To follow up on my Cyprus post from yesterday, the deal between Brussels and Nicosia looks like a geopolitical reversal of fortune for the Russian Federation.  As Max Fisher noted: 

Maybe Moscow thought this would tilt its client state toward the pro-Russia choice in that binary, but it appears to have be having the opposite effect....

Russia is not in the process of losing a client-state, exactly — the political and cultural ties are likely still too deep for something that drastic to happen that quickly — but Moscow certainly isn’t doing itself any favors. As [Felix] Salmon wrote today, “If this is how the game ends, it’s an unambiguous loss for Russia, and a win for the E.U.”

Moscow’s aggressive, all-or-nothing approach appears to have only pushed Cyprus further toward Europe. 

Now, far be it for me to question Russia's motiva--- oh, screw it, I'm totally going to question Russia's motivations here.  Because what happened in Cyprus is emblematic of an interesting trend since 2008 -- the great powers that analysts have lazily defined as "revisionist" don't seem all that interested in collecting allies. 

This is not the first time a weak Western ally has sought out either China or Russia as a way of avoiding onerous financial strictures.  Iceland begged Russia for financial assistance during the depths of the 2008 financial crisis.  At one point, the Icelandic President allegedly offered Russia the use of Keflavík Air Base.  This possibility caused some mild consternation in Foggy Bottom.  In the end, the Russians said they didn't need the base and proffered only a fraction of what Iceland wanted, leaving Reykjavik little choice but to cut a deal with the IMF. 

One can tell a similar story with Pakistan and China.  During the fall of 2008 Islamabad was facing a balance of payments crisis and sought out China as a benefactor.   In the end, China was unwilling to offer Pakistan enough money to substitute for IMF support, forcing the Pakistani government to take out an IMF loan. 

Both the Iceland and Pakistan outcomes were surprising enough in 2008 that I bothered to blog about them back then.  The interesting thing is that nothing much has changed.  Sure, through the Forum on China-Africa Cooperation, China has enhanced its role outside its region, but even FOCAC is more about commercial interests than geopolitical interests.  At the same time, China became estranged from one of its most loyal allies when Myanmar started embracing the United States.  It also alienated a lot of neighbors that might otherwise have been more willing to defer to Beijing.  And as I blogged earlier this year, China continues to be standoffish towards Pakistan despite the latter country's eagerness to ally itself with Beijing.  Ironically, the only countries that Russia and China have really stuck their neck out for in recent years have been the allies that have given them the most agita -- Syria for Moscow, and North Korea for Beijing.  [Gee, it's almost as if this phenomenon of small allies that are strategic deadweights is not unique to the United States or something!!--ed.  This is a blog post, so stop your subtweeting.]

To be sure, China and Russia have , on occasion, engaged in some revisionist efforts to change the status quo.  See: Russia's 2008 war with Georgia; China's border disputes with the rest of the Pacific Rim.  What's striking, however, is that neither Moscow nor Beijing seems terribly interested in collecting client states.  Hell, for all the rhetoric involving closer Sino-Russian cooperation, it seems as though the actual bilateral relationship amounts to little more than empty rhetoric and cooperation at the U.N. Security Council. 

Why is this?  I'm honestly not sure.  Back in 2008, I spitballed the following: 

For all their aspirations to great power status, both countries lack the policy expertise necessary to take on greater leadership roles.  This leads to profound risk aversion, which leads to inaction.  On the flip side, the U.S. is accustomed to talking to the countries in crisis, which both provides it with more information and allows Washington to act more quickly.

Four and a half years later, I don't think that's a sufficient explanation.  Spitballing now, I think there are three possible explanations. 

1)  Pure buckpassing.  Why should Moscow or Beijing spend their hard-earned cash on marginally useful client states?  Let the West exhaust itself with these aid packages. 

2)  Internal balancing.  Realists like to think that external balancing (forming alliances) and internal balancing (augmenting national capabilities) are substitutable strategies.  Maybe China and Russia prefer to focus on national capabilities rather than coalition-building.

3)  Outside their own neighborhood, neither Russia nor China is really revisionist.  As great powers, Moscow and Beijing will do what they gotta do in their near abroads.  Globally, however, they have neither the ambition nor the interest in altering the current system of "good enough" global governance.  After all, the current rules of the global game have benefited both of them pretty well over the past decade or so. 

You can guess which of these explanations I gravitate towards, but I'm hardly convinced. 

What do you think? 

