habit second thought

A Habit of Second Thought

President Donald John Trump occupies a singular place in the history of American leadership. He is at once a politician, a successful businessman, and an enthusiast of freestyle wrestling. His manner of thinking, planning, and decision-making bears a character distinctly different from that of his predecessors; indeed, many observers contend that it has few, if any, precedents in the annals of modern American politics. Analysts frequently describe him as a man of remarkable flexibility, yet they also acknowledge that a position defended with absolute conviction at one moment may, in the next, be replaced by its very opposite without the slightest hesitation.

This characteristic became strikingly evident following the commencement of large-scale military operations against Iran on 28 February 2026. A careful examination of the period, particularly up to the defence of the Memorandum of Understanding concluded in June, reveals no fewer than seven significant shifts in President Trump’s strategic approach.

At the outset, he dismissed economic concerns altogether, declaring that the financial difficulties of the American people were of no consequence and that the sole imperative was to prevent Iran from acquiring a nuclear weapon. By the time of the G7 summit, however, his tone had undergone a marked transformation. He began advocating the necessity of an agreement capable of shielding the global economy from a crisis comparable to the Hoover era and the Great Depression, pointing to instability in the financial markets as evidence supporting this revised position.

His initial call for regime change in Iran was equally unequivocal. In a video address, he urged the Iranian people to rise against their government, declaring that the moment might represent their final opportunity for generations to come. Yet subsequent statements quietly abandoned this objective. Instead, he began speaking of normalising relations with Iran and cooperating with its existing leadership, occasionally describing those very leaders as more “reasonable” than before.

During the early phase of the conflict, the complete destruction of Iran’s missile program, the industries responsible for its production, and the naval forces supporting it was presented as a principal objective. Later, however, his position softened considerably. He observed that while missiles might inflict damage upon limited areas, they were incapable of destroying the world, and since other nations possessed similar capabilities, Iran might also retain a limited missile arsenal. It was for this reason that the Memorandum of Understanding contained no provision requiring the dismantlement of Iran’s missile program.

A similar evolution occurred regarding Iran’s nuclear program. Following the military operations of 2025 and again in 2026, it was asserted that Iran’s entire uranium enrichment capability would be eliminated and that the nuclear threat would be extinguished permanently. In time, however, the objective was narrowed simply to ensuring that Iran would not acquire a nuclear weapon. Rather than insisting upon total dismantlement, reliance shifted towards international monitoring and continued negotiations.

Control over highly enriched uranium, initially regarded as a non-negotiable and indispensable condition, was subsequently treated as a matter of secondary importance. It was argued that preventing the production of a nuclear weapon remained the essential objective, while questions concerning enriched uranium would be addressed in future negotiations.

The instruments of pressure likewise underwent a profound transformation. Economic sanctions and financial restrictions, once regarded as the principal means of coercion, gradually gave way to incentives. Discussions emerged concerning the release of frozen assets, temporary licences for Iranian oil exports, and the possibility of reconstruction assistance amounting to hundreds of billions of dollars, with additional concessions to be granted subject to Iran’s future conduct.

Likewise, the original determination to terminate Iran’s support for regional proxy groups gradually receded into the background. In its place, greater emphasis was placed upon securing a direct ceasefire and addressing the broader requirements of peace and stability throughout the Middle East.

These strategic adjustments were accompanied by repeated tactical oscillations, in which stern threats were frequently followed by the postponement or cancellation of military action. A chronological review compiled up to 3 August reveals numerous announcements of major strikes that were ultimately abandoned. The latest example occurred on 1 and 2 August, when military action was suspended following requests from Iran and several regional parties, together with the emergence of preliminary outlines for a possible understanding involving the reopening of the Strait of Hormuz and measures aimed at removing the nuclear threat.

On 7 April, shortly before the expiration of an ultimatum in which President Trump had threatened strikes against bridges and power stations, a two-week ceasefire was agreed. He had warned that such attacks could extinguish an entire civilisation. On 21 April, at the request of international mediators, the ceasefire was extended indefinitely, although hostilities resumed at a later stage.

On 18 May, a major military operation was deferred to allow serious negotiations to proceed, but when those negotiations faltered, military action recommenced. On the night of 11 June, President Trump threatened an overwhelming assault upon Iran together with the seizure of its oil and gas resources. Yet only hours later, citing what he described as a significant diplomatic breakthrough, he cancelled the operation, thereby paving the way for the Memorandum of Understanding. Signed on 17 June, the Memorandum provided for a ceasefire, the temporary reopening of the Strait of Hormuz, limited economic relief, and a framework for sixty days of negotiations. It nevertheless expressly reserved the right to resume bombing should its provisions prove unsatisfactory.

