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Economy

Corruption, ascension, and oil: Why Saudi Arabia’s moves should worry the world

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Mohammed bin Salman

Saudi Arabia has dominated the world’s oil exports for decades. They’ve used this status to wield great influence over every industrialized nation. Sometimes this influence is indirect as nations like Russia and China must take cues on prices even when they aren’t trading with the Saudis. Others, including the United States, have been forced to change policies and relationships based upon the will of Saudi Arabia’s leaders.

Things have been changing in recent years. There are more players in the game. OPEC, which is essentially controlled by Saudi Arabia, is still the biggest player in oil town, but their power has been fading. The Saudis are no longer able to control every facet of oil production and distribution around the world. Moreover, the world’s dependency on oil is waning. Fossil fuels are still the driving force for industry and travel, but technology is pushing away from them. Though there are greater needs than ever before for energy, those needs are being met by a more diverse range of sources. Efficiency is a priority for everyone from automakers to farmers.

There’s another thing hurting the Saudis that isn’t discussed as often as the previous two challenges. They’ve blown their money. Instead of investing into infrastructure and diversifying their economic footprint, they’ve lived the last four decades under the illusion that their money wells were always going to sustain them. They didn’t start planning for a post-oil world until recently and if they don’t make major changes soon, it may be too late.

All of these factors are in play with their recent moves towards modernization. Crown Prince Mohammed bin Salman has been spearheading the charge towards a new Saudi Arabia, but he’s facing roadblocks both inside and outside of the kingdom. How he handles those roadblocks will affect a good chunk of the world, including the United States. Based upon his actions this weekend, we should be worried he’s heading in a precarious direction that could cause turmoil worldwide.

“Corruption”

17 major players in the Saudi government from princes to ministers were arrested over the weekend as part of King Salman’s anti-corruption push. This push is under the control of Prince Mohammed for a very important reason. He’s solidifying power and eliminating challenges to his ascension to the thrown.

Corruption is an ironic avenue through which the Crown is pursuing Prince Mohammed’s adversaries. Who is at the center of this corruption? The Crown itself. That means that they know where all the bodies are buried. They know every financial move made by all who have power in the kingdom. Of course, they’ll choose corruption as the way to mow down potential roadblocks. They have dirt on literally everyone.

It’s like the CIA taking down bureau chiefs for keeping secrets. They all keep secrets just as everyone in the Saudi government practices corruption of some sort. That’s the point. They were able to isolate those opposed to Prince Mohammed in a demonstration meant for them as well as anyone else who would fight him once the King dies. Anyone even thinking about supporting a different choice will now know they’ll face repercussions if they do. Those who were arrested have a choice: devotion or penalties. Nobody is exempt. They must either fall in line or fall on their swords.

Why this is bad

Contrary to popular belief, Saudi Arabia is anti-American. They’re anti-everyone. They play their “allies” for fools. This isn’t a secret. Every American president since Nixon has willfully accepted the unrighteous relationship we’ve maintained with the House of Saud because they’ve empowered the dollar to be the world’s reserve currency. They’ve given us much of the power we’ve enjoyed since the 1970s by being the producers and allowing us to be the bankers.

This isn’t a conspiracy theory. It’s just not talked about very much in public circles because to admit it would mean trouble for this “mutually beneficial” relationship. This is why every President, even President Trump, has looked the other way and even supported moves made by the Saudis that attack human rights, American excpetionalism, and the well-being of our nation’s stability. We need them to keep the dollar from collapsing under the weight of untenable debt. They need us to keep the wolves who would have at them at bay.

Despite the support Prince Mohammed has received from the White House, they are aware that he could take the nation in a direction that opposes our interests. This is why President Trump practically begged them to open their IPO for Saudi Aramco on the NYSE.

This is why Jared Kushner was sent on an unannounced trip to Saudi Arabia last week.

Kushner took unannounced trip to Saudi Arabia – POLITICO

https://www.politico.com/story/2017/10/29/jared-kushner-saudi-arabia-244291Kushner left Washington, D.C., via commercial airline on Wednesday for the trip, which was not announced to the public, a White House official told POLITICO. He traveled separately from Treasury Secretary Steven Mnuchin, who led a delegation to Riyadh last week to focus on combating terrorist financing.

Kushner was accompanied in the region by deputy national security adviser Dina Powell and Middle East envoy Jason Greenblatt. Greenblatt continued from Saudi Arabia to Amman, Jordan; Cairo; the West Bank city of Ramallah; and Jerusalem, where he was on Sunday.

