My Key stories of the world in 2014

Twenty fourteen was a busy year for the planet and in general a rather unhappy time. But believing as I do that when the pendulum swings too far in one direction (big brother) it swings back (personal freedom), I am such an optimist that I see some hopeful signs for 2015. These are the developments that I think are important (and/or felt like writing about).

Torture: A big plus this year was the eye-opening report of the United States Senate Select Committee on Intelligence Report on CIA Torture. It found that the CIA used torture (violating the Universal Declaration of Human Rights, the United Nations Declaration Against Torture, and the I, II, and IV Geneva Conventions of 1949 all of which were signed by the United States and are thus binding laws of the land) and that it was not effective in gathering actionable information that couldn’t have been obtained with traditional interrogation techniques. Admittedly Senator Diane Feinstein was angry about CIA illegal hacking of computers of the Committee staff who have the legal responsibility of CIA oversight and may have been settling some scores. But if you do not find these abuses of power frightening, you live in the wrong country. While the report might not have been fully balanced, its findings on the ineffectiveness of torture are consistent with the earlier findings. https://wcoats.wordpress.com/2010/02/26/torture-is-immoral-and-doesn’t-work/

Our common sense assumption that a prisoner being tortured will tell his captures whatever they want to hear in order to stop the pain was dramatically confirmed by the recent news that Nian Bin was released by the Chinese government after eight years in prison for murders he did not commit. He was originally tortured into admitting the alleged crimes. http://www.washingtonpost.com/world/asia_pacific/in-china-a-rare-criminal-case-in-which-evidence-made-a-difference/2014/12/29/23f86b80-796b-11e4-9721-80b3d95a28a9_story.html

Hopefully these disclosures will reign in these embarrassing and appalling abuses by the United States government.

Greece: Since joining the EU and adopting the Euro (still very popular in Greece as protection against the bad old inflation days), Greece has enjoyed and unfortunately recklessly indulged in a higher living standard (consumption) than it earned (produced) by borrowing from the rest of Europe at the low interest rates paid by Germany. This mispricing of the risk of lending to Greece by financial markets resulted in part from the failure of the European Central Bank (ECB) to rate Greece sovereign debt realistically (treating all sovereign debt of its members alike). It also reflected the moral hazard of the wide spread belief that the EU, ECB, and international financial institutions such as the IMF would bail out holders of such debt. But no one and no country can live beyond its means forever. What can’t go on forever, won’t. https://wcoats.wordpress.com/2010/05/30/greeces-debt-crisis-simplified/, https://wcoats.wordpress.com/2012/02/26/saving-greece-austerity-andor-growth/

The balance between what Greece (short hand for individuals, firms, and government domiciled in Greece) imports and (pays for with) exports can be restored by lowering the cost of Greek goods and services. This will increase its exports and decrease its imports. This can be achieved by lowering wages and other costs of production or increasing productivity. Lowering wages without an increase in productivity simply acknowledges the reality that Greeks are poorer than most other Europeans. Increasing productivity improves Greek competitiveness and thus exports while also increasing its real standard of living.

The loans provided to the Greek government by the troika (EU, ECB, and IMF) tied to (i.e. conditional on) reductions in the government’s borrowing needs (reducing government employees, increasing tax revenue, etc) and structural reforms to make the economy more productive, provided an alternative to its default and forced sudden cut in government spending that markets would have forced on it otherwise. There is debate about which approach would be best for Greece in the long term. Hopefully Greek voters will face and debate this choice honestly in the presidential elections in January: http://www.washingtonpost.com/world/europe/greek-impasse-forces-early-elections-and-fears-of-euro-crisis-return/2014/12/29/3be75924-8f4e-11e4-ba53-a477d66580ed_story.html The implications for the EU and the Euro are huge. https://wcoats.wordpress.com/2011/11/02/the-greek-referendum/

Cuba: President Obama has decided to diplomatically recognize Cuba after a half century long failed policy of sanctions. Not only have our economic sanctions failed to displace the Castro brothers and their pernicious regime (most other countries do not observe our sanctions and trade and invest with Cuba anyway), we have no business (or national self interest) in adopting and promoting a regime change as national policy, however much we might wish for it. Moreover it is very much in our national interest to have good information on and channels of communication with every country with a government no matter how chosen. The linked article by Marc Thiessen illustrates the arrogant and dangerous thinking of our neocons. If Thiessen supports something, I start out against it until convinced otherwise: http://www.washingtonpost.com/opinions/marc-thiessen-cuban-dissidents-blast-obamas-betrayal/2014/12/29/cc68ffcc-8f5b-11e4-ba53-a477d66580ed_story.html

