Friday News Roundup — April 12, 2019: Iran’s Official Terrorists; Preserving the Fed’s Independence; Changes Coming in the Use of Race in College Admissions; Plus News You May Have Missed
Happy Friday from Washington, DC. The weather is warm and the nets have been cut down, so that must mean that the last vestiges of winter have finally been banished. Michael wants you all to know that he was victorious in our office’s March Madness Bracket Pool, a victory that comes with no prize and little prestige, except that delivered by you, our dear readers. Around the world, Binyamin Netanyahu appears to have won a fifth term as Israel’s Prime Minister, which will shortly make him the longest-serving leader in that country’s history. The European Union agreed to let the United Kingdom have six more months to decide what Brexit means, a process that will likely include a leadership struggle and growing chances of new elections.
For the policy team, however, all of this pales in comparison to the most important political question of our age: who will win the complicated conflict among Targaryens, Lannisters, Starks, Greyjoys, and the undead to rule Westeros. This will not turn into CSPC’s weekly Game of Thrones roundup, but not because we don’t secretly want it to.
In news that affects earth and its near-environs this week, Dan Mahaffee looks at the Trump administration’s designation of the Iranian Revolutionary Guard Corps as a foreign terrorist organization, Michael Stecher worries about the risks of politics infecting the Federal Reserve, and Chris Condon covers the changing rules that govern the use of race in college admissions, and we cover some stories both near and far that you may have missed.
U.S. Lists Iranian Revolutionary Guards as Foreign Terrorist Organization
Dan Mahaffee
On Monday morning, President Trump announced that the United States government was designating the Iranian Revolutionary Guards Corps (IRGC) a foreign terrorist organization (FTO). The IRGC joined a list that includes groups ranging from al Qaeda and ISIS to the IRA and Basque separatists. What was unique about the IRGC’s inclusion on the list is that, for the first time, an organization that is part of another government is included on the list of declared FTOs.
Certainly, Iran and the IRGC are no friends of ours, but in the complicated circumstances of the Middle East and counterterrorism, the United States has found itself fighting alongside IRGC-led and IRGC-affiliated forces in Iraq and Syria, as the shared threat of the ISIS caliphate made for strange bedfellows. But, before the shared threat of ISIS, IRGC-affiliated forces were one of the major threats to U.S. forces in Iraq. A recent Pentagon report suggested that approximately 17% of U.S. fatalities in combat were the responsibility of Iranian-backed militias. As Iran continues to further and consolidate its influence in Syria, Lebanon, Iraq, and Yemen, the IRGC has been the tip of Iran’s spear.
In the near term, this step is unlikely to change the level of pressure on the Iranian regime. Existing sanctions measures have already served to isolate much of the Iranian economy as the Trump administration has pursued its “maximum pressure” strategy. Furthermore, even with this designation, there is likely to be little impact on the IRGC’s existing operations to push Iranian influence throughout the Middle East and beyond. None of the previous, strict measures applied to Iran have changed the reality on the ground.
Beyond the IRGC’s military role, it fills an amalgamation of roles in the Iranian government, and its influence throughout the economy and political system is widespread. Mohsen Sazegara — once a founding member of the IRGC and now an exiled dissident in the United States — described the group as “something like the Communist Party, the KGB, a business complex, and the Mafia.” In parts of impoverished rural Iran, the IRGC serves as the only source of economic investment, and employment in their Basij militia provides one of the few paths to a steady paycheck. Thus, the IRGC provides some economic stability, while also recruiting the reactionary militiamen from rural Iran who suppress dissent in cosmopolitan urban Iran.
