Monthly Archives: January 2017

Memoirs of the Addams Administration 2.

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During his first week in office,[1] President Donald Trump ended American participation in the Trans-Pacific Partnership trade agreement[2]; took the first step toward re-negotiation of the North American Free Trade Agreement (NAFTA) by arranging to meet the leaders of Canada and Mexico[3]; instructed the Department of Homeland Security to begin completion of the border wall; ordered that federal funds not go to any “sanctuary cities”[4]; indicated that he would lift President Obama’s blockage of the Dakota Access and the Keystone XL pipelines; began the process of “repealing and replacing” the Affordable Care Act by instructing federal agencies waive regulations that [the presidentially-appointed head of the agency] regards as burdensome; ordered the Environmental Protection Agency (E.P.A.) to pause in issuing grants and contracts; barred foreign aid funds from going to international agencies or groups that provide information on abortions[5]; and imposed a federal hiring freeze.[6]  All these steps appear to be reasonable efforts to fulfill promises that candidate Trump made during his campaign.

Furthermore, the president told a group of businessmen that he wanted to lower the corporate tax rate from 35 percent to the 15-20 percent range,[7] and to cut back federal regulation of business by 75 percent.

More alarming—to many if not all—was President Trump’s renewed claim that millions—up to five millions–of people had voted illegally in November 2016.  He promised to launch an investigation.  In addition, he seems eager for a war against the press/media, and he swats aside predictions of conflict of interest.  In addition, the president and his spokespeople have attacked the press—America’s last large unregulated industry—while trumpeting “alternative facts.”[8]  A 500,000-strong Women’s March on Washington had a divided impact.  Supporters saw it as “resistance”; while critics saw it as resistance to a democratic election.[9]

So, a fast start to his first term as president.

[1] “President Trump makes his mark,” The Week, 3 February 2017, p. 4.

[2] The agreement already was Dead-on-Arrival, given the shift in position by both parties during the 2016 election campaign.  Bernie Sanders or Hillary Clinton would have done the same thing.

[3] The two men signaled a willingness to negotiate.   Then came the whole personal spat.

[4] These are cities that refuse to co-operate with Immigration and Customs Enforcement (ICE) in searching for illegal immigrants.  They do, however, avidly pursue federal money for other projects.

[5] This does not prevent other countries from providing those funds.

[6] This freeze ensnared my son, a seasonal wildlands firefighter for the National Forest Service.  The freeze seems unlikely to last, especially once the West catches fire in July 2017.

[7] The nominal Canadian basic tax rate is 38 percent, but a “federal tax abatement” cuts it to 28 percent, and a general tax reduction cuts the effective tax rate to 15 percent.

[8] “’Alternative facts’: Is Trump at war with reality?” The Week, 3 February 2017, p. 6.

[9] “Women’s March: The progressive backlash against Trump,” The Week, 3 February 2017, p.16.

Memoirs of the Addams Administration 1.

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From 1945 to the very recent past, the United States led the capitalist world toward negotiation of an open world economy.  In recent decades, that policy has come back to bite the United States as Asian countries became ferocious competitors.  Eighty percent of trade-related job losses can be attributed to Asian countries (China, Japan, South Korea).  However, public hostility has focused on the North America Free Trade Agreement (NAFTA), the least offending agreement.

In 1992, President George H. W. Bush completed the negotiations for NAFTA.[1]  The agreement ended tariffs and non-tariff barriers between Mexico, Canada, and the United States.  This would allow the free flow of assets across national borders.  Soon afterward, President Bill Clinton got the treaty passed by Congress.

“Comparative advantage” (a term in economics) suggests that low-wage, low-skill Mexican workers will manufacture one sort of product,[2] and high-wage, high-skill Canadian workers will manufacture another sort of product.  This seems to be the case under NAFTA, as Mexicans produce dashboards and Canadians produce transmissions for final assembly by Americans.  There’s nothing innovative about this.  Asian manufacturers have been doing the same diversification of the supply-chain thing for a while.  American manufacturers had to adapt to stay competitive.

