The Banks Are Still Too Big To Fail

Simon Johnson was unimpressed by the President's financial regulation speech:

The administration will not tell anyone the exact capital and liquidity requirements they are proposing, but close observers of the internal administration process have taken to calling the likely increases “dinky.” Remember, the last time our financial system showed this taste for risk and a comparable level of incompetence (prior to 1935), it had equity relative to assets roughly three times current levels (e.g., put into tier one-equivalent terms). There is no proposal on the table, either in the U.S. or within the G20, that is even remotely in the right ballpark. President Obama has put his finger on the problem but is apparently unwilling to do anything about it.

Lost In Iran

A US TV show arrives. Not uncontroversially:

The officially distributed Iranian version of the show will be edited to "exclude "un-Islamic" scenes such as those featuring scantily clad women or male-female physical contact" — so the authorities' decision might be less about exposing Iranian viewers to Lost's exploration of spirituality than preventing them from seeing Evangeline Lilly in a bikini. Somehow I think the bootleggers are going to stay in business.

In Iran, the mullahs are edgy about its "Zionist concepts":

Mohammad Hossein Saffar-Harandi, recently sacked as Mahmoud Ahmadinejad's culture and Islamic guidance minister, lambasted it for displaying "Zionist concepts". However, others insisted the programme was suitable for an Iranian audience because it has "eastern" themes. "The atmosphere of this story, due to our classic literature, is familiar to Iranian and eastern viewers," Saeed Ghotbizadeh, a TV and cinema critic, told the Tehran-e Emrooz newspaper. "Eastern viewers can understand it better and would naturally like it. "Because it has a religious theme, it is possible to broadcast 90% of it without censorship. But its brilliant and special characterisation might be sacrificed in Persian dubbing – a lot will depend on how well it is dubbed."

Malkin Award Nominee

"The book, "Your Life-Your Choices," had been deep-sixed by the Bush administration. It was reissued by the Obama administration. The book includes various "exercises" for vets that suggest more than a gentle nudge toward death. How about a sharp kick," – Ken Blackwell, Family Research Council, joining the Obama-As-Euthanizer-Of-Heroes meme.

Obama Is “Pushing Israel To War”

This Bret Stephens op-ed is fascinating less for what it says than the assumptions it makes:

The conclusion among Israelis is that the Obama administration won't lift a finger to stop Iran, much less will the "international community." So Israel has pursued a different strategy, in effect seeking to goad the U.S. into stopping, or at least delaying, an Israeli attack by imposing stiff sanctions and perhaps even launching military strikes of its own … The problem, however, is that the administration isn't taking the bait, and one has to wonder why.

Really? It baffles Stephens why the US doesn't simply do what Israel tells it to do? Well, here's one possible response: maybe the US doesn't actually like being forced to calibrate its entire foreign policy to the interests of one foreign country alone, however close and unbreakable the alliance. There are distinctions and nuances between Israel's national interests and the United States' national interests – a fact that has been largely erased from the neocon psyche, but which any American president is bound to consider in the current delicate moment. Those distinctions make a difference.

Here are arguments that do not seem to have occurred to Stephens. It may be in the long-term interests of the US not to confront Tehran over the one policy the Iranian people strongly support it on right now: the nuclear question. Given the strength of the internal resistance to the regime, it might be better to accept some nuclear development while trying to exploit internal divisions with economic carrots. Containment, in other words: a policy that was once quite acceptable on the mainstream right.

And what's so awful about a nuclear stand-off between Iran and Israel in the Middle East? It is not necessarily a stable situation in a region when one country – and one country alone – has nuclear weapons in a region like the Middle East. In fact, it might encourage that country to act militarily with impunity, to over-reach and generate excessive hostility. Nuclear deterrence worked very well for much of the world for a long time in preventing conflict rather than exacerbating it. It may be the one thing preventing an India-Pakistan war. Why is it unthinkable in the Middle East?

Of course, we'd all rather Iran did not have the bomb.

But is there any way to prevent that without a brutal and constant war against its regime, a regime that may well be shored up at home as a result? And is it really in American interests to launch another war on Muslims (which is how it would be portrayed by al Qaeda) and at the same time side totally with the Sunni autocracies in their own anti-Shiite paranoia and bigotry? How will that impact Iraq's independence from its giant Shiite neighbor? How will it impact US forces in Iraq and Afghanistan? How much international terrorism will it spawn that could kill Americans and Europeans?

These are tricky questions and while I respect the argument that attempting to disarm Ahmadinejad's coup-led government (even in the last resort by military force) should be on the table, I don't share the notion that this is inevitable or that America's support for Israel should be reflexive in this situation. Sure, some kind of deal whereby Iran is used as a common enemy to resolve the Israel-Palestinian question is tempting. But such an anti-Shiite Sunni-Israeli alliance of convenience could destabilize Iraq and force it further into Iran's hands. It might also be prudent to hang back, and see how events within Iran proceed, and also, by keeping an open hand, remove from Tehran any claim that it is being bullied by the Great Satan.

But what I really worry about in Stephens' op-ed is the attempt to blame the US for Israel's predicament. The truth is the opposite of Stephens' claim: the US is not secretly pushing Israel to strike Iran; Israel is openly pushing the US to strike on its behalf. Why on earth would any US president take that bait on Israel's terms and on Israel's time-table?

The real question we need to consider is what to do if Israel acts unilaterally, and sets the region ablaze, bringing the rest of the West into the cross-fire. Do we sanction Israel? Dare we not sanction Israel if it starts a fourth world war in the region that ends up killing Americans in the blowback?