Crony Capitalism

The standard of living of the median income family in the United States has risen to heights that could not have been imagined just a hundred years ago ($73,891 in 2017). All other industrial countries have had similar experiences.  “As measured in 2011 U.S. dollars, the global income per person per day in the first year of the Common Era stood at $2. That’s also where it stood when William the Conqueror set sail in 1066 to claim the crown of England…. In 1800, the average income was $2.80. In the 18 centuries that separated the emperorship of Caesar Augustus and the presidency of Thomas Jefferson, per capita income rose by less than 40 percent….

“Then industrialization changed everything. Between 1800 and 1900, GDP per person per day doubled. In other words, income grew over twice as much in one century as it had over the preceding 18 combined. By 2016, the number…in the United States… stood at $145…. In other words, global and American standards of living rose twelve-fold and 24-fold respectively over the course of the last two centuries….  These and other fascinating data are presented by Marian Tupy in: https://humanprogress.org/article.php?p=1906

How was this miracle possible? It resulted from each worker on average becoming dramatically more productive and being able to trade his or her products for the other goods and services he or she wanted. But what was the source of such an amazing increase in productivity?  Workers developed and or were provided with tools and equipment (capital) that made it possible.  These machines, cooperative production structures and worker skills (so called “human capital”) were developed because “capitalists” creating and investing in them had protected property rights in them and shared in the profits from their use. In short, it was because people had an incentive to invent and learn that was lacking in feudal or earlier social structures.  Bill Gates, for example, became a billionaire from selling us the computer products and services that Microsoft invented and produced. We happily paid Microsoft these billions for its tools that greatly enhanced our own productivity in both production, household management, and play. In the win-win world of private property and trade, we gained from Microsoft as much or more than Bill Gates did.

Interestingly, there is more to this story. As industrialization took hold, and the incomes of the lower and middle classes rose, income inequality declined. The monopolies of feudal Lords were eroded.  More recently “global inequality is declining as developing countries catch up with the developed world. Between 1990 and 2017, argues Branko Milanovic from City University of New York, the global Gini coefficient, which measures income inequality among all of the world’s inhabitants, decreased from 0.7 to 0.63” i.e., became more equal (zero equals perfect equality). [Tupy]

In the U.S. after years of gradual decline, the Gini coefficient rose from 0.35 in 1979 to 0.49 in 2018, slightly less than China’s (0.47). What is going on? Though still more equal than the world on average, why is income distribution widening modestly over the last forty years in the U.S.?

A widely held explanation is that industries have become more concentrated and have exploited their quasi monopolistic market power to extract noncompetitive, i.e. monopoly, rents. Two hundred forty-four years ago, Adam Smith wrote that, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” [Wealth of Nations Book I, Chapter X.] What prevents such conspiracies from succeeding is the competition from other firms seeking to exploit these attractive prices. When faced with competition, a person or firm can only profit by satisfying customers better than the competition.

But why have American firms, and those of many other industrial countries, become more concentrated and protected from competition?  Largely via state capture. As he reluctantly increased U.S. military spending as the “Cold War” heated up, President Dwight D. Eisenhower worried that it would be hard to avoid a mutually self-serving relationship between the government paying the bills and the defense industry supplying the goods. In his famous Farewell Address on January 16, 1961, Eisenhower warned that: “In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes.”

When government becomes involved or increases its involvement with private firms, the door (and the revolving door) is opened for firms to exploit the relationship to their advantage. It is not just the military-industrial complex (or the military-industrial-congressional complex as Eisenhower stated it in the first draft of his Farewell Address) that enjoys government favor and protection. President Trump’s tariffs on imported steel and aluminum are not for the benefit of American’s generally but are protectionist favors to America’s uncompetitive steel and aluminum firms. Protectionism is just another word for corruption.

Some products and industries need to be regulated to protect consumers and insure honesty and transparency. But larger firms increasingly accept, if not welcome, overly burdensome regulations because they are better able to devote resources to complying with them and thus absorbing their cost than are smaller firms. Such regulations protect them from competition from new, smaller firms. Professional licensing has increasingly been used to protect professionals from hairdressers to real estate agents to lawyers from competitors thus enjoying higher fees than would result in a more competitive market for their services.

The quasi monopoly rents firms are able to extract as the result of government protection against competition grow with the size of government involvement with the economy. The increase in income inequality (a reflection of shrinking competition) of recent decades (the increase in America’s Gini coefficient) have followed the large increases in the size of government, whether measured by expenditures, employment, or regulations.  https://wcoats.blog/2008/09/06/how-to-measure-the-size-of-government/

“• In 1900 the federal government consumed less than 5 percent of total output.

  • In 1950 the federal government consumed roughly 15 percent of total output.
  • In 1992 the federal government consumed almost 25 percent of total output.”

https://fee.org/articles/the-growth-of-government-in-america/

Bernie Sanders, a self-proclaimed Socialist, and Elizabeth Warren, a self-proclaimed defender of capitalism (I am not joking), argue that to fix industrial concentration, to prevent or unwind monopolies, the government needs to be bigger and more active in the economy. This is backward in terms of logic and experience. I don’t question that overwhelmingly most public servants work for the government out of the desire to serve the public. However, the interface between government and the private sector creates opportunities and incentives (resisted by most I am sure) for corruption. By corruption I mean the exploitation of government regulations and contracts to reduce market competition for (i.e. to protect) established firms.

