Benjamin Netanyahu

The International Criminal Court (ICC) issued an arrest warrant for Netanyahu in November 2024, accusing him of war crimes and crimes against humanity related to Israel’s actions in Gaza, including the alleged use of starvation as a method of warfare and intentionally targeting civilians. 

Netanyahu is now considered a wanted suspect by the ICC, and member states are obligated to arrest him if he enters their jurisdiction. So why is he enjoying dinner with US President Trump? Sadly, the US too often ignores the rules of international relations that we helped establish. In doing so we are diminishing our status in the world community. Lossing friends and becoming more and more isolated is NOT in America’s self-interest.

As of now, Netanyahu has not been tried or found guilty by any international court for war crimes. The legal process would require his arrest, extradition, and a full trial before any conviction could occur. Not only has America failed its obligation to arrest him, we have supported his efforts to eliminate Palestinians (one way or another) from their homeland. America is complicit in these crimes. Our support of Israel’s wars is not compatible with our principles of the rights of each and every person and our generous and well-meaning hearts. Those of us who speak out against these crimes risk punishment by the Trump administration — even the deportation of legal residents who have committed no crimes. If we do not speak out against these horrors, we must accept some blame for them.

Econ 101: Government Budgets

Newspapers are full of articles about the deaths or other losses that will result from proposed budget cuts. Today’s Washington Post, for example, headlined a story on USAID cuts “USAID cuts may cause 14 million more deaths in next five years, study says”  “Washington post /2025/07/01/”

If the government’s spending on X is reduced (aside from any improvement in efficiency) the benefits of that spending will be lost. But our resources are limited. If we spend more on X we have less to spend on Y.  So when we lament the losses from reduced spending on X we should take account of the gain from the increased spending on other things.

To put a bit of flesh on this issue, consider the following: “The administration has cut more than a hundred contracts and grants from the President’s Emergency Plan for AIDS Relief, the HIV and AIDS program credited with saving millions of lives in poor countries. President Donald Trump has shut down the agency that signed off on most PEPFAR spending and fired other staffers who supported it.”  “Rubio-pepfar-aids”

Evaluating whether this cut is “good or bad” is not easy because determining the likely alternative use of the money saved is not easy. If we stick to a fixed government budget total, the alternative use by the government of the money saved might save even more lives (or maybe not). But the saving could also be given to tax payers whose use of that money would reflect their own personal needs and priorities.  

The process used by Elon Musk’s DOGE to arrive at the spending and/or personnel cuts they proposed was not transparent thus is largely unknown to us. But I have serious doubts that it was appropriate. Semafor offers the following advice:

“A lot of US government work is highly inefficient, says the science reformer Stuart Buck. Federally funded scientists say they spend 44% of their research time on bureaucracy, federal procurement is “broken” and often results in the government buying products that don’t work, and “the Paperwork Reduction Act paradoxically results in endless paperwork.” “Many such cases,” says Buck. “We should have an official effort to address these issues… We could even call it a ‘Department of Government Efficiency.’” As you might be aware, there is one: It is “widely viewed as a failure,” but the basic idea is sound. How could we make it good?

“The first step, says Buck, would be taking a long time to deeply understand how each government agency works, so you don’t mistake routine human error or some statistical artifact for fraud. Second, it should focus on high-value reforms, like outdated data systems or software. Third, it should learn from previous attempts to cut red tape — because there have been many, not all of which worked. And importantly, a good DOGE would not mistake things we don’t use for “waste” — like an insurance policy, we hope pandemic preparedness infrastructure and fire departments are never used, but they’re in place in case we need them. The real-world DOGE is a failure, says Buck, because it ignored all of these strictures.”  “Semafor.com/newsletter/06/30/2025/”

I think some, if not many, government programs or activities should be reformed or eliminated. But those the public really want must be paid for by the public paying additional taxes or lending to the government (buying US bonds). U.S. debt is dangerously high (123% of US GDP) and continuing to grow.  So to the extend spending is not reduced, taxes should be raised.   

Atonement

I doubt that many armchair warriors have a clue what the wars they urge are really like. What the cost is to the tens of thousands of men, women and children who’s lives are upended or destroyed. The pain and suffering they endure.

