Tag: Rule of Law

What I believe

I am a classical liberal fusionist. The following brief outline will hopefully explain what that means followed by a brief summary of where Trump stands relative to my beliefs of what is good for America.

I want to be free to make my own decisions about my life and for you to be similarly free as well. As we live together with 8.3 billion others, we must have understandings/rules/laws guiding our interactions if we are to live peacefully with each other. An efficient government limited to those purposes is essential. As a classical liberal I strongly support the limited, enumerated powers and structure (checks and balances) of government provided by the American constitution. Our constitution provides that our government will have limited powers sufficient to protect us from foreign and domestic threats of corruption, fraud and attack, secure our property rights, adjudicate disputes, provide public goods (e.g. roads, pollution regulations) and establish the rules (guardrails) for private enterprise. Our constitution specifically prohibits our government from infringing upon our freedom of speech, assembly, or religion.

Such limited government powers would leave use with substantial freedom to choose our own way of life. The quality of our lives will depend importantly on how wisely we use that freedom. While it would be ideal for those in need of help to receive it from family and friends and from private charities established for that purpose, I believe that the private provision of charity on any large scale has been so displaced by government welfare that I accept the government’s role in providing a social safety. But the current mix of programs restrict our freedoms and are inefficient. I propose a Universal Basic Income as the most efficient approach and the most consistent with individual freedom. https://wcoats.blog/2020/08/20/replacing-social-security-with-a-universal-basic-income/

America has flourished because the substantial freedom our government leaves us is generally used well. The vast majority of us use our freedom in ways that respect the freedoms of others. The three monotheistic religions—Christianity, Judaism and Islam (and no doubt others as well)—provide important guidance for virtuous behavior. These include honesty, charity, love, prudence, justice, fortitude, temperance, humility, forgiveness, etc. Virtue is the other leg of Fusionism, which is explored in the wonderful new book by Stephanie Slade: Fusionism: Liberty, Virtue, and the Future of the American Right.

While respecting the freedoms of others, I may choose (within my abilities) how I make my living, whom to buy from and sell to (free trade), and how to spend my free time and with whom. Much of our relationships with others will reflect the locally accepted norms of good behavior. This extends far beyond driving on the same side of the road. Some of these norms have been codified into laws, which we expect to be applied equally to all of us. Some are the norms of courteous behavior (good manners). Thus, freedom and rights have fostered the entrepreneurship that has made the U.S. the economic envy of the world.

But today, with the internet and jet planes, our world extends far beyond our own communities. Engaging with as much of the world as possible peacefully has benefits. It can enhance our safety by making agreements with other governments that reduce the occurrences of war. It can add joy to our lives by exposing us to the many wonder of other cultures and geographies. It has enormously lifted the average standard of living because of the extension of the benefits of specialization made possible by trade. Global average per capital real income has risen 13 to 15 times (1,200 to 1,400%) over the last two centuries. This after many, many centuries of virtually no change.      

But what is required to travel to or trade with other countries? How can our planes fly over and safely land in other countries? How do we prevent the signals from other countries’ satellites from interfering with the internet and other signals from our own as they fly over? Just as our Federal government can establish laws to protect our safety, liberties and property across state lines that benefit us all, they need to do so across country borders.  https://wcoats.blog/2020/12/01/the-rule-of-law-china-and-the-u-s/ Without such agreements we would not be free to trade and travel nearly as widely as now. https://wcoats.blog/2017/01/06/the-liberal-international-order/

We have failed to live up to these standards on many occasions, but they are the north star to which we strive. Or at least until now. On July 23, 2019, speaking to a Turning Point USA audience (and on other occasions as well) President Trump said: “I have an Article II, where I have the right to do whatever I want as president.” With that he threatened to throw away the limits on the power of our government and the checks and balances on its exercise. Some of his policies have been consistent with the principals I believe in, but many have not.

The Economy: The government’s limited role of protecting property rights and promoting business transparency has unleashed the entrepreneurial energies that have led to our country’s flourishing. Like President Biden before him, Trump thinks his ideas of where to put our resources are often better than the market’s—thus projecting government activities beyond its proper functions. He was right, however, to think that many government agencies and their regulations were more burdensome than helpful to the private sector. A review and streamlining of the government’s oversight of the economy would be a good idea. Unfortunately the Department of Government Efficiency (DOGE) led by Elon Musk was a crude hatchet job that did more harm than good.  https://wcoats.blog/2020/11/04/saving-the-american-dream/

Immigrants: America would not exist without immigrants. https://wcoats.blog/2026/07/06/immigrants-2/ Currently they are important to provide the younger workers needed to pay the expenses (e.g. Social Security benefits) of our growing number of longer-living retirees. Rather than allowing more legal immigrants, Trump has reduced the number and promised to deport those here illegally. https://wcoats.blog/2026/02/08/immigrants/ . While I support efforts to prevent illegal immigration, Trump’s quickly recruited and improperly trained ICE agents have murdered innocent Americans and deported American citizens, along with illegal immigrants, without due process and in violation of court orders. The rule of law be damned. https://wcoats.blog/2025/08/29/immigration/

Free Speech: Our constitution specifically protects free speech for a good reason: https://wcoats.blog/2012/09/15/further-thoughts-on-free-speech/ It helps build public consensus and support for good public policies.

Trump goes ballistic when criticized and misuses executive power to punish critics. These have included suing critics, threating the licenses of their employers, etc. https://wcoats.blog/2026/08/21/our-first-amendment-freedom-of-speech/

“ABC late-night comedian Jimmy Kimmel said an interview he conducted with Texas Democratic Senate nominee James Talarico will not air on broadcast because of what he called threats issued to his network by President Trump’s Federal Communications Commission.” The Hill 9/10/2026

Our constitution provides checks and balances on the powers of government in an effort to prevent (or minimize) the overreaching of government. Donald Trump took major actions against agency inspectors general across both of his presidential terms: Between April and May 2020, he removed or replaced five agencies’ inspectors general in a series of late-Friday decisions: just days into his second term, he dismissed seventeen independent inspectors general at once across cabinet departments—including Defense, State, Transportation, Labor, and Energy. Subsequent individual firings followed throughout early 2025 (such as the USAID IG in February 2025).

