Taking on a major new constitutional dispute over gun rights, the Supreme Court agreed on Wednesday to decide whether to apply the Second Amendment to state, county, and city government laws. In another major case among ten new grants, the Court said it will rule on the constitutionality of one of the government’s most-used legal weapons in the “war on terrorism” — a law that outlaws “material support” to terrorist groups.
The Court had three cases from which to choose on the Second Amendment issue — two cases involving a Chicago gun ban, and one case on a New York ban on a martial-arts weapon. It chose one of the Chicago cases — McDonald v. Chicago (08-1521) — a case brought to it by Alan Gura, the Alexandria, VA., lawyer who won the 2008 decision for the first time recognizing a constitutional right to have a gun for personal use, at least in self-defense in the home (District of Columbia v. Heller). A second appeal on the Chicago dispute had been filed by the National Rifle Association (NRA v. Chicago, 08-1497). Presumably, the Court will hold onto that case until it decides McDonald; the same is likely for the New York case, Maloney v. Rice (08-1592) — a case in which Justice Sonia Sotomayor had participated when she was a judge on the Second Circuit Court.
It looks like we’ll soon find out; the Supreme Court has accepted cert on McDonald v. Chicago, a gun rights case brought by Alan Gura, the lawyer who won the Heller case. The court has been dodging the twin questions of whether the Second Amendment protects an individual right to bear arms, and whether it can be incorporated against the states, for decades. It looks like the question will finally be settled–at least as much as Supreme Court decisions ever settle things–in the next year.
Thus, the so-called incorporation doctrine will be at issue in this case – the question of whether the Fourteenth Amendment “incorporates” the guarantees of the Bill of Rights against the states. The Bill of Rights applied originally only against the federal government. But the Fourteenth Amendment, ratified in 1868, left open the question of which rights states were bound to recognize. The modern Court has incorporated most of the rights found in the Bill of Rights, but the Second Amendment’s guarantees have yet to be incorporated.
Moreover, a question that will arise in this case is whether the Court, if it does decide that the states are bound by the Second Amendment, will reach that conclusion under the Fourteenth Amendment’s Due Process Clause or under its Privileges or Immunities Clause, which has been moribund since the infamous Slaughterhouse Cases of 1873. In its brief urging the Court to hear the McDonald petition, the Cato Institute urged the Court to revive the Privileges or Immunities Clause.
The Empire State Building will light up red and yellow today to mark the 60th anniversary of the Communist takeover of China. What’s next — Stalin’s birthday? Unfortunately, they missed the 130th anniversary of his birth last December 18. But next April 17 will be the 35th anniversary of the the Khmer Rouge takeover of Phnom Penh — surely that deserves to be celebrated too. Or maybe next February 18, the 605th anniversary of Tamerlane’s death — how about a pyramid of skulls atop the skyscraper?
Two notes on China and the Empire State Building: A reader says, “Should we now call it the Evil Empire State Building?” That goes a little far, but I appreciate the spirit. And a different reader tells of a letter sent home from his daughter’s junior-high principal:
“October 1st this year is the 60th anniversary of China, and great changes have taken place and people are enjoying their life. In order to celebrate this great holiday, a party will be held . . .”
“People are enjoying their life,” huh? Well, I know of many people in cells and labor camps who aren’t enjoying life at all. In any case, our reader wrote to the principal to say that 2009 does not mark the 60th anniversary of China, which is a very old place, but the 60th anniversary of Communist rule: There is a difference. The principal wrote back that he appreciated the parent’s “perspective.”
Mark, Jay, you are of course both quite right about the Empire State Building. Truly a disgusting decision. That said, the fact that the building’s managers are planning to light their property red and yellow might suggest a way in which they could partly redeem its honor. Perhaps they could just remove the yellow — and leave the red as a symbol for the blood shed by a regime with the deaths of tens of millions on its hands.
Hey, the Red Chinese only killed 50 or 60 million of their own people, why not celebrate that achievement with a special lighting scheme. The only question is what colors they use for Stalin’s birthday, since obviously they don’t want people confused as to which genocidal regime they’re paying tribute to on any particular night.
This should make no sense to Americans. Why on Earth are we celebrating the founding of Communist China. The ideas at the core of Communist China’s founding are diametrically opposed to the ideas at the core of America’s founding. Remember, of course, that these are the same people who continue their oppressive rule over Tibet; who cracked down on the Tiananmen Square protests all those years ago; continue to oppress various religions (including Chinese Christians); censor the press, speech, the internet, etc.; refuse to recognize the democratic Taiwan; and so on.
Why on Earth are we celebrating this?
It would be interesting to see how many times the building has been bathed in the colors of countries whose ideas and philosophy happen to be more in line with ours. Israel, for example.
Here’s the questionnaire that the Chinese government, presumably, would have had to fill out to get the Empire State Building to honor the 60th anniversary of Chinese communism. Turn to the last page to see what’s in it for the ESB. Basically, management wants to know how much China is going to promote the building in its marketing efforts back home. Courting a few extra tourists is worth honoring 60 years of oppression, I guess.
A shadowy private security company that has no known clients but claims to have helped foreign governments combat terrorism and will protect anything from cruise ships to Pakistani convoys has taken over a jail in a small Montana town, with plans to build a law enforcement training facility on the property.
The state legislature is looking into the matter and residents of Hardin, MT, were alarmed last week when executives from the firm, American Police Force, showed up in the town, which does not have its own police department, with Mercedes SUVs bearing “City Of Hardin Police Department” decals.