At the beginning of July, following attacks upon commercial shipping, the ceasefire was declared terminated. Military strikes were launched against dozens, and subsequently scores, of targets. Congress was formally notified, and the Administration adopted an increasingly uncompromising public tone. Yet negotiations continued simultaneously. The naval blockade was reimposed, retaliatory operations persisted, and on 27 July the intensive daily bombardment was once again suspended in order to afford diplomacy another opportunity. Even in early August, fresh threats eventually yielded to renewed consideration of a possible political framework.

Oil sanctions followed a similarly fluctuating course. Temporary export licences were granted, only to be withdrawn as sanctions were reimposed. Military deployments, official statements, and even the interpretation of the Memorandum itself changed repeatedly. The initial maximalist objectives—the destruction of Iran’s missile forces and navy, the complete elimination of the nuclear threat, the dismantling of regional proxy networks, and even the prospect of political change—gradually evolved into more limited and negotiable goals. Military expenditure, fluctuations in oil prices and global markets, domestic political considerations, constraints upon available munitions, and Iran’s demonstrated resilience all appear to have contributed to this transformation.

The June Memorandum of Understanding was, by its very nature, temporary and performance-based. Reports suggested that many of its principal provisions were undermined within only a few weeks, leading to renewed hostilities and a fresh round of negotiations. Thus, as the conflict entered its fifth month, the situation remained fluid, uncertain, and subject to continual change.

The reasons underlying these successive alterations may have been varied. In some instances they appear to reflect tactical calculation; in others they may have arisen from necessity or from long-established habits of political conduct. Certain critics have advanced even graver allegations, contending that the pattern of market instability followed by recovery was deliberately exploited for the financial benefit of President Trump and his family. Whatever the precise combination of motives, the record extending from late February to early August consistently reveals a pattern in which ambitious and uncompromising initial objectives gradually gave way to narrower, more negotiable positions, while rapid oscillations between threats of force and gestures of restraint remained the defining characteristic of the entire period.

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  • Beyond Riba: Reconstruction of Just Financial Orde…

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Minute Mirror, April 7, 2026]. Its first task must be the one identified in Part I: define what is prohibited. The law should distinguish a loan or debt carrying a stipulated increase because of time from lawful consideration arising from genuine sale, lease, service, partnership or productive risk. Courts and regulators should be empowered to examine connected contracts as one economic arrangement. A murabaha, ijarah, musharakah or Sukuk should not become immune from scrutiny merely because recognised Islamic terminology appears in its documents. The second requirement is a clear cut-off rule. No bank, financial institution, government agency or other regulated person should be permitted to originate a new interest-bearing financial contract in Pakistan after December 31, 2027. The prohibition must be activity-based, not ownership-based. A transaction cannot change its constitutional character because shareholders of the institution happen to be foreign. This is also the weakness we identified earlier in examining the Government’s strategy paper. Existing liabilities require different treatment. Pakistan cannot simply repudiate sovereign bonds, multilateral obligations or private contracts. That would replace one problem with default, litigation and financial isolation. The law should instead require a complete register of every conventional obligation extending beyond the cut-off: principal, return, maturity, governing law, creditor, refinancing possibility and proposed conversion date. Contracts capable of consensual refinancing should be converted. Those that cannot immediately be altered should continue only under a transparent transitional schedule with definite sunset dates, rather than receiving an indefinite exemption merely because they were signed before 2028. The third issue concerns money itself. Part II argued that commercial-bank money creation is not automatically riba. The power to create purchasing power through credit is nevertheless too important to remain outside reform. Parliament should require a time-bound examination of sovereign transaction money, reserve arrangements and separation of monetary creation from productive financial intermediation. This question should be decided upon economic evidence and institutional consequences, not theological assertion. Part III then demonstrated why payment accounts and investment accounts require legal separation. Money held for immediate payment and nominal safety should not be treated as risk capital. Funds deliberately invested for commercial return should carry transparent exposure to the enterprises and assets from which that return arises. Deposit protection against institutional failure must similarly be distinguished from a State guarantee against every commercial investment loss. The fourth area is productive finance. The law should protect genuine murabaha, ijarah, salam, istisna, musharakah, mudarabah and other permissible arrangements while prescribing minimum standards of ownership, possession, disclosure and risk. Shariah audit should examine economic substance rather than merely documentation. Taxation must also become neutral. Equity participation, leasing and genuine asset transactions should not suffer additional fiscal costs merely because legislation was historically designed around conventional debt. Public finance cannot remain outside this discipline. Government should not treat Sukuk merely as a technique for reproducing conventional borrowing against whatever public assets can be placed in a registry. The official strategy itself proposes an Assets Registry Company and expanded hybrid Sukuk issuance. Sovereign instruments must confer genuine economic rights and corresponding responsibilities rather than provide documentary assets solely to support a predetermined financial return. Fiscal reform is inseparable from elimination of riba. No monetary arrangement can remain sound where governments continuously borrow merely to finance structural deficits. Monetary policy requires the same intellectual honesty. The Government’s strategy envisages Shariah-compliant open-market operations, standing facilities and liquidity arrangements. These are necessary developments, but changing contractual forms will not be enough if their sole objective becomes mechanical reproduction of the existing interest-rate corridor. SBP ultimately needs a transparent post-riba monetary framework explaining liquidity creation and absorption, lender-of-last-resort assistance, foreign-exchange operations and monetary transmission. The fifth element takes us beyond banking altogether. Part V argued that riba flourishes not only because creditors seek gain but also because human beings are compelled by need. 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  • Beyond Riba: Reconstruction of Just Financial Orde…

