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Surprise! Obama Plans to Normalize Relations With Cuba.

| Wed Dec. 17, 2014 11:31 AM EST

A couple of weeks ago, National Review's Jay Nordlinger suggested that maybe President Obama's next executive action would be normalization of relations with Cuba. That struck me as something out of left field, since I'd heard not even a hint of a peep of a rumor that anything along these lines was in the works. But congratulations Jay! You were right:

The United States will restore full diplomatic relations with Cuba and open an embassy in Havana for the first time in more than a half century after the release of an American contractor held in prison for five years, American officials said Wednesday.

In a deal negotiated during 18 months of secret talks hosted largely by Canada and encouraged by Pope Francis who hosted a final culminating meeting at the Vatican, President Obama and President Raul Castro of Cuba agreed in a telephone call to put aside decades of hostility to find a new relationship between the island nation just 90 minutes off the American coast.

....The United States will ease restrictions on remittances, travel and banking relations and Cuba will release 53 Cuban prisoners identified as political prisoners by the United States government. Although the decades-old American embargo on Cuba will remain in place for now, the administration signaled that it would welcome a move by Congress to ease or lift it should lawmakers choose to.

Oddly enough, I don't see any reaction yet from Nordlinger, or indeed, from anyone over at National Review. Perhaps the intercession of Pope Francis is giving them pause?

In any case, this is good news. I don't personally care an awful lot about Cuba or our relations with them, but half a century of pointless enmity really ought to be enough. Fidel Castro may not have been an admirable guy, but Fulgencio Batista was no great shakes either, and it's long past time to stop pining away for the days when he was in power. So let it go, folks. We don't have to approve of everything Cuba does in order to act like adults and conduct normal relations on both sides. We manage to do it with Russia and Venezuela and Pakistan, after all.

In any case, that's that. The next step is lifting the trade embargo, but I suppose it's unlikely that a Republican Congress is going to act on that any time soon. Too bad. There's no longer any reason for it, and I'll bet the majority of cigar smokers are Republicans. They want their Havanas, so lifting the embargo would, in a sense, be nothing more than a routine bit of base maintenance. Perhaps if Republicans think of it as just another political payoff for their strongest supporters, they can be talked into it.

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BREAKING: US to Normalize Relations With Cuba

| Wed Dec. 17, 2014 11:16 AM EST

Wow:

The United States and Cuba will begin talks to normalize relations, including opening an embassy in Havana and putting to rest one most enduring Cold War standoffs, a U.S. official said Wednesday.

The landmark initiatives appeared to be set in motion by a surprise prisoner swap that freed American contractor Alan Gross after five years in custody in Cuba. In exchange, the United States would release three Cubans jailed for espionage, the Associated Press reported.

President Obama is scheduled to speak at noon. Watch below for his press conference: 

Update: The White House just released a fact sheet outlining the policy changes with Cuba:

 

 

Wall Street Salivating Over Further Destruction of Financial Reform

| Wed Dec. 17, 2014 10:37 AM EST

Conventional pundit wisdom suggests that Wall Street may have overreached last week. Yes, they successfully managed to repeal the swaps pushout provision in Dodd-Frank, but in so doing they unleashed Elizabeth Warren and brought far more attention to their shenanigans than they bargained for. They may have won a battle, but with the public now suitably outraged and alert for further mischief, they're unlikely to keep future efforts to weaken financial reform behind the scenes, where they might have a chance to pass with nobody the wiser.

Then again, maybe not. Maybe it was all just political theater and Wall Street lobbyists know better than to take it seriously. Ed Kilgore points to this article in The Hill today:

Banks and financial institutions are planning an aggressive push to dismantle parts of the Wall Street reform law when Republicans take control of Congress in January.

Fresh off a victory in the government funding debate that liberals decried as a giveaway to Wall Street, advocates for the financial sector aim to pursue additional changes to Dodd-Frank that they say would lighten burdens created by the 2010 law. Among the top items on the wish list: easing new requirements on mortgages, loosening restrictions on financial derivatives and overhauling the Consumer Financial Protection Bureau....Another fight on the horizon is the push for “regulatory relief,” as financial institutions and Republicans seek to require agencies to pursue more cost-benefit analysis when writing rules.