And the town has had to tamp down reports on conspiracy Web sites that APF plans to impose experimental H1N1 vaccines on residents under threat of quarantine in the jail.
The shadowiness of the whole enterprise has spawned a series of conspiracy theories on the left and the right. But it mainly seems like it’s some guys with a bunch of guns who’ve found some way to make a lot of money. They just won’t say what. At least not yet.
So where exactly is APF getting the money for the venture? The company’s spokesperson says they don’t plan to answer the question. And who’s the spokesperson? That would be Becky Shay, who used to cover APF as a reporter for the local paper until about a week ago.
Late Update: Wow, it gets even better with APF. If you want to overthrow a small third world country? Check. Have them tail your cheating spouse and catch him/her in flagrante? Yep, got you covered there too.
The secrecy has led to speculation that the deal is tied to President Obama’s search for Gitmo detainee housing alternatives in the U.S. Hardin jail officials expressed interest in accepting released Gitmo enemy combatants last spring.
There’s not enough info to determine what exactly is going on — so Montana legislators are doing their jobs and trying to get to the bottom of it
So what do I think is happening here with American Police Force? I emphasize again that this is opinion, a piecing together of inherent knowledge and publicly available facts, not proof perfect that this indeed what is happening.
We’ve a small time operator feeding on the scraps and tail end of the Pentagon’s logistics chain: the sort of contracts they’ve been doing look remarkably similar to what one associate of mine was doing a decade ago. There are myriads of these companies out there at the moment, all scrapping to get these small contracts.
They saw that Hardin, Montana, had built this jail but had no prisoners to put into it. The bonds issued to pay for the jail are in default. So, how hard could it be to construct a story that would fly with the Town Manager?
“Yes, yes, we’ll sort it all out for you. We’ve great experience. Don’t worry, just sign the contract.”
In the tradition of so many of these small companies, it’s all about getting the contract first. Worry about how to perform, how to complete the contract, once it’s all been signed.
I doubt very much indeed if this bodes well for the filling up of that empty prison with paying convicts.
Citizens claim to have been stopped at road blocks and one business owner claims to have been told by an APF employee that they have a register list of all gun owners in the town. Stories are developing as the plot thickens. The company refuses to release information on the parent company but many computer savvy individuals have already discovered the APF shares operations with American Police Group, DPSNA, and Allied Defense Systems. Is this another private contractor like Halliburton or KBR?
Is it Constitutional for a private paramilitary police force with foreign mercenaries belonging to a foreign owned company to be patrolling the streets of an American city?
City officials claim to have had no discussions on the issue of this company patrolling the streets yet there they are. This story is still developing.
The only other things people seem to know about APF is that it has a fleet of Mercedes SUVs that say “City of Hardin Police Department,” they use a double-headed eagle emblem, have “virtual offices” in Washington DC and registered its website on May 15th, two weeks after Hardin made its Guantanamo request.
This group may not fit the criteria for a good old fashioned American militia, but their ominous takeover of a small town’s police force sounds pretty fucking paramilitary. Welcome to the future!
This is insane and weird: “A shadowy private security company that has no known clients but claims to have helped foreign governments combat terrorism and will protect anything from cruise ships to Pakistani convoys has taken over a jail in a small Montana town, with plans to build a law enforcement training facility on the property.” The company, American Police Force, is renting the fancy, new, and empty jail — a local politician recently offered to take Gitmo prisoners there, just to fill it up, bless his soul — and will invest many many millions to create a full War Facility. Just think of all the meth they can traffic! Ugh.
What is reconciliation and why is it used?
As mentioned above, it takes 60 votes to pass anything controversial in the Senate, due to the threat of a filibuster. But in 1974, in an effort to cut the nation’s soaring deficits, Congress passed a law creating a procedure that could NOT be filibustered and would only need a simple majority of 51 votes to pass.
Without a filibuster-proof procedure, lawmakers reasoned, the Senate would face difficulty passing bills that would make cuts in Medicare and Medicaid — popular programs which take up a significant portion of government spending. In an “explanation” of why reconciliation is needed, the Senate Budget Committee wrote in 1998:
These changes are considered difficult because the very nature of the programs involved often necessitates changing tax rates or placing restrictions on very popular social programs in order to achieve budgetary savings.
In addition to needing only 51 votes to pass, floor debate is limited to only 20 hours. Adding amendments that are unrelated to the bill are also prohibited. These rules are intended to speed up the legislative process and prevent opponents from gumming it up with deliberate procedural dawdling.
Strickland writes, “In 1974, in an effort to cut the nation’s soaring deficits, Congress passed a law creating a procedure that could NOT be filibustered and would only need a simple majority of 51 votes to pass. Without a filibuster-proof procedure, lawmakers reasoned, the Senate would face difficulty passing bills that would make cuts in Medicare and Medicaid.”
The thing is, deficits were not “soaring” in 1974. The federal budget deficit that year was $6 billion, or four-tenths of 1 percent of GDP. This year’s deficit will be about 13 percent of GDP. Reconciliation was not designed to force cuts in Medicare and Medicaid, which were not yet growing rapidly. When I was in the middle of the reconciliation process in 1993, trying to push a complex provision, I suddenly understood the process in a way I never had from the books: It was an effort to impose a modern, public-management type of budget process on top of the existing congressional process without disturbing the powers that be. It was a kludge. Before 1974, the president wrote a budget, but there was no overall congressional budget. The authorizing committees created programs, the appropriations committee funded some of them, others, like Social Security and Medicare, were funded automatically, based on the rules of the programs. There was no overall plan for spending or taxes. The Budget Committee (also created in 1974) was empowered to produce a plan, but in itself that plan would have no power.
