Category: Travel

Dear Congressman Kevin McCarthy

The Times of Israel and other press report that you “would remove Ilhan Omar, the Minnesota Democrat, from the House Foreign Affairs Committee, in part because of her criticism of Israel.” We should all speak out against antisemitism or any other hateful characterizations of other religious and ethnic groups. However, when you criticize the Biden administration, we would be wrong to call you unamerican. Similarly, you are wrong to conflate criticism of the Israeli government with antisemitism. 

In fact, the U.S. government has been embarrassingly negligent in criticizing the Israeli government’s illegal and abusive treatment of the Palestinian residents of the Palestinian territories.  Amnesty International has declared Israel an apartheid state. “Israel’s occupation of Palestinian territory is unlawful under international law due to its permanence and the Israeli government’s de facto annexation policies, a UN-appointed Commission of Inquiry said in its first report, published on Oct 20, 2022.” It is reassuring that the US is undertaking an investigation of the recent shooting death of Palestinian American Shireen Abu Akleh by an Israeli soldier.  “FBI investigation—killing of Shireen Abu Akleh by Israel military”

I was born and raised in Bakersfield and now live in the Washington, DC area, and I have worked extensively in Israel and the WBGS for the International Monetary Fund. I hope for more from you.   “Israel and Palestine”   My travels to Jerusalem”  

Sincerely,

Warren Coats

Ukraine War—How does it end?

Russia’s invasion of Ukraine is wrong in every way (legally, morally, strategically). Ukraine’s fight to defend its sovereignty is heroic, brave, and impressive. The U.S. is supporting Ukraine to the last Ukrainian soldier. But there are a limited number of potential Ukrainian fighters left and causalities are high.

The fighting can end when: a) Russia kills or disables Ukraine’s remaining soldiers and puts a Russian friendly President in Kyiv; b) the West (NATO) provides soldiers to support the Ukrainian Army perilously launching WWIII; c) The advice offered in the letter to President Biden from 30 congressional members of the Congressional Progressive Caucus to press Zelensky and Putin to negotiate leads to a truce and end to the fighting. “CPC letter for diplomacy on Russia-Ukraine conflict”  However, the letter was later withdrawn (perhaps because the signers now foolishly believe that Ukraine can defeat Russia). “Obama already said some of what the Progressive Caucus got slammed for about Ukraine”

Of Ukraine’s total population of almost 44 million, all of fighting age and condition are on the battle fields and their numbers are shrinking every day. Of its total standing military of about 200,000 when the war began, 70,000 to 80,000 have already been killed or wounded. Another approximately 300,000 have since joined the fight. “Ukraine-Russia military comparison”    “Russia-Ukraine crisis-how big is the Ukraine army size compared to Russia’s”

Of Russia’s total population of a bit over 143 million (three times that of Ukraine), almost one million are in the military. Putin sent an estimated 190,000 into Ukraine this year. Half of them have been killed or wounded. However, unlike Ukraine, which is already all in with virtually no more potential fighters to draw on, Russia plans to send in an additional 135,000 soldiers before Spring and has 800,000 military personnel stationed elsewhere to draw on. “Putin could cripple Ukraine without using nukes”

Ukraine cannot win this war without additional soldiers from the West. “David Petraeus’s recent suggestion that Washington and its allies may want to intervene in the ongoing conflict between Moscow and Kiev. According to Petraeus, the military action he advocates would not be a NATO intervention, but ‘a multinational force led by the US and not as a NATO force.’”  “Playing at war in Ukraine”  Just think about that for a second. Whether the resulting WWIII would be nuclear or not is an open question.

I don’t want to see Ukraine lose and I don’t want to see the start of WWIII that my children and grandchildren will hopefully survive to clean up. It was a terrible mistake for us to break our promise not to expand NATO East in the early 1990s. It was a terrible mistake for us not to insist that Ukraine honor its commitments under the Minsk agreements in2014 and 2015. It was a terrible mistake to finally (2016) build the missile launch sites in Poland and Romania first announced in 2009. It was a terrible mistake for us not to press Ukraine and Russia to negotiate their semi sensible offers the first quarter of this year. I am not sure how many more mistakes we can get away with — if any.

The Ukraine War

Ukrainian President Zelensky says his country will file an expedited application to join NATO immediately. “’De facto, we have already proven interoperability with the Alliance’s standards, they are real for Ukraine — real on the battlefield and in all aspects of our interaction,’ Zelensky said. ‘Today, Ukraine is applying to make it de jure.”  “Zelensky says Ukraine filing expedited application to join NATO”  This reverses Zelensky’s statements he made in March of his willingness to stay out of NATO.

NATO members should just say no.  Hell no! After successfully serving to protect the West from the USSR, post-Soviet NATO has become a liability. After breaking our promise not to expand NATO further east in exchange for Russia’s agreement to the reunification of Germany, NATO has done nothing but cause problems.

