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Tuesday, April 07, 2009
Congressional war powers Republican Senator Jacob Collamer of VermontI came across this speech of February 21, 1859, as recorded in The Congressional Globe (official record of Congressional speeches before The Congressional Record) by Republican Sen. Jacob Collamer of Vermont. He was speaking in opposition to the push by the slave states, encouraged by Democratic President James Buchanan, to seize Cuba and more of Mexico and perhaps other territories in Central America. Mr. President, the Constitution provides that Congress shall declare war. What is war? I say, forcible occupation of any part of any country by armies is war. You need not qualify it by saying it is an act of war, that it is hostility, or something of that kind - it is war. Sir, when the Emperor of Russia took possession of the principalities of Moldavia and Wallachia with a military force, merely on the ground claimed to give protection to the Greek church, all Europe declared that war existed. They made no more declarations. It was prosecuted as a war, and terminated as a war, after all its scenes of blood. When Mexico sent an army across the Rio Grande they were driven out, after the battles of Palo Alto and Resaca de la Palma; but the act they did was to come over with an army, to cross the Rio Grande into a country which claimed; and what was done? Our Congress declared that war existed by the act of Mexico. So we ourselves have indorsed [sic] it, that the occupancy of any part of any country by a military force is war. Now, sir, I have merely this to say: when the Constitution says that Congress shall declare war, I take it, it necessarily implies this: that no war shall exist in this country by the act of the functionaries of this Government unless Congress has passed upon the constitutional causes of that war. When Power is given to them to declare war, there is given to them, and to them only, the power to judge whether there is occasion for a war; and it necessarily follows that if any war exists in this country, not declared upon us from abroad, but by the act of this country, if war exists by any other instrumentality than the declaration of Congress, it exists unconstitutionally. The people of this country had been, long before the adoption of their form of Constitution, the colonists and descendants of the people of England. They had lived under a Government where the discretion of the king could involve the nation in war when he pleased; they had had enough of that; and accordingly, in the Constitution, they carefully reserved the power to make war to be alone in Congress. When it is said that really our people would be better protected abroad if it was known that the President could at once use force and make war when he pleased, that those Governments would be more careful in the treatment of our citizens, what does that mean? Why is means this: a monarchical form of Government with the power of war in the hands of the Executive, is a desirable Government, better than ours. It is a power needed, and it should be had, in the Executive. Sir, the Constitution is not so; the people thought it otherwise when they made it. But it is said the President can involve this nation in war whenever he pleases, in the exercise of his diplomatic power; he has nothing to do but to send an insolent correspondence to a foreign nation and involve the nation in war. Because the President may, by abusing the power that he has, make a war, is a miserable argument that we should give him the right to make war when he pleases without abusing anything. If he abuses his diplomatic power for such a purpose, he may be impeached. If you tell him he may use his discretion about going to war when one of our men is imprisoned in Mexico, he can go to war and cannot be impeached. It is no reason, because he has the power by abusing his diplomatic functions to involve this nation in war and subject himself to an impeachment, that, therefore, you shall give him the power to make war so that he shall do it without impeachment. [my emphasis]Imagine having a Congress that could stand up to a President who wanted to, say, invade a country based on falsified intelligence, a country that was no threat to the United States, and an invasion sure to become a nightmare. Just to take a hypothetical example. Today we have a President that just proposed a new defense budget that is wildly in excess of what is really required for national defense. But instead of exerting themselves to limit the President's and the Pentagon's proposals, they will most likely work hard to increase the budget. And Congressional oversight on the Iraq War, the Afghanistan-Pakistan War, and the various secret military projects that the Cheney-Bush administration had going on Lord-knows-where has been to put it mildly, pitiful. Just to be clear: Obama does seem to be using his Republican Defense Secretary to start to at least clean up the predator-state style procurement and development processes that Rummy put in place. And that's a very good thing. While I'm on the subject, I would sure like to see some real limits on the ability of companies to lobby for defense systems. The military budget should be to protect the country, not to provide self-developed markets for corporate boondoggles. Tags: war powers