The nonpartisan inspectors general review agency programs, financial statements, and operations, recommend changes to make government operations more economical and effective, manage hotlines and intake processes for employees to report wrongdoing safely, and report their findings to the heads of the agencies they monitor and to Congress. In September 2025, a federal judge ruled that the mass January 2025 firings violated federal law because the administration failed to provide the mandatory 30-day notice and substantive rationale to Congress, though the court did not order their reinstatement.

At least 20 high-ranking generals, admirals, and civilian defense leaders have been directly fired or pushed out of their roles by Defense Secretary Pete Hegseth and President Trump. When including behind-the-scenes actions—such as blocking promotion rosters, cancelling appointments, and forcing early retirements—over 80 generals and admirals have had their careers altered, blocked, or cut short as part of a sweeping restructuring aimed at downsizing senior military leadership and reshaping the Pentagon. According to my military friends, those removed were generally the best of the lot. Not bowing to Hegseth’s silly games proved fatal. Where might this be going?

Trade: The Trump administration has stifled the free market allocation of resources to the detriment of our growth in several ways. He has complained about offshoring manufacturing resulting in our trade deficits (which by the way help finance the government’s fiscal deficits thus keeping interest rates on government bonds lower than otherwise). In fact, however, manufacturing output in the US is greater than it has ever been. Domestic employment in manufacturing, however, has fallen because of increased labor productivity.

Trump claims that high tariffs are needed to reduce our trade deficit. But he has not imposed them in ways sanctioned by the World Trade Organization, i.e., to improve competitiveness with a level playing field. His tariffs often seem weapons to get countries to agree to other totally unrelated goals. Trump’s bullying has cost the U.S. more than trade. Often his threats require that foreign companies building plants in the US give shares to the Federal government. The US government now owns shares in some 40 or so such companies (https://wcoats.blog/2026/08/10/econ-101-capitalism-and-socialism/ ). And the courts have struck down some of his tariffs. https://wcoats.blog/2024/11/26/tariffs/

Wars and foreign policy:  During his Presidential campaign, Trump promised to end our forever wars. Then, with Israel, he ordered an invasion of Iran. One reason seemed to be to stop Iran from developing atomic bombs (correcting Trump’s first term error of withdrawing from the Joint Comprehensive Plan of Action with Iran which prevented such a development). https://wcoats.blog/2026/04/02/iran-and-the-bomb/. “Trump’s threats against countries trading with Iran expose the limits of US economic power, as allies resist Washington’s demands and the global economy moves towards a less American-dominated order.” “Trump is hastening the decline of American power,” by Joseph E. Stiglitz 9/12/2026. https://johnmenadue.com/post/2026/09/trump-is-hastening-the-decline-of-american-power/

Trump’s continue support of Israel’s ethnic cleansing of Gaza and increasingly the West Bank has further isolated the US, which stands alone with Israel in the UN in defense of these humanitarian atrocities. https://wcoats.blog/2026/03/31/fixing-palestine/

I agree with Trump’s insistence that others (in particular NATO members) pay their share of the cost of the defense they get with American help. But insulting our allis, often with tariff increases or threats, is not in America’s interest, nor in compliance with WTO rules.

In The New York Times (9/10/2026), Tom Friedman proclaimed that: “Trump is the most un-American president in my lifetime. No president has done more, and continues to do more, to unravel the post-World War II institutions and alliances that were built and sustained by his predecessors. We are talking about… our intimate relationships with Canada and Mexico and our military alliances with South Korea and Japan — to name but a few. These relationships and institutions together produced global and American prosperity and great power peace for generations….”

During his presidential terms, Donald Trump initiated U.S. withdrawals from or ceased participation in a wide range of prominent international treaties, agreements, and bodies:

  • Paris Climate Agreement: Withdrawn during his first term and formally pulled out of a second time in January 2025.
  • Iran Nuclear Deal (JCPOA): The U.S. withdrew in May 2018.
  • Trans-Pacific Partnership (TPP): Withdrawn via executive order in January 2017.
  • UN Framework Convention on Climate Change (UNFCCC): Trump ordered the U.S. withdrawal from the founding 1992 climate treaty.
  • Intermediate-Range Nuclear Forces (INF) Treaty: The U.S. exited this Cold War-era arms control treaty with Russia in August 2019.
  • Open Skies Treaty: Withdrawn in November 2020.
  • World Health Organization (WHO): Initiated withdrawal in 2020 and executed withdrawal actions again during his second term.
  • UN Human Rights Council (UNHRC) & UNESCO: Withdrawn during his first presidency.
  • Global Compact for Migration: Withdrawn in December 2017.

Standing alone we are much weaker than when standing together with friends.

Interest rates: While Trump’s threats to the Federal Reserve to lower interest rates reflects a complete misunderstanding of the forces in play and the Trump administration’s perverse impact on them, I have confidence in the integrity of Kevin Warsh and expect the Fed to raise its policy rate next week in keeping with its commitment to lower inflation to 2%. https://wcoats.blog/2026/08/29/inflation/

Corruption: Trump’s wealth increased $3 to $4 billion dollars during his second term so far. Corruption? No comment. “Trump has pledged a $5,000 dividend to every American adult if Republicans retain control of Congress in November’s midterm elections, prompting questions about how the benefit would work, whether it is legal and where the funds would come from.” Washington Post 9/10/2026. Amazingly Trump publicly proclaims this bribery.

The Washington Post reported on 9/12/2026:

“Democrats hope to retake control of the House, and to use that power to probe Trump’s business ventures, legal maneuvers and policies…. ‘There’s so much corruption and grift that it’s going to take the entire House on the Democratic side to do investigations appropriately,’ Rep. Robert Garcia (D-California), who would probably lead investigations as chair the Oversight Committee in a Democratic-held House….