The reason this history is important is because it is a reminder that reconciliation was not designed to create a “50-vote Senate.” It was really a limited scheme intended to connect the old spending process with the new.
In the lead-up to the Iraq War, there was a saying among neoconservatives: “Everyone wants to go to Baghdad. Real men want to go to Tehran.” Now, among progressives, one might say, “Everyone wants to do health reform. Real men want to use reconciliation” to cut out all Republicans and a few Democrats. But legislative strategy, like foreign policy, is not a test of manhood. It’s a very arcane and limited process that will leave many key provisions behind, and a weak and limited health plan.
One way or another, we’ll have to compromise. We’ll either compromise with the most conservative Democrats and one or two Republicans, or we’ll compromise with the limits of a process that was designed for a totally different purpose. The political question is simply going to be which compromise is worse.
I’ll just add that the most committed skeptics of reconciliation that I run into come from some of the most liberal offices on the Hill. It has not, in my experience, been even mildly split along ideological lines. In part, this is a simple matter of staffing. These sources would prefer that power remained with Nancy Pelosi, Henry Waxman, Harry Reid and the White House. Reconciliation empowers the Senate parliamentarian and the chairmen of the budget committees. In the Senate, that’s Kent Conrad, who hasn’t distinguished himself as a particularly fire-breathing lefty.
Their other argument is that reconciliation, which is a surefire process for policies that directly change spending but a very uncertain process for everything else, seems better suited to things that centrists want than things that liberals want. Liberals are very worried about consumers, while conservatives are very worried, at least in theory, about spending. The reconciliation process favors spending concerns over consumer protection. Regulating insurers, for instance, is almost certainly ineligible. But taxing health benefits and tightening Medicare’s belt will sail right through.
My conclusion has been that a reconciliation bill should not look like the current health-care reform bill. It should be an expansion of public programs: Bring Medicaid up to 150 or 200 percent of the poverty line and allow people from 45 to 65 to buy into Medicare and give some of them tax credits to do so. I don’t know if there are votes for that strategy. But it wouldn’t run afoul of the Senate parliamentarian.
A month ago, as Congress prepared to return to Washington DC in total disarray on overhauling the American health-care system, the White House proclaimed that Barack Obama himself would draft a proposal to restart the process. His joint speech in Congress mentioned no such plan, however, and the media quickly shifted its focus to the Senate Finance Committee, where moderates would have more influence than in Nancy Pelosi’s House. Today, though, Roll Call reveals that the White House did craft its own plan — but wants to keep it under wraps now that Congress has returned to its own deliberations
This creates another problem for Democrats. Both moderates and progressives in their caucus need traction over some contentious points of the plan, especially the public option. With the White House super-secret plan known, members of both chambers may demand to see it to gauge where they stand with the administration. Both groups would also be concerned, as Roll Call notes, that Obama was preparing to “sell them out.”
They might not need it. Despite sweeping Republican opposition to the Democrats’ plans, the Senate Finance Committee is carving through the hundreds of amendments to its proposal this month, with hopes that the bill will reach the Senate floor next week. With the arrival of Sen. Paul Kirk Jr. (D-Mass.), the Democrats now have a 60 members in the upper chamber. And without a public plan, the Finance proposal just might attract all of them.
So where does that put us now? It seems there are several possibilities. As occurred with social security and immigration reform under George W. Bush, the entire health-care reform effort may simply implode without resolution. Liberals insist on a public option while everyone else says no. Everyone goes away mad, vowing to blame the other guys. The public breathes a sigh of relief.
Alternatively, Nancy Pelosi and Harry Reid may realize they cannot become the death panel for the Obama administration. They assemble a package of discrete reforms that could have been enacted months ago. There are many pilot programs and study groups. Obama declares “victory,” liberals are furious that their moment of triumph has turned to mush, and the Obama agenda limps on.
And then there is the possibility that out of the morass of conflicting measures and without any assistance from the president (who plainly has no inner LBJ), some sort of comprehensive bill emerges. This alternative now seems the most difficult to imagine, which suggests how far we’ve come and how badly the president has fared. What would be in the bill? Could the Democrats use the reconciliation process to jam it through? We still have no answers to these basic questions. Why?
Until now, the threat of a government-run healthcare plan has deterred Republicans from negotiations with the administration. They were (reasonably) afraid of being mousetrapped into a philosophically unacceptable deal. But if the single most threatening element of such a deal has been voted down by Democrats, the field looks different. Instead of worrying about worst-case scenarios, Republicans now can begin to think: are there things we want? Might we successfully wedge centrist Democrats away from the Chuck Schumers? Until now, Republicans have clung to the untenable healthcare status quo in great measure because they feared the likeliest alternative would be worse. But what if the alternative might be an improvement over the status quo? Suddenly the deal option begins to look a lot more interesting.
The Obama administration’s lack of diplomatic seriousness goes beyond clumsy tactics; it reflects an inadequate understanding of the strategic necessity of constructive American-Iranian relations. If an American president believed that such a relationship was profoundly in our national interests — as President Richard Nixon judged a diplomatic opening to China — he would demonstrate acceptance of the Islamic Republic, even as problematic Iranian behavior continued in the near term.
