Normative Narratives


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Transparency Report: Keeping Pressure on the UN to ‘Do The Right Thing’ With Respect To Haiti’s Cholera Victims

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Last October, I wrote a blog about the UN’s role in bringing Cholera to Haiti, subsequent steps to avoid accountability, and the impact this might have on the Post-2015 Development Agenda. Little had changed on this front until earlier this week:

This week Georges, one of five Haitian and Haitian-American plaintiffs named in the case, may be one step closer to being granted his day in court. Institute for Justice and Democracy in Haiti (IJDH) lawyers will get their chance on Thursday to argue that the lawsuit should go forward. It was filed in a federal court in New York a year ago, and the United Nations has declined to acknowledge it, on the grounds that the organization enjoys diplomatic immunity.

“The case is indefensible both legally and morally, from the U.N.’s perspective,” said Brian Concannon, the lead attorney at IJDH. If the judge agrees that the court has jurisdiction to hear the case, despite the U.N.’s historic immunity from prosecution, he said, that would likely mean the plaintiffs will win the case.

The IJDH’s lawyers are demanding three things: funds to fight the ongoing epidemic and clean up Haiti’s rivers (only 1% of a $2.27 billion 10-year pledge have been raised), financial compensation for victims and an apology from the United Nations. Implicit in their lawsuit, however, is the far bigger challenge, lawyers say, to the U.N.’s immunity from prosecution.

There are, however, official channels for victims of U.N. actions to seek redress. If complaints are made in the context of peacekeeping operations, the host country and the U.N. typically agree to a system for handling these claims. Despite an agreement between the U.N. and Haiti that promised victims the right to file claims for unintentional harms caused by the organization’s personnel, no such system was ever set up. (The U.N. has not offered an explanation, and a U.N. representative declined to comment for this article).

Even critics of the United Nations concede that diplomatic protections for the U.N. are, overall, a “good thing,” said IJDH’s Concannon, allowing the organization to provide alternative justice in countries where local courts do not ensure a fair trial. But he and others say the cholera case shows a U.N. too unwilling to waive its immunity. “The U.N. is currently suffering from an accountability crisis,” said Beatrice Lindstrom, another lawyer working on the case for the IDJH, “one in which they treat ‘immunity’ to mean ‘impunity.’ ”

Whatever the results of that hearing — which could take weeks, or months, to be determined — an appeal is likely. Said Lindstrom, “We’ve always understood the lawsuit to be a tool to keep public attention and pressure on the U.N. to change course and do the right thing.”

The Haitain Cholera epidemic and lackluster response remains a black cloud over the UN, as it should. The Post-2015 Development Agenda, which starting at the end of 2015 will influence the direction of national development plans and hundreds of billions in development aid, has human rights based accountability at it’s core. The Agenda calls for all actors–public, private, non-profit, etc.–to be held accountable for the human rights implications of their actions.

The UN should have owned up to it’s mistakes in the first place (“waived it’s immunity”), taking the opportunity to lead from the front and show that all actors, even the UN itself, must be held accountable in order to promote sustainable human development. Unfortunately it did not, necessitating a negative PR campaign and legal battle. Furthermore, if the lawsuit makes it to court it could set a costly legal precedent, hampering the UN’s ability to respond to crises going forward.

The UN has gone to great lengths to ensure the Post-2015 Development Agenda is inclusive, participatory, and well received by people around the world. These decisions were made in response to a perceived weakness of the preceding Millennium Development Goals; having been drafted by development professionals behind closed doors, they did not fully address many impediments to poverty eradication (specifically those related to political rights and good governance–empowering vulnerable people to become active participants in development, as opposed to passive recipients of aid).

Refusing to sit down with Haitian Cholera victims is not only a failure of justice in Haiti, it threatens to undermine support for (and therefore the efficacy of) the Post-2015 Development Agenda.

The UN is often accused of being ineffective and useless. As someone who is well versed in economic development, I know that these claims are generally made out of ignorance; there are checks in place which purposefully limit the ability of the UN to impose it’s values on a sovereign nation.

This case, however, is different–the only thing holding the UN back from championing it’s own principles is the UN itself.

It is not too late for the UN to reverse course and make this right, but an about-face on this issue does not seem to be forthcoming. As a supporter of this organization and it’s many important missions, I hope that its leadership recognizes the damage caused by its current course of action.


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Economic Outlook: Of Minimum Wages and Employment (Revisited)

Another hot button topic during the 2014 midterm election season are candidates stances on increasing the federal minimum wage.

This past February, the CBO released its analysis of the effects of a federal minimum wage increase on economic growth, employment, and poverty. Those on the political right seized on the reports projection that raising the minimum wage could result in 1 million fewer jobs in America.

