Normative Narratives

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Transparency Report: Closing the Rift Between What the UN Knows and What the UN Does


Quote, FDR Memorial, Washington D.C.

Original article:

He [Current General Assembly President Mogens Lykketoft] also touched on the issue of Security Council reform, saying the subject was “of central importance to a large majority of the Membership” of the UN, and that the General Assembly had decided to immediately continue the intergovernmental negotiations on Security Council reform in its 70th session.

Mr. Jürgenson [Vice President of ECOSOC] said that the relationship between the Charter bodies of the UN should be revitalized.

“The changing nature of conflict, from inter-State wars to complex civil conflicts that are intractable and reoccurring, highlights the fundamental link between sustainable development and lasting peace,” he said.

ECOSOC and the Security Council, he said, can interact on a regular basis on issues of concern to them both, from the promotion of institution building and improved governance to the consequences of economic and financial crises on global stability and the impact of environmental degradation on weakened societies.

“On each dimension of sustainable development, economic, social or environmental and on their contribution to the overall objective of peace, the UN development system, under the oversight of ECOSOC, has a lot to contribute,” he said. “The Economic and Social Council can be the counterpart of the Security Council to embrace a truly holistic approach to peace and security, an approach that world leaders have recognized as the only one which can lead to sustainable results.”

Human rights theory recognizes the broad array of human rights (economic, social, cultural, political and civil) are mutually dependent. Furthermore, certain rights, such as civil and political rights, create the enabling environment needed for people to claim other rights / hold violators accountable.

Any society that prioritizes the human rights of all its citizens will, in time, experience a virtuous cycle of sustainable human development and “positive peace“. In contrast, a society that “tolerates” certain human rights abuses in the name of security / stability greatly risks further restrictions of other rights; one rights violation invites others, and the vicious cycle of repression, poverty, and conflict emerges.

The human rights based approach to development therefore recognizes the interdependence of ostensibly separate U.N. operations. Specifically, preventative action–natural disaster preparedness and conflict prevention–feature prominently in development efforts.

The UN Development Programme (UNDP), the UNs primary development policy body, uses the slogan “Empowered Lives, Resilient Nations”. “Empowered lives” refers to upholding human rights obligations and consultative policy-making–enabling people in the developing world to be active participants in their country’s modernization. “Resilient nations” refers to conflict prevention and natural disaster mitigation, reasonable welfare programs, and the social cohesion and institutions needed to resolve internal grievances peacefully.

Of course, prevention and preparation only work at certain points during disaster response. Conflicts in full swing must be addressed decisively or they will fester and devolve. Countries that do not amply invest in natural disaster preparedness must bare huge rebuilding costs (this is not just a poor country problem, think about the devastation caused in the U.S. by Hurricane Katrina and Super-Storm Sandy).

Addressing issues once they have reached catastrophic levels is much more expensive than investment in prevention / mitigation. The current model–ignoring warning signs followed by a too-little-too-late response–strains humanitarian aid budgets, resulting in the need to make untenable, short-sighted decisions that perpetuate future crises.

Whenever a capable, trustworthy partner exists on the ground, the international community should not be constrained by short-term financial considerations. The world’s poorest countries should not be consigned to larger futures bills, social problems and insecurity because of a failure of leadership in global governance.

The international community’s inability to adequately address today’s problems stems primarily from two sources. One is short-sighted decision making due to financial constraints. The second is the ineffective structure of the U.N.S.C.

Here are a few suggestions to make the U.N. more responsive.

1) UNSC Reform:

The inability of the U.N.S.C. to preventatively defuse conflicts, due to concerns over “national sovereignty”, condemns large groups of people to a future of conflict and economic decline. Conflict does not know national borders, leading to spillover conflicts that affect whole regions. Even once resolved, post-conflict countries are susceptible to sliding back into conflict. Taken together, these factors show why an inability to deal with one problem proactively can result in long-term instability for a whole region.

This issue gets to the root of the power struggle between the permanent members of the U.N.S.C. that champion human rights / democracy (U.S., Britain, France) and those champion national sovereignty (or more specifically, the ultimate supremacy of national sovereignty, even in instances where the Responsibility to Protect should clearly be invoked)–China and Russia.

Those opposed to “Western” values believe promoting “human rights” is just a way for America to impose its values abroad. I would contend human rights represent values that all people desire, by virtue of being human. Reforming the U.N.S.C. to give a General Assembly super-majority the power to overrule a U.N.S.C. veto would reveal which side of the argument is correct. I would bet the global majority would almost always land on the side of taking action to defend human dignity against any who would challenge it–terrorist or authoritarian ruler.

As the world’s largest military and a veto-possessing permanent member of the Security Council, America on the surface has the most to lose from such a reform. This is precisely why America must lead this push; if we champion this brave and uncertain approach, it would ultimately lead to a much more effective and timely defense of the very principles we hold dear. By loosening our grip on power, we would actually achieve our desired aims through a democratic process–what could be more American than that? 

Human rights violations lead to revolution and conflict, during which legitimate opposition is branded “terrorism”. Inaction by the international community leads to “hurting stalemates” and power vacuums that are filled by opportunistic extremist groups. Authoritarian governments then become the more tenable option, and their “fighting terrorism” narrative becomes self-fulfilling (despite the fact that often their abusive actions led to the uprisings in the first place). Failure to reform means we are OK with this status-quo–we should not be.

During the 70th session of the UN General Assembly, many countries called for U.N.S.C. reform. When such disparate countries with differing needs use their moment in the global spotlight to promote this common cause, it is a message that should be taken very seriously.

2) Development Aid Smoothing

This is admittedly a less developed plan, as I am no financial economist. But it remains clear to me that the world needs some sort of mechanism to smooth development aid for the world’s Least Developed Countries.

We see it time and time again–poor countries slowly slide into worsening conflict or are devastated by predictable natural disasters because:

a) The LDCs do not have the resources or capacity to address these issues preventatively;

b)  The international community cannot muster the funds, as they are all tied up in long-term humanitarian missions (likely because not enough resources were invested preventatively elsewhere–you can see why there is never a shortage of disasters, we ignore budding issues to address full blown ones. By the time those full-blown issues are under control, the ignored budding issues have festered into the new issue de jour).

The continued inability of the international community to address problems before they get worse is not only financially short-sighted, it is a failure of the U.N’s mandates and fuels the perception (and increasingly the reality) that international community is incapable of addressing the problems of the 21st century. 

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Economic Outlook: For-Profit Failures Further Support Free Community College Plan

Your Student Government '13 to '14

New Research:

On Thursday (9/10), two researchers — Adam Looney of the Treasury Department and Constantine Yannelis of Stanford University — released an analysis of a new database that offers much more detail. It matches records on federal student borrowing with the borrowers’ earnings from tax records (with identifying details removed, to preserve privacy). The data contains information about who borrows and how much; what college borrowers attended; their repayment and default; and their earnings both before and after college.

the data suggests that many popular perceptions of student debt are incorrect. The huge run-up in loans and the subsequent spike in defaults have not been driven by $100,000 debts incurred by students at expensive private colleges like N.Y.U.

