that FY2016 will happily ruin this chart, once and for all reaffirming that both parties are utterly irresponsible on this issue (and most others).

If you’d prefer a more positive spin, then take heart. Because while the US economy may be stagnant, there’s one thing in the US that always grows–the national debt.

Trump Releases Child Care Plan

Donald Trump released his child care plan yesterday. It sounded like something that would usually be proposed by a moderate Democrat. It’s clearly aimed at helping working and middle class people, it would give workers new legal rights to parental leave, and it will almost certainly cost more money (which, as the earlier discussion shows, nobody in Washington cares about).

Thus, you might think Team Clinton would be applauding Trump for pushing a traditionally Democratic cause. Nope. Instead, a Clinton adviser called the plan “half-baked” and said the “lack of seriousness of the proposal is no surprise.”

This should have been a bit awkward though because Clinton’s plan follows the same basic approach. Employees will have right to additional paid time off; government funds it; and due to the lack of any specific tax plans, the amount paid by government will add to the deficit. They disagree on the number of weeks (Clinton wants twelve versus six for Trump), and some details on implementation (subsidies versus tax deduction/credits). But because one’s a Democrat and the other is a Republican, naturally we’re all supposed to pretend like there is a huge difference between them. (There isn’t.)

Incidentally, neither plan is likely to happen given gridlock in Congress, and that’s probably a good thing. Remember that the government doesn’t have any money of its own–if it wants to spend more money, it needs to take that money from someone else (or borrow it, and then take it later). Thus, if the government decides to subsidize child care, it’s really everyone elsethat’s subsidizing child care; government is just the inefficient middleman. On net, that means it’s a wealth redistribution program from people who have no kids to people that have kids.

You might still think that’s a good idea, but we should be explicit about what it means.

Ambassadors Wanted

More documents have been leaked from the Democratic National Committee hack. And as usual, the revelations are upping the ante for future political scandals.

In particular, the latest documents contain more information on major donors. And by an incredible coincidence, many of these top donors just happened to get selected for government positions in the Obama Administration–mostly ambassadorships.

The leaks offer the latest evidence of quid pro quo arrangements with top political donors. They also offer an exciting opportunity for anyone who has several hundred thousand dollars lying around and has always wanted to work abroad in Luxembourg. This could be your chance!

This story hasn’t really taken off in the mainstream media just yet, and we can’t really blame them. It’s been hard to keep up with all the various things that deserve outrage coming out of the DNC and the Clinton campaign. (Obviously, Republicans have their own scandals, but lately, the Democrats have really dominated this topic.)

But as usual, the DNC has a perfect defense prepared: “The Russians did it, so let’s ignore the documents.” (That was a minor paraphrase, of course.)

Check out Zero Hedge for more on this story.

September 13, 2016

Obama tells 9/11 families they matter less than Saudi Arabia

Yesterday, President Obama took the opportunity to remind us why our blog is called The Daily Face Palm. Because while most days bring news of cynical and appalling government behavior, this week, President Obama went above and beyond the call of duty.

Specifically, the Obama Administration announced that it would veto a bill that would allow 9/11 families to sue officials and governments involved in the attacks for compensation. In other words, he’s telling 9/11 victims that he intends to prevent them from seeking justice. And he announced this intention, on the day after the anniversary of the 9/11 attacks.

Admittedly, flipping the bird to 9/11 families on 9/12 does take some guts. However, one wishes that political boldness was at least occasionally used for something useful. Vetoing the Justice Against Sponsors of Terrorism Act doesn’t qualify.

So why’d he do it? Well, because the government that would be sued by 9/11 victims is Saudi Arabia. This should be no surprise given that 15 of 19 hijackers were from Saudi Arabia, and there is compelling evidence that at least some of the hijackers had extensive interactions with Saudi intelligence agents. But Saudi Arabia is a US ally. And like any good friend, they threatened to crash the US economy if we allowed 9/11 victims to sue them for wrongdoing.

In theory, they’d do this by selling off billions in US debt, which would wreak havoc on interest rates–but there’s a decent probability they’re bluffing. They can’t really destroy the US economy without destroying themselves in the process. But bluff or no, this is the real reason President Obama is going to veto this bill. He’s terrified of having the US economy crash on his watch–especially before the election–and he’s going to do everything he can to postpone the inevitable. And if that means telling 9/11 victims to pound sand, so be it.

Of course, this isn’t the official reason that the Obama Administration is offering for the veto. The official reason given is that it would allow people in other countries to sue US people, companies, and military service members in retaliation. Fair enough. But here’s why that’s a bad argument. If US citizens or the US government is involved in perpetrating mass civilian atrocities in other countries like what occurred on 9/11 (which isn’t really hypothetical), do we seriously believe they should be immune to prosecution? That question seems like it ought to be rhetorical, but the Obama Administration answered it anyway, and the answer they gave could not be more wrong.

