Category: News and politics

To whom or to what am I loyal?

I am an American. I believe strongly and am loyal to the principles of individual freedom and limited government embedded in the American Constitution. I have also been a Republican all of my life because I judged that the Republican Party best reflected the above principles. But in 2016 I changed my party registration to Libertarian because I no longer believed that the Republican Party remained faithful to my political beliefs.

I have followed the testimony in the Impeachment hearings investigating high crimes and misdemeanors by President Trump. Generally, I have relied on press summaries but I watched the live full testimony of Lt. Col. Alexander Vindman, Jenniffer Williams, Ambassador Gordon Sondland, David Holmes and Fiona Hill.  Ambassador Sondland was a large contributor to the Trump campaign and was rewarded with the appointment as Ambassador to the European Union, an assignment that included Ukraine.  Amb. Sondland has no foreign policy experience. His testimony, however, set a high standard for frankness and openness. He came across as very bright and (now) well informed. In his testimony, however, he obviously wished to justify the role he played in attempting to persuade the Ukrainian President to agree to Trump’s request for a “favor.”

The testimony of Ambassador Sondland and the others (including Bill Taylor, George Kent, and Kurt Volker) left no doubt whatsoever that President Trump, operating through Rudy Giuliani, tried to bribe Ukraine’s new anticorruption President, Volodymyr Zelensky, to publicly announce an investigation of Ukraine’s alleged interference in the 2016 U.S. presidential election and of the Biden’s involvement with the Ukrainian energy company Burisma.  Hunter Biden–former Vice President and current Democratic Party presidential candidate Joe Biden’s son–served on the board of Burisma Holdings, a Ukrainian energy company, from 2014 to 2019.  “Secretary of State Mike Pompeo, Vice President Pence and acting White House chief of staff Mick Mulvaney were among those whom Ambassador Gordon Sondland said were aware of the pressure on Ukraine for probes that could damage President Trump’s political opponents” Sondland said there was a quid-pro-quo

It is common for our foreign policy relations and aid to be based on quid pro quos. That is to say that we provide aid when conditions are met that we think service American interests.  What is involved here, however, is President Trump using American tax payers money and the powers and influence of his office for his personal political advantage.  In fact, his actions toward Ukraine are quite contrary to our American interests (which is a stronger, less corrupt Ukraine on the border of Russia).  In my opinion the now well known facts of Trump’s behavior visa vie Ukraine is impeachable.

For a while I still held out hope that there would be Republicans on the House Intelligence Committee who would honestly seek the truth of Trump’s behavior. I was sadly disappointed. Congressman Devin Nunes couldn’t get beyond repeating old discredited claims and his demand that the whistleblower testify. The idea that the secondhand claims by the whistleblower of impropriety by Trump would add anything to the firsthand testimony we have now heard doesn’t pass the laugh test. The council leading the questioning for the Republicans is pathetic–a real embarrassment. He seemed to only strengthen the case against Trump.

In my opinion many of the policies being advanced by many of the Democrat presidential candidates need to be effectively countered. I am losing hope that the Republican party is still capable of doing that.

 

 

 

Black Marks in our History

On October 16, I attended a meeting of the Committee for the Republic at which “Defender of Liberty Awards” where presented to Fred Korematsu, Gordon Hirabayahsi, Minoru Yasui, and Mitsuye Endo for their bravery and perseverance in defending freedom in America. These Americans of Japanese ancestry had undertaken to legally challenge their internment in concentration camps during World War II ordered by Franklin D Roosevelt four months after the Japanese attack on Pearl Harbor. They generally lost their legal challenges, which went all the way to the Supreme Court.  If you are not familiar with this shocking atrocity (or even if you are), I urge you to watch these short videos and weep at the depths to which racism has driven some of us in the past: https://www.youtube.com/watch?v=0z8EHjVoN-o  https://www.youtube.com/watch?v=4MXF2302fr8

These atrocities were not the first, nor unfortunately the last, abandonment of our principles in the name of security in times of heightened fear (think of the so called “Patriot Act” following 9/11 and President Trump’s failed efforts to ban travelers from six Muslim countries more recently). While these reactions are manifestations of racism and cowardice, it is to our credit that we (generally) ultimately acknowledge our periodic abandonments of our love of freedom and justice under the law for barbaric acts that we think will make us safer. https://wcoats.blog/2016/10/20/terrorism-security-vs-privacy/ 

The Defender of Liberty Awards to Fred Korematsu, Gordon Hirabayahsi, Minoru Yasui, and Mitsuye Endo were accepted on their behalf by their surviving children who shared with us their experiences. Several of them learned what their parents had done in school as they never mentioned or discussed the shame and hardship of their three years of internment in despicable facilities.  Growing up in California I had one Japanese classmate in grammar school. When I learned that FDR had put him and his family in a concentration camp for several years, I overcame my shock and shame to ask him about it, but he would not discuss it. It reminds me a bit of the typical reaction of rape victims.

