The Red Folder

Archived from August 12, 2024.

Key stories for the week, brought to you by Lindsey Zhao and the Red Folder team.

Reading for the sake of reading sucks. Telling yourself to read to win a round is nice but ineffective. This condensed news brief helps you understand current domestic and international issues, analyze the news, and gives you opportunities to read more.

Publishing since January 2024.

Domestic Stories

4 key domestic stories for the week:

1) The Election, The Fed, and The Economy’s Future Justin Palazzolo

If there is a face of the era of post-pandemic American economics, it is the face of 71-year-old Jerome “Jay” Powell, the chair of the American Federal Reserve. He’s also the face of both ‘Trumponomics’ and ‘Bidenomics’, and the respective issues of interest rates and inflation that dominated both President's terms. It's safe to say that Jerome Powell is a man of many faces, and each of those faces plays a driving role in the economy's future direction.

However, the 2024 election will determine the direction of the country, including Jerome Powell and the Fed’s role in directing both national and global markets

Currently, the Fed has a major issue: following the 2021-22 inflation crisis, the Fed raised interest rates by a cumulative 5.25 percent to curb inflation. However, these high rates inflicted strife by preventing the acquisition of loans, causing high-interest payments and raising housing prices.

This has now culminated in a stock market crash, resulting in all 3 major index funds dipping more than 3%; the crash, triggered by a weak jobs report, has stoked Wall Street fears that the economy may be headed towards a recession due to high rates. This has put immense pressure on the Fed to cut rates, something it's expected to do. However, though stocks are looking to rebound, the recent crisis has focused the attention of both Trump and Kamala Harris on the Fed regarding their economic platforms.

Just two days ago, Trump announced that he intended to have a direct say over the Fed’s monetary policy if elected, claiming that he “felt strongly” that “presidents should have a say”. This would match the conservative attitude that generally opposes central banking, let alone the Fed’s autonomy outside of the government.

Furthermore, Trump and Powell have routinely butted heads. In Trump’s first term, Trump threatened to fire Powell due to a disagreement over interest rates; however, Trump has stated that he would let Powell finish his term on the 2024 campaign trail. Irrespective of his motivations, Trump will almost certainly play a bigger role in the Fed’s traditionally autonomous operations and directly affect Powell and the Fed’s decision-making process.

If elected, Trump has stated he wants lower interest rates, likely achieved by strongarming the Federal Reserve into lowering them. Though details on the proposed decrease are sparse, there are some signals from Trump regarding his rate plan.

Trump has cemented lowering inflation as one of his core campaign tenets regarding the cost of living crisis. If a rate decrease allowed for inflation to spike again, Trump would be put in a difficult political situation. Thus ,it would make sense for Trump to endorse a gradual slower decrease in interest rates. This matches his statements calling for the Fed to avoid a rate decrease before the election (admittedly for largely political reasons). Furthermore, Trump’s plan to drastically increase tariffs on foreign goods to boost domestic manufacturing might cause temporary inflation. Ultimately making a short-term decrease in rates difficult for Trump.

On the other hand, Trump has incentives to lower rates quickly, since housing prices and a slowing job market ( which are largely driven by higher rates) are an integral part of the cost of living crisis he has promised to solve. Also with Trump’s planned extension of his 2017 tax cuts, an expected 2 trillion dollars will be added to the deficit and thereby the national debt. With the interest payments on the debt already accounting for roughly a sixth of the US federal budget, high interest could be detrimental to the Trump administration’s ability to spend on national initiatives, as higher Fed rates force larger interest payments on the 35 trillion dollar debt America holds.

Kamala Harris, on the other hand, has promised to be neutral, reaffirming the Federal Reserve’s independence as an institution. This signals the continuation of the status quo of the Fed’s autonomy under Biden. However, Kamala is still likely to push for lower interest rates since Republicans are already attacking “Kamala Crash” for this week's market crash, which has stoked fears over high rates and a recession, absent Trump’s more direct method of using executive authority over the Federal Reserve.