The good news is that both houses of Congress originally passed this bill unanimously. That means there’s a decent chance the bill could become law even if Obama objects to it. Here’s hoping.

CNN anchor wonders why anyone would object to civilian casualties when they are profitable for US companies

Speaking of our dear Saudi allies, they were actually making news for another unseemly reason recently. They’re still bombing Yemen with US backing, and they’re killing more civilians all the time. Another 21 civilians (at least) died in a series of strikes reported over the the past few days.

This has led several US legislators to propose banning US arm sales to Saudi Arabia and oppose the ongoing US involvement in the war there.

Last week, Senator Rand Paul made his case to CNN anchor Wolf Blitzer. The response was stunning (emphasis added):

“So for you this is a moral issue,” [Blitzer] told Paul during the Kentucky Republican’s appearance on CNN. “Because you know, there’s a lot of jobs at stake. Certainly if a lot of these defense contractors stop selling war planes, other sophisticated equipment to Saudi Arabia, there’s going to be a significant loss of jobs, of revenue here in the United States. That’s secondary from your standpoint?”

That is to say, who cares about all the dying civilians in Yemen if US companies are profiting off it?

Unfortunately, this wasn’t much of a scandal at all. Mainstream journalists and politicians would immediately face widespread criticism for saying something that is remotely politically incorrect (sometimes for good reason, and sometimes less so). But today, there’s nothing socially unacceptable about justifying an illegal aggressive war, explicitly in the name of US jobs and revenues.

For more on this, you can read The Intercept’s write-up.

Trump sets a trap for the Federal Reserve

In better news, Presidential Candidate Donald Trump was busy denouncing the Federal Reserve yesterday.

Basically, he said that the Federal Reserve is in the tank for Obama. According to Trump, the Fed’s keeping interest rates low to prop up the “false stock market”, and keep the bubble from bursting on Obama’s watch. He also said that low interest rates are punishing American savers, since they can no longer earn a reliable return on their money.

Surprisingly, he’s actually right about the economics here. It’s also a very smart political move.

Trump has expressed similar ideas before, but the timing here is important. Next week, the Fed will decide whether or not to raise interest rates, and they’ve been pretending more than usual that they actually will go through with it this time.

Officially, of course, the Federal Reserve is “independent” from politics. Thus, Trump is essentially taunting them to prove it. If they raise rates, they could prove Trump wrong and show they are independent from the Democrats. But they’d also send the stock market down, which will help Trump. Alternatively, they keep rates the same, and the market might be okay for a bit longer. But then Trump gets to point out the Fed as another part of the rigged system in Washington, which is one of his favorite themes. It’s really a win-win for him.

New Site Launched

Thanks for checking out The Daily Face Palm.

We're pleased to announce that we've finally completed our actual website. This is the domain; it's very predictable:

http://thedailyfacepalm.com

We hope to see you over there!


Other notes

This site will still remain available and accessible, at least until we become clever enough to get the redirect links working properly.

Additionally, if you're on the email list, we'll be transferring that over soon. Until then, we'll probably post them in both spots, so the feeds continue to go out like normal.

Feel free to let us know if you have questions in the comments!

September 12, 2016

New ceasefire deal in Syria reached, but may encounter problems

A new ceasefire deal in Syria has been reached by Russia and the US. The ceasefire set to go into effect at sundown today, and represents the most promising chance in weeks for any reduction in violence in Syria.

Unfortunately, that chance still isn't very good. As Bloomberg reports, the Al Qaeda-linked faction in Syria and ISIS will both be excluded from the ceasefire, as terrorist groups. Meaning the all sides in the conflict--US, Russia, Turkey, Kurds, Hezbollah, other rebel groups, and the Syrian government--will be free to continue engaging them. A logical exception, but in practice, it proved fatal to a previous ceasefire deal.

The problem is that, as is widely acknowledged, the supposedly moderate rebel factions that the US supports are known to collaborate with the Al Qaeda group--recently rebranded as Jabhat Fatah al-Sham. This, of course, raises the question of how moderate any group can be if it collaborates with people who still celebrate the 9/11 attacks against the US? In any case, it creates substantial practical problems, especially for the Russians. Frequently throughout the Syrian War, Russia has claimed to bomb the Al Qaeda groups, only to have Western countries accuse them of hitting US-backed assets in the region. In reality, both claims can be true simultaneously, given the well-known collaboration between Al Qaeda fighters in Syria and the "moderate" rebels.

