On March 12th I participated in the Emergency Economic Summit for Ukraine in Kyiv. The summit was organized by Tom Palmer (Atlas Foundation) and Dalibor Rohac (Cato Institute) and several Ukrainian free market think tanks. My charge was to evaluate monetary policy regime options. The following paper prepared for this meeting and published in the current issue of the Cayman Financial Review, presents my assessment. If, like most people, you are not interested in monetary policy issues, you should skip this paper: http://www.compasscayman.com/cfr/2014/04/07/The-future-of-Ukraine-%E2%80%93-and-the-role-of-sound-money/
Those of us who attend events at the Kennedy Center rather than Wrigley Field or other such palaces of sport are not used to starting off the evening singing the Star Spangled Banner. Thus it is always a bit of a surprise when an evening with an orchestra visiting from abroad starts off that way followed by its own national anthem. The other evening it was the Israel Philharmonic—The Star Spangled Banner followed by Hatikva. We rose a bit awkwardly to our feet. The fact that two nations joined in friendship to salute their national identities, ideals and aspirations added a great deal to the emotions of that moment. I was reminded once again of the great respect and pride I have for my country.
I say this not because my government or fellow citizens always do the right thing—far from it. But because we pretty much agree on what the right things are at the level of general principles and because we try to adhere to them as much as possible and return to them when we don’t. The United States was founded on great and honorable principles. We established institutions and developed attitudes—which include checks and balances on the exercise of power—that deserve our respect and defense. Thus I am encouraged that the abuses of government power following the 9/11 attacks on New York and Washington, which reflected a frightened public’s desire for security, are beginning to be reversed. I am encouraged that our misuse of our military and political power to impose our views on others (Iraq, Afghanistan, Libya, etc.), which we have never been very good at, seems to be on the wane.
Our freedom of speech and free press and our critical mind-set play important roles in the never-ending fight to keep leviathan at bay. The trauma of 9/11 brought out the best and worst in my country. The dangerous excesses of the NSA have received a lot of badly needed attention in recent months but now another area of government lying to us in the name of security is back in the spot light. If you take yourself back twelve years or so, and try to remember what you thought about torturing terrorists for information that might prevent another terrorist attack, you might remember that some argued that it was OK if it really saved lives. We all knew that torture violated our values (not to mention international treaty commitments), i.e. that it was wrong, but if it really saved lives….. It turns out that it didn’t and the government lied to us about the useful information it allegedly produced. It was wrong AND didn’t save any lives. Congressional oversight and our free press are to be thanked in this case for disclosing these government misconducts: “CIA misled on interrogation program”/2014/03/31/.
Were these bad things done by bad people? These latest disclosure were made the same day as General Motor’s failure to disclose a faulty auto part for ten years and the causes of the failures are similar (human nature in the face of weak incentives to behave properly). Most people I encounter (not just Americans of course) want to do good with their lives even when the result of their activities are sometimes not good. There are, of course, also bad (just plain mean) people in the world. Most of us have encountered one or two of them in school (bullies). In adult life they can easily be attracted to position that give outlets to their meanness (the police, prisons, military provide such opportunities). We are fortunate that as the result of hard efforts by many people, our police, military etc. are generally very professional and keep the bullies among them in check. There are exceptions, of course. The disgusting mistreatment of Iraqi prisoners by a few Americans in Abu Ghraib prison was exposed just as I took up a two-month residency in Baghdad. I was embarrassed that my countrymen and women could have behaved so badly (and concerned with its possible impact on my safety). But my point here is that in the United States such things are almost always revealed and disclosed eventually and thus kept in check. This is why I can remain proud of my country. Though we never live up to our high ideas, we take them seriously and are always trying. Excesses usually get corrected until the next one comes along. It is an important and never-ending battle, but as long as we keep fighting it, I will remain proud of my country.