The American economy is given some certainty through the election choices, since both candidates will likely push for lowered rates. However, if Trump is elected, it would break the precedent of Fed autonomy and give the executive branch potential power over interest rates. While the face of the American economy right now is Jerome Powell, the face of its future will be the winner of this year’s election.

Read More Here:

2) 23 Years Later, Justice is Served Boyana Nikolova

“Nine eleven. Never forgotten.”

This September, the US will be commemorating the 23 year anniversary of the 9/11 terrorist attacks. The tragedy, which took close to 3,000 lives and irreparably scarred Americans, has often been the subject of conspiracies, misinformation, and online data leaks, born from the overall lack of closure on the subject. This year, however, may be different. As the friends and family of victims go to pay their respects in a month’s time, they may feel that a certain weight has been lifted off their chests. Justice, to some extent, may be delivered.

Khalid Shaikh Mohammed, the alleged mastermind behind the attacks, has finally pled guilty, along with two of his supposed accomplices. Each is now convicted of various conspiracy and murder charges, and the men are expecting at the very least a life sentence in the Guantanamo Bay Military Prison, where they have been held in custody for the past 21 years. Ever since 2003, the US government has been pressuring them into providing a potential confession, employing methods like torture, to no avail until now. With the co-conspirators finally agreeing to plead guilty, all that’s left to consider is whether they will stick to their plea, and, if they do (as they are expected to), what the extent of their sentence will be. Ongoing talks between Defense Secretary Lloyd Austin, the Guantanamo Bay war court, and the suspected terrorists are even putting the death penalty on the table.

The question (for the time being) is to determine who will be in charge of the case and hence, will evaluate the sentence that must be given. Until now, the Guantanamo Bay war court has been in charge of the case and the court’s official overseer, Brig. Gen. Susan Escallier, was the one overseeing the talks which led to the prisoners pleading guilty. While the deal reached between her and the criminals meant that the war court could at last proceed with sentencing, it came at a steep price for justice: the masterminds behind the single worst terrorist attack in the United States would be due for, at worst, a life sentence in exchange for their guilty pleas.

Needless to say, officials, as well as the loved ones of victims, have been expressly opposed to such a scenario. They are demanding that the perpetrators behind such a large-scale terrorist attack, now a flashbulb memory in the minds of most Americans, receive the harshest punishment possible. To their benefit, Lloyd Austin, the current Defense Secretary, agrees, and he’s taking immediate action. In a memo from last week, Austin announced that the Guantanamo court could no longer assume responsibility for the case and the prior plea deal between the prisoners and Escallier was overruled. The decision sets up Austin as the new overseer, and returns the possibility of the death penalty being imposed. But how is this even allowed to happen?

Austin defends his recall of the plea deal as critical, especially given the depth of the 9/11 attacks and the suffering they have caused. Under the Military Commissions Act of 2009, he argues that he is entitled to take control of the 9/11 military commission, removing authority from the presiding Brig. Gen. Escallier. Although Austin’s reasoning makes sense, he’s been accused of “bowing to political pressure,” considering the opposition that came from families and Republican groups. The legal team of Mohammed and his accomplice is even disputing the action’s legitimacy. On the domestic front, the American Civil Liberties Union and domestic advocacy groups have also promised to challenge the overturning. According to them, Austin violated a regulation in the Military Commissions Act by waiting until after the defendants had started “performance or promises” related to the deal, making his assumption of authority illegitimate. This caveat may or may not be a valid one, and until the legality of Austin’s decision is confirmed by a US court, the situation is up for grabs. Some have pushed to freeze the plea deal until a verdict on Austin is reached, while others have urged that his decision be simply accepted.

At the end of the day, the plea deal has given rise to enormous frustration. Many Republicans, now praising the Defense Secretary’s “bravery,” accused him of complacence just one week ago. On the other hand, victims’ close ones are upset, but hesitant of what to expect. Will the 3,000 individuals tragically killed by Al-Qaeda in 2001 finally be brought to justice? And what must that justice look like in order for it to take place: a life or death sentence or neither?

