Sunday, October 30, 2016

Wallonia Threatens to Veto the E.U.-Canada Trade Treaty: Complicating State Sovereignty in the E.U.

"The European Union and Canada signed a far-reaching trade agreement on [October 30, 2016] that commits them to opening their markets to greater competition, after overcoming a last-minute political obstacle that reflected the growing skepticism toward globalization in much of the developed world."[1] The obstacle may indeed have reflected increasing resistance at the time to globalization, but this veil can be pulled back to reveal the underlying political obstacle--that of states' rights in the E.U., taken to a crippling extreme.

The complete essay is at Essays on Two Federal Empires.

1. James Kanter, "Canada and E.U. Sign Trade Deal, Bucking Resistance to Globalization," The New York Times, October 30, 2016.

Wednesday, October 26, 2016

AT&T Buys Time Warner: An Expansive Strategy Amid Industry Uncertainty

After Comcast’s $30 billion takeover of NBCUniversal and Verizon’s acquisitions of the Huffington Post and Yahoo, AT&T agreed on October 22, 2016 to buy Time Warner for $85.4 billion. The ability to produce content and deliver it to millions of viewers “with wireless phones, broadband subscriptions and satellite TV connections was not lost on either board.[i] At the time, AT&T sold “wireless service in a saturated market, while Time Warner [was] a content company whose primary assets, networks like CNN and HBO, [faced] tougher times in a cord-cutting world.”[ii] Although AT&T’s board could be accused of empire-building, the stabilizing impact of combining wireless service and content could hardly be ignored in a business-environment so full of change and uncertainty. In other words, with the traditional television industry facing such dire threats to its revenue-structure due to the proliferation of high-tech substitutes, having the wherewithal to formulate and experiment with different distribution means and even content was at the time a fitting strategy.

Due to the internet and the smartphone, the way people paid for TV, the kinds of programming, and the devices to watch it on were “all undergoing transformational change.”[iii] Accordingly, consumer behavior was “neither settled nor predictable.”[iv] One thing was clear: the ability to avoid having to watch commercials was something that viewers prized, and this meant that the traditional television industry would very likely be transformed. “I think we’re all trying to figure this out — how technology and the consumer is going to change, and who are the winners and losers in this future,” said Walter Piecyk, who studies the telecommunications industry at the research firm BTIG. The best argument for the merger, he said, is that AT&T would be diversified in that the company would have both programming content and distribution channels, rather than just one or the other. When you face an uncertain future, diversity can be an asset. “If it turns out that in the future, content becomes more valuable than distribution, the new AT&T will have that; if the opposite happens, it’s covered there, too.”[v]

Randall Stephenson and Jeffrey Bewkes, the chairmen and chief executives of AT&T and Time Warner, argued, “the future of TV will depend on a lot of new ideas that are tested and deployed very quickly. These might include new business models for paying for shows, new ways to distribute and market that content, and new technologies and industrywide standards to make sure it all works.”[vi] Analysts, however, said a lot of these potential products and services could be created from licensing deals. A merger might actually slow down industrywide collaborations, they argued, because it sets up a new giant that others in the industry may not want to work with. “This appears to be about empire sustenance rather than economic efficiency,” said Brian Wieser, an analyst at the Pivotal Research Group.

Expanding a business empire is never without its ethical challenges, not to mention the possible economic hit on market-competition. In the case of the media, a lot of power in a few hands also presents political risks to democracy, especially when the electorate relies on the media for information concerning candidates and policy. In the case of the United States, where the First Amendment of the federal constitution protects media, giving such license to a few rather than many can result in distortions within the democracy. Not only could the few who control the "public airwaves" (an antiquated expression) influence elections and public policy; interlocking corporate board memberships could make it easy for the few private companies that control the media to act in the interest of corporations in other sectors at the expense of the public good. Rather than taking on these "macro" issues here, I want to suggest how the combined merger in this case can be optimized from a business standpoint. 

