Given how the spectacle of Trump going to the Middle East and collecting cash and prizes like his much-hyped $142 billion Saudi arms “deal”, part of a purported $600 billion investment package, and his much-criticized Qatari airplane “gift”, Bloomberg has provided a useful service in picking apart the inflated figures in the arms agreement claim.
Even though it’s important to understand how great the Trump claim inflation is, so that recipients will hopefully apply a large discount any time Trump makes a grand pronouncement, he persists in this behavior because it is an effective form of cognitive anchoring. The public and press will remember the $142 billion, and not any properly haircut figure.
Consider another recent example, Trump’s loud claim that the US acted as a mediator in the India-Pakistan ceasefire talks. Washington Monthly explained how that claim was not only false but actually detrimental:
India and Pakistan have reached a ceasefire in their recent conflict, which significantly decreases the risk of a nuclear war this week. However, the amateur-hour way Donald Trump’s administration handled this crisis increased (if only slightly) the chance of a nuclear exchange down the line. It illustrates why Trump’s everything-is-about-me style of governance isn’t just a harmless embarrassment, but a daily disaster….
First, Trump claimed credit for the ceasefire, boasting that the U.S. had “mediated” it. India issued an immediate denial, but the mistake ran deeper than poaching an honor. In diplomacy, words matter. And as everyone in the region knows, the word “mediate” is a diplomatic landmine. Ever since 1947, India has strenuously rejected outside “mediation” of the Kashmir conflict….
Did the U.S. play an intermediary role in helping India and Pakistan reach a ceasefire agreement? Sure—as did Iran, Saudi Arabia, the United Kingdom, the United Arab Emirates, Kuwait, Qatar, and China (none of which rushed to the microphones to seize credit). As India stated in smacking down Trump’s claim, it was the two parties themselves who reached an accord, not any external actor seeking to impose “mediation.” …
Second, Secretary of State Marco Rubio announced a far more substantive negotiation than the one approved. Mindful of his boss’s unquenchable thirst to be seen as a master deal-maker, Rubio posted that the two nations had agreed to “talks on a broad set of issues at a neutral site.” A “broad set of issues” really means “long-term disposition of Kashmir”— or at least that’s how Pakistan wants (and India fears) these words will be interpreted. Did Modi agree to such negotiations, and in response to a terrorist action? Vanishingly unlikely. Did India agree to any talks on any topic? Unlikely, but not impossible, although India immediately denied this, too. So even if Rubio’s statement contained a kernel of truth, any talks were ones India intended to keep secret. Rubio’s decision to spotlight them (if they even existed) stroked Trump’s ego, but at the expense of progress or U.S. credibility….
Another dangerous result of Trump and Rubio’s statements is that they unwittingly promoted Pakistan’s agenda, thereby encouraging a replay of the same hazardous behavior.
There’s more where that came from, but you get the drift of the gist:
Trump’s claims were wildly inflated
His extreme ego needs are harmful to international security
John Helmer has said that the Russians have realized they are negotiating with a cult of personality and have been proceeding accordingly.
But there is another implication: look how many words it took to debunk the Trump claim and question the Rubio follow on (as in either its accuracy or its propriety). How many people pay that much attention, let alone have a tolerance for complex arguments? This is the general problem with bullshit. It takes a minimum of 3x the space, and often more than 10x, to disprove it.
Similarly, a new article in the Financial Times, What has Elon Musk’s Doge actually achieved?, takes a harsh look at the many promises made, from cost savings to transparency, and finds them sorely wanting. The pink paper, as many others have, documents among other things how DOGE grossly inflated cost cuts and took credit for reductions that were already baked in. It even contends the DOGE approach was destined to do more harm than good:
Doge “got off in the wrong direction because it attacked exactly the wrong thing,” says Matt Calkins, chief executive of software company Appian, which powers much of government procurement and has worked with the initiative on some cost-cutting measures.
“Of all the things you could do to affect the government, it would have been better to go after regulation. It would have been better to go after entitlements. Just blowing up jobs was a good way to make enemies, a good way to cause more disruption than progress.”