Even without considering what war is really like, the prospects of a war leading to a better world are remote. A better world is one in which we live peacefully (even fruitfully) with our neighbors, whether next door, across town or across the world. Mutually respected rules of interaction are required and an understanding of the importance of abiding by them. Diplomacy is required to develop such rules.  Better to start with diplomacy than with war.

The wrenching and gripping movie “Atonement” dramatically presents the true horrors of war. Neocon war enthusiast would do well to watch it carefully.

Police state

Congress has struggled for decades to adopt a workable immigration and border security policy. Several reasonable proposals have been advanced over the past several decades but never crossed the finish line. We need more immigrants but of the legal sort. But getting the balance right is not easy.

The path for legal immigration should be widened while border enforcement and workplace employment of illegal residents should be made more difficult. More judges are needed to process refugee applicants much more quickly. How tighter rules are implemented matter. The Trump administration’s current approach is wrong and contrary to American norms. It’s as if he is leading the country step by step to a coup. https://www.washingtonpost.com/opinions/2025/06/11/immigration-arrests-ice-raid-masks/

Looking for win-win

The essence of trade is that both the seller and buyer benefit (win-win). Without that feature the trade would not take place. The expansion of trade locally and then globally increased the output and thus incomes of the average person dramatically.

In 1820, about 80% of the world’s population lived in extreme poverty (defined as living on less than $2.15 per day in today’s terms). By 2019, this figure had fallen to roughly 10%. This decline is especially notable given that the global population increased more than sevenfold during this period.


The pace of poverty reduction accelerated in recent decades. From 1990 to 2019, the global extreme poverty rate dropped from 43% to below 10%, with the fastest declines occurring since the 1990s. This progress was driven largely by rapid economic growth in Asia, particularly in China and India.

The increase in win-win gains in income from trade have been promoted by broad agreement on rules and norms for “fair trade” to maximize the increase in incomes that results. These have been developed over time through what is now called the World Trade Organization (WTO). Tragically, rather than further improving its rules, the U.S. has undermined the WTO by refusing to appoint new members to its dispute resolution body.

The benefits of such collaborative cooperation have been sought and gained in other areas as well. To take one, the climate benefits of nuclear energy also carries the risks of destruction from nuclear bombs. Agreements among the countries with such capacity to contain and minimize the associated risks are reflected in the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) of 1968 (extended in 1995). The Comprehensive Test Ban Treaty (CTBT, 1996), several bilateral agreements with the USSR/Russia and others have further reduced the risks.

The dramatic development of Artificial Intelligence (AI) programs promises incredible increases in our incomes but also carries risks. As with nuclear energy, all would benefit from agreements that limit these risks. Cooperating in developing such guard rails is in everyone interest. The US is making a big mistake in attempting to stifle  China’s AI development rather than a win-win cooperation with them to maximize its promise while minimizing its risk.

The case for such cooperation with China is powerfully made by Alvin Graylin in a recent presentation to the Committee for the Republic (on whose board I serve) the other day. https://www.youtube.com/watch?v=Jg6brPvFJGw.

A perfect world (economically)

The goal of policy should be to maximize world income (output) and its distribution that reflects the contribution of each player. That occurs when resources (capital and labor) are allocate to their most productive uses. But how is that achieved? First by ensuring that the government does not interfere. If the government subsidizes an activity, it will draw resources from its most productive use to the subsidized one thus reducing income.

The government’s role is important for defining and protecting property rights and the rule of law and the basic infrastructure on which firms operate. For example, in the U.S. the government funded basic research because there is no market incentive to undertake it. Much of it provides knowledge that is never used or exploited, but some is exploited by private firms for purposes the government could not guess in advance.

In the real world, consumers’ tastes change and the products and services being offered evolve and the optimal allocation of resources (capital and labor) must evolve as well. Those that are not the most productive tend to go out of business, freeing those resources for better uses. When governments intervene via subsidies or differential taxes they invariably reduce the efficiency of resource allocation and thus lower incomes. Bilateral trade deals introduce large distortions in resource allocation and thus lower global income.

The global maximum thus requires common rules for fair trade globally. The World Trade Organization is the institution through which such rules are developed and enforced (or at lease it should be). Bilateral deals undermine the level playing field optimal resource allocation requires and thus lower world income. With the weakening of the WTO and other international rules and norms, the world is increasingly falling below the income it is capable of.