“Trump family enrichment…

“Handouts to supporters…

“Construction projects…

“Immigration enforcement…

“Prosecutions of Trump’s political enemies…

“Institutional pressure campaigns.”

https://www.washingtonpost.com/politics/2026/09/12/house-democrats-plan-sweeping-trump-investigations-if-they-win-november

It goes without saying that Trump does not support many of the US Constitution based principles I support. If I am right, as I am sure I am, that adhering to the principles of our Constitution is an important part of the foundation of our flourishing, Trump’s abuses of those principles will have the opposite effect. His disregard for the rule of law, his expansion of the powers of government to coerce us, and his disregard and flaunting international agreements and relationships will turn the US into a society of uncertain rights heading in uncertain directions depending on who is leading it at the time.

To give Tom Friedman the last word from his NYT article sited above:

“A year ago, I heard one of our former presidents privately observe that we can survive Trump’s second term as long as our institutions remain intact. Well, unfortunately, they have not. Who would argue today that the Justice Department, which has been turned into a personal legal weapon of the president, is intact, that the Department of Health and Human Services is intact, that the Pentagon is intact, that the Centers for Disease Control and Prevention is intact or that the Federal Communications Commission, which is now run by a Trump-appointed hack who acts as combined government censor and minister of propaganda, is intact?”

Obeying the rules is in our interest

The U.S. Department of Justice indicted former Cuban President Raúl Castro for his alleged role in the 1996 Cuban military downing of two civilian planes operated by the exile group Brothers to the Rescue, which killed four people (including three U.S. citizens).Since September 2, 2025, the U.S. military has attacked suspected drug boats in the Caribbean and the Eastern Pacific 59 times, killing 196 people. Shouldn’t we be indicting Secretary of War, Pete Hegseth, for murder?

“According to President Donald Trump’s mysterious math, that means this campaign of carnage has prevented around 1.5 million drug-related deaths in the United States—more than 20 times the total number recorded in the year before Trump started treating suspected cocaine smugglers as ‘combatants’ who can be killed at will, from a distance and in cold blood.

“Back on planet Earth, there is no reason to think the boat strikes have prevented any deaths at all. That could only happen if blowing up smugglers—as opposed to the previous practice of intercepting them, arresting them, and seizing their cargo, which Trump says was ‘totally ineffective’—reduced the supply of cocaine available to American consumers. Given more than a century of failed attempts to ‘stop the flow’ of illegal intoxicants, that never seemed likely. And nearly nine months after Trump launched his new, deadlier version of the war on drugs, there is no evidence that it is more effective than the traditional tactics he derides as insufficiently homicidal.” Jacob Sullum, “Blowing up boats hasn’t slowed cocaine traffic to U.S.”

Should we care about such a double standard? Yes. What we are doing is not only illegal but also immoral. Hopefully we aspire to behave morally because we aspire to be moral people. But there is a practical self-interest in playing by the rules as well.

We could often get our way simply because we are the strongest guy on the block. President Trump seems to like being a bully. However, pushing others around has a cost. The better we can live up to the high principles upon which our nation was founded, the more respect we will receive from others (nations and people). One of those important principles is adhering to the rule of law. Such respect means that others will cooperate with us more easily (at lower cost to us).

International norms and conventions generally serve the interests of all who have agreed to them. Win, win. When we violate them, the world pays a cost and so do we.

To Kill a Mockingbird

Earlier this week, Ito and I attended a performance at the Kennedy Center of the play version of this moving and powerful novel by Harper Lee. It was a well-staged production, faithful to the movie as best I can remember it from 50 years ago. Beyond its laudable, powerful attack on racism, it champions a moral position I have trouble with.

The play centers on the story’s hero attorney, Atticus Finch, who defends a black man falsely accused of raping a white woman. The alleged rape victim, Mayella Ewell, was actually beaten by her father, Bob Ewell, because she had kissed the accused black man, Tom Robinson. Despite the valent efforts of Atticus to defend Tom, who could not have beaten the white girl on both sides of her head because of his unusable left arm from an earlier accident, the all while jury convicts him anyway.

The play opens with Atticus’s daughter, Scout, addressing the audience about the local newspaper’s report of the death of Bob Ewell by falling on his knife. No one can fall on their own knife, says Scout. What is going on here?

Near the end of the play the mysterious, reclusive neighbor, Boo Radley, who Scout and her older brother Jen have never actually seen before, carries an unconscious Jen to his home for treatment. Jen and Scout had been attacked in the night by their white trash neighbor Bob Ewell. When the sheriff finds the dead body of Bob Ewell, Atticus fears that his daughter has killed him during his attack on her and Jen. But the sheriff concludes it was Boo Radley who plunged the knife into Bob Ewell to protect the children.

In a private conversation between Atticus and the sheriff, it is decided that the Sheriff will claim that Bob Ewell fell on his knife rather than risk the verdict of a bigoted jury. Atticus does not want his children to hear the discussion of the lie. Bob Ewell was a bad guy and no one is very sorry that he is dead. The plan ends with Scout facing the audience and saying, “I guess he fell on his sword.”

The play has many instances in which Scout and Jen defy inappropriate customs and views. I applaud those attacks on bigotry and outmoded customs. We recently watched the British series “Cranford”, which masterfully depicts the power of customs (which fork to use and how to dress), the disruption of progress (the building of the railroad into this quant English town) and the ultimate adjustment to positive changes. I highly recommend it.

The moral dilemma for me is the following. Atticus correctly and bravely defended Tom against the clearly false charges. Both the Judge and the Sheriff were strongly on the side of the truth and the law, but bigotry won out. Thus, the judge and Sheriff set aside the law and lied to protect a good man and his good deed against a bad man. Good wins out but only because in this instance the Sheriff and Judge are on the side of ultimate justice.

Many Filipinos also accepted former President Rodrigo Duterte’s green light to kill drug dealers on the streets of Manila without trail. It may well have been that most of those killed were indeed drug dealers. But if we rely on ignoring the truth and the law to achieve good ends, we open a dangerous door. We can’t always rely on the Sheriff and the Judge to be good people. We need strong and trusted institutions as well.

