Friday News Roundup — February 1, 2019: La Revolución en Venezuela; A Third Party Foul?; and Stories You Might Have Missed
This week, nearly 2 million government employees and contractors who had been furloughed by the 35-day partial government shutdown went back to work, but, with only two weeks of appropriated funding left, both parties, both houses of Congress, and both ends of Pennsylvania Avenue are maneuvering to control the story of what happens next. For us in Washington, the other major story was the blast of arctic air that brought local temperatures to their lowest levels in years. The CSPC policy team, however, all hail from more northern climes and are happy to tell you all about how cold it was when we used to have to go to school (15 miles in the snow, uphill both ways!).
In this week’s roundup, Michael Stecher summarizes the revolutionary moment in Venezuela and how U.S. policy can affect the outcome, Chris Condon analyzes the presidential campaign launch of former Starbucks CEO Howard Schultz in the context of other third-party bids. As always, we wrap up with stories you might have missed, including one from our newest policy intern, Alec Mancini. Dan Mahaffee is on assignment this week.
The Crisis in Caracas
Michael Stecher
Over the last three years, the conditions in Venezuela have begun to resemble Germany in the early 1930s: hyperinflation, rolling blackouts, critical shortages, and a massive refugee crisis. Venezuelan President Nicolas Maduro has responded to the increasingly dire situation by drawing from the dictator’s handbook. He has encouraged corruption, rigged elections, and viciously cracked down dissenters. Last week, the leader of the opposition in the National Assembly, Juan Guaido, declared that the last presidential election had been stolen and the office was effectively vacant, naming himself interim president. The United States, which has long opposed the Maduro government, recognized Guaido, reflecting the revolutionary stakes of the moment. Achieving a democratic transition in Venezuela without war or bloodshed will require vision and coordination from the Trump administration. So far, they have done well in this crisis, but those are not terms often associated with this White House.
Students of history will recognize the revolutionary moment taking place in Caracas as being like Egypt’s Tahrir Square in 2011, Iran’s Green Movement in 2009, Ukraine’s Orange Revolution in 2004–5, not to mention 1917, 1848, or 1776. When a regime totters, all the major players line up one side of the barricades or the other and it is this resolution that determines how the subsequent conflict will play out. If the political elites and the military back the protestors, the government can be swept away in a quick coup like Romania’s Ceauşescu. When the regime’s supporters stay loyal, the uprising is put down, often brutally like in Tiananmen Square in 1989. If some elites and military units come down on either side, the result is often a civil war, like the one that began in Syria in 2011. Whether Maduro follows the path of the Shah of Iran, Muammar Qaddafi, or Bashar al-Assad will be decided in the next few weeks by this behind-the-scenes horse trading.
The United States has a very important role to play in this negotiation. Aside from its role as the leading global power and hemispheric titan, the United States is also the most important market for Venezuela’s most important export: crude oil.
Many readers may not realize that when they go to the Citgo station to fill up their cars, they are patronizing the American subsidiary of the horrifically mismanaged, thoroughly corrupt Venezuelan state oil company, PdVSA. Payments from the oil sector are a major way by which Maduro funnels wealth to his supporters, so U.S. sanctions, like the ones announced by the Treasury Department on Monday, have the potential to change the risk-reward calculations of members of the Venezuelan elite.
In addition, there is cash belonging to the Government of Venezuela and Central Bank of Venezuela in U.S. banks. This could include physical gold stored at the Federal Reserve Bank of New York, deposits to facilitate international currency transactions, or regular accounts for payments and receipts. According to Section 25B of the Federal Reserve Act of 1913, all of these accounts belong to the entity recognized by the United States as the official representatives of the Venezuelan people. Since that is now the government of interim President Guaido, it means that the Maduro regime faces an additional hurdle in transacting in the normal business of its governance.
