I'm old enough to remember when a big European summit was supposedly a big step towards solving the never-ending crisis of the common currency. That was last week.
And the crisis is still never-ending.
That didn't stop markets from indulging in a bit of euro-phoria in the interim. It was understandable. Europe's leaders said all the right things -- even if the details were a little hazy. First, Europe's leaders said that countries wouldn't have to borrow money from the euro bailout fund to bail out their own banks. Instead, the euro bailout fund would bail out banks directly. Second, they said that any bailout loans would not be senior to other loans.
It sounded like Europe's leaders were finally learning from their mistakes. The most obvious such mistake was Europe's wildly unsuccessful bailout of Spain's banks. Just weeks before, Europe had announced that they were piling €100 billion ($123 billion) into Spain's failing banks -- and then watched Spain fall apart faster than ever. That wasn't supposed to happen. But investors were wary due to concerns that the deal increased Spain's public debt, and perhaps made that debt riskier for private investors by subordinating it. Now, Europe was admitting they had gotten it wrong.
It sounded too good to be true. It was.
The chart below from Bloomberg shows the yield on 10-year Spanish bonds over the past month. After nose-diving immediately after the big summit, they have spiked back into the danger zone above 7 percent. It's one step forward, and two steps back.
Why did this latest bout of euro enthusiasm evaporate so quickly? Because Europe's leaders reversed themselves so quickly.
Remember how Europe was going to stop making countries bail out their own banks? The permanent euro bailout fund -- the ESM, which doesn't even exist yet -- would do that. The idea was to break the so-called "doom loop" between weak banks and weak sovereigns. Well, it turns out that was a lie. The ESM -- if, you know, it's ever ratified -- will buy shares in banks, but with a very, very big caveat. That caveat is that the bailed-out country will have to insure the ESM against losses. This is a little like the house-on-fire being ultimately responsible for providing the water. What does that solve?
Guess what? It turns out that ESM loans might still be senior to other debt too. Finland's finance minister helpfully insisted on this point -- although it was always dubious whether the promise to abandon seniority ever amounted to much. Greek bailout loans were never technically senior -- until there was a debt restructuring, and they suddenly were. Still, this abrupt about-face didn't exactly give markets confidence that Europe's leaders agreed on what needed to be done.
It gets worse. Europe conditioned doing these big things -- which they subsequently said they wouldn't do -- on doing something even bigger. That's creating a banking union. In other words, a pan-European bank regulator that acts like a combination of the FDIC and TARP. And that really means sharing each other's debts -- a non-starter for the Germans unless other countries cede control of their budget-making to Berlin.
In other words, Europe has declared they won't save the euro until they create a United States of Europe. As Wolfgang Münchau of the Financial Times pointed out, that means the euro crisis will last for 20 years. Which really means the euro crisis will end much sooner -- Spain and Italy will leave the common currency long before that.
But don't worry. There are lots more summits scheduled in the fall.
Defining common cultural literacy for an increasingly diverse nation.
Is the culture war over?
That seems an absurd question. This is an age when Confederate monuments still stand; when white-privilege denialism is surging on social media; when legislators and educators in Arizona and Texas propose banning ethnic studies in public schools and assign textbooks euphemizing the slave trade; when fear of Hispanic and Asian immigrants remains strong enough to prevent immigration reform in Congress; when the simple assertion that #BlackLivesMatter cannot be accepted by all but is instead contested petulantly by many non-blacks as divisive, even discriminatory.
And that’s looking only at race. Add gender, guns, gays, and God to the mix and the culture war seems to be raging along quite nicely.
The Islamic State is no mere collection of psychopaths. It is a religious group with carefully considered beliefs, among them that it is a key agent of the coming apocalypse. Here’s what that means for its strategy—and for how to stop it.
What is the Islamic State?
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.
For centuries, experts have predicted that machines would make workers obsolete. That moment may finally be arriving. Could that be a good thing?
1. Youngstown, U.S.A.
The end of work is still just a futuristic concept for most of the United States, but it is something like a moment in history for Youngstown, Ohio, one its residents can cite with precision: September 19, 1977.
For much of the 20th century, Youngstown’s steel mills delivered such great prosperity that the city was a model of the American dream, boasting a median income and a homeownership rate that were among the nation’s highest. But as manufacturing shifted abroad after World War II, Youngstown steel suffered, and on that gray September afternoon in 1977, Youngstown Sheet and Tube announced the shuttering of its Campbell Works mill. Within five years, the city lost 50,000 jobs and $1.3 billion in manufacturing wages. The effect was so severe that a term was coined to describe the fallout: regional depression.
Former Senator Jim Webb is the fifth Democrat to enter the race—and by far the most conservative one.
In a different era’s Democratic Party, Jim Webb might be a serious contender for the presidential nomination. He’s a war hero and former Navy secretary, but he has been an outspoken opponent of recent military interventions. He’s a former senator from Virginia, a purple state. He has a strong populist streak, could appeal to working-class white voters, and might even have crossover appeal from his days as a member of the Reagan administration.