They are driven by $8,000 loans at for-profit colleges and, to a lesser extent, community colleges. Borrowing for both of these has become far more common in recent years. Mr. Looney and Mr. Yannelis estimate that 75 percent of the increase in default between 2004 and 2011 can be explained by the surge in the number of borrowers at those institutions.

It’s not hard to see why. The traditional borrowers from four-year colleges tend to earn good salaries out of college and pay back their loans, even during the recent years of economic weakness. The typical borrower who left a less selective four-year college in 2010 earned $35,000. For those leaving more selective colleges, the figure was $49,000. Those salaries obviously aren’t lavish, but they’re high enough to let most people meet their initial loan payments — and they tend to lead to bigger salaries in later years.

Borrowers at for-profit and community colleges, by contrast, earn low salaries — a median of about $22,000 for those exiting school in 2010 — and have had difficulty paying their loans.

The new findings are consistent with earlier data — such as statistics showing that default rates are actually lower among borrowers with large loans than among borrowers with small loans.

But the new data, which goes back two decades, shows how much the landscape of borrowing has changed. Today, most borrowers are older and have attended a for-profit or community college. A decade ago, the typical borrower was a traditional student at a four-year college.

Why did the face of borrowing change so rapidly in just a few years? During the recession, millions of students poured out of a weak labor market and into college to improve their skills. Historically, these students would have gone to community colleges. But with state tax revenues taking a nose-dive, community colleges were starved for funds and unable to expand capacity to absorb all of the new students. Students took their Pell Grants and loans to for-profit colleges. Enrollments at these schools spiked, and so did borrowing.

Behind the increase in for-profit college loan defaults is an underlying problem. How did these for-profit schools become so prominent so quickly? During the Great Recession, there was a spike in demand for schools where people could acquire marketable skills cheaply. This is exactly what economic theory told us would happen:

  1. With a larger pool of people looking for work (higher unemployment), employers could be more selective, requiring greater credentials for a given job than they otherwise would have been able to.
  2. As the labor market worsened, the “opportunity cost” of obtaining required skills (foregone wages) decreased.
  3. As people’s income decreased (both as a result of the recession, but also part of a long-term trend of stagnant median incomes versus increasing tuition costs), demand for the “inferior good” (in this case, for-profit and community colleges) increased.


Compounding the issue, many War on Terror veterans we’re returning home, with GI Bill tuition-assistance in hand but little idea of what to do with it.

At the same time, the recession resulted in lower tax receipts, and municipal and state budgetary restraints became more acute. Instead of increasing funding to deal with the predictable influx of students, community colleges faced budget cuts. The resulting surplus of students was readily snapped up by for-profit colleges.

For-profit colleges are, on average, four times more expensive than community colleges, and return poorer graduation rates and career outlooks. In other words, for every one student the federal government paid for to go to a for-profit school, it could have sent four students to community college. Furthermore, those four students would be more likely to graduate and have better career prospects.

People have different reasons for wanting to attend community college. Some people want to learn a specific marketable skill, with no intention of pursuing a bachelors degree (or beyond). Therefore, in order for community colleges to be eligible for new proposed federal subsidies, they should have to offer specialized vocational training programs.

For other people, community college is a stepping stone towards a more advanced degree. For these students, a free community college option would allow them to find out if “college is for them”, without taking out loans (I would argue that the absence of debt itself would lead to better academic outcomes). Another requirement for receiving expanded federal assistance should be making it easier to transfer community college credits to four-year college.

Of course, it is not solely up to community colleges whether four year institutions accept their credits. The Federal Government could, however, use the power of the purse and scale grant eligibility based on a four year school’s willingness to accept credits from community colleges. I bet community college credits would become more transferable if this were the case…

Perhaps some of these reforms are already baked into the Obama plan–if so, good. Either way the government, with the assistance of academic and private sector partners, should develop guidelines to help community colleges meet technical program and transfer-ease requirements.

With these requirements are met, community colleges could better serve their two target groups–returning adult-students looking for technical skills, and out-of-high-school prospective college students who think they want to pursue a bachelors degree, but do not have the conviction and/or financial resources to jump right into a four year college.

If properly tailored, a tuition-free community college plan would not be a “hand-out for community colleges”. Rather it would be, in large part, a transfer of funding from for-profit (which rely almost exclusively–86% of revenue–on federal grant money to operate) to community colleges, in exchange for reforms that allow community colleges to better serve their students.

Some figures here might help put this “transfer” into context. Obama’s community college plan calls for $1.4 billion in funding in 2016 and $60 billion over the next decade. Compare this to the $32 billion the Department of Education spent on for-profit grants and loans from 2009-2010 alone

Isn’t better educating more people, for far less money (per person), exactly what student aid programs should strive for? Now, to be sure, pushing more people towards community college would increase the cost of the tuition-free plan. As many people have pointed out, to make the plan less costly tuition assistance could be reserved for less wealthy applicants.

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Green News: Properly Managing Natural Resource Revenues–A Focal Point of Sustainable Development

Following the adoption of the Sustainable Development Goals (SDGs) by the UN General Assembly, I would like to highlight a focal point of sustainable human development–utilizing natural resource revenue as a tool for sustainable human development.

Post-2015 Development Financing:

“There’s only so much amount of aid countries can rely on. Indeed, often you can’t rely on aid in the sense of relying on certain amounts every single year… it goes up, it goes down… governments fall in and out of love with the donors… so it’s not so reliable,” said Mr. Nolan.

“At the end of the day, a State operates on the basis of its own revenue collection. And a developmentally-oriented State, a State that actually wants to promote development through infrastructure, health, education spending, needs to raise most of the money itself.”

He added that raising revenue does not necessarily mean going into the rural areas and heavily taxing people. “It actually means taxing the better off in the society and also taxing companies, both domestic and foreign, more effectively.”

Tax rates, he noted, are very low in many low-income countries, in some cases under 15 per cent of gross domestic product (GDP). This could easily be increased by a series of reforms, as well as by better structuring of taxation in the extractive industries and greater attention to the transfer of money out of the country.

Meeting UN-backed climate goals requires leaving the vast majority of natural energy resource in the ground. But sustainable development is contingent on both the intrinsic (electricity) and market value of natural resources; one would be hard pressed to find a development practitioner that does not believe this revenue source is an essential piece of the development financing puzzle.

Developed countries have had decades, if not centuries, of using natural resources limitlessly in their pursuit of development; reliable access to energy is an indispensable part of poverty alleviation, economic growth, and modernization. We are essentially asking the worlds poorest countries to forgo the cheapest form of electricity available in the name of environmental sustainability (do as I say, not as I did). To reconcile this clear mismatch between ability to pay and necessity, the developed world must do more to reach it’s target of $100 billion per year by 2020 to help poorer countries fight climate.