So, after reading up on the Cyprus deal from the Financial Times, the Economist, and Quartz, I think I have a pretty good idea of what happened. Tyler Cowen isn't happy with the deal, and I can see why, but I don't think that means the deal won't stabilize things for a spell. My four quick takes: 

1) I've been pretty insistent that the most surprising thing about the aftermath to the 2008 financial crisis is how much global policy norms haven't changed. By and large the major economies are still rhetorically and substantively committed to trade liberalization, foreign direct investment, and a constrained role for the state in the private sector. The one exception? Capital controls. The earth has moved here, and the fact that this deal will require fair amounts of financial repression and cross-border controls is just the latest sign of this fact. 

From a normative perspective, I can't say I'm too broken up about this. It's not that I'm a huge fan of capital controls or anything. In the various policy trilemmas or unholy trinities that Dani Rodrik and others talk about, however, it strikes me that unfettered capital mobility is the policy preference with the least upside. And Cyprus does seem to be the fifth iteration of the lesson that countries that live by large unregulated offshore finance will die by large unregulated offshore finance. 

2) If the FT's Peter Siegel and Joshua Chaffin are correct, then the political backlash in Cyprus from this deal won't be that great: 

In Nicosia, political leaders generally greeted the deal as painful but necessary.

The city streets were quiet and peaceful, with most businesses closed for a public holiday.

Even before the agreement was clinched, most Cypriots had come to grips with the fact that the offshore financial business sector that has powered the economy since the Turkish invasion in 1974 would be but a shell of its recent self.

And as the Economist explains, the current Cypriot reaction is based on the fact that the new deal is a damn sight better for them than the previous deal:

On March 16th Cyprus’s president, Nicos Anastasiades, desperate to protect Cyprus’s status as an offshore banking model for Russians, had decided to save the two biggest banks and thus to spread the pain thinly. He would have applied a hefty tax to all depositors: 9.9% for those too big to be covered by the EU-mandated €100,000 deposit guarantee, and 6.75% for the smaller depositors.

But after a week of brinkmanship—including protests by Cypriots, the extended closure of banks to avoid the outrush of money, a failed attempt by Cyprus to throw itself at Russia’s feet, an ultimatum by the European Central Bank and an eleventh-hour threat by Cyprus to leave the euro zone—a different decision was made: to apply the pain much more intensely, but on a smaller number of large depositors.

Which leads me to....

3) So much for Russia as a counterweight to the European Union. Cyprus tried to realign itself closer to Moscow, but it didn't take. Furthermore, the new deal really puts the screws on the large deposits of Russian investors that have parked their money in Nicosia. As Felix Salmon explains: 

In the Europe vs Russia poker game, the Europeans have played the most aggressive move they can, essentially forcing Russian depositors to contribute maximally to the bailout against their will. If this is how the game ends, it’s an unambiguous loss for Russia, and a win for the EU.

The Financial Times makes a similar point: 

One Moscow businessman blamed the harsher haircut on the Kremlin, which he accused of failing to protect Russia’s interests, “thereby allowing the Germans to bully Cyprus and thousands of Russian depositors”.

“As soon as the EU saw that Russia was not going to protect its citizens, the confiscation of Russian money in Cyprus was pushed by the EU. All that was necessary for Russia to do was to provide €2.5bn secured by Cyprus’s nationalised assets,” he said.

With Xi Jinping's visit to Moscow, there's been a lot of chatter about "rise of BRICS" and "Russia turns East" and "SCARY!! SCARY!!" Bear in mind, reading all of this, that Moscow couldn't budge the ostensibly enervated EU from its position on the EU member with the closest ties to Russia. 

[Can't Russia just mess with the Europeans on energy?--ed. Um... no. Sure, they could try to do that, but the long-run implications of that move for Russian exports ain't good. To paraphrase an old Woody Allen joke, Russia might find its economic relationship with the European Union to be totally frustrating and irrational and crazy and absurd... but Russia needs the eggs.]   

4) What I said about Cyrprus last week still seems to hold for this week. So I guess this means Cyprus now falls under the "good enough" global governance category, with the caveat that this involves eurozone officials, so "good enough" here is defined down to mean "managed not to wreck the rest of the global financial system."

Am I missing anything? 

Earlier in the week I blogged about Operation Iraqi Freedom's effect on the international system (not much) and its effect on American foreign policy (pretty significant).  Moving from the systemic to the domestic to the individual level, this last Iraqi retrospective post asks a more solipsistic question.  How has Operation Iraqi Freedom affected me as a foreign policy writer? 

Ten years ago I supported the decision to invade Iraq.  If you're looking for another of the many apologies that have been penned this week, don't bother.  I offered my Iraq apology six years ago.  Looking back, I'm just grateful that I wasn't all that influential a foreign policy pundit back in the day. 

