Normative Narratives


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Greece, Birthplace of Democracy, Needs A Democratic Lifeline

No More Blood From A Greek Stone:

It appears Greece’s government has come up with a list of reforms it and its creditors can agree upon in return for 4 months of bridge financing to restructure the conditions of a longer-term growth strategy.

By trading structural reforms for fiscal space, each major player (Greece and Germany) is making major concessions in the name of pragmatism. Germany is relaxing its dogmatic belief  in fiscal targets to provide the Greek government with the fiscal space needed to restructure its economy without exacerbating its “humanitarian crisis”. Greece, in return, must officially bring to an end the era of lax tax collection and over-rigidity in the labor market.

Both sides are making major concessions, neither side is 100% happy, and its appears as if middle ground has been found–all signs of a meaningful compromise. One can only hope that when Greece’s list of reforms comes in on Monday, both sides of this debate remain on the same page:

Greece’s list of reforms to be submitted to the euro zone on Monday comprises pledges on structural issues such as tax evasion and corruption over the next four months without specific targets, a government official said on Saturday.

The accord requires Greece to submit by Monday a letter to the Eurogroup listing all the policy measures it plans to take during the remainder of the bailout period.

If the European Commission, the European Central Bank and the International Monetary Fund are satisfied, the Eurogroup is likely to endorse the list in a teleconference without the need for a formal meeting. Then euro zone member states will need to ratify the extension, where necessary through their parliaments.

There will not be specific figures or targets to be achieved tied to the goals, the official said, adding that the two sides had not yet discussed how Greece would be evaluated on the reforms.

EU officials and euro zone ministers said they had no reason to think Greece would not come up with a satisfactory list of measures on Monday night. However, some hawkish countries have insisted that if there are doubts, the Eurogroup would have to reconvene in Brussels.

Structural reforms are inherently difficult to implement. In order to make the difficult task of taking on strong interest groups politically possible, an overwhelming popular mandate is needed. The need for strong public backing becomes even more important during times of high unemployment, when those lucky enough to remain employed are (quite rationally) more afraid of losing their jobs.

According to a recent opinion poll, 68% of Greeks want a “fair compromise” with the EU; even after years of economic suffering, the vast majority of Greeks remain steadfast in their believe in the E.U.. Such support must be seized upon, it will not last forever.

What Greece needs now is a pro-growth, structural reform based bailout plan, not a continuation of its failed blood-from-a-stone internal-devaluation based “recovery”. Reducing it’s primary surplus while collecting greater tax receipts would open up the fiscal space Greece needs to both deal with its humanitarian crisis and create a safety-net for those adversely affected by labor market reforms as the economy readjusts. 

The past 6 years have had a deep psycho-economic effect on the Greek people. With overall unemployment at 26% and youth unemployment at 50%, to go along with a 24% contraction in GDP, the Greek economy has been ravaged. Lack of control over monetary policy (as all members of the Eurozone face) has limited Greece’s policy space, it must be allowed to regain some control over fiscal policy.

Greeks have suffered enough and have learned their lessons–these next four months are an opportunity to prove it. In addition to any external monitoring imposed as part of this deal, the Greek people must prove they can be their own corruption watchdog and can pay their taxes.

Fighting wealthy tax evaders may be a popular political platform and merited on social justice grounds, but in order to pay-down Greek debt without compromising human development, a widespread cultural acceptance towards paying taxes is required. There is no doubt Greece has been too lax in collecting taxes in the past, but this does not need to be an irrevocable problem. Through legislative reform and social accountability, Greece can overcome it’s culture of tax evasion.

Locking in long-term labor market reforms, without driving more people into poverty and exacerbating the “lost generation” of young Greeks, should be the mutual goal between Greece and it’s creditors. In fact, this could be a potential blueprint for other economically depressed European countries to renegotiate their social contracts with the EU. Democratic governance derives its legitimacy from the will of the governed; if peoples basic needs are not met, democratic governance cannot be sustained.

