Christmas without fanfare

Christmas is set to be spoilt for many Americans by rising prices. While retailers are forecasting a record holiday spending season, inequalities in the economic recovery will again be laid bare.

Inflation is especially taking a toll on lower-income families, who spend roughly a third of their earnings on essentials like food and energy, according to this report by Amelia Pollard and Olivia Rockeman.

It’s eating into recent wage increases, and the timing couldn’t be worse after federal pandemic relief expired for about 7.5 million people.

“Anything that in the very short run puts a lot of pressure on family budgets across the board will cause more stress and damage to low-income households because they just have less scope to absorb it,” said Josh Bivens, director of research for the Economic Policy Institute.

A majority of Americans flush with over US$2 trillion in excess savings accumulated during the pandemic are ready to splurge on gifts and holiday trips.

At the same time, more than 11% of Americans don’t plan to spend at all, the greatest share in at least 10 years and more than double that in 2020, according to a Deloitte survey.

And the Salvation Army is bracing for a holiday season similar to that after the 2008 financial crisis, according to National Commander Kenneth Hodder.

Nery Peña, a first-grade teacher and single mom of two in Washington, DC, says the child tax credit and stimulus checks were a lifeline this past year.

While she’s received around US$500 a month since July, the next tax-credit payment due around December 15, this year will be the last one unless Congress passes the social-spending package, and she’s already started to curb her spending.

“Food prices are going up, gas prices are going up — prices are going up everywhere,” said Peña. “Thank God my daughters understand, but as a mom, it just sucks to tell your kids Christmas won’t be that Christmassy this year.”

CNN reports Biden-Kamala rift

On Monday, White House made a concerted effort to defend Vice President Harris from media criticism, saying she is an important part of the team and signaling she’ll play a role in promoting the bipartisan infrastructure bill.

The pushback came after a CNN report that cast doubt on the vice president’s standing in the Biden administration and said there were rifts within the Biden-Harris operation.

It’s one of a few pieces that have appeared in recent weeks that have taken a critical eye of Harris or that have raised questions about her prospects as a potential successor to Biden as soon as 2024 if he changes his public position and declines to run for reelection. Last week, a Los Angeles Times column’s headline read: “Kamala Harris, the incredible disappearing vice president.” 

The officials dismissed talk of a rift as “gossip,” and a number of faces in Biden World offered on-the-record statements or tweets defending the vice president and pouring cold water on any suggestion that she feels constrained.   

The White House announced that Harris will visit Columbus, Ohio — the capital of a swing state — on Friday to promote the US$1.2 trillion infrastructure bill. White House press secretary Jen Psaki called Harris “a valuable member of our team.” 

“The president relies on the vice president for her advice, for her counsel,” Psaki said after she was pressed on the news reports suggesting Harris is unhappy in her position. “She is somebody who is not only taking on issues that are challenging; she is not looking for a cushy role here. No vice president, no president is.” 

“The president selected the vice president to serve as his running mate because he felt she was exactly the person he wanted to have by his side to govern the country,” she added.

Outside advisers also pushed back against the onslaught of negative coverage and said Harris’s main objective is to advance the Biden agenda.

“While it’s difficult to stop the endless swipes, past gripes or the inside the beltway second-guessing squad, it’s vital that Vice President Harris continue to take meaningful action in helping President Biden deliver for the American people,” said former Democratic National Committee Chairwoman Donna Brazile. 

“It’s untenable for modern vice presidents to succeed in their role as being No. 2. Thus, her number one goal must remain to support the president of the United States,” Brazile said.

On Monday, at least publicly, Harris and Biden seemed as close as ever.

They walked out with one another to the White House signing ceremony for the infrastructure bill. Harris delivered remarks alongside Biden, commending his leadership. Biden thanked the vice president and others for their work and noted that Harris would be among those promoting the bill.

Harris has seen her own approval ratings slide as Biden’s have been in the dumps.

