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The U.S. faces plenty of choices about what to do in the Middle East. Unfortunately, they’re pretty much all bad!
Just consider what I wrote in my column yesterday (or this New York Times analysis today). The inescapable conclusion is that we’re getting hopelessly entangled in confusing, shifting alliances and conflicts that have no easy solution.
On the one hand, we’re trying to reach a deal with Iran that will restrict its nuclear ambitions. Secretary of State John Kerry is holed up in Lausanne, Switzerland with Iranian officials, including Foreign Minister Javad Zarif.
|President Obama is left with tough choices.|
They’re rushing to beat a March 31 deadline for some kind of deal, which would offer the Iranians relief from sanctions and the ability to conduct limited civilian nuclear research and work. But the U.S. and other parties want to ensure that the Shiite Muslim nation won’t use a deal as cover to continue working toward producing a nuclear weapon.
At the same time, we’ve forged an “alliance of convenience” with Iran in the battle against ISIS in Iraq. While we’re bombing ISIS targets as part of the battle for Tikrit, we’re indirectly relying on Iranian-allied Shiite militias to help Iraqi forces on the ground because we sure as heck aren’t going to commit our own troops.
The problem? Those militias don’t really like us! One group called Kitaeb Hezbollah even said it would try to shoot down U.S. or coalition planes that launched attacks in the area.
At the same time, we’re loosely allying ourselves with Shiite-majority Iran in Iraq … and trying to reach a nuclear deal with the Iranian regime … we’re taking a completely opposite side in the latest flare up in Yemen. We’re aligning ourselves squarely with the Sunni-led countries that are bombing the Shiite-affiliated Houthi group there, a move that is being strongly criticized by the Iranians.
As if that weren’t enough, the Saudis and Israelis are mad as all get out over our negotiations with Iran over nuclear power. They believe we need to take a much tougher line, and would probably prefer bombing raids on Iranian nuclear facilities to any accommodation.
The Wall Street Journal rather politely says:
“The Middle East has descended into a state of disarray unusual even for that troubled region, imperiling President Barack Obama’s policy dreams and leaving him with limited ability to control events.”
The Times describes the Mideast Morass this way:
“The administration finds itself trying to sustain an ever-growing patchwork of strained alliances and multiple battlefields in the aftermath of the Arab Spring four years ago. The momentary moral clarity of the demands for democracy across the region has been replaced by difficult choices among enemies and unappealing allies who have rushed to fill power vacuums.”
The Financial Times was much blunter in its assessment:
“The modern Middle East is like 17th century Europe, enmeshed in violent and costly, political and religious struggles within and across borders that could well last for three decades longer.”
So what’s our best option?
A hasty retreat from most of the region, where we just let the locals fight it out on their own? That’s what we just had to do in Yemen after the regime collapsed. The Times reported that our special forces had to evacuate Yemen so quickly, they were forced to blow up their own equipment so it wouldn’t fall into Houthi hands. But that could make the U.S. look like an uncaring, weak-kneed country afraid to do the sometimes distasteful things that have to be done in times of war.
A more aggressive military effort, with expanded bombing and missile strikes using more U.S. military assets in Yemen, Syria (or perhaps even Iran)? That would make Israel and the Saudis happy, as well as encourage Sunni allies who are worried about our willingness to ring-fence Shiite Iran. But it could provoke severe retaliation from Iran and its proxy forces in Iraq, Lebanon, and elsewhere.
|“There’s a very real possibility that just one misstep by any number of interested parties could lead to a much broader shooting war.”|
Or should we continue to take a softer line against Iran, figuring they will at least help us out against even worse enemies like ISIS? That could promote closer cooperation on nuclear issues. But it would risk alienating our long-time Sunni allies whose military and intelligence cooperation we’ve relied on for decades.
Like I said, there are basically no good options — only those that are marginally “less bad.” And there’s a very real possibility that just one misstep by any number of interested parties could lead to a much broader shooting war … one that would have huge repercussions throughout the region and the financial markets.
Bottom line: Tensions in the Middle East are running as hot as I can remember them being in several years. So it’s critical that you continue to monitor the latest developments here in Money and Markets, where I’ll do my best to help you understand the causes and consequences of each new action and reaction.
