Foreign Policy magazine recently wrote that polls show the economy is presently the issue most important to the US electorate, rated at 52%, whereas foreign policy is of concern to less than 1%. FP then went on to list five potential international crises that could change that focus.
Now that Netanyahu has secured his coalition with the Kadima party, rumour has it that he will announce elections for this September, a year in advance of his term in 2013. Having thus pocketed his main opposition party, he will be in a position to freely pursue his agenda, one that surely includes neutralizing Iran.
The FP article opines that this could occur following an Israeli election in September/October this year. They reason that Obama, concentrating on impending US elections would be loath to oppose Netanyahu and an Israeli strike against Iran. I agree but, for a different reason, namely, if he did so, he would be open to a charge of being soft on Iran by Romney and the Republicans who are firmly in Israel’s camp.
This is a real can of worms and it is difficult to assess the likelihood and timing of an almost certain debacle. The next Greek elections due mid June could either strengthen the anti-bailout party, Syriza and precipitate the exit of Greece from the Eurozone or revive the pro-bailout lot and allow them another chance to form a government. Polls, as of today, point in both directions
3. Slowdown in China
The thinking here is that a continued slowdown in the Chinese economy would have a global knock-on effect and pitch the US economy back into recession. Much depends on China’s planned stimulus to boost domestic consumption. Should this counteract a drop in exports to the US and Europe, it could also act to reduce China’s reliance on US trade and the need to bolster US finances by buying US treasuries, a double-edged sword.
4. Domestic Terror, another 911
Certainly such an event would bring international affairs back into focus, and, very likely again a charge that the Obama administration handling of security was deficient and had endangered American lives. The possibility of such an attack is always present and, as always, impossible to predict when or where.
5. October Surprise
Always possible one party or the other could pull a rabbit out of the hat just prior to the US November elections However, as I wrote above, that would seem most likely to be an Israeli attack on Iran in September/October.
Of the five threats those the most likely are Iran and a Eurozone crisis and departure of Greece from the Eurozone. Justifiably or not, both these events could work against Obama.
In the case of Iran, there could be a global panic on oil and the price of petrol in the US could skyrocket and with that economic recovery would be stymied, if not reversed.
Ditto for the Eurozone. Return to recession and US trade with Europe would be threatened. Surely it is a question of when, not if, Greece defaults and leaves the Eurozone and Euro banks are put under severe pressure thus exacerbating the economic downturn. The subject of the viability of the EU as a political and monetary union is grist for yet another blog.