....In the face of loud opposition, financial lobbyists say they have a compelling case for revisiting the law. While the economy is improving, they argue the new rules have made it exceedingly difficult to obtain loans, including mortgages.

Will Democrats in the Senate manage to stick together and filibuster these efforts to weaken Dodd-Frank? Or will enough centrists peel off to allow a few of them to pass? I'd like to think that Elizabeth Warren has made unity more likely, but then again, I have an uneasy feeling that Wall Street lobbyists might have a better read on things than she does. Dodd-Frank has already been weakened substantially in the rulemaking process, and this could easily represent a further death by a thousand cuts. After all, as the Wall Street flacks say, the economy is improving. And who needs a bunch of fussy rules when the economy is good?

This New Report Explains Exactly How the Afghan Economy Will Fall Apart

| Wed Dec. 17, 2014 10:16 AM EST
A staff sergeant from the Alaskan National Guard stands guard as workers build a bazaar in Kandahar

When then-Secretary of Defense Donald Rumsfeld toured a reconstruction center in Jalalabad, Afghanistan, in 2004, he was gushing with optimism. "It is so clear that the Afghan people are winning the struggle to rebuild this nation," he said. That hope is now basically dead. Last week, the Special Investigator General for the Afghan Reconstruction (SIGAR) issued a report that explains exactly how Afghanistan's economy will fall apart in the next few years. The reasons are easy to understand: Western powers came to the country and built a lot of infrastructure. Now coalition forces are leaving, and Afghanistan has to figure out how to maintain everything the westerners built. With foreign funds drying up, that'll be a tall order.

In 2013, the Afghan government collected $2 billion internally, but it spent $5.4 billion. "In other words," SIGAR notes, "domestic revenue covered only 37% of the total budget." The 2014 budget of $7.6 billion plans for even more spending than last year. But Afghanistan's government expects to pay for just $2.8 billion of that with its own money.

Afghanistan, like any other debt-burdened nation in the world, can make the imbalance work as long as it has another, external source of funds. But donors are starting to temper their support, and the security, social services, and infrastructure maintenance costs are increasing rapidly. (You can read Mother Jones' list of Afghan infrastructure disasters from last year here.)

More money will be hard for Afghanistan to come by on its own. There's some mineral development in the works, but it'll be decades before it reaches its true potential, SIGAR says. Licit exports only amounted to a $376 million, or about $8.20 per person, in 2012, according to the CIA World Factbook. (The CIA names "small-scale production of bricks" and "handwoven carpets" among the country's top industries.)

Afghanistan's one lucrative export is illegal everywhere. Last year, Afghanistan's opium industry was worth an estimated $3 billion, despite the billions the US has spent trying to stamp it out.

"Without donor contributions," SIGAR argues, "the Afghan government will not be able to meet most of its operating or development expenditures." Citing an IMF report, SIGAR says the gap between domestic revenue and expenses will average $7.7 billion every year through 2018. 

So who's fault is this mess? SIGAR lays much of the blame at the feet of the United States and other countries that built Afghanistan's infrastructure in the first place. "Each new development project that the United States and other international donors fund increases the country's O&M [operation and maintenance] costs, adding pressure to Afghanistan's operating budget," the report states, adding that the US and other other governments should have had a plan for how to pay for their projects' maintenance, knowing they'd eventually have to leave. 

"Much of the more than $104 billion the United States has committed to reconstruction projects and programs risks being wasted," the report adds, "because the Afghans cannot sustain the investment without massive continued donor support."

The Best Food Books of 2014, Part 1

| Wed Dec. 17, 2014 6:00 AM EST
A veritable feast of letters.

The publishing industry may be in the midst of a long, slow decline, but it's churning out a cornucopia of food books—and 2014 has been another banner year. Today, I'll look at my favorites on the politics/culture front, and soon I'll take up the cookbook beat.