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A bank granting financing normally credits the borrower’s account and simultaneously records a corresponding asset on its own balance sheet.  The deposit is created through the act of lending rather than necessarily representing money previously deposited by another saver. When the loan principal is repaid, the corresponding bank-created money is extinguished. This requires an important correction to the familiar expression “fractional-reserve banking”.  Banks are certainly required to maintain reserves, liquidity and regulatory capital, but contemporary money creation cannot accurately be understood as a mechanical process in which every rupee of reserves is successively multiplied into a predetermined number of rupees of loans.  Lending is constrained by capital requirements, liquidity, creditworthiness, profitability, regulation, settlement requirements and ultimately monetary policy. It nevertheless remains true that deposit-taking commercial banks create a substantial part of the money used by society. Pakistan is no exception. State Bank of Pakistan’s monetary data show that at end-June 2026 broad money was about Rs. 46.46 trillion. Currency in circulation was about Rs. 11.94 trillion, while deposits with banks were approximately Rs. 34.47 trillion. The greater part of what Pakistanis use as money does not consist of notes issued by the State Bank. It consists of claims recorded in the banking system. This distinction has profound consequences for our discussion of riba. Commercial-bank creation of deposit money should not automatically be declared riba. The Quran does not prescribe a reserve ratio, a central-bank structure or a particular technique for creating currency.  To equate fractional-reserve banking itself with riba would unnecessarily turn a question of monetary system into a theological declaration. The real objection is different. A society must ask whether the privilege of creating generally accepted purchasing power should be exercised primarily through private debt contracts; who receives the initial benefit of newly created purchasing power; towards which activities the new credit is directed; who absorbs the losses when excessive credit creation produces instability; and whether private institutions can earn a predetermined return from money whose creation depends ultimately upon the sovereign monetary and payment system. These are questions of political economy and distributive justice. Pakistan provides an especially revealing example. SBP’s provisional monetary aggregates at end-June 2026 recorded net government-sector borrowing of more than Rs. 37 trillion.  Net borrowing from scheduled banks was overwhelmingly larger than direct borrowing from SBP, while credit to the private sector stood at around Rs. 11.4 trillion. The precise categories require care in interpretation, but the broad structural message is difficult to miss: the banking system has become deeply intertwined with financing the State itself. Banks operate within an extraordinary circle. The State confers the banking licence, provides the settlement infrastructure, regulates deposits, maintains monetary stability and acts ultimately as guardian of systemic stability. Banks create deposit money through their financing operations and then deploy enormous resources in government securities carrying returns ultimately serviced through public revenues. The citizen appears at both ends of the transaction by providing deposits to the banking system and later pays taxes from which sovereign financial obligations are serviced. The arrangement may be perfectly lawful under the existing system, but a project seeking elimination of riba cannot ignore its structural implications. Conversion of conventional banks into Islamic banks does not, by itself, answer this problem. An Islamic deposit-taking institution can participate in the same process of deposit creation when it extends financing. If its balance sheet remains concentrated in sovereign instruments and if its returns remain indirectly anchored to the prevailing interest-rate structure, conversion of contractual terminology leaves the underlying monetary structure substantially intact. This is one reason why the proposal recently advanced by Muhammad Munir Ahmad for an alternative riba-free system deserves serious consideration. It correctly asks whether money creation and commercial financing should be separated. Its criticism of the privileges inherent in the existing banking structure identifies a problem much larger than the replacement of an interest-bearing loan with murabaha or ijarah. The proposed solution, however, requires considerable refinement. One possibility is a system under which transaction money is fully backed by sovereign money.  Current accounts used for salaries, business payments and ordinary transactions would represent money held for payment and safekeeping. Banks would not be permitted to use these balances to create additional financing. Investment would take place through an entirely different window. A person seeking a return would knowingly place funds in an investment account. Those funds could be employed in mudarabah, musharakah, leasing, trade finance and other genuine commercial arrangements. Return would arise from investment, ownership, enterprise or service rather than merely from allowing a bank to create a debt against a transaction deposit. This idea is neither historically unprecedented nor uniquely associated with Islamic economics. During the Great Depression, economists associated with what became known as the Chicago Plan proposed 100 per cent reserve backing for transaction deposits, expressly separating the monetary function of banks from their credit function. Irving Fisher became one of its prominent advocates.  Decades later, an International Monetary Fund (IMF) working paper by Jaromir Benes and Michael Kumhof revisited the proposal and modelled potential effects including greater control over credit cycles and reductions in private and public debt. The paper was research rather than IMF policy, but