In December 2021, Russia released an eight-point draft treaty to prevent its invasion of Ukraine. At the top of its list was no NATO membership for Ukraine. Soon after Russia’s invasion, President Zelensky offered to give up seeking NATO membership and agreed to much of what Russia demanded. The status of the largely Russian Donetsk and Lugansk was the largest sticking point. For reasons I totally fail to understand, the United States and its NATO allies refused to remove Ukraine’s NATO membership from the table while stating that membership was not a near term prospect. “Ukraine-Russia-NATO”

In March, following Russia’s stalled Feb 23 attack on Kyiv, representatives of Russia and Ukraine met at Belovezhskaya Pushcha, on the border of Poland and Belarus, for initial ceasefire talks.

Putin made six key demands:

  1. No NATO membership and a neutral position.
  2. Russian should be the second official language of Ukraine, with laws prohibiting it abolished.
  3. Recognize Crimea as Russian territory.
  4. Recognize the independence of Donetsk and Lugansk.
  5. Demilitarization of Ukraine and abandonment of weapons that could be a threat to the Kremlin.
  6. Banning of ultra-nationalist parties and organizations in Ukraine.

Of these, only #4 would be difficult for Ukraine to accept, but no agreement was reached, and the fighting continued with more and more Western support.  “Ukraine’s and Russia’s war”  The U.S. and NATO can bring Ukraine to the peace table anytime they want (by threatening to end their military and financial support).  No compromise agreement was reached in December, February, March or beyond. And NATO keeps expanding. Why? Why is the U.S. and NATO not pushing to make a peace agreement happen? If Russia still thinks it can come out ahead, China, India and others should convince it otherwise.

In a recent column in the Washington Post former chairman of the Joint Chiefs of Staff Mike Mullen, former U.S. senator Sam Nunn (D-Ga.) and former U.S. energy secretary Ernest J. Moniz, all of whom serve on the Nuclear Threat Initiative’s board of directors urged China to step forward:

“The most sensible policy choice for China is to wield its unique position of influence to encourage more “rational” decision-making by Putin. In particular, President Xi must make clear to Putin that nuclear use is a line he must not cross and that nuclear saber-rattling itself threatens the global nuclear order….  The United States and China can — and must — now work together with Europe and other nations to help end this war on the “just terms” called for by Biden in his speech to the United Nations.” “Xi Putin Ukraine nuclear arms”  

Every few months, I have urged us to stop this destructive war now. As winter approaches Europe with mounting energy shortages, I say it again. Stop it now.   “End the war in Ukraine”

Econ 101:  Oil Price Cap

Among U.S. (and E.U. and some other primarily Northern countries) objectives in reacting to Russia’s invasion of Ukraine, is to diminish its capacity to continue this war, in part by reducing its export (largely oil and gas) income with minimum damage to the U.S. and other embargo supporters and to pressure it to the bargaining table sooner rather than later (we are trying to do that aren’t we??). As you can see from the previous sentence, this is not a particularly simple issue.

One measure being promoted by U.S. Treasury Secretary Janet Yellen is to cap the price at which we are willing to buy Russian oil.  If we just stop buying Russian oil all together (effectively a price of zero), global oil supply would presumably fall, and oil prices would rise. We know, of course that Russia will redirect its sales to countries not participating in the embargo, such as China and India, to the extent it can and the oil these countries would have purchased from Saudi Arabia and other suppliers would then be available to us and global oil supply would not fall as much as we might have expected nor would prices increase as much as otherwise. Much could be written about this (the limited potential of embargoes if not everyone participates), but I won’t.

The idea of Secretary Yellen’s cap is that rather than buying no Russia oil we (and all embargo participants) would continue to buy it but at an agreed price that is below normal market prices in normal time (the price cap). Thus, hopefully, Russia would still sell its oil to the West but would earn less foreign exchange from it and the West would have more oil than with a total blockage and thus avoid sharp market price increases.

“There are several outstanding issues to settle on the price-cap idea. Those include figuring out exactly how to enforce it, convincing other nations to subscribe to it and deciding the sales price at which Western countries would permit the purchase of Russian oil. Looming over the proposal is also the presumption that Russia would continue to sell oil at a price mandated by the U.S. and its allies.”  “WSJ: Janet Yellen begins Asia trip to win support for cap on Russian oil price”

“Some economists and oil industry experts are skeptical that the plan will work, either as a way to reduce revenues for the Kremlin or to push down prices at the pump. They warn the plan could mostly enrich oil refiners and could be ripe for evasion by Russia and its allies. Moscow could refuse to sell at the capped price…. 

“Mr. Biden… moved swiftly to ban imports of Russian oil to the United States and coordinate similar bans among allies. In some ways, the price-cap proposal is an acknowledgment that those penalties have not worked as intended: Russia has continued to sell oil at elevated prices — even accounting for the discounts it is giving to buyers like India and China, which did not join in the oil sanctions — while Western drivers pay a premium….