• The Big Fat Surprise: Why Butter, Meat, and Cheese Belong in a Healthy Diet, by Nina Teicholz. This is the most provocative and assumption-shredding food book I've read in years. With exhaustive reporting and lucid science explication, Teicholz drives home her central thesis: that dietary fat, even (if not especially) the saturated kind, is actually good for us. But that's not even her most impressive feat. She also rips the halo from the so-called Mediterranean Diet (which she distinguishes from the actual diets consumed by Mediterranean dwellers), exposing it as one part sound science and three-parts olive oil industry-funded (you read that right) hokum. (I'm still reeling from the revelation that olive oil is a relatively recent addition to the Italian and Greek diets.) And she shows why the food industry's recent rush away from trans fats—whose evils she herself helped establish in a 2004 Gourmet article—may actually be a net negative for public heath. (Partial spoiler: Unlike trans fats, which are artificially hardened vegetable oils, liquid vegetable oils generate lots of "toxic oxidative breakdown products" when they're held at high heat for an extended time—as they are in fast food industry's fry bins.) All in all, a must read.

• Defending Beef: The Case for Sustainable Meat Production, by Nicolette Hahn Niman. A longtime critic of industrial agriculture and a lawyer by training, Niman mounts a lawyerly case for pasture-based beef production. She does so from an interested position. She's the wife of Bill Niman, one of the nation's most celebrated grass-based ranchers. But critics who want to dismiss Niman's advocacy on economic-interest grounds have to grapple with the mountains of evidence she brings to bear. The main ecological question that haunts grass-fed beef involves climate change. Cows emit methane, a greenhouse gas far more potent than carbon, when they burp, which is often. But by grazing, they also promote healthy, flourishing grasslands, which suck carbon from the atmosphere and store it in soil. In doing so, they convert a wild vegetation that people can't digest into a highly nourishing foodstuff. So on balance, do cows contribute to or mitigate climate change?  The conventional view holds that the burps win. Niman casts more than reasonable doubt on that verdict. Citing loads of research, she argues that enteric emissions (methane from burps) are likely overstated and can be curtailed by breeding and techniques like abundant salt licks, and more than offset by the carbon-gulping capacity of intensive grazing (where farmers run dense herds through a pasture for a short time, and then give the land plenty of time to recover). She also shows that healthy pastures also provide plenty of other benefits, including habitat for pollinating insects and birds, which are declining rapidly as industrial grain farming—mostly for grain to feed confined animals—expands. Reading Niman alongside Teicholz makes you want to grill a steak—or, better yet, a fatty and nutrient-dense beef liver.

The Chain: Farm, Factory, and the Fate of Our Food, by Ted Genoways. If Defending Beef delivers a compelling vision for how meat can and should be produced, Genoways exposes—perhaps more clearly than any writer since Upton Sinclair—its massive human toll in an era of corporate dominance. Building on two long features published in Mother Jones (here and here), he lays out in withering detail the horrific conditions faced by workers in factory-scale slaughterhouses after decades of union busting and a relentless push to speed up the kill line. Having laid out the unsavory tale of the rare neurological disorder that overtook workers at a Spam factory in Minnesota in the mid-2000s, Genoways shifts to the plight of animals raised cheek-by-jowl in factory-like conditions, tended by workers under severe pressure to make them conform to their environment. Abuse—beating with sticks, kicking, etc.—is routine, Genoways shows; and the meat industry uses its considerable political clout to promote laws that ban efforts to expose it. Niman exhorts her readers to choose their meat "wisely and well"; Genoways reminds us of just how tricky that task is.

 

• The Meat Racket: The Secret Takeover of America's Food Business, by Christopher Leonard. How did the meat industry amass such power? To answer that question, the veteran agribusiness journalist Christopher Leonard teases out the rise of Arkansas-based Tyson Foods, which evolved after the Great Depression from a small country business to the globe's largest meat company. Today, it slaughters and packs about a quarter of the beef consumed in the United States, and a fifth of the pork and the chicken. Tyson developed the highly lucrative model that would come to dominate US meat production: grab hold of the profitable bits of the supply chain (selling feed and meat) and foist the risky bits (actually raising animals) onto farmers working under contract. As Tyson and other meat companies scaled up, they enticed farmers to scale up, too—taking on huge crushing debt burdens to build massive high-tech barns, keeping them subject to the whims of the big processors. Leonard has written the best account I know of on the serf-like conditions faced by farmers who operate under the heel of the meat giants.

