The problem isn’t China’s rise, but rather America’s insistence on maintaining military and economic dominance right in China’s backyard
To avoid a violent militaristic clash with China, or another cold war rivalry, the United States should pursue a simple solution: give up its empire.
Americans fear that China’s rapid economic growth will slowly translate into a more expansive and assertive foreign policy that will inevitably result in a war with the US. Harvard Professor Graham Allison has found: “in 12 of 16 cases in the past 500 years when a rising power challenged a ruling power, the outcome was war.” Chicago University scholar John Mearsheimer has bluntly argued: “China cannot rise peacefully.”
But the apparently looming conflict between the US and China is not because of China’s rise per se, but rather because the US insists on maintaining military and economic dominance among China’s neighbors. Although Americans like to think of their massive overseas military presence as a benign force that’s inherently stabilizing, Beijing certainly doesn’t see it that way.
According to political scientists Andrew Nathan and Andrew Scobell, Beijing sees America as “the most intrusive outside actor in China’s internal affairs, the guarantor of the status quo in Taiwan, the largest naval presence in the East China and South China seas, [and] the formal or informal military ally of many of China’s neighbors.” (All of which is true.) They think that the US “seeks to curtail China’s political influence and harm China’s interests” with a “militaristic, offense-minded, expansionist, and selfish” foreign policy.
China’s regional ambitions are not uniquely pernicious or aggressive, but they do overlap with America’s ambition to be the dominant power in its own region, and in every region of the world.
Leaving aside caricatured debates about which nation should get to wave the big “Number 1” foam finger, it’s worth asking whether having 50,000 US troops permanently stationed in Japan actually serves US interests and what benefits we derive from keeping almost 30,000 US troops in South Korea and whether Americans will be any safer if the Obama administration manages to reestablish a US military presence in the Philippines to counter China’s maritime territorial claims in the South China Sea.
Many commentators say yes. Robert Kagan argues not only that US hegemony makes us safer and richer, but also that it bestows peace and prosperity on everybody else. If America doesn’t rule, goes his argument, the world becomes less free, less stable and less safe.
But a good chunk of the scholarly literature disputes these claims. “There are good theoretical and empirical reasons”, wrote political scientist Christopher Fettweis in his book Pathologies of Power, “to doubt that US hegemony is the primary cause of the current stability.” The international system, rather than cowering in obedience to American demands for peace, is far more “self-policing”, says Fettweis. A combination of economic development and the destructive power of modern militaries serves as a much more satisfying answer for why states increasingly see war as detrimental to their interests.
International relations theorist Robert Jervis has written that “the pursuit of primacy was what great power politics was all about in the past” but that, in a world of nuclear weapons with “low security threats and great common interests among the developed countries”, primacy does not have the strategic or economic benefits it once had.
Nor does US dominance reap much in the way of tangible rewards for most Americans: international relations theorist Daniel Drezner contends that “the economic benefits from military predominance alone seem, at a minimum, to have been exaggerated”; that “There is little evidence that military primacy yields appreciable geoeconomic gains”; and that, therefore, “an overreliance on military preponderance is badly misguided.”
The struggle for military and economic primacy in Asia is not really about our core national security interests; rather, it’s about preserving status, prestige and America’s neurotic image of itself. Those are pretty dumb reasons to risk war.
There are a host of reasons why the dire predictions of a coming US-China conflict may be wrong, of course. Maybe China’s economy will slow or even suffer crashes. Even if it continues to grow, the US’s economic and military advantage may remain intact for a few more decades, making China’s rise gradual and thus less dangerous.
Moreover, both countries are armed with nuclear weapons. And there’s little reason to think the mutually assured destruction paradigm that characterized the Cold War between the US and the USSR wouldn’t dominate this shift in power as well.
But why take the risk, when maintaining US primacy just isn’t that important to the safety or prosperity of Americans? Knowing that should at least make the idea of giving up empire a little easier.
PEARL HARBOR, Hawaii—China has isolated itself by pursuing development of a chain of artificial islands in the South China Sea, Defense Secretary Ash Carter said, in Washington’s most forceful rebuke yet of Beijing’s attempts to assert its territorial rights in international waters.
“There should be no mistake: the United States will fly, sail and operate wherever international law allows, as we do all around the world,” Mr. Carter said at a ceremony here to recognize a change of commanders at U.S. Pacific Command.
His remarks came a day after China laid out a strategy to shift its armed forces’ focus toward maritime warfare and prevent foreign powers from “meddling” in the South China Sea.
Beijing has defended its actions as legally proper and within the scope of its sovereignty.
The U.S. wants to resolve the international dispute over the islands peacefully, Mr. Carter said, but also wants “an immediate and lasting halt” to land reclamation by China and other claimants, which include the Philippines, Vietnam, Malaysia and Taiwan.
“With its actions in the South China Sea, China is out of step with both international norms that underscore the Asia-Pacific’s security architecture,” Mr. Carter said.
The escalating rhetoric over the disputed territory has set the stage for a confrontation between senior Chinese and U.S. officials, including Mr. Carter, at the annual Shangri-La Dialogue, an international security conference, this weekend.
Beijing rejected Mr. Carter’s rebuke.
“China’s determination to safeguard its own sovereignty and territorial integrity is rock-hard and unquestionable. The activities that China carries out are well within the scope of its sovereignty and are beyond reproach, said Zhu Haiquan, a spokesman for the Chinese Embassy in the U.S. “We urge the U.S. side to honor its commitment of not taking sides on issues relating to sovereignty, stop irresponsible and provocative words and deeds, and make no attempts to play up the tension in the region.”
The U.S. defense secretary has sought to persuade Beijing to stop its construction of the islands, which consist of submerged reefs augmented by dredged materials. China has created a total of 2,000 acres of new land mass across seven islands, according to Pentagon officials. About 1,500 acres of those islands were built since January. Satellite images of the expanding land masses show China has built an airstrip on one of the islands that is large enough for fighter jets, transport planes and surveillance aircraft, significantly enhancing Beijing’s capability to patrol the skies in the area.
此图毫无代表性。双方对抗,不可能只局限于上述的武器,中国航母也属于试验舰,无实战能力
While pressing his criticism of Beijing, Mr. Carter hasn’t announced a change in U.S. posture over the islands. Earlier this month, Mr. Carter asked his staff to recommend options to address the issue, including flying aircraft and sailing vessels to within 12 nautical miles of the islands to reassert the right of navigational freedom.
For natural land structures, the 12-nautical mile limit is considered restricted area. Last week, a Navy surveillance plane flew near the islands and was given a warning by Chinese officials to keep back. But the flight didn’t cross the 12-mile threshold, which would have signaled a more dramatic shift in U.S. policy.
Beijing’s determination to expand the islands, which are among a group known as the Spratlys, about 800 miles off mainland China’s shoreline, is bringing the countries of the region together “in new ways” and those countries are demanding more American engagement in the Asia-Pacific, Mr. Carter said at Wednesday’s ceremony. The U.S. has sought to put greater emphasis on the region as part of a rebalancing of strategic focus.
The Philippines contests some of China’s claims in the South China Sea, but lacks modern military equipment needed to defend its maritime territory. Vietnam, another rival claimant, has invested in advanced capabilities such as modern fighter jets, submarines and land-attack cruise missiles, all from Russia. But even after these new weapon systems are in place several years from now, Beijing would enjoy overwhelming superiority in any confrontation with Hanoi.
The same couldn’t be said for a confrontation with the U.S., however.
The People’s Liberation Army has approximately 2,100 fighter or bomber aircraft in its hangars, according to the U.S. Department of Defense. But only a few hundred of those are considered modern aircraft.
China’s only aircraft carrier—while a huge leap forward for its navy—is still seen mainly as a practice platform for a future carrier fleet. A recent Pentagon review of China’s military modernization said Beijing is “investing in capabilities designed to defeat adversary power projection and counter third-party—including U.S.—intervention during a crisis or conflict.” In practice, that means hundreds of ballistic and cruise missiles positioned near the coast to deter Japanese or American warships from coming anywhere near Chinese territory. China has a substantial submarine fleet as well, piling on more risk for enemy ships.
Beijing’s release of the military white paper came with a small courtesy: When President Barack Obama visited China last year, the two countries agreed on some “confidence-building measures” to enhance their relationship. As a result, Beijing notified Washington in advance that it would be releasing the white paper, just as the U.S. told China that the Pentagon would release its own analysis of Chinese military power earlier this month.
Former commander in chief of the U.S. Pacific Command, Adm. Dennis Blair, delivers a speech in Tokyo in April
Adm. Dennis Blair, a former head of the U.S. Pacific Command and Director of National Intelligence, accused the U.S. of playing “whack-a-mole” in its approach to China’s island-building in the South China Sea and called for coordinated diplomacy rather than a military response.
“I think that’s terrible,” he said of the string of recent statements from U.S. military officials on the South China Sea tensions. “We shouldn’t be leading with the aircraft carriers down there.”
Adm. Blair, who was asked to resign as Director of National Intelligence in 2010 amid a rift with the White House, has some experience of dealing with China in times of crisis.
He was U.S. Pacific Command chief in 2001 when a Chinese fighter jet collided with a U.S. spy plane, killing the Chinese pilot and forcing the U.S. aircraft to make an emergency landing on China’s southern island of Hainan. China detained the crew for 11 days.
In an interview on the sidelines of an energy conference in Beijing on Thursday, Adm. Blair said he had privately advised the U.S. government to encourage other claimants in the South China Sea to negotiate a multilateral compromise that took into account China’s position — whether or not Beijing participated in those talks. China has maintained that territorial disputes should be resolved through bilateral negotiation between the parties involved, rather than through multilateral talks.
He said the main problem would be the Spratly Islands, where China holds eight rocks and reefs and other claimants occupy dozens of islands and other features.
“The only thing I can think of there is you divide them up: Okay, Philippines you get 20, Malaysia gets 15, China gets 10,” he said of a hypothetical solution. He added that any deal would have to include “certain rules,” such as a ban on military forces and an agreement to jointly develop fishing and other resources.
The U.S. and its allies would likely back such a deal, he said.
“So then we can put whatever civilian or military actions we want to take into some sort of overall context, rather than flying an airplane here, running an aircraft carrier there, having a Shangri-La declaration there,” he said, referring to an annual regional security forum set to take place in Singapore this weekend.
“Right now we’re just playing whack-a-mole.”
He noted that some senior State Department officials had also made public statements on the issues, but added: “They’ve been counter-punching and they’ve been defensive rather than saying this is how we want the place to look like.”
Nonetheless, Adm. Blair said there is little China’s forces could do in the Spratlys to deter what the U.S. sees as free navigation in international waters.
“The Spratlys are 900 miles away from China, for God’s sake. Those things have no ability to defend themselves in any sort of military sense,” said Adm. Blair, who today serves as a director at the National Bureau of Asian Research.
He is also chairman of the Sasakawa Peace Foundation USA, an independent non-profit institution that seeks to enhance understanding of U.S.-Japan relations.
“If the Chinese were ever so foolish as to try to take any sort of actual military action from those islands, they’re completely indefensible militarily. Heck, the Philippines and the Vietnamese could put them out of action, much less us,” he said.
《The Atlantic》 Why the U.S. Needs to Listen to China And why China needs to listen to the U.S. The importance of the mutual economic criticisms between two major world powers
Henry M. Paulson Jr. and Robert E. Rubin
The relationship between the United States and China involves cooperation and competition, but recently the latter has received more attention. Much of the mistrust between the two countries has its roots in geopolitical tensions—China’s assertive behavior in the East and South China Seas, for instance, or U.S. naval surveillance off China’s coasts. But economic tensions have played a large role as well.
Discussions of the U.S.-China economic relationship too often begin with a recital of each country’s grievances against the other. The usual litany of American criticisms includes China’s management of its exchange rate, subsidies that benefit state-owned enterprises, and barriers to American companies seeking to operate in China. Another prominent critique involves Chinese cyber-hacking of U.S. businesses’ intellectual property, and China’s failure to protect intellectual property more generally.
For its part, China castigates the U.S. for its irresponsible fiscal trajectory, its political opposition to Chinese investment in American companies and infrastructure, and its export-control laws, especially those restricting the export of technologies with potential military applications.
We believe it’s time to turn the typical exchange of economic critiques on its head. The two countries have largely been engaged in a dialogue of the deaf, each blaming the other for its own failings, exerting pressure on the other to accede to its demands, and too often waiting for the other to act first. In fact, it is in each country’s self-interest to meaningfully address the criticisms made by the other.
The greatest American threat to China’s economic future is the possibility that America’s economic success could come to an end; the greatest economic danger China poses to the U.S. is the chance that China’s economy fails to grow. By contrast, if each country gets its own house in order and thus succeeds economically, that should diminish economic insecurity, which generates friction, and increase confidence about the future, which fosters a constructive relationship. As former U.S. Treasury secretaries with long experience working with China, we believe each country should undertake significant reforms. Seriously considering each other’s criticisms is a good way to begin.
