Isn't this piracy? What could make it not piracy, other than a congressional declaration of a war to conquer & annex the Strait of Hormuz to the USA? And isn't piracy not only a bad thing...
This reminds me of Karl Rove's famous statement to Ron Susskind:
<i>“We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality — <strike>judiciously, as </strike> <u>by the judiciary</u>, if you will — we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors . . . and you, all of you, will be left to just study what we do.”</i>
Agreed on all. A 20% tax would be a strong punishment to his supposed Gulf allies, whose oil and fertilizer would be at a huge price disadvantage. As an amazing concession, he will lower it to 10% as an introductory offer. Even that can get an exception by greasing an itchy palm.
The only way to enforce protection and justify the tax is for US warships to escort commercial ships. That creates a huge incentive for Iran to strike not only the merchant ship, but also the warship. They will figure out how. Video of a sinking US destroyer is worse than boots on the ground. For all the talk, the President is risk-averse in battle.
Iran has agency supported by missiles, drones, satellite intelligence, and Chinese supplies. They can expand the battlefield and the targets at will. Meanwhile, the person who says he has all the cards doesn't know how many are in a pack. We cannot dismiss stupidity.
If US is selling insurance, perhaps that reflects an appropriate rate.
That said, he supposedly said this morning, that he was going to structure as investment commitments which I cannot see much of a justification for. I think he is off the "deep end" at the moment.
Iran's proposal was more or less extortion as it was agreeing to not shoot at ships. I do not believe US would fire on ships, including those carrying Iranian oil provided terms are reached. US could provide real insurance if ships are damaged and people compensated for injury/death. This has been talked about but I do not know current status.
Lots of people have criticized Para. 5 of the MOU, but Trump more or less agreed to a fee provided Oman agrees and is consistent with international law. If Iran/Oman did something along the lines of what Turkey does in the Bosphorus and Dardanelles, I would be inclined to support it provided it is based on real and reasonable costs. Trump also threatened to bomb Oman if they did agree, but as I said, I could get behind that and whatever treaty controls could be amended to allow.
Difficult compromises are necessary and while Trump is a "chaos monkey," in the end, he is prepared to compromise in my opinion. I do not like the current idea of investments but if Gulf countries reimbursed some of our costs, that isn't unreasonable and was done in first Gulf war. I don't know what their attitude was on the war; I'm sure they okayed it, but support it? If not, no fee is appropriate as Kent said.
Insurance pays out defined claims when there's a loss event, so this isn't insurance. At best, one could call this a security service. "Shake down" is most accurate.
I think that the Roberts court has seriously miscalculated: it cannot be in the interest of a court to discard the rule of law. It is clear that they think they are an American gerousia, and that even if they fail to establish a one-party state, they will simply override a president with whom they disagree. But even a Republican president may have interests that conflict with theirs, the Supreme Court has nothing like the social position of the Spartan gerousia, and it is the president whom the armed forces and security establishment obey. Eventually, they will encounter a Putin, and then the self-styled gerousia will melt away.
Trump's plan to charge a tax for ships using the Strait of Hormuz just shows the U.S. plans to run the same kind of mafia protection racket we accuse the Iranians of trying to do. Fortunately the dumb idea was cancelled within hours of being announced. So why was it released in the first place? Because chaos monkeys truly are in charge of this administration.
What strikes me about Trump's floundering over Iran is fact that for once he has met people who play the game the same he always has, and he is getting whipped at it.
What I mean is that Trump has always seen himself as a deal-maker, but in fact he has always been a cheat, a weasel, and someone who exploited power imbalances to bully weaker parties - anything but a fair deal. His long-standing use of lawfare against his enemies is well-established, and far predates his accusations of being a victim of it. What he has never realized is that this only works in the US because all the other actors are mainly playing by the rules and norms and observing rule of law, while he is not. As any child will tell you, if everyone is cheating at a game, cheating doesn't work because the game falls apart.
On the international scene, his tricks work against the Europeans and other allies for the same reason: they are trying to maintain international rule of law and norms of behavior (the rule-based system). Although this may be changing. With Iran he has come up against an adversary that uses all the same tricks and evasions that he does, and are actually much better at that than he. In short, they're beating him at his own game.