While a cowardly public silently acquiesced to the rounding up and the imprisonment of their Japanese American neighbors, an underlying motive was the desire of some farmers to eliminate the competition of Japanese American farmers. From Wikipedia: “The deportation and incarceration were popular among many white farmers who resented the Japanese American farmers. ‘White American farmers admitted that their self-interest required removal of the Japanese.’ These individuals saw internment as a convenient means of uprooting their Japanese-American competitors. Austin E. Anson, managing secretary of the Salinas Vegetable Grower-Shipper Association, told the Saturday Evening Post in 1942:

‘We’re charged with wanting to get rid of the Japs for selfish reasons. We do. It’s a question of whether the White man lives on the Pacific Coast or the brown men. They came into this valley to work, and they stayed to take over… If all the Japs were removed tomorrow, we’d never miss them in two weeks because the White farmers can take over and produce everything the Jap grows. And we do not want them back when the war ends, either.’”   https://en.wikipedia.org/wiki/Internment_of_Japanese_Americans

Quoting again from Wikipedia: “In 1980, under mounting pressure from the Japanese American Citizens League and redress organizations, President Jimmy Carter opened an investigation to determine whether the decision to put Japanese Americans into concentration camps had been justified by the government. He appointed the Commission on Wartime Relocation and Internment of Civilians (CWRIC) to investigate the camps. The Commission’s report, titled Personal Justice Denied, found little evidence of Japanese disloyalty at the time and concluded that the incarceration had been the product of racism. It recommended that the government pay reparations to the internees. In 1988, President Ronald Reagan signed into law the Civil Liberties Act of 1988 which apologized for the internment on behalf of the U.S. government and authorized a payment of $20,000 (equivalent to $42,000 in 2018) to each camp survivor. The legislation admitted that government actions were based on “race prejudice, war hysteria, and a failure of political leadership.” The U.S. government eventually disbursed more than $1.6 billion (equivalent to $3,390,000,000 in 2018) in reparations to 82,219 Japanese Americans who had been interned and their heirs.”

At the Committee for the Republic ceremony the amazingly talented Bruce Fein recited from memory the following:

Athens had Socrates.

King Henry VIII had Sir Thomas More.

And we have the Mount Rushmore of moral courage to honor this evening:  Fred Korematsu, Gordon Hirabayahsi, Minoru Yasui, And Mitsuye Endo.  They are largely unknown American heroes and heroines of World War II.  It can be said without exaggeration, seldom in the annals of liberty have so many owed so much to so few.

What is more American than fidelity to Thomas Jefferson’s injunction that resistance to tyranny is obedience to god?  Our defender of liberty award recipients resisted the racist tyranny of president Franklin Roosevelt’s executive order 9066 issued unilaterally without congress on February 19, 1942, a date that should live in infamy.  Provoked by racism in the west coast battleground states, EO 9066 summarily dispatched 120,000 innocent Japanese Americans because of their ancestry alone into internment camps.  Remember their names.  For they are first cousins of Bergen-Belsen, Buchenwald, Dachau, and Sachsenhausen, Nazi concentration camps, not extermination camps like Auschwitz.  Roosevelt’s camps were ten:  Manzanar (CA), Poston (AZ), Gila River (AZ), Topaz (UT), Granada (CO), Heart Mountain (WY), Minidoka (ID), Tule Lake (CA), Jerome, (AR), and Rohwer (AR).

Risking ostracism or worse, our four award winners challenged the constitutionality of president Roosevelt’s racism.  The president and his mandarin class colleagues echoed the Orwellian bugle of general John Dewitt 80 days after pearl harbor: “the very fact that no sabotage has taken place to date is a disturbing and confirming indication that such action will be taken.”  I am reminded of Mark Anthony’s mocking funeral oration in Julius Caesar:  but president Roosevelt was an honorable man, so were his assistants all honorable men.

Korematsu, Hirabayashi, Yasui, and Endo took their cases to the United States Supreme Court with mixed success.  The high court sustained FDR’s executive order based on knowing lies about military necessity made by the Department of Justice.  Dissenting justice Robert Jackson presciently warned that the court’s decision in Korematsu v. United states would lie around like a loaded weapon ready for use by a future Caligula, Claudius, or Nero in the White House who claimed an urgent need.

But the four did not surrender.  They continued to fight over long decades for vindication and defense of the constitution both for the living and those yet to be born.  In triumph, our defender of liberty award honorees brandished the lofty principles of the greatest generation—the constitution’s architects—against its traitors. Korematsu and Hirayabahsi had their convictions overturned in coram nobis proceedings.  The civil liberties act of 1988 denounced the racism and unconstitutionality of EO 9066.  And the United States Supreme Court overruled Korematsu in Trump v. Hawaii.

Defending liberty is always unfinished work.  Tyranny knows only offense—like a football team with Tom Brady playing all positions.  We cannot escape our moral responsibility as American citizens to equal or better the instruction of American patriots Korematsu, Hirabayashi, Yausi, and Endo.  It is for us, the living, to ensure that their courage was not in vain.  It is unthinkable that we fail to try.  Gordon Hirabayashi was right at the young age of 24: “it is our obligation to show forth our light in times of darkness, nay, our privilege.”

When you awaken each morning, be haunted by Edward Gibbons’ epitaph on Athens:

“in the end, more than freedom, they wanted security.  They wanted a comfortable life, and they lost it all—security, comfort, and freedom. When the Athenians finally wanted not to give to society but for society to give to them, when the freedom they wished for most was freedom from responsibility then Athens ceased to be free and was never free again.”

It is altogether fitting that my closing lines will be delivered at this time and place [the Metropolitan Club] within shouting distance of the white house to thunder like a hammer on an anvil.  In  the eyes of the United States constitution, there is only one race, it is American; there is only one religion, it is American; there is only one ancestry, it is American; there is only one gender, it is American; there is only one sexual orientation, it is American.

E pluribus unum.  Out of many, one.

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Walking out of the Constitutional Convention in Philadelphia, Benjamin Franklin was asked what kind of government we got: “A Republic,” he replied, “if you can keep it.”  I am worried.

 

Where does the desire to explore come from?