I found Jared Bernstein’s Economix blog on the subject pretty even-handed (click here to see my previous blog on the topic):

It is important to recognize that there is a very wide range of estimates from which the budget agency can choose, as shown in the chart below, which plots results of the employment effect from dozens of studies (from a recent set of slides from the White House Council of Economic Advisers).  This wide range does not imply that the budget office made a mistake, though it looks to me as if it applied a higher job-loss estimate than is the current consensus among economists who’ve closely studied the issue.

Note:

As the chart shows, the employment impact from this “meta-analysis” clumps around zero, which is why the report finds that the policy is a significant net plus from the perspective of low-wage workers: Many more workers get a raise from the policy than are displaced from their jobs.” (Jared Bernstein, Economix blog)

There is no policy I can think of that generates only benefits without any costs, and policy makers always have to weigh the two sides. In the case of the minimum wage, on the benefits side of ledger, the budget office shows that 16.5 million low-wage workers would directly get a much-needed pay increase at no cost to the federal budget.

16.5 million workers will benefit from a $10.10 minimum wage by 2016, 900,000 will be raised out of poverty, with negligible effects on the federal budget.

The CBO report was a projection. What have minimum wage “experiments”, carried out in America’s “laboratories of democracy” (states and municipalities), revealed?

The White House told us they were referring to the seasonally adjusted growth of non-farm jobs since December 2013. So we crunched the numbers for state-level employment data, which is collected by the Bureau of Labor Statistics.

The comparison involved nine states that increased their minimum wage automatically early in the year to keep pace with inflation (Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington) plus four more states that passed new laws to hike the wage (Connecticut, New Jersey, New York and Rhode Island). The other side consisted of 37 states that didn’t boost their minimum wage at all.

Using the second method — the one that gives greater weight to high-population states — we found that job growth over that eight-month period averaged 1.092 percent in the wage-raising states, compared to 1.090 percent in the non-wage-raising states. That’s a higher rate of job growth in the minimum-wage-raising states — but by the almost comically narrow margin of 2/1,000ths of one percent.

From this 8-month comparative analysis, we can see that minimum wage changes have had essentially no impact on employment levels. The meta-analysis seems to have been vindicated–I guess economists are good for something after-all.

What does this mean? Which stance on minimum wage increases has been vindicated? I would say it has to be the pro-minimum-wage-increase side of the debate.

Increasing the federal minimum wage is not meant to be a “job-creating” policy; its primary purpose is to redistribute income from the top of the economic pyramid (wage payers) to the bottom (wage earners). It is a “market” solution that does not require taxation and welfare spending, so money would not go to those “lazy welfare recipients” (this is not my view, however a significant proportion of Americans do view welfare recipients this way, and it is necessary to consider alternative perspectives when trying to pass legislation in a democracy).

One may think such an inequality / poverty reducing solution would be agreeable to proponents of “small government”, and one would be wrong. Since opponents of increasing the minimum wage cannot assail deficit spending going to undeserving recipients, they have relied on the “jobs lost” argument. Fortunately, this argument becomes less and less viable the more it is challenged and disproven.

Raising the minimum wage does not just address the “symptoms” of inequality / poverty–there are important long term / inter-generational implications of minimum wage increases. Having more money enables people to build their skills, take more entrepreneurial risks, and provide better upbringings for their children (which obviously affects their earning capacity later in life).

“Meta-analysis” of the effects of minimum wage increases on employment clustered around zero, and these findings have been backed up by the non-partisan statistics produced by the Bureau of Labor Statistics (in the interest of full disclosure, I should mention that I work for the BLS, although my job has nothing to do with employment statistics).

The mechanism by which minimum wage increases raises poorer peoples income is straightforward. How people would choose to use their new-found income is less straightforward–some will predominately invest in into their and their families futures, while others will use the majority for instant gratification. While not as targeted as a welfare program, raising the minimum wage is the most politically viable solution to America’s inequality problems.

Contemporary American political discourse is dominated by the related themes of “equality of opportunity” and “social mobility”. Raising the federal minimum wage would bring immediate relief to America’s poorest workers, while moving closer to the utopian goal of “equality of opportunity”. Furthermore, it would accomplish these goals without any meaningful impact on employment rates or the federal budget.

Some redistribution of income in necessary; inequality is a drag on economic growth, and poverty is a root cause of many other societal ills. History has proven over and over again that “trickle-down” economics does not work. Minimum wages should also be linked to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), periodically (once per year?) increasing to reflect changes in cost of living.

If our federal government continues to fail in this regard, leaders at the state and municipal level must step-up–this is a matter of both present and future socioeconomic justice.

 


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Economic Outlook: Magic Asterisks v. Cross-Country Analysis

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The Great Debate Continues–The Austerity v. Stimulus Referendum of 2014:

It has been over 6 years since the beginning of “The Great Recession”. As the stimulus vs. austerity debate rages on, it is worthwhile to evaluate the efficacy of these competing economic ideologies, as they are essentially up for referendum in the 2014 U.S. midterm elections.