What gnaws at me is why my analytical assessment was so wrong.  I can't really blame this on Beltway groupthink.  Hell, at the University of Chicago, two of the leading anti-war proponents were just a floor below my office.  As I was blogging during the debates in the run-up to the war, I'd like to thjink I engaged critics frequently and in depth. 

After reading some of the self-reflections this week, however, I'm beginning to  think that my flaw was generational in nature.  John B. Judis wrote something interesting on this earlier in the week on why he was so dubious about Operation Iraq Freedom: 

I opposed the war, and didn’t listen to those who claimed to have “inside information” probably because I had come of age politically during the Vietnam War and had learned then not to trust government justifications for war. I had backed the first Bush administration’s Gulf War, but precisely because of its limited aims. Ditto the Clinton administration intervention in Kosovo. George W. Bush’s aims in Iraq were similar to American aims in South Vietnam. During those months leading up to the war, I kept having déjà vu experiences, which failed to interest my colleagues. Still, I wavered after Colin Powell’s thoroughly deceptive speech at the United Nations in February 2003, where he unveiled what he claimed was evidence of Iraqi nuclear preparations. I had to have an old friend from the anti-war days remind me again of the arguments against an invasion.

Contrast this with Operation Iraqi Freedom supporter Jonathan Chait's recollections: 

The Gulf War took place during my freshman year in college. It was the first major American war since Vietnam, and the legacy of Vietnam cast a heavy shadow — the news was filled with dire warnings of bloody warfare, tens of thousands of U.S. deaths, uprisings across the Middle East. None of it happened. And again, through the nineties, the United States intervened in the Balkans twice under Bill Clinton, saving countless lives and disproving the fears of the skeptics, which had grown weaker but remained.

These events had conditioned me to trust the hawks, or at least, the better informed hawks. They also conditioned me unconsciously to regard wars through this frame, as relatively fast attacks without a heavy occupation phase. People tend to think the next war will be somewhat like the last. That is a failing I will try to avoid again.

Age-wise, I'm a contemporary of Chait's and a generation younger than Judis.  Ironically, for all the Gen-Xer tropes about irony and cynicism, the foreign policy arc of our generation looked pretty damn optimistic until March 2003.  Indeed, reading the above paragraphs I can recall my attitudes about the use of force in 2002 and 2003.  America's use of force during the 1990s -- and, at the time, Operation Enduring Freedom -- had been limited in scope and pretty efficient in its execution.  Furthermore, the foreign policy principals who were planning the Second Gulf War had run the first one, which, again, had gone pretty well.  So yes, I think I had a generational bias -- I badly overestimated the capacities of George W. Bush's national security and foreign policy hands. 

How does this affect my thinking about the use of force now?  I think so, but in a limited way.  I'm more leery of arguments that the overwhelming use of force will change things for the better in places like Syria or Iran.  I'm extremely leery about the creeping militarization of American foreign policy.  I think to read people I disagree with on policy -- even, say, the Leveretts -- with a more generous eye than I did a decade ago, because I'm less sure I'm right.   

That said, I was by and large supportive of U.S. actions in Libya, and I've been skeptical about the constant warnings from 2006 onwards that the United States is being pulled inexorably into a war with Iran.  So I suppose that some of that nineties optimism still resides within me about the use of force as an adjunct to American foreign policy. 

[Lest one think I'm doing this to maintain my "viability" for a foreign policy position in the federal government, let me assure you that for very good personal and professional  reasons, there is no way I'll ever be serving the U.S. government in an foreign policy capacity in the future.  Furthermore, I've got about as secure a sinecure as I can find in the academy.  No, the views expressed here have nothing to do with any future career aspirations.]

In this, I'm more like Chait and less like the millenial generation that follows me.  Indeed, as Chait observed: 

I get the sense that their foreign policy worldview is dominated by the Iraq War in the same way the Boomer generation is dominated by Vietnam and the generation before them by World War II. The formative event of their adulthood is the reference point for all future conflict....

And I think if you look at the commentary leading up to the Obama administration’s intervention in Libya, you see the same pattern asserting itself. Anti-interventionists were treating it as Iraq redux, reprising every argument they wish they could have made in 2003. But Libya was not Iraq. I’d argue it was a success — not a perfect success, but a superior alternative to standing by as tens of thousands of people were massacred.

There's hard data that the millenial generation thinks about American foreign policy differently -- and given their formative experiences, I can't say that I blame them.  Indeed, it's just punishment for the neoconservatives that they bungled Iraq so badly that their intellectual project might die out Children of Men-style because they're producing fewer and fewer young neoconservatives.  Still, while this worldview might prevent another Iraq, I do wonder whether it also constrains more limited military actions that do yield foreign polivcy gains. 

