Peter L. Berger's Blog, page 611

After Iran Deal, Democrats Will Own the Middle East

Congress seems to be moving inexorably toward approval of the Iran nuclear deal—or at least towards sustaining a presidential veto of any bill blocking the deal. According to the Washington Post‘s whip count, 31 Senators will vote to uphold the agreement, leaving the President only needing three more, out of 12 still undecided, to vote yes for it to be safe. Barring something truly unexpected—e.g. several declared “yes” Senators suddenly switching their votes to “no”—President Obama will have enough Democratic Senators on his side to push the deal through. A sitting administration simply has too many levers of patronage and power to pull to be unable to retain 34 votes from its own party on a matter on which it’s staked its reputation.

But even as the deal looks safer and safer in DC, a new poll indicates that the public is moving against it, as CNN reports:

As Congress inches closer to a vote to approve or disapprove of the deal, 56% of Americans now say they think Congress should reject the deal with Iran — up from 52% less than a month ago — according to the latest CNN/ORC poll released Thursday.

And 6-in-10 Americans also disapprove of President Barack Obama’s handling of the U.S. relationship with Iran, according to the poll.

If this poll is representative, the President may be winning inside the Beltway but losing beyond it. We’ve seen this before with this Administration; something similar happened with Obamacare. The President’s main domestic “achievement” was a Pyrrhic victory. He got it passed, but then his party was wiped in the midterms, and the Democrats still hasn’t recovered from the political “success” of the ACA. And just as the passage of Obamacare meant that Democrats “owned” the health care system, with every website glitch and every premium increase and every new limit on doctor choice now blamed on the party that passed the ACA, so too the Democrats will now own the Middle East and Iran.

Nor is Obamacare the only precedent here. In 1977, former president Jimmy Carter won a “victory” in getting the Panama Canal treaty ratified. The treaty promised to turn control over the canal to the Panamanians, but Carter’s policy victory became a political setback. Reagan fundraised off it, and he used it (along with the Iranian hostage crisis) to paint Carter, as well as the Democrats as a whole, as unfit to lead on foreign policy. The next election marked not merely a GOP victory, but a generational shift in the public’s perception of each party. It’s too soon to tell, of course, how exactly the Iran deal will play out long term. But this poll should give any Democrats thinking about the future of their party a pause.

EU Climate Chief Decries “Painfully Slow” Climate Talks

European Union climate commissioner Miguel Arias Cañete complained this week about the pace of progress of climate negotiations in the run-up to the Paris conference this December. “In the negotiating rooms, progress has been painfully slow”, he said. “The technical talks are seriously lagging behind the political discussion.” Cañete described the draft text, which is still more than 80 pages despite weeks spent trying to pare down redundancies and technical language, as “far too long.” The Guardian reports:

Deeply-ingrained divisions have plagued negotiations in Bonn over issues such as financing for a $100bn-a-year climate finance pot due by 2020, and the distribution of emissions cuts between rich and poor countries.

The EU and US also disagree sharply over the legally-binding nature of any global pact, although Cañete stressed that the bloc’s alliances are evolving and provisional.

While Cañete said he was encouraged by last November’s joint emissions reductions announcement by China and the U.S., he reminded reporters that only 56 of 192 member countries had submitted their national plans for cutting emissions, called Intended Nationally Determined Contributions (INDCs). That’s not even a 30 percent participation rate—and if members continue to drag their feet on INDC submissions, negotiations in France later this year will surely suffer for it.

Now We’re Fracking with Sewage Water

When the going gets tough, the tough…frack with toilet water? That’s what one shale company in Odessa, Texas is doing after signing a $117 million deal with the city to use its treated wastewater in the company’s operations for the next 11 years, starting later this year. Reuters reports:

Pioneer is the first oil and gas company to sign a long-term wastewater supply contract with Odessa, a city of about 110,000 people. The Dallas-based company recently began construction on a pipeline network that will transport the treated water from the city’s sewage plant to one of its oilfields about 20 miles away. […]

The municipal reclaimed water the company intends to use comes from sewage plants that treat human waste and water from activities that include bathing and food preparation, according to Texas regulators.City officials say the deal will provide a steady stream of revenue and reduces truck traffic.