Political lobbying by firms and trade organizations can provide useful industry input to congressional legislation or executive rule making but it is generally the prospective of established firms rather than of potential competitors or the general public. “Since the 1970s, there has been explosive growth in the lobbying industry, particularly in Washington DC.  By 2011, one estimate of overall lobbying spending nationally was $30+ billion dollars. An estimate of lobbying expenses in the federal arena was $3.5 billion in 2010, while it had been only $1.4 billion in 1998.” “Lobbying_in_the_United_States – A_growing_billion_dollar_business”

In 2010 the Supreme Court ruled in a 5-4 decision in Citizens United v. Federal Election Commission, “that the free speech clause of the First Amendment prohibits the government from restricting independent expenditures for political communications by corporations, including nonprofit corporations, unions and other associations.” “Citizens_United_v._FEC – Super_PACs”  This opened the door to direct corporate and union “donations” to political candidates and parties, providing a powerful tool in achieving government cooperation with what these groups consider their special interest.

The competitiveness, and whatever the lack of it contributes to income inequality, of American businesses will not be served by expanding the government’s role in the economy, quite the opposite. Competition is rarely stifled by natural market phenomena. Rather it is much more often blocked or restrained by government regulations that favor the established, dominant firms, who are able to gain the government’s favor. The political forces of expanding government regulation and interference in the economy promote every increasing state capture by dominant firms.  Crony capitalism will be the death of the real thing if it is not continuously resisted. As we should all well know, the price of liberty is eternal vigilance.

The Basis of American World Leadership

Since the end of World War II, the United States has played a disproportionately large role in guiding world affairs. It has unquestionably been the most powerful nation on earth. Its dominance reflects a number of factors including economic and military strength. But in addition to these, most countries have been happy, or at least willing, to accept American leadership because it was largely seen as guided by broad principles of fair play and the rule of law.  American leadership was the least of evils. The United States has benefited a great deal from this good will.

But as the old saying goes: power tends to corrupt, etc.  Being able often to bend other countries to our will (as long as others still saw us as driven by widely shared principles of fair play), the U.S. increasingly exploited this influence to encompass policies or actions others were not so happy to comply with.  To take a fairly recent example, the wisdom of President Trump’s withdrawal from the Joint Comprehensive Plan of Action (JCPOA or the Iran Deal) to stop Iran’s development of its nuclear capabilities for at least ten years was not shared by the other parties to the agreement (the P5+1–the permanent members of the UN Security Council: the United States, the United Kingdom, Russia, France, and China, plus Germany–and the European Union).  All signers of the agreement except the United States continued to abide by it. But the U.S. dollar is the primary currency used for international payments and the U.S. threatened to punish (cut off from the use of the dollar and trade with the U.S.) any country that did not observe its unilateral trade sanctions on Iran. The non-U.S. signers attempted to set up alternative ways for paying for trade with Iran that did not use the dollar but found the reach of American threats hard to avoid. On January 5, 2020 Iran announced that it would stop complying with the agreement and resume its nuclear development program. It is not clear why Trump considers this better for American security than the (at least) ten-year suspension in the Iran Deal he tore up.  See: Economic-Sanction

President Trump has also used up a lot of “good will capital” with his Trade wars. He began by withdrawing the U.S. from the 12-member Trans-Pacific Partnership or TPP (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the United States). The TPP further reduced tariff and non-tariff restrictions on trade, while expanding and modernizing coverage for the digital world. As, or perhaps more, importantly, the TPP provided a model and positive encouragement to China to adopt Western trading rules as a condition of joining the TPP in the future.  The remaining signatories went forward with a Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which went into effect a year ago with the U.S.

But Trump’s counterproductive trade strategies didn’t stop there by a long shot. In addition to economically harmful tariff protection of inefficient American industries (e.g. steel, washing machines, etc.), Trump has angered many of our friends in Europe, Japan and elsewhere by threatening tariffs in situations that do not seem to be justified by the World Trade Organization’s rules. In the process he is ignoring and weakening the WTO, which has played such an important role in the gradual trade liberalization that has dramatically lifted living standards around the world following WWII. He even tore up the North American Free Trade Agreement (NAFTA) and replaced with a new agreement that is not unambiguously better.  See: The-shriveling-of-US-influence

But once bullies taste their power, their appetites tend to grow. While elected with promises to end our forever wars and reduce our military commitments around the world, Trump has done neither.  This is not the occasion for exploring why (I don’t doubt Trump’s sincere desire to achieve both of those goals, but his ignorance of history seems to have made him vulnerable to flipflopping in the face of pressure from the neocons, such as Secretary of State Pompeo, he has surrounded himself with). Rather it is to review his rapid descent into a major bully, to the detriment of American influence and security.

On January 3, President Trump ordered the assassination of Maj. Gen. Qassem Soleimani, the leader of Iran’s paramilitary Quds Force in retaliation for an attack a week earlier on an Iraqi air base in Kirkuk that killed a U.S. civilian contractor and injured four U.S. soldiers and two Iraqis.