Greece is not in the clear yet. But by finding this acceptable middle ground, the foundations of a sustainable solution for keeping the Eurozone intact may have been laid.

Reversing the Democratic Recession:

Neither side of this debate should have to pretend that keeping the Eurozone unified is an unimportant political, economic, foreign relations and security consideration. Greece staying in the E.U. is important for Greece, Germany, the E.U. and any country with aspirations of democratic governance:

[Stamford University democracy expert] Diamond adds, “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.”

If anything, the U.S. has been the poster-child for prosperity through democracy compared to the E.U.. Regardless, twin “democratic recessions” of varying degrees on both sides of the Atlantic have compromised the appeal of democratic governance abroad. Spreading Islamophobia, antisemitism, and xenophobia throughout Europe–side effects of Europe’s failed economic policies–compromise the appeal of Western values and galvanize authoritarian and extremist messages. 

ISIS finds itself at Italy’s back-door geographically in Libya. But ideologically, ISIS could not be further away from European ideals. Ultimately, reversing the democratic recession and countering authoritarian and extremist ideals requires. among other things, proving democracy remains a viable path to widespread freedom and prosperity.

“Western” countries cannot push Greece towards China / Russia for a bailout. We, like Greece, finds ourselves at an inflection point–we must  prove that democracy in a first world country can satisfy peoples basic needs. Failure to do so could lead to a long-term setback in promoting modernization, human rights, and democratic governance in the worlds least developed countries.

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Transparency Report: Debt, Depression, and College Drop-Outs

The graphs in this blog come from a recent report co-authored by the Pell Institute and The University of Pennsylvania:

graduation rates

In addition to the direct (tuition, room and board, cost of living) and “opportunity cost” (foregone wages) of attending college, there is mounting evidence that suggests there is an emotional / psychological cost associated with taking out student loans.

Despite the intense interest in this issue among researchers, this is the first paper that attempts to understand the emotional cost of carrying student loan debt.  This question is, in fact, more fundamental than the others being posed in this genre of research, since it could help to explain the mechanism through which debt may be affecting other outcomes (i.e. emotional health, graduation rates).

Based on their analysis, the authors report, “cumulative student loans were significantly and inversely associated with better psychological functioning.”  In other words, individuals with more student debt reported lower levels of psychological health, when other things are held constant (including occupation, income, education and family wealth).  The effect is statistically significant, but it is quite small.  They also find that “the amount of yearly student loans borrowed was inversely associated with psychological functioning,” which implies that taking on debt is emotionally costly for students.

Unfortunately, this emotional / psychological “cost” seems to be affecting a greater number of incoming college students:

High numbers of students are beginning college having felt depressed and overwhelmed during the previous year, according to an annual survey released on Thursday, reinforcing some experts’ concern about the emotional health of college freshmen.

The survey of more than 150,000 students nationwide, “The American Freshman: National Norms Fall 2014,” found that 9.5 percent of respondents had frequently “felt depressed” during the past year, a significant rise over the 6.1 percent reported five years ago. Those who “felt overwhelmed” by schoolwork and other commitments rose to 34.6 percent from 27.1 percent.

Not coincidentally, the frequency and magnitude of student loan debt has increased greatly during this period of increasing student unease and depression, according to data released by the NY Fed:

More U.S. students continued to borrow larger sums for their college education last year, according to data from the Federal Reserve Bank of New York, while total student loan balances tripled over the last decade.

At 43 million, the number of student borrowers jumped 92 percent from 2004 to 2014, while their average balances climbed 74 percent, according to New York Fed researchers. The average balance was some $27,000.

Obviously correlation does not prove causation. But given the logical link between debt, depression, and dropping-out of school, these trends cannot be purely coincidental–more research on the subject is needed.