It isn’t just London or Tokyo that makes the U.S. fear the Saudis won’t use the NYSE. There are rumors that Russia or China could work private investment deals with Saudi Aramco. Why? Because they would require much less transparency than the major stock exchanges. It might not be as lucrative for the Crown, but it would prevent them from having to disclose and eliminate corrupt portions of the money-flow through the company. In other words, they wouldn’t have to let the world know a bigger chunk of the profits go to the crown than they’ve been reporting.

Prince Mohammed wants to modernize Saudi Arabia. This makes sense for them and could even be beneficial for the world if they were to truly tackle corruption. They won’t. Doing so would mean draining much of the power the Crown currently enjoys. They are still extremely prosperous, so they’re not at a point that they’d be willing to trade transparency for security. As far as Prince Mohammed is concerned, they’re still a generation or two away from collapse. They have time to fix it. Why give up an ounce of power now when it’s not required?

The answer: they won’t. That was essentially confirmed by this weekend’s purge of Prince Mohammed’s adversaries.

Final Thoughts

Prince Mohammed is 32-years-old. He has the vitality and ambition to lead the nation for several decades. Moving against his opponents now means he’s starting off his reign with the same iron grip his father has held. If anything, he’s demonstrating an even stronger grip before he’s even ascended to the throne. This does not bode well for a world that is dependent on their direction regarding oil. It’s even worse for the United States’ dependence on them to keep the dollar at the center of world economics. If there’s no plan-B that doesn’t include Saudi Arabia’s support, the U.S. government needs to start putting that plan together immediately.

Perspectives

Saudi Arabia ‘corruption’ arrests are a bold but risky attempt by the crown prince to seize power

http://www.independent.co.uk/news/world/middle-east/saudi-arabia-arrests-coup-corruption-mohammed-bin-salman-latest-a8040961.htmlFor years, Saudis have complained of rampant corruption and misuse of public funds by top officials in a system where nepotism is also widespread.

The public would surely welcome efforts to eradicate both, particularly as low oil prices hurt the economy, but the arrests have simultaneously whipped up “apprehension and fear”, said Madawi Al-Rasheed, who wrote several books on Saudi Arabia and is a London-based critic of its leadership.

After more crackdowns, its clear: Saudi Arabia’s Mohammed bin Salman is acting like Putin

https://www.washingtonpost.com/news/global-opinions/wp/2017/11/05/saudi-arabias-crown-prince-is-acting-like-putin/?utm_term=.fdffc18a3c2bSaudi royals view themselves as The Party, sharing power and ruling by consent, in an arrangement that is largely opaque. What is absolutely clear after Saturday’s “Night of the Long Knives” is that Crown Prince Muhammad bin Salman is upending this arrangement and centralizing all power within his position as crown prince.

This purge comes on the heels of complete intolerance for even mild criticism of Mohammed bin Salman’s reforms, resulting in at least 70 arrests that have, unfortunately, garnered far less attention. Many of us living outside Saudi Arabia will not return home for fear of the same fate. Our families have been targeted instead.

Saudi Crown Prince Makes Dangerous, Unprecedented Power Grab

http://nymag.com/daily/intelligencer/2017/11/saudi-crown-prince-makes-dangerous-unprecedented-power-grab.htmlWhy he moved at this precise moment is not quite clear: Bin Salman likely either saw some threat looming that he needed to head off, or an opportunity to cement his authority and cut off possible rivals to his claim to the throne. As the favorite son and de facto regent of his father, the elderly, Alzheimers-suffering King Salman bin Abdulaziz, bin Salman was already in a position of strength, but he’s alienated a lot of his relatives to get to where he is, which means he has a good number of people to intimidate before they make trouble.

Hence the instant anti-corruption commission. The power he’s given himself here is considerable, though, and will be used to illiberal ends no matter how much his supporters insist he’s a reformer. Impossible as it sounds, Saudi Arabia is actually getting more authoritarian, in meaningful ways. The separation of control over the security forces was meant to keep any one individual or branch within the family from growing too powerful; bin Salman now has more power than any member of his family was really ever meant to have. He’s also breaking the mold of Saudi patronage politics, the consequences of which are unpredictable.

Carl is a gaming fanatic, forever stuck on Reddit and all-around lover of food. He writes about food, politics, and cars for several publications and lives in northern California.

