Nonetheless, we should not cut off aid to Egypt. It’s not that we must blindly support unfriendly regimes. It is perfectly reasonable to cut off aid to governments that are intrinsically hostile and beyond our influence. Subsidizing enemies is merely stupid.

But Egypt is not an enemy, certainly not yet. It may no longer be our strongest Arab ally, but it is still in play. The Brotherhood aims to establish an Islamist dictatorship. Yet it remains a considerable distance from having done so, and this is precisely why we should remain engaged. And engagement means using our economic leverage. …

There is nothing inevitable about Brotherhood rule. The problem is that the secular democratic parties are fractured, disorganized, and lacking in leadership. And they are repressed by the increasingly authoritarian Morsi. …

Any foreign aid we give Egypt should be contingent upon a reversal of this repression and a granting of space to secular, democratic, pro-Western elements.

That’s where Kerry committed his mistake: Not in trying to use dollar diplomacy to leverage Egyptian behavior, but by exercising that leverage almost exclusively for economic, rather than political, reform.