Obama's Attack Machine. By Kimberley A Strassel
WSJ, Apr 03, 2009
The thing about fear is that you can see it. For an insight as to what the left today fears most, witness its attempted political assassination of Eric Cantor.
The 45-year-old Virginia congressman came to Washington in 2001, and by last year had been unanimously elected Republican Whip, under Minority Leader John Boehner. In recent months, Mr. Cantor has helped unify the GOP against much of President Barack Obama's agenda, in particular his blowout $787 billion stimulus, and yesterday, his blowout $3.6 trillion budget.
He's also one of the GOP's up-and-coming talents. Along with Wisconsin's Paul Ryan, or California's Kevin McCarthy, he represents a new guard, one that's sworn off earmarks and brought the conversation back to fiscal responsibility and economic opportunity. They've focused on party outreach, and are popular with younger voters and independents. They are big fund-raisers, part of a drive to recruit and elect more reformers. And they are on the rise.
All of which threatens the left. Democrats know their current dominance in Washington is in no small part due to public disillusionment with the GOP. They are also aware that their current tax-and-spend governance is creating plenty of opportunities for that opposition to remake itself. Thus the furious campaign -- waged by every blog, pundit, union, 527, and even the White House -- to kneecap Republicans who might help lead a makeover. Mr. Cantor is the top target.
This kicked off after the GOP's unanimous vote against the stimulus, which Democrats saw as an opening to brand Mr. Cantor as the public face of partisan opposition to the "bipartisan" president. The Virginian has in fact publicly reached out to the White House, and has been deeply involved in producing alternatives to administration policies. But never let the facts get in the way of a good smear.
Within days of the vote, the Democratic Congressional Campaign Committee was up with radio ads targeting 28 Republicans who'd voted no. Mr. Cantor was the only member of the House GOP leadership to get hit. The American Federation of State, County and Municipal Employees (AFSCME), the big union, and Americans United for Change, the pro-Obama group, launched their own ads against 18 members, again singling out Mr. Cantor. The groups also ran a national TV spot sporting a picture of the whip with text that read "just saying no" -- which earned Mr. Cantor a new liberal nickname: Dr. No.
Mr. Obama joined in at his Fiscal Responsibility Summit. As the TV cameras rolled, he deliberately turned to the whip to say: "I'm going to keep on talking to Eric Cantor. Some day, sooner or later, he's going to say 'Boy, Obama had a good idea.'"
The Rush Limbaugh flap inspired a new AFSCME and American United for Change ad, accompanied by a statement that when Rush says jump, "Eric Cantor and other Republicans say 'how high.'" At nearly the precise moment Obama Chief of Staff Rahm Emanuel made Sunday news by claiming Mr. Limbaugh was rooting for Obama "failure," George Stephanopoulos (who, take note, has daily calls with Mr. Emanuel) demanded on his own show that Mr. Cantor tell him if this was indeed the GOP strategy. David Plouffe, the president's campaign wizard, followed up with an anti-Limbaugh screed for the Washington Post, zeroing in on that "new Republican quarterback Eric Cantor, who says "the GOP's strategy will be to 'Just Say No.'"
And then there's the echo chamber. MSNBC's Keith Olbermann is so obsessed with Mr. Cantor, he can barely find time to be indignant about anything else. Talking Points Memo, Huffington Post, Think Progress and other leading liberal blogs are today all-anti-Cantor-all-the-time.
But the real ugly was unleashed a few weeks ago, when the goon squad set on Mr. Cantor's wife. An outfit called Working Families Win began running robocalls in five districts noting that Diana Cantor was a "top executive" at a bank that had received bailout funds -- the clear implication being that Mr. Cantor's vote for said bailout hinged on this fact. "In the middle of the AIG scandal, our congressman [fill in the blank] voted to make Virginia Republican, Eric Cantor, the conservative leader in Congress," it droned (incoherently and incorrectly), before demanding voters oppose the "Cantor Family Bank bailout."
At least when Chuck Schumer ran ads targeting Republicans for voting for a "bailout" that his own party brought to the floor -- and passed -- he kept his attacks on the members. And the last anyone looked, the AIG intervention was being overseen by the Obama administration, not the House minority whip. This may set a new political low, not the least because Mrs. Cantor in fact works at a subsidiary of the bank in question. Not to mention that Mr. Cantor led the initial GOP revolt against the "bailout."
The Virginian has a new, high-profile job, and that means taking some knocks. Mr. Cantor is also where he is for a reason, and has so far weathered the onslaught. But the coordinated takedown attempt is yet more proof that the Obama-led Democrats aren't nearly as interested in changing the "tone" as they are in holding on to power.
Friday, April 3, 2009
The President Is 'Keeping Score' - Chicago politics has moved into the White House
The President Is 'Keeping Score'. By Karl Rove
Chicago politics has moved into the White House.
WSJ, Apr 03, 2009
"Don't think we're not keeping score, brother." That's what President Barack Obama said to Rep. Peter DeFazio in a closed-door meeting of the House Democratic Caucus last week, according to the Associated Press.
A few weeks ago, Mr. DeFazio voted against the administration's stimulus bill. The comment from Mr. Obama was a presidential rebuke and part of a new, hard-nosed push by the White House to pressure Congress to adopt the president's budget. He has mobilized outside groups and enlisted forces still in place from the Obama campaign.
Senior presidential adviser Valerie Jarrett and her chief of staff, Michael Strautmanis, are in regular contact with MoveOn.Org, Americans United for Change and other liberal interest groups. Deputy Chief of Staff Jim Messina has collaborated with Americans United for Change on strategy and even ad copy. Ms. Jarrett invited leaders of the liberal interest groups to a White House social event with the president and first lady to kick off the lobbying campaign.
Its targets were initially Republicans, as team Obama ran ads depicting the GOP as the "party of no." But now the fire is being trained on Democrats worried about runaway spending.
Americans United is going after Democrats who are skeptical of Mr. Obama's plans to double the national debt in five years and nearly triple it in 10. The White House is taking aim at lawmakers in 12 states, including Democratic Sens. Kent Conrad, Ben Nelson, Mary Landrieu, Blanche Lincoln and Mark Pryor. MoveOn.Org is running ads aimed at 10 moderate Senate and House Democrats. And robocalls are urging voters in key districts to pressure their congressman to get in line.
Team Obama is also ginning up the Democratic National Committee. A special group at the DNC has been created called "Organizing for America." It is headed by Mr. Obama's campaign manager, David Plouffe, and is lobbying for the administration's spending proposals.
Organizing for America's first effort has not been terribly effective. It emailed 13 million Obama election workers, recruited 1,200 neighborhood canvassers, and, after a couple of weeks and more email pleas to the Obama list, produced 642,000 signatures. Having less than 5% of your own activists sign a petition is unimpressive and perhaps evidence that adding $9.3 trillion to the deficit alarms even some of Mr. Obama's most fervent supporters.
Every White House is faced with finding ways to nudge Congress without antagonizing it. But this overt campaign could infuriate members who won't appreciate being targeted by a president of their own party. They could react by becoming recalcitrant. Should that happen, team Obama will have to recalculate its efforts, especially as the public sours on big spending plans.
In March, a Gallup Poll found that positive impressions of the Obama budget dropped five points. Only 39% now harbor supportive views of it. A CNN/Opinion Research Poll in mid-March found that support for the stimulus bill Mr. Obama signed into law shifted 11-points against the bill in five weeks, with 66% of Americans opposed to a second stimulus bill.
Support continues to decline for the proposition that a big boost in government spending will lead America to prosperity. A NBC News/Wall Street Journal Poll early last month found that 61% of Americans were concerned that "the federal government will spend too much money" (up 12 points from December), and only 29% were concerned "it will spend too little money to try to boost the economy."
This growing skepticism will not be assuaged by White House Budget Director Peter Orszag's bewildering response when asked by a reporter last week about increasing federal debt. He said, "I don't know what spiraling debt you're referring to."
Members of Congress should also worry about how Mr. Obama is "keeping score." He is steeped in the ways of Chicago politics and has not forgotten his training in the methods once used by Saul Alinsky, the radical Chicago community organizer.
Alinsky's 1971 book, "Rules for Radicals," is a favorite of the Obamas. Michele Obama quoted it at the Democratic Convention. One Alinsky tactic is to "Pick the target, freeze it, personalize it, and polarize it." That's what the White House did in targeting Rush Limbaugh, Rick Santelli and Jim Cramer. (The president's press secretary, Robert Gibbs, went so far as to lash all three from the White House press podium.) It may also explain Mr. Obama's comments to Mr. DeFazio.
After all, Alinsky's first rule of "power tactics" is "power is not only what you have but what the enemy thinks you have." Team Obama wants to remind its adversaries it has plenty of power, and it does. The question is whether the White House will wield it responsibly. The jury is still out, but certain clues are beginning to emerge. "Don't think we're not keeping score, brother," even if said with a wink and a smile, isn't quite the "new politics" we were told to expect.
Mr. Rove is the former senior adviser and deputy chief of staff to President George W. Bush.
Chicago politics has moved into the White House.
WSJ, Apr 03, 2009
"Don't think we're not keeping score, brother." That's what President Barack Obama said to Rep. Peter DeFazio in a closed-door meeting of the House Democratic Caucus last week, according to the Associated Press.
A few weeks ago, Mr. DeFazio voted against the administration's stimulus bill. The comment from Mr. Obama was a presidential rebuke and part of a new, hard-nosed push by the White House to pressure Congress to adopt the president's budget. He has mobilized outside groups and enlisted forces still in place from the Obama campaign.
Senior presidential adviser Valerie Jarrett and her chief of staff, Michael Strautmanis, are in regular contact with MoveOn.Org, Americans United for Change and other liberal interest groups. Deputy Chief of Staff Jim Messina has collaborated with Americans United for Change on strategy and even ad copy. Ms. Jarrett invited leaders of the liberal interest groups to a White House social event with the president and first lady to kick off the lobbying campaign.
Its targets were initially Republicans, as team Obama ran ads depicting the GOP as the "party of no." But now the fire is being trained on Democrats worried about runaway spending.
Americans United is going after Democrats who are skeptical of Mr. Obama's plans to double the national debt in five years and nearly triple it in 10. The White House is taking aim at lawmakers in 12 states, including Democratic Sens. Kent Conrad, Ben Nelson, Mary Landrieu, Blanche Lincoln and Mark Pryor. MoveOn.Org is running ads aimed at 10 moderate Senate and House Democrats. And robocalls are urging voters in key districts to pressure their congressman to get in line.
Team Obama is also ginning up the Democratic National Committee. A special group at the DNC has been created called "Organizing for America." It is headed by Mr. Obama's campaign manager, David Plouffe, and is lobbying for the administration's spending proposals.
Organizing for America's first effort has not been terribly effective. It emailed 13 million Obama election workers, recruited 1,200 neighborhood canvassers, and, after a couple of weeks and more email pleas to the Obama list, produced 642,000 signatures. Having less than 5% of your own activists sign a petition is unimpressive and perhaps evidence that adding $9.3 trillion to the deficit alarms even some of Mr. Obama's most fervent supporters.
Every White House is faced with finding ways to nudge Congress without antagonizing it. But this overt campaign could infuriate members who won't appreciate being targeted by a president of their own party. They could react by becoming recalcitrant. Should that happen, team Obama will have to recalculate its efforts, especially as the public sours on big spending plans.
In March, a Gallup Poll found that positive impressions of the Obama budget dropped five points. Only 39% now harbor supportive views of it. A CNN/Opinion Research Poll in mid-March found that support for the stimulus bill Mr. Obama signed into law shifted 11-points against the bill in five weeks, with 66% of Americans opposed to a second stimulus bill.