It is almost impossible to find truly neutral economic analysis; there are experts and spin-doctors across the political spectrum, people whose jobs are to cherry-pick facts and provide anecdotes to vindicate their positions. I try my best to be objective, but I am sure that my progressive biases are evident to my readers.

One thing that cannot be faked, at least in modern democracies, is macroeconomic history (thanks to advances in data collection, government budgetary transparency / accountability and communications technologies). So what have the past 6 years taught us?

On one hand, the doctrine of “expansionary austerity” relies on “magic asterisks“–the math doesn’t add up. This is not just a liberal claim, it is backed up by the [absence of] economic growth in countries and states that have tried / been force-fed the bitter pill of “expansionary austerity”.

On the other hand, robust, cross-country analyses of post-Great Recession economic policies, carried out by the IMF, have [slowly] acknowledged the damage caused by austerity / benefits of stimulus spending (and this is the IMF here, not exactly a pro-poor institution).

The Case For Austerity–Magic asterisks:

At the state level, Republican governors — and Gov. Sam Brownback of Kansas, in particular — have been going all in on tax cuts despite troubled budgets, with confident assertions that growth will solve all problems. It’s not happening, and in Kansas a rebellion by moderates may deliver the state to Democrats. But the true believers show no sign of wavering.

the nature of the budget debate means that Republican leaders need to believe in the ways of magic. For years people like Mr. Ryan have posed as champions of fiscal discipline even while advocating huge tax cuts for wealthy individuals and corporations. They have also called for savage cuts in aid to the poor, but these have never been big enough to offset the revenue loss. So how can they make things add up?

Well, for years they have relied on magic asterisks — claims that they will make up for lost revenue by closing loopholes and slashing spending, details to follow. But this dodge has been losing effectiveness as the years go by and the specifics keep not coming…

The Case For Stimulus–IMF Cross Country Analysis:

The International Monetary Fund, showing heightened concern over a slowing world economy, said on Tuesday that cash-rich countries like Germany needed to step up large public investments to help keep the flagging global recovery on track.

Its estimate for United States growth in 2015, 3.1 percent, outpaces all major industrialized countries and exceeds as well a number of emerging markets, which in theory are supposed to grow at a substantially more rapid clip.

The fund unveiled this week a paper arguing that large-scale infrastructure investments, if properly undertaken, could bring relatively quick growth benefits — a message that seemed to be directed at deficit-obsessed eurozone governments, including Germany.

“Infrastructure investment, even if debt-financed, may well be justified,” Olivier Blanchard, the fund’s senior economist, said at the news conference on Tuesday.

Mr. Blanchard pointed out that with interest rates at modern-day lows — Germany can borrow money for 10 years at below 1 percent — taking on extra debt to stimulate the economy need not be seen as profligacy.

He offered up a brief economic primer to underscore his point. “It is an irony of macroeconomics,” he said with a small smile, “that for countries with too much debt, sometimes the solution is to create more debt.”

Mr. Blanchard, who oversees economic research at the I.M.F., was behind the fund’s public recognition two years ago that heavy-handed austerity policies in Europe had a larger-than-expected impact on economic growth.

Now, it seems, the global watchdog seems to be going one step further by urging eurozone officials to relax their rigid austerity measures.

What Does “American Exceptionalism” Mean to You?:

In America, those who oppose stimulus spending–fiscal conservatives–also tend to believe in “American Exceptionalism”. What happens in other countries is not relevant to America; “we’re special”, they claim.

These same opponents of stimulus spending may also argue (with negative connotation) that “the U.S. is turning into Europe”. However,  as you can see from the graphs at the top of the post, the U.S. has far lower spending and unemployment rates than other wealthy economies.

The great irony, which I am sure is lost on those who worry about the “eurofication” of America, is that it was in large part our ability to pursue policies that they would consider “European” (the ARRA, QE), that enabled the U.S. to lead the global economic recovery.

I too believe in “American Exceptionalism”. To me, however, this exceptionalism is more about the extra-territorial obligations that come with being the world’s strongest economy, military, and reserve currency, than an heir of hubris which precludes considering the experiences of other countries when drafting policy. But that’s just my opinion.

Debt Sustainability, MMT, and Context Sensitive Macroeconomics:

The issue of debt sustainability, however, is far less subjective. America’s relatively high growth rates, and historically low interest rates (thanks to central bank independence and a sterling history of honoring our debts), make stimulus spending both feasible and fiscally responsible.

I am not fully sold on the merits of Modern Monetary Theory (MMT), it seems too radical to me. I am, however, a proponent of context sensitive macroeconomics; expansionary fiscal policy (stimulus spending) is appropriate now, but may not always be. However, the temporal nature of democratic politics makes offering future deficit reductions in exchange for stimulus spending, impracticable (which is unfortunate, as this approach is just what the doctor ordered). 