Still, while the IRGC remain a significant threat to U.S. interests, their designation as an FTO raises more significant long-term questions. First, there is the fact that we have now declared part of a foreign government to be a terrorist organization. The concept of a terrorist organization was defined to reflect that non-state actors were seeking their political aims through performative violence, thus challenging the state-held monopoly on the use of force. Furthermore, it continued the uniformed versus non-uniformed distinction of combatants that is the foundation for many of the laws of conflict and other legal frameworks. In an era where gray-zone conflict, hybrid warfare, and other conflicts that blur these lines become more common, what are the delineations? Iran has already countered by declaring the forces of U.S. Central Command to be a terrorist organization. Would Russian forces supporting Ukrainian separatists warrant such a designation? Chinese fishing militias? What if other powers apply such designations to U.S. Special Forces, CIA drone operators, or U.S. and allied intelligence agencies?
Beyond the legal and diplomatic Pandora’s Box, there is fundamental strategic impasse. While the U.S. efforts have backed Iran into a corner, the Europeans and Russians have provided plenty of prospective relief valves for Tehran. This will make containment of Iran nearly impossible, and U.S. leverage will lessen. It’s hyperbolic to suggest that this new measure means conflict is imminent. Neither the United States or Iran can afford open military conflict, but nothing in the Trump administration’s current approach suggests a realistic pathway towards changing Iran’s posture. Conflict may still be far down the road, but the lack of off-ramps should be the real concern.
Partisanship Would Undermine the Federal Reserve’s Functioning
Michael Stecher
“Some conspiracy theorists out there have criticized [the Federal Reserve] as a secretive cabal that only benefits the well connected, when in fact the Fed is merely an extra-constitutional Star Chamber that controls our monetary policy with no oversight.”
In that segment, “Stephen Colbert,” the blowhard host of the Comedy Central’s dearly departed The Colbert Report and former Daily Show correspondent played by former Daily Show correspondent and CBS Late Show host Stephen Colbert, makes fun of the structure of America’s central bank — the Federal Reserve System — and its opaque decision-making process. He concedes, however, that, “we don’t need to know what they’re doing as long as we think they know what they’re doing. That makes the economy strong, which means whatever they did was right, which means they know what they’re doing.” With two announced nominations to the Fed’s governing board, however, President Trump has made it clear that he would like to oversee the central bank’s decisions and that he is willing to trade our collective faith in the good functioning of the institution in order to do it.
Last Thursday, President Trump announced the nomination of former restaurant magnate and Republican political operator Herman Cain to an open seat on the Federal Reserve’s Board of Governors. Last month, he similarly nominated Trump campaign advisor and former Wall Street Journal editorial page writer Stephen Moore to a seat. Unfortunately, both men have economic views that are functions of their political goals, which is anathema to the health of the economy and the stability of the financial system.
If you took an introduction to macroeconomics course, you probably learned that a country’s central bank tries to smooth the effects of the business cycle and keep inflation in check. When the economy is slowing down, lowering interest rates makes it less expensive to borrow money and less remunerative to save it. This encourages companies and consumers to spend, which can either avert or minimize the damage from a recession. When the economy is humming along, however, interest rates that are too low will cause prices to rise and inflation will eat into people’s savings. Both Cain and Moore got this exactly backwards: in February 2009, when the economy was still in recession, Moore argued that the Fed’s policy of low interest rates would cause hyperinflation, summoning images of Germany in the early 1930s. Moore also flirted with calling for a return to the gold standard, a policy under which the value of a dollar is fixed to a certain quantity of physical gold; in 2012, Cain explicitly called for it as a way to stop the “looters and moochers in government.”
As an aside, the gold standard is a dangerous political fantasy masquerading as economic policy. With a gold standard, when the economy begins to slow, it can enter a death spiral. Defending gold requires the government to restrict lending when the economy needs it most and allow bank runs, which happened in the U.S. in both 1931 and 1933 before the Roosevelt administration abandoned the gold standard. The University of Chicago polled academic economists about the gold standard in 2012, 100% of the respondents agreed that it would be bad for the average American (and the comments in the margins really are pure gold: my favorites are “love of the [gold standard] implies macroeconomic illiteracy,” “Why tie to gold? Why not 1982 Bordeaux?” and “eesh. has it come to this?”)