  • PM Shehbaz Sharif and Field Marshal Syed Asim Muni…

    Pakistan’s growing diplomatic influence has entered a new phase as Prime Minister Muhammad Shehbaz Sharif and Field Marshal Syed Asim Munir lead the country’s strategic engagement with the world, strengthening alliances and projecting Pakistan as an important voice in regional peace and security. The signing of the Makkah Joint Defence Agreement between Pakistan, Saudi Arabia and Türkiye represents a major milestone in Pakistan’s foreign and security policy. The agreement brings together three influential nations through a framework of collective defence, enhanced military cooperation and a shared commitment to regional stability. In recent months, Pakistan’s defence capabilities and strategic importance have received increased international attention. The role of the Pakistan Army in national security and regional stability has been a central factor in shaping Pakistan’s strategic partnerships, while Field Marshal Syed Asim Munir’s engagement with international counterparts has highlighted the importance of defence diplomacy in promoting peace and cooperation. The global perception of Pakistan’s strategic role has evolved as Islamabad has continued to demonstrate its capacity to engage with major powers and regional stakeholders. Under Field Marshal Asim Munir’s leadership, Pakistan’s military diplomacy has focused on strengthening partnerships, supporting stability and advancing dialogue as a pathway to resolving regional challenges. Prime Minister Muhammad Shehbaz Sharif has complemented these efforts through active diplomatic outreach, engaging world leaders and strengthening Pakistan’s relationships with key allies. Whenever Pakistan’s leadership has engaged internationally, these visits have increasingly focused on expanding cooperation, improving economic ties and promoting peace initiatives. Pakistan’s diplomatic role in encouraging dialogue during tensions involving the United States and Iran also attracted international attention. US President Donald Trump acknowledged Pakistan’s leadership efforts in supporting peace and dialogue, reflecting the country’s potential role as a constructive bridge between nations. Pakistan continues to maintain strong strategic relations with major international partners, including China, while also enjoying deep historical and security ties with Saudi Arabia, Türkiye and other Middle Eastern countries. Iran has repeatedly highlighted the importance of its relationship with Pakistan and recognised the value of regional cooperation. The Makkah Declaration further strengthens this strategic momentum. The agreement reflects the shared commitment of Saudi Arabia, Türkiye and Pakistan to collective security and regional stability. It establishes that any armed attack against one of the three states will be regarded as an attack against all, while enhancing defence cooperation, military coordination and strategic collaboration. Built on historic relations, Islamic solidarity and common interests, the declaration aims to strengthen collective deterrence and contribute towards peace, security and prosperity. The emerging partnership between Pakistan’s political and defence leadership is being viewed by supporters as a coordinated national effort to protect Pakistan’s interests and expand its international role. Prime Minister Shehbaz Sharif’s diplomatic engagement and Field Marshal Syed Asim Munir’s strategic approach have together shaped a more proactive foreign policy outlook. The Makkah summit could become a defining moment in Pakistan’s international journey—strengthening its alliances, enhancing its strategic relevance and reinforcing its message that Pakistan seeks peace through cooperation, dialogue and responsible global engagement.

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