Pleven Plan.

You can think of the early Cold War as having had layers.[1] Between 1945 and 1947 the Soviets had it pretty much the way they wanted. The Red Army occupied Eastern and much of Central Europe. Chase away or kill the supporters of democracy in Eastern Europe. Stage a bunch of elections. (Run by guys waving pistols saying “Who is against? Raise your hands.”) The Western European countries were in ruins and bankrupt. The Americans cut off Lend-Lease aid as soon as Japan surrendered and they wanted to bring their troops home as soon as possible. The Communist Parties of France, Belgium, and Italy were under Soviet control, so most of the labor unions were under Soviet control as well.[2] Wait for the Americans to leave, use the unions to wreck the economy and the Communist parties to paralyze government, and march in.

From 1947 to 1950, the Americans changed their minds. You can imagine Henry Fonda going “Hey, wait a minute.” With a combination of money, technology, know-how, a basic decency that we used to possess, and that casual ruthlessness Americans adopt when they belatedly decide that they don’t like you, the US slapped the Russkies silly.[3] The Marshall Plan, the CIA, NATO, the Berlin Air Lift all followed.

Then, in June 1950, North Korea invaded South Korea. Apparently, the Cold War wasn’t just about politics and economics in Western Europe. It also was about being willing to die at a freezing dawn on some ridge in a wide spot in Asia. If it happened in a divided country in Asia, then it might happen in some divided country in Europe—like Germany. The Americans demanded that the Western Europeans prepare to fight the Russkies. If you wanted people who knew about killing Russkies, the natural place to look was Germany.[4] So, re-arm the Germans.

The French (and Italians and British and everyone else) went buggy over this idea. After the Blitz, after Oradour, after the Ardeatine Caves, the last thing any European wanted was the same Germans with new guns.

So, cut to another feature of post-war Western European history: “integration.” By 1947, uniting the nations of Europe “at the peak” hadn’t worked out, so an engaging schemer named Jean Monnet had proposed uniting “at the base.” In 1948 he got the French foreign minister, Robert Schuman, to pitch the idea of a European Coal and Steel Community. Every member country would pool its resources and an international authority would apportion them.

How about trying the same thing with the scary prospect of German soldiers? The Germans put in the soldiers, while the British, French, and whoever put in the officers. Jean Monnet got the French defense minister Rene Pleven to pitch this idea in late 1950. They called it the “European Defense Community.” No one liked it except the Americans. However, they were the ones with the money, so…

Years of negotiations followed. French resistance proved most important.[5] In August 1954 the French rejected the EDC. People said “It’s the end of the ‘European’ project.” Right.

[1] Rather like yon Shrek beastie.

[2] Sorry if this offends any progressive-thinking people. It’s just another “inconvenient truth.” Like androgenic climate change for Republicans. See: Franz Borkenau, The Communist International (1938); Stephane Courtois, ed., The Black Book of Communism: Crimes, Terror, Repression (1999). Just for a hoot, see Paul Hollander, Political Pilgrims (1981). While you’re at it, see Ronald Radosh, with Joyce Milton, The Rosenberg File (1983).

[3] There were probably old guys up at Standing Rock wondering what a Russian reservation was going to look like. Maggots in the flour, watering the cattle before weighing them, ministers with Bibles and “boarding schools.”

[4] Of course, Germans also knew a lot about being killed by Russkies, so they weren’t enthusiastic about this idea.

[5] In 1954, the CIA thought about bribing a majority of French parliamentarians to win passage of this EDC, but concluded that French politicians are like beer: you don’t buy it, you just rent it.

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Why are the Germans so mad at the Greeks?

You can’t get blood out of a stone. The Greek debt will have to be “restructured”[1] for the crisis to end. Germany owns the largest single chunk of the debt[2] and is the dominant force in Eurozone decision-making. The Germans are obdurately refusing to restructure the debt, at least until the Greeks show a firm commitment to economic reforms. This position is opening a gap between Germany and other countries like France, and threatens to drive Greece right out of the Eurozone. Why are the Germans so determined to play the “bad cop”? Here it is worth thinking about two factors.   One is German formative experiences; the other is Greek behavior.

