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Dramatically, the political debate in Egypt has not developed beyond where it was in the 1920s. The gap between the MB and the secularists, and the hate and intransigeance on both sides, is a constant. Mubarak tacitly tolerated the MB on condition that they stayed out of politics; they were allowed to take on a social role, organising charity and funnelling oil money to the needy. A huge strategic mistake, no doubt.
One thing seems obvious to me. No reconciliation is possible until Muslim Brotherhood triumphalism is dispelled. It was in full bloom right up to the night Morsi was overthrown. Now triumphalism has turned to defiance. I don't see how it can end well either. But canceling joint maneuvers could be a favor to the Egyptian regime at this point, both from reducing the association of the Egyptian military with the USA and from freeing them to deal with domestic unrest. "It is not necessary to have hope in order to persevere."
I am left to wonder as to the extent to which this course of action was urged upon Mubarak by the USA.
I'm assuming that the US had no strong interest in domestic Egyptian policy. US aid was a straightforward bribe to bring military security to Israel; and the US made a deal with the partner in front of them, and Mubarak was a product of the armed forces. So they are extraordinarily well-funded, by the US, and any economic development that happens with US funds is strictly under the aegis of the Egyptian armed forces.
The rent-extracting classes of Egypt were OK with this. In order to prevent a social explosion in the under-classes, the MB were a handy way to keep the lid on. It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
So it is possible to tell another story, in which the US foreclosed on the possibility of an urban, secular opposition, which implicitly amounts to support for the Brotherhood.
- Jake Friends come and go. Enemies accumulate.
American foreign policy doesn't have to make rational sense. That's one of the privileges that sufficient warship tonnage buys you. So the reality of things matters a lot less than what the American conventional wisdom believes to be the reality of things.
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