The drone that launched two missiles that killed Gen. Soleimani at the Baghdad International Airport also killed the Iraqi leader of the PMU, Abu Mahdi al-Muhandis, a close Soleimani associate, and eight other Iraqis.  According to the Pentagon, “General Soleimani was actively developing plans to attack American diplomats and service members in Iraq and throughout the region,”  According to Adil Abdul-Mahdi, Prime Minister of Iraq, Soleimani was on his way to see the PM in order to discuss moves being made to ease the confrontation between Shia Iran and Sunni Saudi Arabia.

The White House stressed that Soleimani’s planned attack was “imminent” thus justifying it without having to first inform Congress. Bruce Ackerman argues that Trump’s failure to obtain Congressional authorization for the attack justifies a third article of impeachment.  See: Trump-war-against-Iran-impeachable-offense  Iraqi PM Mahdi claimed that the attack on Iraqi soil was a violation of Iraqi sovereignty and a violation of the agreement between the U.S. and Iraq for stationing American forces in Iraq. Though Congress was not informed in advance, the Israeli government was told of the planned attack, according to some reports. In these circumstances, it is very difficult to know which reports are authentic and which are deliberate (or sometimes inadvertent) fake news.

In order to assess the likely impact of all this on our standing and support in the rest of the world, I like to evaluate American actions from how they might seem standing in someone else’s shoes. How would Americans react, for example, if our government had invited, say, French troops for training in the U.S., and the French Army blew up a Russian general on his way to meetings at the UN (or reverse the roles between the French and the Russians) without our permission?

But this note is not about whether this assassination was legal or good policy. For that see the following article from The Economist: Was-Americas-assassination-of-Qassem-Suleimani-justified?  It’s about the rise of American bullying in the world and its impact on our standing and ability to influence friends and enemies in ways that serve our national interest. What followed in the days after Soleimani’s assassination is mind boggling.

Keep in mind that following America’s invasion of Iraq that started on March 20, 2003, the U.S. and its coalition partners returned sovereignty to the Iraqi government at the end of June 2004. I was there as part of the Coalition Provisional Authority (I was the Senior Monetary Policy Advisor to the Central Bank of Iraq reporting to the U.S. Treasury). As we boarded helicopters to waiting planes at the Baghdad International Airport (of recent fame) many of us recalled images of the last American helicopter lifting off the roof of the American Embassy in Saigon when the U.S. ended its participation in the Vietnam War. Over the next seven years American and coalition troops remained in Iraq under terms agreed to in a Status of Forces agreement with the Iraqi government.  Following the ups and downs of troop surges and draw downs American forces were kicked out after Blackwater security contractors killed 17 Iraqis in Nisour Square in 2010.

With the rise of the Islamic State (ISIS) American troops were invited back under new, less formal terms. “Instead, the current military presence is based on an arrangement dating from 2014 that’s less formal and ultimately based on the consent of the Iraqi government, which asked the parliament on Sunday to pass urgent measures to usher out foreign troops…. ‘If the prime minister rescinds the invitation, the U.S. military must leave, unless it wants to maintain what would be an illegal occupation in a hostile environment,’” said Ramzy Mardini, an Iraq scholar at the U.S. Institute of Peace.  Getting-us-troops-out-of-iraq-might-not-be-that-hard-say-experts

And how did POTUS, the great negotiator, respond to the Iraqi Parliament’s vote: “President Donald Trump threatened to impose deep sanctions on Iraq if it moves to expel U.S. troops…. ‘We’ve spent a lot of money in Iraq,’ Trump told reporters aboard Air Force One as he returned to Washington after spending the holidays at his Florida resort, Mar-a-Lago. ‘We have a very extraordinarily expensive air base that’s there. It cost billions of dollars to build. … We’re not leaving unless they pay us back for it.’” Trump-threatens-iraq-sanctions-expel-us-troops

However, the Pentagon promptly announced that it was repositioning its troops in preparation for withdrawing them. Reuters released a copy of a letter on US Department of Defense letterhead addressed to the Iraqi Defense Ministry by US Marine Corps Brigadier General William H. Seely III, the commanding general of Task Force Iraq, which read in relevant part: “In deference to the sovereignty of the Republic of Iraq, and as requested by the Iraqi Parliament and the Prime Minister, CITF-OIR will be repositioning forces over the course of the coming days and weeks to prepare for onward movement…. We respect your sovereign decision to order our departure.”  reuters.com/article/

Within hours, the Pentagon stated that no decisions had been taken and that the letter had been sent by mistake. “U.S. Army General Mark Milley, chairman of the Joint Chiefs of Staff, said on Monday that a leaked letter from the U.S. military to Iraq that created impressions of an imminent U.S. withdrawal was a poorly worded draft document meant only to underscore an increased movement of forces.”  Iraq-security-pm  Or maybe they forgot to consult POTUS or maybe he changed his mind.  Are you confused yet? See: Amid-confusion-and-contradictions-Trump-white-house-stumbles-in-initial-public-response-to-Soleimanis-killing

In response to Iran’s threat to retaliate for killing General Soleimani “Trump tweeted on Saturday that the United States has targeted 52 sites for possible retaliation, including “some at a very high level & important to Iran & the Iranian culture.” The outcry over this clear war crime was immediate. “Secretary of Defense Mark Esper… put himself at odds with President Trump on Monday night by definitively telling reporters that the U.S. military will not target cultural sites inside Iran on his watch, even if hostilities continue to escalate in the wake of the U.S. drone strike that killed Maj. Gen. Qasem Soleimani at the Baghdad airport last week. ‘We will follow the laws of armed conflict….’” See: Esper’s-split-with-trump-over-targeting-iranian-cultural-sites-is-a-nod-to-the-laws-of-armed-conflict  Trump quickly backed down. Perhaps discussing these decisions with his staff before twitting them would be a good idea.

