Today, Abbas Milani sketches the tough choices now facing Iran’s leadership and calls for the protection of Iranian civilians amid ongoing strikes; H.R. McMaster analyzes the American bombing campaign against Iranian nuclear infrastructure over the weekend; and Kiron Skinner also responds to the US strikes, suggesting that President Trump is charting an American grand strategy unlike any other so far this century.
US Foreign Policy in the Middle East
Writing at The New Statesman, Research Fellow Abbas Milani illustrates the “dire dilemma” Iran’s Supreme Leader Ayatollah Ali Khamenei now faces. For the Khamenei regime, “to abandon the nuclear programme would be to accept a humiliating defeat, one that would wipe away any political and ideological legitimacy he might have. But to persist in pursuing the nuclear option could bring ruin upon Iran, with catastrophic consequences for the Iranian people and all but certainly end the clerical despotism in Iran.” Milani notes the possibility of the Trump administration’s allowing Iran’s leadership to take a “‘face-saving’ exit” in exchange for the abandonment of Iran’s nuclear enrichment activity—already compromised by Saturday’s American strikes on key nuclear infrastructure sites. Milani reiterates his call for the protection of Iranian civilians and his belief that democratization within Iran, led by the Iranian people, is the only long-term pathway to freedom for Iran’s citizens and “peace and stability in the Middle East.” Read more here.
With writings and interviews in multiple national media outlets over the weekend, Senior Fellow H.R. McMaster provided timely analysis of global events. In a guest column for The Economist, McMaster shares with European leaders and other allies “how to play the inconsistencies in Trump’s worldview” to strengthen the transatlantic relationship (subscription required). For the Free Press, the former national security advisor reflected on the enduring wisdom contained in British military historian John Keegan’s 1976 book The Face of Battle. And to discuss America’s strikes against Iran’s Fordow uranium enrichment site and other nuclear facilities, McMaster joined The Story with Martha MacCallum on Fox News and PBS NewsHour. On the latter program, McMaster shared his view that any Iranian retaliation to US strikes would come at an “extremely high price” for the regime, possibly increasing the chances that Iran will try to respond via its regional proxies. Watch here.
Research Fellow Kiron K. Skinner also joined national news outlets this weekend to discuss American foreign policy in the wake of US strikes on Iran. “I think most of the world is tired of the nearly 50 years of the Iranian regime,” Skinner said on Fox News Live on June 23. While cautioning President Trump to not emphasize “regime change,” given the mixed record of US success in trying to pursue that goal, Skinner argues that “nothing is going to work” over the longer term without a leadership change in Tehran. Speaking to Fox News on Sunday, Skinner—a first-term Trump national security official—noted how the Trump administration has managed to transcend the global-war-on-terror paradigm in American foreign policy and chart a new agenda for the Middle East, with diplomatic pursuits like the Abraham Accords and the recent action against Iran’s nuclear program showing that Trump, not populist influencers, is setting the course for American grand strategy. Watch here.
Answering Challenges to Advanced Economies
In an essay for the Civitas Outlook, Senior Fellow Richard Epstein criticizes New York Governor Kathy Hochul’s decision to favor large wind energy projects over new natural gas pipelines. Epstein notes the environmental and liability issues with massive offshore wind developments featuring finite lifespans, significant impacts on marine life, and unknown long-term pollution as turbines and their supports age and degrade. Epstein contrasts such green-sounding developments with high-technology fracking operations and associated delivery pipelines that are subject to extensive regulations and whose developers are subject to liability in the event of environmental contamination. The stakes are significant, as the northeast United States suffers from structural energy shortages exacerbated by insufficient oil and gas supplies. Read more here.
At his Grumpy Economist blog, Senior Fellow John H. Cochrane responds to the emerging proposal “that the Congress force the Fed to stop paying interest on reserves.” He argues, “If the government says no interest on reserves, and if other interest rates are unchanged, then banks don’t want to hold reserves.” In Cochrane’s view, the proposal may be geared to drive down interest rates; as he explains, “Eliminating interest on reserves is equivalent to commanding ‘set the interest rate target to zero.’” Cochrane proceeds to outline how this policy, if adopted, would likely yield inflation, as it is akin to “dropping two trillion [dollars] of cash on the economy.” In response to a reader question at the end of the post, Cochrane outlines how the Treasury actually pays interest on its reserves: first by using interest it receives on its assets, then by printing money, or creating “new reserves to pay the interest on old reserves.” Read more here.
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