Tolerance

Tolerance is an essential feature of a flourishing society, but it is a low bar. Jesus of Nazareth told his followers that they should “love thy neighbors as themselves.” This view is widely shared among most religions.

My Afghan friends say Islam is rooted in both love and peace. The Qur’an and Islamic teachings emphasize God’s love and compassion as central, motivating principles, with believers encouraged to love God and one another in return. The Prophet Muhammad is portrayed as a model of mercy, kindness, and tolerance, teaching forgiveness and respect for others, regardless of their beliefs. But the Quran also demands harsh punishments of transgressors, and we have seen horrible acts perpetrated in the name of Islam by radical wings of the religion (e.g. Wahabis in Saudi Arabia and the Taliban regime in Afghanistan).

Like the Qur’an, the Christian Bible also demands harsh punishments of transgressors. Radical wings of Christianity have also undertaken horrible acts. For example, the January 6, 2021, attack on the U.S. Capitol involved participants motivated by radical Christian nationalist beliefs, blending religious rhetoric with calls for violence and anti-democratic actions. Leaders within certain Neo-Charismatic Pentecostal movements promoted the idea of “spiritual warfare,” which helped justify extreme actions among followers.

Most Christians and Muslims ignore these demands in their holy books, which would send them to jail most anywhere in the world. My favorite presentation of the bible’s horrible demands was a scene in the TV series “West Wing”:  https://www.youtube.com/watch?v=3CPjWd4MUXs.

My question here is how best to promote Jesus’s call to love our neighbors. We are born with the protective instinct to trust those we know and distrust “others”. But with the huge increase in wealth from trade and other interactions and cooperation, dealings with “others” increased. The siloing of religious and racial groups gave way to tolerance, and with greater exposure, tolerance gave way often to friendship. Though some of us were born with an urge to explore and meet new and different people, most are not. Their natural aversion to “others” requires social encouragement to overcome it.

Look at almost any of today’s TV series (especially British). The total mix of black, white, brown and yellow has now become the norm and feels natural. A white man’s boss is as likely to be a black woman as the other way around. This is a wonderful development in which each person is judged on their own talents and character. It is also a more interesting world. But how did we get from the culture of tribalism to our more exciting world of today?

Teaching our children the rightness of treating each person individual on the basis of their talents and character and then exposing them to those not like them was the path. As more white people encountered blacks, they became more relaxed around them. TV shows like the Bill Cosby Show were incredibly important in making normal blacks seem “normal” to whites.

Gays became more fully accepted as more and more families discovered that one of their members was gay. But the TV show Will and Grace played the incredibly important role played by the Bill Cosby Show of demystifying Gays and making the straight public more understanding and comfortable with them. Combined with Jesus’s call to love our neighbors, actual exposure to all types does the job. Companies that want a more interesting (and productive) work environment will go out of their way to hire from all races and creeds. This is an area in which real progress has been made toward a fairer, and more interesting society.

Trump’s Chainsaw

I assume that I approve of many of Trump’s cuts or closers. But how can I know? His executive orders do not include or are not preceded by a discussion of the issues involved and the pros and cons of alternatives, as is customary in free societies.  As our government is supposed to reflect the will of the people, it is essential that “the people” debate the desirability of polices and their adoption. In the end they need to be accepted by us as desirable or at least OK. My goal is a federal government limited to powers granted in our constitution, delivering only those services that are wanted and doing so as well and efficiently as possible.

But Trump takes a different approach.  Lindsey Halligantold Trump that the Smithsonian needs to remove “improper ideology”. He’s ordered her to do it. https://www.washingtonpost.com/style/power/2025/04/21/lindsey-halligan-smithsonian-executive-order/.

Of course we want our museums to reflect our history accurately. But the many controversies about historical facts and their implications have been publicly and transparently debated by historians for decades. It is quite proper to review such representations. Trump’s executive order stated that Halligan “will consult with Vice President JD Vance to ‘remove improper ideology’ from Smithsonian properties.”

The first question is: What is improper ideology, exactly?

The second: Who is Lindsey Halligan, Esq.? (Washington Post above)

The established process of review, appropriate to a free society, has been replaced by a top-down order typical of autocracies.

The point here is that the manner and process of review and reform appropriate to a free society is discarded in the top-down orders of an autocrat.