But that was a long time ago! Now, when the economy is in strong shape, Cain thinks we should not fear inflation and Moore wants a rate cut saying that the Fed is “suck[ing] more dollars out of the economy at a time when the world is demanding more dollars — thanks to Trump’s tax-cutting and deregulation policies.” Despite Moore’s comment being a total word salad, as statements of fact, both have some merit; there are signs that the economy still has slack (most notably that employers keep hiring more workers every month but wage growth is still not that high). The problem is the rationale for these changes of heart. Rather than following the business cycle, Moore and Cain are demonstrating that they are primarily interested in the political cycle. When a Democrat was in office, loose money was going to turn us into Zimbabwe; now that a Republican sits at the Resolute Desk, tight lending standards are going to tank the economy regardless of the underlying economic conditions. This same effect is clearly visible when looking at concerns about fiscal policies that increase the national debt: the out-party rails against deficits; the in-party supports targeted stimulus. The GOP went from “Reagan proved that deficits don’t matter” to the Tea Party revolt in 2 short years — in contravention of sound economic advise — and are back to ignoring fiscal discipline when “steady as she goes” would be the right course.
Voters consistently say that the economy is among the most important issues that affect their voting behavior so it makes a perverse partisan sense to try and sabotage the economy when your opponents are in power and goose it when your allies are. Economists call it the “political business cycle” and it is a trait of banana republics rather than well-governed advanced economies. It results in an inefficient allocation of economic resources, courts inflation and exacerbates recessions. While it is bad enough in fiscal policy, it is especially dangerous with monetary policy. As I have written many times in these pages, the United States benefits from enhanced prestige, reduced borrowing costs, and unique policy making capabilities from the dollar’s position as the international reserve currency. That position, however, relies on global investors’ belief that the dollar is the safest investment in the world. A long tradition of technocratic, apolitical Fed governors have steadfastly maintained their faith but, by nominating explicit partisans like Moore and Cain, President Trump has made it clear that he has a higher goal for the Fed than that: participating in an explicitly political project to support his reelection. Exchanging long-term monetary stability for such a short-term gain would be a very expensive trade indeed.
Race-Based Admissions on the Chopping Block
Chris Condon
After their defeat in the final game of the NCAA Men’s Division I Basketball National Championship Tournament, you may have thought things couldn’t get much worse for Texas Tech. In that case, you would have been proven wrong by the Department of Education, which mandated this week that the school must cease using the characteristic of race in all admissions decisions. Although it may seem that this action is unique to an administration that has had a complicated relationship with racial issues, it is in fact a symptom of a larger historical battle over the practice of affirmative action. In their implementation of this policy, the Trump administration applies the letter of the law as it is written, which is at odds with past federal policies and Supreme Court jurisprudence.
The Supreme Court has ruled multiple times on the legal challenges of race-based admissions, and its evolving jurisprudence has shaped the practice since its inception. Although not a direct ruling on affirmative action, Griggs v. Duke Power Company (1971) was arguably the first case to demonstrate the Court’s posture towards race-based treatment following the 1964 Civil Rights Act. In that case, the a unanimous court ruled that policies which discriminate indirectly against a certain racial group (in this case requiring unnecessary aptitude tests and a high school diploma for a promotion) violate federal law. The controlling legal framework in this case was Title VII of the 1964 Civil Rights Act, which prohibits employment discrimination on the basis of race, color, or national origin.
When shifting to racial considerations in university admissions, the Court changed their tune from Griggs. In Regents of the University of California v. Bakke (1978), the first of such rulings that provided a substantive ruling, the justices took a more measured approach to racial discrimination than in past cases. As with the decision in Griggs, they decided that the racial quota system utilized by the University of California in their admissions system violated the Civil Rights Act of 1964, forcing the school to admit a qualified white applicant who was excluded because of the quota. However, a five-justice majority endorsed the principle of race as a consideration in admissions, but qualified this by stating that it may only be one factor among many. The minority, led by Justice Stevens, more bluntly returned to the principle set forth in Griggs: “[t]he meaning of the Title VI ban on exclusion is crystal clear: Race cannot be the basis of excluding anyone from a federally funded program.”