After taking office in 1969, Nixon directed the C.I.A. to stop covert operations in Tibet and ordered the Navy to stop its regular patrols of the Taiwan Strait even while China was supplying weapons to kill American soldiers in Vietnam. President Obama has had several opportunities to send analogous signals to Tehran — such as ending Bush-era covert programs against Iran — but has punted.
The Leveretts remind us that Richard Nixon achieved his opening to China by taking concrete steps to reduce U.S. pressure on Beijing, even at a moment when China was helping North Vietnam kill U.S. soldiers. (And this was Mao’s China, remember, which U.S. officials had long seen as fanatical, ruthless, irrational, etc.). Nixon did this because he understood that transforming the entire U.S.-China relationship was more important than worrying about Beijing’s bad behavior; the key was move to a relationship where such bad behavior was no longer in China’s interest.
The strategy they outline might not work with Iran, but it would hardly leave the United States worse off than the strategy Cohen recommends, which by his own admission is likely to fail. The problem, of course, is that it is the neoconservative forces that Cohen represents are now working overtime to prevent the United States from pursuing the one course of action that might-repeat, might-actually convince Iran it is better off with an enrichment capacity but not an actual bomb.
This seems as propitious a moment as any to cave to popular demand that I articulate some thoughts on the sanctions question with regard to Iran. I would expect some somewhat more utility in the sanctions process than the Leveretts. If the U.S. can foster cooperation among the P5 + 1, and the Iranians see the extent of this cooperation, then I think they’d be willing to deal. That’s not an easy proposition to pull off, and would require both diplomatic skill and will. That does not mean it should’t be tried, however. Even the effort to build momentum in the Security Council might prompt serious bargaining from the Iranians.
I would also like to know how the Iranian opposition feels about sanctions. If they reject them as a policy tool, well, that’s a good argument against their imposition. On the other hand, if this is a replay of South Africa, then that’s something else to consider.
One final point — the analogy with Nixon’s opening to China makes zero sense in the current context. Nixon was trying to outflank the Soviet Union during the Cold War by cozying up to their most powerful bordering state. What the Leveretts seem to be proposing is a multilateral move to bring Iran in from the cold — which benefits Russia and China far more than it benefits the United States. In other words, I’m not sure how a Nixon strategy works in the P5 + 1 framework.
I suppose that the Obama administration could attempt secret shuttle diplomacy with Iran to outflank Moscow and Beijing. Such a gambit would infuriate our European allies and push Israel into panicking, however — and I’m not sure that’s worth whatever strategic gains would be had by a rapprochement with the regime in Tehran.
So, to review, I give the Leverett op-ed an “I” — for being inchoate, inconsistent, and idiotic.
The apologia for Ahmadinejad was indeed odious (and more importantly wrong). So no defense of the indefensible on that point. The Leveretts don’t help their own case by referring to the recent events in Iran as “hardly a cataclysmic event.” And accuse, falsely, the Obama administration of trying to use the elections to topple the Iranian regime (to which Drezner correctly gives a WTF?).
The brunt of Drezner’s claim is that they have taken this Ahmadi-apologetic stance to new highs (or lows I suppose) in regards to the upcoming talks with Iran. But then he goes on to say the article makes “no f***ing sense whatsoever.” Which while colorful is not true. In the process Drezner I think misses some really insightful thinking on this subject.
The Leverett article makes a great deal of sense IF one has a different frame of mind about who runs the shows in Iran than Drezner does.
What the Leveretts are ultimately arguing is that sanctions against Iran will not work. If you read Dan’s piece he’s more open to the idea that they will. I’m probably more in the Leverett camp on this one. The Leveretts are also correct that this upcoming meeting with Iran will not involve an actual diplomatic offer but rather an ultimatum. The ‘offer’ such as it is, is entirely based on the principle of “we’re in charge, if you follow our rules and play nice, then you’ll get some goodies.” We’ll see, but I have a hard time imagining that will work, new nuclear site revealed or no.
Meaning I think at this point continuing down the sanctions route (which I believe has little to no chance to succeed) will inevitably lead to one of two outcomes: war or a nuclear armed Iran. For a long time, I’ve thought the second option the likely one, but my fear is that by ratcheting up on the sanction and Axis of Evil path oh this last decade, and all the declarations about never being able to live with a nuclear-armed Iran is tipping the balance towards the first option.
Dan Drezner reads the Leveretts on Iranian-American relations so that the rest of us don’t have to. Like Drezner, I don’t know how the Leveretts were able to convince the editors at the New York Times that their proposals for negotiating with Iran are good ones. And like Drezner, I have no idea what makes the Leveretts think that a grand alliance between the United States and Iran could serve the same purpose that the grand alliance between the United States and China–opened by the Nixon Administration–did.
I will add anew my call–repeated again in the Arena–for talks with Iran that feature discussions on the state of human and political rights in Iran.
During the first wave of the Green Revolution, this blog had loads of Iranian readers in Iran, or Iranians outside the country able to convey what the sentiment was within. Please email your thoughts on sanctions and I’ll do my best to air them.
Neoconservatives generally take the view that the internal character of a regime usually predicts the nature of its foreign policy. Governments that are answerable to their own people and accountable to a rule of law tend to respect the rights of their neighbors, honor their treaty commitments, and abide by the international rules of the road. By contrast, regimes that prey on their own citizens are likely to prey on their neighbors as well. Their word is the opposite of their bond.