He almost doesn't know what to do except imitate them: blockade if they blockade, charge tolls if they charge tolls, break the ceasefire if they break the cease-fire. Its like they have stolen his whole bully/weasel-words repertoire. Only difference is that they serve a theocracy, and he serves only himself (an democracy?). Like them he doesn't really care how much pain he inflicts upon his people. As with most autocrats he comes up against, he can't decide if he wants to beat them or be them.
If Trump and his gauleiters succeed in rigging the elections in key states this November, we would be wise to consider that a) the second civil war that has been brewing since MAGA first arose in full force is now upon us, b) only a successful impeachment, death from natural causes, or assassination—most likely the latter—can prevent Trump from completing his fascist demolition of the United States, and c) whatever happens, there will be blood. It's painful to live with this premonition, and none of these posssible events are anything that, all else being equal, I could ever bring myself to wish for. The problem, as by now all honest people must acknowledge, is that all else definitely isn't equal. One hopes that Trump will just wander away, or succumb to the natural causes already visibly nibbling away on him, but it would be irresponsible of us to deny that he is in fact an epiphenomenon. No matter his personal fate, the original sin embodied in the compromises that led to our "more perfect union," and the payment for its 250 year-old unhealed wounds, is now about to come fully due.
"The Hormuz blockade shows how easily “national security” rhetoric is now weaponized into raw rent extraction from global commerce."
Of course when a third party takes some of the value out of a transaction through extra-legal force it is a rent theft. If boats are involved it is piracy. Remember the Shores of Tripoli!
More interesting is if, or rather when, the holders of Hormuz-served reserves recognize the carbon value of the reserves. Then they can legally charge for the transfer of those carbon values from their accounts in recognized carbon banks to the account of the buyer.
Iran's threat of an environmental fee is consistent with this approach.
This would be neither piracy nor a rent-grab. The carbon charge is a real expense.
Carbon accountancy is fun. Y'all should try it. Our eyeshades are really Green.
The strong tea is the assertion that Iran, and its Hormuzian cartel partners, can adopt carbon economy, book the asset value of the unextracted oil, and charge something in the range of (that is me mking weak tea, you can get to dollars per barrell with a tiny amount of physical chemistry and a current carbon-credit price, and there your AI can figure out something like...) 30%.
This is noot a "rent," or even a "quasi-rent." This is an internalization of the Great Externality (unpriced CO2 emissions), at least in the teahouses I frequent.
Where we are busy brewing a big pot of efficiency tea. The weak minded can add milk.
Energy econommics. Essential if we are going to get a handle on the climate crisis.
That it allows Iran to legally collect charges benefit them just like illegal tolls, is a freebee. A rent in the political economy.
Does Iran have access to an elementary application of carbon economics to the energy industry?
Iran has enough smarts to apply the lbest generative IT to make memes about Leggo Donaldo.
My first teacher in energy economcs was an electrical engineer from Iran. It would surprise me (more weak tea for ya) if the Iranian reference to "Environmental Fees" did not reflect familiarity with principals and practices that are well known in the energy industries, if not in the tea houses of Marvelous Magical Marin.
Saying "weak tea" is pretty weak tea, unless it is served with Graffeo Espresso.
I'm not arguing that carbon counting is weak. I'm saying you're grasping at straws thinking it has anything to do with this catastrophe involving two rogue states.
I’ll snatch any straws within my grasp. Might be I can spin ‘em into gold.
As it happens, when I introduced the late Doug LaMalfa to “carbon counting,” in the context of the intersection between energy markets and forests health, he amazed me with a smart question-in-answer:
“Can you help with our rice straw problem?” Of course the answer is “yes,” if you are willing to accept carbon economics. Which of course Doug wasn’t, since his campaigns were paid by Big Black (fossil interests) and anthropogenic climate change is still seen by his gang as a a hoax dreamed up by the brainiacs at the National Science Foundation.
Let’s see if I can fling some more straw in your direction in hopes you can grasp one.
The climate criisis is real, and it is going to be with us long after the current chaos resolves itself.
Iran has the means to impose a significant toll on Hormuz. It will not reopen until Iran agrees to something.