Monday, April 06, 2009
More on Simon Johnson and the IMFing of the US economy Simon Johnson"No sólo ha fracasado el neoliberalismo, sino una forma de funcionamiento del sistema mundial de los organismos internacionales." (Not only did neo-liberalism fail, but also the functioning of the global system of the internatal mechanisms.) - Argentine President Cristina Fernández, March 2009 Continuing with my reservations about the analysis of former IMF chief economist Simon Johnson, The Quiet Coup The Atlantic May 2009 ... Criticism of Johnson's article has been coming from a variety of Democratic/liberal sources, including Tim Fernholz at Tappped (Why the IMF approach? 03/30/09; More criticism of Johnson and the IMF 03/31/09) and Dani Rodrick (Simon Johnson's morality tale 03/30/09). Thinking about Johnson's position some more, the key problem in his approach to the current financial system's crisis is that although nationalization (i.e., recognizing that some major banks are in reality insolvent) is considered a more liberal (left) position at the moment than the Geithner plan, he seems to be clinging to the IMF "neoliberal" faith in deregulation. He doesn't emphasize better regulation at all. He assumes that hedge funds and private equity funds will basically have no new regulations. And he proposes that the largest banks be reduced in size and kept that way through anti-trust legislation and enforcement. He argues that banks too big to fail shouldn't be allowed to exist in the first place. He generalizes it even more: "Anything that is too big to fail is too big to exist." I take this to mean that he thinks that through antitrust laws, not only in the financial sector, but in the rest of the economy, that we can adopt a policy of never bailing out failing companies in the future. Presumably, it also means that banks would be simply allowed to go bankrupt and close their doors in the future, rather than be taken over by the FDIC and kept in operation until they can be resold in a healthier form, or their assets and liabilities parceled out to other institutions. This is very unrealistic, both in his faith in antitrust laws and in the neoliberal assumption that the state can stand on the sidelines and watch companies critical to the economy go down. It's neoliberal utopianism, as far as I can see. And that's why his definition of the problem sounds so suspicious to me, even though it's clearly partly accurate. He is not only be diagnosing the financial problem. It seems to me that he's even more focused on defending the IMF's Washington Consensus form of neoliberal economics. So while parts of his diagnosis of the corruption of the American financial and political elite could fit comfortably into a left or even radical-democratic analysis, that's not really what he's up to. My reading is that he's presenting the Washington Consensus as being focused on combating elite corruption and crony capitalism, not on slashing social services and public infrastructure projects, which is what happens in reality with countries that become wards of the IMF . And at least from what appears in the Atlantic article, he's not giving up his IMFish neoliberal faith in the miracles of deregulation of financial companies. He's just packaging it in a Progressive-era wrapping of of antitrust militancy. Dani Rodrick also dings him for his Pollyanna presentation of the IMF approach. Strong and effective government regulations and honest, consistent enforcement of them are critical. And that is a major area in which the overly cozy relationships between the political and financial elites has been devastating. As Joe Conason argues in No More Refuge for Scoundrels PolitickerNY.com 03/31/09: Massive fraud has been at the center of this crisis from bottom to top, as everyone paying attention must know. The criminal mind-set extended from the bankers and mortgage agents who made loans to unqualified borrowers and sometimes tricked them into signing agreements they could not fulfill. (Among the most industrious marketers were many with actual criminal records, whose entry into the mortgage industry was not blocked by the state regulators.) They marketed those same bad loans with false assurances of their soundness to convince investors to buy them—and somehow induced rating agencies to offer hollow testaments to their creditworthiness. Investors then resold the toxic packages to other investors both here and abroad. At every step, the inflation of the bubble was hastened by fraud, forgery and deception.The decisions of the G-20 summit this past week were yet another reminder of the massive failures of the IMF economic dystopia of privatizing everything that can be privatized, slashing government expenses to the bone, radical deregulation, hostility to labor and throwing the doors open to the international "free market" in capital and everything else. Tags: simon johnson, us economy