Moving to the company-level, a possible conflict of interest is involved in this particular merger. Specifically, would AT&T give priority in its distribution channels to its own content from Time Warner? Also, would AT&T restrict Time Warner’s content to the company’s distribution channels? It would not make sense economically “for Time Warner to offer most of its content exclusively to AT&T’s customers. Not only would that destroy its profitability (Comcast’s customers pay a lot for CNN and HBO, so why would Time Warner want to kill that business?), but it would also be out of step with the future. The notion of content tied to specific distribution lines is exactly what consumers [were] moving away from when they [chose] services like Netflix over cable bundles.”[vii] Clearly, maximizing both the types of distribution and the content would be in the combined company’s best interest, especially considering the tremendous uncertainty playing out in the industry after decades of traditional radio and television. 

So in this case, enlightened self-interest can obviate the conflict of interest that is inherent in having content and distribution channels that show others' content as well. Having the wherewithal to put large sums of money into research and development in new means of distribution and how they would impact the type of content is perhaps the foremost strategic advantage in the merger. With the industry changing so much and so quickly, at least as of the time of the merger, being and staying on the forefront both technologically and in terms of content is a prime advantage of this gigantic merger. 

The strategic standpoint at the company- and industry-level is of course not the whole story, particularly as the industry includes the media, which is very important especially in a large republic such as the United States. Weighing the strategic benefit to the firm and industry from the merger against possible costs including not only political ones, but also economic as well (i.e., diminished competition) is especially difficult because different levels are involved (i.e., society, industry, and company), and analysts reside at these various levels. A CEO talking about the case with a U.S. Senator, for instance, will face the problem of talking from one level to another (i.e., company to societal). Ideally, societal actors can work to create and sustain competitive industries and a free and open media, while CEOs still have enough space to situate their respective firms as best as possible strategically. The present case is interesting because the merger has the potential to facilitate the transformation of how content is delivered due to the combined financial wherewithal even as there are major ethical, economic, and political risks or downsides.

[i] Michael J. de la Merced, “AT&T Pledges $85 Billion To Acquire Time Warner,” The New York Times, October 23, 2016.
[ii] Farhad Manjoo, “AT&T-Time Warner Deal Is a Strike in the Dark,” The New York Times, October 24, 2016.
[iii] Ibid.
[iv] Ibid.
[v] Ibid.
[vi] Ibid.
[vii] Ibid.

Monday, October 24, 2016

Apple’s iPhone and the FBI: Recalibrating the Right-to-Privacy

On February 29, 2016, a federal judge rejected the FBI’s request to unlock the work-issued iPhone 5c of Syed Rizwan Farook, who with his wife killed 14 people at a 2015 holiday gathering of county workers. The FBI and DEA cited the All Writs Act, a law passed in 1789 that authorizes federal courts to “issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.”[1] The U.S. Justice Department was demanding that “Apple create software to bypass security features on the phone.”[2] In other words, Apple was to “write code that overrides the device’s auto-delete security function.”[3] In response, Apple’s lawyers argued that the statute does not give the court the right to “conscript and commandeer” the company into defeating its own encryption, thus making its customers’ “most confidential and personal information vulnerable to hackers, identity thieves, hostile foreign agents and unwarranted government surveillance.”[4] Tim Cook, Apple’s CEO at the time, said the FBI “was asking his company to create a ’back door’ that could be used to unlock other phones, exposing customer data. Agreeing to the FBI's demand would set a dangerous precedent that could lead to other calls for Apple's help to obtain private information, Cook said.”[5] Only weeks later, the FBI abruptly dropped the case because the bureau had found an outside company with technology that could serve as a master key. The FBI could use the “key” to unlock any iPhone. This left customers fearful that their data was now less than private even though Apple had promoted the iPhone product as not having a “back door” In the end, (t)he iPhone fight exposed a rift between the FBI and Silicon Valley technology companies over encryption, and sparked a debate about the right balance between privacy and national security.”[6] I suspect that although a trade-off, or tension between the right of privacy and the national-security interest of the United States existed at the time, electronic privacy would become harder and harder to protect as a result of the FBI’s tactics.  