Support continues to decline for the proposition that a big boost in government spending will lead America to prosperity. A NBC News/Wall Street Journal Poll early last month found that 61% of Americans were concerned that "the federal government will spend too much money" (up 12 points from December), and only 29% were concerned "it will spend too little money to try to boost the economy."
This growing skepticism will not be assuaged by White House Budget Director Peter Orszag's bewildering response when asked by a reporter last week about increasing federal debt. He said, "I don't know what spiraling debt you're referring to."
Members of Congress should also worry about how Mr. Obama is "keeping score." He is steeped in the ways of Chicago politics and has not forgotten his training in the methods once used by Saul Alinsky, the radical Chicago community organizer.
Alinsky's 1971 book, "Rules for Radicals," is a favorite of the Obamas. Michele Obama quoted it at the Democratic Convention. One Alinsky tactic is to "Pick the target, freeze it, personalize it, and polarize it." That's what the White House did in targeting Rush Limbaugh, Rick Santelli and Jim Cramer. (The president's press secretary, Robert Gibbs, went so far as to lash all three from the White House press podium.) It may also explain Mr. Obama's comments to Mr. DeFazio.
After all, Alinsky's first rule of "power tactics" is "power is not only what you have but what the enemy thinks you have." Team Obama wants to remind its adversaries it has plenty of power, and it does. The question is whether the White House will wield it responsibly. The jury is still out, but certain clues are beginning to emerge. "Don't think we're not keeping score, brother," even if said with a wink and a smile, isn't quite the "new politics" we were told to expect.
Mr. Rove is the former senior adviser and deputy chief of staff to President George W. Bush.
Children's toys, the Consumer Product Safety Improvement Act and the lawmakers' intentions
Toys R Congress. WSJ Editorial
Ruining the kids motorcycle business
WSJ, Apr 03, 2009
Last year's Consumer Product Safety Improvement Act was supposed to make children safer by reducing the risk of lead poisoning in toys. Instead, the new law has become a case study in how hastily written regulation can club the economy and reduce consumer safety.
This bill was passed by wide margins in Congress and signed into law by President Bush in the aftermath of the controversy over lead paint in imported toys from China. The new law, which took effect in February, establishes strict limits on lead levels in products for children. Never mind that in 2008 only one American child was injured from lead poisoning from toys.
What few on Capitol Hill anticipated was how the new law would devastate the domestic toy industry. According to the American Toy Association, the new rules will cost retailers and toy makers an estimated $2 billion for compliance and removing children's products from the shelves even though they pose no real health threat. Even old children's books are being cleared from stores and libraries.
The multibillion-dollar children's motorcycle and all-terrain vehicle industry has been clobbered. Kids motorcross racing has boomed in recent years in rural and Western states. And the regulators at the Consumer Product Safety Commission (CPSC) have decided that virtually all of these youth vehicles violate the new standards because of lead in the brakes, tire valves and gears. They've ordered motorcycle dealers to stop selling them, putting hundreds of dealers and the entire motorcross industry in a depression. With one stroke of the regulatory pen, an estimated $100 million of inventory can't be sold, and the industry loss may reach $1 billion.
While safety concerns need to be paramount, there is virtually zero threat of lead poisoning from riding a motorcycle. One study by Dr. Barbara Beck of Harvard finds that a youth's intake of lead from riding a motorcycle is less than the amount from drinking water. Even the CPSC admits in a letter to Congress that the lead-intake risk from youth motorcycles is "remote at best."
The introduction in recent years of smaller cycles for kids under 12 has increased safety by replacing heavier cycles more prone to accident and more severe injury. According to a study by the Motorcycle Industry Council, "90% of the youth fatalities and injuries on motorcycles occur when kids ride adult vehicles." Those are what kids will ride if the CPSC ban stays in effect. Ken Luttrell, a Democratic state house member from Oklahoma, says, "With these new regulations, Washington has only succeeded in making biking much more dangerous for kids."
The inane regulations are leading to a backlash against Congress and the CPSC. A resolution calling for a year delay in implementing the new law so the industry has time to adjust passed the Oklahoma legislature 101-0 last week. Missouri and Nevada legislatures have passed similar resolutions. California's burgeoning cycle community is so enraged that some motorcycle dealers are openly defying the sales ban. On Wednesday a coalition of toy users and manufacturers held a rally in Washington to "stop the toy ban."
But so far the folks in Washington aren't interested in what families or employers think. Henry Waxman, a scourge of private business and ally of Speaker Nancy Pelosi, refuses even to hold hearings. Meanwhile, the Obama Administration has called for a major increase in the CPSC budget. Don't you feel safer already?
Ruining the kids motorcycle business
WSJ, Apr 03, 2009
Last year's Consumer Product Safety Improvement Act was supposed to make children safer by reducing the risk of lead poisoning in toys. Instead, the new law has become a case study in how hastily written regulation can club the economy and reduce consumer safety.
This bill was passed by wide margins in Congress and signed into law by President Bush in the aftermath of the controversy over lead paint in imported toys from China. The new law, which took effect in February, establishes strict limits on lead levels in products for children. Never mind that in 2008 only one American child was injured from lead poisoning from toys.
What few on Capitol Hill anticipated was how the new law would devastate the domestic toy industry. According to the American Toy Association, the new rules will cost retailers and toy makers an estimated $2 billion for compliance and removing children's products from the shelves even though they pose no real health threat. Even old children's books are being cleared from stores and libraries.
The multibillion-dollar children's motorcycle and all-terrain vehicle industry has been clobbered. Kids motorcross racing has boomed in recent years in rural and Western states. And the regulators at the Consumer Product Safety Commission (CPSC) have decided that virtually all of these youth vehicles violate the new standards because of lead in the brakes, tire valves and gears. They've ordered motorcycle dealers to stop selling them, putting hundreds of dealers and the entire motorcross industry in a depression. With one stroke of the regulatory pen, an estimated $100 million of inventory can't be sold, and the industry loss may reach $1 billion.
While safety concerns need to be paramount, there is virtually zero threat of lead poisoning from riding a motorcycle. One study by Dr. Barbara Beck of Harvard finds that a youth's intake of lead from riding a motorcycle is less than the amount from drinking water. Even the CPSC admits in a letter to Congress that the lead-intake risk from youth motorcycles is "remote at best."
The introduction in recent years of smaller cycles for kids under 12 has increased safety by replacing heavier cycles more prone to accident and more severe injury. According to a study by the Motorcycle Industry Council, "90% of the youth fatalities and injuries on motorcycles occur when kids ride adult vehicles." Those are what kids will ride if the CPSC ban stays in effect. Ken Luttrell, a Democratic state house member from Oklahoma, says, "With these new regulations, Washington has only succeeded in making biking much more dangerous for kids."
The inane regulations are leading to a backlash against Congress and the CPSC. A resolution calling for a year delay in implementing the new law so the industry has time to adjust passed the Oklahoma legislature 101-0 last week. Missouri and Nevada legislatures have passed similar resolutions. California's burgeoning cycle community is so enraged that some motorcycle dealers are openly defying the sales ban. On Wednesday a coalition of toy users and manufacturers held a rally in Washington to "stop the toy ban."
But so far the folks in Washington aren't interested in what families or employers think. Henry Waxman, a scourge of private business and ally of Speaker Nancy Pelosi, refuses even to hold hearings. Meanwhile, the Obama Administration has called for a major increase in the CPSC budget. Don't you feel safer already?
Federal President Guarantees Cars - Federal President's Ultimate Agenda
Obama's Ultimate Agenda. By Charles Krauthammer
WaPo, Friday, April 3, 2009; A19
Five minutes of explanation to James Madison, and he'll have a pretty good idea what a motorcar is (basically a steamboat on wheels; the internal combustion engine might take a few minutes more). Then try to explain to Madison how the Constitution he fathered allows the president to unilaterally guarantee the repair or replacement of every component of millions of such contraptions sold in the several states, and you will leave him slack-jawed.
In fact, we are now so deep into government intervention that constitutional objections are summarily swept aside. The last Treasury secretary brought the nine largest banks into his office and informed them that henceforth he was their partner. His successor is seeking the power to seize any financial institution at his own discretion.
Despite these astonishments, I remain more amused than alarmed. First, the notion of presidential car warranties strikes me as simply too bizarre, too comical, to mark the beginning of Yankee Peronism.
Second, there is every political incentive to make these interventions in the banks and autos temporary and circumscribed. For President Obama, autos and banks are sideshows. Enormous sideshows, to be sure, but had the financial meltdown and the looming auto bankruptcies not been handed to him, he would hardly have gone seeking to be the nation's credit and car czar.
Obama has far different ambitions. His goal is to rewrite the American social compact, to recast the relationship between government and citizen. He wants government to narrow the nation's income and anxiety gaps. Soak the rich for reasons of revenue and justice. Nationalize health care and federalize education to grant all citizens of all classes the freedom from anxiety about health care and college that the rich enjoy. And fund this vast new social safety net through the cash cow of a disguised carbon tax.
Obama is a leveler. He has come to narrow the divide between rich and poor. For him the ultimate social value is fairness. Imposing it upon the American social order is his mission.
Fairness through leveling is the essence of Obamaism. (Asked by Charlie Gibson during a campaign debate about his support for raising capital gains taxes -- even if they caused a net revenue loss to the government -- Obama stuck to the tax hike "for purposes of fairness.") The elements are highly progressive taxation, federalized health care and higher education, and revenue-producing energy controls. But first he must deal with the sideshows. They could sink the economy and poison his public support before he gets to enact his real agenda.
The big sideshows, of course, are the credit crisis, which Obama has contracted out to Treasury Secretary Tim Geithner, and the collapse of the U.S. automakers, which Obama seems to have taken on for himself.
That was a tactical mistake. Better to have let the car companies go directly to Chapter 11 and have a judge mete out the bitter medicine to the workers and bondholders.
By sacking GM's CEO, packing the new board, and giving direction as to which brands to drop and what kind of cars to make, Obama takes ownership of General Motors. He may soon come to regret it. He has now gotten himself so entangled in the car business that he is personally guaranteeing your muffler. (Upon reflection, a job best left to the congenitally unmuffled Joe Biden.)
Some find in this descent into large-scale industrial policy a whiff of 1930s-style fascist corporatism. I have my doubts. These interventions are rather targeted. They involve global financial institutions that even the Bush administration decided had to be nationalized and auto companies that themselves came begging to the government for money.
Bizarre and constitutionally suspect as these interventions may be, the transformation of the American system will come from elsewhere. The credit crisis will pass and the auto overcapacity will sort itself out one way or the other. The reordering of the American system will come not from these temporary interventions, into which Obama has reluctantly waded. It will come from Obama's real agenda: his holy trinity of health care, education and energy. Out of these will come a radical extension of the welfare state; social and economic leveling in the name of fairness; and a massive increase in the size, scope and reach of government.
If Obama has his way, the change that is coming is a new America: "fair," leveled and social democratic. Obama didn't get elected to warranty your muffler. He's here to warranty your life.
WaPo, Friday, April 3, 2009; A19
Five minutes of explanation to James Madison, and he'll have a pretty good idea what a motorcar is (basically a steamboat on wheels; the internal combustion engine might take a few minutes more). Then try to explain to Madison how the Constitution he fathered allows the president to unilaterally guarantee the repair or replacement of every component of millions of such contraptions sold in the several states, and you will leave him slack-jawed.