Sunday, April 05, 2009
Change You Can Count in Your PocketI cleaned out my car today, and I was rewarded with a big pocket full of coins that I found in between the seats, and under the floor mats. I felt pretty good about having a car that had clean windows and seats, and the $3.32 in change that I put into the coin jar in my kitchen might buy a Subway sandwich at some future date. It was also great to rid my vehicle of those nasty week-old coffee cups, the milk begins to smell bad after a couple of days.The thing that stinks worse than my solidifying coffee, is the scam that is being perpetrated by our very own newly-elected Administration. This is from today's Washington Post: The Obama administration is engineering its new bailout initiatives in a way that it believes will allow firms benefiting from the programs to avoid restrictions imposed by Congress, including limits on lavish executive pay, according to government officials. . . . The administration believes it can sidestep the rules because, in many cases, it has decided not to provide federal aid directly to financial companies, the sources said. Instead, the government has set up special entities that act as middlemen, channeling the bailout funds to the firms and, via this two-step process, stripping away the requirement that the restrictions be imposed, according to officials. . . .The thing is, I think we are re-inflating the bubble,propping up the old system, and economic recovery is going back to the people who need it the least, those who caused all of the pain for the rest of us, and the loss of jobs for nearly 10 percent of Americans. We are getting change for sure, change we can put in our penny jar, but the folks at Goldman Sachs and Citigroup are getting dollars, lots of dollars. Please read this post by Glenn Greenwald at Salon.com. I think our own Democrats are ripping us off.
Ignoring the ObviousOkay so over the past couple of days, beginning on Friday, gun violence has made the headlines again.13 people killed in Binghampton NY, and 3 police officers shot to death in Pittsburgh PA. As drug wars threaten our very borders, and Mexican officials struggle to contain the killing, it is our very own weapons, made in the USA, and our flawed gun control laws that threaten our citizens. Does anyone else think it's time to pass some serious gun control legislation, or should we wait for the next bloodbath? Progressive law makers have got about 17 months before the midterms, and Obama has got maybe a little more time than that before he has to run again, so maybe it's time to take advantage of our majority. Why can't we shove some serious gun legislation through Congress and get rid of these dangerous weapons before we all kill each other? As the economy deteriorates, crime becomes an employment option for those with no good choices for jobs. It is happening in Pittsburgh, and New York, and on a much larger scale, North Korea. It is time to disarm. The small baby steps towards world peace must begin in our own cities and states. We have to get rid of the guns.
Saturday, April 04, 2009
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Are we chasing phantoms in "Af-Pak"? Obama is telling our NATO partners that Al Qa'ida is a greater threat to Europe than to the US. (Obama advierte de que Al Qaeda es un peligro mayor para Europa que para EE UU El País 03.04.2009)If that's the case, then why is the US so much more insistent on carrying on an open-ended war in Afghanistan and Pakistan for the purpose of fighting "Al Qa'ida"? Similar questions were asked about the Vietnam War, where the US was far more worried about the alleged threat than the immediate neighbors who were supposedly more threatened. The US certainly has good reason to keep looking for Osama bin Laden and whatever group of followers he still commands. But carrying on a protracted war, already in its eighth year, primarily against Pashtun tribal warlords in Afghanistan and Pakistan - whether we label them "Taliban" or not - isn't a way to reduce the overall terrorist threat from Muslim extremists. The Afghanistan War has turned into a war in search of a mission. And we keep finding new ones. Tags: afghanistan war
Friday, April 03, 2009