“It’s a public health issue,” said Dr. Anthony L. Rostain, a psychiatrist and co-chairman of a University of Pennsylvania task force on students’ emotional health. “We’re expecting more of students: There’s a sense of having to compete in a global economy, and they think they have to be on top of their game all the time. It’s no wonder they feel overwhelmed.”

While I cannot speak personally about the burden of student loan debt, I have experienced depression first hand, and understand how being depressed could make one more likely to drop out of school.

Depression is particularly difficult to battle in a college atmosphere. The pressure to maintain a social life, despite anxiety and financial issues, can reinforce negative feelings associated with depression. The abundance of drugs and alcohol certainly does not help the situation either.

The general pessimism which accompanies depression compromises a person’s ability to clearly assess long term goals, such as completing a degree. Depression also affects ones cognitive abilities, hampering academic outcomes.

I can only imagine the pressure on someone who is both depressed and has student loan debt to consider; some combination of the two surely accounts for more low-income drop-outs than is currently recognized.

I had to take a semester off to get myself back in the proper state of mind to complete my degree; not everyone has this luxury. However, everyone should have the support needed to realize their educational and emotional potential.

Due to my personal experiences and knowledge of economics, I vehemently support President Obama’s proposed Community College plan. Lower income students could learn if pursuing a bachelor’s degree is “for them” without taking out tens of thousands of dollars in loans, likely leading to better emotional, educational, and economic outcomes.

Furthermore, community colleges are more likely to have the the social counseling and financial advising services missing from for-profit universities, which predominantly attract low income students.

collegetypebyincome

The Obama administration is attempting break the vicious cycle of student debt, emotional suffering, and dropping-out of college. Dropping out of college with student loan debt in a competitive global economy is a poverty trap for low income individuals, and has become a drag on economic growth in the macro.

By expanding mental health parity through the ACA, getting treatment for depression is no longer a luxury reserved for the wealthy. If our lawmakers pass a free community college bill, the synergy between these two public policies would go a long way towards bringing equity to America’s higher education system and reinvigorating the American Dream.


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Conflict Watch: The End of Team America World Police (Part 7)

Obama’s Strategic Plan For National Security:

The latest installment of my ongoing series “The End of Team America, World Police” focuses on President Obama’s second and final National Security Strategy (full document can be found here):

“The question is never whether America should lead, but how we should lead,” Mr. Obama writes in an introduction to the document, a report that seems to mix legacy with strategy. In taking on terrorists, he argues that the United States should avoid the deployment of large ground forces like those sent more than a decade ago to Iraq and Afghanistan. In spreading democratic values, he says, America should fight corruption and reach out to young people.

“On all these fronts, America leads from a position of strength,” he writes. “But this does not mean we can or should attempt to dictate the trajectory of all unfolding events around the world. As powerful as we are and will remain, our resources and influence are not infinite. And in a complex world, many of the security problems we face do not lend themselves to quick and easy fixes.”

“There is this line of criticism that we are not leading, and it makes no sense,” said Benjamin J. Rhodes, a deputy national security adviser. “Who built the effort against ISIL? Who organized the sanctions on Russia? Who put together the international approach on Ebola?”

The strategy lists eight top strategic risks to the United States, starting with a catastrophic attack at home but including threats like climate change, disruptions in the energy market and significant problems caused by weak or failing states.

Regardless of your opinion on how effectively the Obama administration has handled foreign affairs, it is hard to argue the United States is not leading from the front on major global issues. Yet it is important that our future leaders recognize, as President Obama has, the limits of both our government’s resources and our ability to sustain democratic revolutions through unilateral military intervention.

In a highly interconnected world, confronting global problems is in America’s economic and security interests (not to mention ethical considerations). This does not mean, however, that we should rush headlong into battle without carefully considering the probability of success and costs of alternative courses of action. There are other tools in America’s foreign policy toolkit–the other components of the D.I.M.E (diplomatic, intelligence, military, economic) framework–which should be considered before sending our military (and particularly ground troops) to war.