The firm’s decision isn’t just about saving money (although that’s a big concern for the industry these days as oil flirts with a drop below $40 per barrel). It’s also about conserving water, something companies have tried to tackle in a number of ways, whether by fracking with brackish groundwater unsuitable for drinking or figuring out ways to recycle water already used in drilling. Pioneer, the company looking to frack with wastewater, said it hopes to eliminate the need for freshwater in its operations sometime in the next five to ten years.

Critics of fracking often point to the strain it puts on water resources as its biggest problem, whether that’s the potential for groundwater contamination or simply the consumption of such an important resource. The industry has demonstrated an ability to meet those challenges not out of some deep yearning for existing in harmony with nature, but rather because it’s simply good for the bottom line. Again, we’re seeing American shale companies iterating and innovating on the processes that set off the fracking revolution to begin with, and it’s that kind of impulse that will sustain this boom—and improve its environmental impact.

So Long, Pops

French politician Marine Le Pen has gotten rid of the biggest obstacle facing her far-right political party Front National in its bid to become a more electable party: her father. Jean-Marie Le Pen, the firebrand who founded the FN and is known for his anti-Semitic and racist remarks, was expelled by the party’s leadership on Thursday. It was reportedly quite the kiss-off, though Marine herself didn’t show. WSJ:

Mr. Le Pen was summoned before the party’s executive committee at its headquarters in the Paris suburbs of Nanterre after he reiterated comments he made 25 years ago playing down the Holocaust.

The committee voted to exclude Mr. Le Pen, said a National Front spokeswoman. “The full decision, including its reasoning, will be sent shortly to Mr. Le Pen,” she added. […]Changing gears, on Aug. 4 Ms. Le Pen sent her father a list of grievances, detailing contentious comments he had made and instructing him to face the disciplinary hearing. Ms. Le Pen didn’t attend the meeting.

After a spate of recent political victories, Ms. Le Pen is expected to be at least a contender in the 2017 presidential race. She faces an important local election later this year, when she will run for president of the Nord-Pas-de-Calais-Picardie region, which includes the now-infamous port of Calais. Near the port thousands of migrants live in makeshift camps, awaiting a chance to cross into Britain and Calais is at the center of France’s white hot debate about immigration.

Immigration is one of the issues buoying the popularity of far-right parties in Europe and it will continue to be a flashpoint as the number of migrants from the Middle East and Africa keeps rising. Still, the FN’s prospects for taking the presidency remain an outside shot, and Daddy Dearest probably won’t get to visit his ungrateful daughter in the Élysée Palace. But who knows? Given the restlessness and hopelessness of Europe, the FN will likely have political legs for a while yet.

The First Postmodern Political Machine

The contrast between the apparent inevitability that surrounded Hillary Clinton’s procession toward the Democratic presidential nomination for so long and the air of scandal and suspicion that seems to trail behind her wherever she goes is striking. And it points to something important: Hillary Clinton isn’t a candidate borne aloft on a wave of popular enthusiasm. She is no JFK, no Ronald Reagan. She is no George Wallace or William Jennings Bryan. The marching bands processing before her have to be paid; she can’t fill vast halls with cheering throngs like Bernie Sanders or, heaven help us, Donald Trump. But she soldiers gamely on, determined to struggle through the exhausting and degrading routine of the eternal campaign.

