1/ For @cnas I wrote an explainer on how the Fed responded to the coronavirus and how it ensures the stability of the US dollar system -- and, by extension, how the Fed enables US sanctions. https://www.cnas.org/publications/commentary/how-u-s-sanctions-depend-on-the-federal-reserve

2/ This continues the debate about the dollar system, US power, national security and sanctions. Most recently, this took the form of this exchange between @BuddyYakov / @DominikLeusder and Herman Mark Schwartz

https://phenomenalworld.org/analysis/the-class-politics-of-the-dollar-system https://phenomenalworld.org/analysis/dollar-and-empire

3/ But while these debates usually place sanctions in the context of the macroeconomics discussion, this explainer tries to place macroeconomics in the sanctions/national security discussion.

4/ Specifically, there has been an ongoing debate in the sanctions community about the durability of these measures. Jack Lew warned about this in 2016 and Mnuchin and Bolton themselves have debated it.
https://carnegieendowment.org/2016/03/30/u.s.-treasury-secretary-jacob-j.-lew-on-evolution-of-sanctions-and-lessons-for-future-event-5191

https://www.bloomberg.com/news/articles/2020-06-18/mnuchin-feared-sanctions-would-undercut-u-s-dollar-bolton-says

5/ There has been an especially active debate about sanctions overuse after the US JCPOA exit. Including by

Secretary Lew and @RichardMNephew

https://www.foreignaffairs.com/articles/world/2018-10-15/use-and-misuse-economic-statecraft

as well as by @NeilBhatiya and me and @RosenbergEliz and me
https://www.theatlantic.com/international/archive/2018/08/when-sanctions-go-too-far/566771/ https://foreignpolicy.com/2018/11/16/us-eu-china-trump-sanctions/

6/ Despite these warnings, these concerns have not come true. Countries grudgingly complied with US unilateral sanctions and Europe's escape mechanism, INSTEX, does not seem to have worked.

This piece tries to explain why our predictions keep falling short.

7/ The new generation of sanctions succeeded because they successfully weaponized the plumbing of international finance, so understanding their resilience today requires understanding how this plumbing works.

The coronavirus response offers insight into this infrastructure

8/ Responding to the March financial upheaval, the Fed resurrected the 2008 Global Financial Crisis and debuted new tools, on a massive scale.

This scale was necessary, and, given the dollar's role in global finance, only the Fed could play this role.

https://www.bis.org/publ/cgfs65.htm 

9/ The Fed's role suggests that the US is a maker, not just a take of the global dollar system.

The world is not always looking at the exit, one sanctions rule away from abandoning the US dollar.

11/ Opposition to sanctions should focus on the merits, not on concerns about their threat to the dollar

This approach keeps the door open to potentially constructive uses of US financial power, e.g., to regulate transnational private finance. @BuddyYakov @b_judah @njtmulder

11/ Finally, these Fed measures have raised other salient foreign policy questions -- about transnational cooperation, the distinction between domestic and foreign policy, and between "national security" and "international economic policy" -- discussed in the piece

12/ I am hopeful this will stimulate more discussions between the macro and sanctions/economic statecraft sides of the debate.

Many thanks to @RosenbergEliz @SamDorshimer @Chris_Estep at @CNASdc