These are but a few examples of a bully on the loose. “Foreign Minister Mohammed Javad Zarif told NPR that he was scheduled to deliver an address when the U.N. Security Council meets Thursday [Jan 9] but that he was told the State Department had informed the U.N. that there was not enough time to process his request for a visa, which he said he first submitted 25 days ago.” Iran-foreign-minster-javad-zarif-denied-visa   Under the 1947 U.N. headquarters agreement, “the United States is generally required to allow access to the United Nations for foreign diplomats.”  Once again, we are violating our commitments. Iran is demanding that all future meetings of international bodies be held outside the US.  The IMF and World Bank are also headquartered in the U.S.

The American and coalition partners now in Iraq are there to support its fight against ISIS. This benefits us, our partners, and Iraq. The traditional tools of diplomacy (persuasion), rather than the threats of a bully, would ultimately be more effective.  The respectful consideration traditionally given to the views and positions of the United States in international bodies –such as global satellite spectrum allocation–global warming agreements–security agreements–or any other multilateral agreement in which we have an interest, is rapidly vanishing.  Assuming that the Trump administration can de-escalate the current tensions with Iran, something quite possible with sufficient diplomatic skill–see: The-soleimani-killing-could-draw-the-us-deeper-into-the-mideast-but-it-doesnt-have-to–our general loss of good will is the real cost of excessive bullying and it will hurt us considerably.

 

Goodbye 2019 (and good riddance)

As 2019 and the decade of the 20 teens comes to a close, the impeachment of Donald Trump, only the third President impeached in the history of the United States, dominates the headlines.  My hope (I am a crazy optimist) and wish for my country’s sake is for Trump’s trial in the US Senate to adopt rules that most everyone will see as fair. That means giving Trump every opportunity to state and defend his case and the opposition every opportunity to state theirs. Some Republicans have denied the evidence presented in the House investigation that Trump offered favors (White House visit and military aid) to Ukraine President Zelensky if he would investigate the activities of Trump’s political opponent’s son in Ukraine. Other Republicans, such as Congressman Will Hurd, accepted the evidence but argued that the offence was not sufficiently serious to justify impeachment. Congressman Hurd’s judgement reflects the fact, I suppose, that political standards have sunk so low that we now accept that every President lies to us and abuses his authority (see the Washington Post’s Afghanistan Papers https://www.washingtonpost.com/graphics/2019/investigations/afghanistan-papers/documents-database/).  I think it would be a mistake to accept and normalize such behavior.

Here are some of the key issues of this year (at least those I wrote about) and a few of my blogs/articles about them:

Health care insurance

Given medical costs must be paid by someone (the recipient of the care, the tax payers, insurance premiums, etc.). Insurance shares the cost (the lucky who are well help pay for the unlucky who are sick). But how services are paid for (what and how much is covered by insurance, etc.) will also influence the services provided and their cost.

https://wcoats.blog/2019/08/01/health-care-in-america-2/

Trade war and protectionism

President Trump has torn up the rule book for negotiating freer and freer trade. The result so far has left us worse off.  Fed economists Aaron Flaaen and Justin Pierce found “that tariff increases enacted in 2018 are associated with relative reductions in manufacturing employment and relative increases in producer prices.” https://www.federalreserve.gov/econres/feds/files/2019086pap.pdf

Trump pulled out of the progressive Trans Pacific Partnership (TPP), negotiated a “new” North American Free Trade Agreement (whatever he calls it) that is worse than the existing NAFTA except for the new parts taken from the TPP, worsened trade with China (so far–see Federal Reserve report above), alienated potential partners who would have happily joined us in negotiating with China, and angered the EU with whom he wants a new trade agreement. His potentially illegal uses of tariffs have introduced government protection of favored industries increasing crony capitalism. He continues to weaken the World Trade Organization (WTO), which has provided the bases of increasingly free rule-based trade since WWII. The growth in trade over the last 70 years has helped lift most peoples of the world out of dire poverty.  The number of people living in extreme poverty fell from 2.2 million in 1970 to 0.7 million in 2015.

https://wcoats.blog/2019/11/18/protecting-jobs/

https://wcoats.blog/2019/08/05/econ-101-currency-manipulation/

https://wcoats.blog/2019/06/07/the-sources-of-prosperity/

Foreign wars and policy

President Trump rightly condemned our forever wars and promised retrenchment. I agree with his assessment of our excessive military aggressions and deployments abroad, but for one reason or another he has failed to deliver. The New York Times reports that: “Under President Trump, there are now more troops in the Middle East than when he took office.” https://www.nytimes.com/2019/10/21/world/middleeast/us-troops-deployments.html