“The cap plan seeks to keep the Russian oil moving to market, but only if it is steeply discounted. Russia could still ship its oil with Western backing if that oil is sold for no more than a price set by the cap.”  “NYT Biden gas price cap Russia”

John Bolton, whose view I don’t generally share, said about Yellen’s oil price cap: “The proposal, academic and untried, faces multiple practical obstacles and uncertainties. Widespread sanctions violations by Russian maritime cargoes already exist, with no reason to think the oil-price cap is more enforceable.” “WP: Biden oil price cap-Russia Sanctions”

Such efforts to “hurt” Russia cannot avoid also hurting us. What other approaches might the Biden administration consider?

“The White House… has held off for months on backing a gas tax holiday, amid divisions within the Democratic Party and skepticism a roughly 18.4 cent-per-gallon discount would be passed on to consumers….  In private meetings with senior Energy Department officials to discuss ideas for boosting supply and lowering prices, some industry representatives have instead used the sessions to push for longer-term priorities like building pipelines and easing environmental restrictions.”  “Politico: White House-Biden-gas prices”

“Rep. Kim Schrier, D-Wash.,… called it “infuriating” that spikes in gas prices were “happening at the same time that gas and oil companies are making record profits and taking advantage of international crises to make a profit. This must stop.″ “PBS: House approves bill to combat gasoline price gouging”

When the supply of a product falls short of its demand, the gap can be closed in one of two ways. Both involve rationing a scarce commodity as is required for anything in limited supply which is virtually everything. The first approach—the market approach of price rationing—allocates the product to those who want it the most, i.e. those who are willing to pay the most for it. The second approach—the administrative allocation approach—allocates the product to those the government agency responsible for choosing who gets it, determine are most worthy or in most need of it based on the criteria the agency sets (which in practice invariably includes friends and relatives). History has clearly documented which of these methods of allocation works best.  Some of you will remember the long lines at gas stations when President Richard Nixon capped gasoline prices (another form of rationing).

That leaves measures that encourage increased supply from everywhere except Russia or that facilitate reducing demand. “Biden officials are openly pleading with Big Oil to pump more, not less. ‘We want them to get their rig counts up. We want them to increase production so that people are not hurting,’ [Energy Secretary Jennifer] Granholm said.”  “CNN: Gas prices-Biden-inflation” A higher price at the pump provides the market a strong incentive to increase supply, but that generally takes years to achieve much of an increase. In the interim profits of the suppliers will be higher than usual.

Some months back policy sought to reduce the consumption of carbon omitting products as part of our effort to slow global warming. For that objective an increase in gasoline prices would be a good thing, whether from a gas tax or restrictions on finding and pumping more oil out of the ground.

For the moment, encouraging more production by Saudi Arabia and other (non Russian) members of OPEC would be helpful. Finally rejoining the JCPOA (Iran deal), Trump’s withdrawal from which Max Boot called the “single worst diplomatic blunder in U.S. history” “WP: Trump-Biden Iran nuclear deal dead with no alternative”, would, among other important things, increase an important source of oil supply, as would dropping sanctions on Venezuela. If we can make deals with Saudi Arabia, given all it has done, deals with Iran and Venezuela should be no brainers.

Ending the war in Ukraine promptly is the most important measure for addressing the shortage of oil (and food more generally). “End the war in Ukraine”

End the war in Ukraine

With regard to Russia’s war in Ukraine, are you in the “peace camp” or the “Justice camp”? Do you want a peace agreement to end the war or do you want to punish Russia for the terrible things it has done no matter how long it takes?  “The Economist on Ukraine” It is rarely wise to take strategic decisions when enraged by someone’s behavior. It is currently hard not to want to flatten Russia for its illegal and brutal war with Ukraine (the Justice camp) but it would not be in our or the world’s interest to do so (Peace camp).  “The Russian war in Ukraine”

Everyone will suffer from continuing the war even without escalation. The world will suffer serious food shortages, oil and gas shortages, disruption and reorganization of the global trading system, and Ukraine and its economy will be in ruins.  And no one should forget that Russia is a nuclear power, in fact it has the largest nuclear arsenal in the world.

Ukraine President Zelensky said that he is willing to keep Ukraine neutral and out of NATO (but in the EU). He also demanded that Russia withdraw to the territories it occupied on February 23, 2022, which included the Crimea and parts of the largely Russian speaking Donbas. In a face-to-face interview with the managing editor of the Economist magazine on March 27 and as quoted in my blog above, Zelensky stated that: “Victory is being able to save as many lives as possible…because without this nothing would make sense. Our land is important, yes, but ultimately, it’s just territory.”

But on April 17, “President Volodymyr Zelensky told CNN that Ukraine is not willing to give up territory in the eastern part of the country to end the war with Russia.”   “Zelensky Russia war tapper interview-cnn-tv”  

Speaking at the Davos World Economic Forum last week, Henry Kissinger stated that “it’s time to think about a diplomatic settlement to end the war, and that settlement will have to include territorial concessions to Russia. ‘Ideally, the dividing line should be a return to the status quo ante,’ referring to the pre-war lines in which Russia controlled the Crimean Peninsula and approximately a third of territory in the Donbas. ‘Pursuing the war beyond that point would not be about the freedom of Ukraine, but a new war against Russia itself.’” “Does Henry Kissinger have a point?”