Since Bakke produced six separate opinions and much division among the justices, clarification was needed. Grutter v. Bollinger and Gratz v. Bollinger (2003) provided just such a blueprint, outlining what circumstances permitted the use of race in admissions decisions. Justice O’Connor, writing for the majority, reaffirmed the precedent set in Bakke in her Grutter decision. Therein, she opined that creating racial diversity on campuses is a compelling interest of the state, so race is an appropriate consideration if it sits among other characteristics. She also mused that affirmative action will become decreasingly necessary over time as educational opportunities equalize, leaving room for movement in future cases. Gratz also maintained consistency with Bakke, holding that a point system which awarded a large numerical value to applicants of minority status put too much value on racial considerations and amounted to impermissible discrimination.
The most recent case(s) to wade into college admissions was Fisher v. University of Texas, which was heard in both 2013 and 2016. In its first hearing, the Court ruled similarly to Gratz that any policy that takes race into consideration must be narrowly tailored to serve a compelling state interest. Since the appellate court had not applied this strict standard (“strict scrutiny”) in their judgement, the Supreme Court remanded the case for further review. When Ms. Fisher returned to challenge the University’s policy specifically, the Court this time found that the admissions policy had passed constitutional muster under the application of strict scrutiny by the lower court. In essence, this case reaffirms the general principle that race may be considered as an admissions factor if tailored narrowly to promote racial diversity.
The Trump administration, on the other hand, taps into the tradition conceived by conservative minorities in each of the above cases. Although the Obama administration took a rather broad view of permissible racial considerations when enforcing anti discrimination laws, the Department of Education now takes a different approach. Rather than attacking affirmative action by frontal assault, the administration takes the position that schools are wielding race unnecessarily, and that other factors such as socioeconomic status could be used to promote the same diversity the schools hope to achieve by using race. In this way, they employ a more literal interpretation of the 1964 Civil Rights Act, which states patently that “[n]o person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.”
The discussion of whether affirmative action serves a laudable purpose is best saved for another time and place. What must now be said is that the Civil Rights Act of 1964 prohibits all racial discrimination unequivocally, and the government’s action against Texas Tech enforces this faithfully. Alongside recent challenges to the admissions policies of Harvard and Yale that allegedly disadvantage Asian-American applicants, it demonstrates a new chapter in the textualist pedigree of opposition to affirmative action.
Stories You May Have Missed
Sudanese President Deposed by Military
Zachary Pendolino
After holding power for almost 30 years, Sudan’s President Omar al-Bashir has been arrested and the Sudanese military has taken over the country in a military coup. A large opposition movement has been calling for al-Bashir’s removal from office for months and a transition to democracy, but the future of Sudan seems uncertain with a military council in control. Sudan’s defense minister says that the military council is only transitional, but that it will rule the country for at least two years until democratic elections take place. Opposition protesters are celebrating that al-Bashir is in military custody after committing genocide and crimes against humanity, but are wary about what the future of their country holds.
Trump Administration Changes Obama Policy On Cuban Baseball Players
Alec Mancini
There are some who argue that the Trump Administration is determined to overturn everything with President Obama’s name on it. While we at the Center are not in the business of prescribing motivations to presidents, we are in the business of providing interesting news stories, regardless of if they may be used to fulfill certain narratives. This week, the administration took the step of reversing an Obama-era policy which pertained to Cuban baseball players. The policy in question had allowed Cuban baseball players to sign with U.S. teams without needing to initially defect from their homeland. With the reversal, if a Cuban baseball player would like to sign with a United States team, that player will now need to defect first. The reversal of this seemingly innocuous policy can be viewed in the broader context of the changing status of relations with the island nation.