Trump seems to act on impulse without serious consultation with his National Security Council, State Department or Pentagon, decimating our diplomacy. His periodic insults to our foreign allies haven’t helped either.  Nor have his love affairs with Putin, Kim Jon-un, and Xi Jinping (do you see a pattern here?).  Diplomacy is the alternative to military adventures for serving our national interests abroad. Trump has failed to fill important State Department positions and seems to pay little attention to his NSC and State Department briefings. Having removed two ambassadors to Ukraine in one year (this year) because his personal lawyer, Rudy Giuliani, thought they were insufficiently loyal to Trump, the U.S. currently has no ambassador in Ukraine.  Trump’s stewardship of our international relations has been a disaster.

Then there was Trump’s intervention in Military justice: From the Military Times: “President Donald Trump’s decision to grant clemency in the cases of three military members tangled in war crimes cases raises questions about whether troops are being given a green light to disobey the rules of law…

Army 1st Lt. Clint Lorance, convicted of second degree murder in the death of three Afghans, was given a full pardon from president for the crimes. Army Maj. Mathew Golsteyn, who faced murder charges next year for a similar crime, was also given a full pardon for those alleged offenses.  Special Warfare Operator Chief Edward Gallagher, who earlier this fall was acquitted of a string of alleged war crimes while being convicted of posing with a dead Taliban member, had his rank restored to Chief Petty Officer by the president.”  “We-shouldnt-forget-what-whistleblower-seals-told-us-about-eddie-gallagher”  What is Trump thinking? What does he have in mind?

https://wcoats.blog/2019/12/14/nation-building-in-afghanistan/

https://wcoats.blog/2019/05/03/oslo-the-play/

https://wcoats.blog/2019/03/11/is-rep-ilhan-omar-anti-semitic/

Monetary policy and the international monetary system

While monetary policy has been relatively good for a floating exchange rate system, asset price bubbles and international currency flow imbalances persist and, in my view, are unavoidable. We need to adopt a hard anchor for the value of the dollar.  The shockingly large fiscal deficits (over one trillion dollars per annum in 2019) with a fully employed economy, when we should be running a budget surplus to provide room for deficits during the next downturn, are building serious risks for the not so distant future. Trump’s attacks on the Federal Reserve’s monetary policy will make managing those risks more difficult.

https://wcoats.blog/2019/01/25/central-banking-aware/

https://wcoats.blog/2019/03/24/central-banking-award/

https://wcoats.blog/2018/05/01/free-banking-in-the-digital-age/

https://wcoats.blog/2019/07/24/whither-libra/

https://wcoats.blog/2019/04/16/returning-to-currencies-with-hard-anchors/

Information and the Internet

The Internet has had a profound impact on how we live and do business. It is hard to imagine a day without our mobile phones. But like all new tools and technology it opens the door to new ways of doing harm as well. This is currently most conspicuous with the spreading of fake news and learning anew what news sources to trust and not trust.

https://wcoats.blog/2019/12/01/new-tools-require-new-rules/

Domestic politics and Trump

In my discussions of the Trump administration I have tried to focus on policies, some of which I like and some I don’t, rather than on Donald Trump himself, about whom I like nothing. The following focuses on Trump.

https://wcoats.blog/2019/12/27/a-letter-to-the-republican-party/

https://wcoats.blog/2019/11/20/to-whom-or-what-am-i-loyal/

My friend Jonathan Rauch explains the limitations of my efforts to focus on policies in an article well worth reading. “Believing is belonging,” https://www.nationalaffairs.com/publications/detail/rethinking-polarization

Modern Society and its challenges

If we move away from personalities and dig deeper into our human motivations that inform policy design and choices, we can’t escape the role of incentives at the center of much of the analysis of my profession–economics. I have and will continue to explore my thoughts on human nature and the role of incentives, institutions, and customs in our search for how best to live free with others seeking their own goals in our society.

https://wcoats.blog/2019/08/10/where-does-the-desire-to-explore-come-from/

https://wcoats.blog/2016/11/22/globalization-and-nationalism-good-andor-bad/

https://wcoats.blog/2016/12/31/my-political-platform-for-the-nation-2017/

Happy New Year

 

A Letter to the Republican Party

As a no doubt futile outlet for my frustration with the Republican Party, I have been enclosing the following letter in the return envelops they keep sending me with the request for financial support.

Dear Members of the Republican National Committee,

The Trump administration has had some positive achievements domestically (tax reform, regulatory reforms and court appointments). However, its continued increase in government spending (annual deficits of one trillion or more when the economy is at a cyclical peak) is wrong and unthinkable for Republicans. President Trump’s weakening of America’s support for and role in international organizations, abandonment of the Iran Deal and anti-nuclear proliferation treatises, and war on trade, are bad for America and the world we live in.  President Trump’s divisive language is unbecoming of the leader of a great nation, a nation of immigrants. The Republican Party has failed to stand up for these principles and to criticize the President for these offenses.