A USA Today-Suffolk University poll out last week showed Harris with an approval rating of 28%, lower than Biden’s 38%. 

Supporters say media stories about strife between the vice president and Biden or their camps are not doing anyone favors.

“These stories don’t help anybody. And they don’t matter. All they do is embarrass the vice president, embarrass the president and hurt the party,” said one former Harris staffer who requested anonymity to speak candidly.

The former staffer said it didn’t matter who was doing the sniping but suggested it could have been former staffers or donors who are upset about not having the same level of access to Harris.

The source also pointed out that much of Harris’s staff are Biden people or were picked by Biden aides, which could also contribute to some of the feelings of dysfunction.

“People can be frustrated all they want, but it’s not helpful,” the former staffer said. “It’s not helpful to anybody, and it’s certainly not advancing the vice president’s political position. It makes her look weak.”

Harris just completed what was generally seen as a successful trip abroad to France to help bolster ties between Washington and Paris after a fallout earlier this year over a submarine deal with Australia. And her aides sought to minimize the CNN report as Beltway chatter. 

“It is unfortunate that after a productive trip to France in which we reaffirmed our relationship with America’s oldest ally and demonstrated US leadership on the world stage, and following passage of a historic, bipartisan infrastructure bill that will create jobs and strengthen our communities, some in the media are focused on gossip — not the results that the ‘resident and the Vice President have delivered,” Harris chief spokesperson and senior advisor Symone Sanders tweeted.

Harris is presiding over a difficult and expansive policy portfolio that includes immigration and voting rights.

She’s also leading the National Space Council and taking meetings with foreign leaders. While she’s been less visible in Biden’s effort to get the infrastructure bill passed, officials insist she is still playing a meaningful role. Harris was among a group that made calls alongside Biden earlier this month when the White House was trying to get the legislation across the finish line in the House. 

As vice president, she would be considered among the front-runners to carry the party mantle should Biden opt not to run again in 2024. But others are also seen as positioning themselves for that race, including Transportation Secretary Pete Buttigieg.

“There is skepticism among the Democratic establishment that Kamala can be the standard-bearer of the party, and I’m not sure she’s done a lot to dispel that in the last year,” the former Harris staffer said.

At the same time, some Harris allies complained that the White House needs to continue to do more to help position her, especially if she is the heir apparent to Biden should he choose not to run for reelection in 2024. 

 “Simply put, I think people expected her to have a higher profile,” one ally said. “What happens if she runs in 2024? They’re not helping matters."

At the briefing on Monday, Psaki put it this way: “I don’t have any predictions of whether she will run, when she will run. I will leave that to her and they do not reflect his view of our experience with the vice president.”

Iran accuses US supporting ISIS in Afghanistan

Iran's special envoy for Afghanistan said on Monday that after the defeat in Afghanistan, the United States is trying to support the ISIS terrorist group.

"The aggressor country, which intended to rule Afghanistan for the past 20 years, is now trying to strengthen the takfiri groups in Afghanistan after its defeat," Hassan Kazemi Qomi said.

Arriving in Kabul, the Iranian diplomat told reporters that the purpose of his visit was to discuss political, economic, security and Afghan refugee issues with the officials of interim government.

"We respect the will of the Afghan people and our position is in line with the wishes of the Afghan people," Kazemi Qomi told a reporter when asked about recognizing the Taliban government.

Iran's special envoy for Afghanistan expressed hope that with formation of a strong government in Afghanistan, stability would prevail in the region.

The diplomat went on to say that "Afghanistan, like the Islamic Republic of Iran, is facing oppressive Western sanctions and the two countries will try to cooperate more by ensuring security in the borders."

The Iranian envoy in his remarks underlined that Iran had always stood by the people of Afghanistan and today stands by the people of Afghanistan in all aspects of security, economy and politics.

Referring to the US defeat in Afghanistan, the envoy said some countries are exploiting terrorism to launch a proxy war in Afghanistan.