I'm definitely more risk-averse about the use of force than I used to be.  And I hope I'm more generous with those who oppose the use of force as a foreign policy tool than I was a decade ago.  Still, going forward, I'm still probably more hawkish than the median foreign policy wonk of the millenial generation.  Which, I confess, is a very weird place to be ten years after Iraq. 

Yesterday an amendment to the continuing resolution funding the U.S. government, sponsored by Senator Tom Coburn of Oklahoma, was passed by a voice vote in the Senate. Its purpose? 

To prohibit the use of funds to carry out the functions of the Political Science Program in the Division of Social and Economic Sciences of the Directorate for Social, Behavioral, and Economic Sciences of the National Science Foundation, except for research projects that the Director of the National Science Foundation certifies as promoting national security or the economic interests of the United States.

Now, from a pure material interest perspective, this should make me happy. I've never received a dime in NSF funding, and I'm sitting on a pretty good grant for the next 5-10 years, so from a strictly relative gains perspective, I acquire more influece in the discipline. Furthermore, the national security exemption means that whatever scraps the NSF throws to political science will go to my preferred subfields like international relations and comparative politics. 

The thing is, though, that I love political science. I want to see more quality research being done, and the NSF cutoff pushes things in the opposite direction. So I'm not happy. 

If I'm displeased, however, then I think it's safe to say that the American Political Science Association is galactically pissed off at this outcome: 

Adoption of this amendment is a gross intrusion into the widely-respected, independent scholarly agenda setting process at NSF that has supported our world-class national science enterprise for over sixty years.

The amendment creates an exceptionally dangerous slippery slope. While political science research is most immediately affected, at risk is any and all research in any and all disciplines funded by the NSF. The amendment makes all scientific research vulnerable to the whims of political pressure. 

Adoption of this amendment demonstrates a serious misunderstanding of the breadth and importance of political science research for the national interest and its integral place on the nation's interdisciplinary scientific research agenda. 

Singling out any one field of science is short-sighted and misguided, and poses a serious threat to the independence and integrity of the National Science Foundation.

And shackling political science within the national science agenda is a remarkable embarrassment for the world's exemplary democracy.

I've blogged at length in the past on the substantive reasons why a cutoff of NSF funds for political science is really, really, stupid. Another post on that question won't change things. And I vented my frustration at the willful ignorance of Senator Coburn yesterday, so there's no reason to go there now. Yesterday, however, there was rollicking debate on Twitter about the need for political scientists to, well, be better at politics. Folks such as Phil Arena, Jay Ulfelder, William Winecoff, and Jacob Levy observed that APSA's tactical response to Coburn's folly -- encouraging APSA members to email Congress and so forth -- was pretty lame. Only if we used the Dark Arts of political science knowledge could we somehow stymie the Senator from Oklahoma. 

Here's the thing, though -- while I'm no expert in American politics, I think I know enough of the Dark Arts to know that we could have the best arguments in the world and still recognize that political science is good and truly f**ked. 

From a straight interest group perspective political scientists don't matter. At all. The NSF funding for political science is a $13 million appropriation spread out geographically. There is no concentrated interest in a particular congressional district or state to motivate a member of Congress to fight for this issue with as much ardor as Tom Coburn or Jeff Flake. 

Now, one could argue that if you believe in epistemic communities -- i.e., the power of collective expertise -- to influence uninformed members of Congress, then maybe political scientists could function as Weberian activists and educate members about the inherent value of political science. The thing is, as I've argued previously, politicians and pundits do not think of politics as a scientific enterprise. Maybe a few pundits developed a new appreciaion for statistics following the 2012 election, but that's not quite the same thing. So an epistemic community of political scientists won't cut it. Hell, all social scientists would be unlikely to persuade the Senate -- remember, this is a body that was copacetic with a Senator blocking a Nobel Prize winning economist from sitting on the Federal Reserve Board of Governors. Maybe we could logroll with all  the natural and physical sciences too, but if the past decade of climate change policy has proven anything, it's that this won't work terribly well. 

Another gambit would be to move public opinion on this issue to the point where Congress had no choice but to accede to the masses ... except the masses likely support the cuts. A mass public that believes the foreign aid budget is a thousand times larger than it actually is likely believes that cutting NSF funding of political science goes a long way toward tackling the deficit. Furthermore, as Brendan Nyhan and Jason Reifler's research shows, it's next to impossible to correct that misperception. 

There are three other ways for political scientists to alter the status quo -- but each of them has issues: 

1) A political scientist needs to come up with a killer scientific breakthrough that really advances knowledge in the field in an unambiguous manner. We're talking something Nobel-worthy. Oh, wait, Elinor Ostrom already did that, and it didn't matter. Never mind...