Government spending need not take the form of “paying people to dig holes and then refill them”, a picture anti-government proponents love to paint. There are glaring infrastructure weaknesses that pose serious problems from both public safety and economic perspectives.

Furthermore, in the current context, government spending would not “crowd out” private investment. In fact, if properly enacted, stimulus spending should increase private spending. Governments around the world are increasingly embracing public private partnerships (PPP)–leveraging public money to raise private funds when it serves both sectors interests (such as infrastructure spending, job training, etc).

Corporate cash hording, despite very low interest rates, suggests that private companies are able and would be willing to spend more if either a) the government contributes funding (PPP), or b) aggregate demand increased (which in the short run can be catalyzed either by increasing government spending, or by putting more money in the hands of those with the highest marginal propensity to consume–poorer people).

Of course, there are limits to what stimulus spending can achieve. The “multiplier” effect of a stimulus program depends on the necessity, targetability, efficiency, and accountability of its components. Beyond government spending, major policy changes, such as tax reform and minimum wage increases, are also desperately needed.

Liberal economic policies in the U.S. cannot fix the world’s problems, but they can increase American growth, set our economy up for higher future growth rates, and rekindle “The American Dream”. The U.S can lead both by action and example, serving as a model for other countries to emulate as best they can.


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Transparency Report: China Speaks of Inclusion at UN, Cracks Down on Protestors in Hong Kong

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Pro-Democracy Protests in Hong Kong:

During China’s annual address to the UN General Assembly, Foreign Minister Wang Yi had an interesting message for the international community:

The new sustainable development agenda should advance people’s wellbeing, promote inclusivity and ensure implementation

Inclusive, participatory politics are a foundation of modernization theory / a human rights based approach to development. Coming from a Chinese official these words ring hollow, as they were delivered while the Chinese government cracked down on pro-democracy protestors in Hong Kong:

In a significant escalation of their efforts to suppress protests calling for democracy, the authorities in Hong Kong unleashed tear gas and mobilized riot police with long-barreled guns Sunday to disperse crowds that have besieged the city government for three days. But thousands of residents wielding only umbrellas and face masks defied police orders to clear the area.

At the heart of current protests are provincial elections in Hong Kong. The Chinese government is allowing these elections to take place, but will only permit certain candidates to run. To their credit, and against great odds, protestor’s have defied calls from the Communist Party to end their protests.

It has become clear the people of Hong Kong are willing to defy authority in their attempt to secure political rights. The protests have naturally gained much international attention, and have put the usually shrewd Chinese Communist party in a difficult position.

Polyarchy and a Context Sensitive Approach to Development:

Robert Dahl, one of the most influential political scientists of the 21st century, would probably consider Hong Kong an “inclusive hegemony”. Technical terms aside, even the casual observer should realize that, as they stand, Hong Kong’s elections would not represent a real democratic exercise (and hence the protests).

When it comes to human rights and poverty reduction, the Chinese experience is perplexing. Since 1981, the number of people in the world living in “extreme poverty” (less than $1.25 PPP / day) has fallen by 500 million people; excluding China, this reduction turns into an increase of 100 million people. One could certainly argue that the UN is not in a position to lecture China on the finer points of poverty reduction.

But China’s experience with development and poverty reduction cannot easily be replicated. Economic development is always context sensitive, and the least developed regions in the world (specifically Western / Sub-Saharan Africa and the Middle-East) must develop from starkly different contexts than China has.

China is generally a homogenous, stable country with a strong central government that effectively meets peoples basic needs. Generally speaking, modern day Western / Sub-Saharan Africa and the Middle-East couldn’t be more different; sectarianism / tribalism run rampant, and governments are corrupt and ineffective at providing even the most basic services. This combination results in instability, insecurity, and high poverty rates.

Any meaningful attempt at “South-South cooperation”–using the experiences of past development efforts when drafting new ones–would quickly identify these difference. While China’s economic development has been a remarkable success story, it would also be impossible to reproduce in today’s least developed countries (LDCs).

Furthermore, there are limits to the growth China’s can realize from it’s political economy model. While extreme poverty has dropped in China, the average Chinese person is by no means “wealthy”. The Chinese government has proven itself to be incredibly adept at picking the “low hanging fruit” of economic development. But it is widely accepted, even by Chinese leadership, that future growth and development requires a shift from export-based / state-sponsored growth to consumer-demand / market based growth.

The question is whether  this type of growth is possible in a quasi-capitalist, authoritarian country. Perhaps China will continue to be the exception to the rule, and become a highly developed nation without extending the political freedoms many of it’s people crave. I have my doubts, and recent slowdowns in China’s economic growth may affirm my beliefs, but admittedly a longer-term perspective is needed to see whether China’s economic slowdown is a symptom of structural flaws in its political economy or not.