That’s why neocons have no faith in any deals or “grand bargains” the U.S. might sign with North Korea or Iran over their nuclear programs: Cheating is in the DNA of both regimes, and the record is there to prove it. Nor do neocons put much stock in the notion that there’s a “reset” button with the Kremlin. Russia is the quintessential spoiler state, seeking its advantage in America’s troubles at home and abroad. Ditto for Syria, which has perfected the art of taking credit for solving problems of its own creation.
Where neocons do put their faith is in American power, not just military or economic power but also as an instrument of moral and political suasion. Disarmament? The last dictator to relinquish his nuclear program voluntarily was Libya’s Moammar Gadhafi, who did so immediately following Saddam Hussein’s capture. Democratization? Contrary to current conventional wisdom, democracy is often imposed, or at least facilitated, by U.S. pressure—in the Philippines, in the Balkans and, yes, in Iraq. Human rights? Anwar Ibrahim, the beleaguered Malaysian opposition leader, told me last week that “the only country that can stand up” to abusive regimes is the United States. “If they know the administration is taking a soft stance [on human rights], they will go on a rampage.”
None of this is to say that neoconservatism represents some kind of infallible doctrine—or that it’s even a doctrine. Neocons have erred in overestimating the U.S. public’s willingness to engage in long struggles on behalf of other people. They have erred also in overestimating the willingness of other people to fight for themselves, or for their freedom.
But as the pendulum has swung to a U.S. foreign policy based on little more than the personal attractions of the president, it’s little wonder that the world is casting about for an alternative. And a view of the world that understands that American power still furnishes the margin between freedom and tyranny, and between prosperity and chaos, is starting to look better all the time. Even in France.
The question remains then what the “realists” believe. The crowd that was to put ideology off to the side has again and again substituted wishful thinking for clear-eyed analysis. We’d force a peace deal by insisting Israel do what Israel could never agree to do (enforce an absolute freeze on settlements) in the hopes the Palestinians would finally agree to do what they’ve never done (halt terrorism and recognize a Jewish state) in circumstances that suggest both parties are incapable of doing anything differently. This is “realism”?
In Honduras, the Obama team ignored the essential facts precipitating the ouster of Manuel Zelaya (the text of the Honduran constitution), the Honduran political scene (the military, middle class, Catholic Church, legislature, and Supreme Court all oppose Zelaya’s return), and the regional and international implications (boosting Hugo Chavez, who is fast becoming Ahmadinejad’s best pal). The Obama realists put their stock in a delusional follower of Chavez. Not much “realism” there either.
The list goes on. On Afghanistan the president is searching in vain for a mythical alternative to the counterinsurgency recommendation of his own general. The light-footprint model has proved unworkable, but experience does not matter much these days. Meanwhile, we yank the rug out from under Poland and the Czech Republic on missile defense because we know Iran isn’t working on long-range missiles and because the Russians will have to cooperate with us now. The Russians didn’t actually promise anything, but realists these days operate on warm fuzzy feelings and intuition about our adversaries.
There is not a single meaningful foreign policy decision—aside from the continuation of George W. Bush’s Iraq policy—that bears any trace of realism, if we understand realism to mean a foreign policy grounded in the world as it is, not as ideologues wish it to be. Past experience, current geopolitical realities, historical precedent, and common sense are nowhere in evidence. Instead we get gauzy rhetoric and undiluted faith in talking to those who plainly don’t want to talk to us (or who would be happy to talk while doing precisely what they want to anyway). And there’s plenty of stalling. So it seems that “realism” boils down to wishful thinking and a heavy dose of procrastination.
It is not at all clear that neoconservatives have “returned” in any way, and it seems highly unlikely that many people overseas are now craving the firm smack of incompetent warmongering that the neocons can offer. To a large extent, the neocons never went anywhere in domestic policy and political debates. This is because there has not been any accountability in either the foreign policy community or the conservative movement for their colossal failures and misjudgments. That said, they are not exactly riding high, either. Neocons continue to be taken far too seriously and they continue to have access to a great many media outlets, but for the most part they have been leading the Republican Party’s charge into spluttering irrelevance on foreign policy. Having destroyed the party’s political fortunes with the war in Iraq, they seem intent on sinking the party even deeper into the ditch into which it has crashed. If this is a “return,” I wonder what decline looks like.
One of the problems the GOP and the conservative movement has had over the last several years is the retreat inside their own echo chambers, in which they keep repeating the same nonsense to themselves and reinforcing all of their false assumptions. The foreign policy cocooning seems the worst to me, but the stagnation and persistence in error we see in most Republican foreign policy arguments are functions of the larger intellectual collapse on the right. Stephens’ op-ed is one example of this. The world is not looking for an alternative to Obama at the moment, but Stephens simply asserts that it is because a foreigner (a Frenchman, no less!) pitched a counterintuitive idea for a column to him. This assertion is similar to the repeated claims made by Iraq hawks throughout 2006 and after that the public had not turned against the war when it clearly had. It is understandable that ideologues feel compelled to ignore reality, because it almost never fits their predetermined schemes, but when they are reduced to making things up out of thin air they have reached a new depth of desperation.
China is not the only country that is rising. So is India. But we do not worry about India’s rise. That is because India is a democracy. Almost everything it does is transparent to us. We share liberal values with India, including the desire to strengthen the post-World War II liberal international order of open trade and investment and the general desire among democracies to settle internal and external disputes peacefully and democratically. The fact that China is not a democracy matters greatly as it rises. It makes its rise more disruptive as countries have to divine its intentions and observe the gap between its rhetorical policy of a “Peaceful Rise” and some of its actions that are inconsistent with a peaceful rise.