In fact, we are now so deep into government intervention that constitutional objections are summarily swept aside. The last Treasury secretary brought the nine largest banks into his office and informed them that henceforth he was their partner. His successor is seeking the power to seize any financial institution at his own discretion.
Despite these astonishments, I remain more amused than alarmed. First, the notion of presidential car warranties strikes me as simply too bizarre, too comical, to mark the beginning of Yankee Peronism.
Second, there is every political incentive to make these interventions in the banks and autos temporary and circumscribed. For President Obama, autos and banks are sideshows. Enormous sideshows, to be sure, but had the financial meltdown and the looming auto bankruptcies not been handed to him, he would hardly have gone seeking to be the nation's credit and car czar.
Obama has far different ambitions. His goal is to rewrite the American social compact, to recast the relationship between government and citizen. He wants government to narrow the nation's income and anxiety gaps. Soak the rich for reasons of revenue and justice. Nationalize health care and federalize education to grant all citizens of all classes the freedom from anxiety about health care and college that the rich enjoy. And fund this vast new social safety net through the cash cow of a disguised carbon tax.
Obama is a leveler. He has come to narrow the divide between rich and poor. For him the ultimate social value is fairness. Imposing it upon the American social order is his mission.
Fairness through leveling is the essence of Obamaism. (Asked by Charlie Gibson during a campaign debate about his support for raising capital gains taxes -- even if they caused a net revenue loss to the government -- Obama stuck to the tax hike "for purposes of fairness.") The elements are highly progressive taxation, federalized health care and higher education, and revenue-producing energy controls. But first he must deal with the sideshows. They could sink the economy and poison his public support before he gets to enact his real agenda.
The big sideshows, of course, are the credit crisis, which Obama has contracted out to Treasury Secretary Tim Geithner, and the collapse of the U.S. automakers, which Obama seems to have taken on for himself.
That was a tactical mistake. Better to have let the car companies go directly to Chapter 11 and have a judge mete out the bitter medicine to the workers and bondholders.
By sacking GM's CEO, packing the new board, and giving direction as to which brands to drop and what kind of cars to make, Obama takes ownership of General Motors. He may soon come to regret it. He has now gotten himself so entangled in the car business that he is personally guaranteeing your muffler. (Upon reflection, a job best left to the congenitally unmuffled Joe Biden.)
Some find in this descent into large-scale industrial policy a whiff of 1930s-style fascist corporatism. I have my doubts. These interventions are rather targeted. They involve global financial institutions that even the Bush administration decided had to be nationalized and auto companies that themselves came begging to the government for money.
Bizarre and constitutionally suspect as these interventions may be, the transformation of the American system will come from elsewhere. The credit crisis will pass and the auto overcapacity will sort itself out one way or the other. The reordering of the American system will come not from these temporary interventions, into which Obama has reluctantly waded. It will come from Obama's real agenda: his holy trinity of health care, education and energy. Out of these will come a radical extension of the welfare state; social and economic leveling in the name of fairness; and a massive increase in the size, scope and reach of government.
If Obama has his way, the change that is coming is a new America: "fair," leveled and social democratic. Obama didn't get elected to warranty your muffler. He's here to warranty your life.
WaPo Editorial on G-20 summit
'We Did Okay'. WaPo Edtorial
The G-20 summit produces a few useful economic steps -- but misses a big opportunity.
WaPo, Friday, April 3, 2009; A18
THE MEETING in London of leaders of 20 top world economies produced a number of pledges of useful action to cope with the global recession. Increased economic coordination, a reaffirmed commitment to open trade and assistance to developing nations -- these are all hugely important, if leaders follow through. And the conversations among the 20 countries are useful in and of themselves -- the type of coordination that must accompany a tightly linked global economy. But the summit would have benefited from a greater focus on the U.S. priority of fixing the crisis we are in before moving on to protecting against the next one.
Entering the summit, there was a tension between the U.S. desire to focus on economic repair and France and Germany's interest in using the summit as a launching pad for a more coordinated financial regulatory regime. Perhaps President Obama could have pushed harder; on the other hand, he was handicapped by worldwide belief in U.S. culpability for the crisis and residual resentments of perceived U.S. high-handedness under the previous administration. Mr. Obama wanted to represent U.S. interests without appearing to bully other participants. Some of his counterparts, in turn, were happy to turn his dilemma to their advantage. One can only imagine the reaction if Mr. Obama had emulated French President Nicolas Sarkozy and threatened to walk out if he did not get his way.
So it was not a surprise when the summit birthed a communique chock-full of plans to increase and strengthen regulatory institutions but devoid of any commitment to further fiscal stimulus. It is a lost opportunity, nonetheless, that the leaders were gauzier in the area that matters most -- actions to restore economic growth -- than on almost any other topic that was covered. Standing between the world and an economic recovery are a broken financial system and inadequate global demand. Extended discussion of how best to jump-start lending and clean up banks' balance sheets would have been beneficial as nations struggle to find the right model for cleaning up toxic assets. And even if no specific stimulus actions would be taken right away, a commitment to spend more if the global economy continued to deteriorate would have been progress. On the other hand, devising a system to ward off the next crisis and cracking down on tax havens fall into the category of crucial but less urgent.
Still, some important and positive policies came out of the meeting. The commitment to a free and open system of trade is particularly critical in the face of protectionist sentiments emerging around the world. The substantial increase in resources for the International Monetary Fund and for poorer nations will help countries in need and provide capital to help keep trade flowing at a time when it is expected to contract. Both policies reflect not only important measures to help the world economy but continued economic integration, instead of an isolationist step backward.
When asked how he thought he did, Mr. Obama said, "I think we did okay." That sounds about right.
The G-20 summit produces a few useful economic steps -- but misses a big opportunity.
WaPo, Friday, April 3, 2009; A18
THE MEETING in London of leaders of 20 top world economies produced a number of pledges of useful action to cope with the global recession. Increased economic coordination, a reaffirmed commitment to open trade and assistance to developing nations -- these are all hugely important, if leaders follow through. And the conversations among the 20 countries are useful in and of themselves -- the type of coordination that must accompany a tightly linked global economy. But the summit would have benefited from a greater focus on the U.S. priority of fixing the crisis we are in before moving on to protecting against the next one.
Entering the summit, there was a tension between the U.S. desire to focus on economic repair and France and Germany's interest in using the summit as a launching pad for a more coordinated financial regulatory regime. Perhaps President Obama could have pushed harder; on the other hand, he was handicapped by worldwide belief in U.S. culpability for the crisis and residual resentments of perceived U.S. high-handedness under the previous administration. Mr. Obama wanted to represent U.S. interests without appearing to bully other participants. Some of his counterparts, in turn, were happy to turn his dilemma to their advantage. One can only imagine the reaction if Mr. Obama had emulated French President Nicolas Sarkozy and threatened to walk out if he did not get his way.
So it was not a surprise when the summit birthed a communique chock-full of plans to increase and strengthen regulatory institutions but devoid of any commitment to further fiscal stimulus. It is a lost opportunity, nonetheless, that the leaders were gauzier in the area that matters most -- actions to restore economic growth -- than on almost any other topic that was covered. Standing between the world and an economic recovery are a broken financial system and inadequate global demand. Extended discussion of how best to jump-start lending and clean up banks' balance sheets would have been beneficial as nations struggle to find the right model for cleaning up toxic assets. And even if no specific stimulus actions would be taken right away, a commitment to spend more if the global economy continued to deteriorate would have been progress. On the other hand, devising a system to ward off the next crisis and cracking down on tax havens fall into the category of crucial but less urgent.
Still, some important and positive policies came out of the meeting. The commitment to a free and open system of trade is particularly critical in the face of protectionist sentiments emerging around the world. The substantial increase in resources for the International Monetary Fund and for poorer nations will help countries in need and provide capital to help keep trade flowing at a time when it is expected to contract. Both policies reflect not only important measures to help the world economy but continued economic integration, instead of an isolationist step backward.
When asked how he thought he did, Mr. Obama said, "I think we did okay." That sounds about right.
Fantasizing about capped 350 ppm CO2
Conference of the Century! (Fantasizing about capped 350 ppm CO2). By Marlo Lewis
Master Resource, March 30, 2009
Well, how else should we describe a conference addressing “The Greatest Challenge in History”? That’s what the 350 Climate Conference, to be held May 2 at Columbia University, calls global warming, which it also asserts is ”likely the greatest threat humanity has ever faced.”
The number “350″ refers to the “safe upper limit” of carbon dioxide (CO2) concentrations in the atmosphere–350 parts per million (ppm)–according to NASA scientist and Columbia University professor James Hansen, who will keynote the conference. Atmospheric CO2 levels today are roughly 385 ppm.
The online conference flyer explains:
While the exact limit–whether it be 550, 450, 350, or even lower–is subject to debate, the need for proactive strategies to climate change is clear. Vital issues directly relating to climate change, such as alternative energy and carbon sequestration, are likely to drive domestic and international policies for the decades and centuries to come. This conference will discuss the scientific, political, social and economic challenges and opportunities associated [with] reducing emissions and lowering atmospheric carbon levels.
Notice what’s missing from the program. There are “challenges and opportunities” associated wtih reducing emissions and lowering CO2 levels, but, apparently, no risks, no perils, no threats to humanity. That’s dishonest, daffy, or both.
For several years, the UN, the European Union, and numerous environmental groups have said that the world must reduce CO2 emissions 50% below 1990 levels by 2050 in order to “stabilize” atmospheric CO2 concentrations at 450 ppm by 2100.
Newsweek science reporter Sharon Begley (no skeptic she) interviewed Cal Tech chemist Nathan Lewis (no skeptic either) on what it would take just to keep atmospheric CO2 levels from reaching 450 ppm:
Lewis’s numbers show the enormous challenge we face. The world used 14 trillion watts (14 terawatts) of power in 2006. Assuming minimal population growth (to 9 billion people), slow economic growth (1.6 percent a year, practically recession level) and—this is key—unprecedented energy efficiency (improvements of 500 percent relative to current U.S. levels, worldwide), it will use 28 terawatts in 2050. (In a business-as-usual scenario, we would need 45 terawatts.) Simple physics shows that in order to keep CO2 to 450 ppm, 26.5 of those terawatts must be zero-carbon. That’s a lot of solar, wind, hydro, biofuels and nuclear, especially since renewables kicked in a measly 0.2 terawatts in 2006 and nuclear provided 0.9 terawatts. Are you a fan of nuclear? To get 10 terawatts, less than half of what we’ll need in 2050, Lewis calculates, we’d have to build 10,000 reactors, or one every other day starting now. Do you like wind? If you use every single breeze that blows on land, you’ll get 10 or 15 terawatts. Since it’s impossible to capture all the wind, a more realistic number is 3 terawatts, or 1 million state-of-the art turbines, and even that requires storing the energy—something we don’t know how to do—for when the wind doesn’t blow. Solar? To get 10 terawatts by 2050, Lewis calculates, we’d need to cover 1 million roofs with panels every day from now until then. “It would take an army,” he says. Obama promised green jobs, but still.*
The point? In Begley’s words, “We can’t get there from here: Political will and a price on CO2 won’t be enough” to stabilize emissions at 450 ppm. The UN/EU emission reduction target is unattainable absent “Nobel caliber breakthroughs.” Meeting the target will require “revolutionary changes in the technology of energy production, distribution, storage, and conversion,” as one group of energy experts wrote back in 2002.
Now, if those breakthroughs do not occur, then the only way to bring the world into compliance with the UN/EU goal envisioned for Kyoto II would be to deny large segments of humanity the blessings of affordable energy. As I observed in an earlier post, there is nothing quite like economic collapse to cut emissions.