Human Rights Records and Rankings:

It is worth noting that China is far from an outlier / renegade nation (such as North Korea). China is not, for instance, Egypt or Syria–countries whose leaders greeted pro-democracy protestors with indiscriminate slaughter. Furthermore, modern day China is not 1989 China; these are not the Tiananmen Square protests, times have changed and I am fairly certain the Chinese central government will not resort to violence in order to break up the protests.

China generally works within the international community, and is sensitive to negative perceptions that may affect its economic growth. The Communist party has proven itself to be in-tune with the needs of it’s people–whether this is out of some sense of good governance or a survival tactic is certainly open to debate.

It is difficult to rank countries based on their human rights records; human rights violations are interconnected and their consequences difficult to quantify. One such organization that attempts to rank countries, the International Human Rights Rank Indicators, has China ranked 48/216. This rank is below most of the world’s wealthiest countries (which has a lot to do with a governments ability to fulfill economic and social rights), but ahead of many of the worlds poorest / most oppressive regimes; I would say this is a reasonable ranking.

Growth and Development:

The ability of the worlds LDCs to develop, and of China to continue to develop, should be of great concern even to those in the “developed” world. If the Great Recession has proven anything, it is that “financial innovation” is not a sustainable path to prosperity. Wealthy countries need new markets to export their goods–they need people in poorer regions to obtain greater purchasing power. This means the international community must be clear-eyed when assessing the merits and limitations of the Chinese growth model.

For the world’s LDC’s, I am fully convinced that a human rights based approach to development is needed. The Post-2015 development agenda–with a human rights and a context sensitive approach to development at its core–is being designed with the world’s most impoverished in mind. I am cautiously optimistic that this second iteration of the MDGs will make a meaningful impact in the battle to end extreme poverty and expand human dignity in the worlds poorest regions.

China will not take outside advice when determining its future policy choices. China does not need international economic assistance, so there is no mechanism for implementing outside advice (regardless of its merits). If democratic gains are to take hold in China, it will require a combination of internal pressure (protests) and a continued slowdown in China’s economic growth.


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Monday Morning QB: Can the NFL Stop Domestic Violence Among Its Players?

Long answer short–it can reduce it, but not definitively stop it.

The NFL has come under fire from fans, politicians, and sponsors over the past two weeks. Since the infamous Ray Rice elevator video was released (which the NFL claims it never saw, a claim I strongly doubt), a parade of disturbing and embarrassing stories have come to the forefront.

Notably, news of Adrian Peterson’s multiple child abuse episodes has (rightfully) resulted in public outcry. As if not to be outdone, soon-to-be-former Arizona RB Jonathan Dwyer was arrested for both beating his wife and throwing a shoe at his 17 month old son. The Greg Hardy and Ray McDonald domestic violence cases have also come under closer scrutiny.

These incidents have led to an independent investigation into the NFL’s conduct during the Ray Rice investigation. Commissioner Roger Goodell has promised that “all options are on the table” in revamping NFL processes and rules. Perhaps most notably, their has been a decisive shift in the balance between legal due process and NFL / team punishment. These are all important steps; in behavioral economics terms, the NFL has increased the “cost” of domestic violence.

Furthermore, the NFL should pursue a preventative campaign against domestic violence through education. The NFL should educate its incoming and current players, as well as league personnel, on domestic violence issues on a regular basis. The NFL should also focus its efforts towards the youth within its influence, utilizing it’s NFL Play60 and Youth Football programs as an already-in-place infrastructure for reaching young people during a period in life when lifelong values are formed. The NFL can also team up with the NCAA to educate young adults at the college level. At all levels, the NFL should partner with experts in the domestic violence, substance abuse, and the behavioral sciences fields to create curricula which effectively address domestic violence and related issues.

I believe the question on many peoples minds is, “Why the sudden increase in domestic violence?” The answer is there has not been an increase in domestic violence, but rather it’s reporting. The 24 hour news cycle and muckraking news outlets like TMZ (I can’t believe I am using such a noble term to describe TMZ, but it has truly evolved into an important news source) have brought previously unreported issues to light. Social media has given fans a direct outlet to voice their displeasure; overwhelming shifts in public opinion can catalyze change in ways that “the facts” alone historically have not. These are positive evolutions–ignorance is not bliss, it is ignorance.

Having said this, we must remember that the court of public opinion often makes up its mind based on imperfect / incomplete information, and demands disproportionate penalties. I am not advocating for relying solely on the legal process–which when popular figures and high-priced lawyers are involved often delivers incomplete justice–but a reasonable middle ground. While players should certainly be held accountable for their actions, they should not suffer enhanced punishments because of their public status; a mistake should not cost someone their career (most of the time).