Wouldn’t it be nice if China got on board with all the post-modern, feel-good notions about international politics put forth by the Obama Administration? In the 21st century, says the Obama team, all countries have common interests in confronting transnational issues like climate change and proliferation. Sorry guys, those who lead China think 21st century international politics will look more or less like it did in the past. They favor good old fashioned power politics. Unfortunately for Obama, that forces us to do the same.
Taking his lead from Reinhold Niebuhr, Bacevich believes we are on an utopian mission to remake the world–or, in this instance, the Muslim world; it is a program that is immoral both because it is impossible (and hence counterproductive) given human nature and because, in pursuing it, we adopt policies that chip away at our own morality. (The ends begin to justify the means, etc, etc.) The more limited our ambitions in Bacevich’s view, the less damage we do to ourselves and others.
All of which contains a kernel of truth–but only a kernel. Whatever problems we face domestically, it is just an historical fact that a broader American vision abroad has typically made us a better people at home. Nor is there any evidence that a less expansive (and hence less expensive) foreign and defense policy would free up monies that miraculously would solve a problem like poverty or second-rate schools. To the contrary, more government funds could well confound finding the policies that would actually help alleviate those problems. However, the larger point is that Bacevich and other conservative critics, like George Will, are standing on unsound ground when they argue that the transformative goal of the Long War is utopian. It might be long and it might be difficult but, if anything, the evidence so far suggests that the establishment of decent democratic regimes is possible in all kinds of regions and in countries with diverse cultural histories. That hardly means that failure in the Long War isn’t possible; but to hear Bacevich and others tell it, is inevitable.
In Schmitt’s reading, spending tax dollars on welfare or education “could well confound finding the policies that would actually help alleviate those problems.” This is a fairly straightforward conservative argument. What’s strange is that Schmitt makes the argument that while the U.S. government likely could not figure out how to improve education or the general welfare in the United States, it can parachute into faraway countries and improve the governance over there. Or it at least ought to try, since “a broader American vision abroad has typically made us a better people at home.” This is, to my mind, utterly, profoundly incoherent. I think the most important point is that we ought not to send our military overseas to kill and die so that we can be “a better people at home.”
I am reminded of Irving Kristol’s statement that “A nation whose politics turn on the cost of false teeth is a nation whose politics are squalid.” It’s something of a parlor game in IR to debate whether neoconservatism is its own IR theory; whether it’s a theory at all, of anything; whether it’s really just liberalism; et cetera, but what would be really good to have is a clear statement that could be scrutinized on its own merit. Until then one is left guessing or, at best, turning up weird conspiracy theories about Leo Strauss and the University of Chicago on the internet.
A new Newsmax column advocates a military coup to unseat Obama or usher in a period of “shared responsibility” between military government and a ceremonial Obama presidency. “A coup is not an ideal option, but Obama’s radical ideal is not acceptable or reversible.”
The author, John L. Perry, claims not to be ‘advocating’, only describing what he says is already being considered and is the best option available. But give it a read and you be the judge.
And just so we’re totally clear, no, I’m not expecting any military coups. This is just one more nugget to add to the backdrop list of incitement now coming from the right.
Here’s why this fellow should be put in a straitjacket, and locked up in a nice padded room with plenty of stuffed animals so he he can work off his misplaced aggression against President Obama by tearing off their heads with his teeth:
“Military intervention is what Obama’s exponentially accelerating agenda for “fundamental change” toward a Marxist state is inviting upon America. A coup is not an ideal option, but Obama’s radical ideal is not acceptable or reversible.
Unthinkable? Then think up an alternative, non-violent solution to the Obama problem. Just don’t shrug and say, “We can always worry about that later.””
Ok – I just shrugged my shoulders and said “We can always worry about that later.” Seems to me the republic is still here. Oh sure, Obama is a pifflehead and he wants to nationalize health care but really now, shouldn’t there be like a, you know, good reason to just toss the election results from last year out the window and put General Fiddle Faddle or Colonel Tootie Frootie in charge? No domestic unrest because of this action? What to do with all those very angry liberals and Democrats? It might be emotionally satisfying for some to see our opponents marched off to those detention camps Haliburton built in Utah and Nevada, but gawd, we’d never hear the end of it.
Perry is an old man – served in the Johnson Administration and his bio says he was one of the first journalists allowed into Russia following the death of Stalin. He has got to be in his mid 80’s. He talks of the military performing what amounts to a “family intervention” to remove the duly elected, constitutionally legitimate, president of the United States.
I think his own family should heed that advice and retire this fellow before he hears the laughter directed his way for being such a monumental ass.
Anyone who thinks we are headed for a Marxist state either A) hasn’t ever lived in one, B) hasn’t bothered with the hard work of separating hyperbole from fact, or C) both. Far too many people making limited-government criticisms of Obama cry wolf about Soviet communism without having a clue of what they’re talking about. It’s not a recipe for persuasion, IMO.
The morning is young but I’ll bet this will be the silliest thing I read today, or maybe this year. The military effecting a civilized, bloodless coup because they don’t like the current leadership? The United States military? They have spent over two hundred years not doing that, and they have far too much pride and honor to start now.
I’ll worry about more plausible disasters, like the Yankees flying to the wrong city and forfeiting a playoff game.