Raúl Alfonsín (1927-2009) of Argentina Raúl Alfonsín, President of Argentina 1983-89, passed away on Tuesday evening due to complications from lung cancer.Alfonsín was an attorney by profession. He was affiliated with the Radical Civic Union (UCR) party and served in local and national posts, including as a senator. During the military dictatorship of 1976-83, he founded the Asamblea Permanente por los Derechos Humanos (Permanent Assembly for Human Rights) and defended political prisoners. He became leader of the UCR in 1981 upon the death of the previous leader, Ricardo Balbín. Despite the "radical" in its name, the UCR was and is basically a conservative, democratic party. But ideological labels are very tricky with Argentine parties, and Alfonsín himself was more of a social-democratic viewpoint and was said to have been influenced by German utopian thought and French humanism. The Mavinas War of 1982 with Britain, called the Falklands War by the British, destroyed what public support the brutal military junta still enjoyed. And they found themselves forced to step down and agree to a transition back to democratic government. Alfonsín and the UCR won a clear majority with 52% of the vote. As one of the Clarín articles cited below puts it, "Tenía 56 años y la potencia política para encarar la transición de la dictadura a la democracia." (He was 56 years old and had the political power to confront the transition from dictatorship to democracy.) A major task of Alfonsín's was to deal with the crimes of the outgoing dictatorship. As part of the deal for the junta to step down, the civilian parties had agreed to an amnesty law for crimes committed by the junta. Alfonsín annulled it two days into his first term and put senior officials of the dictatorship on trial in what is known as the Juicio a las Juntas. Some leaders of the violent guerrilla opposition were also put on trial at the same time. He also established the Comisión sobre la Desaparición de las Personas Comisión sobre la Desaparición de las Personas (CONADEP) that investigated those who went missing, most of them murdered, during El Proceso, the self-designation of the military dictatorship. But, under the pressure of two coup attempts by the military, he later approved two laws known as "Punto Final" and "Obediencia Debida", that put an end to further prosecutions until they were revived a few years ago. Alfonsín also framed the period of the dictatorship as one of two evils, the other being the guerrilla/terrorist movement that led the military to overthrow the previous democratic government. It's still a matter of not-inconsequential dispute whether that framing of the issues may have given excessive credence to the military's justification for their coup and the "dirty war" against real and alleged subversives that ensued. I discussed the transition period in more detail in Remembering military dictatorship in Argentina 12/11/08. His administration ended in 1989 with inflation at galloping rates, in major part a result of the huge debts taken on by the junta's government. He was widely respected and honored as the President who led the successful transition to democracy and began to re-establish the rule of law after a difficult period of lawless government. Not only Argentines have found lessons and inspiration in his example. Former President and current leader of the Partido Justicialista (PJ; Peronist) Néstor Kirchner remembered him as a "political leader of the highest stature": Los argentinos van a tener un profundo reconocimiento porque encabezó el proceso democrático a partir de 1983, pero además el juicio a las juntas militares fue un parangón histórico que le deberán reconocer.Aurora Kochi in a blog post (Adiós Alfonsín Madre Padre Tutor o Engargado blog 04/02/09) recalled the sense of freedom that she felt as a young person then along with others: De golpe, nos sentíamos libres. Algo nuevo y prometedor comenzaba. Alfonsín representó para muchos de nosotros, una época llena de esperanzas de cambio. Representó la recuperación de aquellos sueños, y el entusiasmo con el nuevo modo de vida, la democracia, incipiente, a la que apostábamos con mucha vitalidad.Being remembered as a symbol and embodiment of freedom and democracyis a real tribute. Jimmy Carter (see link below) calls him "uno de los líderes más importante de la recuperación de la democracia en América Latina" (one of the most important leaders in the recuperation of democracy in Latin America). Carter says that during Alfonsín's presidency, the Argentine leader "abrió un nuevo ciclo de libertad en la región por su fuerte compromiso con los derechos humanos" (opened a new cycle of freedom in the region by his strong engagement with human rights). Alfonsín worked with Carter in monitoring elections in Nicaragua and Venezuela. "El ha mantenido un firme compromiso con sus ideales de justicia social a lo largo de su vida, y yo estoy muy orgulloso de haber sido su amigo personal." (He maintained a firm commitment to his ideals of social justice throughout his life, and I am very proud to