Crony capitalism: President Eisenhower famously worried about the dangers of the military industrial complex as he sought to conduct a cold war with the USSR: https://wcoats.wordpress.com/2011/01/17/eisenhowers-farewell-address-50-years-later/. It is difficult for the government to objectively serve the public interest while dealing with or regulating industry. https://wcoats.wordpress.com/2014/12/18/free-markets-uber-alles/ The relationship that develops in such a situation often serves the interests of the regulated industry more than the general public. The result is what we call crony capitalism and it is the enemy of true capitalism as much as its variants– socialism and fascism. One of the particularly alarming examples of truly disgusting and damaging crony capitalist deals is described in the following article. It involves JPMorgan Chase CEO Jamie Dimon and Eric Holder’s Justice Department agreeing on what seems like a large fine, but is more accurately described as a bribe, to suppress evidence of criminal behavior on the part of Chase. http://www.rollingstone.com/politics/news/the-9-billion-witness-20141106.

Twenty fifteen will be a better year than was 2014 if public outrage at the use of torture, the abuse of the privacy of American’s, the bailing out of and favoritism toward Wall Street and the costly and counter productive deployment of American military around the world, result in rolling back these dangerous excesses. My fear is that nothing will be done and that there will be more the same. I hope that I am wrong.

My country

Those of us who attend events at the Kennedy Center rather than Wrigley Field or other such palaces of sport are not used to starting off the evening singing the Star Spangled Banner. Thus it is always a bit of a surprise when an evening with an orchestra visiting from abroad starts off that way followed by its own national anthem. The other evening it was the Israel Philharmonic—The Star Spangled Banner followed by Hatikva. We rose a bit awkwardly to our feet. The fact that two nations joined in friendship to salute their national identities, ideals and aspirations added a great deal to the emotions of that moment. I was reminded once again of the great respect and pride I have for my country.

I say this not because my government or fellow citizens always do the right thing—far from it. But because we pretty much agree on what the right things are at the level of general principles and because we try to adhere to them as much as possible and return to them when we don’t. The United States was founded on great and honorable principles. We established institutions and developed attitudes—which include checks and balances on the exercise of power—that deserve our respect and defense. Thus I am encouraged that the abuses of government power following the 9/11 attacks on New York and Washington, which reflected a frightened public’s desire for security, are beginning to be reversed. I am encouraged that our misuse of our military and political power to impose our views on others (Iraq, Afghanistan, Libya, etc.), which we have never been very good at, seems to be on the wane.

Our freedom of speech and free press and our critical mind-set play important roles in the never-ending fight to keep leviathan at bay. The trauma of 9/11 brought out the best and worst in my country. The dangerous excesses of the NSA have received a lot of badly needed attention in recent months but now another area of government lying to us in the name of security is back in the spot light. If you take yourself back twelve years or so, and try to remember what you thought about torturing terrorists for information that might prevent another terrorist attack, you might remember that some argued that it was OK if it really saved lives. We all knew that torture violated our values (not to mention international treaty commitments), i.e. that it was wrong, but if it really saved lives….. It turns out that it didn’t and the government lied to us about the useful information it allegedly produced. It was wrong AND didn’t save any lives. Congressional oversight and our free press are to be thanked in this case for disclosing these government misconducts: “CIA misled on interrogation program”/2014/03/31/.

Were these bad things done by bad people? These latest disclosure were made the same day as General Motor’s failure to disclose a faulty auto part for ten years and the causes of the failures are similar (human nature in the face of weak incentives to behave properly). Most people I encounter (not just Americans of course) want to do good with their lives even when the result of their activities are sometimes not good. There are, of course, also bad (just plain mean) people in the world. Most of us have encountered one or two of them in school (bullies). In adult life they can easily be attracted to position that give outlets to their meanness (the police, prisons, military provide such opportunities). We are fortunate that as the result of hard efforts by many people, our police, military etc. are generally very professional and keep the bullies among them in check. There are exceptions, of course. The disgusting mistreatment of Iraqi prisoners by a few Americans in Abu Ghraib prison was exposed just as I took up a two-month residency in Baghdad. I was embarrassed that my countrymen and women could have behaved so badly (and concerned with its possible impact on my safety). But my point here is that in the United States such things are almost always revealed and disclosed eventually and thus kept in check. This is why I can remain proud of my country. Though we never live up to our high ideas, we take them seriously and are always trying. Excesses usually get corrected until the next one comes along. It is an important and never-ending battle, but as long as we keep fighting it, I will remain proud of my country.