Earlier, the embassy of the Islamic Republic of Iran in Kabul announced the trip. It said, "Kazemi is scheduled to talk with senior Taliban officials on various issues such as regional issues, refugees, humanitarian aid, formation of an inclusive government and especially economic issues. Helping the Afghan people is a priority before the cold season."

Speaking at his weekly press briefing on Monday, Saeed Khatibzadeh, the Iranian Foreign Ministry spokesman, said that Qomi’s trip to Kabul will address the current and future status of the people of Afghanistan.

He then said that Iran has tried to make the Afghan people bear the least impact from the developments in Afghanistan and the catastrophic departure of the United States from the country.

The diplomat noted that the responsibilities of this governing body will be discussed.

“We are concerned about extremism and terrorism, and we have witnessed the disgusting act of terrorism in attacking worshippers, and it is the direct responsibility of the governing body to protect the security of worshippers and the people of Afghanistan,” he insisted.

He then said that Iran has news of the presence of ISIS in Afghanistan, which is worrying and is one of the topics that will be discussed during the trip by the special envoy to Afghanistan.

ISIS has been targeting worshippers since the Taliban took power in August. Its suicidal attacks on worshippers in Kunduz (northern Afghanistan) on October 8 and Kandahar (southern Afghanistan) on October 15 were horrific.

It also attacked a military hospital in Kabul on November 2. At least 25 people were killed and more than a dozen were wounded during the attack.

The attack, which included armed gunmen and at least one suicide bomber, targeted the 400-bed Sardar Mohammad Daud Khan military hospital.

Zabihullah Mujahid, a spokesman for the Taliban, said the attack was carried out by several members of ISIS, including a suicide bomber who detonated his explosives at the gate to the hospital. A car full of explosives outside the hospital also exploded, wounding dozens, and several Taliban fighters were killed and wounded in the ensuing gun battle, Mujahid said.

Iran hosted the meeting of the foreign ministers of countries neighboring Afghanistan on October 27. The participants at the conference insisted on the need for security in Afghanistan and formation of an inclusive government among other issues.

Analysts forecast proving wrong

Mass vaccinations were supposed to spur a major shift in spending away from goods, toward services. The thinking was that as more people traveled, dined out and attended entertainment venues, the less they would spend on merchandise. That would, in turn, help remove some of the strains on the supply chain., but that didn’t happen.

In part because the delta wave of the virus kept massive pent-up demand skewed toward merchandise and added further strain to supply chains.

Jobs

Another basic assumption was that as the pandemic receded and schools returned to in-person learning — freeing up home-bound parents — millions more Americans than have done would return to the job market. More workers would mean fewer bottlenecks and more supply, validating the “transitory” predictions for high inflation. The bitter reality is as of October, the participation rate, which measures those employed or looking for work, has recovered less than half of its pandemic-related collapse. 

Energy

With the fossil fuel industry having cut back investment over the years, in part amid pressure from tilt toward ESG investing and in part thanks to having over-invested in the previous cycle, energy companies haven’t been able to meet rising global demand. Labor shortages have only made things worse. This led to energy prices rising 30% from a year earlier, the largest annual advance since 2005. Gasoline is up nearly 50%. The price of electricity in October increased 6.5% from the same month a year ago, the most since March 2009.

Pricing-Power

Global competition and consumer expectations for stable prices had long eroded companies’ ability to pass along higher costs. There was no US inflation surge during the escalating tariff hikes with China, for example. But that’s all changed. Large companies have pushed through price increases after having to boost wages to lure workers, along with pay for higher input costs.

Forecasting inflation “has been incredibly challenging,” says Matthew Luzzetti, Chief US economist at Deutsche Bank AG. “And risks remain skewed to the upside for the inflation outlook.”

The Federal Reserve has been off in its forecasts just like everyone else, and will need to reassess next month, when policy makers update their projections.

Credit, though, to Lawrence Summers and Mohamed El-Erian, both contributors to Bloomberg, who have been warning of a prices problem for a while. 