Now recall that the emission stabilization goal of the 350 Climate Conference is 100 ppm lower than the EU/UN goal. In a paper on his Web page, Lewis says that achieving 350 ppm by mid-century would require world CO2 emissions to drop to zero by that date.
There is no known way to get there except draconian cutbacks in economic output, population, or both. Poverty is of course a perenniel source of conflict within and among nations as well as the leading cause of preventable disease and premature death. Moreover, climate policies punitive enough to induce negative economic and population growth are likely to meet with resistance and promote conflict rather than peace.
Will any of the invited speakers at the 350 Conference address these risks in a serious ways? Not unless he (or she) is brave enough to be the skunk at the garden party and endure abuse from those who denounce dissent as villainy and treason.
* See also my colleague Iain Murray’s blog on Begley’s column.
Master Resource, March 30, 2009
Well, how else should we describe a conference addressing “The Greatest Challenge in History”? That’s what the 350 Climate Conference, to be held May 2 at Columbia University, calls global warming, which it also asserts is ”likely the greatest threat humanity has ever faced.”
The number “350″ refers to the “safe upper limit” of carbon dioxide (CO2) concentrations in the atmosphere–350 parts per million (ppm)–according to NASA scientist and Columbia University professor James Hansen, who will keynote the conference. Atmospheric CO2 levels today are roughly 385 ppm.
The online conference flyer explains:
While the exact limit–whether it be 550, 450, 350, or even lower–is subject to debate, the need for proactive strategies to climate change is clear. Vital issues directly relating to climate change, such as alternative energy and carbon sequestration, are likely to drive domestic and international policies for the decades and centuries to come. This conference will discuss the scientific, political, social and economic challenges and opportunities associated [with] reducing emissions and lowering atmospheric carbon levels.
Notice what’s missing from the program. There are “challenges and opportunities” associated wtih reducing emissions and lowering CO2 levels, but, apparently, no risks, no perils, no threats to humanity. That’s dishonest, daffy, or both.
For several years, the UN, the European Union, and numerous environmental groups have said that the world must reduce CO2 emissions 50% below 1990 levels by 2050 in order to “stabilize” atmospheric CO2 concentrations at 450 ppm by 2100.
Newsweek science reporter Sharon Begley (no skeptic she) interviewed Cal Tech chemist Nathan Lewis (no skeptic either) on what it would take just to keep atmospheric CO2 levels from reaching 450 ppm:
Lewis’s numbers show the enormous challenge we face. The world used 14 trillion watts (14 terawatts) of power in 2006. Assuming minimal population growth (to 9 billion people), slow economic growth (1.6 percent a year, practically recession level) and—this is key—unprecedented energy efficiency (improvements of 500 percent relative to current U.S. levels, worldwide), it will use 28 terawatts in 2050. (In a business-as-usual scenario, we would need 45 terawatts.) Simple physics shows that in order to keep CO2 to 450 ppm, 26.5 of those terawatts must be zero-carbon. That’s a lot of solar, wind, hydro, biofuels and nuclear, especially since renewables kicked in a measly 0.2 terawatts in 2006 and nuclear provided 0.9 terawatts. Are you a fan of nuclear? To get 10 terawatts, less than half of what we’ll need in 2050, Lewis calculates, we’d have to build 10,000 reactors, or one every other day starting now. Do you like wind? If you use every single breeze that blows on land, you’ll get 10 or 15 terawatts. Since it’s impossible to capture all the wind, a more realistic number is 3 terawatts, or 1 million state-of-the art turbines, and even that requires storing the energy—something we don’t know how to do—for when the wind doesn’t blow. Solar? To get 10 terawatts by 2050, Lewis calculates, we’d need to cover 1 million roofs with panels every day from now until then. “It would take an army,” he says. Obama promised green jobs, but still.*
The point? In Begley’s words, “We can’t get there from here: Political will and a price on CO2 won’t be enough” to stabilize emissions at 450 ppm. The UN/EU emission reduction target is unattainable absent “Nobel caliber breakthroughs.” Meeting the target will require “revolutionary changes in the technology of energy production, distribution, storage, and conversion,” as one group of energy experts wrote back in 2002.
Now, if those breakthroughs do not occur, then the only way to bring the world into compliance with the UN/EU goal envisioned for Kyoto II would be to deny large segments of humanity the blessings of affordable energy. As I observed in an earlier post, there is nothing quite like economic collapse to cut emissions.
Now recall that the emission stabilization goal of the 350 Climate Conference is 100 ppm lower than the EU/UN goal. In a paper on his Web page, Lewis says that achieving 350 ppm by mid-century would require world CO2 emissions to drop to zero by that date.
There is no known way to get there except draconian cutbacks in economic output, population, or both. Poverty is of course a perenniel source of conflict within and among nations as well as the leading cause of preventable disease and premature death. Moreover, climate policies punitive enough to induce negative economic and population growth are likely to meet with resistance and promote conflict rather than peace.
Will any of the invited speakers at the 350 Conference address these risks in a serious ways? Not unless he (or she) is brave enough to be the skunk at the garden party and endure abuse from those who denounce dissent as villainy and treason.
* See also my colleague Iain Murray’s blog on Begley’s column.
Drunken Nation: Russia's Depopulation Bomb
Drunken Nation: Russia's Depopulation Bomb. By Nicholas Eberstadt
AEI, Thursday, April 2, 2009
Since the fall of the Soviet Union, Russia has suffered a rapid and tragic decline in population. For a modern and so-called "emerging" economy, this is more than a human crisis; it is a human resources crisis.
A specter is haunting Russia today. It is not the specter of Communism--that ghost has been chained in the attic of the past--but rather of depopulation--a relentless, unremitting, and perhaps unstoppable depopulation. The mass deaths associated with the Communist era may be history, but another sort of mass death may have only just begun, as Russians practice what amounts to an ethnic self-cleansing.
Since 1992, Russia's human numbers have been progressively dwindling. This slow motion process now taking place in the country carries with it grim and potentially disastrous implications that threaten to recast the contours of life and society in Russia, to diminish the prospects for Russian economic development, and to affect Russia's potential influence on the world stage in the years ahead.
Russia has faced this problem at other times during the last century. The first bout of depopulation lasted from 1917 to 1923, and was caused by the upheavals that transformed the Russian Empire into the Soviet Union. The next drop took place between 1933 and 1934, when the country's population fell by nearly 2 million--or almost 2 percent--as a result of Stalin's war against the "kulaks" in his forced collectivization of Soviet agriculture. And then, between 1941 and 1946, Russia's population plummeted by more than 13 million through the cataclysms and catastrophes of World War II.
The current Russian depopulation--which began in 1992 and shows no signs of abating--was, like the previous episodes, also precipitated by events of momentous political significance: the final dissolution of the Soviet Union and the end of Communist Party rule. But it differs in three important respects. First, it is by far the longest period of population decline in modern Russian history, having persisted for over twice as long as the decline that followed the Bolshevik Revolution, and well over three times as long as the terrifying depopulation Russia experienced during and immediately after World War II.
Second, unlike all the previous depopulations in Russia, this one has been taking place under what are, within the Russian context, basically orderly social and political circumstances. Terror and war are not the engines for the depopulation Russia is experiencing today, as they have been in the past.
And finally, whereas Russia's previous depopulations resulted from wild and terrible social paroxysms, they were also clearly temporary in nature. The current crisis, on the other hand, is proceeding gradually and routinely, and thus it is impossible to predict when, or whether, it will finally come to an end.
A comparison dramatizes what is happening in Russia. Between 1976 and 1991, the last sixteen years of Soviet power, the country recorded 36 million births. In the sixteen post-Communist years of 1992–2007, there were just 22.3 million, a drop in childbearing of nearly 40 percent from one era to the next. On the other side of the life cycle, a total of 24.6 million deaths were recorded between 1976 and 1991, while in the first sixteen years of the post-Communist period the Russian Federation tallied 34.7 million deaths, a rise of just over 40 percent. The symmetry is striking: in the last sixteen years of the Communist era, births exceeded deaths in Russia by 11.4 million; in the first sixteen years of the post-Soviet era, deaths exceeded births by 12.4 million.
The Russian Federation is by no means the only country to have registered population decline during the past two decades. In fact, 11 of the 19 countries making up Western Europe reported some annual population declines during the Cold War era. On the whole, however, these population dips tended to be brief and slight in magnitude. (Italy's "depopulation," for example, was limited to just one year--1986--and entailed a decline of fewer than 4,000 persons.) Moreover, the population declines in these cases were primarily a consequence of migration trends: either emigration abroad in search of opportunity (Ireland, Portugal), or release of foreign "guest workers" during recessions or cyclical downturns in the domestic economy (most of the rest). Only in a few Western European countries (Austria, Denmark, Germany, the United Kingdom) did negative natural increase ever feature as a contributing factor in a year-on-year population decline. In all but Germany, such bouts of negative natural increase proved to be temporary and relatively muffled.
So where, given these daunting facts, is the Russian Federation headed demographically in the years and decades ahead? Two of the world's leading demographic institutions--the United Nations Population Division (UNPD) and the U.S. Bureau of the Census--have tried to answer this question by a series of projections based upon what their analysts believe to be plausible assumptions about Russia's future fertility, mortality, and migration patterns.
Both organizations' projections trace a continuing downward course for the Russian Federation's population over the generation ahead. As of mid-year 2005, Russia's estimated population was around 143 million. UNPD projections for the year 2025 range from a high of about 136 million to a low of about 121 million; for the year 2030, they range from 133 million to 115 million. The Census Bureau's projections for the Russian Federation's population in 2025 and 2030 are 128 million and 124 million, respectively.
If these projections turn out to be relatively accurate--admittedly, a big "if" for any long-range demographic projection--the Russian Federation will have experienced over thirty years of continuous demographic decline by 2025, and the better part of four decades of depopulation by 2030. Russia's population would then have dropped by about 20 million between 1990 and 2025, and Russia would have fallen from the world's sixth to the twelfth most populous country. In relative terms, that would amount to almost as dramatic a demographic drop as the one Russia suffered during World War II. In absolute terms, it would actually be somewhat greater in magnitude.
Strikingly, and perhaps paradoxically, Moscow's leadership is advancing into this uncertain terrain not only with insouciance but with highly ambitious goals. In late 2007, for example, the Kremlin outlined the objective of achieving and maintaining an average annual pace of economic growth in the decades ahead on the order of nearly 7 percent a year: on this path, according to Russian officials, GDP will quadruple in the next two decades, and the Russian Federation will emerge as the world's fifth largest economy by 2020.
But history offers no examples of a society that has demonstrated sustained material advance in the face of long-term population decline. It seems highly unlikely that such an ambitious agenda can be achieved in the face of Russia's current demographic crisis. Sooner or later, Russian leadership will have to acknowledge that these daunting long-term developments are shrinking their country's social and political potential.
Marxist theory famously envisioned the "withering away" of the state upon the full attainment of Communism. That utopia never arrived in the USSR (or anywhere else for that matter). But with the collapse of Soviet rule, Russia has seen a pervasive and profound change in childbearing patterns and living arrangements--what might be described as a "withering away" of the family itself.
In the postwar Soviet era, Russia's so-called "total fertility rate" (TFR), which calculates the number of births a typical woman would be expected to have during childbearing years, exceeded 2.0--and in the early years of the Gorbachev era, Russia's total fertility rate temporarily exceeded 2.2. After 1989, though, it fell far below 2.0 with no signs as yet of any recovery. Russia's post-Communist TFR hit its low--perhaps we should say its low to date--in 1999, when it was 1.17. By 2005, the total fertility rate in the Russian Federation was up to about 1.3--but this still represented a collapse of about two-fifths from the peak level in the Gorbachev years.