No doubt focused entirely on national security, the U.S. government cannot be expected to protect an individual right to privacy when it is in the way. The FBI “sometimes loses sight of what is important to corporations . . .  and privacy is incredibly important," Jack Bennett, a key figure in the FBI’s iPhone hack, said after the fact.[7] Even so, he was unapologetic about the FBI being able to access the phone. “We were trying to get on one phone because we had 14 murdered people."[8] As it turned out, investigators did not find anything of significant value on the phone.[9] Even so, the damage was done as far as privacy is concerned.

Even though Bennett “disputed that the FBI was asking Apple for a tool that could access other iPhones, calling it a ‘one-shot deal,’”[10] the bureau could be expected to extend the one-shot deal the next time phone data might serve a useful purpose in preventing or prosecuting a terrorist-attack or even a lesser crime. "What's comfortable for a private corporation that will still provide an investigator the ability to stop or prevent a terrorist attack, a missing child or a national security incident?" Bennett asked.[11] The list could easily be extended; hence, some legal limitation on the FBI’s access would be necessary lest the bureau resort to clandestine data-swooping on a massive scale not limited to particular crimes and people related to them in some way.

Apple’s iPhone was supposed to be hack-proof; the company promoted the product as not having a “back door.” Even so, this turned out not to be so. It may be, therefore, that there’s no such thing as a completely secure system. Privacy may simply be an illusion marketed by the company and valued by the customers. Customers of any smart phone could feel vulnerable, moreover, as a result of the FBI successfully getting into the iPhone.[12]

Furthermore, a court can put a gag rule on a tech company, such that customers may be oblivious to any personal data being extracted. This only exacerbates the insecurity to be felt by customers regarding the privacy of their information. Microsoft had sued the Justice Department over the gag-order practice in April, 2016, “arguing that law enforcement was relying on these orders too often. Specifically, the software giant said the gag orders violate the Fourth Amendment right of its customers to know if the government searches or seizes their property and also the company’s First Amendment right to speak to its customers.”[13] Yet the gag orders could continue. To be sure, a company’s First Amendment right seems a bit of a stretch here.

Lastly, the FBI could be expected to continue to go wherever private data useful in uncovering a crime exists. For example, Open Whisper Systems, a maker of a widely used encryption app called Signal, received a subpoena in the first half of 2016 “for subscriber information, including web browsing histories, telephone numbers, methods of payment, internet providers, and data stored in the tracking “cookies” of the web browsers associated with two phone numbers that came up in a federal grand jury investigation in Virginia.[14]  Interestingly, “one of Signal’s biggest draws is that it does not collect most of that information.”[15] Civil liberties lawyers argued nevertheless that “the Justice Department request fell well outside the bounds of what is typically covered by a subpoena, including basic subscriber information.”[16] Particularly upsetting, the subpoena arrived with a court order that said Open Whisper Systems was not allowed to tell anyone about the information request for one year. Technology companies contend that court-imposed gag orders are being used too often by law enforcement and that they violate the Bill of Rights. The companies also complain that law enforcement officials are casting a wide net over online communications — often too wide — in their investigations. Justice Department officials, for their part, argue that these gag orders are necessary to protect developing cases and to avoid tipping off potential targets. The officials say that they are simply following leads where they take them.”[17]
In conclusion, even wealthy companies like Apple are no match for the FBI and the courts in protecting customer privacy. Just as companies pursue profits often single-mindedly, the FBI can be expected to attempt to uncover any lead. Furthermore, the electronic means of storing personal information may simply be too susceptible—too easily accessed by a government (and hackers)—for privacy to be at all realistic. Smartphone technology, as well as social media such as Facebook pages, is causing us all to come to terms with a recalibrated acceptance of privacy-risk and even loss. It is asking too much, I submit, for a company to be tasked with defending an increasingly antiquated expectation of privacy. As a result, we might expect people to recalibrate what personal information we are willing to put on a phone (or social-media page). The Apple case can be interpreted as one of the triggers of the societal recalibration, rather than settling the matter.