Military interventions are never quick, easy, or cheap. Even when successful, they leave a power void that must be carefully managed, lest that void be filled by ineffective leaders or extremist groups (or, as is often the case, both). When mismanaged, even the most well intended interventions can be counter-productive, fueling anti-Western propaganda and empowering the very ideologies we seek to destroy.

American tax dollars are a precious resource. Every dollar we spend abroad is a dollar we cannot use for nation building at home. The American government is solely responsible for managing America’s domestic affairs, but we have many allies who share the same ideologies and interests as us (and who should therefore more proportionately shoulder the cost of defending them).

A NATO By Any Other Name…:

NATO was established in recognition that global security was part of the “global commons” (and remains even more-so today). This brings us to recent comments on NATO’s future by outgoing Secretary of Defense Chuck Hagel:

Hagel, making his final appearance at NATO as U.S. defense chief, said the alliance faced several challenges, including violent extremism on its southern rim, Russian aggression in Ukraine and training security forces in Afghanistan.

“I am very concerned by the suggestion that this alliance can choose to focus on only one of these areas as our top priority,” Hagel told a news conference. “And I worry about the potential for division between our northern and southern allies.”

“The alliance’s ability to meet all these challenges at once, to the east, to the south and out-of-area, is NATO’s charge for the future,” Hagel said.

“This is a time for unity, shared purpose and wise, long-term investments across the spectrum of military capability,” he added. “We must address all the challenges to this alliance, all together and all at once.”

Often times, one can speak most candidly when their tenure at a position is coming to an end. Those who oppose the ideals of NATO will not coordinate their attacks one at a time. In fact, knowledge that NATO resources are strained (due to say, simultaneous humanitarian crises, a wear weary American public, or underinvestment in the global security commons by the rest of the international community) is only likely to embolden our enemies. While NATO needs to be able to effectively counter more than one major threat at a time, this does not mean the American army alone needs that capacity.

As the world becomes “smaller”, the exclusively Northern Atlantic nature of NATO should be reconsidered. Two major democracies–India and Japan–are not members of NATO, limiting the groups ability to fulfill its goals. Furthermore, having regional actors involved in security operations helps builds legitimacy, underscoring the strategic importance of greater Indian and Japanese involvement.

President’s Obama and Modi recently met and discussed, among other things, defense cooperation. India must become a major partner in promoting peace and democracy in the Middle-East (particularly in coordinating the fights against the Afghan and Pakistani Taliban) even as it itself modernizes.

More Turkey Please:

An Op-Ed published in the NYT today by two Arab professors teaching at American Universities was very supportive of Turkey’s level of involvement in the Middle East:

There have been sharp disagreements over the 2013 coup in Egypt, the Israeli-Palestinian conflict and the need for intervention in Syria. Turkey’s critics have called into question its reliability as a NATO ally, including in the fight against the radical Wahhabi group known as the Islamic State.

But much of this concern is misguided. The ongoing crises in the Middle East have only underscored Turkey’s pivotal geostrategic position: It’s no surprise that Pope Francis, President Vladimir V. Putin of Russia and Prime Minister David Cameron of Britain have visited Ankara in the past few months. And Turkey’s detractors, partly because they do not understand the sources of its new assertiveness, fail to see that its transformation actually serves America’s long-term interests.

The United States has long allowed client states like Saudi Arabia, the United Arab Emirates and Israel to pursue shortsighted goals in the Middle East. This has only brought despotism and strife. Washington’s failure to fully support the democratic government of Mohamed Morsi and his Muslim Brotherhood in Egypt contributed to its collapse, and so to the instability and violence that have occurred there since. And it was President Obama’s cynical abandonment of the Syrian opposition during the first two years of the uprising against Mr. Assad that set the stage for the advent of the Islamic State.