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Culture and Religion

Video: You’re Not A Liberal!

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A Truth Revolt Original from Bill Whittle that succinctly explains why Leftists aren’t Liberal.

Published on Oct 10, 2014

The 4:20 minute mark in the 6 minute video has its most important point:

The founding fathers were the True Liberals because they believed in Liberty – with both words having the same origins.

They believed in individual Liberty, private property, limited government and the common sense civil rights of free-speech and armed self-defence. They believed in the freedom to be left alone.

The point of the video is that the collectivists of the nation’s Socialist-Left do not meet the definition of the word Liberal. They believe in collective rights, Collective ownership of property, unlimited government, limitations on speech and gun confiscation.

Those of that mindset (Leftists) are not Liberal by any stretch of the imagination.

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Economy

On corn dogs and continuing resolutions

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Confession: I was a fat kid.

You don’t need to know how fat, but it was enough that my mom had to establish strict limits on how much of any given food I could eat per meal, and I couldn’t surpass that amount without her express permission.

My family well remembers one such occasion when I was maybe seven years old where I got a little, shall we say, excessive.

I had maxed out for the day on my allotted two corn dogs — my favorite food at the time — but I was still hungry. My mom wasn’t home, so I asked my dad if I could have two more corn dogs.

He approved and I had two more, but I still wasn’t satisfied, so I asked my dad again if I could have two more corn dogs, which he authorized, and so on.

All told, I ended up consuming eight jumbo corn dogs in one meal. And I felt fantastic.

In fairness to my dad, given that each of my requests couldn’t have come more than five minutes apart (I tend to inhale my food), he probably thought I was referring to the same two additional corn dogs each of the three times I petitioned his consent.

Moreover, when my mom found out, there wasn’t much that could be done; I had clearly overeaten, but I hadn’t technically disobeyed procedure.

Believe it or not, congressional budgeting is a lot like an overweight seven-year-old downing corn dogs.

Periodically, despite gouging the American people trillions of dollars already, Congress runs out of money, maxing out on its corn dog limit, as it were. Congress is then faced with two options: 1) a continuing resolution, wherein the legislature passes an appropriations bill and thereby authorizes government funding at the same levels as previously established by that year’s budget until either a specified date or a regular appropriations bill is passed; or 2) a government shutdown until appropriations can be passed.

Since October, when the 2018 fiscal year began, we have seen four continuing resolutions from Congress, two of which materialized only after a government shutdown — the most recent one occurring early Friday morning for approximately eight hours.

This means that Congress has eaten its two corn dogs and gone back to ask for two more corn dogs four times in the last four months. They have now consumed ten corn dogs, which is even more than a certain hefty seven-year-old.

The latest continuing resolution, which put an end to Friday’s blink-and-you’ll-miss-it shutdown, outlines two years of spending and absolutely blows out the deficit to the tune of $1.2 trillion. And while it’s true that the continuing resolution only extends to March 23 in order to allow for time to iron out all the details, the legislature has bypassed any threat of government shutdown or continuing resolution in the near future.

You see, the traditional two options listed above — a resolution or a shutdown — only trigger due to the debt ceiling, which prohibits spending past a certain point without specific authorization from Congress, who holds the power of the purse. But what would happen if that limit didn’t exist? The government could spend whatever it wanted with or without a budget, with or without a deficit, and with or without any accountability to the American people. Essentially, it means Congress can write itself a blank check.

Unsurprisingly, Congress has vied for this third option, suspending the debt limit until March 2019 in order to free up legislators to focus on reelection in 2018 and avoid the negative publicity of a government shutdown. To avoid a shutdown, Congress has made itself too big to fail.

And that means that no matter which issues arise, be it DACA, welfare, military, education, or healthcare, Congress will undoubtedly take advantage of its liberty to spend-up the wazoo.

Where there is no accountability, there is no progress. After all, once you grant the obese seven-year-old inexhaustible access to unlimited Foster Farms jumbo corn dogs, he’s not getting any skinnier.

Richie Angel is a Co-Editor in Chief of The New Guards. Follow him and The New Guards on Twitter, and check out The New Guards on Facebook.

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Economy

The GOP: The Party of Fiscal Conservatives?

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The GOP, led by President Trump, recently passed the most massive tax reform bill in decades. One of the biggest pieces of that bill dropped the corporate tax rate down to 21% from 35%, which had previously given the United States the largest corporate tax in the industrialized world. So cutting this tax and cutting individual taxes was a job well done for fiscal responsibility. It was a CRITICAL first step, but it was only a first step.