There is a limit to what the NFL, or any organization, can do to stop domestic violence. Ultimately, the issue of domestic violence comes down to one of personal accountability. The NFL is not beating women or abusing young children, individuals are. The NFL can make counseling, mental healthcare, and anger management services available or even mandatory, but it cannot police it’s almost 1,700 players 24/7.

Players bring their own personal baggage into the NFL. Players drink, do drugs, and make bad decisions; players are people, and will inevitably make mistakes. Even if the NFL was willing to institute a vigorous vetting process, turning away talented players on the grounds of character concerns, it would be impossible to completely stop such occurrences. Everybody make mistakes, and with player’s lives under the microscope, these mistakes will come to light. This fact, in-and-of-itself, should provide a powerful deterrent to would-be offenders.

The NFL has to revamp it’s policies, but it should not have to defend itself every time one of its players makes a poor decision. You don’t see the POTUS apologizing for every personal scandal involving a Congressman, or a CEO addressing the personal issues of their employees; this is an unfair burden that no other organization faces. The NFL probably does not deserve tax-exempt status, but this issue should not be connected to some mystical air of infallibility which never existed in the first place.

Professional sports leagues champion positive values such perseverance, teamwork, and community service, in addition to providing enjoyment to millions of people on a regular basis. No matter what the NFL does, these stories will continue to pop up–they are symptoms of advances in communication technologies, not a signal of deteriorating values.


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Conflict Watch: The Imperfect But Neccesary Fight Against ISIS

 

In the week following the unveiling of the new American-led anti-ISIS plan, one thing has become clear. This plan, while theoretically sound, will be very difficult to implement.

Regional allies have been reluctant to commit to specific responsibilities in the fight against ISIS. This reluctance highlights some American hubris that I failed to account for in my previous post. Even if taking on specific responsibilities is ultimately in these countries best interests, America cannot simply delegate responsibilities to other countries and decide for them that they will accept them. Generally speaking, the dearth of political will, lukewarm attitudes towards American intervention, and protracted grievances between potential allies are to blame for these seemingly irrational responses.

But despite these issues, the American plan is still the best way forward in a less than ideal situation. For sustainable peace and development, what is known in the conflict resolution field as “positive peace”, a pluralistic, inclusive, human rights based approach to development is needed. This is, unfortunately, far from the current reality in the Middle East.

However, in order for development to take hold, there must be “negative peace”–an absence of fighting. And it is fostering negative peace that the American plan is primarily focused on. There are elements of positive peacebuilding–capacity building for allies that share American values of pluralism and human rights–but these are secondary to the goal of “degrading and ultimately defeating ISIS”. “Negative peace” is a necessary precondition for “positive peace” to truly take hold. The foundations of “positive” peace can be laid, but in order for it’s benefits to reach people–to begin the process of sustainable human development–an atmosphere of security / “negative peace” must exist.

Ideally, “positive peace” is built preventatively; should conflict erupt, the partnerships and trust needed to negotiate an end to the fighting already exist. There is nothing “ideal” about the fight against ISIS; the group moves with blinding speed, destroying everything that opposes its radical version of Islam. To do nothing would amount to a de-facto death sentence for anyone who dares to oppose ISIS, while enabling the group to cement it’s control in the region. This would make “negative peace” even more difficult to attain.

Unfortunately, it is too late for preventative peacebuilding in the fight against ISIS. The American-led plan must try to simultaneously build “positive” and “negative” peace–admittedly a difficult task. To this end, the plan must be inclusive of all Muslims, Sunni and Shiite (as well as minority groups). Furthermore, it must minimize actions that ISIS can use as anti-Western propaganda–something the group has proved itself adept at.

This fight against ISIS will not be quick or easy. It would be easier if regional allies would take stronger stands and commit to specific responsibilities in the fight against ISIS, but early indications suggest this is currently not the reality. Short of putting boots on the ground, America must make up for the current shortfalls of our regional partners. If we do not, no one else will, and the ISIS threat will become even more difficult to confront.


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Conflict Watch: Meet the New Coalition, (Not the) Same as the Old Coaliton

At the NATO summit in Wales, a strategy for dealing with the growing ISIS threat was unveiled:

In his most expansive comments to date about how the United States and its friends could defeat ISIS, a once-obscure group of Sunni militants that has now upended the Middle East and overshadowed Al Qaeda, Mr. Obama said the effort would rely on American airstrikes against its leaders and positions, strengthen the moderate Syrian rebel groups to reclaim ground lost to ISIS, and enlist friendly governments in the region to join the fight.

Mr. Obama spoke after aides had unveiled what Defense Secretary Chuck Hagel called the “core coalition” to fight the ISIS militants, the outcome of a hastily organized meeting on the sidelines of the NATO summit talks. Diplomats and defense officials from the United States, Britain, France, Australia, Canada, Germany, Turkey, Italy, Poland and Denmark huddled to devise a two-pronged strategy: strengthening allies on the ground in Iraq and Syria, while bombing Sunni militants from the air.