Newsmax actually ran this as a column, not a blog post. It’s a lunatic fantasy straight out of Greek theater. In those days, when mediocre tragedians wrote plots so complicated that they couldn’t resolve them through character interaction, the Deus ex machina (loosely, the Flying God Machine) would deposit a new actor portraying one of the Greek pantheon onto the stage to sort out the mess. Perry fantasizes about a military takeover that would be the world’s most powerful Deus ex machina, mainly out of political laziness:
“Unthinkable? Then think up an alternative, non-violent solution to the Obama problem. Just don’t shrug and say, “We can always worry about that later.””
The alternative, non-violent solution is the one we’ve been using for 220 years: elections. We have another coming in 2010. If the American people get fed up with the direction of this government, then we will change it in the midterms. We do not need our military to rescue us from ourselves, thank you very much.
One might excuse this kind of nihilism if it came from a college freshman who had no sense of his own nation’s history, but this comes from a man who served two White House administrations. There is simply no excuse for this hankering for a banana republic in America from someone who should know much, much better.
Modern behavioural economics shows that there are distinct limits to people’s ability to understand and deal with complex instruments. They are often inattentive to details and fail even to read or understand the implications of the contracts they sign. Recently, this failure led many homebuyers to take on mortgages that were unsuitable for them, which later contributed to massive defaults.
But any effort to deal with these problems has to recognise that increased complexity offers potential rewards as well as risks. New products must have an interface with consumers that is simple enough to make them comprehensible, so that they will want these products and use them correctly. But the products themselves do not have to be simple.
The advance of civilisation has brought immense new complexity to the devices we use every day. A century ago, homes were little more than roofs, walls and floors. Now they have a variety of complex electronic devices, including automatic on-off lighting, communications and data processing devices. People do not need to understand the complexity of these devices, which have been engineered to be simple to operate.
Financial markets have in some ways shared in this growth in complexity, with electronic databases and trading systems. But the actual financial products have not advanced as much. We are still mostly investing in plain vanilla products such as shares in corporations or ordinary nominal bonds, products that have not changed fundamentally in centuries.
Why have financial products remained mostly so simple? I believe the problem is trust. People are much more likely to buy some new electronic device such as a laptop than a sophisticated new financial product. People are more worried about hazards of financial products or the integrity of those who offer them.
The point of this metaphor is to convince you that, since houses and consumer devices like laptops have become immensely more complex in the last hundred years, financial products should as well – and the fact that they have not is a problem.
This is a perfect example of a misleading metaphor. No one today would want to live in a house from 100 years ago (not the house itself, but all the stuff in it, is what Shiller means), nor do we want to give up our laptops. Because most of our financial products were around 100 years ago, we must be missing out on all sorts of potential improvements. But nowhere does Shiller show – or even argue – that there is some underlying feature of financial products that makes them like technological products in this respect. In technology, for example, we have Moore’s Law – the observation that every 18 months (originally two years) the achievable density of transistors doubles – which implies that products can get smaller and cheaper. Shiller makes no equivalent claim for financial products. The point of our Democracy article was to argue that there is in fact no equivalent for financial products, because financial innovation is fundamentally different from technological innovation. You may not agree with us, but at least we argued the case, instead of relying on a metaphor.
I think metaphors are a great way to illustrate abstract concepts, especially to beginner audiences. I use them all the time. But their value is solely illustrative; they don’t ever prove a point. If you say A is like B, and you want to show that A has some attribute that B also has, you have to prove it without reference to B. A good example is Paddy Hirsch’s video comparing a CDO to a pyramid of champagne glasses; there, he walks you through why a CDO has the properties of a pyramid of champagne glasses, instead of simply asserting it.
However one feels about financial innovation, it should be clear that it is fundamentally different from technological innovation. Technological innovation generally results in something that either demonstrably improves the way we do things (or enjoy things), or it reduces the cost of things we’re already doing or enjoying. Some financial innovations are like this. Most of the ones that are—like ATMs or online banking—are actually technological innovations.
Many other financial innovations aren’t really like this at all. They allow market participants to do things that they couldn’t previously do, but it’s often far from clear that this leads to any net increase in utility, and it certainly doesn’t seem to reduce the cost of finance overall.
Just to focus on consumers, I think it’s interesting to see how consumer product innovations have been different from those in consumer finance. Consumer technologies have largely been about making it ever easier to manage an increasingly large range of options. Even as products, like computers, cameras, appliances, and so on, have grown increasingly sophisticated, user interfaces have gotten simpler. Sitting here at my Mac, I can handle a remarkably large range of tasks and manage massive amounts of data in various forms, using little more than a mouse and the dock full of application icons at screenside.
Finance doesn’t work like that. It might be one thing if innovations were like the increasingly boggling array of wires and circuitboards inside an iPod, all of which serve to make it very simple to craft the perfect playlist or easily move through photos and videos using only an index finger, and which seem to get better and cheaper all the time. Instead, innovation is like those same wires and circuitboards dumped in front of consumers, who are then asked by a loan officer where he should start soldering. And at the end of it all, consumers aren’t sure what they’re getting and what they’re paying for it. To make it plainer still, when a consumer pays $300 for a new iPod, Apple makes money and the buyer is happy. When a consumer takes out a confusing loan or signs up for an account with overdraft fees that are applied when the bank juggles the times at which deposits and purchases are cleared, well, the banks make money, but buyers often feel bewildered or angry, or are unsure exactly what they’ll wind up paying.