The united states has enormous long-term strengths, including a dynamic and entrepreneurial culture, a strong rule of law, flexible labor and capital markets, vast natural resources, and relatively favorable age demographics. But China is right to say that improving America’s long-term fiscal outlook is a prerequisite to sustainable growth. Well-structured fiscal reforms could contribute to growth and job creation now while reducing the burden of debt in the future. Some argue that the government could create jobs and increase demand in the short term through public investment in infrastructure or other sectors, while simultaneously taking steps to improve the country’s long-term fiscal trajectory. Others argue that the nation could create more well-paying jobs by reforming its tax code for individuals and corporations, reducing the distortions that undermine economic competitiveness while raising necessary revenue.
Chinese investors could help the United States speed growth now without worsening its long-term debt problem. The U.S. has vast infrastructure needs and a paucity of public capital. But byzantine regulatory and policy barriers too often discourage private investment in major projects. A more streamlined and welcoming environment for domestic and foreign investment in infrastructure projects would create jobs and boost competitiveness.
Much of the effort to attract Chinese investment—whether in infrastructure or manufacturing or agribusiness—needs to come from outside Washington. States and cities have a choice: they can continue to be passive recipients of occasional Chinese investment, or they can design more-systematic approaches to seeking Chinese capital, and the jobs and competitive advantages that accompany it. In Ohio, Michigan, and California, for example, proactive governors are attracting Chinese investment and creating high-quality jobs in sectors like auto parts and clean energy.
Chinese investment could also benefit the U.S. by facilitating exports back to China. In the industrial Midwest, for example, relatively small firms, including family businesses, play a large role in manufacturing and employment. Expansion into China could contribute to the growth of many of these firms. Chinese investors not only can inject capital into these firms; they can help them navigate Chinese markets through strategic partnerships.
Relaxing some export controls is another way to expand opportunities for U.S. firms—and address a common Chinese critique of U.S. economic policy in the bargain. The U.S. should of course restrict the export of technologies with military applications when the national-security implications are significant. But many so-called dual-use products—those with important nonmilitary applications and some military applications—are restricted unnecessarily, and this harms the workers who make those products. In some areas, such as clean energy, the U.S. can both increase exports and promote other national interests—like helping China meet environmental goals and climate-related commitments.
Just as the United States should act on Chinese criticisms, China would be better off taking American criticisms seriously. For sustained economic growth, China must de-emphasize government investment in its own infrastructure, which currently plays an outsize role in the economy, and enable private investment in services and other emerging sectors. And it must de-emphasize exports in favor of domestic-led growth, especially household consumption. These shifts can be advanced by opening the economy further to private-sector competition, including competition from U.S. companies. Doing that would force state-owned firms to compete on a level playing field, without preferential treatment, and give a boost to both the private sector—the future of the Chinese economy—and the underdeveloped service sector. The Bilateral Investment Treaty with the U.S., currently being negotiated, would help by giving Chinese reformers leverage to open their markets to competition and encourage cross-border investment, creating jobs in both countries.
Chinese investors could help the U.S. speed growth without worsening its debt problem.
The efficiency of China’s economy would likewise improve if the country reformed its financial sector, encouraging competition (and empowering Chinese consumers) by granting more private banking licenses, liberalizing interest rates on deposits, and ending preferential access to credit for state-owned firms. Those subsidies create an overabundance of cheap money that many Chinese companies depend upon. Mispriced capital impedes the evolution of China’s economy, prevents the efficient use of capital, and financially constrains some of the economy’s best performers—private companies, which are already responsible for more than 70 percent of Chinese jobs.
China also subsidizes land, energy, and resource prices, in part to support its massive industrial sector. These subsidies are a major reason China is now the dominant global player in steel, cement, and other industries, but they have also distorted the Chinese economy. Beijing has begun to liberalize many commodity prices and has pledged to make further adjustments, including to oil and natural-gas prices. China has its own motivations for doing this—for example, to conserve resources and encourage efficiency. Continued movement toward market pricing would allocate resources more rationally and improve the workings of the Chinese economy, while also eliminating a major source of economic tension between Washington and Beijing. Similarly, there have long been tensions regarding China’s use of artificially low exchange rates to subsidize exports, but currency reform is manifestly in China’s own interest. Its leadership understands this and has made real progress here.
Finally, China’s long-term success, and even much of its near-term success, depends on innovation, as its leaders have said. Innovation, in turn, requires the protection of intellectual property. China has made many commitments to protect intellectual property in the past, but too often ignores them. Ultimately, that will hurt domestic companies such as Xiaomi and Alibaba more than it will hurt Apple or Amazon. China and the U.S. would also benefit from a global regime to protect intellectual property from hacking for commercial purposes.
By addressing each other’s chief economic criticisms, China and the U.S. would simultaneously improve their own economies, remove irritants to their relationship, and foster trust. Doing so would not make geopolitical tensions disappear, but it would anchor them in a framework of mutual interest.
For all their differences, the U.S. and China face several similar internal challenges: rising health-care costs, inadequately funded social safety nets, and fiscal problems at the state or municipal level. And each faces serious income-distribution issues, though the specifics are different. The U.S. continues to face significant pressure on low- and middle-income wages, as well as widening income disparity, which runs contrary to the nation’s objective of broadly shared growth. In China, the emergence of an ultra-wealthy class is stoking resentment and unease.
The two countries also share an important external challenge: the need for a smoothly working global trading regime. As the world’s largest trading nations, they both have an interest in heading off protectionism that would damage their economies. And beyond trade, the two countries have other common goals: Middle East stability, especially with regard to Islamic extremism; climate-change mitigation; nuclear nonproliferation.
It will be much easier to make progress on these issues if America is working in complementary ways with China than if the two countries are working at cross-purposes. The international institutions that should be dealing with these challenges are far from adequate. But if the United States and China—the world’s two biggest economies—act together, that can create the kind of political and moral suasion that helps lead global action. The recent bilateral climate agreement, pledging to limit emissions in both countries, demonstrates how U.S.-China cooperation can produce meaningful results.
Arguably, the best hope for effective transnational action on many of the world’s thorniest problems lies in the cooperation of these two countries. For that to happen, perhaps the most crucial challenge will be to first look within.
The Sting
How the FBI Created a Terrorist
By Trevor Aaronson 03/16/2015
IN THE VIDEO, Sami Osmakac is tall and gaunt, with jutting cheekbones and a scraggly beard. He sits cross-legged on the maroon carpet of the hotel room, wearing white cotton socks and pants that rise up his legs to reveal his thin, pale ankles. An AK-47 leans against the closet door behind him. What appears to be a suicide vest is strapped to his body. In his right hand is a pistol.
“Recording,” says an unseen man behind the camera.
“This video is to all the Muslim youth and to all the Muslims worldwide,” Osmakac says, looking straight into the lens. “This is a call to the truth. It is the call to help and aid in the party of Allah … and pay him back for every sister that has been raped and every brother that has been tortured and raped.”
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Osmakac in his “martyrdom video.” (YouTube)
The recording goes on for about eight minutes. Osmakac says he’ll avenge the deaths of Muslims in Afghanistan, Iraq, Pakistan and elsewhere. He refers to Americans as kuffar, an Arabic term for nonbelievers. “Eye for an eye, tooth for a tooth,” he says. “Woman for a woman, child for a child.”
Osmakac was 25 years old on January 7, 2012, when he filmed what the FBI and the U.S. Department of Justice would later call a “martyrdom video.” He was also broke and struggling with mental illness.
After recording this video in a rundown Days Inn in Tampa, Florida, Osmakac prepared to deliver what he thought was a car bomb to a popular Irish bar. According to the government, Osmakac was a dangerous, lone-wolf terrorist who would have bombed the Tampa bar, then headed to a local casino where he would have taken hostages, before finally detonating his suicide vest once police arrived.
But if Osmakac was a terrorist, he was only one in his troubled mind and in the minds of ambitious federal agents. The government could not provide any evidence that he had connections to international terrorists. He didn’t have his own weapons. He didn’t even have enough money to replace the dead battery in his beat-up, green 1994 Honda Accord.
Osmakac was the target of an elaborately orchestrated FBI sting that involved a paid informant, as well as FBI agents and support staff working on the setup for more than three months. The FBI provided all of the weapons seen in Osmakac’s martyrdom video. The bureau also gave Osmakac the car bomb he allegedly planned to detonate, and even money for a taxi so he could get to where the FBI needed him to go. Osmakac was a deeply disturbed young man, according to several of the psychiatrists and psychologists who examined him before trial. He became a “terrorist” only after the FBI provided the means, opportunity and final prodding necessary to make him one.
Since the 9/11 terrorist attacks, the FBI has arrested dozens of young men like Osmakac in controversial counterterrorism stings. One recent case involved a rudderless 20-year-old in Cincinnati, Ohio, named Christopher Cornell, who conspired with an FBI informant — seeking “favorable treatment” for his own “criminal exposure” — in a harebrained plot to build pipe bombs and attack Capitol Hill. And just last month, on February 25, the FBI arrested and charged two Brooklyn men for plotting, with the aid of a paid informant, to travel to Syria and join the Islamic State. The likelihood that the men would have stepped foot in Syria of their own accord seems low; only after they met the informant, who helped with travel applications and other hurdles, did their planning take shape.
Informant-led sting operations are central to the FBI’s counterterrorism program. Of 08 defendants prosecuted in federal terrorism-related cases in the decade after 9/11, 243 were involved with an FBI informant, while 158 were the targets of sting operations. Of those cases, an informant or FBI undercover operative led 49 defendants in their terrorism plots, similar to the way Osmakac was led in his.
In these cases, the FBI says paid informants and undercover agents are foiling attacks before they occur. But the evidence suggests — and a recent Human Rights Watch report on the subject illustrates — that the FBI isn’t always nabbing would-be terrorists so much as setting up mentally ill or economically desperate people to commit crimes they could never have accomplished on their own.
At least in Osmakac’s case, FBI agents seem to agree with that criticism, though they never intended for that admission to become public. In the Osmakac sting, the undercover FBI agent went by the pseudonym “Amir Jones.” He’s the guy behind the camera in Osmakac’s martyrdom video. Amir, posing as a dealer who could provide weapons, wore a hidden recording device throughout the sting.
The device picked up conversations, including, apparently, back at the FBI’s Tampa Field Office, a gated compound beneath the flight path of Tampa International Airport, among agents and employees who assumed their words were private and protected. These unintentional recordings offer an exclusive look inside an FBI counterterrorism sting, and suggest that, even in the eyes of the FBI agents involved, these sting targets aren’t always the threatening figures they are made out to be.
ON JANUARY 7, 2012, after the martyrdom video was recorded, Amir and others poked fun at Osmakac and the little movie the FBI had helped him produce.
“When he was putting stuff on, he acted like he was nervous,” one of the speakers tells Amir. “He kept backing away …”
“Yeah,” Amir agrees.
“He looked nervous on the camera,” someone else adds.
“Yeah, he got excited. I think he got excited when he saw the stuff,” Amir says, referring to the weapons that were laid out on the hotel bed.
“Oh, yeah, you could tell,” yet another person chimes in. “He was all like, like a, like a six-year-old in a toy store.”
In other recorded conservations, Richard Worms, the FBI squad supervisor, describes Osmakac as a “retarded fool” who doesn’t have “a pot to piss in.” The agents talk about the prosecutors’ eagerness for a “Hollywood ending” for their sting. They refer to Osmakac’s targets as “wishy-washy,” and his terrorist ambitions as a “pipe-dream scenario.” The transcripts show FBI agents struggled to put $500 in Osmakac’s hands so he could make a down payment on the weapons — something the Justice Department insisted on to demonstrate Osmakac’s capacity for and commitment to terrorism.
“The money represents he’s willing to do it, because if we can’t show him killing, we can show him giving money,” FBI Special Agent Taylor Reed explains in one conversation.
These transcripts were never supposed to be revealed in their entirety. The government argued that their release could harm the U.S. government by revealing “law enforcement investigative strategy and methods.” U.S. Magistrate Judge Anthony E. Porcelli not only sealed the transcripts, but also placed them under a protective order.
The files, provided by a confidential source to The Intercept in partnership with the Investigative Fund, provide a rare behind-the-scenes account of an FBI counterterrorism sting, revealing how federal agents leveraged their relationship with a paid informant and plotted for months to turn the hapless Sami Osmakac into a terrorist. Neither the FBI Tampa Field Office nor FBI headquarters in Washington, D.C. responded to requests from The Intercept for comment on the Osmakac case or the remarks made by FBI agents and employees about the sting.
Osmakac as a boy. (Photo courtesy of the Osmakac family)
SAMI OSMAKAC WAS 13 years old when he came to the United States with his family. Fleeing violence in Kosovo in 1992, they had first traveled to Germany, where they stayed until 2000, when they were granted entrance to the U.S. He was the youngest of eight children, and he and his older brother Avni struggled at first to adapt to a new land, a new language and a new culture.