One has to ask what propels her toward the nomination with such force. Yes, it is partly her inner drive. Love her or loathe her, Hillary Clinton brings a focus to her political and professional engagements that is admirable and pure. If shaking another hand, kissing another baby, chomping down another pork chop at yet another state fair will bring her closer to the nomination, Secretary Clinton will be there, wearing her game face and giving the job all she has. And, to be fair, if it means reading another policy brief, mastering the intricacies of another important budget question, wrapping her head around another complex set of foreign policy problems, she will be there too.But determination and grit aren’t the only forces behind her. To understand the Clinton candidacy and the odd mix of acceptance and resistance it conjures up in the party, one has to understand that she represents something that is at once very old and very new in American politics. She is a machine politician, but the machine behind her is a new kind of American political machine: a postmodern one.The old kind of political machine, like the one Rahm Emmanuel rides in Chicago, is based on geography and office. Loyalists get contracts, favors and jobs. In return, they give money to the organization and they turn out to vote.Chicago isn’t the last of the old time machines; American cities have been run more or less in this way for 200 years, give or take. Some, like Detroit’s dysfunctional kleptocracy, jumped the shark long ago; others, as in Los Angeles, thrive on the energy from new immigrants.But the Clintons have invented something new. The Clinton Machine doesn’t depend on holding local offices or controlling a particular city or state; it floats untethered from geography. Bill Clinton isn’t the Mayor of anything, and he’s constitutionally ineligible for another term in the White House, but few people in the United States have more influence than he does.That isn’t typical for post-Presidents. Some, notably Jimmy Carter and Herbert Hoover, continue to advocate for the issues and viewpoints they brought to their office. Many, like Gerald Ford, make speeches, play golf, and do charity fundraisers. But not since Theodore Roosevelt, who remained a major political force and was widely believed to have cinched the Republican presidential nomination for 1920 before he died, has an ex-President had the power and visibility Bill Clinton does.Bill Clinton is charming and smart and most Americans prefer him to his successors, but that’s not why he’s a force in the land. He’s a force in the land because he continues to operate a political machine that underwrites his wife’s ambitions and his own continuing power. He is a new kind of ex-President; he and his wife share a new understanding of how power works in a new age.The Clinton political machine, like all machines, ultimately runs on money. Somebody has to pay the apparatchiks and loyal technicians who keep the wheels turning. In traditional machines, the money came out of the rough and tumble of local politics: You stroke City Hall, and City Hall strokes you. Private contractors who depend on city contracts, public sector unions, law firms, and Wall Street banks who manage city pension funds and peddle the city’s bonds: There is an army of special interests whose businesses do well when the Mayor is a friend. But the Clintons don’t do it that way anymore; they figured out something better.The Clintons stand where money, influence, and celebrity form a nexus. When Hillary Clinton was running the State Department and Bill Clinton was shaking down contributors to the Foundation, the donors knew, or thought they knew, what they were getting. Now that Hillary is running for President, the donors have an even better idea of what good things might come to them—or what problems and complications could develop if they cut the Clintons off.I don’t say that the Clintons are breaking the law, at least as far as the basic principles of the machine go. As Tammany Hall’s George Washington Plunkett once said, there is such a thing as “honest graft.” In the old fashioned political machine, that meant that you only take money from the group you had already decided on legitimate grounds would get the contract. The new machine offers even more opportunities for honest graft than the old kind.The machine gathers the cash that provides perches and incomes to Clinton loyalists; the loyalists keep the publicity machine pumping, keep the networks of contacts and patronage refreshed throughout the vast Clinton network, and staff what amounts to a permanent campaign. This is what party machines used to do: provide incomes for the army of operatives who would jump into action to make sure the machine stayed in office.But the cash doesn’t come from a system of payoffs that go all the way from the cop on the beat up to the Board of Aldermen and the Mayor. The cash comes from donations and speaking fees. When the husband of the Secretary of State or potential next President calls about a special charity project, most people, even if they happen to be CEOs of major companies or senior government officials, take the call. More than that, there will be times when government and corporate officials will reach out and make the call themselves, rather than waiting passively to hear that the Clinton machine has an ask.The donor proposition is rock solid. Any fashionable cause that can gain applause at Davos and in the world of gentry liberalism here at home (empowering women in development, climate change, entrepreneurship and the poor, disaster relief, medical research, and and so on) gets office space and a PR package at the