1. Jim Stavridis and Dave Weinstein, “Apple vs. FBI Is Not About Privacy vs. Security—It’s About How to Achieve Both,” The World Post, March 8, 2016.
2. The Associated Press, “New FBI Head in San Francisco Was Key Figure in iPhone Hack,” The New York Times, October 5, 2016.
3. Jim Stavridis and Dave Weinstein, “Apple vs. FBI Is Not About Privacy vs. Security—It’s About How to Achieve Both,” The World Post, March 8, 2016.
4. Jim Stavridis and Dave Weinstein, “Apple vs. FBI Is Not About Privacy vs. Security—It’s About How to Achieve Both,” The World Post, March 8, 2016.
5. The Associated Press, “New FBI Head in San Francisco Was Key Figure in iPhone Hack,” The New York Times, October 5, 2016.
6. The Associated Press, “New FBI Head in San Francisco Was Key Figure in iPhone Hack,” The New York Times, October 5, 2016.
7. The Associated Press, “New FBI Head in San Francisco Was Key Figure in iPhone Hack,” The New York Times, October 5, 2016.
8. The Associated Press, “New FBI Head in San Francisco Was Key Figure in iPhone Hack,” The New York Times, October 5, 2016.
9. The Associated Press, “New FBI Head in San Francisco Was Key Figure in iPhone Hack,” The New York Times, October 5, 2016.
10. The Associated Press, “New FBI Head in San Francisco Was Key Figure in iPhone Hack,” The New York Times, October 5, 2016.
11. The Associated Press, “New FBI Head in San Francisco Was Key Figure in iPhone Hack,” The New York Times, October 5, 2016.
12. Arjun Kharpal, “Apple vs FBI: All You Need to Know,”, March 29, 2016.
13. Nicole Perlroth and Katie Benner, “Subpoenas and Gag Orders Show Government Overreach, Tech Companies Argue,” The New York Times, October 4, 2016.
14. Nicole Perlroth and Katie Benner, “Subpoenas and Gag Orders Show Government Overreach, Tech Companies Argue,” The New York Times, October 4, 2016.
15. Nicole Perlroth and Katie Benner, “Subpoenas and Gag Orders Show Government Overreach, Tech Companies Argue,” The New York Times, October 4, 2016.
16. Nicole Perlroth and Katie Benner, “Subpoenas and Gag Orders Show Government Overreach, Tech Companies Argue,” The New York Times, October 4, 2016.
17. Nicole Perlroth and Katie Benner, “Subpoenas and Gag Orders Show Government Overreach, Tech Companies Argue,” The New York Times, October 4, 2016.

Tuesday, October 18, 2016

A Housing Bubble in China: A Rationale for Government Intervention

As of October, 2016, China was in the midst of a dizzying housing bubble. A month before, “economists at the Bank of China warned in a report that worsening asset price bubbles were adding to a frothy market that could result in trouble.”[1] Shanghai’s average housing price was up nearly one-third from a year before; prices in major cities like Beijing and Guangzhou were not far behind.[2] The recognition of the bubble—which does not come easily—should have triggered counter-cyclical measures by the Chinese government.

For example, the government could have increased the minimum requirements for down-payments and even increased tax on purchases of additional properties to counter the impact of speculators. Rumors alone of these measures was enough in 2016 for many couples to file for divorce “so that one partner could still be treated as an independent buyer” so as to be able to buy additional properties as investments.[3] That people would go to such an extreme based on rumors points to how carried-away market bubbles can get. For this reason, increasing the minimal down-payment and associated taxes even on a couple’s purchase of one property may not be excessive.

Adding to the difficulty in curtailing the boom was the “growing amount of American-style debt.”[4] Long-term household loans (mostly mortgages) doubled as a share of total official bank lending in 2016 through mid-October. In August, the loans accounted for about 40 percent of all new loans, contrasted with just 20 percent at the start of the year. The value of new home-loans as a percentage of all housing sales surged to a record high. Underground lenders were also feeding the boom. Unfortunately, the loans facilitated the role of speculators in the market, whom I submit play a crucial role in any market-bubble.