In the late 1980s, near the end of the Communist era, there were just a handful of European countries (most of them under Communist rule) with higher fertility rates than Russia's. By 2005, the last year for which authoritative data is available, there were only a few European societies (perhaps ironically, most of them ex-Communist) with lower rates.
What accounts for the Russian Federation's low levels of fertility? Some observers point to poor health conditions. And indeed, as we will see, Russia's overall health situation today is truly woeful. This is especially true of its reproductive health.
A consortium headed by the World Health Organization estimated that for 2005 a woman's risk of death in childbirth in Russia was over six times higher than in Germany or Switzerland. Moreover, mortality levels for women in their twenties (the decade in which childbearing is concentrated in contemporary Russia) have been rising, not falling, in recent decades.
But Russia's low fertility patterns are not due to any extraordinary inability of Russian women to conceive, but rather to the strong and growing tendency among childbearing women to have no more than two children--and perhaps increasingly not more than one. The new evident limits on family size in Russia, in turn, suggest a sea change in the country's norms concerning family formation.
In 1980, fewer than one Russian newborn in nine was reportedly born out of wedlock. By 2005, the country's illegitimacy ratio was approaching 30 percent--almost a tripling in just twenty years. Marriage is not only less common in Russia today than in the recent past; it is also markedly less stable. In 2005, the total number of marriages celebrated in Russia was down by nearly one-fourth from 1980 (a fairly typical Brezhnev-period year for marriages). On the other hand, the total number of divorces recognized in Russia has been on an erratic rise over the past generation, from under 400 divorces per 1,000 marriages in 1980 to a peak of over 800 in 2002.
In 1990, the end of the Gorbachev era, marriage was still the norm, and while divorce was very common, a distinct majority of Russian Federation women (60 percent) could expect to have entered into a first marriage and still remain in that marriage by age 50. A few years later, in 1996, the picture was already radically different: barely a third of Russia's women (34 percent) were getting married and staying in that same marriage until age 50.
Since the end of the Soviet era, young women in Russia are opting for cohabitation before and, to a striking extent, instead of marriage. In the early 1980s, about 15 percent of women had been in consensual unions by age 25; twenty years later, the proportion was 45 percent. Many fewer of those once-cohabiting young women, moreover, seem to be moving into marital unions nowadays. Whereas roughly a generation earlier, fully half of cohabiters were married within a year, today less than a third are.
Is Russia's post-Communist plunge in births the consequence of a "demographic shock," or the result of what some Russian experts call a "quiet revolution" in patterns of family formation? At the moment, it is possible to see elements of both in the Russian Federation's unfolding fertility trends. Demographic shocks tend by nature to be transient; demographic transitions or "revolutions," considerably less so. But this much is clear: to date, no European society that has embarked upon the same demographic transition as Russia's--declining marriage rates with rising divorce; the spread of cohabitation as alternative to marriage; delayed age at marriage and sub-replacement fertility regimens--has reverted to more "traditional" family patterns and higher levels of completed family size. There is no reason to think that in Russia it will be any different.
There are many ramifications of the dramatic decline in population in Russia, but three in particular bear heavily on the country's prospective development and national security.
First, when Western European nations reached the level of 30 percent illegitimate births that Russia has now attained, their levels of per capita output were all dramatically higher--three times higher in France, Austria, and Britain, and higher than that in countries such as Germany, Ireland, and the Netherlands.
This means that Russia's mothers and their children will be afforded far fewer of the social protections that their counterparts could count on in Western Europe's more generous welfare states.
A second and related point pertains to "investment" in children. According to prevailing tenets of Western economic thought, a decline in fertility--to the extent that it occurs under conditions of orderly progress, and as a consequence of parental volition--should mean a better material environment for newborns and children because a shift to smaller desired family size, all else being equal, signifies an increase in parents' expected commitments to each child's education, nutrition, health care, and the like.
Yet in post-Communist Russia, there are unambiguous indications of a worsening of social well-being for a significant proportion of the country's children—in effect, a disinvestment in children in the face of a pronounced downward shift in national fertility patterns.
School enrollment is sharply lower for primary-school-age children--99 percent in 1991 versus 91 percent in 2004. And the number of abandoned children is sharply higher. According to official statistics, as of 2004 over 400,000 Russian children below 18 years of age were in "residential care." This means that roughly 1 child in 70 was in a children's home, orphanage, or state boarding school. Russia is also home to a large and possibly growing contingent of street children whose numbers could well exceed those under institutional care. According to Human Rights Watch, over 100,000 children in Russia have been abandoned by their parents each year since 1996. If accurate, this number, compared to the annual tally of births for the Russian Federation, which averaged about 1.4 million a year for the 1996–2007 period, would suggest that in excess of 7 percent of Russia's children are being discarded by their parents in this new era of steep sub-replacement fertility.
A third implication of the past decade and a half of sharply lower birth levels in Russia will be a drop-off in the country's working-age population, and an acceleration of the tempo of population aging in the period immediately ahead. Barring only a steady and massive in-migration, Russia's potential labor pool will shrink markedly over the coming decade and a half and continue to diminish thereafter.
In addition to its daunting fertility decline, Russia's public health losses today are of a scale akin to what might be expected from a devastating war. Since the end of the Communist era, in fact, "excess mortality" has cost Russia hundreds of thousands of lives every year.
The 1960s and 1970s witnessed an increase in mortality rates for key elements of the Soviet population. But Russia's health patterns did not correct course with the collapse of the USSR, as many experts assumed they would. In fact, in the first decade and a half of its post-Communist history the country's health conditions actually became worse. Life expectancy in the Russian Federation is actually lower today than it was a half century ago in the late 1950s. In fact, the country has pioneered a unique new profile of mass debilitation and foreshortened life previously unknown in all of human history.
Like the urbanized and literate societies in Western Europe, North America, and elsewhere, the overwhelming majority of deaths in Russia today accrue from chronic rather than infectious diseases: heart disease, cancers, strokes, and the like. But in the rest of the developed world, death rates from these chronic diseases are low, relatively stable, and declining regularly over time. In the Russian Federation, by contrast, overall mortality levels are high, manifestly unstable, and rising.
The single clearest and most comprehensible summary measure of a population's mortality prospects is its estimated expectation of life at birth. Russia's trends in the late 1950s and early 1960s were rising briskly. In the five years between 1959 and 1964, for instance, life expectancy increased by more than two years. But then, inexplicably, overall health progress in Russia came to a sudden and spectacular halt. Over that 18-year period that roughly coincides with the Brezhnev era, Russia's life expectancy not only stagnated, but actually fell by about a year and a half.
These losses were recovered during the Gorbachev period, but even at its pinnacle in 1986 and 1987, overall life expectancy for Russia was only marginally higher than it had been in 1964, never actually managing to cross the symbolic 70-year threshold. With the end of Communism, moreover, life expectancy went into erratic decline, plummeting a frightful four years between 1992 and 1994, recovering somewhat through 1998, but then again spiraling downward. In 2006--the most recent year for which we have such data--overall Russian life expectancy at birth was over three years lower than it had been in 1964.
The situation for Russian males has been particularly woeful. In the immediate postwar era, life expectancy for men was somewhat lower than in other developed countries--but this differential might partly be attributed to the special hardships of World War II and the evils of Stalinism. By the early 1960s, the male life expectancy gap between Russia and the more developed regions narrowed somewhat--but then life expectancy for Russian men entered into a prolonged and agonizing decline, while continued improvements characterized most of the rest of the world. By 2005, male life expectancy at birth was fully fifteen years lower in the Russian Federation than in Western Europe. It was also five years below the global average for male life expectancy, and three years below the average for the less developed regions (whose levels it had exceeded, in the early 1950s, by fully two decades). Put another way, male life expectancy in 2006 was about two and a half years lower under Putin than it had been in 1959, under Khrushchev.
According to the U.S. Census Bureau International Data Base for 2007, Russia ranked 164 out of 226 globally in overall life expectancy. Russia is below Bolivia, South America's poorest (and least healthy) country and lower than Iraq and India, but somewhat higher than Pakistan. For females, the Russian Federation life expectancy will not be as high as in Nicaragua, Morocco, or Egypt. For males, it will be in the same league as that of Cambodia, Ghana, and Eritrea.
In the face of today's exceptionally elevated mortality levels for Russia's young adults, it is no wonder that an unspecified proportion of the country's would-be mothers and fathers respond by opting for fewer offspring than they would otherwise desire. To a degree not generally appreciated, Russia's current fertility crisis is a consequence of its mortality crisis.
How did Russia's mortality level, which was nearly 38 percent higher than Western Europe's in 1980, skyrocket to an astonishing 135 percent higher in 2006? What role did communicable and infectious disease play in this fateful health regression and mortality deterioration?
By any reading, the situation in Russia today sounds awful. The Russian Federation is afflicted with a serious HIV/AIDS epidemic; according to UNAIDS, as of 2008 somewhere around 1 million Russians were living with the virus. (Russia's HIV nexus appears to be closely associated with a burgeoning phenomenon of local drug use, with sex trafficking and other forms of prostitution or "commercial sex," and with other practices and mores relating to extramarital sex.) Russia also faces a related and evidently growing burden of tuberculosis. As of 2008, according to World Health Organization estimates, Russia was experiencing about 150,000 new TB infections a year. To make matters worse, almost half of Russia's treated tubercular cases over the past decade have been the variant known as extreme drug-resistant tuberculosis (XDR-TB).
Yet, dismaying as these statistics are, the picture looks even worse when we consider cardiovascular disease (CVD) mortality trends.
By the late 1960s, the epidemic upsurge of CVD mortality in Western industrial societies that immediately followed World War II had peaked. From the mid-1970s onward, age-standardized death rates from diseases of the circulatory system steadily declined in Western Europe. In Russia, by stark contrast, CVD mortality in 1980 was well over 50 percent higher than it had been in "old" EU states as of 1970, and the Russian population may well have been suffering the very highest incidence of mortality from diseases of the circulatory system that had ever been visited on a national population in the entire course of human history.
Over the subsequent decades, unfortunately, the level of CVD mortality in the Russian Federation veered even further upward. By 2006, Russia's CVD mortality rate, standardizing for population structure, was an almost unbelievable 3.8 times higher than the population-weighted level reported for Western Europe.
Scarcely less alarming was Russia's mortality rate from "external causes"--non-communicable deaths from injuries of various origins. The tale here is broadly similar to the story of CVD: impossibly high levels of death in a society that otherwise does not exhibit signs of backwardness.
In Western Europe, age-standardized mortality from injury and poisoning, as tabulated by the World Health Organization, fell by almost half between 1970 and 2006. In Russia, on the other hand, deaths from injuries and poisoning, which had been 2.5 times higher than in Western Europe in 1980, were up to 5.3 times higher as of 2006.
A broadly negative relationship was evident between mortality from injuries and per capita income. In other Western countries in 2002, an increase of 10 percent in per capita GDP was associated with a drop of about 2 points in injury deaths per 100,000 population. Yet Russia's toll of deaths is nearly three times higher than would be predicted by its GDP. No literate and urban society in the modern world faces a risk of deaths from injuries comparable to the one that Russia experiences.
Russia's patterns of death from injury and violence (by whatever provenance) are so extreme and brutal that they invite comparison only with the most tormented spots on the face of the planet today. The five places estimated to be roughly in the same league as Russia as of 2002 were Angola, Burundi, Congo, Liberia, and Sierra Leone. To go by its level of mortality injury alone, Russia looks not like an emerging middle-income market economy at peace, but rather like an impoverished sub-Saharan conflict or post-conflict society.