“We came to Tampa, and at first we lived in this really bad neighborhood,” Avni recalls, wearing blue jeans, spotless white Nikes and a white New York Yankees Starter cap. “It was tough, but as we learned the language, things got easier. We adapted.”
The Osmakac family opened a popular bakery in St. Petersburg, across the bay from Tampa. They were Muslim, but they rarely attended the mosque. They didn’t usually fast during Ramadan, and Sami’s sisters did not cover their hair. Growing up, Sami wasn’t particularly drawn to Islam either, according to his family. He suffered the concerns many young men in the United States do, like getting a job and saving up for a car.
In July 2009, one of Sami’s older brothers had returned to Kosovo to get married, and just before Sami was to fly to the Balkans with his brother Avni for the wedding, he had a terrible dream. “An angel grabbed me by the face and pushed me into the hellfire,” he would later tell a psychologist. At the wedding, Avni took a photograph of Sami; he’s clean-shaven and wearing a pressed white suit. He looks happy. On the flight back from the wedding, during the final leg of the journey to Tampa, the plane Sami and his brother were on hit turbulence, losing altitude quickly. “I thought we were going to crash,” Avni remembers. Sami looked horrified.
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Osmakac in 2009. (Photo courtesy of Osmakac family)
That’s when something changed in him, according to his family and mental health expertshired by both the government and the defense. Osmakac began to isolate himself from his siblings and attend the mosque frequently. He spoke of dreams about killing himself, and chastised family members for being more concerned about this life than what comes after.
In December 2009, Osmakac met a red-bearded Muslim named Russell Dennison at a local mosque. Dennison, who was American-born, was described by Osmakac as a “revert.” Muslims believe that all people are born with an understanding of the unity of Allah, so when a non-Muslim embraces Islam, some Muslims refer to this as reversion rather than conversion. Dennison went by the chosen name Abdullah; he says in a YouTube video that after being introduced to Islam, his faith grew stronger during a prison term in Pennsylvania. Osmakac’s dress changed after he met Dennison. Whereas he had once saved his money to buy nice shoes and Starter caps, he suddenly began to dress like Dennison, according to family members — cutting his pants high at the ankle, buying cheap plastic sandals and sometimes wearing a keffiyeh on his head. He refused to cut his beard, which he struggled to grow with any thickness, and he wouldn’t wear deodorant that contained alcohol.
It wasn’t just his physical appearance that was changing; by the beginning of 2010, his family also believed he was deteriorating mentally. He’d become paranoid and delusional. His skin was pale. He was sleeping on the floor of his bedroom and complained about nightmares in which he burned in hell. He stopped working at the family bakery because they served pork products. Near the end of the year, his family repeatedly asked him to see a doctor. He rebuffed them, saying that the doctors would want to kill him. (Osmakac later told a psychiatrist he in fact “was scared to go to a mental home.”
dennison
Russell Dennison (YouTube)
Meanwhile, Osmakac’s friendship intensified with the red-bearded revert. Dennison, whose videos on YouTube are posted under the username “Chekdamize7,” frequently preached about Islam and ranted about the corruption of nonbelievers. Osmakac’s family believed that Dennison encouraged his extreme views, often recruiting him to make videos. Among their efforts was a two-part series in which they argued combatively about religion with Christians they confronted on the sidewalk.
Over the next year, Osmakac, who was without steady employment, established a reputation as a firebrand in the local Muslim community. He was kicked out of two mosques, and lashed out at local Muslim leaders in a YouTube video, calling them kuffar and infidels. In March 2011, Osmakac made his way to Turkey, in the hopes of traveling by land to Saudi Arabia, according to his brother. He’d been told that holy water from Mecca was a cure-all, Avni says — that if he drank it, the nightmares would cease. But Osmakac never got much farther than Istanbul, after encountering multiple transportation mishaps, and getting turned away at the Syrian border by officials who refused to let him cross without a visa. He quickly ran out of money, lost his will and called home for help. His family in Tampa helped purchase a plane ticket for him to return to Florida.
Osmakac would later tell several mental health professionals that he was in fact more interested in traveling to Afghanistan or Iraq to fight American troops, and perhaps even find a bride there. “If I got to Afghanistan or Iraq, someone would marry me to their daughter,” he mentioned to one psychologist. Osmakac got back in touch with Dennison in Florida, and would talk often of returning to a Muslim land so he could marry.
Osmakac’s altercation with Keffer, April 16, 2011. (YouTube)
ON APRIL 16, 2011, Osmakac was outside of a Lady Gaga concert in Tampa. Larry Keffer, a Christian street preacher with short-cropped brown hair and a thick, white beard, was outside the concert as well. Keffer was wearing a fishing hat, a green camouflage shirt and blue pants.
“Sin is a slippery slope,” Keffer yelled through a megaphone to the Lady Gaga fans as someone else recorded the demonstration.
Most of the crowd ignored Keffer. A few concertgoers taunted him. He taunted them back. A police officer directing traffic refused to acknowledge the demonstration, while Keffer ranted about Lady Gaga and the devil. Osmakac finally confronted Keffer, pointing his finger in the preacher’s face.
“You infidel, I know the Bible better than you,” Osmakac told the preacher.
“What’s your message?” Keffer replied, talking into the megaphone.
“My message is, if y’all don’t accept Islam, y’all going to hell,” Osmakac said.
The men continued to provoke each other as people milled into the concert venue.
“Go have yourself a bacon sandwich,” Keffer told Osmakac.
“You infidel,” Osmakac said. “You infidel.”
As the argument escalated, Osmakac charged one of Keffer’s fellow demonstrators and head-butted him, bloodying the man’s mouth and breaking a dental cap. He then charged Keffer. Each wrapped his arms around the other, turning and twisting, until they broke free. The police officer managing traffic charged Osmakac with battery, giving him notice to appear in court. Osmakac was later arrested after failing to show up, Avni says, and his family had to bail him out; in just a few months’ time, Osmakac’s red-bearded friend would lead him straight into an FBI trap.
Screen-Shot-2015-03-02-at-3.51.58-PM
SAMI OSMAKAC AND Russell Dennison lived in Pinellas County, across the bay from Tampa. In September 2011, Dennison told Osmakac he knew a guy who ran a Middle Eastern market in Tampa. They should go see him, Dennison suggested. To this day, Osmakac doesn’t know why Dennison suggested this, or why he agreed to accompany him on the 45-minute drive to the store, called Java Village, near the Busch Gardens theme park.
When they arrived, Dennison introduced Osmakac to the owner, Abdul Raouf Dabus, a Palestinian. Dabus had flyers in his store promoting democracy, and he and Osmakac argued about the subject, with Osmakac contending that democracy and Islam were incompatible.
“Democracy makes the forbidden legal and the legal forbidden, and that’s greater infidelity,” Osmakac would tell Dabus. “Whoever enforces it is an infidel, is a Satan. Hamas is Satan. Muslim Brotherhood is Satan … If you don’t accept that God is the only legislator, then you become a polytheist, and that’s why I’m telling you.”
Osmakac didn’t know that Dabus would become an FBI informant. His work for the government has until now been secret.
According to the government’s version of events, Osmakac asked Dabus if he had Al Qaeda flags, or black banners. Osmakac disputes this, saying he never asked anyone for Al Qaeda flags.
Whatever the truth, the sting had just begun.
A psychologist appointed by the court later diagnosed Osmakac with schizoaffective disorder.
“He asked me if he can work a couple of hours, working and other stuff,” Dabus said in a phone interview from Gaza, where he now lives. “But it wasn’t really like a job. So basically, he was helping whenever he comes. And he got paid.” Dabus acknowledged he was paying Osmakac as the FBI was paying him.
In Tampa’s Muslim community, Dabus is well known. A former University of Mississippi math professor, Dabus was an associate of Sami Al-Arian, the University of South Florida professor who was indicted for allegedly providing material support to the Palestinian Islamic Jihad, in a case prosecutors argued proved successful intelligence-gathering under the Patriot Act. Dabus had worked at the Islamic Academy of Florida, an elementary and secondary private school for Muslims that Al-Arian had helped to found in Temple Terrace, a suburb of Tampa.
Dabus was among the witnesses in the Al-Arian trial, and his testimony was damaging to the government’s case. He testified that he had known Al-Arian only to raise money for charitable purposes, not for violence. During cross-examination, Dabus told the defense that he feared that Al-Arian’s trial meant Palestinians in the United States could no longer speak openly about the occupied territories. “There is no longer any security for the dog that barks in this country,” Dabus said.
He also questioned whether Al-Arian’s indictment suggested Muslims had become a new target for the U.S. government. “Our kids, will they have a future here?” he asked. “I don’t know.”
While Al-Arian would continue to battle federal prosecutors, living under house arrest in Virginia until finally agreeing to deportation to Turkey this year, Dabus remained in Tampa, active in the local religious and business community. But he acquired a reputation during this time for running up debts. From 2005 to 2012, he faced foreclosure actions on his home and businesses, as well as breach-of-contract and small-claims cases. In fact, when Dabus met Osmakac, he was in rough financial straits, records show. In July 2011, the bank holding the mortgage on his business’s building was granted approval to sell the property through foreclosure; Dabus owed $779,447.
It’s unclear why Dabus became an FBI informant, or for how long he worked with the government. He says he was doing his civic duty in reporting Osmakac and the young man’s interest in acquiring weapons, and had not previously worked with the FBI, though an FBI affidavit in the Osmakac case described Dabus as having “provided reliable information in the past.” Money is a common motivator for FBI counterterrorism informants, who can earn $100,000 or more on a single case. Dabus estimates the FBI paid him $20,000 for his role in the Osmakac sting, though insists money did not motivate him.
On November 30, 2011, after Osmakac had begun working for Dabus, the two drove around the Tampa area together as Dabus secretly recorded their conversation for the FBI. Osmakac asked if Dabus could help him obtain guns and an explosive belt. However, transcripts suggest he was also having trouble separating reality from fantasy. “In the dream, I was shown that everywhere you go, everything you do, hush your mouth,” Osmakac says. “Don’t say nothing. So, yes, the dream is real. Allah showed me that dream for a reason. And he’s also protected me for a reason.”
A psychologist appointed by the court later diagnosed Osmakac with schizoaffective disorder.
Osmakac and undercover FBI agent “Amir Jones.” (YouTube)
ABOUT THREE WEEKS after this conversation, on instructions from the FBI, Dabus introduced Osmakac to “Amir Jones,” an undercover agent. He might be able to help Osmakac obtain weapons, Dabus told him.
“What are you looking for, so that I know if it’s something I can get you or not?” Amir asks Osmakac.
“I’m looking for, even if … one AK, at least,” Osmakac says.
“OK.”
“And maybe a couple of Uzi, ’cause they’re better to hide.”
“OK. OK.”
“If you can get the long extension like for the AK and the Uzi, the long magazines—”
“They’re called banana magazine,” Amir says. “OK.”
“And … couple of grenades, 10 grenades minimum, if you can,” Osmakac says.
“Now, and that’s it?” Amir asks.
“And a [explosive] belt.”
For all Osmakac’s talk, the FBI’s undercover videos suggest he was less a hardened terrorist and more a comic book villain. While driving around Tampa with Amir, a hidden FBI camera near the dashboard, Osmakac described a plot to bomb simultaneously the several large bridges that span Tampa Bay.
“That’s five bridges, man,” Osmakac says. “All you need is five more people …. This would crush everything, man. They would have no more food coming in. Nobody would have work. These people would commit suicide!”
Amir Jones, behind the wheel of the car, offered a hearty laugh.
BACK AMONG FEDERAL law enforcement agents, according to the secret transcripts of their private conversations, there were plenty of reasons to joke at Osmakac’s expense. FBI employees talked about how Osmakac didn’t have any money, how he thought the U.S. spy satellites were watching him, and how he had no concept of what weapons cost on the black market.
The source of their amusement was also their primary source of concern. Osmakac was, in the FBI’s own words, “a retarded fool” who didn’t have any capacity to plan and execute an attack on his own. That was a challenge for the FBI.
“Once [the source] gives it to him, it’s his money, whether we orchestrated it or not.”
– Special Agent Taylor Reed
“Part of the problem is they want to catch him in the act,” FBI Special Agent Steve Dixon says, referring to federal prosecutors. “The attorneys do and stuff, but the problem is you can’t show up at a nightclub with an AK-47, in the middle of a nightclub, and pretend to start shooting people, or I mean people —”
“Right,” another speaker interrupts.
“— would get killed, just a stampede, just to get away from him,” Dixon finishes.