How to destroy the U.S.

The United States has the largest economic output (GDP) of any country on earth and the eighth highest income per capita at $59,939, below Luxembourg, Macao, Ireland, Switzerland, Norway, Iceland and Qatar. The world average per capita income is $17,100. The factors contributing to America’s prosperity would require volumes to fully explain. But the essence of our flourishing can be summarized in a few sentences.

Americans, individually or together in companies, have produced more than the citizens of other countries, because they trust in and rely on well defined and honestly enforced property and other individual rights that enable them to profit from their efforts—they believe in and follow the rule of law. That profit includes the freedom to live as they choose. We don’t always agree on which rules and laws would best facilitate our rights and interactions, but we trust in the process of public debate, adoption and enforcement of such rules.

Someone wanting to weaken American would attempt to undermine our trust in the above (trust in the institutions that formulate and enforce the rule of our agreed laws). Don’t confuse criticisms of weaknesses in our laws and their enforcement meant to strengthen and improve them with attacks on their legitimacy and fundamental honesty meant to undermine and discredit them. The former are from patriots and the later from our enemies. Look around you and see who is trying to improve American who is trying to tear it down and weaken it.

The Rule of Law: China and the U.S.

The rule of law has been an essential and critical foundation of successful free market economies. It provides the certainty of property rights and contracts needed for entrepreneurs to risk their capital in business undertakings. But as our business and other activities cross borders, whose laws apply?

“Among the earliest examples of legal codes concerning maritime affairs is the Byzantine Lex Rhodia, promulgated between 600 and 800 C.E. to govern trade and navigation in the Mediterranean.” https://en.wikipedia.org/wiki/Law_of_the_sea  Leaping forward, international air travel, satellite communications, spectrum allocation for radio, TV, internet, and other telephonic transmission would be impossible without firm agreements among countries–the international rule of law.

Laws facilitate commerce–buying and selling–by establishing rules for doing so (e.g. contract enforcement rules) that are stable and applicable to all. They lower the costs and reduce the risks of trading. The United States Constitution recognizes the importance of this in the commerce clause of Article I Section 8, which is used to prevent individual states from taxing or otherwise interfering with interstate commerce. Achieving the same law-based freedom to trade across national borders is more difficult, requiring the negotiation of agreements and treaties that establish common rules between sovereign nations.

The World Trade Organization (WTO) develops and enforces the rule of law in the area of cross border trade. The difficulty of achieving global agreement on the rules of various aspects of trade is reflected in the fact that no new agreements have been reached since the establishment of the WTO (taking over the General Agreement of Trade and Tariffs) on January 1, 1995. “The WTO agreements cover goods, services and intellectual property. They spell out the principles of liberalization, and the permitted exceptions. They include individual countries’ commitments to lower customs tariffs and other trade barriers, and to open and keep open services markets. They set procedures for settling disputes.” the WTO – what is it?

China was admitted to the WTO as a developing country on December 11, 2001. Chinese officials immediately expressed the desire to understand and conform to the international rules required by the WTO and requested technical assistant from the IMF for doing so. In July of 2002, the IMF sent me to Beijing to review their needs with them.  They were particularly keen to have an American banking supervisor to advise them. I had a perfect candidate who was just finishing a two-year posting to Hong Kong. Everyone I spoke to in Beijing, as well as my Chinese colleagues at the IMF, stated that virtually all Chinese officials agreed on where China wanted to go–full liberalization according to WTO rules. They only differed with regard to how fast they thought they should move to get there.

Our condition was that our resident banking supervision advisor had to have his office located with the other Chinese banking supervisors and that he would have an open door. This was enthusiastically accepted by the Deputy Governor who apparently had not informed the Governor of these details. Unfortunately, when the Governor was presented the contract of his signature, he killed the arrangement. I was, however, able to enjoy wonderful tours of the Great Wall, the Forbidden City, and dine on the best Peking Duck I have ever had.  

An economically rising China is lifting millions of people out of poverty. We rightly welcome its newly productive economy contributing to increasing world output and living standards. The challenge is to square China’s authoritarian political regime with an international free market trading system. The vehicle has been the WTO and other international rule setting bodies that exist to harmonize diverse economies in the direction of freer and more open trade. The rules were being set by the dominant, largely free market economies that China wanted to join.

Beyond an American led WTO itself, the multilateral trade agreement that established the highest standards yet for tariff reduction and the incorporation of more modern trade issues such as non-trade barriers, services, protection of intellectual property, minimum labor standards, and dispute resolution (the rule of law cannot meaningfully exist without credible dispute resolution procedures) was the Trans-Pacific Partnership (TPP) negotiated between 2006 and 2015. The TPP agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the United States was announced on October 5, 2015.

Three days later, on October 8, I spoke in New York City at a seminar hosted by the Chinese Chamber of Commerce of New York on the internationalization of China’s currency, the renminbi. All of the talk by the Chinese attending was about the TPP. Why was China excluded? Could they join? My reply was that China would be very welcomed to join when they were able to meet the treaty’s conditions. TPP was another powerful magnet pulling China into the liberal international trading order.  