To avoid any more such calamities, policy makers in Washington, and other Western capitals, should abandon their counterproductive approach: They should embrace Turkey’s growing, and positive, engagement in the Middle East.

I could not agree more.

But I do not think America’s leaders are opposed to Turkey asserting itself in the Middle-East. Indeed, as a primarily Muslim democracy and NATO member, it must play a large role in Obama’s plan of relying more heavily on regional partners in curtailing Islamic extremism.

I agree the Obama administration was wrong on Syria and Egypt, I am on the record saying as much. But in this case, two wrongs don’t make a right. Turkey cannot afford to play the moral high ground on these issues while the dogs of war bark at it’s door-step. Furthermore, Erdogan’s delayed and half-hearted support of the Kurdish peshmerga reeks of political calculus, not someone who considers ISIS a serious threat to regional stability.

So I am not exactly sure what these professors are talking about–they appear to be building a straw-man just to knock him down. I think it is pretty clear the Obama administration wants more Turkish involvement, including ground forces, in the fights against Assad and ISIS, not less.

Japan and Germany (Finally) Begin to Shed Their Post-WWII Identities:

Updating a previous blog about Japan and Germany shedding their post-WWII pacifist identities, Prime Minister Shinzo Abe is pushing Japan to change it’s pacifist Constitution:

Prime Minister Shinzo Abe has said that he wants to start the process of revising Japan’s Constitution as early as next year, a senior lawmaker in his party said Thursday, giving the clearest indication yet that the Japanese leader will seek to change a document that has undergirded the country’s postwar pacifism.

Mr. Abe told Hajime Funada, the leader of a group of Liberal Democratic Party lawmakers, on Wednesday that the best time to begin the difficult political task of amending the Constitution would be after elections for the upper house of Parliament, scheduled for the summer of 2016…

The Constitution, which also prohibits Japan from possessing the means of war, was written by American occupiers after World War II to prevent the defeated nation from ever again engaging in militarist expansion. The document proved so popular among Japan’s war-weary people that it has never been amended.

But Mr. Abe has seized on the murders of the Japanese hostages to make some of his strongest appeals yet for unshackling the nation’s military. Saying Japan was unable to save the hostages, he has called for easing restrictions on its purely defensive armed forces to allow them to conduct rescue missions, evacuations and other overseas operations to protect Japanese nationals.

The hostages, Kenji Goto, a journalist, and Haruna Yukawa, an adventurer, were beheaded a week apart by the Islamic State, a militant group in Syria and Iraq that had demanded a $200 million ransom for their release. The murders outraged and sickened Japan, which had seen itself as largely immune to the sort of violence faced by the United States and other nations that have been involved militarily in the Middle East. Since 1945, Japan has adhered to a peaceful brand of diplomacy that has seen it become a major donor of economic and humanitarian aid to the Middle East and elsewhere.

It remains unclear whether the shock of the killings will swing the Japanese public in favor of Mr. Abe’s harder line. Since the murders, opposition politicians have stepped up attacks on the prime minister, accusing him of provoking the Islamic State by allying Japan more closely with the United States-led efforts to destroy the militant group. Just days before the ransom demand appeared, Mr. Abe pledged $200 million in nonmilitary aid to countries in the region confronting the Islamic State.

However, on Thursday, the lower house of Parliament unanimously adopted a resolution condemning the killings and calling for increased coordination with the global community to combat terrorism.

Germany to Play a More Active Role in Global Security?:

Germany must ramp up defense spending starting in 2016 to ensure its military is able to take on a bigger role in crisis zones, according to two top lawmakers in Chancellor Angela Merkel’s coalition.

Germany spends about 1.3 percent of gross domestic product on the military, short of the 2 percent level pledged informally by North Atlantic Treaty Organization allies.

Merkel’s spokesman has said no additional funding will come in the short term as the government struggles to hold on to its target of balancing the budget next year and with 2015 spending already largely negotiated.