In constructing the sting, FBI agents were in communication with prosecutors at the U.S. Attorney’s Office for the Middle District of Florida, the transcripts show. The prosecutors needed the FBI to show Osmakac giving Amir Jones money for the weapons. Over several conversations, the FBI agents struggled to create a situation that would allow the penniless Osmakac to hand cash to the undercover agent.
“How do we come up with enough money for them to pay for everything?” asks FBI Special Agent Taylor Reed in one recording.
“Right now, we have money issues,” Amir admits in a separate conversation.
Their advantage was that Dabus, the informant, had given Osmakac a job. If they could get Dabus to pay Osmakac, and then make sure Osmakac used his paycheck to make a payment toward the weapons, the agents could satisfy the Justice Department. “Once he gives it to him, it’s his money, whether we orchestrated it or not,” Reed says.
In conversations about this plan, FBI agents refer to Dabus as the “source,” short for confidential human source. “Jake” is FBI Special Agent Jacob Collins, who transcripts indicate worked closely with Dabus.
“The source has to tell him, ‘Hey, listen! You are gonna have to give [Amir] the three hundred bucks,’” says Richard Worms, the squad supervisor. “And that’s something Jake has the source tell him. ‘And I’ll take care of the rest … and here’s three hundred of my money for you.’ Is that something you accept?”
“That’s a feasible scenario,” Amir Jones answers.
“That’s what you’re going to do,” Worms says. “That way, the source has to be coached what to do.”
In order to avoid being vulnerable to entrapment claims, the FBI agents didn’t want their money being used to purchase their weapons in the sting. So they laundered the money through Dabus. In an interview, Dabus implicitly confirmed that arrangement, describing the $20,000 he estimates he received from the FBI as a mix of expenses and compensation.
“It also shows good intent,” Worms says of giving Osmakac the money, according to the transcripts. “He was willing to cough up almost his entire paycheck to get this thing going.”
“That does look really good,” concurs FBI Special Agent Taylor Reed.
Osmakac and Amir at a Days Inn in Tampa on January 7, 2012. (YouTube)
AMIR AND OSMAKAC arranged to meet at a Days Inn in Tampa on January 7, 2012. The FBI had the room wired with two cameras, a color one facing the headboard and a black-and-white one looking over the bed and toward the closet door, in front of which Osmakac would film his martyrdom video. Just as the FBI had orchestrated, Osmakac provided the cash to Amir as a down payment on the weapons.
The hotel surveillance video starts at 8:38 p.m. Osmakac is kneeling down on the floor and praying. He then stands and greets Amir, who has laid out the weapons on the bed. There are six grenades, a fully automatic AK-47 with magazines, a handgun and an explosive belt. Outside, a vehicle-borne improvised explosive device is assembled in the bed of Amir’s truck. None of the guns or explosives was functional, but Osmakac didn’t know that.
“You know, they saying they like three trillion in debt, they like 200 trillion in debt,” Osmakac had said, describing their plot. “And after all this money they’re spending for Homeland Security and all this, this is gonna be crushing them.”
Amir shows Osmakac the weapons one by one. He demonstrates how to reload the guns, and how to arm and throw the grenades, as Osmakac had never received weapons training.
“This one’s fully automatic,” Amir says, as Osmakac holds the AK-47.
Osmakac then slips on the suicide vest, as Amir showed him, and sits down in front of the closet, where he’ll record his video. Amir is seated in a chair facing Osmakac, holding the digital camera out in front of him.
The FBI was making a movie — all the agents needed was, in their words, a “Hollywood ending.” Osmakac would give them that final scene.
Osmakac had settled on an Irish bar, MacDinton’s, as his target. The supposed plan, which Osmakac dreamed up with Amir, was for Osmakac to detonate the bomb outside the bar, and then unleash a second attack at the Seminole Hard Rock Hotel & Casino in Tampa, before finally detonating his explosive vest once the cops surrounded him.
But that didn’t happen. Instead, FBI agents arrested him in the hotel parking lot. He was charged with attempting to use a weapon of mass destruction — a weapon the FBI had assembled just for him.
After the arrest, according to the sealed transcripts, the FBI agents intended to celebrate their efforts over beers.
“The case agent usually buys,” one of the FBI employees is recorded as saying. Another adds: “That’s true — the case agent usually pops for everybody.”
Osmakac loading the fake car bomb with Amir. (YouTube)
HOW OSMAKAC CAME to the attention of law enforcement in the first place is still unclear. In a December 2012 Senate floor speech, Dianne Feinstein, chairwoman of the Senate Intelligence Committee, cited Osmakac’s case as one of nine that demonstrated the effectiveness of surveillance under the FISA Amendments Act. Senate legal counsel later walked back those comments, saying they were misconstrued. Osmakac is among terrorism defendants who were subjected to some sort of FISA surveillance, according to court records, but whether he was under individual surveillance or identified through bulk collection is unknown. Discovery material referenced in a defense motion included a surveillance log coversheet with the description, “CT-GLOBAL EXTREMIST INSPIRED.”
If he first came onto the FBI’s radar as a result of eavesdropping, then it’s plausible that as part of the sting, the FBI manufactured another explanation for his targeting. This is a long-running, if controversial process known as “parallel construction,” which has also been used by the U.S. Drug Enforcement Administration when drug offenders are identified through bulk collection and then prosecuted for drug crimes.
In court records, the FBI maintained that Osmakac came to agents’ attention through Dabus. The informant reached out to the FBI after meeting Osmakac, and soon offered him a job at Java Village.
At trial starting in May 2014, Osmakac’s lawyer, George Tragos, argued that the Kosovar-American was a young man suffering from mental illness, who had been entrapped by government agents.
A difficult defense to raise, entrapment requires not only that the government create the circumstances under which a crime may be committed, but also that the defendant not be “predisposed” toward the crime’s execution. “This entire case is like a Hollywood script,” Tragos told the jury, pointing out that the central piece of evidence was that Osmakac used government money to buy government weapons.
A psychologist retained by the defense, Valerie McClain, testified that Osmakac’s psychotic episodes, along with other mental health issues, made him especially easy for the government to manipulate. “When I talked to him most recently, he was still delusional,” McClain testified. “He still believed he could become a martyr.” Six mental health professionals examined Osmakac before his trial. Two hired by the defense and two appointed by the court diagnosed Osmakac with psychotic disorder or schizoaffective disorder. The pair hired by the prosecution said Osmakac suffered from milder mental problems, including depression and difficulty adapting to U.S. culture.
Tragos wasn’t able to tell the jury that FBI agents might have agreed with McClain’s assessment of Osmakac. The transcripts of the accidentally recorded conversations among FBI agents weren’t allowed into evidence, but after the trial, District Judge Mary S. Scriven did agree to unseal a number of them, which were heavily redacted by the government before being entered into the court file.
Prosecutors relied on the undercover FBI recordings and Osmakac’s own words to convict him. They played for the jury Osmakac’s so-called martyrdom video. They showed footage of Amir slipping over Osmakac’s shoulder the strap for the AK-47. They filled the courtroom with exchange after exchange of Osmakac’s hateful and violent rhetoric. Prosecutors played up Osmakac’s most ridiculous remarks, including his desire to bomb simultaneously the bridges that cross Tampa Bay. “The most powerful thing you can see are the defendant’s own words. His intent was to commit a violent act in America,” prosecutor Sara Sweeney told the jury.
Following a six-hour deliberation, jurors convicted Osmakac of possessing an unregistered AK-47 and attempting to use a weapon of mass destruction. In November 2014, he was sentenced to 40 years in federal prison.
“I wanted to go and study the religion … hoping that Allah is gonna cure me one day from the evil inside that I used to believe. But the doctors are saying it’s not evil — it’s mental illness.”
– Sami Osmakac
Entrapment has been argued in at least 12 trials following counterterrorism stings, and the defense has never been successful. Neither Abdul Raouf Dabus nor Russell Dennison testified in or provided depositions for Osmakac’s trial.
The government couldn’t produce Dabus, the FBI’s informant, because he had traveled to Gaza and Tel Aviv, where he says he was receiving treatment for cancer. He says his involvement with the FBI was limited to the Osmakac case — to reporting a suspicious man who was asking about Al Qaeda flags. Dabus disputes the FBI’s claim in court records that he was known to provide reliable information in the past.
“I did my job with them. I went away, and it is over,” Dabus says. “But I do not regret, and I would never regret to call again.”
Before Dabus left the country, the bank was granted approval to sell his Tampa home through foreclosure. His family owed $302,669, or about $50,000 more than the house was worth. Java Village is now shuttered. The signs are still on the outside of the building. Inside, the shelves are knocked over. Canned and dry goods litter the floor. Two dogs now guard the property.
Dennison, the red-bearded man who introduced Osmakac to Dabus, remains a mystery. He left the area shortly after Osmakac’s arrest, and emails he sent in late 2012 to a mutual friend he shared with Osmakac suggest he was fighting in Syria.
Osmakac’s family suspects much of Dennison’s story is a lie, and that he was, and likely still is, working with government agents. How else could Dennison have so conveniently delivered Osmakac to Dabus?
Confidential FBI reports on Dennison, copies of which were provided to The Intercept, do not address whether he’s been linked to a government agency. But the reports suggest the red-bearded man had a peculiar knack for becoming friendly with targets of FBI stings. After Osmakac’s arrest, FBI Special Agents Jacob Collins and Steve Dixon interviewed Dennison at Tampa International Airport, according to one report. Dennison was headed to Detroit, and from there, he said he hoped to go to Jordan to teach English. Dennison described how he was in contact with Abu Khalid Abdul-Latif, whose real name is Joseph Anthony Davis, a 36-year-old Seattle man who, like Osmakac, was troubled and financially struggling, lured by a paid informant into an FBI counterterrorism sting in June 2011. Abdul-Latif is serving 18 years for his crime.
Osmakac is now in USP Allenwood, a high-security prison north of Harrisburg, Pennsylvania.
“I was manipulated by [the FBI],” Osmakac says in a phone call from prison. He says he only wanted to move to a Muslim country, where he hoped to find a wife. Instead, he says, Dabus and the FBI exploited his mental problems and pushed him in different direction.
“I wanted to go and study the religion and get married, have children, just have nothing to do with this Western world,” Osmakac says. “I wanted to study Arabic and the religion in depth, hoping that Allah is gonna cure me one day from the evil inside that I used to believe. But the doctors are saying it’s not evil — it’s mental illness.”
Osmakac’s family is trying to raise money for an appeal.
“If my brother was truly part of a plot to kill people, I’d be the first one in line to condemn him,” Osmakac’s brother Avni says. “But my brother was mentally ill. We were trying to get him help. The FBI got to him first.”
This story was reported in partnership with the Investigative Fund at The Nation Institute.
BOSTON — Yusufi Vali was hunched over his computer at this city’s biggest mosque, where he is executive director, when the first phone call came. The police had killed a man a few miles away. Soon there were reports that the man was a Muslim who had been under investigation for terrorism.
And so the news media inquiries began. More than 100 calls came to the mosque over the next few days. Mr. Vali would explain, over and over, that the young man fatally shot after pulling a knife on the police on June 2 had only the slightest connection to the mosque: He had been hired by a security contractor to guard the mosque during the holy month of Ramadan in 2013.
No, he was not a regular at prayers. No, Mr. Vali did not recall meeting him. No, he could not shed light on any reported plan to behead a police officer, except to say that such a thing would be abhorrent.
Continue reading the main story
“It weighs on you,” Mr. Vali, a rail-slender 31-year-old Princeton graduate, said of the fallout from the latest allegations of terrorist plotting in the name of Islam. “I don’t have control over what these people do. It’s frustrating to have it put on us.”
Men gathered for Friday Prayer at the Islamic Society of Boston Cultural Center
To be Muslim in America today means to be held responsible, or to fear you may be, for the brutal acts of others whose notion of what Allah demands is utterly antithetical to your own. For the diverse crowd that prays at the Islamic Society of Boston Cultural Center, where professors at nearby universities mix with freshly arrived immigrants from Somalia and Egypt, it means hearing the word “Islamic” first thing each morning in news reports on an infamous extremist group. It means a kind of implied collective responsibility, however illogical, for beheadings in Syria, executions in Iraq and bombs in Boston.
For the estimated 70,000 Muslims in the city and suburbs, there are particular pressures. For more than two years, since the bombing near the finish line of the Boston Marathon, the city has been transfixed by the tragedy’s aftermath. For more than six years, a tiny organization with an anodyne name, Americans for Peace and Tolerance, has publicly claimed in newspaper ads and web postings that Boston’s Muslim institutions are led by extremists and terrorist sympathizers.
And in some mosques, tensions have played out between conservatives, some with deep roots in the Middle East, and more liberal worshipers. The former imam at the Boston center, William Suhaib Webb, who moved to Washington last year, recalled that after a sermon expressing a tolerant view of what Islam allows, a congregant told him bluntly: “You’re not a Muslim.”
