Dr. Adam Posen on US-Saudi Relations, Economic Diversification, and Political Norms

US-Saudi Economic and Security Relationship

• 💡 The economic incentive for Saudi Arabia to transition away from fossil fuel dependence is significant, with the crown prince's agenda aiming for diversification.
• 🎯 Deeper integration with the US is seen as a credible path for Saudi Arabia's economic diversification, alongside domestic investment and liberalization efforts.
• 🔑 For the US, the relationship is viewed as more important for security and diplomacy than for Saudi investment, which has historically been abundant.

Conditionality in International Relations

• ⚠️ The exchange of F-35 jets for Saudi cooperation should be tied to substantial issues, such as their relationship with Iran or involvement in rebuilding Gaza.
• 🤝 While not necessarily tied to Israel recognition, conditionality should be of a caliber that ensures significant diplomatic or security benefits for the US.

Perceptions of Family Enrichment in Public Office

• ⚖️ The perception of family enrichment while in public office, particularly for the US President, is problematic regardless of direct involvement, eroding norms and expectations.
• 📉 This practice, seen in various countries, is considered wasteful and distortionary, representing a significant step change for the US, unlike anything seen in over a century.
• 🚩 Even overt actions, like those involving crypto or hotel deals, do not negate the problem; the perception of favoritism and compromised decision-making persists.

Global Repercussions of Eroding Norms

• 🌍 The US, as a lynchpin of the post-WWII rules-based economic system, sets an example; its deviation from norms against perceived corruption has repercussions worldwide.
• 📉 This can lead to reduced returns on capital, decreased opportunities for ordinary businesses and people, increased global instability, and wasted public money.

Domestic Priorities and Global Engagement

• 🇺🇸 Engaging with the world is ultimately beneficial for Americans if it leads to a safer, less corrupt, and more stable global environment, fostering open and free commerce.
• ⚠️ Domestic issues like the removal of healthcare subsidies, anti-migration policies impacting caregivers, and an inflationary environment due to various policies, are materially detrimental to human well-being and the economy.
• 🎯 The choice is not between global and domestic, but between self-interest and public welfare.