The “Natural Resource Curse“:

The “Natural Resource Curse”–the misappropriation of resource revenue–robs the worlds poorest countries of a needed source of development finance. Often times the natural resource curse finances armed conflicts, which cause immeasurable human suffering, roll back development gains, and make future development much more difficult (conflict is often associated with poverty and malnutrition which stunts physical and cognitive development, can prevent children from going to school, and can cause trauma that leads to lifelong psychological issues).

The Natural Resource Curse is not inevitable, but fighting it requires good governance and the security capacity to counter those who wish to extract revenues for their own privilege. Battling the Natural Resource Curse also requires effective sanctions regimes–by driving ill-gotten natural resource revenues to the black market, and attacking that black market and related international money laundering, international criminals and terrorists would lose an important source of funding.

Sanctions, of course, require broad based cooperation. There is a risk that in this era of disorder and instability, the international community might “ease up” on bad-but-stable governments. The importance of good governance of natural resource revenues shows this would be a short-sighted and ultimately counter-productive strategy for fighting international crime and promoting sustainable human development.

If the world is to simultaneously address the needs of Least Developed Countries (LDCs) and reach climate targets, we must focus on making sure LDCs leverage all the resources they do extract to maximize social welfare. Effective “South-South Cooperation“–the sharing of best practices between developing countries–would greatly enhance this effort.

Given the importance of the source, the propensity for corruption (“Resource Curse”), and the need to leave much of the existing deposits in the ground, when it comes to properly managing natural resource revenues for sustainable human development, there is little margin for error.

Natural Resources and the SDGs:

Fortunately, proper natural resource revenue management is addressed many times throughout the proposed SDG text:

Goal 1. End poverty in all its forms everywhere

1.4 by 2030 ensure that all men and women, particularly the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership, and control over land and other forms of property, inheritance, natural resources, appropriate new technology, and financial services including microfinance.

Goal 5. Achieve gender equality and empower all women and girls

5.a undertake reforms to give women equal rights to economic resources, as well as access to ownership and control over land and other forms of property, financial services, inheritance, and natural resources in accordance with national laws

Goal 12. Ensure sustainable consumption and production patterns

12.2 by 2030 achieve sustainable management and efficient use of natural resources

Goal 16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels

16.4 by 2030 significantly reduce illicit financial and arms flows, strengthen recovery and return of stolen assets, and combat all forms of organized crime

16.5 substantially reduce corruption and bribery in all its forms

16.6 develop effective, accountable and transparent institutions at all levels

16.7 ensure responsive, inclusive, participatory and representative decision-making at all levels

Goal 17. Strengthen the means of implementation and revitalize the global partnership for sustainable development


17.1 strengthen domestic resource mobilization, including through international support to developing countries to improve domestic capacity for tax and other revenue collection

17.3 mobilize additional financial resources for developing countries from multiple sources

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Transparency Report: Europe’s Predictable and (Partly) Self-Inflicted Refugee Crisis


The European Refugee Crisis did not come out of nowhere. In fact, for anybody who follows international affairs, it is an inevitable result of a failure of leadership, shared responsibility, and vision in global security. For the past 70 years, America has been the guarantor of global security for countries seeking to promote democracy and human rights. For many decades this strategy either worked, or we lacked the communications technologies to know that it did not.

However, the decline of the inter-state war (thanks in large part to the economic interdependence and institutions engineered by America post-WWII) and rise of civil wars / non-state (terrorist) actors have led to much more protracted conflicts. The costs of modern warfare, exemplified by America’s “War on Terror”, have left America war-weary and financially strained–the era of “Team America, World Police” is over. This does not mean America should pull back from its extra-territorial human rights obligations, it means that countries that share our values must begin to pull their weight.

These sentiments were recently shared in a statement by UN Secretary General Ban Ki-moon:

“Let us also remember: the high number of refugees and migrants are a symptom of deeper problems – endless conflict, grave violations of human rights, tangible governance failures and harsh repression. The Syrian war, for example, has just been manifested on a roadside in the heart of Europe.”

Mr. Ban said that in addition to upholding responsibilities, the international community must also show greater determination in resolving conflicts and other problems that leave people little choice but to flee. Failing that, the numbers of those displaced – more than 40,000 per day – will only rise.

“This is a human tragedy that requires a determined collective political response. It is a crisis of solidarity, not a crisis of numbers,” the Secretary-General declared.

Thomas Friedman, who is by no means a war hawk, had a surprisingly hawkish outlook on the wars of the Middle East and their subsequent refugee crises in his most recent NYT Op-Ed:

Since World War II, U.S. foreign policy has focused on integrating more countries into a democratic, free-market world community built on the rule of law while seeking to deter those states that resist from destabilizing the rest. This is what we know how to do.

But, argues Michael Mandelbaum, author of the forthcoming “Mission Failure: America and the World in the Post-Cold War Era”: “There is nothing in our experience that has prepared us for what is going on now: the meltdown of an increasing number of states all at the same time in a globalized world

Your heart aches for the Syrian refugees flocking to Europe. And Germany’s generosity in absorbing so many is amazing. We have a special obligation to Libyan and Iraqi refugees. But, with so many countries melting down, just absorbing more and more refugees is not sustainable.

If we’re honest, we have only two ways to halt this refugee flood, and we don’t want to choose either: build a wall and isolate these regions of disorder, or occupy them with boots on the ground, crush the bad guys and build a new order based on real citizenship, a vast project that would take two generations. We fool ourselves that there is a sustainable, easy third way: just keep taking more refugees or create “no-fly zones” here or there.

Will the ends, will the means. And right now no one wants to will the means, because all you win is a bill. So the world of disorder keeps spilling over into the world of order. And beware: The market, Mother Nature and Moore’s law are just revving their engines. You haven’t seen this play before, which is why we have some hard new thinking and hard choices ahead.

Obviously the first option–isolating these regions of disorder–is not really an option at all. Pursuing this option would lead to untold human suffering and stifle innovation, trade, and economic growth. Furthermore, these regions of disorder will not simply leave us alone, as evidenced by 9/11, the 2004 Madrid Train bombings, and more recent “lone wolf” terrorist attacks around the world.

One of the great challenges of the 21st century for the global community, therefore, is to establish a fair, equitable, and financially sustainable system for promoting economic development, “positive peace“, and conflict prevention. The UN Security Council must be reformed, in order to allow the “Responsibility to Protect” to fulfill it’s promise and respond to conflicts in a decisive and timely manner.

The Syrian civil war is a case-in-point of what happens when the international community is unwilling to dedicate the necessary resources to stemming a conflict before it gets out of control.

There are many considerations when assessing the true cost of war, aside from the obvious financial cost of intervention and casualties. Other less obvious costs include damage to the “host” country (physical damage, lost economic output, the cost of post-conflict reconstruction) and psychological and human development costs to civilians in the “host” country–surely war is not to be rushed into or taken lightly.