It is politically very difficult for either Ukraine or Russia to give up territory they hold or aspire to.  Edward Luttwak, a strategist and author of “The Logic of War and Peace” among many other books, has proposed a solution to this political dilemma, which like all political compromises should be acceptable to both sides without being fully satisfactory to either.  He proposes to settle the territorial issues via an internationally supervised plebiscite for determining the fate of each Oblast:

“That leaves the disposition of the Donetsk and Luhansk oblasts, substantial territories that Zelensky does not have the authority to give up, and without which Putin cannot leave the table where he has gambled and lost so much. While Putin cannot be given the two regions he demanded before starting the war, he can be provided with something that he can portray as a victory: plebiscites in both regions where properly certified residents, including returning refugees, would be allowed to vote on whether their oblast should remain Ukrainian or join Russia.

“Upon acceptance of the plebiscites in principle, a cease-fire would come into immediate effect, with Russia’s respect of their terms guaranteed by the ease of reimposing sanctions just lifted.”  “How the Ukraine war must end”  Allowing the residents of each region to determine their own affiliation can hardly be objectionable to the rest of us.

The Justice Camp and the military industry that cheers it on should yield to the Peace Camp in the interest of all of us.  “Ukraine’s and Russia’s war”

My 80th Birthday

Dear friends,                                                                         May 19, 2022

Life Begins at Eighty was a TV show in the mid 1950s. As our family only acquired a TV set later in the 1950s, I don’t think that I ever watched it. But I would like to take exception to its premise. For me, turning 80 is a time of reflection on a life well lived, no longer a continuation of the endeavor, or dare I say struggle, to achieve still more. As such it is a relaxed time of contemplation. I do not suffer Torschlusspanik. In fact, I am very grateful for having experienced a very interesting and eventful life.

When we are young it is all about preparing for and striving to do great things, or at least to realize our potential whatever that might be. As such it is a time of considerable tension. Will I make it? Will I graduate? Will I be hired/appointed? Will I get promoted? Will my project succeed? It is so nice to be beyond those.

I was born on my father’s birthday (what a gift) and raised in Bakersfield California. The first time I left my home state was also the first time I flew in an airplane, which was to New Jersey to prepare with others from around the country for a year abroad as part of the International Christian Youth Exchange (ICYE).

Two weeks of preparation later, we boarded the USS New York for a six-day Atlantic crossing to South Hampton then La Havre, France. In my case, at the age of 17, I traveled on by train to Kassel, Germany to meet the German family I would live with for the next year–my senior year of high school. Their house was in the nearby village of Rasdorf kreis Hünfeld in the Fulda Gap. My home for that year was a few hundred yards from the “ten meter strip” that marked the border with the DDR (East Germany)–the border dividing East and West Germany after WWII.

During that year in Germany (1959-60) I visited Berlin with my ICYE group. We attended my first opera in the Opera House located in what became East Berlin. The Berlin wall did not yet exist. I returned to Berlin and its Eastern Zone many times after the wall went up in 1961 and many times later after it come down in November 1989.

During that same year I graduated from Bakersfield High in absentia. When I returned home to the US, I attended Bakersfield College (the local Jr. College that allowed me to live at home for financial reasons for two more years) before transferring to the University of California at Berkeley. At Bakersfield College, with friends, I started and edited a politically conservative underground weekly paper we called the Weekly Blatt, thus launching a lifelong interest in public policy. It reflected the appreciation of the difference between free, capitalist economies and the repressive, impoverished communist ones that I saw and experienced from my year living on the edge of communist East Germany.

While at Berkeley, I was president of the University Conservatives and of my fraternity Alpha Tao Omega (ATO). When I heard Milton Friedman speak at Berkeley, I vowed to study under him at the University of Chicago. As the result of spending considerable time on the Free Speech Movement Council during my Senior year at Berkeley (1964) and misjudging the effort needed to slide through on a C in a very boring economic history class taught by a socialist, I was admitted on probation to the University of Chicago graduate program. But hard work and with Milton Friedman as Chairman of my dissertation committee (which also include Robert J. Gordon) eventually led to my PhD and an appointment as an Assistant Professor in the Economics Department at the University of Virginia in Charlottesville, Virginia.

While studying at the University of Chicago, Professor Friedman introduced me to and sponsored my membership in the Philadelphia Society, which in those years held its annual meeting in Chicago. He later did the same for the Mont Pelerin Society, an international organization founded after WWII by Friedman, Fredrick Hayek, and others to defend free markets and liberalism against the socialism sweeping Europe at the time. Before finishing at Chicago, I took a year off to teach at the University of Hawaii where I married Louise Wilkinson who had left her graduate studies in the English Department at Chicago to teach at the University of Hawaii.

As a Californian, where history is largely about cowboys and Indians, I found Charlottesville, the hometown of Thomas Jefferson, a beautiful place wonderfully rich in American history. I loved my time there. My son, Brandon, and daughter, Daylin, were born there, which were transformative events as every parent knows.