As Americans wait expectantly to hear about the future of Mohammed and his accomplices, they will also have to come to terms with a painful truth: the US has never fully moved on from the tragedy of 9/11. It must, however, move into a plan for justice. Providing closure to the victims’ loved ones and healing a nation’s trauma is no easy matter, but it can start with holding the masterminds accountable.

Read more here:

4) America Lifts Saudi Weapons Ban Paul Robinson

Save maybe for Israel, the Kingdom of Saudi Arabia is the United States’ most important strategic ally in the Middle East. Relations between the two powers goes back nearly a hundred years; the US recognized Saudi Arabia as a sovereign state just three years after King Abdulaziz bin Abdul Rahman Al Saud unified the nation in 1928. After oil was found in the nation, ties became even stronger; Saudi oil was an essential resource to the Allies in their victory during the Second World War.

Now just as much as then, the United States of America needs Saudi Arabia. Oil prices remain high due to the wars in Ukraine and Gaza having an impact on supply chains, and Saudi Arabia is one of very few countries which has the ability to actually produce more. While the US doesn’t actually buy much oil from Saudi Arabia, oil produced there affects the price of the global market, which in turn affects America.

Much to the chagrin of the US government, Saudi Arabia does not entirely align with the goals of the US. It still has extremely strict laws which provide the death penalty for blasphemy, silences journalists in brutal manners, and conducts destructive and pointless wars. Human rights abuses within the country, especially against activists who demand change, have been widely documented in recent years. The war in Yemen, which has been ongoing since 2014, has claimed hundreds of thousands of lives. Perhaps most infamously, Jamal Khashoggi, a Saudi journalist critical of the Saudi government, disappeared in the Saudi embassy in Istanbul in 2018, and was later found to have been murdered at the order of the Saudi government. That incident caused a huge blow to Saudi Arabia’s relationship with the United States, with both the Trump and Biden administrations distancing themselves from the government run by Crown Prince Mohammed bin Salman (colloquially known as “MBS”). In addition to the damage done by the Khashoggi killing, President Biden halted all offensive weapons shipments to the Kingdom in 2021 due to the war in Yemen.

The Saudi war in Yemen was in no small part championed by MBS, who not only took control over military operations himself but entirely changed the way in which Saudi Arabia conducts its foreign policy: he gave the Obama administration very little notice before airstrikes using US weapons delivered in US planes to practically destroy Saudi Arabia’s southern neighbor.

Saudi Arabia justified the war by claiming that the Iranian-backed Houthis were planning to take control over Yemen. However, they also created a monumental human rights disaster in the process. It was this disaster which caused the United States to cease sending offensive weapons in 2021.

This week, though, the Biden administration lifted that ban. The reason stated was that Saudi Arabia had complied with US demands, and thus the US was willing to lift the sanctions. There is almost certainly an ulterior motive: the US has been losing influence in the Middle East ever since the start of the Israeli war in Gaza, and it needs to keep as much influence as it can. Saudi Arabia, with strong ties going back a century, is their best bet. The United States needs Saudi Arabia in order to stay influential in the Middle East; otherwise, it stands the risk of being supplanted by Eastern powers.

Supporting a regime which continues to perpetrate human rights abuses, and still has not even agreed to end the Yemen war as the current ceasefire is not permanent, is not exactly what America wants to do. Given its current stance on Israel, though, they ultimately have no choice but to let Saudi Arabia have what it wants. Nations all over the region hate the United States for their support of Israel, and having an ally as powerful as Saudi Arabia is invaluable.

Given the current state of the Middle East, the US really had no choice but to do this. They need to have some friends, which is an uphill battle while the US continues to support Israel. Thus, America cannot hold Saudi Arabia accountable no matter what they do with these weapons. They need Saudi Arabia so much that nothing, even human rights abuses which would land sanctions on any other country, can come between the US and Saudi Arabia if the US wants to remain an influential power in the Middle East.

Of course, there remains an obvious solution: if the US were to stop unconditionally supporting Israel, it would no longer be bitter enemies with the entire region to the point where they have to ignore whatever MBS does in the name of keeping their influence. But until they do that, Saudi Arabia has the upper hand, and the power they wield over the world is frightening.