Upping the Ante of Geopolitical Blackmail: Duterte Tells US Government: Time for You to Leave!

Last weekend I wrote,

The administration seems to be applying a tacit blackmail stratagem at the US: “if you push hard on my war on drugs, then we will shift allegiance to China!”

It’s not tacit anymore.

From today’s headlines (Inquirer):

PRESIDENT Duterte said on Monday he wanted U.S. forces out of his country’s south and blamed America for the restiveness of Muslim militants in the region, marking the first time he publicly opposed the presence of American troops in the country.

Duterte has had an uneasy relationship with the U.S. since becoming president in June and has been openly critical of American security policies. As a candidate, he declared he would chart a foreign policy that would not depend on America, his country’s treaty ally.

The U.S. military in 2002 deployed troops to train, advise and provide intelligence and weapons to Filipino troops battling the al-Qaida-linked Abu Sayyaf militants in the southern Philippines. When the American forces withdrew in February last year, U.S. officials said a smaller contingent of U.S. military advisers would stay. Details of the current U.S. military presence in the south were not immediately available.

Duterte did not mention any deadline or say how he intends to pursue his wishes. The U.S. Embassy did not immediately issue any reaction.

(bold mine)

I’m all for “independent foreign policy” and “non intervention”, but then again that’s not the real issue. It’s a smokescreen. The main issue has been the ochlocratic ad hominem (path to dictatorship) politics that has now been reinforced through “geopolitical blackmail”.

Actions have consequences.

In the same weekend note I observed: “much will now depend on the feedback mechanism between the parties involved as with those associated with them.”

If the Philippine government makes real of the threat to undermine the interests of the shadow but powerful and highly influential political forces behind Washington—the neo-conservative and military industrial complex—then potential responses or repercussions may have already been set in motion. To repeat:

 -This would eventually prompt US rating agencies credit downgrades—especially if US military interests are compromised.

-This would reduce investment and portfolio flows from US and allied nations.

-Credit flows will likely ebb too, thereby putting pressure on access to international credit markets and thereby tightening financing conditions. This will be baneful to a leftist government with a penchant for political spending profligacy: social spending (welfare state), bureaucracy, infrastructure, and most importantly, the military institution.

 The reduced access to credit and fund flows will likely accelerate on the unraveling of the mounting economic and financial imbalances inherited by this government from the previous two regimes.

-The Philippine government will be alone to deal with territorial disputes. (This should be a good thing if only the Philippines government’s response would be to increase trade rather than through brinkmanship politics)

-Finally, it would be a lot cheaper or cost effective for the US government to engage in covert operations to influence the domestic political environment than to pullout from the country. The US government may surreptitiously work to offset whatever leverage the administration has been building to countermand the US government’s influences in the country. The US government has been no stranger to the financing, influencing and orchestrating destabilization to regimes it perceives as hostile to its interests. Operation Gladio should be stark reminder.

Unpredictable behavior?

Leftist governments virtually operate on the same set of actions

Ben Bernanke on Debt Ceiling: Only I am Allowed to Dabble with Politics!

US Federal Reserve chairman Ben Bernanke warns that the US debt ceiling should NOT be used as a bargaining chip.

Yet he goes on to talk down on the supposed nasty implications of NOT raising the debt ceiling

From the UK’s Telegraph,

Federal Reserve Chairman Ben Bernanke said the US could lose its AAA credit rating and create a new crisis in the financial markets if it does not raise the cap on government debt.

Mr Bernanke warned that if the $14,300bn (£8,784bn) debt ceiling was not lifted quickly there could be disastrous consequences.

"Even a short suspension of payments on principal or interest on the Treasury's debt obligations could cause severe disruptions in financial markets and the payments system, induce ratings downgrades of US government debt, credit fundamental doubts about the creditworthiness of the United States, and damage the special role of the dollar and Treasury securities in global markets in the longer term," he said.

American journalist and libertarian H. L. Mencken once wrote,

The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.

By putting pressure on the opponents to raising the debt ceiling, Mr. Ben Bernanke is essentially saying,

I am the only person entitled to do politics, because I am the expert and everybody else does not know what they are talking about.

Apparently Mr. Bernanke is using 'fear' from 'hobgoblins' as leverage to reach a political compromise.

Of course, we also know how much of an expert Mr. Bernanke is considering his highly inspirational track record.

President Obama’s Use of Regime Uncertainty and the Political ‘Government Shutdown’ Blackmail

All of a sudden, President Obama embraces the Austrian perspective of Regime Uncertainty (Robert Higgs).

From the Washington Post, (hat tip Russ Roberts)

At a town hall meeting near Philadelphia on Wednesday, President Obama warned that the uncertainty of a shutdown could slow the economic recovery.

“Companies don’t like uncertainty, and if they start seeing that suddenly we may have a shutdown of our government, that could halt momentum right when we need to build it up — all because of politics,” Obama said.

Of course, the use of uncertainty here is all about political convenience. This have been predicated on the ongoing battle over proposed budget cuts from the Republicans.

The administration appears to use “government shutdown” as leverage to negotiate to prevent or mitigate these.

Graphics from Cato’s David Boaz

Yet what is being argued looks inconsequential relative to the budget (government spending) gains over the years.

And based on the Cato’s graphics, the Republican proposal would seem not as a NET reduction, but rather a reduction of expansion.

As Jacob Sullum of the Reason foundation writes,

The cuts represent less than 2 percent of the total budget, less than 4 percent of the deficit, and less than 5 percent of discretionary spending, which rose in real terms by 75 percent from 2000 to 2010 and by about 9 percent in each of the last two fiscal years.

Yet the administration is trying to spook (blackmail) the public with the prospects of mayhem from a prospective government shutdown.

US government shutdowns have not been rare.

Below is a table from Bespoke Invest showing previous shutdowns.

Bespoke writes, (bold highlights mine, table above from Bespoke)

“funding gaps in the federal government are hardly rare. While we all remember the two shutdowns in 1995, there have actually been a total of 17 shutdowns going back to 1975. However, due to their length as well as changes in federal law over the years, not all funding gaps are created equal. For starters, of the seventeen funding gaps highlighted, only eight lasted longer than three days. In other words, in most cases the shutdown was a one day affair or else it occurred over a weekend.

“As shown in the table, however, funding gaps prior to 1980 all lasted one week or more, and then from 1980 to 1995 all funding gaps lasted three days or less. The reason for this change is the fact that beginning in 1980 the US Attorney’s Office ruled that any time there was a funding gap, non essential federal agencies were required to begin terminating activities and ‘shutdown.’ Once that opinion was issued, funding gaps took on added urgency forcing lawmakers to come to an agreement. This is why the shutdown in 1995 was so notable.

Bottom line:

This serves as a lucid example that when it comes to cutting government (privileges) in terms of spending and control, you can hear the shrill of cry OUCH from politicians! Even if the proposed spending cuts seem inconsequential or even perhaps symbolical.

And in desperation or as a political maneuver, politicians employ various ‘strawmen-bogeyman’ tactics to scare the wits out of the public so that the public would be stampeded to approve their desires.

As former US President John Adams once wrote [The Foundation of Government],

Fear is the foundation of most governments; but it is so sordid and brutal a passion, and renders men in whose breasts it predominates so stupid and miserable, that Americans will not be likely to approve of any political institution which is founded on it.

Milton Friedman’s 4 ways money is spent

Stripping away control and spending other people’s money is so addictive that politicians can’t seem to do away with it and would fight heaven and hell to avoid it.

Update: Bespoke appears to have been proven right, a deal has been reached according to marketwatch.com. Details have yet to come in.