On the grounds of the Boston center, a soaring mosque with a minaret and red-brick construction meant to honor New England tradition, work is underway to turn an abandoned swimming pool into a formal Islamic-style garden. It was to be called the “Terrace Garden,” until some jaw-dropping reactions showed that some people thought they were hearing “terrorist garden.” The project was quietly renamed “Paradise Garden.”
News arrived recently that a 57-year-old man in Iowa had been arrested after posting obscene and threatening notes, one including a photograph of a rifle, on the mosque’s Facebook page. Then people began to stop by the office to show Mr. Vali fliers someone had slid under the doors of neighboring houses in the Roxbury neighborhood, citing the Americans for Peace and Tolerance claims and denouncing the mosque for “extremist leadership.”
Mr. Vali, who is close to several local rabbis and ministers and whose only evident fanaticism is for the Kansas City Royals, took to the public address system before Friday Prayer to call on congregants to ignore the bait. “Let’s kill them with kindness,” he said of the mosque’s critics.
He said he and his staff, who are guiding a search for a new imam, were determined not to be distracted from the mosque’s mission — to build a home for a distinctly American Islam, one that models community service, tolerance and compassion.
The Obama administration, worried about the recruiting of young Americans by Islamic State extremists, chose Boston last fall as one of three cities for a Countering Violent Extremism pilot program. The idea is to brainstorm ways to combat recruitment by all militants, including antigovernment groups and white supremacists. But the plan has divided Muslims in Boston and the other two cities, Minneapolis and Los Angeles.
Mr. Vali’s mosque is among those that have opted out of the federal program, saying that however well intentioned it is, they believe it will further stigmatize Muslims.
“There is obviously an ideology that exists that’s horrific,” Mr. Vali said. But he said he had not encountered violent militancy in his congregation and believed it would be a mistake “to gear everything around extremism.”
Rather than lecturing young people about terrorism, he said, he wants them learning genuine Islamic principles in a new youth program and in joint projects with churches and synagogues.
Some Muslim activists have decided to go along with the federal effort. Nabeel Khudairi, 53, an optometrist in the Boston suburb of Norwood, is already creating a program to encourage young Muslims to look for genuine heroes and convince them that they “should not go to YouTube University and not listen to Imam Google.”
Hafsa Salim, a human resources manager, waited outside the Islamic Society of Boston Cultural Center for a shuttle to take her youngest daughter Nura to school
Participating in the federal project “is getting on a ship before it sails,” Mr. Khudairi said. “Otherwise you’re standing on shore, watching it go.”
Unlike Minneapolis, Boston has not experienced the departure of dozens of young people for militant groups like the Shabab, in Somalia, and the Islamic State, also known as ISIS or ISIL. But over the years, a growing list of Muslim extremists and terrorists has emerged from the city.
Most notorious are the Tsarnaev brothers, who committed the marathon bombing. But there are others:
■ Ahmad Abousamra, 33 if he is still alive, grew up in suburban Boston. His father was an endocrinologist at Massachusetts General Hospital and president of the Islamic Center of New England. He fled to Syria in 2007 after coming under F.B.I. scrutiny and last year joined the Islamic State’s prolific English-language social media operation in Syria, officials believe. In late May, the Iraqi military announced that he had been killed in an airstrike; American officials have not confirmed his death.
■ Tarek Mehanna, another suburbanite in his early 30s, who was charged in 2009 with Mr. Abousamra but did not flee. He was convicted of supporting Al Qaeda and other charges, and is serving a 17-year federal sentence.
■ Rezwan Ferdaus, 29, grew up in the outer suburb of Ashland and earned a physics degree at Northeastern University. He was sentenced in 2012 to 17 years for plotting to fly explosives-laden model planes into the Capitol and the Pentagon and other crimes.
■ Aafia Siddiqui, 43, who earned a Ph.D. in neuroscience at Brandeis and became an outspoken Muslim activist. She later joined Al Qaeda and in 2008, in custody in Afghanistan, was accused of shooting at American soldiers. She was sentenced in 2010 to 86 years.
■ Abdurahman Alamoudi, 63, a founder of the Islamic Society of Boston, parent organization to Mr. Vali’s mosque, who in 2004 was sentenced to 23 years for joining a bizarre Libyan plot to kill the Saudi crown prince and other charges.
They are among more than a dozen people featured in a rogues’ gallery of former Bostonians featured in advertisements and online writings of Americans for Peace and Tolerance. The group’s founder is Charles Jacobs, 71, a former business consultant who spent years combating contemporary slavery in Africa before focusing on what he sees as a new form of anti-Semitism, fueled by Islamic extremism and hostility to Israel.
The accumulation of Boston malefactors makes for a disturbing list, especially if it is now updated with Usaamah Rahim, the man killed by the police this month, and two other men who were charged Friday with plotting with him and supporting the Islamic State. The Boston Globe was prompted last week to ask in a headline, “Are Boston terrorism cases a trend?”
Mr. Jacobs blames what he believes to be the radical leadership of area mosques, including the Islamic Society of Boston. He points to the fact that devotees of the Muslim Brotherhood, the conservative Islamist organization with branches and allies across the Middle East, were involved in founding the society more than three decades ago. The Muslim American Society, whose Boston branch operates Mr. Vali’s mosque, has been accused of links to the Brotherhood; it insists any ties are historical and have no relevance.
“We think and say and write that the vast majority of Muslims in Boston and America are moderates who would never do anyone any harm,” Mr. Jacobs said. “We think the I.S.B. leadership are hiding behind the general Muslim population.”
Abdul Cader Asmal, left, a retired physician, and Nabeel Khudairi, an optometrist, outside the Islamic Center of New England in Sharon, Mass. Dr. Asmal said that Islam must find a way to “excommunicate” extremists
His assertions have been rejected by Boston’s leading rabbis and the United States attorney, Carmen Ortiz, who said she found the group’s claims “incredibly racist and unfair.”
A closer look at extremists who have come from Boston finds little evidence that they were radicalized at local mosques. For example, the authorities believe the Chechen brothers responsible for the bombing at the marathon got their ideas largely online; the older brother, Tamerlan Tsarnaev, was thrown out of the Islamic Society of Boston’s Cambridge mosque after a strident outburst.
Still, to talk privately with a range of Boston-area Muslims is to hear a more subtle story about the battle over Islamic ideology. One Pakistani-American, who did not want to be identified for fear of becoming a target of anger, said he believed Muslim Brotherhood loyalists in Boston still met secretly and had a pernicious influence on some young people. But he said he did not believe these “hard-liners,” as he called them, supported terrorism.
Talal Eid, 63, a liberal imam who was ousted from his longtime position at a suburban Boston mosque in a factional fight in 2005, said he believed the city’s mosques should operate more democratically. But he said the ideological tensions had no relationship to violence.
“Muslims all over are very good people, working hard, living their lives,” he said. “In Boston, when you talk about terrorists, you can count them on the fingers of one hand. It’s not even one in 10,000.”
But while the numbers may be small, the consequences for American Muslims of each reported plot or act of religiously motivated violence are incalculable.
Some Boston Muslims believe Islam itself faces a grave, perhaps existential danger from the association with terror.
Mr. Webb, the imam who served at Mr. Vali’s mosque from 2010 to 2014, has been denounced on the Internet for his liberal views. A onetime gang member and hip-hop D.J. from a Christian family, he said he himself had espoused deeply conservative views after converting to Islam and changed only gradually.
After the Islamic State beheadings of journalists last year, Mr. Webb delivered a striking sermon. “In America, no religious community has been beaten up or slapped around in the last 13 years like us,” he said.
But he added: “Within our ranks, we have people who openly say they want to kill Americans, they would like to see the destruction of America.” Mr. Webb said Muslims did not like to talk about the few who embrace violence. “But if we continue to ignore these problems, they’ll never be answered,” he said.
The same sense of danger to Islam was expressed by an older member of the Boston community, Abdul Cader Asmal, 76, a retired physician and longtime leader in area mosques. He recalled watching Tarek Mehanna and Ahmad Abousamra grow up, and expressed puzzlement that one had ended up in prison and the other with ISIS.
“This is painful for us,” Dr. Asmal said. Islam, he said, must find a way to “excommunicate” extremists.
“If it doesn’t take a drastic stance against terrorism,” Dr. Asmal added, “its credibility as a force for good will be lost.”
The 19th-century artist James E. Buttersworth, although a titan in the field of marine art, cannot be described as famous. Prized for his exquisitely detailed portraits of racing yachts and clipper ships, he remains unknown to the general public and therefore has limited drawing power.
To overcome this obstacle, the Mariners’ Museum in Newport News, Va., hit on a novel solution for its new exhibition of his work: Toss in a forgery and challenge museum visitors to sniff it out from among the 34 genuine Buttersworth works.
About that ringer: Museums and forgeries are natural enemies, and officials at the Mariners’ Museum tiptoed warily around their idea for quite some time before committing to it.
“The museum couldn’t be seen spending money on this and putting it in the collection,” said Lyles Forbes, the museum’s chief curator and the organizer of “B Is for Buttersworth, F Is for Forgery: Solve a Maritime Mystery,” which opened on Saturday.
When it came down to it, he added, he was not even sure how to acquire a forgery.
At this point, help arrived from a man who has agreed to identify himself only as “a friend of the museum.” (Because his name appears as a lender on the wall text of the forged painting, providing it here might give away the secret to visitors).
The friend took on the assignment of securing a forged Buttersworth, which proved to be relatively easy, since, when it comes to bogus Buttersworths, nearly all roads lead to one man: Ken Perenyi.
For years, Mr. Perenyi studied and imitated the work of Buttersworth, turning a tidy profit by selling his paintings to unsuspecting dealers and collectors. He is not shy about this. Visitors who click on his website are greeted with the words “Welcome to America’s No. 1 Art Forger Website.” He has chronicled his buccaneering days of turning out bogus Buttersworths and Martin Johnson Heades, his mainstays, in “Caveat Emptor: The Secret Life of an American Art Forger,” published two years ago.
Mr. Perenyi now plies his trade openly and legally (though he is still on the F.B.I.'s radar). The friend of the museum acquired, through an intermediary, a genuine ersatz Buttersworth, from Mr. Perenyi’s stock on hand, for about 5 to 10 percent of the price that the painting might fetch if it were authentic.
A small Buttersworth in good condition might sell for $30,000, said Alan Granby, who, with Janice Hyland, runs Hyland Granby Antiques in Hyannis Port, Mass, which usually has several Buttersworths for sale. The much rarer large paintings, especially those depicting America’s Cup races, can go for more than $1 million. Mr. Perenyi said that his prices range from $5,000 to $150,000.
The museum has made a point of not mentioning Mr. Perenyi, who said he did not know until a reporter approached him that his work was in its current show. “We did not want to lend any legitimacy to the forger or be seen as promoting him in any way,” Mr. Forbes said.
On entering the exhibition, visitors approach a high-resolution digital image of “Magic and Gracie off Castle Garden,” an 1871 Butterworth that shows two yachts, sails taut in the wind, racing neck and neck in New York Harbor. On a nearby television screen, a photo of Buttersworth pops up, and “hot spots,” activated with the touch of a finger, explain the fine points: the signature, size, background features, sky and weather, seas and sea gulls, composition and meticulous detailing of the ships.
Visitors, prompted by clues in the wall texts, then try to identify the lone forgery. At two voting booths, they can test their suspicions by entering the number of the suspected forgery on touch screens that tell them whether they are right or wrong and offer to give them the correct answer. Then the honor system applies. Those in the know are asked not to give away the secret.
Mr. Forbes invited Colette Loll, the founder and director of the consulting firm Art Fraud Insights, to write wall texts explaining the difference between fakes and forgeries: Fakes replicate an existing work, while forgeries masquerade as new or unknown work.
Mr. Perenyi has been a burr under her saddle for quite some time. “He seems to have no remorse for diluting the body of work of an artist he professes to admire with all the forgeries he has inserted into the market,” she said. “If you fess up, but do not provide the specifics, the forgeries are still out there in circulation.”
Mr. Perenyi is more than happy to explain the techniques required to fake a Buttersworth, which he does crisply and authoritatively. If the circumstances were different, you could imagine him delivering a splendid lecture at the museum.
Over the telephone, he held forth enthusiastically on Buttersworth’s hallmarks: the favored New York settings; the play of light on clouds and water, reflecting the influence of the Luminist painters; the love of dramatic contrasts in the sky; and the painstaking attention to detail, with the stitching on canvas sails depicted in lines as fine as a human hair.
“Hardest of all is the unique way he painted water, " Mr. Perenyi said. “He did not follow the tried and true technique that British artists developed for waves and water. He rolls or twists his brush in his fingers as he pulls it along, to get ribbons of highlights.”
Close study and constant practice, Mr. Perenyi said, have made him the equal of his master. “If he could come back to life, he would shake my hand,” he said. “After all, I devoted 30 years to understanding him. He would say, ‘I would be proud to put my name on it myself.”