While journalists invoke the great post-WWI inflation as an explanation for German insistence on austerity and probity, a more immediate influence may be that of German reunification in 1990. An old Russian joke about Communism held that “they pretend to pay us and we pretend to work.” The same held true in the former East Germany. Inefficiency went hand-in-hand with feather-bedding. Massive shut-downs of uncompetitive eastern factories followed unification. West Germans bitterly complained of the poor work ethic of the “Ossies.” Unemployment doubled in the eastern territories between 1990 and 1995. Nevertheless, western Germans kept faith with eastern Germans. Wages and pensions doubled in the east,. One informed estimate of the total cost of German reunification between 1990 and 2010 runs to 2 trillion Euros, or 100 million Euros per year for twenty years.[3] Much of this came in the form of subsidies paid from western Germany to the eastern Germany. In the end, however, Germany emerged as the highly-competitive dynamo that dominates the European economy today. No one helped the Germans pay these costs. Two figures in this trauma were Angela Merkel and Wolfgang Schauble. Now they have the same prescription for Greece.

In contrast, the Greeks have behaved disgracefully from one end of this long crisis to the other. Anyone who lives in Britain, Canada, Australia, or the United States knows Greeks to be hard-working and entrepreneurial. Those aren’t the Greeks who were left behind by the great emigration. The Greeks of Greece can excite only contempt. They obtained much of the loans through outright fraud. They spent the money on artificially raising living standards (wages, pensions, public employment), rather than on productive investment that would allow Greece to repay its debts. They ignore the fact that a huge write-off of Greek debt already took place back in 2009. They have tried to prosecute the Greek official who revealed that Greece governments had been “cooking the books” for a decade. From first to last, they have resisted carrying out most reforms so that the economy could return to economic viability. They denounce being asked to pay their bills or to work for a living as “humiliation.” Lots of German tourists have seen Greeks ‘”at work”: for example, 2.3 million German tourists visited Greece in 2007.

The Germans are in the wrong on the need to restructure the Greek debt. The Germans fail to realize that Greece today is a much poorer country than was western Germany when it bailed-out eastern Germany by itself. However, the Greeks are just in the wrong. The Greeks of today are not the Greeks of the Peloponnesian War. Resolution, honor and self-sacrifice are not Greek characteristics today. Neither side seems to recognize the truth.

The truth is that the Greeks will not pay. Do the Germans want to destroy Europe and create a “humanitarian” crisis to make a point? What can be saved of and for “Europe”?

[1] The IMF has recommended a 30 percent reduction and a stretching out of the payment period to reduce annual payments and to allow inflation to further reduce the real value of the obligations.

[2] See the chart at http://www.bbc.com/news/world-europe-33426328

[3] https://en.wikipedia.org/wiki/German_reunification#Cost_of_reunification

Inequality 6.

Does economic inequality matter? Citing Thomas Piketty’s book Capital in the Twenty-First Century, Neil Irwin argues that there is a “deepening consensus…that rising inequality of income and wealth is an important trend over the last two or three decades.”[1] Eduardo Porter regards these social ills as “an existential threat to the nation’s future.”[2] NB: Is he correct? However, a “trend” isn’t either a problem or a solution. It is just an observed movement. People assign meaning to trends. The meaning assigned reflects the ambitions, fears, and beliefs of the people doing the assignment.

What has caused the stagnation in most incomes? Since 1973 productivity growth in the American economy has slowed dramatically.[3] That is the principal cause of the stagnation in most incomes. According to the most-recent Economic Report of the President, the failure to maintain the productivity-growth of the pre-1973 period means that the average American family now earns $30,000 a year less than it would have earned. In contrast, the increase in income inequality over the same period accounts for $9,000 a year for the same family.[4]

Regardless of the causes of rising inequality, liberals see a correlation between rising inequality and social problems. The teen-age birth-rate in the United States is about seven times as high as in France. More than one in four children lives with a single parent. More than twenty percent of Americans live in poverty. Seven out of every thousand adults is in prison.[5] A child born to a white, college-educated, married woman has the same chance of survival as does a child born to a similarly-circumstanced woman in Europe. However, children born to non-white, poor, single women have a much greater chance of dying young. Mental illness is more common among poor people than among wealthy people. Between 2009 and 2013, 9 percent of people with incomes below the poverty level reported “serious psychological distress,” while only 1.2 percent of people earning more than $80,000 so reported.[6] NB: Hard to get ahead if you’re mentally ill. On the other hand, 91 percent of people below the poverty level did not report “serious psychological distress.” Why not? Shouldn’t you be all wrought-up over your miserable situation? “People in low-income households don’t live as long [as people in high income households].”[7] By one measure, where there is a great disparity in income, upper income people live almost two days longer for every one-point increase in income disparity. In places with high inequality, you can live eleven days less than in places with low economic inequality. “But what causes the drop in life expectancy is debatable.”