There are examples of useful financial innovation – the cash machine and the credit card come to mind – but products which appear to reduce risk are not among them. Plain die-to-win protection is useful, simple and easy to understand, but has a thin profit margin, which is why the life offices would rather sell you an endowment policy, precipice bond or pension plan, products which have little to do with insurance. They are driven by the fees which can be extracted while putting the savers’ money through the mincing machine to construct the “product.”
Saving and investment is tricky, and it’s in the interests of the financial services industry to make it harder by adding complexity. For the ordinary punter, one rule should apply above all else: never buy a structured product.
James Kwak has a great response to Robert Shiller’s FT op-ed about financial innovation. But his line at the end about how “for the sake of argument, I am willing to concede that these are useful innovations that would make people better off” has been misconstrued, and it’s worth pointing out that in fact they’re not useful innovations that would make people better off.
Why not? Mainly because, at heart, they’re all variations on the theme of doing-clever-things-with-as-yet-uninvented-derivatives. But that’s a theme which really shouldn’t have survived the financial crisis.
In 2003, Alan Greenspan famously said that ““what we have found over the years in the marketplace is that derivatives have been an extraordinarily useful vehicle to transfer risk from those who shouldn’t be taking it to those who are willing to and are capable of doing so.” But, as it turned out, they weren’t. Lots of people wanted to transfer risk, and precious few were genuinely willing and able to take it on: even hedge funds generally prided themselves on being lower-risk than the stock market as a whole.
The result was a system where derivatives were used to hide risks, and shunt them off, unseen, into the tails. A system where hidden risks turned out to be much more dangerous than if they’d all been out in the open all along.
“The person most willing to take on risk is the one unaware he is doing so. He charges no risk premium…
The resulting market equilibrium is that the guy who is unaware of the risk ends up loaded with it. Then the music stops.”
This is possibly a very beautiful and elegant explanation for the extreme profitability of investment banks. They charge their clients a lot of money to take risk off their hands, and then they transformed that risk, using sophisticated financial engineering, into instruments which didn’t, on their face, look risky at all, and which could easily be sold to risk-averse investors. Bingo, massive profits.
Financial complexity and innovation, on this view, are essentially tools of obfuscation. And it’s easy to hide risks when risk-averse investors want debt-like products which retain their face value: such instruments tend to have very low volatility, and so look and feel as though they’re low-risk, even if they’re full to bursting with enormous amounts of tail risk. The answer, as I’ve said many times in the past, is for risk-averse investors to be willing to take a small amount of explicit market risk, and to move towards safe equities (utilities and the like) and away from debt. Because if they go to an investment bank asking for safety, they’re likely to just get hidden risk in return.
Conclusion: “Financial complexity and innovation, on this view, are essentially tools of obfuscation.” I don’t think we should say that financial innovation is “essentially” one thing or another. A lot of the financial innovation of the past thirty years was aimed at regulatory arbitrage. A lot was basically aimed at hiding the ball so as to better be able to mislead people (and in some cases the financial institutions themselves) about where risk lay. And it’s also true that if you look at shifts in the global economy over the long run, innovation has led to more efficient financial markets. It’s much easier than it was 150 years ago to find reasonable ways to finance moderately risky projects in capital poor areas of the world.
But I think the upshot of this isn’t that we need to be “against” financial innovation but that we need to be skeptical of the claim that any measure to reduce the pace of innovation is likely to bring economic disaster. We should try to stifle innovation aimed at exploiting loopholes in regulations or ripping people off. It’s pretty basic to see that there are good business opportunities in those fields and thus we should expect a lot of innovative activity to be aimed at exploiting those opportunities.
But aren’t a lot of the most risk averse investors funds or insurance companies with limits on the kinds of assets they can invest in? I’m not sure we can fix this problem without knowing the answer to the question we’ve been asking for a year now: why did the ratings agencies underestimate the tail risk, and is that reason fixable?
What Felix omits in his short post is the unwilling risk taker known as the taxpayer. A lot of the trick of investment banking is to figure out a way to transfer risks to taxpayers. And the investment bankers have gotten really good at it, particularly in the last thirty years. That is why there are those of us on the right (Russ Roberts and myself, to name two) and those on the left (Simon Johnson and James Kwak,, to name two) who are skeptical of the incumbent regulators when they say that they can control moral hazard. Our view is that the moral hazard problem is much more profound than the regulators acknowledge.
Another really profound issue, which Salmon raises, is why so many people prefer debt-like contracts to equity-like shares in enterprises. If he were to read This Time is Different, by Carment M. Reinhart and Kenneth S. Rogoff (and perhaps he already has), Salmon would have even more reason to raise this issue.
My theory is that people have the illusion (and again, government policy can foster this illusion and sometimes make it come true) that they will not be victims of default. Every individual thinks, “Of course, if I see trouble coming, I’ll be able to get out (or be bailed out) before I take a loss.” When a default occurs, somebody will be left holding the bag. However, as individuals, none of us believes that that we are going to be the bagholder.
Oh, The Health Care Posts We’ve Had And Haven’t Had And Wish We Could Do
First, let’s talk reconciliation:
Ken Strickland at MSNBC:
Mark Schmitt at Tapped:
Moving on, Ed Morrissey:
Mike Lillis at Washington Independent:
Jennifer Rubin in Commentary:
David Frum at New Majority:
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Tagged as Commentary, David Frum, Ed Morrissey, Ezra Klein, Health Care, Jennifer Rubin, Ken Strickland, Legislation, Mark Schmitt, Mike Lillis, MSNBC, New Majority, Tapped, Washington Independent