The forgery aside, the exhibition draws heavily on its own substantial collection of Buttersworths, augmented by loans from other museums and by a collection of 16 paintings recently donated by Janet Schaefer, a collector in Stonington, Conn.
All eyes will be searching for the non-Buttersworth, however. The painting returns to the friend of the museum when the exhibition closes on April 26, at which point, the friend said, “I’ll probably put it in my office as a conversation piece.”
As for Mr. Perenyi, he declared himself well pleased to be included in the Mariners’ Museum exhibition. " I take it as a great compliment,” he said, “and a testament to the museum’s good taste.”
Scrapper Bob ‘Hoop’ Hooper was making as much as $400 a day selling scrap just three years ago. ‘Now I’m doing $100 to $200,’ he says
James R. Hagerty and Bob Tita
Updated June 7, 2015
American companies have complained for the past year that the headwinds of a strong dollar and a slowing Chinese economy are hurting their earnings.
For sellers of scrap metal, used cardboard boxes, and other waste, those headwinds are more like a hurricane.
Waste has long been a major U.S. export, providing material to be melted in foreign steel mills or made into new paper products. But the strength of the dollar has made American waste pricier abroad, cutting demand in China, Turkey and other markets.
U.S. exports of scrap materials have fallen by 36% since peaking at $32.6 billion 2011. Prices of shredded scrap steel have plunged about 18% so far this year and are down 41% since early 2012, according data collected by the Platts unit of McGraw Hill Financial -0.45 The dollar is up about 17% since last July against a basket of major currencies compiled by the Federal Reserve.
That has been hard on the network of waste dealers and scrap gatherers who are the backbone of the industry.
Bob Hooper, who goes by Hoop, finds discarded metal on curbs and in dumpsters around Pittsburgh and carries it to scrapyards in a rusting Chevy pickup with a bungee cord to keep the driver’s door shut. He was making as much as $400 a day selling scrap just three years ago, he said. “Now I’m doing $100 to $200.”
Or less. On a recent day, he hauled in more than 1,000 pounds of scrap, including two discarded refrigerators, a water heater and a broken microwave buried in egg shells and other moist trash. After gasoline expenses, he netted about $80.
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Turkey, whose steel mills are big users of scrap, has been buying less from the U.S. and more from Russia, Ukraine and other places with weaker currencies. Meanwhile, U.S. steel production has fallen in response to more imports, so American producers are buying less scrap.
Demand for old paper and boxes also is down in the U.S. The average price for used corrugated cardboard has fallen 27% in the past year to $77 a ton, according to Pulp & Paper Week.
The recent labor dispute at West Coast ports disrupted exports, forcing buyers like China to find other sources and creating a glut in the U.S.
Waste and scrap remains a big business. Last year it accounted for 1.3% of U.S. exports, about the same as meat and poultry, and bigger than either corn or computers. The industry directly employs about 149,000 people, according to the Institute of Scrap Recycling Industries, a trade group. That doesn’t count self-employed people like Mr. Hooper.
On a recent day, Mr. Hooper hauled in more than 1,000 pounds of scrap, including two discarded refrigerators, a water heater and a broken microwave. After expenses, he netted about $80
After a steep drop in scrap prices earlier this year, “things seem to have stabilized a little,” said Joe Pickard, economist for the trade group. But the outlook hinges on a pickup in global manufacturing, which is currently sluggish.
When China was booming, scrap dealers focused heavily on that market. Ships that carried furniture and other household goods from China to California returned stuffed with old metal and boxes ready to be converted into new products. That traffic has slowed.
“Clearly, it’s been a great run for a number of years,” said Alan Dick, president of Los Angeles-based Alpert & Alpert Iron & Metal Inc. As demand from China wanes, he hopes Vietnam, Thailand and Malaysia will buy more U.S. scrap. Combined they might provide enough demand to keep his 85-year-old company alive for another generation, he said.
Warren Rosenfeld, president of Calbag Metals Co., a scrap metals dealer in Portland, Ore., said he fears a long-term decline in the U.S. scrap industry. As people in China buy and wear out more cars and refrigerators, they create a larger supply of domestic scrap, he said, reducing the need for imports from the U.S.
Another worry for scrap-metals dealers is that new cars contain less steel these days as manufacturers reduce vehicle weights to improve fuel economy, said Randy Castriota, owner of Castriota Metals & Recycling in Pittsburgh. Cars also stay longer on the road—and out of the scrap pool.
Mr. Castriota, who employs about 30 people, had to lay off four a few months ago. A shortage of truck drivers has forced him to pay more to haul scrap to his customers. Insurance costs are up, too.
One beneficiary of lower scrap prices is Nucor Corp. -0.74 , the largest U.S. steelmaker, which makes most of its steel from melted scrap rather than iron ore. Chief Executive John Ferriola told investors recently that profit margins for scrap processors have been severely compressed, adding, “We expect to see some people not making it through this very difficult time.”
Nucor, he said, may take advantage of the downturn by acquiring distressed scrap-processing businesses. “We won’t be shy,” he said. “We’ll be at the table.”
Falling prices also threaten the paper-recycling business, some dealers said.
Joel Litman, co-owner of Texas Recycling/Surplus Inc. in Dallas, worries that “prices can get so low that you can’t even cover your processing costs.” Texas Recycling collects high-grade waste paper from various businesses and sells the material to dealers for use in tissue paper, paper towels and other paper products used by restaurants and the food service industry.
With the current glut, he said, “there’s just a lot of paper out there that cannot get consumed fast enough.”
WASHINGTON — Facing resistance from Pacific trading partners, the Obama administration is no longer demanding protection for pharmaceutical prices under the 12-nation Trans-Pacific Partnership, according to a newly leaked section of the proposed trade accord.
But American negotiators are still pressing participating governments to open the process that sets reimbursement rates for drugs and medical devices. Public health professionals, generic-drug makers and activists opposed to the trade deal, which is still being negotiated, contend that it will empower big pharmaceutical firms to command higher reimbursement rates in the United States and abroad, at the expense of consumers.
“It was very clear to everyone except the U.S. that the initial proposal wasn’t about transparency. It was about getting market access for the pharmaceutical industry by giving them greater access to and influence over decision-making processes around pricing and reimbursement,” said Deborah Gleeson, a lecturer at the School of Psychology and Public Health at La Trobe University in Australia. And even though the section, known as the transparency annex, has been toned down, she said, “I think it’s a shame that the annex is still being considered at all for the T.P.P.”
The annex, which covers pharmaceutical and medical devices, is the latest document obtained by The New York Times in collaboration with the watchdog group WikiLeaks, and it was released before the House vote on whether to give President Obama expanded powers to complete the Trans-Pacific Partnership. The Senate has already approved legislation giving the president trade promotion authority, or fast-track power that would allow him to complete trade deals without the threat of amendments or a filibuster in Congress. A House vote on final passage of the bill, now expected on Friday, appears extremely close.
The Pacific accord, would link countries stretching from Canada and Chile to Japan and Australia in a new set of trade rules that would cover 40 percent of the global economy.
Opponents of both the Pacific deal and the legislation to grant trade promotion authority have long targeted the pharmaceutical issue. Foreign governments and health care activists have accused pharmaceutical giants, mostly based in the United States, of protecting profits over public health, especially in poor countries where neither the government nor consumers can afford to pay rates anywhere close to those charged in wealthier nations.
That fight re-emerged in the Pacific trade negotiations, which involve countries with strong cost-containment policies, like New Zealand, as well as poor countries like Peru and Vietnam.
The agreement “will increase the cost of medicines worldwide, starting with the 12 countries that are negotiating the Trans-Pacific Partnership,” said Judit Rius Sanjuan, a lawyer at Doctors Without Borders, a humanitarian organization that provides medical care in more than 60 countries.
Drug companies, however, say they need to be able to charge fair prices to compensate for the billions of dollars and decades of research that go into their medicines.
Jay Taylor, vice president for international affairs for Pharmaceutical Research and Manufacturers of America, said penetrating the opaque process for getting a drug considered for a national health system, then listed as available and properly priced, is central to free trade for drug makers. “It is market access,” he said.
That is particularly true for the Pacific accord, he said, because one of the countries, New Zealand, has a powerful system for holding down drug costs — and keeping drug makers in the dark. New Zealand’s health system has been held up as a model for the Pacific region, a prospect the pharmaceutical industry does not relish.
“There are no clear timelines for review, no sense of what a complete dossier is to get a fair review,” Mr. Taylor said. “It’s a question of basic due process.”
Negotiators from the United States appear to be pushing a similar agenda in separate negotiations with the European Union, according to a copy of an internal European report viewed on Wednesday by The New York Times.
The report, dated May 8 and written by the European Commission, said of the status of talks with the United States on a planned Transatlantic Trade and Investment Partnership, also known as T.T.I.P., “The U.S. reiterated its interest to include transparency provisions on pricing and reimbursement within the T.T.I.P. similar to the ones E.U. and U.S. have with Korea.”
The report was made available by a person who shared the information on the condition of anonymity.
The European Commission has said that the pharmaceutical aspects of trade talks with the United States focus mostly on simplifying inspections and making it easier to approve and develop new medicines, insisting that the “fear E.U. governments would lose their right to decide” drug costs was unfounded.
Pharmaceutical firms and their trade associations have filed by far more lobbying disclosure forms on the Pacific trade negotiations than any other industry, according to the watchdog Sunlight Foundation. More broadly, the pharmaceutical and health product industries have been the biggest spenders on lobbying, and drug company deal-making with the Obama administration and in Congress was instrumental in securing passage of the Affordable Care Act.
Public health professionals say pharmaceutical industry lobbying is meant to diminish the power of government health programs that trim reimbursement rates to global pharmaceutical giants. The newly leaked annex, dated Dec. 17, 2014, lists Medicare and the Centers for Medicare and Medicaid Services as falling under its strictures.
That may embolden critics.
“The leak is just the latest glaring example of why fast-tracking the T.P.P. would undermine the health of Americans and the other countries and cost our government more, all to the benefit of pharma’s profits,” said Lori Wallach, director of Public Citizen’s Global Trade Watch and one of the most prominent voices in the coalition working to scuttle trade promotion authority.
Officials at the United States trade representative’s office, while declining to comment on a leak they would not acknowledge, said rules in the Pacific accord would have no impact on the United States because Medicare already adhered to them. The trade representative’s office helped develop the proposals.
“Already, transparency and procedural fairness are integral parts of the U.S. legal system and as such are principles reflected in U.S. trade agreements,” the representative’s office said in a statement.
While the current draft may fall short of what pharmaceutical companies wanted, it also offers them new opportunities to challenge the decisions of trading partners on which drugs they will offer their citizens through government health care programs and the rates at which they will reimburse drug sellers.
A version of the Trans-Pacific Partnership annex that was leaked in 2011 made explicit reference to “competitive market-derived prices,” promising drug companies the chance to appeal rates they deemed insufficient. Those are gone, “a victory for the non-U.S. partners to some extent,” Ms. Gleeson said.
But Pacific accord negotiators appear ready to grant pharmaceutical and medical device makers more power to influence participating governments. The 12 countries involved, and any others that might join later, would have to disclose rules and guidelines for deciding which medical products would be made available through government programs and at what rate providers would be reimbursed.
In the United States, pharmaceutical companies and Medicare have fought for years over which drugs are listed for reimbursement, especially when Medicare lists generic drugs over name brands. While advocates of the trade deal, including Mr. Obama, say opening markets to competition should lower prices for consumers, generic-drug makers say the Trans-Pacific Trade Partnership could raise costs instead.
Heather Bresch, the chief executive of Mylan, one of the largest generic-drug makers, said the brand-name pharmaceutical industry was “establishing, through U.S. trade policy, an international system designed to maximize its monopolies.”
By listing the Centers for Medicare and Medicaid Services, the annex makes it clear the United States would not be immune to T.P.P. rules. Japan, Australia and New Zealand may not have drug companies as powerful as those in the United States, but under the accord, American subsidiaries in Pacific trade partners could use the accord’s dispute-resolution process against perceived violations by Medicare.
It also suggests that disputes over pharmaceutical listing would not be subject to government-to-government dispute resolution, the World Trade Organization and retaliatory tariffs.
Instead, trade lawyers say, disputes would most likely be resolved through the Investor-State Dispute Settlement process, which involves three-lawyer extrajudicial tribunals organized under rules set by the United Nations or the World Bank.
That could be significant for current Medicare practices, said Peter Maybarduk of Public Citizen’s Global Access to Medicines project, and also could hinder efforts to lower costs by changing federal law to allow the government to negotiate prices directly with drug makers.
Officials at the trade representative’s office say those concerns are unfounded.
“The transparency annex in T.P.P. is not subject to Investor-State Dispute Settlement, and nothing in its provisions will undermine our ability to pursue the best health care policy for Americans, including any future action on health care expenditures and cost containment,” a trade representative spokesman said.