Long ago I had the pleasure of introducing a young friend to types of food he hadn’t tasted before.  He was quite comfortable with his American style hot dog and hamburger meals and wasn’t certain he wanted to try new and strange dishes.  People differ in this regard.  Some are eager to try new cuisine, see new places, and encounter new people and cultures. Some are not.  And some are even rather intimidated and reluctant to leave their familiar comfort zone. There is a lot to be said for the predictability of the familiar, perhaps similar to well-worn shoes.

After some gentle persuasion, my friend agreed to sample a few dishes.  I reassured him that nothing would be forced on him and that he might even discover some exciting new tastes.  If he found that he didn’t like a dish he would not have to finish it.  But he would never know what he might be missing if he didn’t explore a bit.  Once he started, however, it was hard to stop him.  He was pleasantly surprised at how interesting and tasty some dishes were.  He was particularly reluctant to try foie gras knowing it was goose liver, though he fell in love with it by the second bite.

As I noted earlier, people differ in their tastes for adventure.  We might just leave it at that but for two reasons.  The first is that being rich is more interesting and exciting than being poor.  I am speaking here of experience rather than money.  Seeing and engaging new and different places, meeting new and different people of different cultures, listening to new and different music can make life richer.  The core of a liberal arts education (as opposed to acquiring professional skills) is the introduction to and broadening of our understanding and appreciation of ours and other cultures. It makes our lives richer.

The second is that openness to change is a necessary aspect of economic progress.  Technical progress disrupts the established order but increases our productivity and standards of living.  Global trade not only significantly increases our material standard of living but confronts us with other people and cultures as well.  Both–technical progress and global trade often impose changes on us (such as the job skills demanded in the market) that we might otherwise not choose or want.  If people can choose to live where their opportunities are greatest and if firms are able to employ people with the skills that best fit the firms needs, economies will be more efficient and will raise the standard of living for everyone.  By allowing the disruption of innovation and trade we will have the opportunity to, or be forced to, confront and deal with strangers more often.

This can have a negative side for those who do not easily embrace adventure—those who prefer the familiar (hot dogs and hamburgers). If new neighbors come from different backgrounds and cultures, adventure lovers can enjoy the excitement of learning more about other places and people.  But those uncomfortable with strangers can be – well – uncomfortable.  Economic advances can also have negative impacts on those whose skills are no longer needed and we would be wise to develop and support government measures to soften and facilitate the needed adjustments.

A predisposition to seek and embrace adventures or to shun them is given to us by nature. However, civilization and its advance builds on nurturing more social skills and openness. Failure to teach/convince our fellow citizens of the rewards of adventure (or merely accepting and adjusting to change) can lead to disastrous results.  In extreme cases unease can turn to fear/hate as in the recent white nationalist terrorist attack in El Paso by Patrick Crusius.  As-his-environment-changed-suspect-in-el-paso-shooting-learned-to-hate.  The nature of public debate on race relations, religious freedom, globalization, etc., and the words of role models can have a profound impact on how those confronting change formulate their views on these subjects.

The world is a better, richer place when all of its people respect one another and live peaceably together. We and our education systems (school, churches, clubs, jobs) should do our best to encourage those reluctant to welcome strangers of the positive experiences it can open to them.  By learning to understand different ways of thinking and doing, we not only enrich our lives but can strengthen our own ways of doing things (our own cultures). Such interactions can show us what we like and value about our own ways and what we might adjust in light of the interesting practices of others. This is what the American melting pot is all about. It has produced a vibrant, dynamic and economically flourishing country. However, it is more friendly to the adventuresome types than to those resistant to change. We would do ourselves and our country a favor to kindly encourage those “left behind” to open up more to the wonders of our changing world.  With regard to a difference subject of misinformation Anne Applebaum explores multiple approaches to this task: Italians-decided-to-fight-a-conspiracy-theory-heres-what-happened-next?

 

The Sources of Prosperity

I am an economist so I can’t help writing about the virtues of trade in the (futile?) hope that what is obvious to economists might be better understood and appreciated by the general public. https://wcoats.blog/2016/12/22/save-trade/,  https://wcoats.blog/2017/01/06/the-liberal-international-order/,   https://wcoats.blog/2018/03/03/econ-101-trade-in-very-simple-terms/, https://wcoats.blog/2017/01/06/the-liberal-international-order/, https://wcoats.blog/2019/02/09/tariff-abuse/

So please bear with me one more time. If you join with ten, or a hundred, or a thousand others to cooperatively produce things, you can jointly produce much more than ten times, or one hundred or one thousand times as much as you could all produce individually as one person factories. But that huge increase in productivity and output is not possible unless you can sell your joint output to others for the many other things you need and want to consume that they produce. In short, none of this is possible without trade. The wider the area over which we can trade the greater are the possible gains in productivity from the specialization of labor and capital that a larger market makes possible. The American constitution recognized this when it prohibited restraints on trade between the states (across state lines).  The ultimate limit in the size of the market is given by the world itself.

But markets—the “places” or the arrangements through which trade deals (purchase and sales agreements) occur—require trust that deals will be honored.  The rule of law, which protects private property and the enforcement of contracts, provides the certainty needed for a manufacturer or other service provider to invest in the productive capacity and facilities needed to generate the promised supply of products that is the foundation of our relative affluence. When trade extends beyond national boundaries the rule of law takes the form of international agreements to rules of the game.  Bilateral, multilateral and global trade agreements establish the rule of law within their domains.  The World Trade Organization (WTO) was created to oversee this process. The astonishing skyrocketing of the standard of living of the average (even the poorest) earthling rest on, i.e. would not have been possible without, trade.