Officials have also hinted in recent days that military intervention is also under discussion. On Monday, National Security Advisor John Bolton told reporters that President Trump “has made it clear that all options are on the table,” using the well-worn American idiom for military threats. At that briefing, Mr. Bolton was holding a yellow legal pad on which he had apparently written, “5,000 troops to Colombia.” An American military intervention, however, would be a mistake. It would torpedo Guaido’s claim to democratic legitimacy and validate those who — incorrectly — view the crisis through the lens of yanqui imperialism or oil mercantilism. Instead, the United States needs to show a mix of carrots and sticks: humanitarian aid and economic assistance to be distributed by Guaido’s government and assurances to as many members of the elite as ethically possible that they will not face prosecution if they step aside; sanctions, seizures of illicit funds, and, eventually, prison for those who hang on until the end or have blood on their hands.
A war of choice must be clearly preferable to all other policy options and competing strategic priorities before it makes sense, and the forcible overthrow of Nicolas Maduro does not rise to that level at this point. It is clear that President Trump dislikes the process by which policy tends to be made in the Executive Branch. He will need that policy process, however — overruling the national security advisor whose job is managing this process if necessary — if he wants to ensure that his stated goal of seeing Maduro leave power takes place without bloodshed.
A Venti Problem for Democrats
Chris Condon
This week, Starbucks pioneer and billionaire Howard Schultz announced that he was actively considering a bid for the presidency. This news, however, was met with instant hostility from Democrats, as Schultz clarified that he is considering an independent campaign rather than vying for the Democratic nomination. His potential to jump into the race as a third-party candidate situates the billionaire among the storied lineage of past third-party candidacies for the nation’s highest office; as parties drift from their former positions, those left behind can become disaffected, and may challenge the new direction from within the party (as with Ronald Reagan’s challenge to Gerald Ford in 1976), or from the outside. These provide rich historical examples for how the 2020 campaign may play out if Schultz follows through on his plan.
In 2000, Ralph Nader was seen by the political mainstream as a wingnut, someone who could never seriously contend for the presidency. In large part, they were correct, as Nader ended up with zero electoral votes. That said, what made the Green Party candidate’s run so memorable was his impact on the major party candidates, rather than his own electoral success (or lack thereof). Nader scratched the itch of a specific segment of the Democratic party, that felt the party lost its way under Clinton and Gore. To them, Clinton and Gore’s policy of triangulation made them no better than the Republicans who trounced them in 1994. Since Nader ran far to Gore’s left, he captured a small but important group that, especially in Florida, may have been enough to throw that state, and the presidency, to George W. Bush.
Ironically, the tables were turned on the Bush family in 1992. While President George H.W. Bush was popular for his swift victory in the first Gulf War, his domestic agenda saw comparatively little support. Businessman Ross Perot saw an opportunity, and threw his hat into the ring as a homespun alternative to the patrician President Bush. Centered around Bush’s defunct “read my lips” pledge, Perot ran as a common-sense populist, fed up with Washington politics and ready to take on the establishment. Although he garnered a whopping 19% of the popular vote, he received no electoral votes, and acted mainly as a spoiler to Bush’s candidacy. If Perot hadn’t run and Bush was only able to snatch three quarters of Perot’s supporters, he would have beaten Clinton 52% to 48%. Like Nader, Perot tapped into a sentiment that Bush was out of touch with the concerns of regular Americans, especially those who suffered when he broke his promise of “no new taxes.”
Moving even further back into the 20th century, the examples of George Wallace and Strom Thurmond come to mind as important third-party challengers. In 1968, Wallace ran squarely on the sentiment that the Democratic Party, at that point the home of segregationists and Klansmen, had moved too far toward the center and away from its legacy of “states’ rights.” He ended up with a sizeable 46 electoral votes and siphoned off over 13% of the popular vote from the other candidates, helping ensure that Hubert Humphrey was resolutely trounced by Richard Nixon. Strom Thurmond of South Carolina ran on a similar platform, alleging that President Truman had abandoned the interests of the South. Although he wasn’t successful enough to act as a spoiler for Truman, he achieved victory in four states and forced a conversation in the Democratic Party about its southern constituency.