This is the fifth Decade Forecast published by Stratfor. Every five years since 1996 (1996, 2000, 2005, 2010 and now, 2015) Stratfor has produced a rolling forecast. Overall, we are proud of our efforts. We predicted the inability of Europe to survive economic crises, China's decline and the course of the U.S.-jihadist war. We also made some errors. We did not anticipate 9/11, and more important, we did not anticipate the scope of the American response. But in 2005 we did forecast the difficulty the United States would face and the need for the United States to withdraw from its military engagements in the Islamic world. We predicted China's weakness too early, but we saw that weakness when others were seeing the emergence of an economy larger than that of the United States. Above all, we have consistently forecast the enduring power of the United States. This is not a forecast rooted in patriotism or jingoism. It derives from our model that continues to view the United States as the pre-eminent power.
We do not forecast everything. We focus on the major trends and tendencies in the world. Thus, we see below some predictions from our 2010 Decade Forecast:
We see the U.S.-jihadist war subsiding. This does not mean that Islamist militancy will be eliminated. Attempts at attacks will continue, and some will succeed. However, the two major wars in the region will have dramatically subsided if not concluded by 2020. We also see the Iranian situation having been brought under control. Whether this will be by military action and isolation of Iran or by a political arrangement with the current or a successor regime is unclear but irrelevant to the broader geopolitical issue. Iran will be contained, as it simply does not have the underlying power to be a major player in the region beyond its immediate horizons.
The diversity of systems and demographics that is Europe will put the European Union's institutions under severe strain. We suspect the institutions will survive. We doubt that they will work very effectively. The main political tendency will be away from multinational solutions to a greater nationalism driven by divergent and diverging economic, social and cultural forces. The elites that have crafted the European Union will find themselves under increasing pressure from the broader population. The tension between economic interests and cultural stability will define Europe. Consequently, inter-European relations will be increasingly unpredictable and unstable.
Russia will spend the 2010s seeking to secure itself before the demographic decline really hits. It will do this by trying to move from raw commodity exports to process commodity exports, moving up the value chain to fortify its economy while its demographics still allow it. Russia will also seek to reintegrate the former Soviet republics into some coherent entity in order to delay its demographic problems, expand its market and above all reabsorb some territorial buffers. Russia sees itself as under the gun, and therefore is in a hurry. This will cause it to appear more aggressive and dangerous than it is in the long run. However, in the 2010s, Russia's actions will cause substantial anxiety in its neighbors, both in terms of national security and its rapidly shifting economic policies.
The states most concerned — and affected — will be the former satellite states of Central Europe. Russia's primary concern remains the North European Plain, the traditional invasion route into Russia. This focus will magnify as Europe becomes more unpredictable politically. Russian pressure on Central Europe will not be overwhelming military pressure, but Central European psyches are finely tuned to threats. We believe this constant and growing pressure will stimulate Central European economic, social and military development.
China's economy, like the economies of Japan and other East Asian states before it, will reduce its rate of growth dramatically in order to calibrate growth with the rate of return on capital and to bring its financial system into balance. To do this, it will have to deal with the resulting social and political tensions.
From the American point of view, the 2010s will continue the long-term increase in economic and military power that began more than a century ago. The United States remains the overwhelming — but not omnipotent — military power in the world, and produces 25 percent of the world's wealth each year.
The Decade Ahead
The world has been restructuring itself since 2008, when Russia invaded Georgia and the subprime financial crisis struck. Three patterns have emerged. First, the European Union entered a crisis that it could not solve and that has increased in intensity. We predict that the European Union will never return to its previous unity, and if it survives it will operate in a more limited and fragmented way in the next decade. We do not expect the free trade zone to continue to operate without increasing protectionism. We expect Germany to suffer severe economic reversals in the next decade and Poland to increase its regional power as a result.
The current confrontation with Russia over Ukraine will remain a centerpiece of the international system over the next few years, but we do not think the Russian Federation can exist in its current form for the entire decade. Its overwhelming dependence on energy exports and the unreliability of expectations on pricing make it impossible for Moscow to sustain its institutional relations across the wide swathe of the Russian Federation. We expect Moscow's authority to weaken substantially, leading to the formal and informal fragmentation of Russia. The security of Russia's nuclear arsenal will become a prime concern as this process accelerates later in the decade.
We have entered a period in which the decline of the nation-states created by Europe in North Africa and the Middle East is accelerating. Power is no longer held by the state in many countries, having devolved to armed factions that can neither defeat others nor be defeated. This has initiated a period of intense internal fighting. The United States is prepared to mitigate the situation with air power and limited forces on the ground but will not be able or willing to impose a settlement. Turkey, whose southern border is made vulnerable by this fighting, will be slowly drawn into the fighting. By the end of this decade, Turkey will emerge as the major regional power, and Turkish-Iranian competition will increase as a result.
China has completed its cycle as a high-growth, low-wage country and has entered a new phase that is the new normal. This phase includes much slower growth and an increasingly powerful dictatorship to contain the divergent forces created by slow growth. China will continue to be a major economic force but will not be the dynamic engine of global growth it once was. That role will be taken by a new group of highly dispersed countries we call the Post-China 16, which includes much of Southeast Asia, East Africa and parts of Latin America. China will not be an aggressive military force either. Japan remains the most likely contender for the dominant position in East Asia, both because of its geography and because of its needs as a massive importer.
The United States will continue to be the major economic, political and military power in the world but will be less engaged than in the past. Its low rate of exports, its increasing energy self-reliance and its experiences over the last decade will cause it to be increasingly cautious about economic and military involvement in the world. It has learned what happens to heavy exporters when customers cannot or will not buy their products. It has learned the limits of power in trying to pacify hostile countries. It has learned that North America is an arena in which it can prosper with selective engagements elsewhere. It will face major strategic threats with proportional power, but it will not serve the role of first responder as it has in recent years.
It will be a disorderly world, with a changing of the guard in many regions. The one constant will be the continued and maturing power of the United States — a power that will be much less visible and that will be utilized far less in the next decade.
Europe
The European Union will be unable to solve its fundamental problem, which is not the eurozone, but the free trade zone. Germany is the center of gravity of the European Union; it exports more than 50 percent of its GDP, and half of that goes to other EU countries. Germany has created a productive capability that vastly outstrips its ability to consume, even if the domestic economy were stimulated. It depends on these exports to maintain economic growth, full employment and social stability. The European Union's structures — including the pricing of the euro and many European regulations — are designed to facilitate this export dependency.
This has already fragmented Europe into at least two parts. Mediterranean Europe and countries such as Germany and Austria have completely different behavioral patterns and needs. No single policy can suit all of Europe. This has been the core problem from the beginning, but it has now reached an extreme point. What benefits one part of Europe harms another.
Nationalism has already risen significantly. Compounding this is the Ukrainian crisis and Eastern European countries' focus on the perceived threat from Russia. Eastern Europe's concern about Russia creates yet another Europe — four, total, if we separate the United Kingdom and Scandinavia from the rest of Europe. Considered with the rise of Euroskeptic parties on the right and left, the growing delegitimation of mainstream parties and the surging popularity of separatist parties within European countries, the fragmentation and nationalism that we forecast in 2005, and before, is clearly evident.
These trends will continue. The European Union might survive in some sense, but European economic, political and military relations will be governed primarily by bilateral or limited multilateral relationships that will be small in scope and not binding. Some states might maintain a residual membership in a highly modified European Union, but this will not define Europe.
What will define Europe in the next decade is the re-emergence of the nation-state as the primary political vehicle of the continent. Indeed the number of nation-states will likely increase as various movements favoring secession, or the dissolution of states into constituent parts, increase their power. This will be particularly noticeable during the next few years, as economic and political pressures intensify amid Europe's crisis.
Germany has emerged from this mass of nation-states as the most economically and politically influential. Yet Germany is also extremely vulnerable. It is the world's fourth-largest economic power, but it has achieved that status by depending on exports. Export powers have a built-in vulnerability: They depend on their customers' desire and ability to buy their products. In other words, Germany's economy is hostage to the economic well-being and competitive environment in which it operates.
There are multiple forces working against Germany in this regard. First, Europe's increasing nationalism will lead to protectionist capital and labor markets. Weaker countries are likely to adopt various sorts of capital controls, while stronger countries will limit the movement of foreigners — including the citizens of other EU countries — across their borders. We forecast that existing protectionist policies inside the European Union, particularly on agriculture, will be supplemented in coming years by trade barriers created by the weaker Southern European economies that need to rebuild their economic base after the current depression. On a global basis, we can expect European exports to face increased competition and highly variable demand in the uncertain environment. Therefore, our forecast is that Germany will begin an extended economic decline that will lead to a domestic social and political crisis and that will reduce Germany's influence in Europe during the next 10 years.
At the center of economic growth and increasing political influence will be Poland. Poland has maintained one of the most impressive growth profiles outside of Germany and Austria. In addition, though its population is likely to contract, the contraction will most probably be far less than in other European countries. As Germany undergoes wrenching shifts in economy and population, Poland will diversify its own trade relationships to emerge as the dominant power on the strategic Northern European Plain. Moreover, we expect Poland to be the leader of an anti-Russia coalition that would, significantly, include Romania during the first half of this decade. In the second half of the decade, this alliance will play a major role in reshaping the Russian borderlands and retrieving lost territories through informal and formal means. Eventually as Moscow weakens, this alliance will become the dominant influence not only in Belarus and Ukraine, but also farther east. This will further enhance Poland's and its allies' economic and political position.
Poland will benefit from having a strategic partnership with the United States. Whenever a leading global power enters into a relationship with a strategic partner, it is in the global power's interest to make the partner as economically vigorous as possible, both to stabilize its society and to make it capable of building a military force. Poland will be in that position with the United States, as will Romania. Washington has made its interest in the region obvious.
Russia
It is unlikely that the Russian Federation will survive in its current form. Russia's failure to transform its energy revenue into a self-sustaining economy makes it vulnerable to price fluctuations. It has no defense against these market forces. Given the organization of the federation, with revenue flowing to Moscow before being distributed directly or via regional governments, the flow of resources will also vary dramatically. This will lead to a repeat of the Soviet Union's experience in the 1980s and Russia's in the 1990s, in which Moscow's ability to support the national infrastructure declined. In this case, it will cause regions to fend for themselves by forming informal and formal autonomous entities. The economic ties binding the Russian periphery to Moscow will fray.
Historically, the Russians solved such problems via the secret police — the KGB and its successor, the Federal Security Services (FSB). But just as in the 1980s, the secret police will not be able to contain the centrifugal forces pulling regions away from Moscow this decade. In this case, the FSB's power is weakened by its leadership's involvement in the national economy. As the economy falters, so does the FSB's strength. Without the FSB inspiring genuine terror, the fragmentation of the Russian Federation will not be preventable.
To Russia's west, Poland, Hungary and Romania will seek to recover regions lost to the Russians at various points. They will work to bring Belarus and Ukraine into this fold. In the south, the Russians' ability to continue controlling the North Caucasus will evaporate, and Central Asia will destabilize. In the northwest, the Karelian region will seek to rejoin Finland. In the Far East, the maritime regions more closely linked to China, Japan and the United States than to Moscow will move independently. Other areas outside of Moscow will not necessarily seek autonomy but will have it thrust upon them. This is the point: There will not be an uprising against Moscow, but Moscow's withering ability to support and control the Russian Federation will leave a vacuum. What will exist in this vacuum will be the individual fragments of the Russian Federation.
This will create the greatest crisis of the next decade. Russia is the site of a massive nuclear strike force distributed throughout the hinterlands. The decline of Moscow's power will open the question of who controls those missiles and how their non-use can be guaranteed. This will be a major test for the United States. Washington is the only power able to address the issue, but it will not be able to seize control of the vast numbers of sites militarily and guarantee that no missile is fired in the process. The United States will either have to invent a military solution that is difficult to conceive of now, accept the threat of rogue launches, or try to create a stable and economically viable government in the regions involved to neutralize the missiles over time. It is difficult to imagine how this problem will play out. However, given our forecast on the fragmentation of Russia, it follows that this issue will have to be addressed, likely in the next decade.
The issue in the first half of the decade will be how far the alliance stretching between the Baltic and Black seas will extend. Logically, it should reach Azerbaijan and the Caspian Sea. Whether it does depends on what we have forecast for the Middle East and Turkey.
The Middle East and North Africa
The Middle East — particularly the area between the Levant and Iran, along with North Africa — is experiencing national breakdowns. By this we mean that the nation-states established by European powers in the 19th and 20th centuries are collapsing into their constituent factions defined by kinship, religion or shifting economic interests. In countries like Libya, Syria and Iraq, we have seen the devolution of the nation-state into factions that war on each other and that cross the increasingly obsolete borders of countries.