Germany must engage in international missions “earlier, more decisively and more substantially,” Gauck told the Munich Security Conference on Jan. 31.

Fiscal responsibility is usually good, but like anything, overzealous attachment to an ideology can preclude pragmatic policy. Economics is context sensitive, and in the current context, Germany’s dedication to running a balanced budget has left holes in the Eurozone economy and the global security commons.

A large scale increase in German defense spending would bolster global security efforts (particularly in countering Russian aggression in former Soviet Republics), while simultaneously providing a partial answer to Europe’s economic stagnation (by “buying European“).

Please do not confuse my views with war-mongering or advocating for the military-industrial complex, I just recognize that there are bad actors in the world who only understand realpolitik. In order to provide room for the forces of human dignity and freedom to flourish, these bad actors must be marginalized.


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Awareness, Self-Interests, People Power, and The End of Poverty

bmgastes

Inside the Bill and Melinda Gates Visitor Center in Seattle, WA

While finishing up my first business trip in Seattle, WA, I walked by the Bill and Melinda Gates Foundation. Due to my studies and interests, I was familiar with the organization’s important work in the related fields of Education, Healthcare, and Poverty Eradication both in the US and abroad. Intrigued, I went in.

While walking around the visitors center, I was struck by something I read. Explaining the origins of the foundation, a plaque stated that Bill and Melinda gates started their mission by providing Internet access to public libraries in America. Then, in the 1990s, Bill and Melinda “learned” of the extreme poverty affecting children around the world (specifically lack of access to medical care), and expanded the scope of their work.

This line took me a while to comprehend. Growing up during the age of globalization and global news coverage, the plight of people in the developing world was something I had always taken as obvious. How could it be that someone, let alone one of the smartest people in the world, would have to “learn” about these injustices later in life?

Then I began to think about what growing up in a hyper-connected world meant. For those who grew-up in previous generations, understanding the plight of people in the developing world required an active and time consuming search for information. Conversely, growing up in generations Y / Z, with globalized news coverage and internet access, not knowing about the existence of extreme poverty requires willful ignorance.

There are many self-interested reasons for wanting to  promote sustainable human development and end poverty, including: stopping violent extremism, stemming the “offshoring” of jobs to lower income countries through economic convergence, and creating new markets for sustainable trade-based growth (the Great Recession was a perfect example of the unsustainability of relying too heavily on financial innovations for growth).

But universal awareness will also play a large role in ending poverty (much like the first step to finding a solution is admitting there is a problem). The “silent majority” of the global community believes in basic rights and human dignity for all. It is in the long run interests of the global community, and resonates with mankind’s central tenets as ethical, social beings. Ultimately, it is this awareness which will galvanize the global effort to end poverty.

The Post 2015 Development Agenda is an important element of the fight to end poverty, as it will help direct trillions of dollars of public and private development resources over the next 15 years. Building on the successes (and learning from the shortcomings) of the Millennium Development Goals (MDGs), the Post 2015 Development Agenda is being drafted in an inclusive and consultary manner. Incorporating input from the very people it is intended to help, the agenda recognizes the importance of civil / political rights, good governance, multi-sectoral accountability, and self-determination in ending poverty. With human rights and empowering the world’s most vulnerable people at its core, the Post 2015 Development Agenda is poised to make great strides in poverty eradication.

As the world continues to get “smaller” and more interconnected, the costs of environmental degradation, human rights abuses (in relation to terrorism and protracted social conflict / genocide), and economic inequality will more acutely impact not only to the world’s most vulnerable, but also people in first-world countries (who have historically have considered themselves largely immune to such issues).

While it will not be easy, ours is the generation that must make meaningful strides towards ending poverty and promoting sustainable human development in the worlds least developed countries (LDCs). Failure to do so would gravely affect us all, and this (now) common knowledge is (slowly) creating unstoppable momentum towards positive, sustainable change.