As a certified Liberal Globalist (I even worked at the OECD!) my knee jerks against tolls on uncongested chokepoints, which are what our host Professor Delong identifies as a rent grab. You can tell it’s a rent grab when a lawless thug tries to snatch it from someone else.
From the standpoint of the LG, I would rather that the 20-30% charge be not a toll-rent, which messes with international law.
As a Greenie I like replacing that illegal charge with a line on the invoice for transfer of the ownership of the associated carbon from the source sovereignty (the reserve operators in Iran, Iraq, etc.) to whoever owns the crude in the tanker.
This is part of the transition to carbon economy.
This is as convenient to the Rogues of Iran (and of Dubai) as it is inconvenient to fossil consumers.
It’s also convenient to the Carbon Bankers of California, who have figured out how to share this convenience with the poor ignorant saps of Mahvelously Magical Marin, once they get over the really inconvenient truth that the Carbon Economy has been innovated by those obnoxious hicks up in Recreation Land. Loggers. Eek.
Yep, I’m grasping at straws. I think the Hormuz Crisis is good for my friends and neighbors, and for the rest of us too. Even people who dare to attempt vegetation-based insults in preference to grabbing the bull by the tail and facing the situation.
1. Collective intelligence is multiple, and Polanyian group-defense is one of its valid (but also dangerous) forms. Markets, as you say, are not enough -- no matter how hard their primary beneficiaries insist.
2. I still think we underestimate the importance of Gulf War II/the flouting of UN 1441. That was a gateway to this, wasn't it? And our liberals have done nothing to go back and seek a do-over. Nothing.
This reminds me of Karl Rove's famous statement to Ron Susskind:
<i>“We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality — <strike>judiciously, as </strike> <u>by the judiciary</u>, if you will — we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors . . . and you, all of you, will be left to just study what we do.”</i>
Agreed on all. A 20% tax would be a strong punishment to his supposed Gulf allies, whose oil and fertilizer would be at a huge price disadvantage. As an amazing concession, he will lower it to 10% as an introductory offer. Even that can get an exception by greasing an itchy palm.
The only way to enforce protection and justify the tax is for US warships to escort commercial ships. That creates a huge incentive for Iran to strike not only the merchant ship, but also the warship. They will figure out how. Video of a sinking US destroyer is worse than boots on the ground. For all the talk, the President is risk-averse in battle.
Iran has agency supported by missiles, drones, satellite intelligence, and Chinese supplies. They can expand the battlefield and the targets at will. Meanwhile, the person who says he has all the cards doesn't know how many are in a pack. We cannot dismiss stupidity.
If US is selling insurance, perhaps that reflects an appropriate rate.
That said, he supposedly said this morning, that he was going to structure as investment commitments which I cannot see much of a justification for. I think he is off the "deep end" at the moment.
The Iranians have also used the euphemism "insurance" in proposing their protection racket. It's hard to see how ours would be any different.
Iran's proposal was more or less extortion as it was agreeing to not shoot at ships. I do not believe US would fire on ships, including those carrying Iranian oil provided terms are reached. US could provide real insurance if ships are damaged and people compensated for injury/death. This has been talked about but I do not know current status.
Lots of people have criticized Para. 5 of the MOU, but Trump more or less agreed to a fee provided Oman agrees and is consistent with international law. If Iran/Oman did something along the lines of what Turkey does in the Bosphorus and Dardanelles, I would be inclined to support it provided it is based on real and reasonable costs. Trump also threatened to bomb Oman if they did agree, but as I said, I could get behind that and whatever treaty controls could be amended to allow.
Difficult compromises are necessary and while Trump is a "chaos monkey," in the end, he is prepared to compromise in my opinion. I do not like the current idea of investments but if Gulf countries reimbursed some of our costs, that isn't unreasonable and was done in first Gulf war. I don't know what their attitude was on the war; I'm sure they okayed it, but support it? If not, no fee is appropriate as Kent said.
Insurance pays out defined claims when there's a loss event, so this isn't insurance. At best, one could call this a security service. "Shake down" is most accurate.
Someone should try to explain to the public that investments in the US must increase the US trade deficit.
_at the moment_?