A recent report from the Peterson Institute of International Economics (June 23, 2020) stated that: “The Trans-Pacific Partnership (TPP) was designed in 2016 to be almost China-proof, with stringent obligations requiring transparency and trade liberalization. As former US Trade Representative Michael Froman put it, Chinese participation would be welcomed only when China could meet TPP’s terms, which it was far from doing. The United States was not keeping China out; China was just not ready to come in.” “China and Trans Pacific Partnership-in or out”

Broadly speaking, the aim of the WTO is to increasingly move its member countries toward the freest trade possible with fair competition (a level playing field), thus promoting a more productive allocation of economic resources and lifting global incomes.  The organization is not without its problems. But rather than working to strengthen the WTO, President Trump turned to negotiating bilateral trade agreements and raising rather than lowering import tariffs. Clearly bilateral agreements are easier to conclude than are global or broad multilateral agreements. Trump focused on China and its large bilateral trade surplus with the U.S. out of the mistaken belief that its surplus (our deficit) was harmful to the U.S. and that reducing it would increase American jobs. “Who pays Uncle Sam’s deficits”

In one of his most short-sighted actions from a sadly long list, President Trump withdrew the U.S. from the TPP on January 23, 2017. In addition to tweaking a few existing trade agreements, such as the North American Free Trade Agreement (NAFTA) by incorporated many of the newer provisions of the TPP and the United States-Japan Trade Agreement and the United States-Japan Digital Trade Agreement, and imposing protective tariffs on solar panels, washing machines, steel and aluminum imports in the name of national security and “America First,” the Trump administration has focused its trade war bilaterally on China (with occasional pot shots at our friends in Europe and elsewhere).  “Trade Office fact-sheets and-annual-report”   A Brookings Institution study assessed the result of all of this for the American economy and workers as follows: “American firms and consumers paid the vast majority of the cost of Trump’s tariffs. While tariffs benefited some workers in import-competing industries, they hurt workers in sectors that rely on imported inputs and those in exporting industries facing retaliation from trade partners. Trump’s tariffs did not help the U.S. negotiate better trade agreements or significantly improve national security.”  “Did-Trump’s-tariffs-benefit-American-workers-and-national-security”

The remaining eleven countries that had signed the TPP agreed in January 2018 on a revised treaty they renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership” (CPTPP).  CPTPP is substantially the same as TPP, but omits 20 provisions that had been of particular interest to the U.S. These provisions can be relatively easily restored should the U.S. choose to rejoin. “Trade and Globalization”

With the increasing power of Xi Jinping, China’s President and the General Secretary/Chairman of the Central Committee of the Chinese Communist Party (now for life), China has played an increasingly active role in the IMF, WB, WTO and other international bodies. In addition, it has launched several regional organizations that it leads (the Asian Infrastructure Investment Bank, the New Development Bank–BRICS, and the Belt and Road Initiative) “The Asian Infrastructure Investment Bank and the SDR”  Xi Jinping claimed that the AIIB would adhere to the highest international standards. But as President Trump and others have noted, there are a number of important areas in which China does not abide by the WTO rules. The policy question is what should be done about it.

The Cato Institution began a recent review of China’s trade practices as follows: “There is a growing bipartisan sentiment in Washington that Chinese trade practices are a problem, since these practices are unfair to American companies in a number of ways. But there is disagreement about the appropriate response. Can multilateral institutions be of use here? Or is unilateralism the only way?” Their conclusion is that the WTO and other multilateral institutions would be the most effective way of continuing to pull China into compliance with the international rule-based system. “Disciplining China’s trade practices at the WTO-how -WTO complaints can help”

President Trump has unilaterally gone the other way. He has blocked Huawei, the world’s leading seller of 5G technology and smartphones, from U.S. 5G mobile phone systems and urged our European allies to do the same because of Huawei’s links with the Chinese government. He is attempting to block the sales of U.S. and other non-Chinese manufacturers of the semiconductor chips used in Huawei and other Chinese products to China.  “A-brewing-US-China-tech-cold-war-rattles-the-semiconductor-industry”  He is trying to ban TikTok, WeChat and other popular Chinese products from U.S. markets and raising tariffs on an increasing number of Chinese products imported into the U.S. Some of these measures might be justified on national security grounds but some seem more protectionist of U.S. companies that are not otherwise competitive.

We are basically forcing China to build its own alternative rules and approach to trade. It is even offering its own global tracking system in place of the GPS system the U.S. has given the world and they seem well along in dividing the World Wide Web and other Internet protocols into two worlds. https://www.voanews.com/east-asia-pacific/voa-news-china/chinas-rival-gps-navigation-carries-big-risks

A November 20, 2020 article by William Pesek highlights what Trump’s misguided trade war with China is producing: “On his presidential watch, Donald Trump did manage to make one thing great: economic cooperation within North Asia.

So chaotic and pernicious was the outgoing US president’s pivot away from Asia that China, Japan and South Korea are dropping the hatchet and joining hands. The unlikely union was formalized on November 15 with the signing of the 15-nation Regional Comprehensive Economic Partnership, or RCEP, free trade agreement.”  “US sidelined as China Korea and Japan unite”  The RCEP is a lighter more limited trade agreement than was the TPP (now the CPTPP) but it is led by China rather than the U.S.  Rather than converging to WTO standards it creates an alternative. 

“President Xi Jinping’s Friday [Nov 20, 2020] announcement of China’s intent to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), a high-standard mega regional trade pact, has been seen as a bold move to reassure the world of the country’s continuing commitment to reform and opening-up.” “News analysis: an uphill task for China to negotiate CPTPP accession agreement”  While Xi Jinping’s strategy for China’s ascension is to take over the leadership in forging the rules for the international order more to the liking of his regime, China’s younger and upcoming managerial and entrepreneurial class, many of whom studied in the U.S. and Europe, have seen and liked the freer and more open capitalist societies. Their patriotism and commitment to a rising China is informed by the knowledge that freer and more open economies thrive more than centrally controlled ones.  We should not overlook their potential for returning China to a path of liberalization and integration with the liberal international order enjoyed by the rest of us.

Xi Jinping and his government’s goal is to retain power by delivering rapid economic growth, which allows and requires a vibrant private sector, while overseeing tight political control. One example is provided by its Social Credit System.  “China’s social credit system-mark of progress or threat to privacy?”  This requires a different set of rules for cross border trade than set out by the WTO. But many of China’s world traveling citizens see China’s successful rise in more closely embracing free market capitalism. We should incentivize the later view.

President Trump’s trade policies have damaged the world’s rule-based trading system and hurt the American economy while turning China in a different direction. President elect Biden has indicated his interest in rejoining the TPP. He should give it and the rebuilding of the WTO and other multilateral bodies high priority.