The uneven but persistent history of trade has seen the protection of less efficient and uncompetitive firms and industries reduced over time via trade agreements that reciprocally reduced the taxation of imports (i.e. tariffs).  Starting with President Trump’s misguided withdrawal from the Trans Pacific Partnership (TPP) trade liberalization has been thrown into reverse. Trump vs Adam Smith  TPP modernized and further liberalized existing trade agreements between the U.S. and a number of Pacific countries.  The agreement was to be between 12 Asian Pacific countries until the U.S. withdrew.  It would have provided a strong magnet to further draw China into the global system of rules for increasingly free trade. It was ultimately signed by 11 countries without the U.S. and renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The US withdrawal from the agreement was a serious mistake.

The United States as well as much of the rest of the world is beginning to pay the costs of Trump’s trade wars. In January of this year Deutsche Bank estimated that Trump’s trade wars have cost the U.S. stock market $5 trillion in forgone returns so far. Costs of trade war  “Bloomberg economists Dan Hanson and Tom Orlik have… concluded: If tariffs expand to cover all U.S.-China trade, and markets slump in response, global GDP will take a $600 billion hit in 2021, the year of peak impact.” US China trade war-economic fallout  “The import tariffs proposed by President Trump could wipe out the income gains provided by the Republican tax cuts for low- and middle-income earners, Jim Tankersley of The New York Times reported Monday.”  ”Trump-Tariffs-Could-Wipe-Out-Tax-Cuts-Most-Americans”

Are Trump’s import taxes old fashioned protectionism (protecting relatively inefficient domestic industries from foreign competition), a legitimate response to national security concerns, or a reflection of Trump’s “famed” negotiating style?

Protectionism

For starters Trump’s steel and aluminum tariffs of 25% and 10% respectively (following his earlier imposition of tariffs on solar panels of 30% and washing machines of 50%) are clearly protectionist and reflect an alarming over reach of executive authority. Using the “authority” given the President under Section 232 of the Trade Expansion Act of 1962, U.S. Department of Commerce found that imports of steel and aluminum “threaten to impair the national security” of the United States.  Canadian Prime Minister Justin Trudeau called the claim that reliance on Canadian steel could be considered a national security risk “absurd”.  Trump removed these tariffs on Canada and Mexico last month, but they remain in effect on our other friends (e.g., EU) and enemies. On several occasions Trump has threatened to raise tariffs on car’s imported from Europe on the same phony national security grounds.

The patters of trade that minimize costs of production and maximize labor productivity can be complex. While protecting a few inefficient American steel producers and their related jobs might be good for those few firms, it is bad for American consumers and the economy at large. Workers in less productive protected industries are thus not available to work in more productive activities. Moreover, more jobs were lost than saved as the result of high prices and lost sales by steel importing manufactures.  One study estimated that these tariffs could result in the loss of 146,000 jobs.[1]

A Peterson Institute for International Economics study estimated that American businesses and consumers paid more than $900,000 a year for each job that was created or saved as a result of the Trump administration’s tariffs on steel and aluminum. The cost for each job saved as a result of the administration’s tariffs on washing machines was $815,000.[2]

National Security

The distinction between legitimate security concerns and protectionism is not always obvious. Trump’s approach is often more protectionist and bargaining chips than concerns for security.  An early indication of this was the U.S.’s treatment of ZTE Corp, China’s second largest telecoms gear maker.  In April 2018 the U.S. band U.S. companies from selling their products to ZTE in connection with its violation on U.S. restrictions on trade with Iran, Sudan, North Korea, Syria and Cuba.  “That means no Qualcomm chips or Android software for its phones, and no American chips or other components for its cellular gear.” NYT The company was effectively shut down and heading for bankruptcy when in early June of 2018 Trump ordered these restrictions lifted to save Chinese jobs!!  According to the NYT: “The Trump administration is pressuring China to make trade concessions. It may also need Beijing’s help to strike a deal with North Korea as Washington and Pyongyang plan a high-profile meeting on June 12 in Singapore.  Mr. Trump appears to be using ZTE’s punishment as a bargaining chip in negotiations with China, rather than a matter of law enforcement.” What is ZTE–A Chinese Geopolitical Pawn

Trump’s more recent banishment of Huawei, a Chinese tech company leading the world in 5G development, from the American market and efforts to convinces our once British and EU friends to do the same provides another example. In some applications security concerns when dealing with a Chinese company may be justified, but these areas are limited and Huawei has gone to great lengths to allay those concerns. “Google has been arguing that by stopping it from dealing with Huawei, the US risks creating two kinds of Android operating system: the genuine version and a hybrid one. The hybrid one is likely to have more bugs in it than the Google one, and so could put Huawei phones more at risk of being hacked, not least by China.”  “Google warns of US national security risk of Huawei ban” FT June 6, 2019

The Trump administration has expressed its anger with the refusal of many other countries to follow its lead thus incurring a diplomatic cost as well as the economic one of restricting access to the best and/or most cost-effective products. The dangers and potential damage of using trade threats for other objections are clearly express by seven former US Ambassadors to Mexico in a joint letter published June 5: Ex US Mexico Ambassadors-Tariffs would destroy partnership we built

Moreover, the US’s exploitation of the importance of the dollar as a reserve and payment currency in forcing its political agenda on the rest of the world has incentivized the EU, Russian, China and others to look for alternatives. As another example of the growing risks of relying on American markets, Alibaba, China’s national champion internet giant whose share are currently only listed on the New York Stock Exchange, will raise its next round of capital on the Hong Kong exchange.