Pakistan likely to face food shortage and spike in prices

In the aftermath of COVID-19 lockdowns, port congestions and supply chain disruptions food prices around the world are on the rise. Whatever is happening around the world is having trickle down effect on Pakistan. The situation is not different in three of its immediate neighboring countries, India, Afghanistan and Iran.

The biggest fear is that food products are being smuggled to these countries in large quantities and sooner than later Pakistan will also face acute shortage of these products. Therefore, it is necessary that the governments of these countries sit together to evolve a sustainable strategy to overcome the looming shortage of staple food items.

According to the available information three of Pakistan’s immediate neighbors suffer from acute problems, due to internal and external reasons. Let me begin with Afghanistan, the war torn country faces the worst problem, United Stated has frozen its foreign exchange reserve and the country is not able to import staple food items. It is feared that due to highly porous borders and use of Pakistani currency for the procurement of these items from Pakistan, Afghans has no option but to take these from products Pakistan to save people from starvation.

Iran also suffers due to ‘economic sanctions’. There are enormous opportunities for barter trade the goods are exchanging hands at borders. Since United States is not ready to lift these sanctions Iran is forced to buy food and other items from its immediate neighbors, be it Pakistan and Afghanistan or Central Asian countries.

India has ample food supplies, but bad governance, particularly ‘hording’ is pushing prices higher. Without going in too many details Indian are in a position to offer certain most sought after goods to Pakistan in exchange for food items. Since both the countries, due to the presence of ‘hawks’ don’t enjoy cordial diplomatic and economic relations the field is open for smugglers.

In the abnormal conditions people and countries have to make ‘exceptional’ decisions. Under the prevailing conditions the representatives of all the three countries must sit together to find sustainable solutions.

In case of Afghanistan trade must be allowed in Pak Rupee, export of wheat, edible oil and rice may be allowed in exchange for fruits and vegetables.

In case of Iran, ‘gas for food’ option should be exercised. At present prices of natural gas are hovering at record high level and Iran is in a position to supply gas to Pakistan at very attractive prices. Due to geographical proximity lower freight cost and shorter sailing time are the two biggest incentives.

Let me warn the policy makers that if they fail in coming up with conducive policy, it will only proliferate smuggling. On one hand the governments of respective countries will not be able to monitor the quantum of goods being smuggled and on the other hand floodgate will be opened for the influx of ‘highly undesirable products’ into Pakistan. Act now to avoid regret later.

Qatar to represent US interests in Afghanistan

Qatar will formally represent the US interests in Afghanistan, according to a new agreement signed by the two countries on Friday. This creates a new pathway for the United States to assist American citizens and allies left behind in America’s chaotic exit.

Secretary of State Antony Blinken and Qatari Deputy Prime Minister and Minister of Foreign Affairs Mohammed bin Abdulrahman Al-Thani signed an agreement, effective next month, to make Qatar's embassy in Kabul a protecting power for the US, essentially hosting many of its consular functions. 

A State Department spokesperson confirmed that at the US-Qatar Strategic Dialogue, the secretary and Qatari foreign minister signed an agreement related to Afghanistan.

Under the agreement, first reported by Reuters, the Qatari Embassy will dedicate a certain portion of its staff to lead a US special interests section.

"Qatar has long been a great friend and strong partner of the United States and our cooperation on Afghanistan reflects the depth and strength of our bilateral relationship," a spokesperson said. "We are deeply thankful for Qatar’s close coordination on Afghanistan and its extraordinary support in facilitating the transit of US citizens and their families, Embassy Kabul personnel, at-risk Afghans, and other individuals from Afghanistan through Qatar."

Under the agreement, the US would address diplomatic relations in Afghanistan in a manner similar to how it does in Iran, where the US has no embassy but instead works through Switzerland’s embassy in Tehran.

Qatar has been a key player in the US evacuation, including by hosting a site for Afghan evacuees to be vetted before arriving in the US. 