2) A political scientist needs to develop a predictive model that's so powerful that it yields substantial profit -- to the point where the political scientists can afford to set up an endowment that substitutes for NSF funding. The thing is, there already are political scientists who have thrived in the private sector -- but I'm not seeing enough cabbage being earned to create endowments. 

3) Finally, maybe a trained political scientist could just run for the Senate, get elected, and apply the necessary counterweight to Coburn et al ... except that one of Coburn's co-sponsors is Arizona freshman Senator Jeff Flake, who has -- wait for it -- an M.A. in political science. 

Am I missing anything, or is political science good and truly f**ked? 

UPDATE: OK, there's one other possibility that could theoretically shift the status quo. Suppose a rival great power -- say, a country that rhymes with "Dinah" -- were to suddenly throw around huge research $$$ to develop a comparative advantage in poli sci. Say that the money was so good that it started to attract the cream of the political science crop. That might spur Congress to freak out about the existence of a political science gap. 

So, any political scientists sitting on fat research offers from China -- now is the time to accept them. 

On Monday I blogged that Operation Iraqi Freedom didn't affect the international system all that much. What about the second image, however? Ten years after Operation Iraqi Freedom, are there lasting effects on American foreign policy?  

The answer here seems to be "yes." Intriguingly enough, the people making this argument the loudest are neoconservatives. William Kristol argued that "war weariness" was affecting American foreign policy decision-making:  

Now we’re weary again. And there are many politicians all too willing to seek power and popularity by encouraging weariness rather than point out its perils. Foremost among those politicians is our current president. It’s hard to blame the American people for some degree of war weariness when their president downplays threats and is eager to shirk international responsibilities.

[Note to Kristol: When you or anyone else inside the Beltway says "war weariness," to the rest of the country it means either "prudence" or "a healthy distrust of the claims of Beltway advocates for the use of force."] 

Here's the thing: Deep down, the American people are pretty realist. The legacy of Operation Iraqi Freedom is that this realist consensus has cemented itself further in the American psyche. The American public has an aversion to using force unless the national interest is at stake, and a deep aversion to using force to do things like promote democracy or human rights. The current GOP civil war on the use of force demonstrates the extent to which this sentiment has become a bipartisan phenomenon. Indeed, if the GOP doesn't alter its rhetoric on the use of force, it will continue to bleed support from young voters.

Public opinion does not always form a powerful constraint on American foreign policy, but one of the biggest legacies of Iraq is that public attitudes about the use of force have imposed serious constraints on the United States. Sure, an administration can use force as in Libya, but now it needs multilateral support and a light footprint in order to avoid a public backlash. The curel irony of this for neoconservatives is that as secretary of defense, Donald Rumsfeld wanted a light footprint in the Iraq invasion, reflecting his own faith in the revolution in military affairs. By going in too light, however, Rumsfeld tarnished the RMA and the notion of using ground troops in anything but an overwhelming capacity. 

Last year I closed out an essay in Policy Review with the following: 

[T]he long, draining conflicts of Afghanistan and Iraq have taken their toll on public attitudes about U.S. leadership in the world, as well as the use of force. In 2009 Pew found isolationist sentiments had reached an all-time high in the United States. A January 2012 pipa poll found that Americans strongly prefer cutting defense spending compared to either Medicare or Social Security. According to a January 2012 Pew survey, "Defending against terrorism and strengthening the military are given less priority today than over the course of the past decade." Seventy-eight percent of respondents to a December 2011 cnn poll approved of the Obama administration’s decision to withdraw all U.S. forces from Iraq. The growth of unrest in that country since the U.S. withdrawal has done nothing to alter public attitudes on the matter — which is why Republican challengers to Obama have been rather reticent to talk about it. By the beginning of 2012, majorities opposed the war in Afghanistan and favored a withdrawal of U.S. forces as soon as possible. On Iran, Americans strongly prefer economic and diplomatic action to military statecraft even as tensions escalate in the Persian Gulf.

As Libya demonstrated, presidents still have some latitude when choosing to use force. The political risks for presidents to invest political capital into foreign affairs have clearly increased, however. Unless foreign interventions yield immediate, tangible results, Americans will view them as distracting from problems at home. If far-flung military interventions bog down, public support will evaporate. This will make any president regardless of ideology more risk-averse about projecting military power and persisting with it should difficulties arise. For strategic culture, this means a reversion back to the days of the Powell Doctrine and a continued appreciation for economic coercion.

It took a generation and the end of the Cold War for the lessons of Vietnam to fade away. I'd wager that it will take at least a generation for the legacy effects of the Iraq War. 