But despite all these costs, the use of force must remain as a deterrent; war might be costly for society as a whole, but it can still be very profitable for authoritarian governments and terrorist groups. Given Europe’s relative wealth and proximity to the Middle East / North Africa, it’s role in global security and defending human rights abroad has been feeble. Germany is leading the European campaign to house refugees, but as Friedman and Ban point out, treating the symptom and not the cause is not a sustainable solution.

The U.S. more than does it’s part in fighting these wars, but despite good intentions our track record is far from perfect–both intervention and non-intervention in past decades have had disastrous effects. When the U.S. military is the only show in town, “debates” on the proper course of action devolve into an echo-chamber of American ideas, and any ensuing missteps–be they to act or not to act–are amplified. 

Russia, China, and Saudi Arabia will not defend democratic principles. India, while democratic, is inherently non-interventionist. Japan, for it’s part, is beginning to pivot towards playing a greater role in global security. However, when examining countries military capabilities and their ideologies, it is obvious that there is no substitute for Europe (led by Germany) playing a larger role in promoting democracy and human rights abroad, including through the use of force when necessary. 

One would hope that the daily influx of thousands of conflict-driven refugees, in addition to a resurgent Russian military, would kick the Europe military machine into gear. Failure to do so does not promote peace or fiscal responsibility, it is a short-sighted and cowardly approach to governance, and one the world cannot afford. 

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Economic Outlook: Inelastic Demand, Imperfect Competition, and Price Regulation

Talk is cheap, which is why makes sense for business owners to claim prices will increase and / or mass layoffs will result if regulations are put in place. What this really means is that profits will fall, so it is worth it to talk (which, remember, is cheap), and hire lobbyists (which are relatively cheap for big business compared to the benefits they deliver) to support these claims.

In most cases, markets decide pricing. Increase prices, and people can substitute your good for a competitors. Lay people off to make a political statement, and you forego market-share that will be readily snapped up by competitors. In competitive markets, these problems tend to regulate themselves. While true Perfect Competition doesn’t exist in reality, some markets are closer to this ideal than others.

Under perfect competition, there are many buyers and sellers, and prices reflect supply and demand. Also, consumers have many substitutes if the good or service they wish to buy becomes too expensive or its quality begins to fall short.

When a good is necessary for living (healthcare) or for social mobility (college), imperfect markets can price lower income people out.

bls data

Base Year 1978 (Prices = 100)


ACA–companies justify price increases:

Rate Review helps protect you from unreasonable rate increases. Insurance companies must now publicly justify any rate increase of 10% or more before raising your premium.

Price controls imposed as part of the ACA are at least partially responsible for the dramatic slowdown in healthcare cost increases over the past few years (the Great Recession was another major factor).


While a college education is not a silver bullet, it is an important element of the social mobility puzzle. As the graph above shows, college costs have skyrocketed in recent decades, leading poorer students to take on increasing levels of debt to afford a degree.

Those who complete their degree still tend to realize a strong return on investment, but the high (and increasing) debt burden is a huge stressor, which likely contributes to poor graduation rates (especially among lower class students). The combination of non-completion (and related low earnings) and high debt can result in an inescapable debt cycle.

A good proxy for the “necessity” of a good or service is it’s elasticity of demand:

Products that are necessities are more insensitive to price changes because consumers would continue buying these products despite price increases.

The availability of substitutes…is probably the most important factor influencing the elasticity of a good or service. In general, the more substitutes, the more elastic the demand will be.

Imperfect markets result in a lack of substitutes, as barriers to entry result in little competition. Policymakers can start with a matrix of competitiveness and necessity (elasticity of demand); goods and services that are both necessities and exist in highly imperfect markets are primary candidates for price regulation. Two obvious tools for regulating these markets are:

  1. Price controls (making companies justify price increases over a certain threshold)
  2. Tying federal funding to price oversight


Price controls may seem like a blunt tool, but they can actually be quite nuanced. Take the ACA’s “Rate Review”. A company can has an opportunity to make its case that a price increase is justified; if it justified is, the government will allow it. It is in no ones interest to see businesses fail in the name of price control regulation. Such failures hurt the economy, and undermine support for the regulatory policies that lead to their failure.

What is the American dream? Is it meritocracy and social mobility, or is it the freedom to charge whatever the market will bear regardless of the social cost?

Admitting their are limits to what PC market models can achieve in the real world does not make you a socialist. It makes you a good economist and policy analyst. There is room for these industries to remain private and profitable. That does not mean we cannot regulate them in ways that make them work for society as a whole (considering the social benefits when they are widely available, and the social costs when they are not).

It is the job of politicians to identify these markets and call owners on their bluffs. Failure to do so reinforces power asymmetries that stifle social mobility.

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Conflict Watch: Kurdish Awakening

Original article:

Turkey and the United States have agreed in general terms on a plan that envisions American warplanes, Syrian insurgents and Turkish forces working together to sweep Islamic State militants from a 60-mile-long strip of northern Syria along the Turkish border, American and Turkish officials say.

The plan would create what officials from both countries are calling an Islamic State-free zone controlled by relatively moderate Syrian insurgents, which the Turks say could also be a “safe zone” for displaced Syrians.

And with only 60 Syrian insurgents having been formally vetted and trained by the United States under a Pentagon program, questions also remain about which Syrian insurgents and how many will be involved in the new operation. A larger number of rebels that American officials deem relatively moderate have been trained in a covert C.I.A. program, but on the battlefield they are often enmeshed or working in concert with more hard-line Islamist insurgents.

Such Syrian Arab insurgents would gain at the expense of the People’s Protection Units, a Kurdish militia known by the initials Y.P.G. that is seeking to take the same territory from the east. While the United States views the group as one of its best partners on the ground, Turkey sees it as a threat; it is affiliated with the Kurdistan Workers’ Party, a militant group whose longstanding conflict with Turkey has flared anew in recent days.

The plan does not envision Turkish ground troops entering Syria, although long-range artillery could be used across the border. Turkish ground forces would work on their side of the border to stem the Islamic State’s ability to infiltrate foreign fighters and supplies into Syria.

Awakening–an act or moment of becoming suddenly aware of something. Awakening is the word used to describe the coming together of disparate Sunni tribes and U.S. coalition forces to fight and defeat al Qeada in Iraq–the “Sunni Awakening”.

But there was another “awakening” for these factions–a rude awakening. After doing the heavy lifting on the front lines, these Sunni factions were largely shut-out of the political reunification of Iraq. This was not only unjust, it contributed to the government ineptitude and subsequent power-vacuum that has helped fuel ISIL’s rapid advance across Iraq.

There is a parallel in the fights against ISIS and Assad. This time, the YPG and PKK Kurdish forces are playing the front-line role. Furthermore, the Kurds are far more ideologically aligned with “Western values” than the Sunni Awakening tribes ever were.