Unmanned Israeli Moon Mission Crashes
Zachary Pendolino
After a main engine failure, the first privately funded lunar mission has crashed on the surface of the Moon. Backed by privately funded Israeli non-profit SpaceIL and Israel Aerospace Industries, the Beresheet spacecraft cost about $100m, a fraction of the cost of a normal lunar mission. Having been launched on February 22nd with a SpaceX Falcon 9 rocket to cut costs, the spacecraft took an unusual route to the moon. After circling the Earth in ever-widening orbits, Beresheet moved into lunar orbit last week. In an attempt at a soft landing on the moon, the spacecraft attempted to fire its engine to slow down its orbital speed but technical and communication problems forced it to crash.
First Images of a Black Hole Released
On April 10th, the National Science Foundation released the first image ever captured of a black hole. Previously, images of the cosmic phenomena were only available through artists’ renderings or computer models, because black holes can only be observed indirectly and are (thankfully) far far away. The image itself was captured by a network of eight telescopes across the globe combining their power to create a collective image, a feat only recently deemed possible. It also helps that the black hole is 6.5 billion times more massive than the sun. Nevertheless, the image is a momentous achievement; one scientist remarked that “[t]his is the equivalent of being able to read the date on a quarter in Los Angeles, standing here in Washington, D.C.”
Julian Assange Arrested in London
Wikileaks founder Julian Assange was arrested by British police on Thursday after his asylum was revoked. Assange had taken shelter in the Ecuadorian embassy in 2012, after Swedish authorities charged him with sexual assault. Fearing that going to Sweden would mean extradition to the U.S. to be tried for his role in leaking classified documents related to the Iraq War in 2010. Prosecutors also allege that Assange was involved in Russian interference in the 2016 presidential election and used his position as a revealer of America’s secrets to function as a Russian intelligence asset.
Louisiana Man Arrested for Arson Attacks on Historically Black Churches
Authorities in Opelousas, LA, arrested Holden Matthews in connection with a series of fires that have destroyed three historically black churches in ten days. Matthews, the son of a sheriff’s deputy, was arrested following an investigation by state and federal officials. While federal officials continue to investigate whether the arson attacks were hate crimes, the Louisiana State Fire Marshal suggested that Mr. Matthews’s affinity for “black metal music” may be a factor. (Insert eyeroll emoji -Ed.)
Measles Outbreak in Brooklyn
New York City Mayor Bill de Blasio declared a public health emergency on April 9th in the face of a growing measles breakout in Brooklyn. Among Orthodox Jewish communities, education campaigns and partnerships with Rabbis to distribute vaccines have been unsuccessful, so the city has decided to take more drastic measures to compel vaccination. Even requiring all public school students to be vaccinated did not extinguish the spread of the disease, so now de Blasio’s administration has instituted compulsory vaccinations for the city’s population. This outbreak is part of a larger nationwide spread this year, with 465 cases reported since January. Similar outbreaks have also sparked a larger debate over the role of mandatory vaccines and their role in American society in the face of a growing anti-vaccine movement.
U-2 Images Reveal Lost Archaeological Sites
Two researchers this week revealed that they had uncovered high-resolution photos of lost archaeological sites in a collection of declassified U-2 images. Emily Hammer of the University of Pennsylvania and Jason Ur of Harvard University knew of the collection of photographs that had been declassified nearly two decades ago, but have only now completed the formidable task of cataloguing and scanning each image. For archaeologists, high-resolution aerial photos can be difficult to obtain, and satellite imagery from the era is rare. U-2 spy planes, however, were designed in the Cold War era to be able to capture detailed images of enemy military activities. Now, scientists can use the images to discover sites that may have been covered up or destroyed since the photos were taken.
The views expressed by contributors are theirs and not the view of CSPC.