Terrorism: Security vs. Privacy

We all care about our personal and national security and about our individual freedom, of which our privacy is an important element. Measures that serve both are win win and thus uncontroversial, but often measures that enhance one diminish the other. How and when to use such measures (tools) involve agreement on the balance of risks between security and privacy. Striking the best balance requires public review and debate and constant monitoring as I have discussed before. https://wcoats.wordpress.com/2016/03/24/fighting-terrorists-part-ii/

Tools that enable our government to collect information on and track individuals can enhance our security by detecting and hopefully interrupting plans to carry out terrorist attacks. The existence of such capabilities, e.g., to monitor phone calls, emails, payments, and physical movements, also create the capability of collecting such information on people for other purposes, e.g. for commercial or political espionage. Governments through out the world have used such tools to monitor and suppress the “undesirable” activities of their foreign enemies and sometimes of their own citizens. Limits and safeguards on the use of such tools can mitigate the risk that they can be misused to get private information on individuals for other unwarranted purposes.

Finding the best balance between security and privacy is difficult but important for our freedom. We know or assume that we know how Russia, for example, uses surveillance tools on its own citizens. We generally believe that our own government only uses such tools to enhance our security. But the risks of and the growing actual misuse of government powers for political ends (e.g., targeted IRS audits on political enemies, illegal surveillance of a government employee’s girl friend or wife, etc.) are challenging our, perhaps, naïve faith in the honestly of our government. Hillary Clinton’s mishandling of classified email and Russian theft of U.S. government personnel records are nothing compared to the temptation to steal historical data on the activities of Donald Trump and Mrs. Clinton.

The credible rule of law is one of the critical foundations of our personal freedom. It both protects and limits the extent and domain of our privacy. The principle of “Innocent until proven guilty” is an essential element of the rule of law. It evaluates whether an act has violated the law. In a free society people are not punished for acts contemplated but not committed. Acting against people the state believes might be likely to or inclined to violate the law, for example, that it thinks are likely to commit a terrorist act, would violate this fundamental principle of a free society. An exception to this general rule would be the arrest of a person having the instruments and ingredients for making a bomb and supported by evidence that he plans to make and use the bomb.

Following the terrorist attacks in New York and Washington DC on 9/11, public sentiment shifted its balance between security and freedom in favor of security. The so-called PATRIOT act signed into law by President George W. Bush on October 26, 2001, reflected that shift by infringing on our privacy and traditional rights in ways that would not have been accepted earlier. Moreover, measures that were initially considered temporary and emergency in nature have become increasingly accepted as normal. Even after a slight curtailment of the provisions of the PATRIOT act when it was renewed in 2015 most of these measures were left in place. No one seems shocked today that the government maintains a “No Fly” list based on suspicions that certain people who have committed no crimes might be potential terrorists. Such profiling unsurprisingly results in Middle Eastern Muslims dominating the list, a racial and religious discrimination that violates existing anti discrimination laws and would not have been tolerated before 9/11.

It is not unusual today to hear people who claim to appreciate the importance of the First Amendment to the US Constitution (freedom of speech) suggest that radical Islamist websites that attempt to recruit ISIS Jihadists should be blocked. Most of my friends are too young to remember the anti-communist witch hunts of Senator Joseph McCarthy of the 1950s from which we coined the term McCarthyism. It was a time when a frightened public saw communists under every bed. Soviet spies, a legitimate target for arrest and punishment, were often confused with Marxists (communists), who espoused an economic system now rightly discredited. Those of us who still support freedom of speech believe that bad and pernicious ideas are best defeated with reasoned counter arguments. We believe that it is potentially dangerous to our freedom to allow our government to determine what we can read, hear, or see.

Edward Snowden did our country a great service by forcing a public discussion of what safeguards are needed to strike the balance desired by the public between their security and their privacy. I have written about Snowden before:  https://wcoats.wordpress.com/2013/12/24/the-year-of-edward-snowden/    I recently viewed the movie “Snowden” and the documentary about the same events called “Citizenfour” and highly recommend both. The Heritage Foundation has contributed to this discussion in the following half-day seminar. http://www.heritage.org/events/2016/10/cybersecurity I particularly recommend the opening session with Michael Hayden, who makes a number of interesting and thoughtful observations.

The level of discussion, which is to say the lack of serious discussion of these issues, in the American Presidential campaign is distressing. I am reassured that some very bright and thoughtful people are discussing them. In addition to the Heritage seminar cited above, the New American Foundation recently held an all day seminar on these issues that started off with an excellent presentation by Andrew J. Bacevich (starting at about 24 minutes into the video)

https://www.newamerica.org/international-security/events/next-presidents-fight-against-terror/

We can not remind ourselves often enough that “the price of liberty is eternal vigilance.” And, we should add, courage.

The Rule of Law

The rule of law is an essential foundation of modern market economies. It increases the prospect and expectation that our individual efforts will be rewarded on the basis of merit (i.e., the success with which we satisfy the public’s wants at prices the public is willing to pay) rather than on the basis of favoritism (i.e., who we know). It introduces an element of certainty (rules of the game) in an otherwise uncertain world upon which to build our entrepreneurial efforts. It is fundamental to our notion of fairness and a protector of our personal freedoms. It is a notion and practice that attracts wide admiration from ambitious and freedom-loving people around the world and to our great benefit brings many of them to our shores.

We have never enjoyed the rule of law fully or perfectly, but our belief in it and our relatively close adherence to it remains critical to our success and the world’s eroding respect. Departures from the rule of law in our dealings with each other at home or abroad, undermine the efficiency of our market economy and diminish our freedom, but more importantly undermine the respect of others and our moral authority, which is almost as important to our place in the world as our military strength. Thus any erosions of the rule of law should be exposed and resisted vigorously.

Two principles of the rule of law are that they must apply to everyone equally (ourselves as well as others) and that the rules can’t be changed retroactively.