Taken together, then, deaths from cardiovascular disease and from injuries and poisoning have evidently been the main drivers of modern Russia's strange upsurge in premature mortality and its broad, prolonged retrogression in public health conditions. One final factor that is intimately associated with both of these causes of mortality is alcohol abuse.
Unlike drinking patterns prevalent in, say, Mediterranean regions--where wine is regarded as an elixir for enhancing conversation over meals and other social gatherings, and where public drunkenness carries an embarrassing stigma--mind-numbing, stupefying binge drinking of hard spirits is an accepted norm in Russia and greatly increases the danger of fatal injury through falls, traffic accidents, violent confrontations, homicide, suicide, and so on. Further, extreme binge drinking (especially of hard spirits) is associated with stress on the cardiovascular system and heightened risk of CVD mortality.
How many Russians are actually drinkers, and how heavily do they actually drink? Officially, Russia classifies some 7 million out of roughly 120 million persons over 15 years of age, or roughly 6 percent of its adult population, as heavy drinkers. But the numbers are surely higher than this. According to data compiled by the World Health Organization, as of 2003 Russia was Europe's heaviest per capita spirits consumer; its reported hard liquor consumption was over four times as high as Portugal's, three times that of Germany or Spain, and over two and a half times higher than that of France.
Yet even these numbers may substantially understate hard spirit use in Russia, since the WHO figures follow only the retail sale of hard liquor. But samogon--home-brew, or "moonshine"--is, according to some Russian researchers, a huge component of the country's overall intake. Professor Alexander Nemstov, perhaps Russia's leading specialist in this area, argues that Russia's adult population--women as well as men--puts down the equivalent of a bottle of vodka per week.
From the epidemiological standpoint, local-level studies have offered fairly chilling proof that alcohol is a direct factor in premature mortality. One forensic investigation of blood alcohol content by a medical examiner's office in a city in the Urals, for example, indicated that over 40 percent of the younger male decedents evaluated had probably been alcohol-impaired or severely intoxicated at the time of death--including one quarter of the deaths from heart disease and over half of those from accidents or injuries. But medical and epidemiological studies have also demonstrated that, in addition to its many deaths from consumption of ordinary alcohol, Russia also suffers a grisly toll from alcohol poisoning, as the country's drinkers, in their desperate quest for intoxication, down not only sometimes severely impure samogon, but also perfumes, alcohol-based medicines, cleaning solutions, and other deadly liquids. Death rates from such alcohol poisoning appear to be at least one hundred times higher in Russia than the United States--this despite the fact that the retail price in Russia today is lower for a liter of vodka than a liter of milk.
Josef Stalin is said to have coldly joked that one death was a tragedy, while one million deaths was just a statistic. This comment seems to apply to post-Communist Russia as well to Stalin's own deranged regime. For the better part of a generation, Russia has suffered something akin to wartime population losses during year after year of peacetime political order. In the United Nations Development Program's annually tabulated "Human Development Index," which uses health as well as economic data to measure a country's living standards as they affect quality of life, Russia was number 73 out of 179. A country of virtually universal literacy and quite respectable general educational attainment, with a scientific cadre that mastered nuclear fission over half a century ago and launches orbital spacecraft and interplanetary probes today, finds itself ranked on this metric between Mauritius and Ecuador.
In the modern era, population decline itself need not be a cause for acute economic alarm. Italy, Germany, and Japan are among the societies where signs of incipient population decline are being registered nowadays: all of these are affluent countries, and all can anticipate continuing improvements in their respective levels of prosperity (albeit at a slower tempo than some might prefer). Depopulation with Russian characteristics--population decline powered by an explosive upsurge of illness and mortality--is altogether more forbidding in its economic implications, not only forcing down popular well-being today, but also placing unforgiving constraints on economic productivity and growth for tomorrow.
As we have already seen, it is Russia's death crisis that accounts for the entirety of the country's population decline over the past decade and a half. The upsurge of illness and mortality, furthermore, has been disproportionately concentrated among men and women of working age--meaning that Russia's labor force has been shrinking more rapidly than the population overall.
Health is a critical and central element in the complex quantity that economists have termed "human capital." In the contemporary international economy, one additional year of life expectancy at birth is associated with an increase in per capita output of about 8 percent. A decade of lost life expectancy improvement would correspond to the loss of a doubling of per capita income. By this standard, Russia's economic as well as its demographic future is in jeopardy.
It is not obvious that Russia will be able to recover rapidly from its health katastroika. There is an enormous amount of "negative health momentum" in the Russian situation today: with younger brothers facing worse survival prospects than older brothers, older brothers facing worse survival prospects than their fathers, and so on. Severely foreshortened adult life spans can shift the cost-benefit calculus for investments in training and higher education dramatically. On today's mortality patterns, a Swiss man at 20 has about an 87 percent chance of making it to a notional retirement age of 65. His Russian counterpart at age 20 has less than even odds of reaching 65. Harsh excess mortality levels impose real and powerful disincentives for the mass acquisition of the technical skills that are a key to wealth generation in the modern world. Thus Russia's health crisis may be even more generally subversive of human capital, and more powerfully corrosive of human resources, than might appear to be the case at first glance.
Putin's Kremlin made a fateful bet that natural resources--oil, gas, and other extractive saleable commodities--would be the springboard for the restoration of Moscow's influence as a great power on the world stage. In this gamble, Russian authorities have mainly ignored the nation's human resource crisis. During the boom years--Russia's per capita income roughly doubled between 1998 and 2007--the country's death rate barely budged. Very much worse may lie ahead. How Russia's still-unfolding demographic disaster will affect the country's domestic political situation--and its international security posture--are questions that remain to be answered.
Nicholas Eberstadt is the Henry Wendt Scholar in Political Economy at AEI.
AEI, Thursday, April 2, 2009
Since the fall of the Soviet Union, Russia has suffered a rapid and tragic decline in population. For a modern and so-called "emerging" economy, this is more than a human crisis; it is a human resources crisis.
A specter is haunting Russia today. It is not the specter of Communism--that ghost has been chained in the attic of the past--but rather of depopulation--a relentless, unremitting, and perhaps unstoppable depopulation. The mass deaths associated with the Communist era may be history, but another sort of mass death may have only just begun, as Russians practice what amounts to an ethnic self-cleansing.
Since 1992, Russia's human numbers have been progressively dwindling. This slow motion process now taking place in the country carries with it grim and potentially disastrous implications that threaten to recast the contours of life and society in Russia, to diminish the prospects for Russian economic development, and to affect Russia's potential influence on the world stage in the years ahead.
Russia has faced this problem at other times during the last century. The first bout of depopulation lasted from 1917 to 1923, and was caused by the upheavals that transformed the Russian Empire into the Soviet Union. The next drop took place between 1933 and 1934, when the country's population fell by nearly 2 million--or almost 2 percent--as a result of Stalin's war against the "kulaks" in his forced collectivization of Soviet agriculture. And then, between 1941 and 1946, Russia's population plummeted by more than 13 million through the cataclysms and catastrophes of World War II.
The current Russian depopulation--which began in 1992 and shows no signs of abating--was, like the previous episodes, also precipitated by events of momentous political significance: the final dissolution of the Soviet Union and the end of Communist Party rule. But it differs in three important respects. First, it is by far the longest period of population decline in modern Russian history, having persisted for over twice as long as the decline that followed the Bolshevik Revolution, and well over three times as long as the terrifying depopulation Russia experienced during and immediately after World War II.
Second, unlike all the previous depopulations in Russia, this one has been taking place under what are, within the Russian context, basically orderly social and political circumstances. Terror and war are not the engines for the depopulation Russia is experiencing today, as they have been in the past.
And finally, whereas Russia's previous depopulations resulted from wild and terrible social paroxysms, they were also clearly temporary in nature. The current crisis, on the other hand, is proceeding gradually and routinely, and thus it is impossible to predict when, or whether, it will finally come to an end.
A comparison dramatizes what is happening in Russia. Between 1976 and 1991, the last sixteen years of Soviet power, the country recorded 36 million births. In the sixteen post-Communist years of 1992–2007, there were just 22.3 million, a drop in childbearing of nearly 40 percent from one era to the next. On the other side of the life cycle, a total of 24.6 million deaths were recorded between 1976 and 1991, while in the first sixteen years of the post-Communist period the Russian Federation tallied 34.7 million deaths, a rise of just over 40 percent. The symmetry is striking: in the last sixteen years of the Communist era, births exceeded deaths in Russia by 11.4 million; in the first sixteen years of the post-Soviet era, deaths exceeded births by 12.4 million.
The Russian Federation is by no means the only country to have registered population decline during the past two decades. In fact, 11 of the 19 countries making up Western Europe reported some annual population declines during the Cold War era. On the whole, however, these population dips tended to be brief and slight in magnitude. (Italy's "depopulation," for example, was limited to just one year--1986--and entailed a decline of fewer than 4,000 persons.) Moreover, the population declines in these cases were primarily a consequence of migration trends: either emigration abroad in search of opportunity (Ireland, Portugal), or release of foreign "guest workers" during recessions or cyclical downturns in the domestic economy (most of the rest). Only in a few Western European countries (Austria, Denmark, Germany, the United Kingdom) did negative natural increase ever feature as a contributing factor in a year-on-year population decline. In all but Germany, such bouts of negative natural increase proved to be temporary and relatively muffled.
So where, given these daunting facts, is the Russian Federation headed demographically in the years and decades ahead? Two of the world's leading demographic institutions--the United Nations Population Division (UNPD) and the U.S. Bureau of the Census--have tried to answer this question by a series of projections based upon what their analysts believe to be plausible assumptions about Russia's future fertility, mortality, and migration patterns.
Both organizations' projections trace a continuing downward course for the Russian Federation's population over the generation ahead. As of mid-year 2005, Russia's estimated population was around 143 million. UNPD projections for the year 2025 range from a high of about 136 million to a low of about 121 million; for the year 2030, they range from 133 million to 115 million. The Census Bureau's projections for the Russian Federation's population in 2025 and 2030 are 128 million and 124 million, respectively.
If these projections turn out to be relatively accurate--admittedly, a big "if" for any long-range demographic projection--the Russian Federation will have experienced over thirty years of continuous demographic decline by 2025, and the better part of four decades of depopulation by 2030. Russia's population would then have dropped by about 20 million between 1990 and 2025, and Russia would have fallen from the world's sixth to the twelfth most populous country. In relative terms, that would amount to almost as dramatic a demographic drop as the one Russia suffered during World War II. In absolute terms, it would actually be somewhat greater in magnitude.
Strikingly, and perhaps paradoxically, Moscow's leadership is advancing into this uncertain terrain not only with insouciance but with highly ambitious goals. In late 2007, for example, the Kremlin outlined the objective of achieving and maintaining an average annual pace of economic growth in the decades ahead on the order of nearly 7 percent a year: on this path, according to Russian officials, GDP will quadruple in the next two decades, and the Russian Federation will emerge as the world's fifth largest economy by 2020.
But history offers no examples of a society that has demonstrated sustained material advance in the face of long-term population decline. It seems highly unlikely that such an ambitious agenda can be achieved in the face of Russia's current demographic crisis. Sooner or later, Russian leadership will have to acknowledge that these daunting long-term developments are shrinking their country's social and political potential.
Marxist theory famously envisioned the "withering away" of the state upon the full attainment of Communism. That utopia never arrived in the USSR (or anywhere else for that matter). But with the collapse of Soviet rule, Russia has seen a pervasive and profound change in childbearing patterns and living arrangements--what might be described as a "withering away" of the family itself.