Unfortunately, the loans stemmed from the lending oriented to keeping the Chinese economy growing. As long as the government wanted to use leverage as a fiscal stimulus for the economy, clamping down on bubble-facilitating, long-term loans could only be difficult at best. Hence the need for tightened government-regulations making the loans less easy to get, especially but not limited to additional properties. One challenge for regulators in such a context is to enable the poor to become homeowners even as unnecessary home-buying is stymied until the bubble has been shrunk.  In other words, regulators should have distinguished home-ownership as a basic human right (and in this sense not a commodity) from home-ownership as an investment—and these two in turn from overall economic growth.

1. Neil Gough and Carolyn Zhang, “In China, Property Frenzy, Fake Divorces and a Bloating Bubble,” The New York Times, October 16, 2016.
2. Ibid.
3. Ibid.
4. Ibid.

Monday, October 17, 2016

U.S. Government adds $587 Billion to Its Debt in 2016: Revealing a Fault-line in Democracy

The U.S. federal-budget deficit for the fiscal year that ended at the end of September, 2016, represented a reversal on the six-year run of declining deficits. The $587 billion deficit is equivalent to 3.2% of GNP; the previous year’s deficit had been $438 billion, which is 2.5 percent of the GNP.[1] The underlying reason for the altered trend has to do with democracy itself—something notoriously difficult to budge.

The revenue loss from the extension of tax breaks for businesses and individuals, plus the refusal of Congress to “pair the tax cuts with some tax increases on wealthy Americans” is the immediate cause.[2] To be sure, President Obama’s proposed tax could be viewed as being unbalanced given the emphasis on the wealthy; refuting this imbalance came at the expense of a larger fiscal balance, given Congress’s extension of the tax breaks. Yet Congress could have substituted another sort of tax to counter the deficit-increasing effect of the tax-cut extension. The refusal to mandate such balance may be due to democracy itself.

In short, elected representatives have a political incentive to provide fiscal benefits to constituents and a political disincentive to extract corresponding fiscal costs. The decoupling itself can be viewed as a vice of democracy. With elected representatives legislating, it is not clear whether they can employ enough self-discipline to couple tax increases or spending cuts to tax cuts. With a federal debt just short of $20 trillion at the time, the systemic imbalance can be said to be inherent to democracy itself, and ultimately to the refusal of an electorate to insist that fiscal benefits be paid for in a reasonable time. Outside of dire emergencies, such as the Great Depression and World War II in the twentieth century, the abstract ideal of balanced government revenue and expenditures should not be so difficult to achieve in practice; so that it is testifies to the difficulty of self-government, whether within the psyche or the polis. The difficulty, in other words, is systemic—in human nature itself—and thus particularly onerous to being corrected.

The only solution I can see is the body politic setting for itself an automatic “coupling” mechanism for “the future” (and thus not so scary). Such a device of parchment would have to be sufficiently protected from the urge for “something for nothing today” and yet flexible enough should an emergency occur. The key might be a constitutional amendment that is sufficiently rigid that it would hold under normal circumstances (including even minor wars), and sufficiently flexible when it really matters. Therein would lie the rub: the possibility that the accommodative feature(s) would be exploited. A constitutional amendment subject to jurisprudence from the judiciary might capture the balance in terms of solidity and flexibility that so alludes fiscal balance in representative democracy.

1. Jackie Calmes, “U.S. Deficit Increases to $587 Billion, Ending Downward Trend,” The New York Times, October 14, 2016.
2. Ibid.

Tuesday, October 11, 2016

The E.U.’s Border-Control and Coast Guard: Held Hostage by Confederalism

In policing its borders as late as 2016, the E.U. suffered the same plight as the U.S. did under its Articles of Confederation—only whereas in the case of the U.S. the States retained all of their governmental sovereignty under the Articles, some governmental sovereignty in the E.U. was already lodged at the federal level. I contend that this perplexing disjunction between extant federal competencies and state rights in the E.U. is not sustainable.