After five years as an Assistant Professor at UVA, I joined the International Monetary Fund (IMF) for twenty-six years. Eight of those exciting years were spent leading the SDR Division of the Treasurer’s Department and the balance providing technical assistance to central banks in what is now called the Monetary and Capital Markets Department (MCM).

With the collapse of the USSR at the end of 1991, I moved back to the MCM Department from the Treasurer’s Department and immediately led a team to the Bulgarian National Bank followed by multiple visits to Kazakhstan and Kyrgyzstan and a few years later to Moldova. The first half of 1992 we flew (back-to-back) to Almaty (Kazakhstan) and Bishkek (Kyrgyzstan) in chartered planes. Later in that year I was on the maiden Lufthansa flight from Frankfurt to Almaty. The institutions of the former Soviet Union were totally unknown to us, and our counterparts were very eager to learn the ways of capitalist economies. It was a very exciting time.

My earlier years at the IMF were also personally traumatic. I had hidden my sexual attraction to men from myself for years and I was beginning to lose that battle. I struggled to face up to the reality and implications of that fact. I was frightened. It was not at all an easy time. When it was no longer possible to deny or repress the truth, I separated from and later divorced Louise. Sadly, she moved with my two kids back to her home in Mercer Island, Washington. A new chapter of my life began. As we often said at the time, “God made me a homosexual, but I chose (finally) to be gay.”

The most important event of this new life was my introduction in 1999 to Dr. Ito Briones from the Philippines by my friend W. Scott Thompson (Jan 1, 1942 – Feb 19, 2017). After finishing a Master of Arts degree at Boston University, Ito relocated to Washington, DC and moved in with me. He received a PhD in Molecular Biology at Georgetown University and worked in the National Cancer Institute (NCI) lab in Ft. Detrick for five years. Yes, Ito is a renaissance man and a wonderful companion. We were formally and legally married on June 5, 2011.

At the request of the Board of Governors of the Federal Reserve System (coming from my former Chicago classmate David Lindsey who had tried to recruit me from UVA earlier), the IMF seconded me to the Board staff for one year (1979). That was the year Paul Volcker moved from President of the Federal Reserve Bank of New York to Chair the Board of Governors in the middle of my stay. The Board room went from a nonsmoking zone under Chairman Bill Miller to Paul’s big cigars. It was a very exciting year as the Fed crushed the 11.4% rate of inflation.

In 1989 I was also seconded to the World Bank to help write that year’s World Development Report (on Financial Systems and Development). It was like being back in graduate school. It was a wonderful experience led by Millard Long and Stan Fischer (WB Chief Economist at that time).

After 26 years at the IMF, I retired in 2003 at the Assistant Director level. During those years, I had led technical assistance missions to over 20 countries, primarily in the Former Soviet Union and post conflict countries such as Bosnia, Afghanistan, Iraq, and Kosovo. But being only 62 (I had met the IMF’s rule of 85 for maximum pension–age plus years of service) I was not about to stop working.

In June 2003, I joined the Coalition Provisional Authority (CPA) in Baghdad for the US Treasury (see my Iraq book below). At the same time, I joined the Board of Directors of the Cayman Island Monetary Authority (CIMA) for the next seven years. Following that I was a member of the Editorial Board of the Cayman Financial Review from March 2011 to May 2017. While I no longer led missions, I joined them as a consultant member for the IMF, ODI in London, and Deloitte Consulting traveling to Albania, Afghanistan, Bangladesh, Iraq, Kazakhstan, Kenya, South Sudan, Yemen (virtually), West Bank and Gaza Strip, and Zimbabwe. Between January 2002 and September 2013, I traveled to Afghanistan 20 times.

I spoke at conferences in Argentina, Bulgaria, Georgia, Greece, (Hangzhou) China, Paris, Ukraine, Freedom Fest in Las Vegas, London, Oxford, and the Eurasia Economic Forum in Astana, Kazakhstan.  I attended Mont Pelerin Society meetings in Guatemala City, Nairobi, Sidney, Prague, Galapagos Islands, Hong Kong, and Stockholm.

But it was not all work. I had a wonderful father-son trip with my son Brandon to Athens and the Greek Islands in 1992 and to London and around Ireland in 1994. My grandson Bryce came with me to Kenya for an IMF mission to the central bank in 2010 during which we spent a weekend ‎in the Maasai Mara National Reserve in the Rift Valley. The highlight was Bryce’s petting a live cheetah.

An almost annual highlight were the July gatherings at the home of Robert Mundell outside Siena, Italy, to discuss the international monetary system. In January 2015 my daughter Daylin’s marriage to Brett Baker in Las Vegas was great fun. In the summer of 2015 Ito and I spent a week in Southern Italy for the first time (Naples, Pompei, Sorrento, Capri, Sicily) following our usual Mundell gathering in Siena.  Ito and I attended the Edinburgh International Festival four times (joined on one occasion my granddaughter, Micaela in 2017) and spent several wonderful weeklong stays in Bruges for Ito’s art classes (2017 and 2019). Another highlight was the award ceremony in London in March 2019 at which I was presented the Central Banking Journal’s first “Award for Outstanding Contribution for Capacity Building of Central Banks, Especially in Demanding Circumstances.”

