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America’s role in the Middle East

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This is the introduction to Checks and Balance, a weekly, subscriber-only newsletter bringing exclusive insight from our correspondents in America.

James Bennet, our Lexington columnist, says America neglects the Middle East at everyone’s peril

The secretary of state declared he was not going to waste his energy chasing peace among Israelis and Arabs. The region was a quagmire, he told an aide as he took office, and he was “not going to fly around the Middle East” like his predecessor. That attitude might sound familiar from the last three American administrations, but the secretary in state in question was James Baker, during the administration of President George H.W. Bush, as described by Peter Baker and Susan Glasser in their biography, “The Man Who Ran Washington”.

Mr Baker’s aide, Dennis Ross, responded to him with a warning that more recent administrations should also have heard: while Mr Baker “might want to ignore the Middle East, it would not ignore him”.

Like Donald Trump and Barack Obama, President Joe Biden came into office wanting to focus his attention on Asia. When it came to Israelis and Palestinians he stuck with the “outside-in” approach of Mr Trump, hoping that more Arab states would sign peace deals with Israel, and that that would somehow put pressure on the Palestinians eventually to strike a deal, too. As our briefing this week explains, both those goals now seem out of reach. 

It was the first Gulf war that prompted Mr Baker to embark on his own round of intense Middle East peacemaking, taking at least eight trips to the region, including one three-week marathon, that led to the Madrid peace conference in 1991. He did not achieve a peace deal; as Mr Ross had also warned him, he would need “heroes for dramatic breakthroughs”, leaders like Anwar Sadat of Egypt, who gave his life for peace with Israel. No such heroes were on offer. 

But Madrid paved the way, as did pressure from the Bush administration that brought down a right-wing Israeli government, elevating a new prime minister, Yitzhak Rabin. During the Clinton administration, Rabin sealed the Oslo accords, the interim peace agreements between Israel and the Palestinians. Then, like Sadat, he was killed. 

I’m not suggesting this war in Gaza is about to lead to some kind of reset, much less a breakthrough. But I found myself thinking about this history as I wrote this week about the public rupture between Chuck Schumer, the Senate majority leader and a champion of Israel within the Democratic Party, and Binyamin Netanyahu, the Israeli prime minister. It seems worth thinking back on the more hopeful moments and what made them possible, including the sort of intelligent, focused attention from American peacemakers that has been missing from the Israeli-Palestinian conflict for far too long.

Economics

Protests against a regal presidency have been notably peaceful

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There is no need to send in the troops

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Economics

Gavin Newsom is ready for his close-up

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NORMALLY, GAVIN NEWSOM is loose. The Democratic governor of California talks with a staccato cadence, often flitting from one incomplete thought to the next. When he talks to journalists or asks a guest on his podcast a meandering question, he tends to use a lot of meaningless filler words: “in the context of” is a frequent Newsomism. But on June 10th he was clear and direct. “This brazen abuse of power by a sitting president inflamed a combustible situation,” he said during a televised address after President Donald Trump deployed nearly 5,000 troops to Los Angeles to quell protests over immigration raids. “We do not want our streets militarised by our own armed forces. Not in LA. Not in California. Not anywhere.”

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Economics

Consumer sentiment reading rebounds to much higher level than expected as people get over tariff shock

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A woman shops at a supermarket on April 30, 2025 in Arlington, Virginia.

Sha Hanting | China News Service | Getty Images

Consumers in the early part of June took a considerably less pessimistic about the economy and potential surges in inflation as progress appeared possible in the global trade war, according to a University of Michigan survey Friday.

The university’s closely watched Surveys of Consumers showed across-the-board rebounds from previously dour readings, while respondents also sharply cut back their outlook for near-term inflation.

For the headline index of consumer sentiment, the gauge was at 60.5, well ahead of the Dow Jones estimate for 54 and a 15.9% increase from a month ago. The current conditions index jumped 8.1%, while the future expectations measure soared 21.9%.

The moves coincided with a softening in the heated rhetoric that has surrounded President Donald Trump’s tariffs. After releasing his April 2 “liberation day” announcement, Trump has eased off the threats and instituted a 90-day negotiation period that appears to be showing progress, particularly with top trade rival China.

“Consumers appear to have settled somewhat from the shock of the extremely high tariffs announced in April and the policy volatility seen in the weeks that followed,” survey director Joanne Hsu said in a statement. “However, consumers still perceive wide-ranging downside risks to the economy.”

To be sure, all of the sentiment indexes were still considerably below their year-ago readings as consumers worry about what impact the tariffs will have on prices, along with a host of other geopolitical concerns.

On inflation, the one-year outlook tumbled from levels not seen since 1981.

The one-year estimate slid to 5.1%, a 1.5 percentage point drop, while the five-year view edged lower to 4.1%, a 0.1 percentage point decrease.

“Consumers’ fears about the potential impact of tariffs on future inflation have softened somewhat in June,” Hsu said. “Still, inflation expectations remain above readings seen throughout the second half of 2024, reflecting widespread beliefs that trade policy may still contribute to an increase in inflation in the year ahead.”

The Michigan survey, which will be updated at the end of the month, had been an outlier on inflation fears, with other sentiment and market indicators showing the outlook was fairly contained despite the tariff tensions. Earlier this week, the Federal Reserve of New York reported that the one-year view had fallen to 3.2% in May, a 0.4 percentage point drop from the prior month.

At the same time, the Bureau of Labor Statistics this week reported that both producer and consumer prices increase just 0.1% on a monthly basis, pointing toward little upward pressure from the duties. Economists still largely expect the tariffs to show impact in the coming months.

The soft inflation numbers have led Trump and other White House officials to demand the Fed start lowering interest rates again. The central bank is slated to meet next week, with market expectations strongly pointing to no cuts until September.

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