Even more concerning is your acquiescence to President Trump’s lying, immorality, and corruption. His clearly documented attempted bribery of the President of Ukraine for personal gain is damaging American security interests. His obstruction of Congress’s execution of its constitutional duties is very concerning. These and other acts cross the sadly low bar of acceptable behavior.

For the sake of our deeply divided country, the Senate owes us all an impeachment trial that any honest person will consider fair. President Trump must have every opportunity to explain and defend his behavior and those challenging it must have every opportunity to make their case. President Trump obstructed the House’s efforts to obtain firsthand evidence of the President’s attempt to use his executive authority for personal gain. It is essential that the Senate permit the testimony of those blocked in the House by the President (Bolton, Mulvaney, Mike Duffey).

With your silence you have abandoned me and my continued commitment to limited and sound government.  I cannot continue to support the party until you stand up and again defend our principles.

Sincerely,

Warren Coats

Nation Building in Afghanistan

Ambassador Crocker rightly calls the American role in “rebuilding” Afghanistan, “complicated.”  “I-served-in-Afghanistan-no-its-not-another-Vietnam”  I first met Ambassador Crocker in January 2002 when he was servicing as America’s chargé d’affaires to Afghanistan. We met in the American Embassy that had just been reopened after a decade or so of abandonment.  A decade’s worth of dust still covered the embassy floor several inches deep. Its newly returning employees were sleeping in cots along the hallways.

Following al-Qaeda’ 9/11 attacks in the U.S., I supported NATO’s UN sanctioned attack on Afghanistan’s Taliban regime as a necessary measure to deprive al-Qaeda of its sanctuary there. I wept when we abandoned that objective unfinished in order to pursue another war in Iraq, which I strongly opposed. The Washington Post just published Defense Department documents evaluating America’s 18-year war in Afghanistan and finding it a costly failure. https://www.washingtonpost.com/graphics/2019/investigations/afghanistan-papers/afghanistan-war-nation-building/

“Former defense secretary Jim Mattis defended American efforts to rebuild Afghanistan as part of the 18-year-old U.S. war there, saying Friday that ‘we had to try to do something in nation-building, as much as some people condemn it, and we probably weren’t that good at it.’  Speaking to journalists at The Washington Post, he cited an increase in the number of Afghan women who are educated, the development of Afghan diplomats and the inoculation of civilians against disease.

“Mattis, who oversaw the war as the four-star head of U.S. Central Command from 2010 to 2013, said violence in Afghanistan is ‘so heartbreaking that it can blind you to the progress,’ and he acknowledged that the United States made a strategic mistake by not paying enough attention to the country as the administration of George W. Bush launched the war in Iraq in 2003.  ‘That we didn’t do things right, I mean, I’m an example of it,’ Mattis said, recalling that as a one-star general, he was pulled out of Afghanistan in the spring of 2002, promoted and told to prepare for war in Iraq.

“’I was dumbfounded,’ he said. ‘But we took our eye off of there.’” “Mattis-Afghanistan-papers-we-probably-werent-that-good-nation-building”

But should we have remained as military occupiers and then as peace guarantors for another 18 years and counting?  I have spent a lot of time in Afghanistan over those 18 years, most intensively as a member of the IMF team addressing the Kabul Bank scandal from 2010-14 (22 visits after that first one in January, 2002).   “The Kabulbank Scandal–Part I” Cayman Financial Review, January 2015  “The Kabulbank Scandal–Part-II” Cayman Financial Review, April 2015  “The Kabulbank scandal–Part-III” Cayman Financial Review, July 2015

I have worked with many wonderful, mainly young, patriotic Afghans and have grown to care a great deal about their conditions and their future. We (the U.S., IMF, World Bank, EU) have a lot to teach them about the institutions of capitalism and they have been very eager to learn. However, the United States has rarely been very good at “building” modern nations that it conquered militarily.  Our Generals and Ambassadors, who rotate in and out every two to three years, rarely understand the cultures and histories they are trying to deal with.  With our military on the ground it is too easy to attempt to impose our institutions on societies unfamiliar with them without more patiently growing more modern institutions from what is in place that are thus better adapted to their traditions and thus more likely to function successfully.

Nation building at the point of a gun has not and is unlikely ever to work for us or for them. https://wcoats.blog/2009/11/16/afghan-national-army/.  https://wcoats.blog/2012/10/23/our-unsupportable-empire/.

My hope for the future of Afghanistan rests with its young, dedicated and increasingly well-educated young people. Our advice can be valuable, especially if filtered and adapted by Afghans themselves. After centuries of relative isolation, the modern world of the Internet, offers them the knowledge of the world. We need to get our troops and our billions of corrupting dollars out of their way.

Paul Volcker, RIP

Paul Volcker was a man of strong convictions, including a commitment to sound money https://wcoats.blog/2017/10/14/sound-money/.  It surprises me that in 1971 he urged President Nixon to end the United States’ commitment to maintaining the price of gold to which most countries had fixed the exchange rates of their currencies. However, he led the Federal Reserve in ending the inflation that followed.