My work at the IMF (and elsewhere) and with the teams I led in the field was challenging, stressful, sometimes dangerous, and highly rewarding. I developed friendships with many central bank staff and officials in these countries and believed that my work and the work of the teams of experts I lead had made significant contributions to bringing more stable and efficient monetary and financial systems to the countries we worked in. It is highly disappointing to see the disintegration and backsliding of many of them (Bosnia, Afghanistan, South Sudan, Kyrgyzstan).

Except for Turkey, the backsliding has been political rather than in monetary stability.  To cite a few examples of dramatic central bank successes, the inflation rates dropped from 1,000% in 1998 to 1.2% in 2020 in Bulgaria, from 1,660% in 1993 to 6.8% in 2020 in Kazakhstan, and from 789% in 1993 to 4.4% in 2020 in Moldova. The lack of political healing in Bosnia and Herzegovina, where the annual inflation rate averaged 1.47 percent between 2006 and 2021, has been particularly disheartening. The messages I get almost daily from Afghanistan from friends wanting help in getting out are heartbreaking. And then, of course, the political environment in my own country has become dismal and divisive.

Were all my efforts for nothing? In fact, I am proud that I gave it my all whatever the result. I met and worked with wonderful people. The bonding with mission team members in the field, I imagine, was a bit like the war time bonding with your fox hole buddies. Life was not dull to say the least. I have written more extensively about some of these experiences in five books: “One currency for Bosnia-creating the Central Bank of Bosnia and Herzegovina”     “My travels in the former Soviet Union”   “My travels to Jerusalem”     “My travels to Baghdad” and “My travels to Afghanistan”.

So, as I reach 80 years of age I can rest and am grateful for the life I have led. It was filled with struggles, pain, adventures, and joy. I married a wonderful woman (Louise Wilkinson) who mothered my two wonderful children who in turn gave me seven wonderful grandchildren and two adorable great granddaughters. My painful struggle with homosexuality evolved (through several chapters) into a wonderful relationship with the loving and multitalented Ito. I have been blessed with wonderful friends and colleagues.

My life is certainly not over yet, the curtains have not yet fallen, but looking back at my life—I am grateful for the many adventures it has led me on.

Thank you all.

Warren

Ukraine’s and Russia’s War

Russia’s attack on Ukraine is horrifying, unjustified and illegal. We can’t help admiring the courage of the Ukrainian people in attempting to defend their country nor being enraged at Russia’s brutality.

In a recent article in Foreign Affairs, Alexander Vindman argued that: “America Must Embrace the Goal of Ukrainian Victory  It’s Time to Move Past Washington’s Cautious Approach” “Will America embrace Ukraine victory goal?”  Vindman, best known to us as Lieutenant Colonel Vindman, was born in Ukraine. It is understandable, but not excusable, that Vindman puts Ukraine’s interests above those of the United States.

As a naturalized American, Vindman proved his patriotism by testifying on October 29, 2019, before the U.S. House of Representatives’ impeachment inquiry against Donald Trump, for whom he worked as a member of the White House’s National Security Council. But when determining our role in Ukraine’s war with Russia, we should give primacy to America’s best interests in both the short and long term.

Historian and military expert Edward Luttwak tweeted recently that “Friends complain that my suggested war aim of restoring the Feb 23, 2022, status quo ante is too modest; some want the expulsion of all Russian forces from all parts of Ukraine incl Crimea, with others emphasizing the need to drive Putin from office. But both mean much more war…”  “Luttwak on war in Ukraine”

It is hard not to sympathize with the desire to punish Russia for what Putin has done and is doing—i.e., to demand justice. Many aspects of the world are not to our liking or of our making, even here at home. But we must deal rationally with the world that exists in the hopes of moving it bit by bit toward a better place.

In today’s Washington Post Brendan Rittenhouse Green and Catlin Talmadge wrote an oped titled: “The U.S. is expanding its goals in Ukraine. That’s dangerous. Comments by political and military leaders suggest the goal is no longer to drive Russia to the negotiating table but to seek a total defeat of Russian forces. That increases the odds of catastrophe.”

 “Talk of total victory aligns well with another recently floated objective: an extended bloodletting of the Russian army. Defense Secretary Lloyd Austin asserted on April 25 that the United States wants ‘to see Russia weakened to the degree that it can’t do the kinds of things that it has done in invading Ukraine.’ Yet crippling Russia’s military or expelling Russia from Ukraine are significantly more dangerous aims than preventing the further loss of Ukrainian territory or, through limited offensive operations, gaining some of it back. Unfortunately, if Russian President Vladimir Putin begins to think that his back is against the wall, he may lash out by directly confronting NATO, intensifying the conventional war in the east, or even using nuclear weapons.” “Ukraine war expansion risks nuclear”

Mr. Vindman wants us to make Russia a permanent enemy. That is never a good objective. Over the last half year both Presidents Zelenskyy and Putin have offered peace conditions that represented reasonable starting points for serious negotiations. Why haven’t we pressed them both to the negotiating table?