Foundation. Sometimes some real good gets done, though one doesn’t read much about how the Clinton Foundation’s rigorous financial controls, inspired programmatic vision, tight management, and relentless concentration on keeping costs low make it one of the leaders in philanthropy for getting the job done cheaply and effectively. What donors buy, or think they are buying, is influence and face time with two of the most powerful people in the world and their political machine; what they get on the side includes good PR, some invites and connections, one’s picture with a Clinton or a courageous and charismatic human rights figure from the developing world, and a tax deduction for a charitable contribution. For big donations, you get more; Clintons, if we can believe Donald Trump, will come to your wedding if the invite comes with enough “warmth.”Whether the Clintons understood this from the beginning, or whether they just pursued opportunities without understanding how it would all add up, they’ve discovered a new way to yoke money and power onto a self-sustaining machine. There seem to be four pillars for this new kind of edifice.First, there are the unintended consequences of the dysfunctional campaign finance “reforms” over the past thirty years that gutted traditional party organizations while empowering billionaires. Both the Democratic and Republican parties are, institutionally speaking, mere shadows of their former selves. Today, every politician is a freelance operator, accumulating bundlers and backers. Those contacts are power, and power is at least partly heritable. Being part of a political dynasty matters more when parties matter less. Look at Jeb Bush, who, according to the AP, has received about half of his financial backing from people who supported his father and brother.Expect to see more family firms like the Bushes and the Clintons going into politics. Daddy’s rolodex is a useful thing to have.Second, there is the synergy created by the intersection of the Power Couple and the Twenty-second Amendment, which limited Presidents to two terms. Term-limited Presidents have a hard time convincing donors that further gifts will result in future benefits. This is a problem the Clintons do not have.Hillary Clinton is the first person who can convince power brokers that she’s ready to make the transition from FLOTUS to POTUS. In former times, women were not considered serious political leaders in the United States; some wives followed their husbands into politics, but the husband, unless dead, remained at the head of the firm. Nobody thought that Lurleen Wallace was the most important politician in the Alabama Governor’s mansion. But in the 21st century, women can be wives and formidable officeholders as well. Nobody doubts that Hillary will be wearing the pantsuit if the Clintons go back to the White House.In an age when access to money hinges on celebrity and familiarity, having two star politicians in the same family can make a big difference. The Twenty-second Amendment, adopted after Franklin D. Roosevelt smashed the third term taboo dating back to the time of George Washington, limits Presidents to two terms. But when you have a Power Couple like the Clintons, that gives you four terms in which you can dominate national life. What the Clintons have figured out is that a successful Power Couple can stay at the top of national life for decades—two terms for the first member, an interregnum of unspecified length followed, hopefully, but two terms for the second member, by which time the torch may have passed to a new generation. The Twenty-second Amendment was written to prevent the centralization of political power that would come if a powerful and popular President used his (or her) time in office to use patronage and power to build a machine that would keep the President in office indefinitely. The Clintons have found a workaround, and as a result they have changed the way political power works in the United States.Third, the Foundation vehicle allows the Clintons to attract enormous sums of money from foreign as well as domestic donors. Unlike ordinary politicians, the Clintons can take money from foreign individuals, states and firms without breaking US laws. They can even sidestep much if not all of the odium that comes from running an American campaign with foreign money. Raising money to fight breast cancer in Botswana is a much more creditable activity than taking political contributions from an African mining company with a dubious reputation. Moreover, one can actually fight breast cancer in Botswana, or at least make moves in that direction, in ways that strengthen the network at home. The network of feminist political activists and operatives includes many people one can credibly hire to administer such a project. This is honest graft at work: one hires someone who is a reasonably qualified administrator for the program, but who is also plugged into the network of activists and operatives needed to keep the permanent campaign up and running. One can also spread the money around: the Clinton Foundation can make grants to other like minded non-profits, providing good jobs to loyal supporters.Patronage in the service of doing good, that can effectively and legally use foreign donations in ways that build a powerful domestic political force: this might not be up there with the discovery of fire or the wheel as an invention that changes history, but it is not an insignificant contribution to the art of American governance.At a time when globalization and the explosion of non-American wealth has changed the dynamics of wealth and power everywhere, the Clintons have built a machine that