Some of Trump’s orders reveal enough to know that I oppose them. Trumps tariff proposals reveal a lack of understanding of trade, quite aside from the rules established by the World Trade Organization (WTO). Trump condemns countries with trade surpluses with the US. These are irrelevant—as it is the US trade deficit with the rest of the world that matters—if anything. My trade deficit with Safeway is irrelevant.

Not only is Trump’s reciprocal tariff calculation laughable for its many errors, but other policies directly counter the presumed purpose of his tariffs (though who really knows what that is). His unlawful deportation attempts and cancelling student visa has produced a sharp fall in foreign visits to the US (foreign students studying here has many other benefits for the US as well). These are US exports, generating the money needed to pay for our imports. Why would he do this? This was later reversed, and the student visa reestablished. Or doesn’t he even understand what he is doing? His targeting for deportation those critical of him or Israel is a frightening attack on our First Amendment rights.

His tariff threats, on again, off again, actually seem unrelated to trade objectives. They seem to be bargaining chips for other objectives, whatever those might be. Their unpredictability itself is inflecting damage to our trade and investments. It is a very different (autocratic) approach to trade agreements than provided by the WTO.

Trump’s bargaining style re tariffs may well produce good results six months or a year down the line. But the cost has been the alienation and isolation from our traditional allies (not in our interest), and economic damage in the interim. More alarming it has strengthened China’s world leadership, driving many into closer alliance with it. The proper question is whether his approach or the traditional working though the WTO would have produced better results.

Education, whether in schools or the public square, is vital in free societies. Closing the Wilson Center was a big mistake in my view. I attended many very informative presentations there, often with Abdul Fitrat, former governor of the central bank of Afghanistan (DAB). But most of our think tanks, also presenting excellent and important seminars, are private. Trump wants to dictate what schools teach and what parents must allow or can opt out of for their children. His demands are being challenged in court. What the state can require, and parents can choose, is a challenging issue. Our traditional and more effective approach to its resolution is via public debate—not executive order.

Our cultural scene (opera, ballet, theater, etc.) is an important aspect of a flourishing society. It is quite proper to debate the extent to which our government should help finance it, but not its importance for a healthy, flourishing society. From the settlement of hunter-gatherers into tribes, such culturally binding activities have flourished. I recently watched a very painful film “A Day in the Life” of a woman (former violin player) working seven days a week to remove the rubble left in Dresden after WWII. Anyone contemplating war should examine what was left after previous wars before starting a new one. After the war, Dresden was occupied by the USSR. Interestingly the Russians set up theaters and concert halls to display the richness of Russian culture.

In the US our cultural events are largely financed by the private sector. The Kennedy Center is a federal building and the only U.S. national cultural center. The federal government covers facility operations, maintenance, security, and capital improvements, as the Center is a federal building and national memorial. About 20% of its annual operating budget is paid by the government. The government is not allowed to fund any of its performance activities and costs. Though he has never set foot in the Kennedy Center, Trump replaced its board with his friends and made himself chairman. ???

I strongly opposed Trump’s shut down of USAID, for example. https://wcoats.blog/?s=usaid. I worked for USAID in Iraq and with it in Afghanistan and other post-conflict counties. Their role was vital. The closing of USAID harms American interest.

Let me add one more example of a USAID activity. Its support of the G-17 in Serbia provides one of many examples. In the late 1990s an IMF collogue from Serbia (former Yugoslavia) pulled me aside to explain the group of center-right, free-market economists from Serbia that he was part of—they called themselves the G-17. He explained that the National Endowment for Democracy and USAID helped organize and fund seminars at which G-17 members could discuss the policies they wanted to support and how to achieve them.

“During the NATO bombing of Yugoslavia in 1999, [Yugoslavia’s President Slobodan] Milošević was charged by the International Criminal Tribunal for the former Yugoslavia (ICTY) for war crimes connected to the Bosnian War, Croatian War of Independence and Kosovo War. After resigning from the Yugoslav presidency in 2000 amidst demonstrations against the disputed presidential election, Milošević was arrested by Yugoslav federal authorities in March 2001 on suspicion of corruption, abuse of power, and embezzlement.] The initial investigation faltered, and he was extradited to the ICTY to stand trial for war crimes.” https://en.wikipedia.org/wiki/Slobodan_Milo%C5%A1evi%C4%87.