Vindman stated that: “A Ukrainian victory against Russia will be defined, first and foremost, by the Ukrainians themselves.” But then he also says that the US should give Ukraine more and better weapons. I am not sure that he sees the disconnect here. We should not push Putin into feeling he must escalate or lose. We should exert maximum pressure to bring this war to an end that is acceptable to both Ukrainian and Russian people and in a way that opens the door to a more peaceful Russia in the future. “Ukraine-France playing good cop with Putin”

Aside from the strong emotional desire to punish Russia for what it is doing, several of the usual suspects are dangerously prolonging this war. Billions of dollars are pouring into our defense industries, which, as always, have a profit incentive to keep things going. Though we are confronted with horrifying pictures of mangled buildings and bodies, they are “over there” somewhere. For most Americans the assumed horrors of war are academic, while in fact they are all too real for those involved. The huge cost of war in lives lost, human suffering, and economic and property damage are rarely given the weight they deserve as we cheer on the brave Ukrainians fighting to the last Ukrainian. Those very well-meaning Americans thanking our soldiers for their service rarely have any idea what we have asked of them to go and fight in other people’s wars.

So our emotions cry out to smash and punish the Russians. But how it ends will have a large impact on conditions in the world ten or twenty years from now. Our standard of living and the degree of security and cooperation in the world—particularly with Russia—will depend on when and how this war ends. We need to temper our emotions and engage our minds.

Our wars in Afghanistan and Iraq, for example, looked quite different at the end than they did as we undertook them. Ukraine is ranked only slightly less corrupt than Russia. “Transparency International” It is much more difficult doing business there than in Russia (Ease of doing business ranking lists New Zealand at the top, Russia 29 and Ukraine 64). “World Bank Ease of Doing Business index”  Thus it is a small wonder that John Hudson wrote in today’s Washington Post that: “Flood of weapons to Ukraine raises fear of arms smuggling Vague U.S. assurances spark concern about lost military equipment in Ukraine, a longtime hub of arms trafficking.” “Ukraine weapons trafficking”

It is too late to point fingers and ask why we did not press Ukraine and Russia to the bargaining table six months ago or four months ago. It is in our self-interest and the interest of Europe and the world to do so now.

Afghan update

The heart-breaking attack on Ukraine by Russian troops has distracted our attention from the tragic misrule (or failure to properly rule) of the Taliban in Afghanistan. An Afghan official I worked with over the last twenty years, who was able to leave Kabul on one of those final fights at the end of August 2021, sent me the following report on conditions in Kabul. I am not revealing his name for his safety and the safety of his family.

“The economy is getting worse day by day, businesses facing many problems, shopkeepers complain less sales, poor people hardly find one time meal, hunger is increasing, at DAB [the central bank], the payment system has been stopped, APS, FID and many other depts are paralyzed, they haven’t managed to print new banknotes, girls’ high school still closed, bomb blasts occurred in many mosques recently during Holy Month of Ramadan and only poor civilians killed, and many more problems.

God help people of Afghanistan.“

Indeed. Over the last twenty years Afghanistan gradually developed and strengthened its institutions of government. After toppling the elected government of Afghanistan, my hope, and the hope of the West, was that the Taliban would form an inclusive government that would build on that progress. It hasn’t happened. The new Taliban “government” has not even been able to solidify itself. If it fails, Afghanistan will suffer another (or continuing) civil war.  “Nation building in Afghanistan”

The former Canadian ambassador to Afghanistan, William Crosbie, commented that: “Hope is certainly receding that the TB will work towards a political settlement to make its military takeover a lasting peace. Our argument to those neighbouring countries and non-Western partners (e.g. China) has been that the TB regime is not sustainable as a Pashtun, TB clique relying on fear.  Quite apart from the economic devastation of a non-functioning government and private sector, the ethnic and tribal rivalries and other extremist groups will resort to the tactics that the TB used so effectively. And they will prove just as destructive.” 

God help the good people of Afghanistan.

What future Russia do we want?

It is not possible to see the pictures of dead bodies (320 and counting) and to hear the reports of the barbaric massacre of citizens of Bucha or the recent rocket attack on a train station in Kramatorsk that killed 50 and injured 98 civilians without feeling outrage towards the Russians and sorrow for the people of Ukraine. Understandable though such feels are, it is not a good state of mind in which to plan for a better future.

In a face-to-face interview with the Editor in Chief of The Economist in Kyiv on March 25, President Volodymyr Zelenskyin defined victory as: “being able to save as many lives as possible…because without this nothing would make sense.”  “The Russian war in Ukraine”  In this spirit, compromises will be made by both sides and a peace deal will be signed. It is for Ukraine to decide what is acceptable to them. But what should we wish for and— via various sanctions around the globe against Russia—what should we press for?