facilitates the integration of global power into American politics.Fourth, the Clintons have captured the power of networks. Like Facebook, the Clinton network is powerful because almost everyone is part of it. Since 1992, when the Clintons stormed out of Arkansas to take the White House, they have been at the center of world power and fame. Everybody who is anybody knows them or knows of them. They can introduce anybody to anybody; they can put together the most star-studded guest list for any purpose. The power of celebrity gives them the ability to publicize and glamorize almost anything; there are powerful reasons to be part of the network that includes virtually everyone in the media, in government, in finance, in business or academia that anyone wants to know or do business with.Opposition is the price of power, and from the “Bimbo eruptions” through Whitewater on up to Servergate, the Clintons have weathered their share of storms. As public awareness of their new political business model sinks in, expect the criticism to rise. This is partly because there is something genuinely innovative and therefore debatable in the way the Clintons acquire and hold power, and partly because Americans have a long history of disliking the institutions and intermediaries who make our system work. There was nothing the Founding Fathers hated more than political parties, but the kind of republic they wanted to build simply could not function without them. All right thinking Americans united in the 19th century to deplore the malign influence of corrupt big city political machines, but it is hard to think how else the tens of millions of immigrants streaming into those cities from all over the world could have learned to govern themselves and begin the process of integration into American life. Everybody hates lobbies and lobbyists, but it is hard to think of any other system that would allow the worlds of government and business to interact in ways that are in fact necessary for the smooth working of the economy on which all of us depend.The postmodern political machine that the Clintons have built will stoke outrage for much the same reasons. Many find something deeply repellent in the ways that the new machine facilitates the integration of global and American politics and lobbying. Many will denounce the self-interested mingling of charity and political power-broking; others will gasp at the depth and degree of conflict of interest that a system like this inevitably entails. All these problems are real, and the Clintons, whatever their virtues, have never been at their best when it comes to disentangling the public good and their political interests. But the integrated global economy of the 21st century does need new forms of political organization that were lacking in earlier times. In an era when traditional political party institutions have been so dramatically undermined, the United States still needs organizations who keep its political life on something like an even keel. (The alternative to Clintonian machine politics might just be successive rounds of disorganized Trumpian populism. Would that really be an improvement?)The most searching questions about the Clinton machine may not have to do with its structure or its propensity for institutionalizing and channeling power, but about the purposes to which all this power is put. In part because of its deep roots in 20th-century liberal Democratic politics, the Clinton machine is deeply entangled with interest groups and lobbies who want to perpetuate blue model governance even as the economic realities that empower the machine are no longer consistent with blue model methods. Bill Clinton’s presidency advertised itself as a quest for a new kind of politics (“The era of big government is over”); Secretary Clinton seems more attuned to the ideas that, more than twenty years ago, her husband said it was time to leave behind.It is much too early to know if Secretary Clinton will get the nomination, much less win the general election. If anything, her position looks weaker today than it did six months ago. Even the power of a great political machine cannot (yet?) deliver electoral victory on a national scale. Barack Obama (who seems increasingly interested in setting up a rival postmodern machine when his own presidency comes to an end) can tell us about that. In the old days, machine politicians had a hard time winning national campaigns; people out in the less corrupted (or, if you prefer, less sophisticated) flyover states aren’t always happy about big city politicians with big city connections.The future of the machine is also open to question. If Secretary Clinton fails to win the election and a third try doesn’t seem either likely or feasible, the machine loses one of its most valuable assets: the connection to future political power. Will the donations continue to flow in that case, or will the machine gradually lose coherence and strength? Can Chelsea Clinton carry the machine into a new era, and does she want to? Will the partnership, often under stress, between Hillary and Bill be strong enough to fuel the machine if the return to the White House fails to occur?The Clintons have built something new and important, if not necessarily durable or good. They have changed, at least for a time, the way power works in the United States and even in the world. They have built a new kind of institution for a different time. Politicians and power brokers all over the world are paying attention; expect many more efforts to create postmodern political machines in a time when the key institutions of governance and organization are increasingly out of date and out of tune.