Bargaining

But some of Trump’s threats of tariffs no doubt reflect his approach to a trade negotiation. While it is not the usual approach to a trade negotiation, in which the parties should be looking for win-win reductions in tariffs and other impediments to freer trade, it could occasionally work to achieve greater concessions from the other side than otherwise. There is really little evidence that it has, however. The renegotiated NAFTA, given the new name United States-Mexico-Canada Agreement or USMCA, is no better than a normal review and updating of the existing NAFTA would have been expected to produce. It incorporates most of the updated provisions of the TPP, as was expected. But Trump started the NAFT review and update, by tearing up the old agreement and threatening to revert to the bad old days. Trump’s threated 5% tariff on imports from Mexico if it doesn’t do more to reduce or deal with the flow of refugees across the US Mexican border seems to be a counter example of a threat that worked.

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Donald J. Trump‏Verified account @realDonaldTrump

FollowFollow @realDonaldTrump

On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP. The Tariff will gradually increase until the Illegal Immigration problem is remedied,..

4:30 PM – 30 May 2019

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What if Trump doesn’t back down as China matches each of Trump’s escalations with new tariff increases of their own? Such a true trade war was not a necessary approach to the negotiations and could be terribly detrimental to both economies as well as those of our trading partners. Some of China’s behavior should be challenged. Its theft of intellectual property, state aid to some of its companies, and restrictions on foreign companies operating in China violate the spirit of the competitive deployment of resources to their most productive uses. But these criticisms are shared by most other countries (UK, EU, Japan, Korea, India, etc.). The US should negotiate with China together with these allies. It should use and strengthen the mechanisms of the World Trade Organization rather than ignoring and weakening it.

Even if Trump does backdown, as he generally has in the past, considerable damage has already been done that could take years to undo. The development of the cost saving, productivity enhancing global supply chains took time and were built with confidence in the rules that would apply—the rule of law. These very much included the maximum taxes (tariffs) and other regulations that would apply. The trust in that framework of rules has now been badly damaged.

Supply chains are already being restructured to reduce the risks of US policy shifts. While new arrangements may avoid or reduce these risks, they do so at the cost of efficiency.  Refusing to buy Russian booster rockets or Chinese semiconductors because of concerns that the Chinese or Russian government might exploit their companies’ products militarily or to steal our trade secrets, forces us into more expensive and/or inferior products and thus keeps us and the world poorer than otherwise. We had better be sure that the costs are necessary.

[1]  Timmons, Heather (March 5, 2018). “Five US jobs will be lost for every new one created by Trump’s steel tariffs”. Quartz (publication).

[2] Long, Heather (2019). “Trump’s steel tariffs cost U.S. consumers $900,000 for every job created, experts say”. The Washington Post.

Oslo: the Play

IMG_2150Yessar Arafat and Warren Coats in the PLO office in Gaza in February 1996.

Last night I saw the Round House Theater’s magnificent production of Oslo, the story of the secret meetings in Norway that led to the establishment of the Palestinian Authority.  It was a moving (heart wrenching) and balanced recounting of how these meetings achieved agreement between Israel and the Palestinian Liberation Organization on “land for peace” as it was called at the time after many years of failed official negotiations. I urge you to see it.

We heard the PLO negotiators lay out the Israeli theft of their homes and killings of their people and we heard the Israeli negotiators lay out the Palestinian attacks on Israelis and on the efforts of Jews to establish and secure an Israeli homeland.  For perspective, since the second intifada (between September 29, 2000 and January 31, 2018) at least 9,560 Palestinians have been killed by Israelis and 1,248 Israelis have been killed by Palestinians.  “The View from the West Bank”

The play focused on the unusual approach of these negotiations, which built on the development of trust and respect between the opposing negotiators and the agreement on achievable steps one step at a time. Between their long negotiating sessions in an isolated room near Oslo, they dinned, drank and bonded together. Unfortunately, the play fails to provide us with an overview of the resulting agreement, which applied the same step by step confidence building approach to the incremental establishment of a Palestinian government (the Palestinian Authority) and withdrawal of Israeli troops from the West Bank and Gaza. The PA was given governance authority for a limited number of functions in order—step by step—to build both institutional capacity and trust.

One of those functions was the establishment of the monetary authority (central bank). I led the IMF team that helped establish the Palestinian Monetary Authority and have many stories to tell of my many visits to Israel and the West Bank and Gaza in 1995-6 plus a number of visits in later years (most recently in December, 2011).

The PMA has developed into a well-run organization of which Palestinians (and those Israelis who see a successful Palestine government as important and necessary for their own security) can be proud.  It helped a great deal that the Bank of Israel and PMA developed good relations. Stanley Fischer was the governor of the BoI from 2005-13 and George Abed was governor of the PMA from 2005-7. They had both previously been colleagues at the IMF. “Jerusalem in August 2006”

It is with a broken heart that I watch Israel’s Prime Minister, Benjamin Netanyahu, with help from American President Donald Trump, increasingly abandon the two state solution of the Oslo Agreement for an apartheid single state regime in which “democratic” Jewish control is preserved by denying what would become the majority Palestinian residents their right to vote. “The Future of Israel and Palestine”

 

Attorney General Barr’s News Conference

I, and everyone I know, want to know the facts of any collusion between Trump and his associates and Russia. I am confident that the Mueller investigation provides them as well as we could expect. Attorney General Barr’s news conference this morning summarizing that report was clear and transparent. He did an exemplary and impressive job. The complaints from some Democrats on the Hill that Barr should not have held this press conference until after they had read Mueller’s report were unfounded and frankly embarrassing. Please let’s move on.