My first thought when I heard Turkey was stepping up its fight against ISIS was “about time”. But my enthusiasm was quickly tempered as it became clear that Turkey’s plan is more about fighting the PKK and Turkish politics than the fights against ISIS and Assad. Turkey has the capacity to play a very important role in the fights against Assad and ISIL–this plan does not fulfill that role, and will likely be a net-negative.

The Kurdish pesh merga is a capable military with boots on the ground. Kurdish political leadership is stable and able to balance security and human rights better than any Middle-Eastern government aside from Turkey, Israel, and Tunisia. For a fraction of the financial and moral support sunk into failed ME regimes, Kurdistan could probably now be a fully functioning democratic state by now–I reiterate my support for an independent Kurdistan (although not on Turkish land, but in parts of Syria and Iraq).

For its part, Kurdish political leadership must denounce terrorist attacks against the Turkish government, and distance itself from any radical elements of their parties. Such terrorist attacks are counter productive–they cost the Kurdish statehood movement public support (which is a necessary element for ever becoming an internationally recognized state) and provide Turkey with legitimate reasons to attack Kurdish positions.

The Kurds should also expand their security mandate from solidifying their borders, to actively engaging and degrading ISIL. Backed by coalition airstrikes, boots on the ground are exactly what the fight against ISIL is most lacking. Despite war at it’s front door, Turkey will still not provide ground troops. The Kurds can use this cowardly position to their advantage, juxtaposing the importance of its ground troops against moderately useful Turkish air bases (yes they allow coalition airstrikes to get to positions faster, but without boots on the ground acting in concert with these airstrikes, they are largely ineffective in the fight against ISIL).

If the Turks want to stay out of the fight against ISIL and Assad, that is its prerogative as a sovereign nation. But the U.S. government and NATO should not sanction Turkey using this fight as a cover to degrade the one capable force on the ground fighting both ISIL and Assad. There is no longer a moderate Syrian opposition without the pesh merga. We should heed the lessons of abandoning our front-line allies after they have done “the dirty work” of war. The Kurds will not remain our allies if we abandon them at the first hint of Turkish intervention in the fight against ISIL.

(Update: In a further blow to the moderate Syrian rebels who figure so prominently in Turkey’s plan to fight ISIS and Assad, the leader of the only U.S. vetted force, Nadeem Hassan, was kidnapped along with 6 other rebels. This puts the number of vetted moderate Syrian rebels somewhere between 53 and 47, a reasonably large college lecture class, but not an army capable of fighting ISIS or Assad, regardless of the level of aerial support.)

Assad and ISIL cannot last indefinitely. The question is what morning-after do we want the Kurdish people to awaken to? The one where we stood by them as partners? Or the one where we gave the thumbs up for Turkey to bomb them after months of doing the world’s dirty work fighting ISIL? 

The Obama administration misplayed its hands in Syria and Egypt. Over time, what began as legitimate democratic movements became exactly what the Assad and Sisi wanted–a fight between “strong men” and radical extremists. We cannot let Kurdistan, a budding “Island of Decency” (in the words of Thomas Friedman), become another example of a failed democratic movement in the Middle East.

Some countries are truly not ripe for democratic modernization–it is a process. Failure to realize this can lead to costly wars and greater instability than before said interventions started. This is not to say the international community cannot or should not use it’s intelligence and resources to identify and support the civil elements within a country that are laying the socioeconomic and ideological groundwork for future democratic movements–we should. But we must be realistic when considering our willingness to dedicate resources and our partners capacities when determining whether direct intervention is a pragmatic decision; moving too fast is as bad as not moving at all.

At the other end of the spectrum, failure to support movements that have the capacity to solidify universal aspirations of freedom into sustainable political infrastructure and government administration–such as Kurdish leadership–should not be an option either. Not only does this go against “Western values”, it is geopolitically short-sighted. Furthermore, continuing to make this mistake makes the “democracy cannot exist in the middle east” narrative self-fulfilling.

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The Greek Bailout Deal Is A Failure of Leadership in Both Greece and Germany


The terms of the 3rd bailout deal between Greece and its creditors brought a lot of issues to the forefront.

Silly me for thinking negotiations had to with economics–modernizing the Greek economy by enacting needed structural reforms, while providing the Greek government with the fiscal space needed to promote growth and address it’s pressing humanitarian crisis (which said structural reforms would only exacerbate in the short run). Instead, the defining elements of the deal were related to personality and politics.

The Germans were mad at the Greeks, so much so that German finance minister Wolfgang Schäuble said perhaps Greece might be better off leaving the Euro–this short-sighted self interest is not suitable behavior for Europe’s de facto leader. Tsipras’s government, for it’s part, apparently did not have a backup plan in case it’s creditors failed to offer a reasonable deal. I know Syriza is new to politics, but you don’t have to be a master negotiator to know that going into negotiations without a backup plan is a flawed strategy.

I was a fan of Tsipras’s government because of the interim agreement it secured in February–the potential for trading structural reforms for fiscal space. But since that point it terribly misplayed its hand. It went into negotiations without a backup plan. It held a referendum at least a month too late–the overwhelming “no” vote would have been a strong bargaining chip had Greece been able to take it back to the negotiating table while still covered under the terms of its prior bailout.

But once those terms expired, and Greek banks closed, the only choices for Greece were Grexit or capitulation. Since there was no plan in place for a Grexit, Greece ended up with the terrible deal it got. That deal–as it currently stands–fails in all regards: financial sustainability, growth prospects, and short term humanitarian concerns.

Not Financially Viable:

The International Monetary Fund threatened to withdraw support for Greece’s bailout on Tuesday unless European leaders agree to substantial debt relief, an immediate challenge to the region’s plan to rescue the country.

A new rescue program for Greece “would have to meet our criteria,” a senior I.M.F. official told reporters on Tuesday, speaking on the condition of anonymity. “One of those criteria is debt sustainability.”

The I.M.F. is now firmly siding with Greece on the issue. In a reportreleased publicly on Tuesday, the fund proposed that creditors let Athens write off part of its huge eurozone debt or at least make no payments for 30 years.

The I.M.F. said in its report that a write-down could be avoided, but only if creditors extended the schedule for Greece to repay its debt. The only other alternative to a haircut would be for the eurozone countries to give Greece the money it needs to repay them.

“The choice between the various options is for Greece and its European partners to decide,” the I.M.F. report said.

Greece would need to spend a sum equal to more than 15 percent of G.D.P. annually to pay interest and principal on its debt, according to the latest I.M.F. report.

Does Not Fulfill Greek’s Human Rights:

The implementation of new austerity measures in Greece amid the country’s deteriorating economic crisis must not come at a cost to human rights, a United Nations expert warned today as he urged international institutions and the Greek Government to make “fully informed decisions” before adopting additional reforms.

“I am seriously concerned about voices saying that Greece is in a humanitarian crisis with shortages in medicines and food,” Juan Pablo Bohoslavsky, the UN Independent Expert on foreign debt and human rights, stressed in a press statement today. “Priority should be to ensure that everybody in Greece has access to core minimum levels of economic, social and cultural rights, including the right to health care, food and social security.”