Shells Fly Across the DMZ

A long-frozen conflict is showing troubling signs of a thaw, as North and South Korea traded artillery shells with each other yesterday. Seoul lobbed ten shells across the border in response to an earlier (failed) attempt by Pyongyang to blow up a South Korean loudspeaker broadcasting propaganda over the DMZ.

It has been 11 years since either side has taken to trumpeting propaganda with outdoor speakers. The South has resumed the practice in response to an incident earlier this month when two of its soldiers were injured by land mines in the DMZ, and the North has taken umbrage, calling the act a provocation. The exchange of fire comes during week-long joint exercises between South Korean and U.S. troops, exercises which the North has described as preparations for war.On the plus side, neither side reported anybody getting hurt. On the not-so-plus side, a confluence of factors is making the prospect of more flareups seem possible. Tensions in East Asia at large are already at fever pitch, neither Korea is particularly happy with Japan at the moment, and the drips and drabs of information that make their way out of the black box that is Pyongyang make it seem as though Kim Jong-un is getting harsher in his attempts to consolidate power—last week, for example, the DPRK confirmed reports that he had executed the country’s vice premier.The Koreas’ conflict goes way back, it hasn’t gone properly hot in a long, long time, and this latest round of shelling may just be an unpleasant blip. But that doesn’t mean the situation is not a real danger in a precarious region.

NATO’s Line in the Ukrainian Sand

NATO made an official statement warning Russia against pressing further into Ukrainian territory when the alliance’s 28 members met to discuss the ongoing war in eastern Ukraine, which has seen a sharp uptick in violence in the past month. Shelling around Mariupol, a key port city on the Sea of Azov that analysts say would be Russia’s likely first step towards establishing a “land bridge” to Crimea, has picked back up to levels not seen since before both sides signed the Minsk II ceasefire agreement banning, among other things, further advances and the use of heavy artillery.

Though the fighters always have taken that deal’s terms more as guidelines than as rules, the violence did die down somewhat in the interim. But the flareup has renewed worries that Russia or the rebels it backs might try to grab another slice of Ukrainian land. Reuters reports on NATO’s statement:

“Russia has a special responsibility to find a political solution,” NATO acting spokeswoman Carmen Romero said in a statement.

“Any attempt by the Russian-backed separatists to take over more of Ukraine’s territory would be unacceptable to the international community,” she said.

The rebels currently control parts of Ukraine’s Lugansk and Donetsk regions and have threatened to expand their holdings further westwards.

The NATO allies stressed the need for all sides to “de-escalate tensions and exercise restraint” while calling for “full implementation” of the peace accords reached in Minsk in February.

The statement also said that monitors from the Organization for Security and Cooperation in Europe (OSCE) must be able to do their job safely and without harassment. The observers have reported aggression from fighters on the ground, especially the rebels.

Because it’s an official NATO statement, this stands out from the chorus of strong Western condemnation for Russia’s action in Ukraine by loud individual voices who condemn Putin’s menacing moves and call for actions to stop them, such as Senator John McCain or NATO’s verbally prolific ex-chief Anders Fogh Rasmussen. The red line is drawn. Will Russia cross it?

GMO Labeling Runs Amok

Genetically modified crops have been vilified by the modern discerning green, who wouldn’t dare to offer up GM food at a potluck dinner. As such, there’s unsurprisingly a growing appetite for foods labeled as non-GMO—even when the food has no chance of being genetically modified. The Wall Street Journal reports:

Last year, Evolution Salt Co. proudly slapped a label on its packages of Himalayan salt proclaiming they contained no genetically modified organisms. It shouldn’t have been a surprise, because salt has no genes. But Hayden Nasir, chief executive of the Austin-based company, said advertising the absence of GMOs was good business. […]

Exact data on how many products claim they are GMO-free isn’t available, but the number is growing. Of the 33,000 newly launched products that market-research firm Mintel adds to its global database each month, 3.8% of food and beverage products included a GMO-free claim on the package last year, up from 1.6% in 2010.

It can be difficult to keep up with the fads of healthy nutrition (Is kale still in? Are we still doing gluten-free?), but if you want to fit in with the superficially food-conscious crowd, you’ll start hunting grocery store aisles for packages containing GMO-free labels. Meanwhile, companies are taking great pains to use the now-trendy labels on their products.

But this is more than just a story about the latest diet fad. The anti-GMO movement rejects our best scientific understanding of these technologies, ignoring the mountain of evidence that these products are safe and instead choosing to focus on their “non-natural” qualities. It’s fear mongering with a real cost, too, because genetically modified crops are one of the most promising methods for feeding the world’s growing population in more extreme climates. In other words, if the future will really be as grim as greens say it will be, then we’ll need to be chowing down on GM food to survive and thrive.These Luddite biases can have impacts beyond the trendy circles looking to snatch these labeled foods up. Scotland recently moved to ban GMOs in an attempt to protect its “clean and green” image, a clear capitulation to eco-thinking unmoored from the facts. If these sorts of national bans proliferate, it will be the world’s poor who will lose out. Like the rest of the offerings you might find at Whole Foods, these non-GMO options aren’t coming cheap.