Secretary of State John Kerry, in a statement regarding the ceasefire, acknowledged the situation above and warned the US-backed factions that associating with the Al Qaeda group "would not be wise". It remains to be seen, however, whether this sober tone will be maintained when Russian and Syrian bombs continue falling on Al Qaeda and its often US-backed associates (and civilians too, undoubtedly).

For the sake of the Syrian people, we should hope that the ceasefire is thorough and lasts as long as possible.

Hillary Clinton thinks roughly 25% of Americans are "deplorables", but regrets saying so

Hillary Clinton took a page from Donald Trump's playbook this weekend by grabbing the headlines with an offensive quote. Here's how CNN summarized the comments, which were made at a private fundraiser on Friday night (emphasis mine):

"To just be grossly generalistic, you can put half of Trump supporters into what I call the basket of deplorables," Clinton said. "Right? Racist, sexist, homophobic, xenophobic, Islamaphobic, you name it." 

She added: "And unfortunately, there are people like that and he has lifted them up. He has given voice to their websites that used to only have 11,000 people, now have 11 million. He tweets and retweets offensive, hateful, mean-spirited rhetoric."

Clinton went on to call them both "irredeemable" and "not America".

Given the inflammatory and incredible nature of the comments--effectively condemning a fourth of US voters--one would think this was probably some kind of off-the-cuff remark said in the heat of the moment. But in fact, it appears to be rhetoric that was planned out in advance.

Indeed, speaking just a day earlier on an Israeli television network, Clinton used strikingly similar language, including the odd "basket of deplorables" bit. Again, from CNN (emphasis added):

"If I were to be grossly generalistic, I would say you can take Trump supporters and put them in two big baskets," Clinton said. "There are what I call the deplorables -- the racists, you know, the haters, and the people who are drawn because they think somehow he's going to restore an America that no longer exists. So just eliminate them from your thinking, because we've always had an annoying prejudicial element within our politics."

Once the language went viral, Clinton apologized for the comments--you know, sort of:

Last night I was 'grossly generalistic,' and that's never a good idea. I regret saying 'half' -- that was wrong.

In other words, she apologized for overestimating the size of the "basket of deplorables". This seems reasonable, given that she also implied the number might be close to 11 million, which is obviously nowhere near half of Trump's supporters. We get it; fractions are hard.

More important than Clinton's tenuous grasp of fractions, however, this episode reveals the distinct similarities between the Trump and Clinton campaigns for anyone who's willing to look. Trump's comments often focus on demonizing illegal immigrants and Muslims. Meanwhile, Clinton focuses on attacking Trump's supporters (for being racists, usually), and the Russians (for being Russians). The themes and targets may differ, but the strategy is remarkably similar: dehumanize the "other" to frighten people into voting for you.

Clinton's campaign slogan may be "Stronger Together" and Trump might want to "Make America Great Again". But the fact is that once the election is over, the America they will be leading will be more divided than it has been in a very long time. And when that day comes, both candidates and both mainstream parties will deserve blame for making it so.

Another stumble for Clinton campaign--this time, it's literal

With our apologies, our third story is also about the election. It was a busy weekend.

After a 90-minute stint at the New York memorial ceremony for the 9/11 attacks, Hillary Clinton decided to leave the event early. Unfortunately, (at least) two videos captured the moment of her getting in the van to leave. It didn't go well.

In the videos, Clinton appears to stumble or even faint as she steps off the curb. Her assistants were able to hold her up, but not quickly enough to make it unnoticeable. The result was another viral negative story for Team Clinton that needed an explanation.

Given the public nature of the episode and uniquely bad timing--presidential candidate faints(?) while remembering 9/11 attacks--the incident quickly gained traction. The Clinton campaign acknowledged the incident and first said that Hillary "overheated", before explaining later in the day that Clinton had been diagnosed with pneumonia on Friday.

This is certain to be a downer for the Clinton Campaign and has led to new questions about transparency. What we find more interesting, however, is the choice of wording.

As a general rule, cars, computers, and a great many other devices can overheat. But people are not among them. That's why it's kind of an odd phrase to use. This is particularly true when one recalls that an earlier viral Clinton gaffe involved her saying she "may have short-circuited". So wait, it overheats and short-circuits; are you sure we're talking about a human?

Kidding aside, this language is used in an attempt to downplay episodes--in this case, because they probably wanted to avoid saying she was ill, tired, exhausted, etc. But ironically, it actually makes the incidents more memorable. Last time, Donald Trump capitalized on the "short-circuit[ing]" by making an ad about "Robot Hillary" with sparks and all. One imagines a sequel will now be forthcoming shortly.