The second step was to cut the bloated federal budget. Last night’s budget deal not only failed to do this but in fact increased spending to the deficit levels of the Obama and Bush eras. Liberals claim this is due to the tax cuts, but Senator Rand Paul demonstrated clearly that this has to do entirely with the expensive high Congress gets from spending taxpayer money as well as placing an unconscionable burden on our children.

Republicans made a big to do about deficits and the debt while Barack Obama’s was in power, even coming up with the sequester during the latter half of the Obama Presidency. However, now that they control both houses of Congress and with Trump in the White House, they suddenly have no inclination to cut spending.

“When the Democrats are in power, Republicans appear to be the conservative party, But when Republicans are in power, it seems there is no conservative party. The hypocrisy hangs in the air and chokes anyone with a sense of decency or intellectual honesty,” said Senator Rand Paul (R-KY) who attempted to block the bill last night.

Others in the party also demonstrated their displeasure at the lack of leadership by the GOP on this issue. Missouri Senate Candidate Austin Petersen’s campaign released this statement:

“The spending deal approved late last night, and supported by both Missouri Senators McCaskill and Blunt, was an absolute travesty. The American people are already $20 trillion in debt, and the deficit for the current fiscal year is estimated to be an additional $1 trillion. This is just plain nuts! And it’s a great example of why Austin is in this Senate race: because like many Missourians, he’s sick and tired of sending politicians to Washington who, break their promises. The truth is we don’t just need another Republican elected to the United States Senate — we need a true constitutional and FISCAL conservative — someone who’s going to stick to their guns, stick to their principles, and most importantly, keep their promises. “

Konstantinos Roditis, Republican candidate for California State Controller said, “Hope of a budget with a modicum of fiscal responsibility from D.C. is laughable. The likelihood a fiscally responsible budget will see the light of day in D.C. is as likely as Trump winning California in a landslide in 2020. Here is a perfect example why I say, I’m a Conservative that happens to be a Republican, instead of a Republican that happens to be a Conservative.”

California GOP Senator candidate Erin Cruz had this to say… Those in the House and Senate work for the American people and should put forth a fiscally responsible budget, one which does not put an undue burden on the taxpayer and future generations. Heavy cuts should be made in the area of foreign aid, as well as pet deals congressional members tuck into these bills known as pork. The taxpayer is the boss and they want big change in government, namely reduction in size and scope of government as well as cuts to unnecessary spending. The budget passed is not reflective of what the American people voted into office. Actual change is coming, patriots like myself are standing up to the call to serve the people, there will be a big turn in how D.C. operates. Americans live by budgets and within their means, Congress should as well. Midterms can’t come soon enough for all Americans. Americans must push for a high turn out at the polls this year.

A disappointment for many conservatives is that standard-bearer Ted Cruz (R-TX) “reluctantly” voted for the spending bill, giving away any credibility he might have in the future on this issue. It should be noted that Cruz has filibustered spending in the past, famously reading to his children from the Senate floor.

In stark contrast, there was no surprise that the other Texas Senator, John Cornyn, was vocal about his annoyance with Rand Paul’s efforts to derail the budget process, saying this was an “emergency” while failing to make mention Congress hasn’t had a non-emergency spending effort in years.

It would be easy for some to lay the blame for all this on the self-proclaimed “king of debt,” President Trump. However, those who have actually read the Constitution know the power of the budget comes from Congress. Sure, Trump could lead a bit more on this issue, but at no point has Trump ever made over-spending a priority.

Speaker Paul Ryan (R-WI), who is the former chairman of the House Budget Committee, seems most to blame. Of all people he should know how to cut spending, and yet has failed to do so.

The political fallout will likely be negligible. The average American, when asked, will say they are concerned about the debt, but often not enough to change their vote. And so both major parties keep passing this issue back and forth like a hot potato. The party that will be hurt by the debt is whoever is in power when the economy comes crashing down due to debt. Time will tell on that one.

A couple of months ago I wrote about how we can’t afford our sacred cows, including increased defense spending, and yet we’re increasing defense spending through the roof. You can refer back to it here.

The thing I can tell you for certain is we can’t keep doing what we’re doing. Spending on credit will eventually lead to default as more and more of our budget is eaten up by paying interest on our debt and it leases to Greek-style austerity. We need new leadership with ACTUAL fiscal conservatives.

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