In the postwar Soviet era, Russia's so-called "total fertility rate" (TFR), which calculates the number of births a typical woman would be expected to have during childbearing years, exceeded 2.0--and in the early years of the Gorbachev era, Russia's total fertility rate temporarily exceeded 2.2. After 1989, though, it fell far below 2.0 with no signs as yet of any recovery. Russia's post-Communist TFR hit its low--perhaps we should say its low to date--in 1999, when it was 1.17. By 2005, the total fertility rate in the Russian Federation was up to about 1.3--but this still represented a collapse of about two-fifths from the peak level in the Gorbachev years.
In the late 1980s, near the end of the Communist era, there were just a handful of European countries (most of them under Communist rule) with higher fertility rates than Russia's. By 2005, the last year for which authoritative data is available, there were only a few European societies (perhaps ironically, most of them ex-Communist) with lower rates.
What accounts for the Russian Federation's low levels of fertility? Some observers point to poor health conditions. And indeed, as we will see, Russia's overall health situation today is truly woeful. This is especially true of its reproductive health.
A consortium headed by the World Health Organization estimated that for 2005 a woman's risk of death in childbirth in Russia was over six times higher than in Germany or Switzerland. Moreover, mortality levels for women in their twenties (the decade in which childbearing is concentrated in contemporary Russia) have been rising, not falling, in recent decades.
But Russia's low fertility patterns are not due to any extraordinary inability of Russian women to conceive, but rather to the strong and growing tendency among childbearing women to have no more than two children--and perhaps increasingly not more than one. The new evident limits on family size in Russia, in turn, suggest a sea change in the country's norms concerning family formation.
In 1980, fewer than one Russian newborn in nine was reportedly born out of wedlock. By 2005, the country's illegitimacy ratio was approaching 30 percent--almost a tripling in just twenty years. Marriage is not only less common in Russia today than in the recent past; it is also markedly less stable. In 2005, the total number of marriages celebrated in Russia was down by nearly one-fourth from 1980 (a fairly typical Brezhnev-period year for marriages). On the other hand, the total number of divorces recognized in Russia has been on an erratic rise over the past generation, from under 400 divorces per 1,000 marriages in 1980 to a peak of over 800 in 2002.
In 1990, the end of the Gorbachev era, marriage was still the norm, and while divorce was very common, a distinct majority of Russian Federation women (60 percent) could expect to have entered into a first marriage and still remain in that marriage by age 50. A few years later, in 1996, the picture was already radically different: barely a third of Russia's women (34 percent) were getting married and staying in that same marriage until age 50.
Since the end of the Soviet era, young women in Russia are opting for cohabitation before and, to a striking extent, instead of marriage. In the early 1980s, about 15 percent of women had been in consensual unions by age 25; twenty years later, the proportion was 45 percent. Many fewer of those once-cohabiting young women, moreover, seem to be moving into marital unions nowadays. Whereas roughly a generation earlier, fully half of cohabiters were married within a year, today less than a third are.
Is Russia's post-Communist plunge in births the consequence of a "demographic shock," or the result of what some Russian experts call a "quiet revolution" in patterns of family formation? At the moment, it is possible to see elements of both in the Russian Federation's unfolding fertility trends. Demographic shocks tend by nature to be transient; demographic transitions or "revolutions," considerably less so. But this much is clear: to date, no European society that has embarked upon the same demographic transition as Russia's--declining marriage rates with rising divorce; the spread of cohabitation as alternative to marriage; delayed age at marriage and sub-replacement fertility regimens--has reverted to more "traditional" family patterns and higher levels of completed family size. There is no reason to think that in Russia it will be any different.
There are many ramifications of the dramatic decline in population in Russia, but three in particular bear heavily on the country's prospective development and national security.
First, when Western European nations reached the level of 30 percent illegitimate births that Russia has now attained, their levels of per capita output were all dramatically higher--three times higher in France, Austria, and Britain, and higher than that in countries such as Germany, Ireland, and the Netherlands.
This means that Russia's mothers and their children will be afforded far fewer of the social protections that their counterparts could count on in Western Europe's more generous welfare states.
A second and related point pertains to "investment" in children. According to prevailing tenets of Western economic thought, a decline in fertility--to the extent that it occurs under conditions of orderly progress, and as a consequence of parental volition--should mean a better material environment for newborns and children because a shift to smaller desired family size, all else being equal, signifies an increase in parents' expected commitments to each child's education, nutrition, health care, and the like.
Yet in post-Communist Russia, there are unambiguous indications of a worsening of social well-being for a significant proportion of the country's children—in effect, a disinvestment in children in the face of a pronounced downward shift in national fertility patterns.
School enrollment is sharply lower for primary-school-age children--99 percent in 1991 versus 91 percent in 2004. And the number of abandoned children is sharply higher. According to official statistics, as of 2004 over 400,000 Russian children below 18 years of age were in "residential care." This means that roughly 1 child in 70 was in a children's home, orphanage, or state boarding school. Russia is also home to a large and possibly growing contingent of street children whose numbers could well exceed those under institutional care. According to Human Rights Watch, over 100,000 children in Russia have been abandoned by their parents each year since 1996. If accurate, this number, compared to the annual tally of births for the Russian Federation, which averaged about 1.4 million a year for the 1996–2007 period, would suggest that in excess of 7 percent of Russia's children are being discarded by their parents in this new era of steep sub-replacement fertility.
A third implication of the past decade and a half of sharply lower birth levels in Russia will be a drop-off in the country's working-age population, and an acceleration of the tempo of population aging in the period immediately ahead. Barring only a steady and massive in-migration, Russia's potential labor pool will shrink markedly over the coming decade and a half and continue to diminish thereafter.
In addition to its daunting fertility decline, Russia's public health losses today are of a scale akin to what might be expected from a devastating war. Since the end of the Communist era, in fact, "excess mortality" has cost Russia hundreds of thousands of lives every year.
The 1960s and 1970s witnessed an increase in mortality rates for key elements of the Soviet population. But Russia's health patterns did not correct course with the collapse of the USSR, as many experts assumed they would. In fact, in the first decade and a half of its post-Communist history the country's health conditions actually became worse. Life expectancy in the Russian Federation is actually lower today than it was a half century ago in the late 1950s. In fact, the country has pioneered a unique new profile of mass debilitation and foreshortened life previously unknown in all of human history.
Like the urbanized and literate societies in Western Europe, North America, and elsewhere, the overwhelming majority of deaths in Russia today accrue from chronic rather than infectious diseases: heart disease, cancers, strokes, and the like. But in the rest of the developed world, death rates from these chronic diseases are low, relatively stable, and declining regularly over time. In the Russian Federation, by contrast, overall mortality levels are high, manifestly unstable, and rising.
The single clearest and most comprehensible summary measure of a population's mortality prospects is its estimated expectation of life at birth. Russia's trends in the late 1950s and early 1960s were rising briskly. In the five years between 1959 and 1964, for instance, life expectancy increased by more than two years. But then, inexplicably, overall health progress in Russia came to a sudden and spectacular halt. Over that 18-year period that roughly coincides with the Brezhnev era, Russia's life expectancy not only stagnated, but actually fell by about a year and a half.
These losses were recovered during the Gorbachev period, but even at its pinnacle in 1986 and 1987, overall life expectancy for Russia was only marginally higher than it had been in 1964, never actually managing to cross the symbolic 70-year threshold. With the end of Communism, moreover, life expectancy went into erratic decline, plummeting a frightful four years between 1992 and 1994, recovering somewhat through 1998, but then again spiraling downward. In 2006--the most recent year for which we have such data--overall Russian life expectancy at birth was over three years lower than it had been in 1964.
The situation for Russian males has been particularly woeful. In the immediate postwar era, life expectancy for men was somewhat lower than in other developed countries--but this differential might partly be attributed to the special hardships of World War II and the evils of Stalinism. By the early 1960s, the male life expectancy gap between Russia and the more developed regions narrowed somewhat--but then life expectancy for Russian men entered into a prolonged and agonizing decline, while continued improvements characterized most of the rest of the world. By 2005, male life expectancy at birth was fully fifteen years lower in the Russian Federation than in Western Europe. It was also five years below the global average for male life expectancy, and three years below the average for the less developed regions (whose levels it had exceeded, in the early 1950s, by fully two decades). Put another way, male life expectancy in 2006 was about two and a half years lower under Putin than it had been in 1959, under Khrushchev.
According to the U.S. Census Bureau International Data Base for 2007, Russia ranked 164 out of 226 globally in overall life expectancy. Russia is below Bolivia, South America's poorest (and least healthy) country and lower than Iraq and India, but somewhat higher than Pakistan. For females, the Russian Federation life expectancy will not be as high as in Nicaragua, Morocco, or Egypt. For males, it will be in the same league as that of Cambodia, Ghana, and Eritrea.
In the face of today's exceptionally elevated mortality levels for Russia's young adults, it is no wonder that an unspecified proportion of the country's would-be mothers and fathers respond by opting for fewer offspring than they would otherwise desire. To a degree not generally appreciated, Russia's current fertility crisis is a consequence of its mortality crisis.
How did Russia's mortality level, which was nearly 38 percent higher than Western Europe's in 1980, skyrocket to an astonishing 135 percent higher in 2006? What role did communicable and infectious disease play in this fateful health regression and mortality deterioration?
By any reading, the situation in Russia today sounds awful. The Russian Federation is afflicted with a serious HIV/AIDS epidemic; according to UNAIDS, as of 2008 somewhere around 1 million Russians were living with the virus. (Russia's HIV nexus appears to be closely associated with a burgeoning phenomenon of local drug use, with sex trafficking and other forms of prostitution or "commercial sex," and with other practices and mores relating to extramarital sex.) Russia also faces a related and evidently growing burden of tuberculosis. As of 2008, according to World Health Organization estimates, Russia was experiencing about 150,000 new TB infections a year. To make matters worse, almost half of Russia's treated tubercular cases over the past decade have been the variant known as extreme drug-resistant tuberculosis (XDR-TB).
Yet, dismaying as these statistics are, the picture looks even worse when we consider cardiovascular disease (CVD) mortality trends.
By the late 1960s, the epidemic upsurge of CVD mortality in Western industrial societies that immediately followed World War II had peaked. From the mid-1970s onward, age-standardized death rates from diseases of the circulatory system steadily declined in Western Europe. In Russia, by stark contrast, CVD mortality in 1980 was well over 50 percent higher than it had been in "old" EU states as of 1970, and the Russian population may well have been suffering the very highest incidence of mortality from diseases of the circulatory system that had ever been visited on a national population in the entire course of human history.
Over the subsequent decades, unfortunately, the level of CVD mortality in the Russian Federation veered even further upward. By 2006, Russia's CVD mortality rate, standardizing for population structure, was an almost unbelievable 3.8 times higher than the population-weighted level reported for Western Europe.
Scarcely less alarming was Russia's mortality rate from "external causes"--non-communicable deaths from injuries of various origins. The tale here is broadly similar to the story of CVD: impossibly high levels of death in a society that otherwise does not exhibit signs of backwardness.
In Western Europe, age-standardized mortality from injury and poisoning, as tabulated by the World Health Organization, fell by almost half between 1970 and 2006. In Russia, on the other hand, deaths from injuries and poisoning, which had been 2.5 times higher than in Western Europe in 1980, were up to 5.3 times higher as of 2006.