Brace Yourself: Here Comes $30 Oil

Are we about to see oil trading in the $30s? A number of analysts think so. WTI crude, America’s benchmark, is trading just above $40 per barrel today, and Brent is a scant $6 higher. With the global glut looking to persist into the fall when seasonal demand slackens, it’s not hard to imagine prices dropping further below their current six year lows. Bloomberg reports:

Oil could fall to lows last seen during the global financial crisis amid a persistent supply surplus, Citigroup Inc. said.

“Balances point to further oversupply throughout 2015 begging the question how low can oil go,” Citigroup analysts led by Seth Kleinman said in an e-mailed report Wednesday. The U.S. crude price of $32.40 a barrel reached in 2008 “is a conceivable reality.”

Even as prices plummet, output is growing from Canada’s oil sands while production from U.S. firms and OPEC alike is holding steady at remarkably high levels. With the prospect of resurgent Iranian crude flooding the market in the coming months, it’s no wonder prices continue to tick downwards.

That downward trend has companies ruthlessly cutting capital expenditures in an attempt to balance the books, and a federal auction of offshore blocks in the Gulf of Mexico yesterday attracted the lowest interest in nearly three decades. Even as the industry struggles to adapt, it seems clear we haven’t hit rock bottom yet. “To end this vicious downward spiral, crude prices need to head lower”, stated chief oil analyst at Energy Aspects Amrita Sen. It looks like that’s exactly where they’re headed.

Submarine Sales Skyrocket in Asia

Asian countries have been on a shopping spree, procuring arms to boost their military capabilities as regional tensions mount. As China stirs up trouble in the region’s many overlapping and bitter territorial disputes, its rivals’ submarine purchases are shooting up, according to an industry report covered by National Defense:

The submarine market in the Asia-Pacific region is valued at $7.3 billion this year, but is projected to grow at an annual rate of 4.18 percent to reach $11 billion in 2025, according to a new report “The Global Submarine and MRO Market 2015–2025,” produced by Strategic Defence Intelligence, a London-based business information firm. The United States is expected to remain the largest market for submarines, with a projected cumulative spending of $102.2 billion over the next decade.

The growth in Asia is primarily driven by major countries such as China, India, Australia and South Korea, which are focusing more on developing their naval capabilities. This is attributed to the rising number of maritime conflicts and potential threats in the South China Sea as well as the Pacific and Indian Oceans, the report said.“Growing Chinese assertiveness in disputes over islands in the South China Sea and the rapid modernization of China’s submarine fleet spurred the demand for submarines in countries such as India, Japan, Taiwan, Australia and Vietnam,” Sravan Kumar Gorantala, an analyst at SDI said in a statement.Smaller nations such as Indonesia, Thailand, Vietnam and Singapore are also investing in submarine acquisitions in order to strengthen their naval arsenals, according to the report’s executive summary.

In 2013, Asia passed a milestone when its militaries first outspent Europe. By April of this year, Asia led the world in rising defense spending. Meanwhile, Japan recently made its first attempts to secure foreign arms sales (most prominently of its Soryu-class subs), and most recently countries with territorial disputes in the waters of the East and South China Seas have begun snapping up spy planes.

This race to arm up is being driven by Beijings’s aggressive expansionist policy, most recently and importantly exemplified by the island building it completed in the disputed Spratly chain north of the Philippines. The PLA’s budget itself continues to balloon, of course, and none of its neighbors can match it individually, but many are stepping up their game.As General Karl Eikenberry wrote in our July/August edition of the magazine, increased defense spending by America’s allies in Asia is key to U.S. efforts to counter China’s longterm ambitions. Regional powers like India and Japan—along with a coalition of smaller powers who can’t do much alone but who could be formidable in concert—are working to balance Beijing’s growing military clout, perhaps a silver lining as Beijing’s belligerence continues.