On October 6, 2016 when the E.U. opened its Boarder and Coast Guard Agency to police the E.U.’s borders given the refugee crisis stemming from Syria’s civil war, the state governments were not required to provide guards and equipment. Those governments had “proved slow in delivering on their pledges to the agency’s predecessor, Frontex.”[1] Accordingly, E.U. Migration Commissioner, Dimitris Avramopoulos, warned, “Everyone must join in and implement it as soon as possible. We have no time to lose.”[2] He was not the first federal official to face such a frustration. Similarly, Alexander Hamilton had had so much difficulty getting the U.S. States to send their quotas of men and equipment to General Washington’s Continental Army that he would later push for a large transfer of governmental sovereignty to the federal level of the U.S. Fortunately, that level had few enumerated powers under the Articles of Confederation, whereas the E.U. Commission has a substantial number of competencies in 2016.

Therefore, having to rely on voluntary contributions from the state governments really does not fit in the case of the E.U.’s border-control and coast guard agency. Even just getting to the goal of 1,500 border-guard officers could be difficult if state officials decide to hold their government’s quota hostage for some other political purpose, for example. Moreover, that a state could fall short and yet get the benefit of border-control agents sent from other states gives such a state an incentive to fall short. Exactly the opposite should be the incentive.

The underlying problem is structural in nature: the federal level of the E.U. had at the time sufficient competencies (i.e., enumerated powers) that the extent of remaining state sovereignty was too much for the federal system itself to function viably. Put another way, state and federal officials, and the European electorate, had stood by in desiring both more federal competencies and substantial state sovereignty—proverbially wanting their cake and eating it too.

[1] Valentina Pop, “EU Launches Effort to Police Its Borders,” The Wall Street Journal, October 7, 2016.
[2] Ibid.

Thursday, October 6, 2016

Political Ideology in the U.S. Supreme Court: Undercutting the Court’s Legitimacy

As the U.S. Supreme Court began its 2016 term with eight justices, the Court stood “at the threshold of an ideological transformation unmatched in nearly a half century.”[1] Not since 1968, when Richard Nixon was elected U.S. President, had such an opportunity presented itself. Nixon’s four nominations ended the liberal majority begun by Franklin Roosevelt’s eight.[2] The conservative majority begun with Nixon’s nominations was up for grabs with the 2016 presidential election. I submit that the legitimacy of the ideological dimension itself dwarfs the matter of which ideology is dominant on the Court.

Even if a victory by Hillary Clinton would “shake the foundations of the court’s marble palace, leading to [the] first liberal majority since the Vietnam [War] era,”[3] it is even more astounding that the result of a U.S. presidential election would have such an impact on the highest court in the United States. In other words, the importance of political ideology in the judicial deliberations and decisions is itself worthy of recognition. I submit that there being politically conservative and progressive justices on the bench gradually wears down the Court’s legitimacy as an institution premised on specialized legal education and training.

Politically ideological opinion is something that any person can have, so if it is salient in judicial opinions at the highest level, the question arises from a democratic standpoint: Why shouldn’t the people or their elected representatives decide the questions? Why should the political ideologies of nine people have such extraordinary influence? The democracy deficit here stems from the fact that the people or their elected representatives are not able to impart their political ideologies directly. Even if the Court’s nine justices were elected, the question would still be why should the political ideologies of just nine people have such influence relative to the political ideologies of the electorate or at least its representatives?

In short, if a political election can have a judicial impact as large as in 1968 and 2016, then it follows that the Court is at least in part political rather than fully judicial [i.e., of jurisprudence]. Just because justices can make rational arguments in legalese does not legitimate the power of the associated political ideologies. That is to say, the political ideologies of U.S. Supreme Court justices are not better or more legitimate than are the ideologies of the popular sovereign (i.e., the People) simply because the justices are skilled in oral and written legal argumentation.