have been his personal friend.) Articles from Clarín: Murió Raúl Alfonsín, primer presidente y símbolo de la democracia 31.03.2009 Una vida dedicada a la lucha y a la política 31.03.2009 Kirchner habló de "un hombre de muy fuertes convicciones al que los argentinos reconocerán" 31.03.2009 Del oficialismo a la oposición, todas las voces lamentan la pérdida 31.03.09 Raúl Alfonsín: El símbolo de la democracia (I) 01.04.2009 Kirchner, emocionado, se despidió de Alfonsín en el Senado 01.04.2009 Una multitud aún hace fila para dar el último adiós al ex presidente 01.04.2009 "Abrió un ciclo de libertad" by Jimmy Carter 01.04.2009 "Fue un símbolo del espíritu de reconquista de la libertad" por Julio María Sanguinetti (Ex Presidente de la Republica de Uruguay) 01.04.2009 Articles from Página 12: La clase política homenajeó al ex presidente 02.04.2009 El día que desfilaron veinticinco años de historia por Miguel Jorquera 02.04.2009 Articles from El País (Spain): El demócrata que juzgó a la Junta por S. Gallego-Díaz 02.04.2009 Argentina se vuelca en el entierro del 'padre de la democracia' por Alejandro Rebossio 03.04.2009 Miles de argentinos despiden al ex presidente Raúl Alfonsín por Leandro Kobisz 03.04.2009 Raúl Alfonsín, la audacia y la honradez por Rodolfo Terragno [a minister in Alfonsín's government and a former head of the UCR] 03.04.2009 Tags: argentina, cristina fernández, el proceso, luis alberto romero, néstor kirchner
Thursday, April 02, 2009
Women in AfghanistanTaylor Marsh has a strange position about the Afghanistan War. Back in January I posted about a post of hers calling for the Obama administration to make establishment of equal rights for women a major goal of the war there. She seemed to be oblivious to the fact that adopting such a goal would be a major expansion of the mission. And of the historical experience of the Soviets there, in which their requirements of schools for girls and the like became a major issue for theToday she's posting about a genuine outrage, President Karzai ‘Legalizes’ Rape 04/02/09. It's about a new law that our ally Hamid Karzai put into effect on his own authority without the action of Parliament requiring that married women have sex with their husbands under certain conditions. I'm not clear what the law actually says. According to the Canadian Press article to which she links, the law applies only to Shi'a women and says that they can't refuse sex to their husbands, apparently at all; Shi'a are a minority among a Sunni majority in Afghanistan. The account in Gesetz bestimmt Häufigkeit von Sex in der Ehe Die Welt 02.04.2009 says it requires women to have sex with their husbands once every four days (in the body of the article) or maybe four times per week (in the introductory summary). This account says it also requires the husband to agree to have sex with the wife at least once every four months. So I'm really confused about what this new law actually says. But, once again, Taylor Marsh is outraged about the law without apparently putting it together what that means for her preferred women's-right war goal. If the very pro-American, relatively secular Hamid Karzai is imposing such a law, it says something about what kinds of obstacles women there have to overcome before gaining full equality. And it shows once again as we've seen in Iraq that the US likes to claim we're improving the status of women by making war on their country, but the practical effects are often very different than our advertised ideals. And wars are the most unpredictable of tools to achieve anything. Optimistic views of Obama's current strategy are picturing another five years before the country can be stabilized and Karzai's government and army be at full capability. How many civilians - men, women and children - will be killed during that time? How many things can go wrong and send developments off into a very different direction? How open are men and women in Afghanistan going to be to American notions of women's equality when our planes and helicopters and drones are rocketing their villages and blowing up adults and children, fighters and noncombatants, young and old? And what kind of blowback will five or ten more years of Americans fighting in Afghanistan produce? I'm sick of people coming up with pretty-sounding reasons to kill foreigners in wars thousands of miles away. And it's depressing to see after the experience of the Iraq and Afghanistan Wars already how hard it is for many people to come to grips with the real limits of American power that we've encountered. Tags: afghanistan war, humanitarian intervention, humanitarian war, taylor marsh