My assessment of Trump’s administration today, which is what we should be debating, is very mixed. Adjusting and lightening the regulatory burdens that have been holding our economy back is largely good in my view (though each must be judged individually) as are the tax reforms making the system simpler and fairer. While the tax reforms did not go far enough, they were a big improvement over the existing tax law.

Trump’s attitude toward trade and the protection of inefficient American firms is ill informed and damaging to American’s economy as a whole (as opposed to coal and steel producers). His bullying and unilateral approach is clumsy, amateurish, and counterproductive. The EU, Canada, Japan and others would be happy to join us in confronting China’s bad trade behavior, if Trump were willing to work together and not busy attacking them as well.

I supported Trump’s campaign promises of restraint in deploying American troops around the world, but he has not delivered. His message to the Senate accompanying his veto of the bill passed by both houses of Congress (54-46 in the Senate and 247-175 in the House) a few weeks ago invoking the War Powers Resolution to end U.S. support of Saudi Arabia’s war in Yemen reflects a truly shocking affront to our Constitution: “This resolution is an unnecessary, dangerous attempt to weaken my constitutional authorities, endangering the lives of American citizens and brave service members, both today and in the future.”  The truth is just the opposite. The constitution gives the power to declare war to Congress and the almost blank check congress gave Presidents following 9/11 cannot meaningfully be stretched to include what we are doing in Yemen.

Trump continues to undercut and weaken American leadership in the international organizations and agreements that have contributed so much to post WWII peace and prosperity. This will be increasingly harmful to our and the world’s legitimate interests.

In his spare time, the President thoughtfully advised the French on fighting the fire in Notre Dame. What an embarrassment and fire experts say that his advice was wrong.

Please, let’s fight the real battles and stop wasting time on the phony ones.

The College Admissions Scandals

A few weeks ago, Ito and I went to “Admissions,” the very well performed and thought provoking play by Joshua Harmon about affirmative action, at Studio Theater. Several friends had independently attended the play and suggested that we get together for one of Ito’s superb dinners and discuss it.  So we enjoyed an evening discussing the pros and cons of “affirmative action,” the “temporary” suspension of nondiscrimination legislation meant to repair and make up for discrimination against blacks that made them less prepared for college. It is a complex issue without obvious solutions. The play did an excellent job of fairly presenting all perspectives on this issue.

My opinion is that suspending, even temporarily, equal treatment (merit-based college admissions) of applicants to universities and colleges, as is done with affirmative action, is not the best approach to achieving equal treatment of all. It attempts to treat the symptoms of racial discrimination rather than the disease. First of all, private universities (unlike state schools using tax payers’ money) should be free to establish whatever admission policy they want.  Any school I would want to attend will want to include an element of diversity in its student body as an important element of the education they offer and will build that into its admission policy in whatever way it considered sensible.

And now we are confronted with the revelation that some of the rich and famous paid bribes to get their underperforming children into top schools. As stated in the Washington Post: “the scope and sheer shamelessness of an elaborate scheme in which some of the country’s richest people allegedly paid bribes to get their children into top U.S. universities is truly mind-boggling.” https://www.washingtonpost.com/opinions/the-college-admissions-scandal-should-prompt-broader-soul-searching/2019/03/13/f67aa986-45b5-11e9-aaf8-4512a6fe3439_story.html

This is shocking and unacceptable for the same reason I oppose affirmative action. It violates the principle and standard of merit in hiring people or admitting them to college. Our country is one of the wealthiest and most respected in the world because firms and organizations allocate jobs, positions, and resources in general on their merits (i.e. qualifications for the job, etc.). In short, people and other resources are put to their most productive use.  Obviously, this is not always the case. But firms that fall short of this standard suffer lower profits than if they had adhered to it. In short, in the private sector there is an economic incentive to employ the resources (including people) that best fit the needs being filled. Companies that employ their under-qualified relatives suffer lower profits as a result. Hiring or admitting people on the basis of merit is also our standard of fairness that is widely admired throughout the world.

Affirmative action is a deliberate departure from this standard as are the recently revealed bribes and test score cheating for college admission. In the first case it is an effort to overcome the damage of earlier discrimination against a once enslaved people. In the second case it is an effort to overcome the deficiencies of intelligence or character in our own children. A world in which we acquiesce to standards other than merit will always favor the already well off. We will never fully achieve the high standards of merit based appointments we have set, but we should never stop trying. A powerful strength of the private sector in a competitive free market economy is that the economic incentives are in the right direction.

American universities may never achieve a perfect admissions system completely based on merit and devoid of personal bias, but we should encourage them aim for it. The world outside of the academic environment is unfair enough when it comes to race, gender, sexual orientation and religion to name a few. Let us try to instill in the younger generation the understanding that hard work and smarts are what gets you ahead– not money, influence and certainly not the color one’s skin. And let’s promote attitudes and policies that encourage and reward such a reality.

Is Rep Ilhan Omar anti-Semitic?