“A debt service burden that may be sustainable from a narrow financial perspective may not be viable at all if one considers the comprehensive concept of sustainable development, which includes the protection of the environment, human rights and social development,” he added.

And of course, as the IMF report highlights, the deal is not even “sustainable from a narrow financial perspective”.

Kicking the Can or Letting Heads Cool?

If Greece’s creditors, led by Germany, ultimately want to see Greece stay in the Eurozone (for the long run), a friendlier deal is needed. If a “Grexit”, with its short term pain but long term possibilities to return Greece to economic health, is indeed in Greece’s best option given what it’s creditors are willing to offer, why not take that tough medicine and let the healing start? The current deal represents the worst of both worlds–economic pain now and a likely Grexit in the future.

The one positive of this deal is that it did buy time, which should not be undervalued as “Grexit” would be permanent and have terrible geopolitical consequences. But  without stimulus (there are talks of a 35 billion euro stimulus fund by 2020 if reforms are fully implemented, but this may be too little too late) and debt restructuring (which cannot be ruled out, but also cannot be counted on), the deal is little more than kicking the can down the road–all while the Greek people continue to suffer.

Greece’s creditors cannot keep dangling future carrots while imposing fiscal restraints which hurt Greece’s already beleaguered citizenry in the here and now. Aid must be synced with structural reforms, or else the Greeks will see their situation go from terrible to worse and reject the terms of this 3rd bailout. 

Doing the same thing and expecting different results is the definition of insanity. Greece has tried to implement reforms in order to unlock future aid before, and we see where that got it--a severely contracted economy, depression level unemployment rates, and costly political instability. 

This is not the time for more business as usual; this is the time for bold action and trust between Greece and it’s creditors. Unfortunately nothing about the past few months of negotiations suggest this is outcome will be realized.


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Economic Outlook: The “Neighborhood Effect” on Social Mobility

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The 2014 Education Choice and Competition Index Map

The “Neighborhood Effect” on Personal Development:

In a recent blog, we examined Harvard economist Raj Chetty’s study on the “Neighborhood Effect” on social mobility–how where a child grows up impacts the life he or she comes to live. The neighborhood one grows up in affects ones prospects later in life primarily in two ways:

1) Experiences: The people one meets and interacts with outside of family (friends, role-models, mentors, etc.). I would like to highlight President Obama’s “My Brother’s Keeper” initiative–which matches underprivileged minority youths with positive role-models–as a powerful tool in promoting social mobility.

2) Quality of schools and other public services: These institutions enable children to pursue interests that keep them “off the streets”, and if cultivated can lead to very marketable skills. Good public schooling and extracurricular programs are important for everyone, but even more so for lower-income children, whose families otherwise likely could not provide such opportunities.

The neighborhood one grows up in can either mitigate or exacerbate the affect a person’s family has on their personal development; a “good” neighborhood will benefit a child, while a “bad” neighborhood (we will use median income as a proxy) can hinder them. The combination of “bad” parenting and a “bad” neighborhood can create a nearly inescapable poverty trap; just because there are one-in-a-million stories of rags-to-riches with no help doesn’t mean we should accept leaving the vast majority of poor minority youths behind.   

Unfortunately, the data shows that–even holding income constant–minority families tend to live in poorer neighborhoods than their white and Asian-American counterparts. The findings are especially notable because they come shortly after a separate research project, by two Harvard economists, that we’ve covered in detail at The Upshot. That project has tracked several million children since the 1980s to analyze how the area where they grew up affected their lives. Children who grew up in better neighborhoods — which tended to have less poverty, less crime, more two-parent families and schools with higher test scores — fared much better as adults than otherwise similar children from worse neighborhoods.

The new paper, being published in The Annals of the American Academy of Political and Social Science, suggests that these neighborhood effects are helping to widen racial disparities, including disparities in upward mobility.

Consider these numbers: A typical black child living in a household with $100,000 in annual income lives in a neighborhood with a median income of $54,400. And a black child in a household making $50,000 typically lives in a neighborhood with a median income of $42,200.

White and Asian children are much more likely to live in neighborhoods where median income is similar to — or higher than — that of their own family. Latino children fall in the middle, less likely than white and Asian children to live in middle-class or affluent neighborhoods but more likely than black children to do so.

Of course, the neighborhood gap arises in part from voluntary choices. Many Americans, of all races, prefer to live among people who are similar to them, note Mr. Reardon and his colleagues Lindsay Fox and Joseph Townsend. For African-Americans, such a choice often means living in lower-income areas, given the racial disparity in incomes.

Taken together, the research shows that neighborhoods matter enormously to a child’s life chances — and play a big role in the nation’s racial inequalities. Some of the gaps will persist as long as the white-black income gap does. But some of the problems are more easily addressed through housing policy.

Housing developments that allow low-income families to move into higher-income neighborhoods appear to be a cost-effective antipoverty strategy. Vouchers that help lower-income families move into better neighborhoods may be even more so.

The fact that the neighborhood gap arises partially from choice cannot be ignored. And as the article points out, incomes are not the only consideration when choosing where to live. Wealth also matters–in America White people’s median wealth is much greater than their Latino and Black counterparts.

Whatever the reason, financial or social, minority families tend to live in poorer neighborhoods, perpetuating racial economic disparities across generations.

Desegregating America: Rethinking The Fair Housing Act and Promoting School Choice

Lost in the mix of two landmark Supreme Court rulings on gay marriage and healthcare subsidies, the Supreme Court recently made an important ruling with regards to federal housing policy that could help chip away at racial isolation:

The Supreme Court on Thursday endorsed a broad interpretation of the Fair Housing Act of 1968, allowing suits under a legal theory that civil rights groups say is a crucial tool to fight housing discrimination. “Much progress remains to be made in our nation’s continuing struggle against racial isolation,” Justice Anthony M. Kennedy wrote for the majority in the 5-to-4 ruling. “The court acknowledges the Fair Housing Act’s continuing role in moving the nation toward a more integrated society.” The question in the case was whether plaintiffs suing under the housing law must prove intentional discrimination or merely that the challenged practice had produced a “disparate impact.” Drawing on decisions concerning other kinds of discrimination, Justice Kennedy said the housing law allowed suits relying on both kinds of evidence.

The first kind of proof can be hard to come by, as agencies and businesses seldom announce that they are engaging in purposeful discrimination. “Disparate impact,” on the other hand, can be proved using statistics.

The latest case, Texas Department of Housing and Community Affairs v. Inclusive Communities Project, No. 13-1371, was brought by a Texas group that favors integrated housing. The group helps its clients, who are mostly lower-income black families, find housing in the Dallas suburbs, which are mostly white.

The families use housing vouchers, but not all landlords accept them. Landlords receiving federal low-income tax credits, however, are required to accept the vouchers.