Was NAFTA good deal for Americans?  Well, the United States now exports to Mexico goods worth 3.5 times as much as in 1993, even allowing for inflation.  On the other hand, Mexico still has run a trade surplus against the United States that amounts to $60 billion a year.  How many jobs—if any—did that amount to?  In the eyes of economists, NAFTA encouraged a migration of American “jobs” from lower-skilled and lower-paid to higher-skilled and higher-paid.  The political problem is that “jobs” are not the same thing as “workers.”  The “workers” who lost “jobs” didn’t shift into the new “jobs” that needed “workers.”  Instead, it seems somebody else—within the United States—got those new jobs.  This shift is not much discussed by political figures and media analysts.

So, trade experts and displaced American workers agree that it was a flawed deal.  It could be improved.  How and at what cost?  First, as is the case with “Brexit,” any country can withdraw from NAFTA by giving notice six months in advance.  Then further negotiations would define the new relationships between Canada, the United States, and Mexico.  However, what the Trump administration may be aiming at is a simple re-negotiation of terms.  Now Canada and Mexico have begun to establish positions for such talks.

The exact issues to be dealt with in any re-negotiation are complex, even if they become household words—in a small number of households—over the next several years.  “Country of origins,” “de minimus” exports, and Value Added Tax (VAT) rebates are all issues on which the Trump administration’s trade negotiators seek accommodation.  Conversely, the Mexican negotiators are going to claim equality-of-status with Canada when it comes to things like easy access to the United States for Mexican truckers and Mexican workers.

None of this is going to be painless.  Anything that comes out of the negotiations will be disruptive.  NAFTA itself has been painful and disruptive.  Then come the Asian economies.

[1] Neil Irwin, “Will NAFTA Be Attacked With Tweezers or a Hammer?” NYT, 26 January 2017.

[2] To further complicate matters, the basic components of the dash might have been manufactured in really-low-wage China (outside NAFTA), then exported to Mexico (inside NAFTA) for assembly for export to the United States for final assembly.  Thus, both Mexico and Canada serve as pass-throughs for counties not party to NAFTA.

City Lights.

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The “Baby Boom” (b. 1945-1963) formed the first memorable demographic mouse to pass through the institutional-cultural snake of American society.  Then “Gen X” (b. 1977-1987) marked a low-birth saddle between the high-birth “Baby Boom” and “Millennial” generations.  .  The “Millennial” generation (b. 1980-2005) has stretched the snake even farther than their predecessors.  Neither big generation has fully run its course so far.  Yet both have had profound impacts.[1]

One feature of the “Baby Boom” appeared in the flood tide toward the suburbs.  In a sense, the children of the “Boomers” motivated this migration.  The “Boomers” wanted bigger, newer houses with yards to play in and good schools.[2]  The life-blood drained out of older American cities as a result.

The “Millennials” reversed this course to some extent by moving back to urban cores in search of a more cosmopolitan life style.  They wanted walkable neighborhoods, other young people who shared their own culture, and—for people on the far side of many rights movements–diverse communities.

Moreover, a sharp fall in the violent crime rate made cities seem much safer than when their parents fled in previous decades.  Violent crimes—and not just homicide—has been falling since 1991.[3]  Studies have begun to reveal that people with higher incomes and more education are alert to changing crime rates.  They have shown a greater willingness than other groups to “gentrify” re-claimed areas.[4]

Apartment houses, starter houses, and many services thrived as a result.  City governments that benefitted from this population movement crowed over their present revival and contemplated their future prosperity.

