EconAir

THE BASIC PROBLEM The most important fact about international relations is that the United States is the only  global  power.    Unlike China, Iran or Russia, the United States has to deal with foreign affairs everywhere in the world.    At the same time.    Although possessing huge resources, these resources are not unlimited.    The American president has to make two sets of related “economic” decisions – how to allocate foreign policy resources among many possible combinations of objectives, and the mix of resources in pursuing each objective.    The temptation is to rely solely on America’s powerful military.    But even this simple strategy has limitations, as experienced by failure in Vietnam, Lebanon, Somalia, and Afghanistan. The military success in invading Iraq was followed by the bungling of the "morning after" occupation that resulted in Iran dominating Iraqi politics and many officers of the ...

Saudi Oil Minister Introduction: The Fall in Oil Prices in 2015 Crude oil prices temporarily rose because Saudi Arabia signaled that it would cooperate with OPEC and non-OPEC producers to “stabilize” oil prices.   Nothing specific was mentioned.   At the current price and for political reasons, it is unlikely Saudi Arabia and its Persian Gulf allies will cut production or negotiate joint production cuts with other large producers.   The comments are probably an indication that Saudi Arabia might be part of a global reduction in crude oil production if prices go much lower and the political situation in Syria changes. Until recently, Saudi Arabia was seeing the results it wanted.   Some are economic, having to do with the current and future price and production of oil.   The economic targets were shale production in the U.S and tar sands production in Canada.   The geopolitical targets were Iran and Russia.   But unexpected economic and...

Ukraine President Russia’s illegal invasion and annexation of the Crimea will set off a chain of events that could strengthen U.S. power and influence, especially in Eastern Europe.   Putin is gambling that President Obama and conservative Republican leaders lack the will to energetically react to Russian expansion.   First U.S. reactions have been weak.   Unless there is a change, Putin might be encouraged to annex other Russian-dominated areas outside current Russian borders. Ukraine has tried to balance Western and Russian pressure.   The popular revolt against the pro-Russian Ukrainian Prime Minister upset the balance and precipitated the crisis. Putin may have decided to upset the unstable status quo in Eastern Europe, starting with Ukraine and Moldova.  Russia's next step could be to annex the eastern third of Ukraine.   This area includes the Donetz Basin, which contains a Russian majority and industrial resources.   If successfu...