Through the Foreign Account Tax Compliance Act (FATCA) and other tax and Anti Money Laundering measures the United States has been increasingly forcing its own laws on other countries and turning banks into policemen to the detriment of the banking system. According to The Economist magazine (6/28/14): “In a piece of extraterritoriality stunning even by Washington’s standards, the new law requires banks, funds and other financial institutions around the world to report assets held by American clients or face a ruinous 30% withholding tax. America is, in essence, using threats to outsource its financial policing. This is working: so far, more than 77,000 financial institutions have agreed to pass information to the IRS. The costs of complying with FATCA are likely to dwarf the extra revenue it raises” Many of the approximately 7 million Americans living abroad are finding it difficult to open bank accounts. “Many have been rejected by foreign providers of banking services, insurance and mortgages because, given the amount of paperwork needed to satisfy Uncle Sam, American clients are simply too much hassle. Foreign firms are less keen to hire Americans because of the extra tax complications. Not surprisingly, the number of Americans renouncing their citizenship has quadrupled since FATCA was hatched…. FATCA’s intrusiveness raises serious privacy issues…. The financial superpower looks ever more a regulatory bully, setting rules it ignores itself.” “America’s new law tax compliance heavy handed inequitable and hypocritical FATCAs-flaws?”

When contracts can’t be honored because a company is not earning enough money, bankruptcy laws provide for a well-defined process for transferring ownership from shareholders to creditors, which includes the priority of creditor claims against the inadequate assets of the failed company. Bank bondholders and other creditors price their credit in light of their place in the cue. It violates the principles of the rule of law to changes these priorities after the fact, but this is exactly what the Obama administration did when it put General Motors into bankruptcy by favoring the United Auto Workers pension fund: “A bedrock principle of bankruptcy law is that creditors with similar claims priority receive equal treatment. In the auto bankruptcies, however, the administration gave the unsecured claims of VEBA [union pension] much higher priority than those of other unsecured creditors, such as suppliers and unsecured bondholders.” “Obama’s UAW Bailout”

The government’s inconsistent and unpredictable treatment of distressed financial institutions in 2007-8, some were bailed out and some were allowed to fail, and the resulting uncertainty about future treatment, has surely contributed to the reluctance of banks to lend and of firms to invest thus slowing the pace of our economic recovery. “The Financial Crisis: Act II”

Sadly the examples of political hypocrisy with regard to the rules of the game are growing. Fortunately there are some signs of push back. The Supreme Court just unanimously overturned as illegal the President’s so called recess appointments of members to the National Labor Relations Board. “Supreme court strikes blow-Obama exceeded authority with recess appointments” The Speaker of the House of Representatives is suing “the Obama administration for its use of executive actions to change laws.” “Boehner confirms lawsuit against Obama executive actions”

The hypocrisy has been non-partisan. Though fully justified, the hypocrisy of the outcry over the IRS’s missing emails related to targeting conservative organizations was exposed fully in Sunday’s Washington Post. Government departments and agencies are required by law to maintain copies of official correspondence (all office emails included). This law has been regularly violated. Examples are “the Bush White House’s destruction of millions of e-mail messages [including those of John Yoo, the Department of Justice lawyer who justified torture] as well as the destruction of pre-investigative files by the Securities and Exchange Commission, including files pertaining to Bernie Madoff and Goldman Sachs.” How has this happened? “Congress has neither appropriated sufficient funds for agencies to implement electronic record-keeping nor added oversight and penalties to the Federal Records Act that would ensure compliance.” “The IRS isn’t the only agency with an e-mail-problem”

Hypocrisy is rendered impotent, hopefully, from exposure. Thus hopefully George Wills’ latest column on the Redskins will be widely read. “The government decided that redskins bothers you” It begins: “Amanda Blackhorse, a Navajo who successfully moved a federal agency to withdraw trademark protections from the Washington Redskins because it considers the team’s name derogatory, lives on a reservation where Navajos root for the Red Mesa High School Redskins.” And the hypocrisy gets worse from there.

For more examples see my “Big brother is getting bigger”

Democracy vs the Rule of Law

Tunisia is providing a hopeful example of how countries can transition to freer societies for the general good. In the following Washington Post Op-Ed David Ignatius provides an excellent account of the process followed and still underway there. From Tunisia-Hopeful Signs/2014/01/24/ It contrasts sharply with the sadly confused and muddled account of “democratic transition” in Egypt presented by Michael Dunn and Thomas Carothers of the Carnegie Endowment for International Peace in the Post three days earlier. Egypt’s Evolving Governance is no Democratic Transition.  They speak of democracy and human rights as if they are the same thing.

Literally democracy means rule of the majority. In fact, the majority of Egyptians voting in the first free elections in memory chose Muslim Brotherhood candidate Mohamed Morsi as their President who proceeded to rule on behalf of Egypt’s majority religious group in disregard for the interests of minority Christians and other groups. That is democracy in its literal sense. Modern democracies, however, are not pure in that the majority is limited in what it may do in order to protect the rights of minorities. From an imaginary “veil of ignorance” the citizens of most modern democracies have written into their constitutions limitations on what they may do even when in the majority. The rule of just laws is more important than, and often in conflict with, democracy.

The bigger government gets the more it’s necessarily uniform treatment of all tends to reduce the freedom of individual citizens to behave differently. The United States from its beginning favored individual freedom over state authority and thus struck a balance between the two that imposed more limits on the role of government than had existed up to that time. Every special interest that gains government favor becomes an entrenched interest that is very difficult to reverse (farm subsidies and defense contractors leap to mind). Keeping government limited to what is really important is a never-ending but critical battle.

Extra-judicial killing

We think of autocratic or despotic regimes as those operating above the law or unconstrained by the rule of law.  It does not surprise us when people like Joseph Stalin, Saddam Hussein, or Colonel Gaddafi order the death of those they think threaten their rule.  In civilized, democratic countries we have legal restraints on the use of such power by our leaders. Laws define the processes by which the lives and liberties of those living in our countries may be arrested and jailed—the nature of the evidence needed—the requirements of an independent judiciary system to judge that evident—the right of self-defense, etc.