The fair housing group argued that state officials had violated the Fair Housing Act by giving a disproportionate share of the tax credits to landlords in minority neighborhoods.

The Supreme Court returned the case to the lower court for further proceedings, cautioning that allowing disparate-impact suits did not mean that they should always succeed. Indeed, Justice Kennedy expressed concern about “abusive disparate-impact claims” and suggested that the case before the court would face headwinds.

Not surprisingly, racially segregated neighborhoods have led to racially segregated schools, an issue brought up by presidential hopeful Hillary Clinton. While a broad interpretation of the Fair Housing Act enables communities to chip away at the neighborhood gap, all levels of government should also promote efforts to desegregate schools through policies that enable greater choice in schooling:

School districts across America are transitioning from the traditional model of assigning students to a school based on their residential address to a system that allows families a choice of schools. Depending on the district, families can choose public charter schools, affordable private schools, magnet schools, virtual schools, and regular public schools in which enrollment is based on parental preference rather than zip code.  Districts differ in which of these options is available, the ease with which parents can exercise the choices available to them, and the degree to which the choice system results in greater access to quality schools.

Like a child’s parents, the neighborhood he or she grows up in is outside his or her control. The purpose of social mobility policies should be to ensure that children that “lose” the “parenting / neighborhood lotteries” still realize some developmental floor, enabling them to realize their full potential.

Making children pay for the questionable choices of their parents is not only socially unjust, it is economically shortsighted. 

The First Step Towards Recovery is Admitting There is a Problem:

In the wake of the recent massacre at the Charleston S.C. Emanuel African Methodist Episcopal Church, there has been a lot of soul-searching amongst Americans. The question on many peoples minds’ being “is America a post-racial country?”–it would appear not. Taking down Confederate flags, while itself a positive step, can have at best a marginal impact on race relations.

The best way to overcome racial divisions is to have people of different races interact with one another. This puts a human face to stereotypes, and exposes the false anecdotes on which they are based (SPOILER: every culture and race has industrious, innovative, good people, as well as lazy, stupid, evil people–it is not a racial thing).

Integration efforts have their greatest impact at a young age, when people’s world views are being formed, another reason why primary school integration is such an important avenue for overcoming racial divides. I know this from first hand experience–attending public schools K-12 with classmates from diverse racial and socioeconomic backgrounds undoubtedly impacted my personal beliefs. This highlights another important point–desegregating neighborhoods and schools is not only beneficial to low income people, it benefits the children of current wealthier residents as well.

The ability to interact with people of diverse backgrounds will only become more important as globalization continues to make the world “smaller”. Children who are not exposed to different types of people will find themselves shut out of many opportunities in the global economy.

The SCOTUS Fair Housing Act decision and expanding school choice are important policy tools in the fight to promote equality of opportunity, meritocracy, and social mobility, while also addressing the very real remnants of America’s lingering racially charged history.

This multi-pronged approach, utilizing both affordable housing policy and school choice policies, are also the cornerstones of Raj Chetty’s policy mix for addressing social mobility–I fully support this prescribed policy mix as an important piece of the social mobility puzzle. “My Brother’s Keeper” type mentor programs are another important tool.

Of course there are other “poverty traps” (which tend to disproportionately affect racial minorities), many of which I have discussed in past blogs, such as the America’s current criminal justice system and predatory payday loans. Addressing each of these poverty traps requires its own nuanced policy mix.

Update (7/9): The Obama administration today announced stricter plans for holding localities accountable for how they dispense federal low income housing credits:

The Obama administration announced an aggressive effort on Wednesday to reduce the racial segregation of residential neighborhoods. It unveiled a new requirement that cities and localities account for how they will use federal housing funds to reduce racial disparities, or face penalties if they fail.

“This rule makes it clear that the fair housing obligation isn’t just being able to say, ‘I didn’t discriminate,’ ” Mr. Breymaier said. “It’s also saying, ‘I’m doing something proactively to promote an integrated or inclusive community.’ ”

Ed Gramlich, a senior adviser at the National Low Income Housing Coalition, cautioned that change was likely to come slowly. Local governments that receive federal funding are required to draw up plans once every five years. For some jurisdictions, the new rules may not need to be addressed until 2020.

Still, he described the new requirement as “tremendous.” Until now, he said, local governments have basically had the freedom to decide for themselves whether they were complying with the 1968 law.

“Jurisdictions would say, ‘We put up a fair housing poster during Fair Housing Month,’ and that was it,” he said. “The whole concept was unenforceable and therefore meaningless.”

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The Democratic Costs of a “Grexit”

To Grexit, or not to Grexit?

Greece’s negotiations with its creditors have not gone smoothly.  The Greek government treated an interim deal reached in February as a starting point for negotiations, while it’s creditors considered it more of an non-negotiable outline of a deal. The result has been two sides talking past each other; the longer this situation persists, the more likely a “Grexit”–Greece leaving the Eurozone and / or EU–becomes.

There is a ton of middle ground for the two sides–both want Greece to return to growth and full employment. The Greek government also wants a safety-net for people negatively affected by labor market and other structural reforms; pushing already impoverished people further into poverty is not only morally reprehensible, it is bad economics.

To prevent this result, Greece has passed an “anti-poverty law” to protect its most vulnerable citizens. The problem is financing this program; the Greek government needs room to implement needed structural reforms without further destabilizing Greek society.

In addition to staving off a humanitarian crisis, Greece also needs a long-term growth strategy beyond structural reforms. There are few options for the Greek government:

1) It can completely comply with creditor demands.

2) It can continue to push its lenders for more fiscal space (smaller primary surplus and / or promises of greater EU level aid / debt relief).


3) It can default on its debts and exit the Eurozone.

The first option is a non-starter, as the Greek government feels current demands would exacerbate social and economic hardship in Greece.

The second option would allow Greece to leverage more public money for safety net programs, educational and workforce training programs, and public private partnerships. This would allow Greece to avoiding default while mapping out a plan to boost economic growth.

The last option would be painful in the short-run as Greece would get battered by financial markets and possibly have to deal with currency instability as it reintroduced the drachma(?), but it would open policy space and make Greece much more competitive in terms of cost of doing business. A Grexit could also lead to a domino effect–if other ailing E.U. countries see a post-E.U. Greece succeeding, it would bolster anti-E.U. parties within these countries.

It is obvious that the second choice is in everyone’s best interests. Unfortunately, that is no guarantee this route will be taken:

Herman van Rompuy [former head of the European Council of EU leaders] told a Brussels conference that if Greece were to leave the euro zone, that would also have geopolitical repercussions in the current standoff with Russiaover Ukraine, emboldening Moscow to see Europe as weak.

Van Rompuy urged all sides to consider the political and geopolitical implications of such a step and not just the economic and financial arguments.