In today’s leftward drifting Democratic Party, however, it’s hard to see Webb—who declared his candidacy Thursday—getting very far. As surprising as Bernie Sanders’s rise in the polls has been, he looks more like the Democratic base than Webb does. The Virginian is progressive on a few major issues, including the military and campaign spending, but he’s far to the center or even right on others: He's against affirmative action, supports gun rights, and is a defender of coal. During the George W. Bush administration, Democrats loved to have him as a foil to the White House. It’s hard to imagine the national electorate will cotton to him in the same way. Webb’s statement essentially saying he had no problem with the Confederate battle flag flying in places like the grounds of the South Carolina capitol may have been the final straw. (At 69, he’s also older than Hillary Clinton, whose age has been a topic of debate, though still younger than Bernie Sanders or Joe Biden.)
“I’m not a vegetarian because I love animals. I’m a vegetarian because I hate plants.”
If the U.S. and Iran conclude a nuclear deal next week, the Islamic Republic stands to gain billions of dollars in eventual sanctions relief. But money isn’t the most important reason the Iranian leadership may be set to shake hands with its historic enemy after 18 months of negotiations.
“One of the most important reasons Iran is signing this deal, in my opinion ... is not actually sanctions,” said Vali Nasr, the dean of Johns Hopkins University’s School of Advanced International Studies. “It’s ISIS. There is actually support for this deal within the Revolutionary Guards in Iran, because their day job is right now fighting ISIS, and they need the United States, particularly in Iraq, on the right side of that fight.”
A European heat wave, lightning over California, a building made of 8,500 beer bottles, shrimp fishing on horseback in Belgium, the first-ever White House Campout, mine detection rats in Cambodia, and much more.
A European heat wave, lightning over California, a building made of 8,500 beer bottles, cosplay in Paris, shrimp fishing on horseback in Belgium, the first-ever White House Campout, mine detection rats in Cambodia, a train wreck in Pakistan, an airshow over St. Petersburg, Russia, and much more.
The retired general and former CIA director holds forth on the Middle East.
ASPEN, Colo.—Retired U.S. Army General David Petraeus pioneered America’s approach to counterinsurgency, led the surge in Iraq, served as director of the CIA for a year, and was sentenced to two years probation for leaking classified information to his mistress. On Wednesday at the Aspen Ideas Festival, he was interviewed by my colleague, Jeffrey Goldberg, about subjects including efforts to stop Iran’s nuclear program; the civil war in Syria; ISIS and the threat it poses to the United States; and the Iraq War.
Here are several noteworthy moments from their conversation, slightly condensed:
The Risks of Attacking Iran
Jeffrey Goldberg: So you believe that, under certain circumstances, President Obama would still use military force against Iran?
David Petraeus: I think he would, actually. I know we’ve had red lines that didn’t turn out to be red lines. ... I think this is a different issue, and I clearly recognize how the administration has sought to show that this is very, very different from other sort of off-the-cuff remarks.
Goldberg: How did the Obama administration stop Israel from attacking Iran? And do you think that if this deal does go south, that Israel would be back in the picture?
Petraeus: I don’t, actually. I think Israel is very cognizant of its limitations. ... The Israelis do not have anything that can crack this deeply buried enrichment site ... and if you cannot do that, you’re not going to set the program back very much. So is it truly worth it, then?
So that’s a huge limitation. It’s also publicly known that we have a 30,000-pound projectile that no one else has, that no one else can even carry. The Massive Ordinance Penetrator was under design for almost six years. ... If necessary, we can take out all these facilities and set them back a few years, depending on your assumptions.
But that’s another roll of the iron dice, as Bismarck used to say, and you never know when those dice are rolled what the outcome is going to be. You don’t know what risks could materialize for those who are in harm’s way.
You don’t know what the response could be by Iran.
There’s always the chance that there will be salvos at Israel, but what if they decide to go at the Gulf states, where we have facilities in every single one.
This is not something to be taken lightly, clearly.
People labeled “smart” at a young age don’t deal well with being wrong. Life grows stagnant.
At whatever agesmart people develop the idea that they are smart, they also tend to develop vulnerability around relinquishing that label. So the difference between telling a kid “You did a great job” and “You are smart” isn’t subtle. That is, at least, according to one growing movement in education and parenting that advocates for retirement of “the S word.”
The idea is that when we praise kids for being smart, those kids think: Oh good, I'm smart. And then later, when those kids mess up, which they will, they think: Oh no, I'm not smart after all. People will think I’m not smart after all. And that’s the worst. That’s a risk to avoid, they learn.“Smart” kids stand to become especially averse to making mistakes, which are critical to learning and succeeding.
Many veterans are suffering from a condition similar to, but distinct from, PTSD: moral injury, in which the ethical transgressions of war can leave service members traumatized.
Amy Amidon has listened to war stories on a daily basis for almost a decade.
As a clinical psychologist at the Naval Medical Center in San Diego, she works with a multi-week residential program called OASIS, or Overcoming Adversity and Stress Injury Support, for soldiers who have recently returned from deployments. Grief and fear dominate the majority of the conversations in OASIS: Amidon regularly hears participants talk about improvised explosive devices claiming the lives of close friends; about flashbacks of airstrikes pounding cities to rubble; about days spent in 120-degree desert heat, playing hide and seek with a Taliban enemy. Many veterans in the program are there seeking treatment for post-traumatic stress disorder.