I first met Paul Volcker while seconded by the International Monetary Fund to the Board of Governors of the Federal Reserve in Washington. During that year (1979) I reported to my former U of Chicago classmate, David Lindsey, while working with another UC classmate, Tom Simpson, in the Capital Markets Department in the Research and Statistics Division (it’s a small world).

At the time Mr. Volcker was President of the Federal Reserve Bank of New York. The New York Fed conducted the monetary operations for the entire system (open market operations buying and selling government securities with Federal Reserve member banks–all of whom had offices in New York). Thus, the FRBNY was the most important and powerful of the twelve Federal Reserve Bank making the Board of Governors in Washington a bit jealous. NY Fed President Volcker had recently taken some decision with regard to “offshore” banking located in New York. The Board of Governors in Washington thought that Volcker had not properly consulted them, so they ordered him to come to Washington and explain himself (and get slapped on the wrists).  My boss, David Lindsey, allowed me to attend that board meeting, sitting quietly at the back of the room.

Cigar smoking Volcker stands 6’7”.  G. William Miller, Chairman of the Board of Governors at that time was a nonsmoker standing something like 5’6”.  Miller had banned smoking in the Board Room during his tenure, driving smoking governors like Nancy Teeters nuts.  Ms. Teeters was the first female Governor on the Board of Governors. The image of the diminutive Miller trying to dress down the towering Paul Volcker is seared into my memory.

As luck would have it (for Ms. Teeters and for the nation), Paul return a few months later (Aug 6, 1979) to replace Miller as Chairman, cigar in hand. Smoking, and firm monetary policy had returned to the Board of Governors. I was again privileged to sit at the back of the Board room on several more occasions.

Paul immediately changed how monetary policy was conducted. He reigned in the rate of growth of the money supply, focusing on Net Borrowed Reserves rather than the federal funds rate, which shot up to almost 20% for a few months.  Inflation had risen from around 4% when Nixon closed the gold window unevenly to almost 15% (percent increase from a year earlier) in April 1980 before plunging to 2.5% in Aug 1983. It took nerves of steel to allow short term interest rates to climb to almost 20% before turning inflation around.

New tools require new rules?

A hammer can hit a nail on the head, or it can hit you (or your enemy) on the head. Most, if not all, tools have multiple uses, some good and some bad.  Societies adopt rules to promote the beneficial uses of technologies and discourage harmful uses. New tools/technologies necessitate a discussion of what the rules for their proper uses should be. We are now having that discussion for the uses of social media to promote and propagate ideas and information (some true and some false).

Free speech is revered in America for good reason. Like many other aspects of our preference for self-reliance (personal freedom), it requires that we take responsibility for sorting out what is true from what is false rather than giving over that task to government (and whoever leads it at the time). This can be a challenging task.  We must sort out who we trust to help us. Those of you my age will appreciate that we no longer have Walter Cronkite, and Huntley and Brinkley to help us filter real from fake news.

Our commitment to free speech is so fundamental to the character of America that I have written about it a number of times. https://wcoats.blog/2012/09/14/american-values-and-foreign-policy/    https://wcoats.blog/2012/09/15/further-thoughts-on-free-speech/ https://wcoats.blog/2012/09/29/freedom-of-speech-final-thoughts-for-a-while-at-least/

Various social media platforms present us with another new tool and the need to sort out how best to use it. The answer(s) will take the form of social conventions and government regulations. It is important to get the balance right.

Facebook, Twitter, Google, YouTube, Instagram, Tiktok and other platforms do not generate or provide content. They provided a very convenient and powerful means for you and me to share the content we produce. What responsibility should Mark Zuckerberg, Jack Dorsey, Larry Page, Sergey Brin, etc. have for regulating the content we post to their own platforms, which are after all private. As you saw in my earlier blogs on this subject, publishing and broadcasting our words are limited when they endanger or slander others. But these limits do not and should not limit our advocacies for policies and political beliefs as I am doing now.

The big issue today is fake news (out right lies). If you create or repeat lies, you must be responsible for what you do (but we don’t generally punish lying unless under oath). You are allowed, for example, to state on Twitter or Facebook that you believe Obama was born in Kenya despite thorough documentation that he was born in Hawaii. Perhaps you are gullible enough to actually believe it though it is false. But should Facebook and other platforms have a responsibility to block clearly fake news? What if their own biases lead them to block more Democratic Party “fake news”, or vice versa?

As a private company Facebook can more or less do what it wants but it has a strong business/financial incentive to build a reputation of fairness and to provide a platform that attracts as many users as possible. Here are their rules from their website:

“To see the full list and learn more about our policies, please review the Facebook Community Standards.  Here are a few of the things that aren’t allowed on Facebook:

  • Nudity or other sexually suggestive content.
  • Hate speech, credible threats or direct attacks on an individual or group.
  • Content that contains self-harm or excessive violence.
  • Fake or impostor profiles.
  • Spam.”