Now, however, there are signs that this process may be cresting.[5]  Two factors may be at work.  First the number of “Millennials” moving into cities has fallen short of rose-tinted projections.  Second, the in-flow of younger “Millennials” is being off-set by the out-flow of older “Millennials”—those who are married with children and in their Thirties.  Many “Millennials” entered the job market during the “Great Recession.”  They’ve faced slow income growth and tight competition for affordable housing.  Many of them may have delayed starting families.  As they do, however, they may well hear the siren-song of more affordable housing and better schools in the suburbs.  Piling on to these forces, at least in some cities like San Francisco, are sharp rises in rents as the very well-off crowd out the only moderately well-off and everyone lower on the income ladder.[6]

It remains to be seen whether the urban renaissance of the early 21st Century will be sustained or will begin to retreat.  Sustaining the renaissance probably will require a complicated mix of school funding coupled with school reform, effective policing that keeps crime rates down without alienating people predisposed to see the police as a problem, and a thoughtful approach to keeping housing prices within reach of ordinary people.

[1] Conor Dougherty, “Cities May Be Starting to Run Out Of Millennials,” NYT, 24 January 2017.

[2] It seems foolish, if indelicate, to ignore the reality of “white flight” as an important factor.  See: https://waroftheworldblog.com/2015/05/21/white-flight-from-baltimore/

[3] See: https://waroftheworldblog.com/2015/01/16/legacies-of-the-violent-decades/

[4] Emily Badger, “To Predict Gentrification, Look for Falling Crime,” NYT, 6 January 2017.

[5] Still, nothing’s set in cement except Bo Weinberg.  See: https://en.wikipedia.org/wiki/Abraham_Weinberg

[6] See: What Government Can Accomplish 1.  https://waroftheworldblog.com/2016/12/29/what-government-can-accomplish-1/

Making a Difference.

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For a long time, Sudan had been the “bete noire” of humanitarian activists.  The government in Khartoum provided shelter to Osama bin Laden before American pressure mounted to such a level that he had to be invited to relocate to Afghanistan.  It waged a grisly war in the western province of Darfur.  This earned Sudan widespread condemnation for “genocide.”  Then it ramped-up a smoldering conflict between the Muslim north and the Christian/Animist South Sudan.  Eventually, the United States played a leading role in achieving national independence for South Sudan in July 2011.[1]

This arguably marked a considerable success for the foreign policy of President Barack Obama.  One question is whether it caused American diplomats to become too invested in that apparent success to see the possible flaws and even to correctly judge the character of the men who took power.   They owed their positions in part—but only in part—to American diplomacy.

Immediately, a problem arose: South Sudan wasn’t a “nation”; it was an agglomeration of tribes.  The two chief tribes were the Dinka and the Nuer.  Although bitter hostilities had pitted Dinka against Nuer in the past, the two groups united to fight the government of Sudan.  At independence, Salva Kiir, a Dinka leader became president, and Riek Machar, a Nuer leader, became vice-president.

Neither peace nor unity lasted very long.  First, Riek Machar lost his position as vice-president.  Then, in December 2013 civil war broke out between the Dinka and the Nuer.  Many people perished in the fighting.  The United Nations brokered a series of peace agreements that were honored only in the breach by the warring parties.  Deaths have mounted into the tens of thousands.  Generally, the Western press and humanitarian groups, like Amnesty International and Human Rights Watch, presented ample evidence of the mass killings to the Western public.  Generally, that public showed no interest in these events.

That left it to governments to decide what course to follow, then to make the case for their policies to the voting public.  Here the wheels came off American diplomacy.  Although the Obama administration had played an important role in creating the South Sudan, it failed to engage with the subsequent crisis.  By Summer 2014, humanitarian groups were urging the United States to use an arms embargo and targeted economic sanctions (of the sort rapidly applied to Russia after it re-took the Crimea from Ukraine) to try to restrain the killing.  However, division ruled in the American government.

In Summer 2016, the United States urged the U.N. to authorize the sending of 4,000 additional peace-keeping troops to the capital city of Juba.  In September 2016, the American ambassador to the U.N., Samantha Power, got the government of South Sudan to agree to admit additional peace-keeping troops.  It appears that President Kiir only agreed to this to get Power to go back to Washington.  So, far none have actually been allowed into the country.