Afghanistan War problems![]() Juan Cole takes a critical look at Obama's Afghanistan War strategy in Obama's domino theory Salon 03/30/09. His analysis raises several important questions. One is the question of the stability of the central government of Pakistan. The Obama administration's rhetoric about Pakistan and that of many supporters of the war make Pakistan sound like a borderline failed state. In his announcement of his war strategy on March 27, Obama talked about Pakistan as follows: It's been more than seven years since the Taliban was removed from power, yet war rages on, and insurgents control parts of Afghanistan and Pakistan. ... The people of Pakistan want the same things that we want: an end to terror, access to basic services, the opportunity to live their dreams, and the security that can only come with the rule of law. The single greatest threat to that future comes from al Qaeda and their extremist allies, and that is why we must stand together.Are Islamic extremists, specifically the groups the US government describes as "Taliban" and "Al Qa'ida" really a critical threat to the Pakistani government? Cole is dubious: While the emergence of "Pakistani Taliban" in the Federally Administered Tribal Areas is a blow to Pakistan's security, they have just been defeated in one of the seven major tribal agencies, Bajaur, by a concerted and months-long campaign of the highly professional and well-equipped Pakistani army. United States Secretary of Defense Robert Gates replied last summer to the idea that al-Qaida is regrouping in Pakistan and forms a new and vital threat to the West: "Actually, I don't agree with that assessment, because when al-Qaida was in Afghanistan, they had the partnership of a government. They had ready access to international communications, ready access to travel, and so on. Their circumstances in the FATA (Federally Administered Tribal Areas) and on the Pakistani side of the border are much more primitive. And it's much more difficult for them to move around, much more difficult for them to communicate."Yesterday I heard the first hour or so of a lecture by one of Pakistan's leading journalists, Hamid Mir of Geo News. He talked about the nature of those Pashtun frontier areas and said that the Pakistani government really has very little actual presence in those areas. The Afghanistan-Pakistan border, based on the Durand Line drawn by the British, doesn't function as a border in the normal sense of the word, according to Mir. The Pashtun tribes in that area are used to passing back and forth across it. He also said that no visa is required for travel from Pakistan to Afghanistan, except for journalists. Part of his point was that it's misleading to talk about that area being a "safe haven" for fighters from Afghanistan. Because to most of the people in those areas, there really is no border in the normal sense of the word. But his description of the ways in which the frontier badlands are isolated from the politics of the rest of Pakistan is also consistent with Cole's. The notion of Pakistan being in imminent danger of being overthrown by Salafi (Al Qa'ida-style) extremists is sound pretty unlikely to me. The United States has a clear interest in finding Osama bin Laden and the remnants of his organization. But it's hard to avoid the impression that the Obama administration is indulging in a significant "threat inflation" around the Afghanistan War. Cole was been critical of Obama's position on this war during the Presidential campaign, for instance in Obama is saying the wrong things about Afghanistan Salon 07/23/08. Cole's description of the badlands of western Pakistan seem to be in line with Mir's observations about the isolation of the region: Pakistan, a country of 165 million people, is composed of six major ethnic groups, one of them the Pashtuns of the northwest. The Pakistani Taliban are largely drawn from this group. The more settled Pashtun population is centered in the North-West Frontier province, with its capital at Peshawar. Between the NWFP and Afghanistan are badlands administered rather as Native American reservations are in the U.S., called the Federally Administered Tribal Areas, with a population of some 3 million. These areas abut Pashtun provinces of Afghanistan, also a multiethnic society, but one in which Pashtuns are a plurality.Another problem on which Cole touches, closely related to the claimed threat of "Taliban" takeovers in Afghanistan and Pakistan, is the question of just who are the present-day "Taliban"? The truth is, it's almost impossible to tell from the meager information we get through our media, which is distracted by other urgent matters such as Michele Obama's fashion sense. But this makes it all the more disturbing that Obama initiated a new strategy for this war without a new National Intelligence Estimate (NIE) on the situation. Cole argues that only a portion of the fighters coded by the American press as "Taliban" are someone directly related to the old Afghan Taliban regime of Mullah Omar. Is that true? And, if so, are these groups capable of seizing power in either country? Are they more or less compatible