Why this social disaster in the midst of so much other success? The conservative argument offered by Charles Murray and others is that the welfare state itself undermined the character of its beneficiaries. The liberal argument offered by Eduardo Porter is that Americans have been guided by a shared disdain for collective solutions and the privileging of individual responsibility. Therefore, America had relied on continuing prosperity instead of a welfare state. When long-term economic troubles hit, many Americans plunged through the cob-web of a “safety net.”

[1] Neil Irwin, “Things Bernanke Should Blog About,” NYT, 31 March 2015.

[2] Eduardo Porter, “Income Inequality Is Costing The Nation on Social Issues,” NYT, 29 April 2015.

[3] Tyler Cowen, “It’s Not the Inequality; It’s the Immobility,” NYT, 5 April 2015.

[4] This suggests that the policy prescriptions of Bernie Sanders target the smaller source of Americans’ discontent.

[5] That is three times the rate of 1975.

[6] “Noted,” The Week, 12 June 2015, p. 16.

[7] Margot Sanger-Katz, “How Income Inequality Can Be Bad for Your Health,” NYT, 31 March 2015.

Terror stats.

There were about 7,000 terrorist attacks in 2013. Then the number soared in 2014. Last year terrorists[1] launched almost 13,500 attacks. That is more than an 80 percent increase. The 2014 attacks killed about 33,000 people.[2] It is startling to see this quantified. That averages to about four per day; with fewer than 3 people killed in each attack. Some of them were so successful that they killed a lot of people, then the median death toll must be pretty low.

So, there is this constant drumbeat of “minor” terrorist attacks going on. Where do most of the attacks occur? Not in Western countries. Some 60 percent happened in Iraq (ISIS), Pakistan (Taliban), Afghanistan (Taliban), India, and Nigeria (Boko Haram). All these are places on the front lines of the struggle against radical Islamist insurgencies. The reverse of the mirror is the 40 percent of attacks spread over many countries, gnawing at civil peace.

Take the case of Iraq in January 2014.[3] There were fifteen attacks (some of them at multiple targets) on twelve different days. That averages to almost three attacks a week. The attacks killed 188 people and wounded 473 others. That averages to about 12 dead and 31 wounded in each attack. Only four of the attacks involved suicide attacks. However, 20 non-suicide car bombs were used in the attacks.

Iraq in January sharply differed from the global averages for the whole of 2014. The attacks in Iraq were less frequent and more deadly than the global averages. They were big car and truck bombs more than smaller suicide vests or hand-grenade attacks. This suggests a high level of professionalism on the part of the Iraqi attackers. They have access to larger stocks of explosives. They know how to build big bombs, conceal the bombs in cars, and prepare the cars (probably a matter of appropriate license plates and dash decorations). They have experienced drivers who can penetrate security lines. They have follower cars that pick up the drivers after they park the bomb-carrying vehicle close to the target. This may reflect the accumulated long experience of anti-American insurgents among the Sunnis and the former Al Qaeda in Mesopotamia. People who have survived at this game for a long time practice good security habits.

Ten of the attacks took place in Baghdad, the rest in a variety of provincial cities. Targets included a police station, a military recruiting office, a prison, a military check-point, and the Ministry of Transportation. These five targets were symbols of government power; the victims soldiers, policemen, and bureaucrats. However, twice as many targets were purely civilians: commercial streets and markets (5), restaurants (2), a teahouse, a bus terminal, a taxi stand, and a hospital. This suggests that ISIS was attacking soft targets and a civilian population. They also were attacking Baghdad ahead of all other targets.   The city is the national capital and in theory, the most heavily guarded place in Iraq. It also allows ISIS to attack Shi’ites from within the Sunni quarters of the city.

Obviously, not many were suicide bombers. Thousands of foreign fighters have streamed to ISIS, but apparently not many of them want to be suicide bombers. Only four incidents in January 2014 involved people willing to kill themselves for a higher cause. At the end of the Second World War, 3,860 kamikaze pilots died in attacks on American war ships.[4] Perhaps the enthusiasm for suicide attacks has begun to wane, while professionalism waxes.

[1] Not just Islamic ones; we’re talking full spectrum terrorism here.

[2] “Noted,” The Week, 3 July 2015, p. 16. Of the dead, 24 were Americans. Two a month, world-wide.

[3] https://en.wikipedia.org/wiki/List_of_terrorist_incidents,_2014

[4] https://en.wikipedia.org/wiki/Kamikaze