“There is no containment policy for ISIL,” Secretary of State John Kerry said at the start of the meeting. “They’re an ambitious, avowed, genocidal, territorial-grabbing, caliphate-desiring quasi state with an irregular army, and leaving them in some capacity intact anywhere would leave a cancer in place that will ultimately come back to haunt us.”

But he and other officials made clear that at the moment, any ground combat troops would come from either Iraqi security forces and Kurdish pesh merga fighters in Iraq, or the moderate Syrian rebels opposed to President Assad in Syria. “Obviously I think that’s a red line for everybody here: no boots on the ground,” Mr. Kerry said.

For Mr. Obama, assembling a coalition to fight ISIS is particularly important to a president whose initial arrival on the global stage was centered around his opposition to the war in Iraq. He is loath to be viewed as going it alone now that he has been dragged back into a combat role in the same country.

An administration official said the reasons for assembling a coalition went beyond any political cover that such an alliance might provide with a war-weary American public. For one thing, the official said, certain countries bring expertise, like Britain and Australia in special operations, Jordan in intelligence and Saudi Arabia in financing.  

American officials are hoping to expand the coalition to many countries, particularly in the region. Obama administration officials said privately that in addition to the participants at the meeting Friday, the United States was hoping to get quiet intelligence help about the Sunni militants from Jordan. Its leader, King Abdullah II, was attending the Wales summit meeting.

United States officials said they also expected Saudi Arabia to contribute to funding moderate Syrian rebel groups. In addition, Yousef Al Otaiba, the United Arab Emirates ambassador to the United States, said in a statement this week that the Emirates stood ready to join the fight against ISIS. “No one has more at stake than the U.A.E. and other moderate countries in the region that have rejected the regressive Islamist creed and embraced a different, forward-looking path,” the ambassador said.

And like the comprehensive strategy to combat Al Qaeda that has taken years to develop and carry out, Mr. Olsen and other counterterrorism officials said  on Friday that destroying the threat from ISIS could take a long time. Even if successful, they said, such a strategy would require maintaining pressure on any remnants of the group.

This plan is consistent with what I have called “The Obama Doctrine“, also know affectionately as the “don’t do stupid stuff” approach to foreign affairs. America cannot afford to get entangled in costly wars (both in economic and human costs). But the world cannot afford to do nothing while threats like ISIS further cement their control. To do nothing would be both morally unconscionable and tactically ineffective.

There are certain elements of this “Coalition of the Willing” that should make it more effective than it’s predecessor in the previous Iraq War:

1) No Boots on the Ground:

A war weary American public has no appetite for a ground invasion in the Middle East. Putting “boots on the ground” is costly in many different senses. Some costs are impossible to quantify, such as lives lost and the physical and mental ailments affecting surviving soldiers (costs which must be paid for the rest of their lives).

Other candidates to provide troops–“rich” countries–are dealing with recessed economies and difficult budgetary decisions; the resources simply do not exist to provide ground troops, even if the will was there. I have argued that Germany and Japan specifically must step up their global security contributions, bringing them more in line with their prominence in the global economy. But even so, these countries will not place troops on the ground, nor should they.

The new plan, a central tenant of the Obama Doctrine, is to provide support (intelligence, weaponry, training) to friendly and stable forces in the region. In the fight against ISIS, this includes the Iraqi Army, the Kurdish peshmerga, and moderate Syrian rebels (led by the Free Syrian Army).

The role of the Egyptian Armed Forces will be interesting to monitor. One on hand, the forces are well equipped and have a strong anti-terrorism mandate. On the other hand, human rights concerns have alienated Egypt from many of the members of the Coalition. We will have to wait and see what role the Egyptian Armed Forces play in this coalition. Update: It appears Egypt will not play a prominent role in this coalition; one could argue The Egyptian armed forces do no want to degrade ISIS–extremist groups provide the impetus for strong handed militaristic governance.

2) Enlisting The Help of Allies:

Any coalition, by definition, includes multiple partners. The Coalition of the Willing for the War in Iraq included 48 members. However, simply listing country names does not mean countries play a meaningful role; many of the members of that coalition provided little more than a vote of confidence.

It appears that members of this coalition will have more defined roles. Notably, ground forces will be provided exclusively by regional actors. This “capacity building” approach should lead to a more sustainable security situation in the region, leaving stable armed forces in place once this particular offensive has concluded (of course this is far from a guarantee; it is very difficult to tell how decisions like this will play out down the line, especially in a region as volatile as the ME).

It is important that the coalition do it’s best to function as a cohesive group. While dividing duties allows for specialization based on expertise and cost-sharing, it can also lead to disagreement and paralyze action. For all its many deplorable attributes, ISIS has proven itself to be well organized and capable of moving very quickly. The coalition must put in place representative leadership that allows for quick, reactive decision making.