But this detailed analysis (the full article is very much worth a read) misses a major, if not the point, of DOGE nevertheless advancing the reactionary libertarian agenda of destroying government services. The Big Lie repetition of “fraud” has been effective. Fraud is a risk in all commercial activity, even one to one dealings. The question for any organization is the cost and effectiveness of fraud prevention and mitigation measures. In just about all instances, having anti-abuse measures that are so stringent as to reduce it to zero is too costly, both in terms of hard outlays like staffing, as well as more complex considerations (for businesses, alienating potential customers; for government, greatly restricting delivering services to target populations).
For instance, a long-standing ally of the site casually mentioned of the Trump demolition exercise, that Something (by implication, Something Big) needed to be done. I disputed that contention. With complex systems, like human bodies, even if there is a problem, limited interventions are always preferred to radical ones, so a stent is a better solution (if viable) than a heart replacement. The big reasons include less risk to the patient, lower costs, plus the conservative treatment typically does not preclude more aggressive ones later.
But in keeping with the idea that DOGE was at least in part a messaging operation, we’ve had far too many otherwise intelligent readers pump for a teardown…with no real logic as to why, let alone any clue of what comes next.
Now to Bloomberg on the Saudi arms deal puffery, politely headlined as US-Saudi $142 Billion Defense Deal Sparks Questions, Few Answers. Key extracts:
The Trump administration called its $142 billion defense deal with Saudi Arabia “the largest defense sales agreement in history.” Critics aren’t so sure….
But like the broader $600 billion economic deal that it was a part of, the defense agreement lacked any specifics. And skeptics of the administration immediately pointed to questions around the numbers. One is that Saudi Arabia’s entire defense budget this year is $78 billion, estimated Bruce Riedel, a nonresident senior fellow at the Brookings Institution.
Yves here. Both the Administration and Congress have a habit of using CBO scoring numbers, which tally total outlays over the next ten years for a particular program or piece of legislation, as the cost, which many news-readers mistakenly treat as expected next-year outlays. But if that was the treatment, there should have been some disclosure, say in a yet-to-be-produced briefing paper.
Back to Bloomberg:
Democratic and Republican administrations alike have a long history of re-purposing previous deals into sweeping, headline-grabbing agreements for presidents to sign during trips. Trump did it before, during his first-term trip to Saudi Arabia in 2017, when he announced the Saudis would spend $110 billion on US weapons to modernize the kingdom’s military.
That package included deals negotiated under the Obama administration and others that were in the initial stages of a lengthy process requiring congressional approval and negotiations between the buyer and defense contractors. To date, the 2017 deal has yielded more than $30 billion in implemented foreign military sales to Saudi Arabia, according to a State Department fact sheet in January….
If deals do eventually emerge from the White House and Saudi Arabia, experts will start sorting through what was new and what was old. Already, there are more than $129 billion in active military sales to Saudi Arabia from the US, according to the State Department fact sheet.
Yves again. So perhaps only $13 billion in incremental commitments? To Bloomberg again, which stresses that the hype has commercial value to the US:
“A lot of this is about the optics, but the optics matter,” said Brian Katulis, a senior fellow at the Middle East Institute. “It’s an attempt to send a message of reassurance after several years of uncertainty in the US-Saudi bilateral relationship on defense cooperation.”
The agreement is likely to yield real gains, particularly in the realm of missile defense, where the US has much to offer and Saudi Arabia has significant needs, said Todd Harrison, a senior fellow at the American Enterprise Institute focusing on defense strategy and budgeting.
At a time when some of the US’s traditional allies in Europe may be reluctant to purchase weapons from Washington, Saudi Arabia’s willingness to do so is especially welcome, he said.
Regular readers are likely wondering why the Saudis and the Europeans are so keen about US weapons, given not just the way Russian systems have regularly proven to be superior in Ukraine, but even the way the stereotyped sandal-wearing Houthis chased the US out of Middle East waterways. The practical difficulty (aside from the elephant in the room of geopolitics) of integrating disparate systems is large, including training of operators. The Russians make a big point of backwards integration in the operation of major systems like military planes: if a soldier knows an old system, it will be close to trivial for him to learn to manage a new one.