I think that the Roberts court has seriously miscalculated: it cannot be in the interest of a court to discard the rule of law. It is clear that they think they are an American gerousia, and that even if they fail to establish a one-party state, they will simply override a president with whom they disagree. But even a Republican president may have interests that conflict with theirs, the Supreme Court has nothing like the social position of the Spartan gerousia, and it is the president whom the armed forces and security establishment obey. Eventually, they will encounter a Putin, and then the self-styled gerousia will melt away.
Miscalculated? Aren't they a pack of true believers who simply do what they do, as they were groomed and sponsored and confirmed to do?
Your "piratical practice of presidents" paragraph inspired me to get a Claude rewrite as an homage to Dr Seuss' Tweetle Beetle Battle
When a president plays at a pirate for pay,
it's a pirate-y president pirate-y play.
When he builds him a booth in a strait far away,
it's a pirate-y president strait-booth-toll play.
And when courts duck away with a "self-executes!" phrase,
it's a court-ducking, booth-tolling, pirate-y maze —
a maze that un-writes what the founders had penned:
that a president's job is to faithfully tend
the laws that the Congress has passed him to mind —
NOT reign as a king of the divine-right kind,
with "the will of the people is law!" on his crown.
Now if THAT isn't betrayal that tears the thing down...
then tell me, dear reader, what else it could be —
this pirate-y, king-ish, strait-toll treachery?
Trump's plan to charge a tax for ships using the Strait of Hormuz just shows the U.S. plans to run the same kind of mafia protection racket we accuse the Iranians of trying to do. Fortunately the dumb idea was cancelled within hours of being announced. So why was it released in the first place? Because chaos monkeys truly are in charge of this administration.
What strikes me about Trump's floundering over Iran is fact that for once he has met people who play the game the same he always has, and he is getting whipped at it.
What I mean is that Trump has always seen himself as a deal-maker, but in fact he has always been a cheat, a weasel, and someone who exploited power imbalances to bully weaker parties - anything but a fair deal. His long-standing use of lawfare against his enemies is well-established, and far predates his accusations of being a victim of it. What he has never realized is that this only works in the US because all the other actors are mainly playing by the rules and norms and observing rule of law, while he is not. As any child will tell you, if everyone is cheating at a game, cheating doesn't work because the game falls apart.
On the international scene, his tricks work against the Europeans and other allies for the same reason: they are trying to maintain international rule of law and norms of behavior (the rule-based system). Although this may be changing. With Iran he has come up against an adversary that uses all the same tricks and evasions that he does, and are actually much better at that than he. In short, they're beating him at his own game.
He almost doesn't know what to do except imitate them: blockade if they blockade, charge tolls if they charge tolls, break the ceasefire if they break the cease-fire. Its like they have stolen his whole bully/weasel-words repertoire. Only difference is that they serve a theocracy, and he serves only himself (an democracy?). Like them he doesn't really care how much pain he inflicts upon his people. As with most autocrats he comes up against, he can't decide if he wants to beat them or be them.
Another great post. Appreciate the inclusion of Keynes thoughts.
If Trump and his gauleiters succeed in rigging the elections in key states this November, we would be wise to consider that a) the second civil war that has been brewing since MAGA first arose in full force is now upon us, b) only a successful impeachment, death from natural causes, or assassination—most likely the latter—can prevent Trump from completing his fascist demolition of the United States, and c) whatever happens, there will be blood. It's painful to live with this premonition, and none of these posssible events are anything that, all else being equal, I could ever bring myself to wish for. The problem, as by now all honest people must acknowledge, is that all else definitely isn't equal. One hopes that Trump will just wander away, or succumb to the natural causes already visibly nibbling away on him, but it would be irresponsible of us to deny that he is in fact an epiphenomenon. No matter his personal fate, the original sin embodied in the compromises that led to our "more perfect union," and the payment for its 250 year-old unhealed wounds, is now about to come fully due.
"A president who can unilaterally tax world commerce at Hormuz, he has discovered a new, extra‑constitutional prerogative-based revenue power."
We can call it Ship Money. And hope that it ends the same way.
"The Hormuz blockade shows how easily “national security” rhetoric is now weaponized into raw rent extraction from global commerce."
Of course when a third party takes some of the value out of a transaction through extra-legal force it is a rent theft. If boats are involved it is piracy. Remember the Shores of Tripoli!