The debate at the moment is focused on political ads. Facebook has said that it will not fact check political ads and Tweeter has said that it will not run them at all.  A Washington Post editorial stated the issue this way: “Politicians should, for the most part, be able to lie on Facebook, just as anyone else is, and the public should be able to hold leaders to account. But that’s a different question from whether politicians should be able to pay to have their lies spread, based on unprecedentedly precise behavioral data, to the voters who are most likely to believe their lies.”  “Google’s reply has been more nuanced. The company will limit the criteria campaigns can use to “microtarget” ads to narrow audiences based on party affiliation or voter record. The aim is to increase accountability by letting more people see ads….”  “Tech-firms-under-fire-on-political-ads”

No one, thank heavens, wants the government to vet ads for truthfulness. Some facts are obvious and some are less so. The potential danger to free speech is illustrated by Singapore’s “fake news” law.  Singapore claimed that a post by fringe news site States Times Review (STR) contained ‘scurrilous accusations’.  Giving in to the law, Facebook attached a note to the STR post that said it “is legally required to tell you that the Singapore government says this post has false information”.  “Facebook’s addition was embedded at the bottom of the original post, which was not altered. It was only visible to social media users in Singapore.” https://www.bbc.com/news/world-asia-50613341

However, the government should provide the broad framework of a platforms responsibilities.  For example, the U.S. government requires transparency of who pays for ads in print and TV ads. The same requirement should be imposed on Internet political ads. To qualify for Facebook’s say whatever you want in a political ad policy, the candidate being supported should be required to attach his/her name as approving the ad. Limiting the use of micro targeted ads broadens the exposure and thus discipline on truth telling.  According to The Economist: “To the extent that these moves make it harder for politicians to say contradictory things to different groups of voters without anybody noticing, they are welcome. “Big-tech-changes-the-rules-for-political-adverts”

Knowing what sources of news to trust is no trivial matter. Knowing the source is helpful. Rather than fact checking the content of posts, Facebook attaches an easily viewed statement of the source.  Establishing standards for and establishing boundaries between categories of posts sound easier than they really are, but insuring transparency of who has posted something should play an important role. Flagging questionable sources, without changing the content of a post, as Facebook does, is also helpful. I hope that the discussion of the best balance (and not every platform needs to adopt the same approach) will be constructive.

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.

 

 

 

Protecting Jobs

Protecting jobs sounds like a good thing to do (if you don’t think very carefully about what it means). Free markets protect jobs that are performing desired tasks better than someone else can. President Trump’s protection of steel workers’ jobs by imposing tariffs on competing sources of steel (mainly Canada) is protecting a relatively inefficient industry and thus “protecting” a lower standard of living for our country at large. “Protectionism” protects us from innovation and exciting technical changes that we eagerly embrace when offered in the market.

This week’s Economist magazine has an interesting article on the latest economic disruption (known to economists as “creative destruction”).  “Today the latest bonanza is in full swing, but instead of steel and sand it involves scripts, sounds, screens and celebrities.” https://www.economist.com/leaders/2019/11/14/who-will-win-the-media-wars

Movies (cinema or film for the more sophisticated) were only available in movie theaters when I was a kid more than half a century ago and yes they were already talkies (don’t be a smart ass). Then there was TV and we could watch movies there if we could stay up late enough. Cable TV packages greatly broadened the choice of channels.  Then video players and cassettes meant that we could choose what movies we wanted to watch and when.  We used to get CDs from Netflix in the mail.  I think I still have an unreturned diskette somewhere.  Maybe I will frame it so that my grandchildren can marvel at such historic relics.  In 1985 Blockbuster Video opened and we could skip the mail and browse thousands of films for rent.  They filed for bankruptcy in 2010 and the last two stores (in Alaska) closed last year.

“This week Disney launched a streaming service which offers “Star Wars” and other hits from its vast catalogue for $6.99 a month, less than the cost of a DVD. As the business model pioneered by Netflix is copied by dozens of rivals, over 700m subscribers are now streaming video across the planet. Roughly as much cash—over $100bn this year—is being invested in content as it is in America’s oil industry…. This binge is the culmination of 20 years of creative destruction (see Briefing). New technologies and ideas have shaken up music, gaming and now television.” The Economist

We can look at these amazing technical and business innovations in several ways:  1. A lot of jobs were destroyed as newer technologies replaced older ones and the jobs associated with them.  2. Fortunately no one succeeded in “protecting” them and we, the consumers–the targets of greedy profit seeking capitalists, enjoyed the greater benefit of more entertainment, more conveniently delivered and costing less.  3. New jobs were created to provide these new services.

“Disruption has created an economic windfall. Consider consumers, first. They have more to choose from at lower prices and can pick from a variety of streaming services that cost less than $15 each compared with $80 or more for a cable bundle. Last year 496 new shows were made, double the number in 2010. Quality has also risen, judged by the crop of Oscar and Emmy nominations for streamed shows and by the rising diversity of storytelling. Workers have done reasonably. The number of entertainment, media, arts and sports jobs in America has risen by 8% since 2008 and wages are up by a fifth. Investors, meanwhile, no longer enjoy abnormally fat profits, but those who backed the right firms have done well. A dollar invested in Viacom shares a decade ago is worth 95 cents today. For Netflix the figure is $37.” The Economist

Such dramatic disruptions can be painful for some–those whose jobs were lost or whose investments lost value. We need to adopt policies that minimize that pain. But thank God we didn’t try to protect those jobs and share values and the older ways they reflected.

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.

______________________________

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.