The U.S. Supreme Court could be limited to oral arguments and the writing of majority and minority opinions, while the deciding of the cases is done by popular referendum or Congressional majority (or supermajority). In other words, the high Court could be willowed down to performing its unique skills, while the People or their elected representatives would function like a jury—hence being able to use the Court’s oral and written arguments in making a ruling. The Court’s justices would then be charged with writing the majority and minority opinions. Hence, the justices would serve the People, rather than imposing a few ideologies. Put another way, the Court’s legal oral and writing skills could be used to justify the ideologically-tinged decisions made by the People or at least their elected representatives.  

[1] Richard Wolf, “Court at Brink of Transformation,” USA Today, September 30 – October 2, 2016.
[2] Ibid.
[3] Ibid.

Monday, October 3, 2016

Americans Can Sue Saudi Arabia over 9/11 and the Saudis Accept Lower Oil Production by OPEC: The Unraveling of a Deal?

On Wednesday, September 28, 2016, the U.S. Congress voted overwhelmingly—97-1 in the Senate and 348-77 in the House of Representatives—to override President Obama’s veto of a bill that allows the families of the September 11, 2001 World Trade Center bombings.[1] As a result, American courts can seize Saudi assets to pay for any judgment obtained by the families. Saudi officials in turn warned that their government might need to sell off hundreds of billions of dollars in holdings in the United States to avoid such an outcome. In another place in the world, Saudi officials were dropping their resistance to OPEC—an oil cartel—cutting production. Even though positive correlation does not in itself indicate causation, the timing may point to the impact of political calculations by Obama. That is to say, the timing may suggest a political deal gone bad.

Generally speaking, low gas prices and the related fall in the prices of foodstuffs favor the reelection of the party in power. Such economics play well with the American electorate voting for U.S. President. So President Obama, being in favor of Hillary Clinton, another Democrat-centrist, may have told Saudi officials that he would make sure a law allowing U.S. citizens to sue the Saudi Government over 9/11 would not be enacted, and in return the Saudis would continue to pressure OPEC to keep oil supply at the high level. Keeping such a deal from falling apart may have been why the White House proffered “fierce objections” to Congress overriding the president’s veto. To be sure, the override could pose a danger in that the Saudis could sue the U.S. Government on matters related to the U.S. military presence in the kingdom, but would Obama have been so “fierce” just for that possibility when a more pressing concern was likely keeping the White House in Democratic hands to insure his legacy (e.g., Obamacare).

Sure enough, OPEC’s 14 oil-producing nations, including Saudi Arabia, agreed on Wednesday, September 28, 2016, “to modestly cut their collective oil output later this year in an effort to bolster sagging prices.”[2] Although the cuts probably would not take place until after the U.S. presidential election in early November, the “decision sent global oil prices soaring by more than 5 percent.”[3] The question for Obama might have been: How long will it take for the increase to be reflected “at the pump” and in grocery stores? Perhaps he might have considered opening up more of the U.S.’s strategic reserves, though he might have felt that the override itself was close enough to the election that any price-implications by election day would not diminish Clinton’s chances.
A major difference separates the motive of not wanting to open the U.S. Government up to being sued in Saudi Arabia on the one hand and not wanting Clinton to lose the upcoming election; whereas the former is acting in the interest of these United States, the latter desire is partisan and personal. Making a deal with a foreign government for the latter motive would essentially put the United States second, as well as having the sordid taste of trying to manipulate the American People—the popular sovereign to which the government and its elected and appointed officials are agents rather than principals.

1. Jennifer Steinhauer, Mark Mazzetti, and Julie H. Davis, ,“Congress Allows Saudis to Be Sued Over 9/11 Attacks,“ The New York Times, September 29, 2016.
2. Clifford Krauss and Stanley Reed, “Oil Prices Rise 5% on OPEC’s Tentative Deal to Cut Production,” The New York Times, September 29, 2016.
3. Ibid.