In the turmoil following Milošević’s replacement, Jimmy Barton (Chief National Bank Examiner of the United States, Retired) and I entered Belgrade on 9/10/2001 (I think—I am no longer sure of the date) to singing and dancing in the streets. As we met with the new government officials, they often gave us their G-17 card with the apology that they had not had time to get new official cards. Thank you EFD and USAID.

Trump also claimed to shut down the Millenium Challenge Corporation, the best foreign aid program we have ever had. He has withdrawn from several international organizations and agreements, and angered our friends and allies, further isolating the US. These are not in American interests.

During his 2024 presidential campaign, Trump promised no more wars. In his first 100 days in office, he threatened to invade Panama and Greenland and to annex Canada. He has started bombing Yemen without Congressional authorization. He continues to support and help finance Israel’s wars in Gaza, West Bank, Lebanon, and Syria. He has withdrawn the US from many international organizations and agreements. We are increasingly isolated with fewer and fewer friends. The US voice in the world no longer carries its earlier weight—all of which has made China stronger and more influential.

To repeat, the longer-run outcome of all this may well be good for us all. There is no knowing that at this point. But the real question is whether good results achieved in this way are better than if achieved via public debate and normal diplomacy?

The courts are increasingly challenging Trump’s disregard for law and due process. What I want to emphasis is that Trump’s autocratic actions via executive orders is very different from our usual public debate over policy seeking as much public understanding and common ground as possible. Such public debate is important for what a policy (or goal of an agency) should be. The internal efficiency with which that policy is implemented is a separate issue and something that a DOGE might well help achieve.

In a letter to U of Chicago alumni, its President Paul Alivisatos stated “As the broader higher education compact is reordered, we should not fear change for its own sake. There is reform to be had—and great opportunity to improve and to achieve more. Yet, how a period of reform unfolds can also cause enormous damage; federal and political overreach and intervention without regard to due process produces profound damage…. We have important interests at stake at this moment, as well as a set of obligations that we must and will honor.”

Trump’s executive order dictates are not an appropriate approach to reforming the scope of government.

Econ 101: How much should we tax the rich?

Should the wealthy pay more taxes than the rest of us? Of course, no one disagrees with that. But how much more? Based on 2022 tax year, the latest available, the top 10% of income earners (those with adjusted gross income above $178,661) paid 72% of the total of $2.1 trillion taxes collected. Is that too much or too little or about right. The bottom 50% of income earners (less than AGI of $50,339) paid 3.0%. What is a “fair” distribution of the tax burden and/or an economically efficient distribution? Corporate income taxes raised $0.42 trillion that year and should really be abolished in our globally trading world.

I have written earlier (many times actually) that I support abolishing all income taxes (personal and corporate) and relying fully on consumption taxation. While it can be challenging to determine where things are produced, there is no question about where we consume them. But while waiting for that miracle to happen, how much more should higher income people pay in taxes than lower income people?

Fair Tax Act of 2023
Replacing Social Security with a Universal Basic Income

My sense of fairness (and economists norm for tax neutrality) says that the tax rate should be the same for everyone. In other words, if your income is twice mine, you should pay twice the tax. If all income taxes and welfare payments were replace with a Universal Basic Income for all and flat consumption tax (VAT) the result would be mildly progressive tax rates on income.

A note on Social Security: it is not a saving plan in which what you saved is there to pay out to you when you retire. https://wcoats.blog/?s=social+security

Ukraine Russian Peace Treaty

I am a monetary, not a foreign policy, expert. But after spending good bits of the last two decades in Bosnia, Afghanistan, Iraq, Kosovo, South Sudan and Israel/WBGS I have some questions:

  1. Why did we expand NATO after the collapse of the Soviet Union?
  2. Why didn’t we discuss Putin’s Dec 2021demands to avoid Russia invading Ukraine? https://wcoats.blog/2022/02/26/ukraine-russia-nato/
  3. When Russia invaded Ukraine on Feb 24, 2022, why didn’t we give Ukraine all the military equipment they wanted?
  4. When Russia and Ukraine were ready to sign a peace agreement negotiated in Turkey in March 2022, why did UK PM Boris Johnson tell Ukraine President Zelenskyy not to sign?
  5. Why do Americans, and especially Congressmen, tolerate President Trump’s threats to invade Panama, Greenland, Mexico and expel all Palestinians from their homes in Gaza and break so many American laws?