• American Catch, by Paul Greenberg. Most recent books on the state of the oceans suggest we're eating too much seafood—that overfishing strains fish populations and contributes to their impending collapse. They're probably right in global terms, but in American Catch, the excellent fish writer Greenberg shows that we Americans, at least, are eating too little of it—and that our fish-averse ways are contributing to ecological degradation, not just in the oceans that surround us, but also on land, particularly in population-dense regions like New York City and the Gulf Coast. In rollicking prose worthy of a novelist—Greenberg's vocation before he took up seafood as his great topic—he spins out a compelling argument that goes like this: Despite the 3.8 billion acres of ocean that lie in US territory along more than 94,000 miles of coastline, we eat just 15 pounds of seafood per capita annually (vs. about 200 pounds of meat and poultry)—and 91 percent of that paltry amount is imported. As a result, we have little incentive to maintain our coasts as robust ecosystems. And so we pave over vital marshlands and salt flats, leaving coastal cities vulnerable to the ever-harsher storms promised by climate change. And we foul coastal waters with agricultural runoff and the pollution from near-shore oil drilling, sacrificing an abundant source of wild, healthy food. American Catch will leave you craving a couple dozen US-grown oysters—and a beer to help ease your pain at the folly he describes.

• The Third Plate: Field Notes on the Future of Food, by Dan Barber. Barber, a celebrated chef known for his obsession with farm-to-table cooking, offers a serious critique of the very trend that he rode to fame—and a vision for what comes next. The farm-to-table restaurant movement started in the 1970s, when chefs began to realize that decades of industrial agriculture had sapped ingredients of flavor. So they began to seek out more interesting produce from the few surviving small-scale farms, and helped spark a revival of agriculture focused on quality and flavor, not just volume and gross profit. But those innovative chefs never revised their vision of what Barbers labels the "first plate": a big chunk of corn-fed beef meat with a few vegetables on the side. "The steak was now grass-fed, the carrots were now a local, heirloom variety, grown in organic soil," he writes. "But inasmuch as it reflected all of the progress American food has experienced in the past decade, the striking thing about the second plate was that it looked nearly identical to the first." Using his considerable storytelling skills and his wide travels as fodder, Barber makes the case for a "third plate": a "new cuisine, one that goes beyond raising awareness about the provenance of ingredients and—like all great cuisines—begins to reflect what the landscape can provide." That is, a much more farm-centered, regionally adapted vision of the restaurant—one that puts what's being harvested at the center of the plate, not necessarily big, fancy cuts of meat. Bringing a Wendell Berry-like ecological vision to the role of the chef, Barber has produced a delicious read.

Republicans Cave In, Begin Traditional Holiday Backbiting, and Head For Home

| Wed Dec. 17, 2014 1:09 AM EST

Earlier today, Harry Reid pushed through Senate confirmations of Tony Blinken to be deputy secretary of State and Sarah Saldaña to head up Immigration and Customs Enforcement. At that point, Republicans, finally tired of staying in session and convinced that Reid wasn't bluffing about continuing to hold confirmation votes, caved in:

Dozens of nominees were confirmed unanimously or by voice vote as the clock ticked on, building on Democrats’ progress pushing through several bitterly contested nominations during the last days of their majority. After fighting Democrats tooth and nail for more than a year on lifetime judicial appointments, Republicans waved the white flag on fighting Reid’s attempts to confirm a dozen judicial nominations and allowed eleven of them to go through without dissent.

Wait. Dozens of nominees? How many dozen?

Democrats controlling the Senate also secured agreements from Republicans to confirm at least six dozen of President Obama’s nominees to serve as federal judges, agency bosses and on myriad government boards, a last-minute coup for the White House since most of the picks faced tougher odds next year once Republicans take full control of Capitol Hill.