Our hearts cry out for revenge and punishment for Russia’s aggression and inhumane and barbaric behavior. But we would be much wiser to rely more on our minds than our hearts in fashioning the future. Existing and potentially strengthened sanctions will flatten the Russian economy if not lifted. Reallocating confiscated Russian property (e.g., the Central Bank of Russia’s foreign exchange reserves) for the reconstruction of Ukraine may seem justifiable but is surely illegal and no one should forget the role played by the Treaty of Versailles (providing for German reparations for WWI) in bringing about WWII. “How to stop a new cold war”

Ukraine President Zelensky has already indicated Ukraine’s potential willingness to become politically neutral ala Austria and give up seeking NATO membership. While taking territory by force violates international law, the formal return of Crimea to Russia, which is supported by over 80% of its residents, may well be part of a peace agreement. Should the U.S. and EU oppose such provisions? Should?

There are some, not just the defense industry, which profits from war, who believe that Putin is determined to reestablish the Imperial Russian Empire and must be resisted at all costs. We should fight Russia “to the last Ukrainian.” “How to stop a new cold war”  See the following interesting interview of Noam Chomsky: “Chomsky-US policy toward Putin assures no path to de-escalation in Ukraine”

Others, myself included, take seriously Putin’s (and Boris Yeltsin before him) pleas for a European security architecture in which Russia feels comfortable. We believe that America’s Monroe Doctrine is applicable to all major powers. Our true interest is in a peaceful Russia that is a comfortable member of the European continent ten or more years into the future. We should encourage Ukraine’s peace negotiations and our own sanctions and defense policies in that direction. Our defense industries have profited enough from our never-ending wars. Enough is enough. “Economic sanctions”

And we must never forget that our own flourishing rests, in part, on our reliable commitment to the rule of law. Why are we sanctioning Russians living outside of Russia and confiscating their yachts when they have not been convicted of any crimes? “The American Civil Liberties Union helped scuttle a bill this week that would have enabled the Biden administration to liquidate Russian oligarchs’ assets and turn the proceeds over to Ukraine.” “ACLU Ukraine-Russia-Oligarchs”

Our news media are confronting us daily with Russia’s atrocities (facts Russians are unable to see in their own country). It is hard not to want to strike out against Russia in kind. Such short-sighted reactions are not in Ukraine’s, nor the world’s, long run interest. We are, and should behave, better than that. “Ukraine itself is proposing terms that, if backed by a combination of U.S. and European sticks and carrots, stand some prospect of success.” “What can the US really do to protect civilians in Ukraine”  We should not let our short sighted, emotional, anger towards Russia and our military industry get in the way.

The good and evil in us all

Listening to political dialog in the U.S. has become very painful and disheartening because there is no dialog. The Republicans and Democrats simply hurdle nasty insults at each other. They are enemies rather than fellow citizens with different views. Serious policy issues and challenges do not receive the serious debate they need. The atmosphere is ugly.

Russia’s unjustified and increasingly barbaric attacks on Ukraine is another example of the worst in mankind.  Following four weeks of Russian attacks on Mariupol, Bucha, and other cities the destruction of lives and property is clearly visible. While it may take a while to sort out the truth of who did what, “President Biden on Monday joined the chorus of world leaders who have said reports of mass killings in the Kyiv suburb of Bucha constituted a ‘war crime,’ vowing to hold Russian President Vladimir Putin ‘accountable’ for the apparent atrocities in Ukraine.” “Bucha Biden sanctions Russia Ukraine”  However, it is natural, and appropriate, that we honor the bravery of Ukrainians defending their homeland and despise the savagery of the Russians invading it.

These understandable reactions do not excuse our damaging loss of our ability to differentiate among people, judging each other individually. Removing Russian performers from western stages may seem a childish reaction–OK it is a childish reaction–but it reveals a dangerous predisposition of caveman behavior. What are we to make of the removal of compositions of Pyotr Ilyich Tchaikovsky from current orchestral programs? He has been dead for more than a hundred years. Or as tweeted by Edward Luttwak: “The U of Milano cancels Dostoevsky course; Poland cancels Mussorgsky, Shostakovich & Stravinsky…. Actual thought is needed.”

Not all Russians living in Russia disapprove of their country’s war in Ukraine (hearing only official Russian propaganda) but many do according to those now leaving Russia in fear or disgust. We are told that many of the young Russian soldiers sent into Ukraine didn’t know why they were there and are not happy fighting their Ukrainian cousins.

Seeing such behavior has been very disheartening.

But man left the caves with admirable instincts as well. Helping their fellow man in need contributed to their own survival as well. The incredible welcome of 4 million Ukrainians in Europe in one month is breathtakingly heartwarming. Though I am embarrassed that the admission of Afghan and other war refugees has not been as easy or welcoming. My friend Tom Palmer continues to help fleeing Ukrainians relocate to Poland as do many others. A recent J Street webinar interview of Naomi Steinberg from the Hebrew Immigrant Aid Society about their work assisting Ukrainian immigrants was equally heartwarming. She noted that in earlier days HIAS helped Jews flying from persecution. Today, she said: “We are helping refugees, not because theyare Jewish but because we are Jewish.”

The fear and loathing of “others” and the desire to help those in need are both impulses that helped cavemen survive. But we no longer live in caves and our survival and flourishing requires that we tame the first instinct and encourage the second one.