Indeed, in American history, the war that Operation Iraqi Freedom reminds me of isn't Vietnam -- it's the War of 1812. That was another war of choice that was launched in no small part because of War Hawks in the halls of Congress. It went disastrously for the United States save the Battle of New Orleans, which allowed politicians to put a gloss of victory on an otherwise calamitous conflict. The long-term political effects on some of the War Hawks were pretty severe however (see:  John C. Calhoun). 

Operation Iraqi Freedom's effects on the international system were minor at best. The effects on American foreign policy, however, are significant and will be with us for some time to come. 

Well, this sounds like very bad news for the global financial system: 

A plan to rescue the tiny European country of Cyprus, assembled overnight in Brussels, has left financial regulators, German politicians, panicked Cypriot leaders and a disgruntled Kremlin with a bailout package that has outraged virtually all the parties.

In the end, a bailout deal that was supposed to calm a financial crisis in an economically insignificant Mediterranean nation spread it wider. Word of the plan unnerved markets across Europe, raised fears of bank instability in Spain and Italy and sent pensioners into the streets of the island’s capital, Nicosia, in protest.

As markets tumbled and the Cypriot Parliament fell into turmoil, salvos of blame were hurled back and forth across the Continent.

Officials scrambled to explain what went wrong and how best to control the damage of what Philip Whyte, a senior research fellow at the Center for European Reform, called a “completely irrational decision” to make bank depositors liable for part of the bailout. The deal flopped so badly that finance ministers who came up with it shortly before dawn on Saturday were on the phone to each other Monday night talking about ways to revise it.

Now, on the one hand, you would be hard-pressed to find anyone who will defend the Cypriot deal as it was announced on Saturday -- but it's pretty easy to find critics of the proposed deal across the political spectrum. So this seems like yet another data point confirming the truly mind-boggling stupidity of European governments and regulators. It's particularly galling that they did this during a time when global capital markets are still fragile from the 2008 financial crisis.

Oh, except, wait a minute, it turns out that those markets aren't as fragile as the perception suggests. If you burrow into the McKinsey Global Institute's latest report on global asset markets, it turns out that, excepting Europe, the rest of global finance has experienced a decent recovery from the 2008 crash. According to MGI: 

With the pullback in cross-border lending, foreign direct investment from the world’s multinational companies and sovereign investors has increased to roughly 40 percent of global capital flows. This may bring greater stability, since foreign direct investment has proved to be the least volatile type of capital flow, despite a drop in 2012.

Of course, this was written before the Cypriot stupidity, so now markets are really roiled, right? Well... here's Business Insider's Joe Weisenthal's take early this a.m.:

Markets are down a bit in Europe although not dramatically so yet.

US futures were flat, and Asia was actually up nicely, with Japan gaining 2%.

That seems like a thoroughly appropriate reaction. And over at the New York Times, Andrew Ross Sorkin explains why that's the rational and appropriate reaction:

While the bailout of Cyprus is a fascinating case study and raises interesting theoretical questions about moral hazard for policy wonks and talking heads, here is the reality: It is largely irrelevant to the global economy. Cyprus is tiny; its economy is smaller than Vermont’s. And the bailout is worth a paltry $13 billion, the equivalent of pocket lint for those in the bailout game.

Even the larger issue about bailing out a country by taking money from depositors — which quickly created outrage around the world — seems overblown....

[I]n truth, the smart money knows that the bailout of Cyprus says very little about future actions.

“I would assume that anyone in Spain, Portugal or elsewhere who knows about the taxation of Cypriot depositors also would know that the Cypriot banking system is a very different animal than anywhere else in the euro zone,” Erik Nielsen, chief economist at UniCredit, wrote in a note to clients.

Mr. O’Neill of Goldman also acknowledged: “I am sure it will not set a precedent.”

Cyprus is unique. Besides being tiny, its banking system looks different from those in most other countries. Much of the big money deposited in its banks is from foreign investors, including Russians who have long been suspected of money laundering. Those investors had fair warning that Cypriot banks were troubled. The issue has been simmering for six months. But those investors left their money in the bank, in part because they were gambling that the banks would be bailed out at no cost to them. If the current plan is approved, depositors will have lost that bet.

Now this is a perfectly rational analysis. What's significant is that it seems like markets are making the same calculation. When financial markets are fragile, when there's a fear of financial contagion, they don't make the rational calculation -- they freak out. That hasn't happened with Cyprus.

I know I'm at the risk of pulling a Donald Luskin here, but what's happening in Cyprus right now primarily affects Cypriots, with a small concern about regional effects. It doesn't look like it's triggering the same kind of concerns of either the Lehman collapse or the Greek sovereign debt crisis. And anytime the abject stupidity of European financial statecraft can be confined to Europe, that's a very, very good thing indeed for the global financial system.

Am I missing anything? 