U.S. Congresswoman Ilhan Omar, a Muslim Somalian immigrant, has been insisting that we need to publicly condemn Israel’s mistreatment of Palestinians in the West Bank and Gaza as well as in Israel itself. This mistreatment includes illegally occupying Palestinian land on which Jewish Israeli’s build so called “settlements,” excessive use of force against Palestinians protesting their treatment (since 2000 Israeli soldiers have killed 9 Palestinian, including women and children, for every Israeli killed by a Palestinian), and legally restricting the citizen rights of Israeli Arabs (i.e. imposing apartheid on Palestinians living in Israel) in an effort to keep Israel both democratic and Jewish with a “one state solution” that would make Jews a minority). All of my Jewish friends, including some Israeli Jews, also condemn these horrible acts. The issue is well summarized by Andrew Sullivan: http://nymag.com/intelligencer/2019/03/how-should-we-talk-about-the-israel-lobbys-power.html?utm_source=fb&fbclid=IwAR1B12R8xQ0PTQhRO3u2f0nPO2ssSPmdZCEbbYbnvWNByClY2zuNgXaV9TE

So why is Ms. Omar being condemned as an anti-Semite by some (those who, in my opinion, are simply diverting the conversation away from Israel’s bad behavior)? It seems to arise from her complaints that “‘I am told everyday that I am anti-American if I am not pro-Israel,’ Omar tweeted March 3 in response to critics. ‘I find that to be problematic and I am not alone.’” Washington Post 3/11/2019 https://wapo.st/2TEMzt9. More specifically, and this is where critics have focused, she has complained that the so-called Israel Lobby has blinded American’s to Israel’s bad behavior. “On Feb. 27, Omar told an audience at a town hall event in Washington, D.C., that accusations of anti-Semitism were meant to silence her criticism of Israel and the American Israel Public Affairs Committee.”  Ibid. In my opinion the charges of anti-Semitism reported in the above Post article, prove her point.

Some people were particularly offended by her reference to the “Dual loyalty” of many Americans (Jewish and non-Jewish) to both our own country and to Israel.  I do not respect anyone who uncritically agrees with anything and everything their hero says or does whether it is Trump, Putin, or Bibi (I like some of Trump’s policies and dislike others, but disrespect the man). The same goes for governments. Given the strong reaction (claims of anti-Semitism) of any criticism of Israel in earlier years in the U.S. (we now see a regression to those days) I was pleasantly surprised on my many visits to Israel that a critical public discussion of Israeli policies and behavior was far more open and honest there. We should not be surprised or concerned that organizations such as American Israel Public Affairs Committee champion a particular point of view. That is what they exist for (just as the Log Cabin Republican’s and other policy oriented groups exist to propagate a point of view). What is unusual is the amazing influence that AIPAC has had on American foreign policy, often against America’s best interest. If you are not aware of this read John Mearsheimer and Stephen Walt’s “The Israel Lobby and U.S. Foreign Policy.”

It is natural and usual for any of us with origins in another country (that would be most of us) to retain sympathies for the fatherland even when condemning bad things it might do. My Russian American friends, for example, can’t help smarting a bit at criticisms of Putin even when they fully agree with them. The country that gave us some of the world’s greatest literature and music has also given us the gulag, etc. But no one, at least no one I know, would dream of calling me anti-Russian when I condemn Putin.

I have not read every word from Rep Omar, but I have not read anything that suggests she is anti-Semitic. She has raised important points about the policies and behavior of the Israeli government.  President Trump’s, and for that matter his predecessors for many years, uncritical acceptance of Israel’s outrageous treatment of the Palestinians in their charge, should be challenged. Those diverting the discussion by labeling those of us who condemn Israel’s behavior as anti-Semitic are exploiting America’s very understandable sympathies for the horrors of the holocaust and a long history of anti-Semitism. But such charges and diversion are dishonest and a disservice to the best interests of the United States (and I would say of Israel as well).

Should Virginia Governor Northam Resign?

After first apologizing for his college yearbook picture in blackface (next to someone in a KKK costume), then denying that it was him in the picture, why hasn’t Governor Ralph Northam resigned? I think that it is because he knows in his heart that he is not a racist. No one can read the Washington Post account of his childhood and college years and think that he is. https://wapo.st/2MW4ndp

The unfolding story raises a number of important points or lessons, if you will (I am always an optimist).  Should adults be held accountable for views or behavior in their youth—i.e., are we able to grow in our understanding and change our views?  Should the prevailing understanding and attitudes of earlier times influence how we “judge” earlier behavior, i.e., does context matter? George Washington and Thomas Jefferson where slave owners, after all. These questions are relevant more generally (think of the confirmation hearings of Presidential nominees for the Supreme Court and other important positions).

Northam’s now famous yearbook picture immediately raised several questions in my mind.  Before making judgements about Northam’s attitudes on race I wanted to know, among many other questions, what was in his mind when that picture was taken (or if not him, put on his yearbook page).  What message did he think he was sending? My first reaction, clearly not the reaction of many others, was that he was making fun of the KKK.  I have the same question about blackface more generally and those fun musicals and minstrels with black-faced white singers and dancers. When did black face become an affront to blacks or should I say African Americans?  This question is thoughtfully explored by John McWhorter in a must read piece in the February Atlantic Monthly https://www.theatlantic.com/ideas/archive/2019/02/mark-herring-and-grey-zones-blackface/582355/. According to Wikipedia: “In the United States, blackface had largely fallen out of favor by the turn of the 21st century, and is now generally considered offensive and disrespectful.”

As I grew up in California, “Negro” was the polite term for “African American.” It sharply contrasted with the derogatory term “Nigger,” the very sight of which outrages me.  But fashion evolved. As an undergraduate at the U.C. Berkeley in the 1960s we switch from Negro to Black, to keep up with evolving fashion.  One of my favorite columnists in the 1980s and 90s, William Raspberry, an African American opinion writer in the Washington Post, wrote a column I liked a lot bemoaning the ever-changing fashion in referring to Negros, Blacks, People of Color, African Americans, etc.  He said that changing the name is less important than changing the reality of the status and treatment of minorities in America.