"As the first and largest transit point in the world, Qatar has been at the forefront of our efforts to relocate people from Afghanistan to safety," the spokesperson added.

Qatar has committed to continue to allow individuals who are at risk in Afghanistan because of their affiliation with the US to transit its territory on their way to resettlement elsewhere. 

The State Department spokesperson also confirmed that according to the memorandum of understanding signed between the two countries on November 12, 2021 Qatar will continue to temporarily host Special Immigrant Visa applicants and eligible family members while their applications are processed.

"In addition, Qatar signed an arrangement today signaling its intention, effective December 31, 2021 to assume the role of protecting power for US interests in Afghanistan. Thanks to our strong partnership with Qatar, we are better positioned to serve US citizens in Afghanistan, whose safety and security is our top priority," the spokesperson added.

The move comes as the US has struggled to help its citizens leave Afghanistan. 

The arrangement could also help the US issue visas or other documents to those who assisted the US during its 20-year war in the country. 

Independent analysts estimate that more than 100,000 people deemed a priority for evacuation were left behind, including activists, those who assisted the military and individuals who worked with US aid and development organizations.

The State Department has been struggling with how to address consular issues without an on-site presence in Afghanistan, as visa applications have to be signed in front of US staff. 

In lieu of directly issuing visas on the ground, some refugee groups have pressed State to get some sort of document to those who are able to travel to nearby countries, signaling that they are likely to be able to secure passage to the US

Other requirements, like biometric screening, could then take place in Qatar.

A senior US official told Reuters it was "an important signal of potential direct engagement between Washington and Kabul in the future after two decades of war." 

The US Embassy in Kabul was evacuated on August 15, this year hours after the Taliban's takeover of the Afghan capital.

Is Iran the only supporter of Palestinians?

Reportedly, in a recent interview, Abu Jamal, a spokesperson for the Popular Front for the Liberation of Palestine’s Abu Ali Mustafa Brigades, stated the group and the ‘Palestinian Resistance’ benefited from Iranian support in its war against Israel.

“We and the Islamic Republic fought the Zionist enemy in Lebanon and we also fought them in Gaza and the West Bank with the support of the Islamic Republic of Iran,” Jamal stated.

Furthermore, Jamal lauded the relationship the group had with Iran and the Islamic Revolutionary Guard Corps (IRGC) by referring to them as ‘blood brothers’ and ‘comrades’ that shared a ‘common destiny’ in defeating Israel.

It’s unclear when Iran began supporting the group. However, in 2013, Iran reportedly resumed military and financial support to the group after leaders from both sides held several meetings in Tehran, Beirut and Damascus under the auspices of Hezbollah.

Hamas, Palestinian Islamic Jihad, PFLP, and Popular Resistance Committees have boasted about their relationship with Iran including military support they have received. After the May conflict in Gaza, the aforementioned groups praised Iran and Hezbollah for their military support during the eleven days of fighting. Additionally, smaller Palestinian factions have benefited from some Iranian aid including the now defunct Harakat al-Sabireen.

The close relationship between Iran and the PFLP was also on display when a PFLP delegation met with President Ibrahim Raisi after his swearing in ceremony in August. As expected, Raisi affirmed the Islamic Republic’s continued support for the ‘Palestinian Resistance’ and the ‘liberation of Palestine.’

It is difficult to say to what extent Iran has supported the PFLP militarily and financially. The group has purposely been ambiguous about what it exactly receives in terms of funding and arms from Iran.

However, it’s likely larger groups such as Hamas and Palestinian Islamic Jihad receive the lion share of military guidance, weapons and funding from the assistance Iran has allocated for the ‘Palestinian Resistance.’

Despite what it may or may not receive in military and financial support, the PFLP has made no qualms about showing its support and allegiance to the Islamic Republic and other members of the ‘Resistance Axis.’

After the May 2021 Gaza-Israel conflict, the PFLP held a military parade where its fighters showed their support for Iran and the IRGC by displaying pictures of former Quds Force Lieutenant-General Qasem Soleimani.