So it's the ten-year anniversary of the start of Operation Iraqi Freedom, which means it's time for the obligatory commemorative blog posts and such. Go read Stephen Walt and Peter Feaver for some contrasting takes. Do wait five minutes in between clicking those two, however -- any quicker than that, and intellectual whiplash might result.

This was a Big Deal in American foreign policy, and a single blog post about it will not do it justice. So I think it's worth reflecting on the legacy of the Second Gulf War at three  different levels -- the system, the country, and the individual levels. Today's installment: How did Operation Iraqi Freedom affect the international system?

The surprising answer is: not all that much.

I don't come to this conclusion lightly. You'd think that a conflict that cost more than $2.2 trillion and led to 190,000 deaths would have some systemic ramifications. Except that it didn't -- not really.  

To understand why, consider what both standard realist, instiitutionalist, and neoconservative accounts predicted would happen. 

Realists were convinced that the largely-but-not-completely unilateral act of preemption by the United States should have triggered significant amounts of blowback. The great powers that opposed the invasion should have formed a balancing coalition against a revisionist United States. That did not happen. Furthermore, all the realist yapping about "soft balancing" looks pretty absurd in retrospect. There is no doubt that the United States suffered a few years of some serious unpopularity -- but that temporary dent ended very quickly after the 2008 election. 

Some realists fond of the "imperial overstretch" argument might try to posit that the costs of the Iraq war led to America's parlous fiscal state. Any serious look at the numbers, however, says this is not true -- the war didn't help, but the principal causes of U.S. budget deficits over the past decade were the Bush tax cuts, the rise in entitlement spending, and the decline in tax revenues caused by the Great Recession.  The Iraq war played a supporting role -- not a leading one.

The institutionalists would focus on the U.S. defection from international regimes and international institutions. In the end, the U.S.-led coalition invaded without an imprimatur from the United Nations. In the run-up to the war, the IAEA was particularly scornful of U.S. claims. Institutionalists would also have predicted some kind of punishment of the United States for its defection from the rules of the game. Absent that punishment, institutionalists would predict a weakening of global governance more generally, given the toothless  nature of enforcement.

Except that none of these things happened. Both the U.S. and the U.N. Security Council suffered minimal costs in the aftermath of the invasion. Within a few years, however, it was the United States leading the U.N.S.C. to successive rounds of sanctions against Iran and North Korea for doing things that had been used as a pretext for invading Iraq. A decade later, it turns out that global governance did a decent job in the wake of the 2008 financial crisis. 

As for the neoconservatives, well, their predictions were straightforward. The invasion of Iraq was supposed to set of a tectonic shift in the politics of the Middle East. States contemplating the development of WMD should have been cowed by the might of American power. The creation of a stable democracy in Iraq was supposed to trigger a massive wave of democratic regime change across the Middle East. 

Now, to be fair to the neocons, Libya did give up its WMD program, and there has been a wave of regime change across the Middle East. But let's be clear about a few things. The Iraq invasion played a supporting and not a primary role in Qaddafi's decision. And anyone who tries to connect the regime change in Iraq with the Arab Spring needs to read Harry Frankfurt again and again and again. The fact that no one judges Iraq to be a real democracy suggests the hollowness of the neoconservative argument. 

At the systemic level, the Iraq invasion did not matter. Maybe one could argue that there was a mild acceleration of relative U.S. decline. The thing is, a lot of the metrics that people use to discuss relative power were shifting away from the United States regardless of Iraq. None of the major predictions of standard realist, institutionalist, or neoconservative models hold up terribly well a decade later. 

So does this mean Operation Iraqi Freedom doesn't matter? Of course not. Affecting the international system is a really high bar. World wars, economic depressions, industrial revolutions -- these things matter at the systemic level. It's rare that a conflict smaller than that would have systemic implications (though the Soviet invasion of Afghanistan does come to mind). Rather, the conflict's primary effects were at the national level. Iraq did have a profound effect on American foreign policy thinking. Which is the subject I'll tackle in my next blog post. 

Am I missing anything? 

Your humble blogger has been too hard at work trashing his diminished reputation for seriousness working on other projects to blog about North Korea as of late. Now, the situation on the Korean Peninsula has been such a predictable cycle of DPRK provocative action, measured response, and more provocative action that I've been tempted to automate these posts the same way I have with Iran.

Still, as one reviews recent behavior, it's necessary to acknowledge that this cycle looks a little different. When Nick Kristof tweets that "I've been covering North Korean pugnacity and brinksmanship for 25 years, and I'm nervous about what might happen," the rest of us snap to attention.