And of course everyone knows who to thank for all this:

Most of the day was consumed with nominations, none more irritating to many Republicans than the ones who received a vote because of an impulsive move by one of their colleagues. And with the book now closed on the 113th Congress, they could go down as the Cruz Confirmations — the batch of the president’s nominees who were confirmed by the Senate only after Senator Ted Cruz, Republican of Texas, forced his colleagues to stay in session for 10 hours on a bleak December Saturday.

“No, we would not have had all of these 24 confirmations, and I think most people know that,” said Senator Orrin G. Hatch, Republican of Utah, referring to the two dozen nominees that Senator Harry Reid of Nevada, the majority leader, forced votes once Mr. Cruz made his move.

Merry Christmas!

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On Torture, Dick Cheney Isn't the Problem. We Are.

| Tue Dec. 16, 2014 6:50 PM EST

Rich Lowry is a satisfied man:

After a week of condemnations of the CIA interrogation program, and talk everywhere of how it violated our values and weakened our standing in the world, the verdict of public opinion is in: People support it....In the case of Cheney v. Feinstein, Cheney wins—at least with the public.

This is the most discouraging part of the whole torture debate. It's one thing to learn that Dick Cheney is every bit the vicious wretch we all thought he was. But time after time since 9/11, polls have shown that the American public is basically on his side. As a nation, we simply don't believe that a comprehensive program of state-sanctioned torture is wrong. On the contrary: we think it's just fine as long as it's done to other people. If we're a Christian nation, as we're so often reminded, we're still an Old Testament one.

The Great Paradox of Bitcoin: If It Ever Succeeds, It's Doomed

| Tue Dec. 16, 2014 2:55 PM EST

Will Bitcoin ever become a major competitor to the world's more conventional currencies? It certainly has some advantages over existing payment networks, thanks partly to its technical structure and partly to the fact that it's largely free of regulation. But Henry Farrell argues that its freedom from regulation is a chimera:

Up to this point, regulators have largely tolerated Bitcoin as a curiosity and experiment....But if Bitcoin were ever to threaten to become a truly decentralized payments network, owned by no one, and with no one e.g. capable of implementing Know Your Customer rules, regulators would know very well what to do with it. They’d introduce regulatory guidances and pass laws to freeze it off from the regular financial system. Very possibly, Bitcoin could still survive at the margins (as the Hawala system has survived). However, it would be isolated, and in no position to threaten Visa or Mastercard, let alone the underlying payment and messaging services that really underpin the world financial system.

If Tim Lee and other Bitcoin fans want to make the case that Bitcoin can become a major payment network, they need to do one of two things. First, they could show that the U.S. and other major states would not feel threatened by a well-established payment system that they couldn’t control. Second, they could show that a Bitcoin financial network would survive the opposition of hostile states that have enormous control over the actually-existing financial systems that Bitcoin needs to connect to, as well as regulators, police, etc. I don’t see any very plausible arguments that would support either claim. It’s perfectly possible that the underlying technologies of Bitcoin (which help solve some interesting problems of trust and exchange) can be deployed to other valuable uses. But Bitcoin is doomed as a payments network — the very point at which it looks as though it is likely to be widely deployed is the point at which governments, like that of the United States, will crack down on it.

This is almost certainly correct, and the interesting question, I think, is whether Bitcoin and its ilk can figure out ways to operate on a large scale without being effectively shut down by real-world governments. At the moment, I don't see any way they can do that, but it's not impossible that this will change in the future.

The evolution of the internet itself provides conflicting guidance as an analogy. Generally speaking, national governments have had considerable difficulty regulating internet content. It's just too distributed and fast moving. So perhaps digital payment networks similar to Bitcoin will eventually thrive because they pose similar problems to would-be regulators. Like kudzu, they'll simply be impossible to contain.

On the other hand, countries like China have shown that internet content can be regulated. It merely requires sufficient motivation. And even less authoritarian governments have managed to throw a lot of sand in the gears when they rouse themselves to action. Given that regulating commerce and money is easier than regulating content, this bodes ill for the future of Bitcoin. There's not much question that it can harried into uselessness if national governments decide to do it.