We would be shocked at the idea that the President of the United States could order the murder of an American citizen without any of the due process required by the law. Why then was there so little out cry when President Obama declared that he has the authority to order the murder (assassination) of American’s that he considers dangerous to our Republic. It is shocking and dangerous that this declaration did not bring millions of American’s into the streets in protest. The reason it did not, I believe, is not that 9/11 has turned us into cowards willing to give up important freedoms for more security. It is, rather, that our traditions of constitutional constraint on government, with its checks and balances and explicit protections of our private, individual rights, makes it difficult for us to imagine the serious abuse of power by our President and our government.

It is not that Presidents have not from time to time abused their power (see for example my review of Arthur Burns’ Secret Diary about Richard Nixon: http://www.compasscayman.com/cfr/2011/07/19/Inside-the-Nixon-Administration–The-Secret-Diary-of-Arthur-Burns,-1969-1974/). However, such abuses have never taken root and become acceptable. Therefore we don’t really take seriously that the President would abuse the new right he is claiming in the interests of our security. Today’s quiet acceptance of his declaration of the right to murder dangerous Americans is thus almost (almost) understandable. It is unimaginable that the President would use such power in any way other than its intended purpose.  But such faith is naive and dangerous. The relaxation of due process today, makes easier further erosion in the future. The weakening of our liberties, which reside in restraining our government as much as our neighbors, is a slippery slope. Presidents do not easily abuse powers they don’t have and can learn to abuse those they do have.

Attorney General Eric Holder attempted to justify these extraordinary powers in a speech at the Northwestern University law school earlier this month. As reported by Congressman Ron Paul:

“Attorney General Holder bluntly explained that this administration believes it has the authority to use lethal force against Americans if the President determines them to be a threat to the nation. He tells us that this is not a violation of the due process requirements of our Constitution because the President himself embodies ‘due process’ as he unilaterally determines who is to be targeted. As Holder said, ‘a careful and thorough executive branch review of the facts in a case amounts to ‘due process.’’ That means that the administration believes it is the President himself who is to be the judge, jury, and executioner.

“As George Washington University Law Professor Jonathan Turley wrote of the Holder speech:

“’All the Administration has said is that they closely and faithfully follow their own guidelines — even if their decisions are not subject to judicial review. The fact that they say those guidelines are based on notions of due process is meaningless. They are not a constitutional process of review.’”

“It is particularly bizarre to hear the logic of the administration claiming the right to target its citizens according to some secret selection process, when we justified our attacks against Iraq and Libya because their leaders supposedly were targeting their own citizens! We also now plan a covert war against Syria for the same reason.

“I should make it perfectly clear that I believe any individual who is engaging in violence against this country or its citizens should be brought to justice. But as Attorney General Holder himself points out in the same speech, our civilian courts have a very good track record of trying and convicting individuals involved with terrorism against the United States. Our civilian court system, with the guarantee of real due process, judicial review, and a fair trial, is our strength, not a weakness. It is not an impediment to be sidestepped in the push for convictions or assassinations, but rather a process that guarantees that fundamental right to be considered innocent until proven guilty in a court of law….

“Sadly, many conservative leaders were silent when Republican President George W. Bush laid the groundwork for this administration’s lawlessness with the PATRIOT Act, warrantless wiretapping, indefinite detention without trial, and other violations. Similarly, as Professor Turley points out, ‘Democrats previously demanded the ‘torture memos’ of the Bush administration that revealed poor legal analysis by Judge Jay Bybee and Professor John Yoo to justify torture. Now, however, Democrats are largely silent in the face of a president claiming the right to unilaterally kill citizens.’ The misuse of and disregard for our Constitution for partisan political gain is likely one reason the American public holds Congress in such low esteem. Now the stakes are much higher. Congress and the people should finally wake up!”

The British American Relationship

I saw The Madness of George III in London yesterday evening on my way to Kabul. The evening included a nice dinner and visit with old friends Tim and Jan Conway, first met in St. Andrews Scotland in 1976. The play, and David Haig’s portrayal of King George III, was spectacular. British theater is the best in the world century after century.

The play set me thinking again about why American’s are so fascinated with England and the English monarchy. My ancestors are mainly English so I may have a slanted perspective. But America’s basic values and institutions, which are respected by all American’s what ever their ancestry, were built upon those of the United Kingdom. We see it most clearly when contemplating the role and place of the British monarchy in British governance.

What fascinates us, I think, is the interaction between the King (or Queen) and his government. From the Magna Carta on Britain has evolved a system of governance based on the rule of law. The powers of the King are limited and checked the powers of Parliament and The Law. This interplay, these checks and balances, are on display in every movie or play about the British monarchy. This, I think, is the core of our fascination with the British monarchy. The King is all-powerful and unquestioned within his household but constrained by tradition and law in his broader exercise of authority.

Indeed, with all of it’s shortcoming, Britain benefits a great deal from the rule of law. The rule of law is much more than having good laws evolved from practical experience (the common law approach of Britain and America rather than the civil law tradition of Europe). The rule of law is an attitude of the members of society. It is the orderly, voluntary adherence to the norms society has agreed on. The result is a much more efficient and relaxed social and economic life.

The English famously queue (line up in an orderly way). It makes the experience of waiting to be served so much more relaxed. Waiting in “line” in Italy, on the other hand is a tension filled, guerrilla warfare effort to minimize being taken advantage of by shamelessly rude Italians, all of whom have relatives or friends ahead of you in line holding their place. On average Italians are more charming than the English. I have concluded that this is necessary to compensate for their disregard for the rule of law. Italians don’t pay their taxes, don’t cue, and in general circumvent at every opportunity the law.

A consequence of the rule of law in Britain and northern Europe more generally and its weaker hold on the behavior of Italians and southern Europeans more generally is that the United Kingdom functions more efficiently. Social interactions are smoother. And members of society enjoy more true liberty. The weaker hold of the rule of law in the south is like a tax on the functioning of the system. The explicit taxes that are not paid by Italians are replace by the tax of higher cost social interactions as they struggle to improve or at least defend their place in line. Italian’s are only fooling themselves to think that they have gotten away with not paying their taxes.