By November 2016, with the Obama administration headed for the exits, Power finally won support within the government for an American proposal to the U.N. to impose both economic sanctions and an arms embargo.  In late December 2016, the U.N. Security Council rejected this proposal.

Why?  Perhaps because the Russians opposed sanctions, and African countries didn’t want to impose sanctions.  Perhaps because it is safe to defy an outgoing administration.[2]

[1] Somini Sengupta, “Failures on South Sudan Highlight the Limits of U.S. Diplomacy,” NYT, 19 January 2017.

[2] And not just for foreign countries.  This is the second recent article implicitly critical of Samantha Power as more theatrical than effective.  See: Helene Cooper, “From a Fateful Motorcade,..,” NYT, 6 January 2017.

The Next Step in Syria.

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The two current centers of resistance by the Islamic State’s caliphate are in the Iraqi city of Mosul and the Syrian city of Raqqa.[1]  Both cities have been heavily fortified by ISIS.  Coalitions of opposition forces are advancing on both cities.  Iraqi Kurds are important for the siege of Mosul and Syrian Kurds are important for the siege of Raqqa.

Of the two coalitions, the Syrian one is the more problematic.  Raqqa holds particular importance as the capital city of the caliphate.  President Obama has committed substantial military resources to the struggle: American planes are bombing; 400 Special Forces troops have been sent to Syria to serve as spotters for air strikes and to train local fighters; and Apache helicopter gunships have been used against Mosul’s defenses.  However, in both countries, the brunt of the fighting has and will fall on local forces.

As an American military problem, this is simple enough.  The Americans hope that the final attack on Raqqa can begin in February 2017.  The core of the anti-ISIS force laying siege to Raqqa is Syrian Kurds.  Around this core have been arrayed (or cajoled) loose groups of Syrian Arabs.  The Syrian Arabs have much less experience with war than do the Kurds.  This means that the Kurds will have to do most of the heavy lifting in the assault on Raqqa.  The Defense Department believes that the Syrian Kurds need to be supplied with better weapons for an urban assault than those that have served them on open battlefields.  These weapons would include rocket-propelled grenades, machine guns, and armored vehicles.  Furthermore, the Defense Department has recommended that Apache gunships be used against Raqqa.

As an American diplomatic problem, this is less simple.  Neighboring Turkey regards the Syrian Kurd political group (the Y.P.G.) as terrorists.  If the Syrian Kurds succeed in carving out an autonomous Kurdish enclave in Syria they will have expanded the proto-state that is being created in neighboring Iraq.  From this proto-state, at some point, the Syrian and Iraqi Kurds can begin to work to liberate the Turkish Kurds.  Arming up the Syrian Kurds poses a future danger to Turkey.  Turkey is a member of NATO and the United States is bound by treaty to defend it against outside attack.

The Turkish government has begun delaying approval of American air attacks launched from Incirlik air base and hampering the flow of supplies into the base.  American diplomats suspect that Erdogan might respond to an increased armament for the Syrian Kurds by attacking Kurdish enclaved along the Syrian-Turkish border.  This might compel the Kurds to divert forces from the attack on Raqqa.  Worse still, Turkey’s authoritarian president, Recep Tayyip Erdogan, has begun to lean toward Russia.  Already prone to blame the United States for many untoward events within Turkey and the region, Erdogan might contemplate disrupting the NATO alliance in the same fashion as did France’s Charles de Gaulle in the 1960s.  A pessimist might see one possible outcome of arming the Kurds to be the weakening of NATO’s southeastern flank at a time when Vladimir Putin is on the watch for opportunities to extend Russian influence.