with US interests than the original Taliban? Another issue is the air strikes on Pakistani villages, and Afghan villages as well. As Cole points out in both articles cited here, even Pakistanis outside the tribal areas get upset when the United States blows up civilian noncombatants in their country. That shouldn't be a hard concept to grasp. The same is true in Afghanistan. And there is little doubt that many of those air strikes, which are presented to the public as more-or-less targeted assassinations, are killing civilian noncombatants. Mir said that he had personally investigated 11 drone strikes in Pakistan. In only two did he find evidence that anyone involved with the Taliban had been killed, and those were only low-level participants. Another problematic matter to me is the stability of the Afghan government. I've been assuming for years that it's barely hanging on because of the persistent reports that it effectively controls only the capital city of Kabul. But Hamid Karzai's government is into its seventh year now. And by previous Afghan standards, that's a pretty enduring incumbency. There's also the fact that power in Afghanistan has always tended to be heavily vested in regional warlords, a structure which the Cheney-Bush strategy heavily reinforced. So the absence of a strong central government there doesn't necessarily equal stability or vulnerability to insurgent takeovers. While Cole's argument on the stability of the Karzai government hasn't convinced me, not least because of chronic problems in building up the Afghan armed forces, it's not something I'm willing to ignore at this point. Pakistan's long-term conflict with India over Kashmir is inevitably connected with the Afghanistan-Pakistan situation, although American press analyses of the area normally give it little if any attention. As long as that conflict is essentially frozen as it is now, Pakistan is going to want a friendly government in Kabul. And they view the Karzai government as "pro-India". Pakistan is never going to fully cooperate with the US-NATO-Afghan counterinsurgency efforts as long as that's the case. Then we have a new, intransigent government in Israel. This is going to complicate the United States' dealings with the Muslim world. Especially with an escalating war lead by the US in Afghanistan. Ever more so if the war keeps expanding into Pakistan. The Obama administration doesn't seem to be looking at the fact that a protracted American war is a problem in itself. Their pronouncement on this war strike me as though they were written for this time of the year in 2002. Instead of in 2009, when we're into our eighth year of war in Afghanistan. Tags: afghanistan war
Wednesday, April 01, 2009
That guy used to work where?Andrew Leonard in his How the World Works blog at Salon points out something that has been bothering me about an increasingly famous article by economist Simon Johnson in Simon Johnson's crusade against the oligarchs of Wall Street 03/31/09. Paul Krugman as well as some of my other favorite bloggers have cited Johnson's article, The Quiet Coup The Atlantic May 2009. Krugman notes that Johnson "served as the chief economist at the I.M.F.".That's what Leonard focuses on with some highly relevant observations: The central narrative gambit of "The Quiet Coup" is simple: The United States is unwilling to take the same harsh medicine it would prescribe to a developing nation that exhibited the same critical problem: domination of the political process by self-interested economic elites. But there is more than a little irony involved with the fact that this advice is coming from a former IMF chief economist. A great many people on the left who are applauding Johnson seem to have forgotten just how critical the IMF was in spreading exactly the kind of economic policies that helped secure Wall Street's absolute sway over global markets. Doesn't anyone remember "the Washington Consensus" -- the belief that deregulation, privatization and trade liberalization were the holy writ for all developing nations? The IMF was one of the primary proseletyzers and implementers of this vision. If your economy got into trouble, the IMF would help you out, but only after requiring "structural adjustments" that often caused significant hardship.Now, I'm all for repentance and redemption and so on. But I'm not sure he's changed his Washington Consensus perspective all that much. One bad sign is when he says early on in the Atlantic piece, referring to various crisis over the last two decades in Asia, eastern Europe and Latin America, "But I must tell you, to IMF officials, all of these crises looked depressingly similar." If you take things to a high enough level of generalization, anything can be made to look similar to anything else, e.g., Earth and Mars are planets so they are basically similar. Given the record of the IMF, though, I have to