Prejudice reflects ignorance.  It is best overcome with knowledge. Familiarity is an important source of knowledge. Large numbers of people cluster with their own ethnic or religious group and thus have little direct knowledge of “others”. Those who thought badly of “niggers” or “faggots” generally didn’t know any. They feared what they did not know. Black-faced performers began to introduce blacks to many whites. Though they were often buffoonishly stereotyped, they were non-threatening and were thus likeable. People often fear what they do not know.

In a step up from blackface Amos and Andy in the sitcom of the 1950s were played by real African Americans.  They were heavily stereotyped but lovable. No one could fear them. In the 1970s we progressed to the Jeffersons and in the 1980s to the Bill Cosby Show. With familiarity, baseless fear dissipated.  TV encounters were increasingly complimented with real live encounters.

Something similar happened with gays. TV first introduced homosexuals as silly but harmless hairdressers or fashion designers. For many of us looking back the stereotypes are borderline offensive (no offense to effeminate hairdressers). But gays gradually became more present in television and in our surroundings and less threatening. Then we were introduced to the comedy show Will and Grace who progressed gay images toward the idea of successful and diverse people living in New York. They were funny and approachable people we would be comfortable to hang out with. People began to discover that their uncle George or Aunt May were gay and were OK with that. Will and Grace performed a similar service for gay acceptance by a wider public as had Cosby for African Americans.

Context matters and people learn and evolve. My own opinion of Governor Northam has evolved from thinking that, of course, he should resign to thinking that he shouldn’t. https://wapo.st/2SBEyoy

 

 

The Wall: Form or Substance?

Most Americans support legal immigration into the United States (preferably more and better targeted than now) and oppose illegal entry. Controversy has arisen over how best to limit the illegal sort (to say the least).

The border between the U.S. and Mexico runs almost 2 thousand miles. By 2009 580 miles of fence or wall had been built for the purpose of reducing illegal entry of people and drugs. This grew to 654 miles by 2017.  Leaving aside the many controversies over the environmental impacts of fencing a border that runs through Indian reservations, and environmentally sensitive areas (“In April 2008, the Department of Homeland Security announced plans to waive more than 30 environmental and cultural laws to speed construction of the barrier.” Wikipedia), we must ask whether a fence/wall on even half of the border will significantly reduce, much less stop, illegal entry into the U.S. and whether it is the most cost-effective way of doing so (electronic “fences” are also now being deployed). The Economist magazine estimated that it may have “reduced the number of Mexican citizens living in America by only 0.6%.” “The-big-beautiful-border-wall-America-built-ten-years-ago”  About half of all illegal emigrants arrived in the U.S. legally by boat or plane and overstayed their visas.

Where there is a will, there is a way. Illegal immigration is reduced when conditions (incomes and security) in a potential immigrant’s home country are improved, when legal channels of immigration widened, and when illegal entry and residence are made less attractive (riskier).

While the North American Free Trade Agreement (NAFTA), which came into effect in 1994, benefited the United States, it improved living standards in Mexico and Canada as well, President Trump’s condemnations notwithstanding.  Over its first 20 years Mexican trade with the U.S. and Canada more than doubled. (Burfisher, Mary E; Robinson, Sherman; Thierfelder, Karen (2001-02-01). “The Impact of NAFTA on the United States”. Journal of Economic Perspectives. 15 (1):125 44.  CiteSeerX 10.1.1.516.6543. doi:10.1257/jep.15.1.125. ISSN 0895-3309.)  Per capita income (GPD) in Mexico increased 37% and in the U.S. 52% between 1993 and 2017.

An example of Trump’s misuse of data was provided by his statement during his recent State of the Union Address when he claimed that: “One in three women is sexually assaulted on the long journey north”, referring to the Mexican caravans to the U.S. border.  The data comes from the Doctors Without Borders, who reported that of the 57 women caravaners who sought their medical care one third “said they were “sexually abused” on the journey, not “sexually assaulted” as Trump says.” This is not even in the same ball park.  “Fact-checking-president-trumps-state-union-address”

On multiple occasions over the last 20 years sensible bipartisan immigration reform laws were proposed but never passed. We badly need to adopt some such reforms in order to meet the labor market needs of the U.S. economy and to settle the legal status of earlier illegal immigrants (including the Dreamers).  See my earlier comments on such reforms:  https://wcoats.blog/2017/02/12/illegal-aliens/  https://wcoats.blog/2018/01/11/our-dysfunctional-congress/

The most challenging component of the policies to reduce illegal immigration are policies to make illegal status as unattractive as possible. In short, a barrier to illegal status that immigrants can’t climb over, tunnel under, or walk around. Illegal status should be very unattractive. Illegal residence should not have access to any, other than emergency, welfare services. People generally immigrate to the U.S. in search of a better life. That generally means a better paying job than they could find at home.  Employers who hire undocumented workers should be heavily fined (especially if the employer happens to be the President of the United States).  Efforts to deny services and jobs to illegal immigrants should not intrude on the privacy and lives of legal residents however recently they might have arrived. Our conflicted approaches of overlooking illegal status, reflects our failure to have adopted sensible laws for legal immigration.

America is an attractive place to live and we have benefited greatly from the best and the brightest who have chosen to come here (legally).  For our own sake and for the sake of those who might come we need to improve the process and widen the door for legal immigration while making the illegal sort less attractive.