The dearth of stable and capable regional allies further complicates matters. I already mentioned Egypt’s questionable role; two countries the international community cannot count on at all are Iran and Syria.

Iran provides a counterbalance to Sunni extremists, but fails in terms of the pluralistic, sectarian-blind solutions needed in the region.

Syria has began launching an offensive against ISIS. However, one cannot imagine an instance in which the coalition’s members–many of which have taken strong anti-Assad positions–would accept his regimes support.

Despite all these caveats, this new coalition is an important first step in the long-term fight against ISIS. The coalition has the advantage of resources, legitimate goals, and lessons learned from previous interventions in the region. In time ISIS will be defeated.

Update: The new coalition has gotten off on rocky footing , with many expected allies failing to agree to the strong, specific commitments America was hoping for.


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Economic Outlook: The Flawed Logic Behind New Bank Rules on Liquidity and Municipal Debt

Original article:

Municipal bonds will no longer be part of the easily sellable assets that banks can use to show they are able to survive a credit crunch, Bloomberg reported, citing a person familiar with the matter.

The final liquidity rule will be approved by regulators, including the Federal Reserve, on Sept 3, the news service reported the person as saying.

The most recent draft does not list debt issued by states and municipalities as high-quality assets that could help sustain a bank through a 30-day squeeze, the report said, citing the person.

The regulations could affect the municipal bond market by giving banks less incentive to buy bonds that finance schools, roads and public works, Bloomberg said.

On the surface, this new rule make perfect sense–it is a natural response to the unprecedented explosion of municipal bankruptcies and the economic decision underpinning them (poor investment of public funds, unsustainable public worker benefits, overly generous subsidies to attract private sector jobs, etc.). “Easily sellable assets” are supposed to be liquid and stable in price, in order to assure banks can “wind down” their holdings in the event of a financial crisis.

But upon further consideration, the decision to not include municipal bonds as “easily sellable” assets is representative of a larger [artificial] divide between the “financial” and “real” economies. It is also incredibly shortsighted.

In the aftermath of the “Great Recession”, America realized two economic recoveries. One was a financial recovery which, buoyed by a financial sector bailout, happened very quickly. This recovery resulted in 95% of economic gains between 2009-2013 went to the top 1%–the people who own the vast majority of financial assets. This recovery continues to be marked by record high values for many popular stock indexes.

The second recovery, which 6 years later is only partially complete, is the recovery of the labor market. Unemployment is low (especially compared to levels in certain European countries), but wages remain depressed and many people are still forced to take jobs below their skill level.

In theory, the financial sector should act as a barometer of sorts for the strength of the real economy; when the real economy is doing well, the financial sector should boom. In reality, throughout the past few decades the financial sector has become synonymous with terms like “bubbles”, insider information / fraud, and offshore banking / tax inversion. Financiers, accountants and lawyers are employed to figure out illegal / quasi-legal loopholes to ensure the rich get richer regardless of their productivity or contributions to society as a whole.

In the aftermath of the Great Recession, the type and amount of “safe” assets banks must hold has to be reexamined. But pricing municipalities out of financial markets is not the answer to this problem.

In the long run, economies do well when we invest in everybody–when no person is left behind. This concept goes by many names; the two most common I have heard are “the human rights based approach to sustainable human development” and “progressive politics”. Regardless of what you call it, this concept is not only ethically and socially just, it is economically viable. Furthermore, we end up paying for those “left behind” in the form of higher police, prison, and welfare expenditures anyways.

The decision to not include municipal debt as “easily sellable” assets will drive up the price municipalities pay for providing essential public services. Of course municipalities must do their best to set economically sustainable policies, perhaps with the assistance / oversight of state and/or federal officials. But America cannot afford to let the current mishandling of municipal policies lead to a further deterioration in local service delivery–it is unfair to the people affected by these policies and the American economy as a whole.

Spending less money on education, social programs, and infrastructure, while perhaps “fiscally responsible” in the eyes of some people, is incredibly harmful to America’s economic prospects in the medium and long runs. Unless this liquidity decision is part of a larger plan for the Federal Reserve to act as a backstop / “lender of last resort” for municipal debt–an idea I have heard nothing about–then it will only further exacerbate the rift between the real and financial economies, setting America up for both future financial crises and a loss of global competitiveness.

During my time interning at the UNDP, there was an organizational slogan I took to heart; judge a society not by the strength of its strongest, but by the strength of its weakest. In America, those at the bottom of the socioeconomic ladder depend the most on municipal services to realize “the American Dream”. This slogan holds holds as true with regards to the sustainable human development of American’s as it is for people in less developed countries.

America should have the resources and political will to enable everybody to realize their full economic potential. This should be the new American dream.

 

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