wonder if all those crises looked so depressingly similar to the IMF and/or Simon Johnson because they were applying cookie-cutter assumptions to them. The IMF's prescription for financial crises were depressingly similar: "deregulation, privatization and trade liberalization", as Leonard puts it, and I would add slashing public services to the bone. In Argentina's case, President Carlos Menem pretty much governed according to the Washington Consensus playbook, and it led to a new economic and political crisis at the end of 2001. The Washington Consensus gospel of free trade was actually a major cause of many problems. As Jamie Galbraith pointed out a couple of years ago, Rich World, Poor World The American Prospect 03/20/06: China has adopted markets without capitalism; it has not had broadly open, speculative markets for capital assets and land. The result is that you usually have to make something in order to get rich. So companies produce and produce, flood the markets with goods, accept low profit margins, improve quality, and hope to strike gold by exporting to the West. If they have losses, as they often do, these may be covered by borrowing from China's rotten, state-owned banks, protected by capital control. Workers thrive on the glutted market for goods. Meanwhile, the richer local governments finance themselves with land rent and spend the proceeds on infrastructure at an incredible pace. [my emphasis in bold]The point to which I wanted to call attention in that quote is the part about open capital markets. China has national capital controls, so that international speculators can't create a run on its currency the way they could in Indonesia or Argentina. (And, no, trolls, he isn't arguing there that only a Chinese-style economy can deal with that problem.) The Washington Consensus at the moment is considered widely discredited because of its results. And because the results are so bad, it's worth asking how good the diagnosis has been. In Johnson's case, his cookie-cutter diagnosis is, "the real concern of the fund’s senior staff, and the biggest obstacle to recovery, is almost invariably the politics of countries in crisis." Now, he defines the problem in a way that has its particular attraction at the moment, and one to which Krugman refers in the link above: Typically, these countries are in a desperate economic situation for one simple reason—the powerful elites within them overreached in good times and took too many risks. Emerging-market governments and their private-sector allies commonly form a tight-knit—and, most of the time, genteel—oligarchy, running the country rather like a profit-seeking company in which they are the controlling shareholders. When a country like Indonesia or South Korea or Russia grows, so do the ambitions of its captains of industry. As masters of their mini-universe, these people make some investments that clearly benefit the broader economy, but they also start making bigger and riskier bets. They reckon—correctly, in most cases—that their political connections will allow them to push onto the government any substantial problems that arise. ...It makes for great snark: the Republicans have made us into Argentina or Russia in their worst crises, har, har! It's pretty obvious that excessive deference by the government to major financial interests has been a major contributor to the current mess. And there may well be important resemblances between this crisis and those of the other countries he names. But I find Johnson's analysis problematic in several ways. I can see I'm going to be doing more than one post on this. But I see at least two key problems. One is that he focuses a lot on the problem of debt in the abstract. I can't help but wonder if there's not some notion that the federal budget deficit is our biggest problem lurking behind that. That's one place where those comparisons to other countries can be very misleading. The dollar is currently the world's reserve country and we have floating exchange rates. In those conditions, the combined public and private deficits are going to equal the external trade deficit. And as long as the dollar is the world's reserve currency, we'll have a trade deficit. In those conditions, balancing the federal budget as an economic goal is worse than meaningless, it's destructive. The other problem is he conspicuously spares the Republican Party any particular blame for the current problem. This has a certain appeal for many Democrats because a lot of us are more than suspicious of our Party leaders' attachment to the some of the more reality-challenged pieces of corporate ideology. And he does so in a weird kind of blending of 60s hippie notions of false consciousness and Herbert-Hooverish pep talk about how "confidence" is all that really matters in economics. Tags: simon johnson, us economy
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