So, after the missile test and the third nuclear test and the inevitable ratcheting up of United Nations sanctions, what's so troubling now? Well…

1) There was the novel threat from a North Korean general to launch a pre-emptive nuclear strike against the United States, causing Washington to "be engulfed in a sea of fire."

2) North Korea has also declared that the 1953 armistice with South Korea is now "invalid," cutting off the direct phone link with South Korea at Panmunjom.

3) North Korea's propaganda machine has ramped up against new South Korean leader Park Geun-hye in a rather sexist fashion, decrying the "venomous swish of skirt" coming from the Blue House. In Korean, this language implies an "overly aggressive" woman.

4) Something something Dennis Rodman inanity something.

5) North Korea has dramatically ramped up the number of air force sorties, from 100 a day last summer to at least 550 a day now -- a number that comes close to matching the South Korean daily number.

So, seriously, WTF, Kim Jong Un? Is this simply a more severe version of typical DPRK brinkmanship, or is this something altogether new and destabilizing?

Well … I think it's the former. First, let's just ignore the DPRK's rhetoric, because it's always over the top -- or, as with Rodman, completely disingenuous. Let's look at the DPRK's actions. Here, even the cancellation of the armistice doesn't necessarily mean much, as McClatchy's Tom Lasseter points out:

Pyongyang is infamous for issuing dramatic but empty threats, like turning its enemies into an apocalyptic "sea of fire." The North has also announced on several previous occasions that it was pulling out from the armistice, most recently in 2009.…

The last time North Korea disconnected the hotline, in 2010, was a year when the North killed four South Koreans when it shelled an island and was accused of torpedoing a South Korean naval ship, killing 46 sailors.

But Yonhap also reported that the North had not severed another North-South communication line, this one related to a North Korean industrial zone where South Korean companies operate.

So … nothing much new here. Beyond that there's the ramping up of air sorties, which does seem like a more powerful signal, if for no other reason than that it's actually a costly act. And beyond that … a lot of hot air.

So does that mean I can automate my North Korea posts? Well, Fareed Zakaria has a different spin:

No one knows for sure what is going on. It is highly unlikely that these moves are being conceived and directed by Kim Jong Un, the young leader who succeeded his father, Kim Jong Il. North Korea’s military dictatorship has wedded itself to the third generation of the Kim dynasty, which now seems to serve mostly as a unifying symbol for its people. But it is unlikely that a 28-year-old with almost no background in politics or experience in government is conceiving and directing these policies. (He does appear to have free rein on basketball policy in the hermit kingdom.)

The most likely explanation for North Korea’s actions is that it is trying to get attention. In the past, its provocations usually led to international (especially American) efforts to defuse tensions. Then came negotiations, which led to an agreement of sorts, which the North soon cheated on, which led to sanctions, isolation and, finally, North Korean provocation again.

The pattern may be repeating — but it’s a high-stakes game, with nuclear weapons, brinkmanship and hyper-nationalism all interacting. Things could go wrong. The most important new development, however, is China’s attitude change. In a remarkable shift, China — which sustains its neighbor North Korea economically — helped draft and then voted last week for U.N. sanctions against Pyongyang.

For decades, Beijing saw Pyongyang as a historical ally. But now, a senior Obama administration official told me Wednesday, “We are clearly hearing increasingly levels of frustration and concern” from Beijing about North Korea.

Zakaria is correct to point out Beijing's growing disenchantment with Pyongyang. But I tend to share Jennifer Lind's assessment that this disenchantment won't necessarily lead to any dramatic changes:

One shouldn't exaggerate the significance of these recent developments. After all, in the U.N. negotiations over sanctions -- this time as before -- the Chinese have consistently played the role of watering down the degree of punishment imposed against Pyongyang. And in the past Chinese firms have helped North Koreans evade sanctions. It remains to be seen whether Beijing intends to enforce the new measures.…

Because the specter of North Korea's collapse could potentially destabilize the Korea peninsula, Beijing may continue to shield Pyongyang. But the two country's [sic] increasingly divergent interests suggest that China's dissatisfaction with North Korea is only likely to grow.

I'd be even more skeptical. Obviously, China's leadership would prefer North Korea to act in a less provocative manner -- but they really don't want a disintegrating North Korean state. So even if they're disenchanted, they won't apply the necessary pressure to foment regime change or regime collapse. Which means that Pyongyang will still have carte blanche to provoke everyone else.

So my take is … not much has changed. I suspect that the reason for all of the amping up has to do with domestic politics on all sides. On the one hand, Kim Jong Un is playing to his own military base. On the other hand, North Korea is also trying to suss out the policy preferences and resolve of the new leadership in both South Korea and China.

Unless and until Beijing gets fed up enough to desire a strategic shift on the Korean Peninsula, I'm dubious that anything will change.

Am I missing anything?