In 1912, former President Theodore Roosevelt mounted what is perhaps the most successful third-party presidential campaign in history. After retiring in 1908, he jumped back into the fray against his friend and former protege: President William Howard Taft. Roosevelt, becoming more liberal in his old age, ran as a true progressive, a champion of the common man who could not even be stopped by a bullet in the chest. A phenomenally popular figure in American politics of the period, Roosevelt appealed to those that found Taft’s relative conservatism unappealing but were unconvinced by Woodrow Wilson’s commitment to progressive causes. In the end, Wilson won with 435 electoral votes and 41% of the popular vote; however, Roosevelt secured 88 electoral votes and an astonishing 27.4% of the popular vote, beating the incumbent President Taft.
In their hostility to Howard Schultz, it seems likely that Democrats fear their nominee will become another Taft. In a sense, this situation is most similar to that which would exist if Schultz were to enter the race: a wealthy, centrist former Democrat against a possibly far-left Democratic nominee and President Trump, whose right-wing populism has a strong grip on Republican voters. Just in the last week, Schultz has clashed with popular figures such as Alexandria Ocasio-Cortez (calling her “a bit misinformed” over her 70% top tax rate proposal) and Kamala Harris, whose proposal to “get rid of” the free market he called “not American.” As a fiscal conservative and a social liberal, Schultz hopes to appeal to the center of American politics, which is seemingly a vacuum with no presence to fill it. Just as with the examples above, as the party drifts leftward, a lifelong Democrat becomes disaffected with the organization and challenges it from the outside.
With media outlets pumping out unfavorable takes on Schultz’s possible candidacy and no shortage of confrontational interviews, the Democratic establishment seems to be acting in their political self-defense. Although Howard Schultz is a lifelong Democrat whose journey from poverty to affluence is a true American tale, his independent candidacy could spell doom for the Democratic nominee.
Stories You May Have Missed
Rand Paul KOs Assailant (in Court)
In November of 2017, Kentucky Senator Rand Paul’s neighbor assaulted him in his own front yard, breaking six of his ribs. Rene Boucher, 59, asserted that the attack was not politically-motivated, but centered around Paul’s penchant for leaving piles of leaves in Boucher’s yard. Charged with assaulting a member of Congress (a felony), Boucher was sentenced to just one month in prison and paid a $10,000 fine. This Thursday, a verdict in a lawsuit between Paul and his neighbor was handed down, with a jury awarding the Senator $580,000 for damages and medical expenses. Boucher’s lawyer relayed the fact that he would appeal the judgement.
Foxconn Factory Flops Despite Generous Tax Breaks
Foxconn, the Taiwanese electronics company, made a much-ballyhooed agreement with former Wisconsin Governor Scott Walker. The promised to construct a massive factory, employing 13,000 Badger Staters, 75% of them in factory jobs making flat-screen TVs, in exchange for over $4 billion in subsidies. Former House Speaker Ryan and President Trump touted the agreement as evidence that they were reinvigorating American manufacturing. Now Foxconn executives say that they will focus on research and development at the Wisconsin site, leading many to believe that few, if any, blue-collar jobs will emerge.
United Arab Emirates Uses NSA Veterans to Spy, Including on Americans
Lori Stroud worked at the NSA for 11 years, first as a member of the military, then as a contractor. Later, she was hired by a small cybersecurity contractor doing counter-ISIS work for the United Arab Emirates. They quickly began to be tasked with spying on dissidents, human rights advocates, and journalists. Within a year, they were tasked with acquiring information on Americans, a bright ethical line that U.S. intelligence agencies can only cross with a court order and putting her actions under the gaze of the FBI. This story raises important questions about the means by which partners in the War on Terror are appropriating American technical assistance for their own ends, as well as how export control for cyber weapons should work when the weapon in question is entirely houses between a programmer’s ears.
Equality Act Finds New Life in the 116th Congress
Alec Mancini
The defining issues of the recent midterm elections included healthcare, economic policy, and the appropriate role of congressional oversight over the Trump Administration. One policy measure that did not receive much attention, but which is high on the priority list for House Speaker Nancy Pelosi is the Equality Act. The Equality Act, which could not get a vote under the Republican majority, would amend the Civil Rights Act of 1964 to prohibit discrimination on the basis of sexual orientation and gender identity. The Equality Act illustrates of the nation’s increasing political and social divide, while also portends the desire of newly emboldened Democrats to propose legislation with the partial intention of making their Republican counterparts look bad.