Grasping at straws, the Americans have contemplated promising the Turks that close monitoring of any weapons will prevent their use against Turkey.  This is hardly credible given the failures to control weapons supplied to Syrian “moderate” forces.  This leaves President Obama with no easy choices.  Perhaps he’ll leave the decision to President Trump.  The new president would be torn between the devil of improving relations with Russia and the deep blue sea of destroying ISIS.

[1] Michael Gordon and Eric Schmitt, “Obama’s Syrian Options: Arm Kurds or Let Trump Decide,” NYT, 18 January 2017.

Vlad the Impaler Putin.

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Vladimir Putin has proved an adept politician in several unforgiving systems.  Under Communism, Putin spent five years as a KGB officer in East Germany, then rose quickly through the intelligence bureaucracy.  When in August 1999, the ailing and alcoholic Boris Yeltsin looked around for a prime minister, the intelligence service pushed forward Putin.  The previously unknown Putin swiftly bolstered his claim to power by battering the rebellious Muslim province of Chechnya into ruins before Christmas.  Yeltsin soon designated Putin to be his successor.[1]  (Already post-Communist Russian “democracy” had begun to fail.)

American leaders soon took a strong dislike to Putin.  From the banks of the Potomac, this is easy to understand.  In domestic policy, he began transforming Russia from a proto-democracy into an authoritarian state.  He replaced the oligarchs who had seized wealth and power during the collapse of the Soviet economy with men loyal to himself.  A “free” press now exists only to the extent that it allows him to claim that everyone else has not been muzzled.  Elections have been ended for the regional governors and rigged to an uncertain extent for the national legislature, so his party now dominates the legislature.  Many of his opponents are in prison or dead under circumstances that would be “mysterious” only to a child.

In foreign policy, Putin has alarmed those who believed that Russia being “down” meant that Russia was “out.”  In addition to the blitzkrieg on Chechnya, Putin has ground away at the territory of the post-Soviet states.  First Georgia, then Ukraine felt Russian power.  In Ukraine, Putin took advantage of a revolutionary situation to seize the former Russian territory of Crimea, then sponsored a rebellion in the heavily Russian eastern districts.  Western countries imposed economic sanctions, but Putin shrugged them off and so did ordinary Russians.  In Summer 2016, Putin allied with Iran and Iraq to support the Assad regime in Syria.

Putin is deeply hostile to the United States.  The immediate roots of this hostility lie in events since 2011.  When the “Arab Spring” uprisings began, the United States abandoned its long-time ally, Egyptian dictator Hosni Mubarak, in favor of currying favor with the Islamist Muslim Brotherhood.  When a copy-cat rebellion began in Russian-allied Syria, President Obama said that President Bashar al-Assad had to be removed from power.  When yet another rebellion began in Libya, the United States intervened to ensure the defeat of the dictator Ghaddafi, then walked away while the country burned down.  Then, Secretary of State Hillary Clinton proclaimed that there had been irregularities in the Russian parliamentary elections.  Existing Russian protest movements quickly expanded in scope.[2]  Then they were clubbed into submission.  Recently Putin launched a cyber-attack on the Clinton presidential campaign.

In the official American view, Putin is trying to discredit democracy as an alternative to authoritarianism.  The American official explanations don’t persuade.  He’s a guy who believes in vendettas.  Anna Politkovskaya, Alexander Litvinenko, and Boris Nemtsov head a long list of Putin’s critics and opponents who have wound up dead.  Hillary Clinton couldn’t be killed, but she could be hampered in her desperately needy run for office.

More broadly, Putin is playing a classic game of great power politics.  Syria is a Russian client-state; he’s made a clear choice in the Sunni-Shi’ite civil war; Crimea used to be part of Russia; and Ukraine is to Russia as Mexico is to the United States.  For the moment, he’s winning.

[1] “Putin’s Purpose,” The Week, 20 January 2017, p. 11.

[2] One recent study has calculated that, since 1945, the United States has tried to influence elections in 45 foreign countries.  “Noted,” The Week, 20 January, 2017, p. 16.