By contrast, Ukraine military pilots had grown up flying Soviet planes. Many experts warned that trying to retrain them to operate Western aircraft was an impossible ask. If they had to undertake an action under high pressure, they would default to what amounted to muscle memory in flying the Soviet jets, which would be all wrong for the Western ones. The high level of not-well-explained losses of Ukraine-operated F-16s validates this concern.
However, an upside of this Saudi arms buy is that it has the Israels worried. Bloomberg mentions that in passing:
Even without specifics, some analysts said the scale and complexity of weapons purchases contemplated by Saudi Arabia could risk compromising Israel’s “qualitative military edge” in the region, which US presidents for decades have committed to maintain….
But Dana Stroul, director of research at the Washington Institute for Near East Policy, said that the categories outlined by the White House have long been part of Saudi Arabia’s military modernization plans. Absent more detail about particular weapon systems, they don’t raise alarms about qualitative military edge, said Stroul, a former deputy assistant secretary of defense for the Middle East.
A very long article in the Times of Israel, Trump signs deals with Saudis, including biggest-ever $142 billion arms agreement, has a banner above the header laying out a key worry: Expert: Gulf states stronger friends for Trump than Israel?
The article weighs heavy on, and is clearly unhappy about, all of the pomp and circumstance during Trump’s visit. There is an absence of substance about the deals, but a lot not-well-coded whining:
Biden had decided to pay a visit to Saudi Arabia as he looked to alleviate soaring prices at the pump for motorists at home and around the globe. At the time, Prince Mohammed’s reputation had been badly damaged by a US intelligence determination that found he had ordered the 2018 killing of journalist Jamal Khashoggi.
But that dark moment appeared to be a distant memory for the prince as he rubbed elbows with high-profile business executives — including Blackstone Group CEO Stephen Schwarzman, BlackRock CEO Larry Fink, and Tesla and SpaceX CEO Elon Musk — in front of the cameras and with Trump by his side…
Saudi Arabia and fellow OPEC+ nations have already helped their cause with Trump early in his second term by stepping up oil production….
William Wechsler, senior director of the Rafik Hariri Center and Middle East Programs at the Atlantic Council, said Trump’s decision to skip Israel on his first Middle East visit was remarkable.
“The main message coming out of this, at least as the itinerary stands today, is that the governments of the Gulf … are in fact stronger friends to President Trump than the current government of Israel at this moment,” Wechsler said.
Admittedly, the Times does land a blow in its brief mention of corruption:
The three countries on Trump’s itinerary — Saudi Arabia, Qatar, and the United Arab Emirates — are places where the Trump Organization, run by the president’s two oldest sons, is developing major real estate projects. They include a high-rise tower in Jeddah, a luxury hotel in Dubai, and a golf course and villa complex in Qatar.
Finally, the apparently big, even if again considerably exaggerated “$600 billion” investment pledge counters the idea that the US is no longer a good place for foreign capital, as demonstrated by exits from US stocks post “Liberation Day” on a scale to seriously weaken the dollar.
A final question is what if anything the show of fealty by Middle Eastern states to US means for BRICS. As we have pointed out repeatedly, a big problem for BRICS is the comparative dearth of high GDP per capita states as members. China’s GDP per capita is less than 1/6 that of the US. Even if you use PPP per capita. China’s level is less than 1/3 of that of the US.
Lower incomes means less economic surplus.
Saudi Arabia’s GDP per capita is roughly 2.5 times that of China’s, so it has the potential to be a powerful addition to BRICS. But if it continues to maintain relations with both the US and what is perceived to be a China-led sphere, as India has said it intends to do, does that limit how much it support BRICS?
And let me remind reader, BRICS so far is much less substantive than most readers imagine. It does not even have a budget, unlike the (perceived to be) much less ambitious ASEAN or Shanghai Cooperation Organization.
So this is a long-winded way of demonstrating, frustratingly, how effective hype can be. How to counter it well remains an open question.