This process follows the model of Lebanon in the 1970s and 1980s, when the central government ceased to function and power devolved to warring factions. The key factions could not defeat the others, nor could they themselves be defeated. They were manipulated and supported from the outside, as well as self-supporting. The struggle among these factions erupted into a civil war — one that has quieted but not ended. As power vacuums persist throughout the region, jihadist groups will find space to operate but will be contained in the end by their internal divisions.
This situation cannot be suppressed by outside forces. The amount of force required and the length of deployment would outstrip the capacity of the United States, even if dramatically expanded. Given the situation in other parts of the world, particularly in Russia, the United States can no longer focus exclusively on this region.
At the same time, this evolution, particularly in the Arab states south of Turkey, represents a threat to regional stability. The United States will act to mitigate the threat of particular factions, which will change over time, through the use of limited force. But the United States will not deploy multidivisional forces to the region. At this point, most countries in the area still expect the United States to act as the decisive force even though they witnessed the United States fail in this role in the past decade. Nevertheless, expectations shift more slowly than reality.
As the reality sinks in, it will emerge that, because of its location, only one country has an overriding interest in stabilizing Syria and Iraq, is able to act broadly — again because of its location — and has the means to at least achieve limited success in the region. That country is Turkey. At this point, Turkey is surrounded by conflicts in the Arab world, in the Caucasus and in the Black Sea Basin. But Turkey has avoided taking risks so far.
Turkey will continue to need U.S. involvement for political and military reasons. The United States will oblige, but there will be a price: participation in the containment of Russia. The United States does not expect Turkey to assume a war-fighting role and does not intend one for itself. It does, however, want a degree of cooperation in managing the Black Sea. Turkey will not be ready for a completely independent policy in the Middle East and will pay the price for a U.S. relationship. That price will open the path to extending the containment line to Georgia and Azerbaijan.
We expect the instability in the Arab world to continue through the decade. We also expect Turkey to be drawn in to the south, inasmuch as its fears of fighting so close to its border — and the political outcomes of that fighting — will compel it to get involved. It will intervene as little as possible and as slowly as possible, but it will intervene, and its intervention will eventually increase in size and breadth. Whatever its reluctance, Turkey cannot withstand years of chaos across its border, and there will be no other country to carry the burden. Iran is not in a position geographically or militarily to perform this function, nor is Saudi Arabia. Turkey is likely to try to build shifting coalitions ultimately reaching into North Africa to stabilize the situation. Turkish-Iranian competition will grow with time, but Turkey will keep its options open to work with both Iran and Saudi Arabia as needed. Whatever the dynamic, Turkey will be at the center of it.
This will not be the only region drawing Turkey's attention. As Russia weakens, European influence will begin inching eastward into areas where Turkey has historical interests, such as the northern shore of the Black Sea. We can foresee Turkey projecting its power northward certainly commercially and politically but also potentially in some measured military way. Moreover, as the European Union fragments and individual economies weaken or some nations become oriented toward the East, Turkey will increase its presence in the Balkans as the only remaining power able to do so.
Before this can happen, Turkey must find a domestic political balance. It is both a secular and Muslim country. The current government has attempted to bridge the gap, but in many ways it has tilted away from the secularists, of whom there are many. A new government will certainly emerge over the coming years. This is a permanent fault line in contemporary Turkey. Like many countries, its power will expand in the midst of political uncertainty. Alongside this internal political conflict, the military, intelligence and diplomatic service will need to evolve in size and function during the coming decade. That said, we expect to see an acceleration of Turkey's emergence as a major regional power in the next 10 years.
East Asia
China has ceased to be a high-growth, low-wage economy. As China's economy slows, the process of creating and organizing an economic infrastructure to employ low-wage workers will be incremental. What can be done quickly in a port city takes much longer in the interior. Therefore, China has normalized its economy, as Japan did before it, and as Taiwan and South Korea did in 1997. All massive expansions climax, and the operations of the economies shift.
The problem for China in the next decade are the political and social consequences of that shift. The coastal region has been built on high growth rates and close ties with European and American consumers. As these decline, political and social challenges emerge. At the same time, the expectation that the interior — beyond parts of the more urbanized Yangtze River Delta — will grow as rapidly as the coast is being dashed. The problem for the next decade will be containing these difficulties.
Beijing's growing dictatorial tendencies and an anti-corruption campaign, which is actually Beijing's assertion of its power over all of China, provide an outline of what China would like to see in the next decade. China is following a hybrid path that will centralize political and economic powers, assert Party primacy over the military, and consolidate previously fragmented industries like coal and steel amid the gradual and tepid implementation of market-oriented reforms in state-owned enterprises and in the banking sector. It is highly likely that a dictatorial state coupled with more modest economic expectations will result. However, there is a less likely but still conceivable outcome in which political interests along the coast rebel against Beijing's policy of transferring wealth to the interior to contain political unrest. This is not an unknown pattern in China, and, though we do not see this as the most likely course, it should be kept in mind. Our forecast is the imposition of a communist dictatorship, a high degree of economic and political centralization and increased nationalism.
China cannot easily turn nationalism into active aggression. China's geography makes such actions on land difficult, if not impossible. The only exception might be an attempt to take control of Russia's maritime interests if we are correct and Russia fragments. Here, Japan likely would challenge China. China is building a large number of ships but has little experience in naval warfare and lacks the experienced fleet commanders needed to challenge more experienced navies, including the U.S. Navy.
Japan has the resources to build a significantly larger navy and a more substantial naval tradition. In addition, Japan is heavily dependent on imports of raw materials from Southeast Asia and the Persian Gulf. Right now it depends on the United States to guarantee access. But given that we are forecasting more cautious U.S. involvement in foreign ventures and that the United States is not dependent on imports, the reliability of the United States is in question. Therefore, the Japanese will increase their naval power in the coming years.
Fighting over the minor islands producing low-cost and unprofitable energy will not be the primary issue in the region. Rather, an old three-player game will emerge. Russia, the declining power, will increasingly lose the ability to protect its maritime interests. The Chinese and the Japanese will both be interested in acquiring these and in preventing each other from having them. We forecast this as the central, unsettled issue in the region as Russia declines and Sino-Japanese competition increases.
Post-China Manufacturing Hubs
International capitalism requires a low-wage, high-growth region for high rewards on risk capital. In the 1880s it was the United States, for example. China was the most recent region, replacing Japan. No one country can replace China, but we have noted 16 countries with a total population of about 1.15 billion people where entry-level manufacturing has gone after leaving China.
To identify these countries, we looked at three industries. The first was garment manufacturing, particularly low-end and of garment parts like coat linings. Second was the manufacturing of footwear. Third, we looked at cellphone assembly. These industries require low capital investment, and manufacturers move their facilities around rapidly to take advantage of low wages. Industries of this sort, such as inexpensive toys in Japan, served as a foundation for manufacturing sectors to evolve into broader low-wage products in high demand. The workforce, frequently women at first, expanded dramatically as new low-wage industries moved in. The wages were low on a global scale but very attractive on the local scale.
Like China during its takeoff in the late 1970s, these countries tend to be politically unstable, with uncertain rule of law, poor infrastructure and all of the risks advanced industrial businesses try to avoid. But companies from other countries excel in these environments and have built business models around this.
The map of these countries shows that they are concentrated in the Indian Ocean Basin. Another way to look at it is that these are the less developed countries (or regions) in Asia, East Africa and Latin America. Our forecast is that in this next decade, many of these countries — and perhaps some not identified — will collectively take on the role that China had in the 1980s. This would mean that by the end of the decade, they would be entering an intensifying period of growth in a much wider array of products. Mexico, whose economy exhibits potential in both low-end manufacturing and higher-end industry in a cost-competitive environment, stands to benefit substantially from its northern neighbor's investment and healthy level of consumption.
The United States
The United States continues to make up more than 22 percent of the world's economy. It continues to dominate the world's oceans and has the only significant intercontinental military force. Since 1880, it has been on an uninterrupted expansion of economy and power. Even the Great Depression, in retrospect, is a minor blip. This expansion of power is at the center of the international system, and our forecast is that it will continue unabated.
The greatest advantage the United States has is its insularity. It exports only 9 percent of its GDP, and about 40 percent of that goes to Canada and Mexico. Only about 5 percent of its GDP is exposed to the vagaries of global consumption. Thus, as the uncertainties of Europe, Russia and China mount, even if the United States lost half its exports — an extraordinary amount — it would not be an unmanageable problem.
The United States is also insulated from import constraints. Unlike in 1973, when the Arab oil embargo massively disrupted the U.S. economy, the United States has emerged as a significant energy producer. Although it must import some minerals from outside NAFTA, and it prefers to import some industrial products, it can readily manage without these. This is particularly true as industrial production is increasing in the United States and in Mexico in response to the increasing costs in China and elsewhere.
The Americans also have benefited from global crises. The United States is a haven for global capital, and as capital flight has taken hold of China, Europe and Russia, that money has flowed into the United States, reducing interest rates and buoying equity markets. Therefore, though there is exposure to the banking crisis in Europe, it is nowhere near as substantial as it might have been a decade ago, and capital inflows counterbalance that exposure. As for the perennial fear that China will withdraw its money from American markets, that will happen slowly anyway as China's growth slows and internal investment increases. But a sudden withdrawal is impossible. There is nowhere else to invest money. Certainly the next decade will see fluctuations in U.S. economic growth and markets, but the United Stares remains the stable heart of the international system.
At the same time, the Americans have become less dependent on that system and have encountered many difficulties in managing — and particularly, in pacifying — that system. The United States will become more selective in assuming responsibilities politically in the next decade, and even more selective in military interventions.
For a century, the United States has been concerned about the emergence of a hegemon in Europe, and in particular of either an accommodation between Germany and Russia or a conquest of one by the other. That combination, more than any other, might be able to muster a force — between German capital and technology and Russian resources and manpower — capable of threatening American interests. Therefore, in World War I, World War II and the Cold War, the United States was instrumental in preventing this from occurring.
In the world wars, the United States came in late, and though it absorbed fewer casualties than other countries, it nevertheless suffered more than was comfortable for it. In the Cold War, the United States intervened early and, at least in Europe, had no casualties. Based on this, the United States has a core policy imperative that is almost automatic: When a potential European hegemon arises, the United States will act early, as in the Cold War, in building alliances and deploying sufficient force in primarily defensive positions.
This is happening now against Russia. Though we forecast the decline of Russia, Russia poses danger in the short term, particularly with its back against the wall economically. Moreover, whatever we forecast, the United States cannot be certain that Russia will decline and indeed, if it launches a successful expansionary policy (politically, economically or militarily), it may not decline. Therefore, the United States will take measures according to its imperative. It will try to build an alliance system outside of NATO, from the Baltics to Bulgaria, encompassing as many nations as possible. It will try to involve Turkey in the alliance and have it reach to Azerbaijan. It will deploy forces, proportional to the threat, in those countries.
This will be the primary focus in the early part of the decade. In the second part, Washington will focus on trying to assure that Russia's decline does not result in nuclear disaster. The United States will not become involved in trying to solve Europe's problems, it will not have a war with China, and its involvement in the Middle East will be minimal. It will conduct global counterterrorism operations but will do so with the full knowledge that those operations will be only partially effective at best.
The Americans will have an emerging problem. The United States has 50-year cycles that end with significant economic or social problems. One cycle began in 1932 with the election of Franklin Roosevelt and ended with the presidency of Jimmy Carter. It began with a need to rebuild demand for products from idle factories and ended in vast overconsumption, underinvestment and with double-digit inflation and unemployment. Ronald Reagan's presidency laid the groundwork for restructuring American industry through a change in the tax code and by shifting the focus from the urban industrial worker to the suburban professional and entrepreneur.
We are now about 15 years from the end of this cycle, and the next crisis will make itself felt in the second half of the next decade. It is already visible. It is the crisis of the middle class. The problem is not inequality; the problem is the ability of the middle class to live a middle class life. Currently, the median household income in the United States is about $50,000. Depending on the state you live in, this is actually about $40,000. That allows the literal middle to buy a modest home and live frugally outside major metropolitan areas. For the lower middle class, the 25th percentile, this is almost impossible.
There are two causes. One is the rise of the single-parent household. Having two households is twice as expensive. The other problem is that the same incentives that led to the badly needed re-engineering of the American corporation and vastly improved productivity also limited job security and income for the middle class. This is not a political crisis yet. It will become one toward the end of the next decade, but it will not be addressed until the elections of 2028 and 2032. It is a normal, cyclical crisis, but painful nonetheless.
In Context
There is no decade without pain, and even in the most perfect of times, there is suffering. The crises that we expect in the next decade are far from the worst seen in the past century, and they are no worse than those we will see in the next. There is always the expectation that what we know now as reality will define the future. There is also the belief that our pain now is the most extraordinary anguish that has ever been. This is simply narcissism. What we have now will always change — usually sooner than we believe possible. The pains we are having now are merely the normal pains of being human. This is not a comfort, but a reality, and it is in this context that this decade forecast should be read.