Still, there are lots of currencies in the world, and it's possible that a medium-scale version of Bitcoin could stay alive by remaining fairly modest in its connection to any one currency, but fairly large when all of its connections to all the world's currencies are added up. This might cause problems of coordinated action that would end up defeating national regulators, especially if there were dozens or hundreds of different digital currencies to deal with. Maybe. Possibly. I'm not sure if the arithmetic here would ever add up to anything significant, but I'm also not sure it's impossible.

But if I had to put money on it? I'd say Bitcoin is doomed in the medium-term future. Farrell is right: it can be a bit of a curiosity, but if it ever enjoys wider success, that very success will kill it.

This Is the Best C-SPAN Call of All-Time

| Tue Dec. 16, 2014 1:46 PM EST

The brothers Woodhouse sit staunchly on opposite ends of the political spectrum. They regularly take to C-SPAN to publicly squabble over their ideological differences. Their mother, Joy Woodhouse, has finally had enough:

"Oh god it's mom," a slightly panicked Dallas Woodhouse mumbles upon realizing the next caller is their mother.

Watch below as Mrs. Woodhouse awesomely takes down her sons' political bickering:

(h/t Washington Post)

This Little History Lesson Should Terrify Vladimir Putin

| Tue Dec. 16, 2014 12:58 PM EST

Why did the Soviet Union lose control of its satellite states behind the Iron Curtain in 1989? Lots of reasons, but the proximate cause was a disastrous war in Afghanistan; plummeting oil prices; and a resulting economic crisis. Here is Yegor Gaidar:

The timeline of the collapse of the Soviet Union can be traced to September 13, 1985. On this date, Sheikh Ahmed Zaki Yamani, the minister of oil of Saudi Arabia, declared that the monarchy had decided to alter its oil policy radically. The Saudis stopped protecting oil prices, and Saudi Arabia quickly regained its share in the world market. During the next six months, oil production in Saudi Arabia increased fourfold, while oil prices collapsed by approximately the same amount in real terms. As a result, the Soviet Union lost approximately $20 billion per year, money without which the country simply could not survive.

The Soviet leadership was confronted with a difficult decision on how to adjust....Instead of implementing actual reforms, the Soviet Union started to borrow money from abroad while its international credit rating was still strong. It borrowed heavily from 1985 to 1988, but in 1989 the Soviet economy stalled completely. The money was suddenly gone. The Soviet Union tried to create a consortium of 300 banks to provide a large loan for the Soviet Union in 1989, but was informed that only five of them would participate and, as a result, the loan would be twenty times smaller than needed.

The Soviet Union then received a final warning from the Deutsche Bank and from its international partners that the funds would never come from commercial sources. Instead, if the Soviet Union urgently needed the money, it would have to start negotiations directly with Western governments about so-called politically motivated credits. In 1985 the idea that the Soviet Union would begin bargaining for money in exchange for political concessions would have sounded absolutely preposterous to the Soviet leadership. In 1989 it became a reality, and Gorbachev understood the need for at least $100 billion from the West to prop up the oil-dependent Soviet economy.

....Government-to-government loans were bound to come with a number of rigid conditions. For instance, if the Soviet military crushed Solidarity Party demonstrations in Warsaw, the Soviet Union would not have received the desperately needed $100 billion from the West....The only option left for the Soviet elites was to begin immediate negotiations about the conditions of surrender. Gorbachev did not have to inform President George H. W. Bush at the Malta Summit in 1989 that the threat of force to support the communist regimes in Eastern Europe would not be employed. This was already evident at the time. Six weeks after the talks, no communist regime in Eastern Europe remained.

This sounds awfully familiar, doesn't it? War, sanctions, an oil crash, and finally bankruptcy. And while history may not repeat itself, it sure does rhyme sometimes: 25 years later Vladimir Putin has managed to back himself into a situation surprisingly similar to the one that led to the end of the Soviet Union and the final victory of the West—the very event that's motivated almost everything he's done over the past few years. This is either ironic or chilling, depending on your perspective.