More interesting is if, or rather when, the holders of Hormuz-served reserves recognize the carbon value of the reserves. Then they can legally charge for the transfer of those carbon values from their accounts in recognized carbon banks to the account of the buyer.
Iran's threat of an environmental fee is consistent with this approach.
This would be neither piracy nor a rent-grab. The carbon charge is a real expense.
Carbon accountancy is fun. Y'all should try it. Our eyeshades are really Green.
"consistent with": rather weak tea here
Totally weak tea.
The strong tea is the assertion that Iran, and its Hormuzian cartel partners, can adopt carbon economy, book the asset value of the unextracted oil, and charge something in the range of (that is me mking weak tea, you can get to dollars per barrell with a tiny amount of physical chemistry and a current carbon-credit price, and there your AI can figure out something like...) 30%.
This is noot a "rent," or even a "quasi-rent." This is an internalization of the Great Externality (unpriced CO2 emissions), at least in the teahouses I frequent.
Where we are busy brewing a big pot of efficiency tea. The weak minded can add milk.
Energy econommics. Essential if we are going to get a handle on the climate crisis.
That it allows Iran to legally collect charges benefit them just like illegal tolls, is a freebee. A rent in the political economy.
Does Iran have access to an elementary application of carbon economics to the energy industry?
Iran has enough smarts to apply the lbest generative IT to make memes about Leggo Donaldo.
My first teacher in energy economcs was an electrical engineer from Iran. It would surprise me (more weak tea for ya) if the Iranian reference to "Environmental Fees" did not reflect familiarity with principals and practices that are well known in the energy industries, if not in the tea houses of Marvelous Magical Marin.
Saying "weak tea" is pretty weak tea, unless it is served with Graffeo Espresso.
I'm not arguing that carbon counting is weak. I'm saying you're grasping at straws thinking it has anything to do with this catastrophe involving two rogue states.
I’ll snatch any straws within my grasp. Might be I can spin ‘em into gold.
As it happens, when I introduced the late Doug LaMalfa to “carbon counting,” in the context of the intersection between energy markets and forests health, he amazed me with a smart question-in-answer:
“Can you help with our rice straw problem?” Of course the answer is “yes,” if you are willing to accept carbon economics. Which of course Doug wasn’t, since his campaigns were paid by Big Black (fossil interests) and anthropogenic climate change is still seen by his gang as a a hoax dreamed up by the brainiacs at the National Science Foundation.
Let’s see if I can fling some more straw in your direction in hopes you can grasp one.
The climate criisis is real, and it is going to be with us long after the current chaos resolves itself.
Iran has the means to impose a significant toll on Hormuz. It will not reopen until Iran agrees to something.
As a certified Liberal Globalist (I even worked at the OECD!) my knee jerks against tolls on uncongested chokepoints, which are what our host Professor Delong identifies as a rent grab. You can tell it’s a rent grab when a lawless thug tries to snatch it from someone else.
From the standpoint of the LG, I would rather that the 20-30% charge be not a toll-rent, which messes with international law.
As a Greenie I like replacing that illegal charge with a line on the invoice for transfer of the ownership of the associated carbon from the source sovereignty (the reserve operators in Iran, Iraq, etc.) to whoever owns the crude in the tanker.
This is part of the transition to carbon economy.
This is as convenient to the Rogues of Iran (and of Dubai) as it is inconvenient to fossil consumers.
It’s also convenient to the Carbon Bankers of California, who have figured out how to share this convenience with the poor ignorant saps of Mahvelously Magical Marin, once they get over the really inconvenient truth that the Carbon Economy has been innovated by those obnoxious hicks up in Recreation Land. Loggers. Eek.
Yep, I’m grasping at straws. I think the Hormuz Crisis is good for my friends and neighbors, and for the rest of us too. Even people who dare to attempt vegetation-based insults in preference to grabbing the bull by the tail and facing the situation.
I got more!
My two cents:
1. Collective intelligence is multiple, and Polanyian group-defense is one of its valid (but also dangerous) forms. Markets, as you say, are not enough -- no matter how hard their primary beneficiaries insist.
2. I still think we underestimate the importance of Gulf War II/the flouting of UN 1441. That was a gateway to this, wasn't it? And our liberals have done nothing to go back and seek a do-over. Nothing.