Please also add your thoughts to the mix over at the website when you have a chance. I’m particularly interested in your evaluation of what we have done as a country so far, and what you think about some of the options President Obama faces.
|Our Readers Speak|
Meanwhile, in the wake of the start of Yemeni airstrikes, you were already getting the conversation going on what it all means.
Reader Clay B. said the spiraling conflicts are a prime example of what happens when the U.S. doesn’t step up to the plate aggressively enough to straighten things out. His view:
“Power hates vacuums. How often have we witnessed an absence of leadership and power from the United States and its allies that has resulted in a total disaster when it comes to world peace and stability?
“Whether it be last year’s Crimea crisis … the continuing (and never ending) wars in Syria and Iraq … the emergence and strengthening of ISIS in places such as Libya, Yemen, and Lord knows where else … the renewed power of Iran and Russia … not to mention the disaster that’s evolving in the Ukraine … the one thing that can be counted on is the price we continually pay for not standing up to aggression and terrorism well before it gets out of hand!”
Reader Joe added: “The arrogant leftist idiots in D.C. are playing a dangerous game. Not only is ISIS wreaking havoc in the Middle East and Europe, the two main branches of Islam are getting dangerously close to all out war. This is much like how World War I started. This has the potential to spin beyond the control of the D.C. nitwits. And there’s a lunatic (Obama) at the controls. Weep for America.”
But Reader Nivram S. countered that the last thing we need is to intervene more deeply in the region, saying: “Let them fight and let’s watch from the sidelines. This is a religious war we can’t stop or expect to win. We can and should blame Bush and his minions for this mess.”
Finally, Reader Mike P. said there may be more going on behind the scenes with this conflict. His comments: “I’m wondering if the Saudis and Egyptians agreed to ‘proxy’ for the U.S. in Yemen in return for a U.S.-backed military strike against Iran’s nuclear facilities.
“It would seem Obama has laid the groundwork to ensure that it appeared he had negotiated to his wits end for a ‘solution’ to the Iranian nuclear threat. However, in the end, no deal. World opinion opens the door opens for military action, as Obama had likely planned it would.”
There are no easy answers to this latest crisis, that’s for sure. Alliances are shifting faster than the desert sand, and the last thing many Americans want is for us to get caught in another major conflict in that part of the world. But if things do escalate substantially, it may be impossible for the U.S. to simply stand aside.
Didn’t get a chance to comment yet? Then make sure you do over the weekend using this link, because any significant new developments could lead to one heck of a market rollercoaster next week!
|Other Developments of the Day|
More troubling details are emerging about the Germanwings co-pilot who crashed Flight 9525 into the French Alps. Reports suggest he was dealing with medical issues over the years, and even had a doctor’s note to be out sick the day of the crash.
If 27-year-old Andreas Lubitz did plan to commit suicide because of personal issues, it is horrific and absolutely inexcusable he took 149 other lives with him. But can you design a system to prevent such tragedies in the future — without there being some way for a determined individual to circumvent them? I don’t have the answer, but am open to any of your suggestions.
The Saudi-led coalition of Sunni Muslim nations resumed bombing Houthi rebels in Yemen overnight. It’s unclear how the rebels or their Iranian patrons will respond, beyond the verbal protests heard so far.
Two New York City buildings collapsed after a massive fire and explosion late yesterday. Nineteen people were injured and one person is reported missing in the wake of the East Village incident, which may have been caused by a gas leak.
Late-breaking reports suggesting that Intel (INTC, Weiss Ratings: B) may acquire Altera (ALTR, Weiss Ratings: B-) sent both stocks soaring in the final minutes of trading. The Wall Street Journal said the move would be Intel’s largest ever, and underscore the company’s desire to expand beyond the PC chip business. We’ll have to see if a deal is actually concluded.
Finally, on the economic front, the final estimate of fourth-quarter GDP came in at 2.2 percent. That fell short of the average economist estimate of 2.4 percent, and early indications suggest growth will be even worse in the first quarter of this year.
Here’s the link to the website where you can comment on these news stories or others you’ve seen. I’d love to address as many of your thoughts after the weekend.
Until next time,