“I hope we will never have to answer the Grexit question,” he added

Greece staying in the E.U. is important for both sides of the negotiation. There are enough crises in the world without manufacturing one in Greece. It is exactly times like these when budgetary restrictions should be relaxed in the name of pragmatic, longer-term priorities. But so far Greece and it’s lenders have been unable to map out a solution that worksall parties involved, and so the current impasse and possibility of an “accidental Grexit” persists.

Greece did submit a new proposal to it’s creditors yesterday, and it was apparently strong enough that it got an unofficial endorsement from French Prime Minister Francois Hollande. This could be meaningful development, as heads of major European states have to this point been reluctant to acknowledge Greek concessions. It is a step towards the “political dialogue” Tsipras has been pleading for (framing the debate less in adversarial terms between debtor and creditor, and more as a mutual compromise between equal partners working towards a common goal).

“Democracy in Recession”

If Greece were to leave the EU, (aside from the economic impact) there would be significant geopolitical repercussions, including a Greek pivot towards Russia. The Greek government has already signaled it disagrees with EU sanctions on Russia. More recently, it was reported that Putin and Tsipras “did not discuss financial aid” on the sidelines of the St. Peteresburg International Economic Forum. Generally speaking, whenever someone has to defend that something “wasn’t discussed”, it means it either was discussed or very likely will be in the future.

This is not to say that Greece would stop being functioning as a democracy if it leaves the EU. In fact, it is a strong belief in democratic ideals that underpin the current standoff between Greece and it’s creditors. But a fracturing of the EU would certainly be a blow to the ideals the EU stands for–peace and prosperity through a cooperative, democratic international system. Specifically, if Greece signed a natural gas pipeline deal with Russia, it would undermine the current sanctions regime against Russia.

Even more alarmingly, Greece’s problems are emblematic of a greater inward shift by major democratic powers:

A recent NATO Poll found that “At least half of Germans, French and Italians say their country should not use military force to defend a NATO ally if attacked by Russia,” the Pew Research Center said it found in its survey, which is based on interviews in 10 nations.

In the United States, the study notes, support for NATO remains fairly strong. Americans and Canadians, it says, were the only nationalities surveyed in which more than half of those polled believed that their country should take military action if Russia attacked a NATO ally.

This is further evidence of a worrying global trend, what Thomas Friedman calls Democracy in recession”:

“…perhaps the most worrisome dimension of the democratic recession has been the decline of democratic efficacy, energy, and self-confidence” in America and the West at large. After years of hyperpolarization, deadlock and corruption through campaign financing, the world’s leading democracy is increasingly dysfunctional, with government shutdowns and the inability to pass something as basic as a budget. “The world takes note of all this,” says Diamond. “Authoritarian state media gleefully publicize these travails of American democracy in order to discredit democracy in general and immunize authoritarian rule against U.S. pressure.”

Diamond urges democrats not to lose faith. Democracy, as Churchill noted, is still the worst form of government — except for all the others. And it still fires the imagination of people like no other system. But that will only stay true if the big democracies maintain a model worth following. I wish that were not so much in question today.

Look, I get it. The world is still emerging from a generational economic crisis. Democracies are first and foremost accountable to their electorates, and in the face of short-term problems it is difficult to sell the importance of dealing with seemingly longer-term issues. But this is what we should demand of our political leaders–the ability to meet peoples short term needs while simultaneously laying the groundwork for long-term peace and prosperity.

The Democratization Process

Modernization theory and recent history support the idea that sustained democratic movements must result from organic desire by local factions. When these natural movements towards democratic governance emerge, they must be nurtured.

Democratic movements are always opposed by those who stand to lose power should they succeed. If the primary champions of democracy (the U.S. and the E.U.) seem increasingly unwilling to provide the resources needed to defend those who share our values, democratic movements are less likely to take shape against adversaries that tend to have economic and military advantages.

Autocratic rulers have always used propoganda and media control to make democracy look less appealing. This job becomes easier when traditional democratic stalwarts appear unable to govern effectively at home, and unwilling to defend their ideals abroad.

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Economic Outlook: Fiscal Policy, Equality of Opportunity, and Social Mobility


“Your chances of achieving the American Dream are almost two times higher … if you are growing up in Canada than in the United States,” said Harvard’s Raj Chetty at a Center on Children and Families (CCF) event held on Monday. Chetty, the Bloomberg Professor of Economics and a leading scholar on opportunity and intergenerational mobility, presented his latest research on how where one grows up has a huge impact on success later in life.

Chetty and colleagues calculated upward mobility for every metro and rural area in the United States. 

The heat map below shows the chances that a child born in the bottom fifth of the income distribution in that particular place will reach the top fifth later in life.

My more perceptive readers may be thinking, “Ben, you usually advocate for equality of opportunity, not outcomes, what gives?”

This is a fair observation. Generally speaking, I do believe more in equality of opportunity than equality in outcomes. But these two concepts cannot be fully separated. In fact, they intersect at what has become an important issue for politicians, academics, and social scientists alike–social mobility.

Observing social mobility outcomes at the macro level provides insight into opportunity (or lack thereof) at the micro level. At more macro levels (neighborhood, city, county, etc), the differences in individuals’ development experiences (wealth, culture, parental values, personal ability, luck, etc.) are naturally smoothed out. Taking into consideration every possible permutation of personal development, these forces offset one another. What we are left with is the “average” (for lack of a better word) personal development experience.  

This “average” experience leaves a common factor–public goods and services–as the variable explaining why certain areas recognize greater social mobility than others (as shown on Mr. Chetty’s map). The fact that the administration of many important public services is carried out at these same levels reinforces the idea that social mobility outcomes are the result of policy choice(s).

Once we get past the question of “if” government programs can impact people’s opportunities, we can focus on which programs are most effective in promoting social mobility. Data mapping serves an important role here, highlighting areas that may have a working policy mix (although since economic development is context sensitive, even the seemingly best policy mix must be adapted to local realities to be effective).

The question then becomes how to pay for the programs which enable equality of opportunity. Fiscal debates are always implicitly an often explicitly shaped by underlying budgetary positions. The unwillingness of governments around the world to engage in stimulus spending despite low interest rates and high un(der)employment (a liquidity trap) is case-in-point.

In order to pay for the services needed to enhance social mobility in poorer neighborhoods, significant investments are needed. This necessitates higher effective tax rates on the ultra-wealthy (which in turn requires a multi-faceted approach, closing loopholes in capital gains, income, and inheritance/gift taxes to name a few); people whose wealth is often unrelated to productivity.

The economic outcomes of the wealthiest ultimately must be impacted in order to finance programs that promote equality of opportunity. This fact, however, does not necessitate class warfare between the lower, middle, and upper-middle classes–the vast majority of the America’s citizenry.

The American economy must work for everybody who is willing to work hard to succeed, regardless of their socioeconomic background. Once this condition is met, inequality is not only defensible, it actually spurs hard work and innovation. Unfortunately, contemporary America is nowhere near this “good inequality”; our inequality is not the result of meritocracy, but primarily the result a political process / tax code beholden to wealthy interests and an outdated criminal justice system.


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