A broadly negative relationship was evident between mortality from injuries and per capita income. In other Western countries in 2002, an increase of 10 percent in per capita GDP was associated with a drop of about 2 points in injury deaths per 100,000 population. Yet Russia's toll of deaths is nearly three times higher than would be predicted by its GDP. No literate and urban society in the modern world faces a risk of deaths from injuries comparable to the one that Russia experiences.
Russia's patterns of death from injury and violence (by whatever provenance) are so extreme and brutal that they invite comparison only with the most tormented spots on the face of the planet today. The five places estimated to be roughly in the same league as Russia as of 2002 were Angola, Burundi, Congo, Liberia, and Sierra Leone. To go by its level of mortality injury alone, Russia looks not like an emerging middle-income market economy at peace, but rather like an impoverished sub-Saharan conflict or post-conflict society.
Taken together, then, deaths from cardiovascular disease and from injuries and poisoning have evidently been the main drivers of modern Russia's strange upsurge in premature mortality and its broad, prolonged retrogression in public health conditions. One final factor that is intimately associated with both of these causes of mortality is alcohol abuse.
Unlike drinking patterns prevalent in, say, Mediterranean regions--where wine is regarded as an elixir for enhancing conversation over meals and other social gatherings, and where public drunkenness carries an embarrassing stigma--mind-numbing, stupefying binge drinking of hard spirits is an accepted norm in Russia and greatly increases the danger of fatal injury through falls, traffic accidents, violent confrontations, homicide, suicide, and so on. Further, extreme binge drinking (especially of hard spirits) is associated with stress on the cardiovascular system and heightened risk of CVD mortality.
How many Russians are actually drinkers, and how heavily do they actually drink? Officially, Russia classifies some 7 million out of roughly 120 million persons over 15 years of age, or roughly 6 percent of its adult population, as heavy drinkers. But the numbers are surely higher than this. According to data compiled by the World Health Organization, as of 2003 Russia was Europe's heaviest per capita spirits consumer; its reported hard liquor consumption was over four times as high as Portugal's, three times that of Germany or Spain, and over two and a half times higher than that of France.
Yet even these numbers may substantially understate hard spirit use in Russia, since the WHO figures follow only the retail sale of hard liquor. But samogon--home-brew, or "moonshine"--is, according to some Russian researchers, a huge component of the country's overall intake. Professor Alexander Nemstov, perhaps Russia's leading specialist in this area, argues that Russia's adult population--women as well as men--puts down the equivalent of a bottle of vodka per week.
From the epidemiological standpoint, local-level studies have offered fairly chilling proof that alcohol is a direct factor in premature mortality. One forensic investigation of blood alcohol content by a medical examiner's office in a city in the Urals, for example, indicated that over 40 percent of the younger male decedents evaluated had probably been alcohol-impaired or severely intoxicated at the time of death--including one quarter of the deaths from heart disease and over half of those from accidents or injuries. But medical and epidemiological studies have also demonstrated that, in addition to its many deaths from consumption of ordinary alcohol, Russia also suffers a grisly toll from alcohol poisoning, as the country's drinkers, in their desperate quest for intoxication, down not only sometimes severely impure samogon, but also perfumes, alcohol-based medicines, cleaning solutions, and other deadly liquids. Death rates from such alcohol poisoning appear to be at least one hundred times higher in Russia than the United States--this despite the fact that the retail price in Russia today is lower for a liter of vodka than a liter of milk.
Josef Stalin is said to have coldly joked that one death was a tragedy, while one million deaths was just a statistic. This comment seems to apply to post-Communist Russia as well to Stalin's own deranged regime. For the better part of a generation, Russia has suffered something akin to wartime population losses during year after year of peacetime political order. In the United Nations Development Program's annually tabulated "Human Development Index," which uses health as well as economic data to measure a country's living standards as they affect quality of life, Russia was number 73 out of 179. A country of virtually universal literacy and quite respectable general educational attainment, with a scientific cadre that mastered nuclear fission over half a century ago and launches orbital spacecraft and interplanetary probes today, finds itself ranked on this metric between Mauritius and Ecuador.
In the modern era, population decline itself need not be a cause for acute economic alarm. Italy, Germany, and Japan are among the societies where signs of incipient population decline are being registered nowadays: all of these are affluent countries, and all can anticipate continuing improvements in their respective levels of prosperity (albeit at a slower tempo than some might prefer). Depopulation with Russian characteristics--population decline powered by an explosive upsurge of illness and mortality--is altogether more forbidding in its economic implications, not only forcing down popular well-being today, but also placing unforgiving constraints on economic productivity and growth for tomorrow.
As we have already seen, it is Russia's death crisis that accounts for the entirety of the country's population decline over the past decade and a half. The upsurge of illness and mortality, furthermore, has been disproportionately concentrated among men and women of working age--meaning that Russia's labor force has been shrinking more rapidly than the population overall.
Health is a critical and central element in the complex quantity that economists have termed "human capital." In the contemporary international economy, one additional year of life expectancy at birth is associated with an increase in per capita output of about 8 percent. A decade of lost life expectancy improvement would correspond to the loss of a doubling of per capita income. By this standard, Russia's economic as well as its demographic future is in jeopardy.
It is not obvious that Russia will be able to recover rapidly from its health katastroika. There is an enormous amount of "negative health momentum" in the Russian situation today: with younger brothers facing worse survival prospects than older brothers, older brothers facing worse survival prospects than their fathers, and so on. Severely foreshortened adult life spans can shift the cost-benefit calculus for investments in training and higher education dramatically. On today's mortality patterns, a Swiss man at 20 has about an 87 percent chance of making it to a notional retirement age of 65. His Russian counterpart at age 20 has less than even odds of reaching 65. Harsh excess mortality levels impose real and powerful disincentives for the mass acquisition of the technical skills that are a key to wealth generation in the modern world. Thus Russia's health crisis may be even more generally subversive of human capital, and more powerfully corrosive of human resources, than might appear to be the case at first glance.
Putin's Kremlin made a fateful bet that natural resources--oil, gas, and other extractive saleable commodities--would be the springboard for the restoration of Moscow's influence as a great power on the world stage. In this gamble, Russian authorities have mainly ignored the nation's human resource crisis. During the boom years--Russia's per capita income roughly doubled between 1998 and 2007--the country's death rate barely budged. Very much worse may lie ahead. How Russia's still-unfolding demographic disaster will affect the country's domestic political situation--and its international security posture--are questions that remain to be answered.
Nicholas Eberstadt is the Henry Wendt Scholar in Political Economy at AEI.
Thursday, April 2, 2009
U.S. Gives $9.3 Million to Help Displaced Pakistanis
U.S. Gives $9.3 Million to Help Displaced Pakistanis
Bureau of Public Affairs, Office of the Spokesman
Washington, DC, April 2, 2009
The United States government is pleased to announce a new contribution of $9.3 million to help Pakistanis displaced by conflict in their country. The money will support emergency operations in Pakistan managed by the United Nations High Commissioner for Refugees (UNHCR) and the International Committee of the Red Cross (ICRC). With this contribution, the U.S. government has contributed $14.6 million to relief efforts for displaced Pakistanis since October 1, 2008.
Counter-insurgency operations by the Pakistani armed forces and ongoing extremist violence in Pakistan's Northwest Frontier Province and Federally Administered Tribal Areas have resulted in the displacement of approximately 550,000 persons since August 2008, with the continued displacement of an estimated 100 additional families per day. An additional 20,000 Pakistanis have sought refuge in Afghanistan.
UNHCR will use the U.S. contribution to house refugees and internally displaced persons (IDPs) with host families, to establish and manage IDP camps, and to take care of the most vulnerable displaced people (women, children, the disabled, and the elderly). The contribution to ICRC will provide clean water, medical care and housing for the displaced. The Pakistan Red Crescent will receive money to expand its programs to train doctors and nurses, and to rehabilitate disabled veterans.
The United States encourages other donors to respond to the United Nations and the ICRC’s emergency appeals with substantial contributions of their own.
PRN: 2009/284
Bureau of Public Affairs, Office of the Spokesman
Washington, DC, April 2, 2009
The United States government is pleased to announce a new contribution of $9.3 million to help Pakistanis displaced by conflict in their country. The money will support emergency operations in Pakistan managed by the United Nations High Commissioner for Refugees (UNHCR) and the International Committee of the Red Cross (ICRC). With this contribution, the U.S. government has contributed $14.6 million to relief efforts for displaced Pakistanis since October 1, 2008.
Counter-insurgency operations by the Pakistani armed forces and ongoing extremist violence in Pakistan's Northwest Frontier Province and Federally Administered Tribal Areas have resulted in the displacement of approximately 550,000 persons since August 2008, with the continued displacement of an estimated 100 additional families per day. An additional 20,000 Pakistanis have sought refuge in Afghanistan.
UNHCR will use the U.S. contribution to house refugees and internally displaced persons (IDPs) with host families, to establish and manage IDP camps, and to take care of the most vulnerable displaced people (women, children, the disabled, and the elderly). The contribution to ICRC will provide clean water, medical care and housing for the displaced. The Pakistan Red Crescent will receive money to expand its programs to train doctors and nurses, and to rehabilitate disabled veterans.
The United States encourages other donors to respond to the United Nations and the ICRC’s emergency appeals with substantial contributions of their own.
PRN: 2009/284
Conservative about Dahlia Lithwick on Harold Koh
More on Dahlia Lithwick on Harold Koh. By Ed Whelan
Bench Memos/NRO, Thursday, April 02, 2009
A follow-up to my post agreeing with Dahlia Lithwick that those of us who are alarmed by State Department nominee Harold Koh should not base our case against Koh on a remark that Koh allegedly made about the possible application of sharia law in cases in U.S. courts:
Let me briefly discuss just a couple of the many things that Lithwick gets wrong in her essay. (I’ll leave aside Lithwick’s ongoing effort, which Jonathan Adler has aptly remarked on before, to reposition herself from her previous role as a perpetrator of the “vicious slash-and-burn character attack” to her new role as a hypersensitive bemoaner of any criticism of nominees.)
Lithwick contends:
The underlying legal charge from the right is that Koh is a "transnationalist" who seeks to subjugate all of America to elite international courts. We've heard these claims from conservative critics before. They amount to just this: The mere acknowledgment that a body of law exists outside the United States is tantamount to claiming that America is enslaved to that law. The recognition that international law even exists somehow transforms the U.S. Supreme Court into a sort of intermediate court of appeals that must answer to the Dreaded Court of Elitist European Preferences.
Set aside Lithwick’s apparent insinuation that “transnationalist” is an epithet invented by conservatives to stigmatize folks like Koh, when in fact Koh himself, as author of articles like “Transnational Public Law Litigation” and “Why Transnational Law Matters,” has championed the label. As she often does, Lithwick, rather than accurately presenting and engaging opposing arguments, proceeds with argument by wild distortion. The italicized passages are an absurd misrepresentation of conservative critiques of Koh. (See, for example, my post here and John Fonte’s post. And for conservative critiques of transnationalism generally, see the article by John Fonte linked to in his post and John Bolton’s recent Commentary essay, “The Coming War on Sovereignty.”)
Lithwick also asserts:
Harold Koh is not a radical legal figure. He has served with distinction in both Democratic and Republican administrations (under Presidents Clinton and Reagan), and in that capacity he sued both Democratic and Republic [sic] administrations.* He was confirmed unanimously 11 years ago, and yet this time around, he is a threat to American sovereignty.
Here Lithwick resorts to insipid makeshift arguments that she herself would not apply to others. So what that Koh was a junior career lawyer in OLC during the Reagan Administration? Is that evidence that he is not now a radical legal figure? Well, then, I guess that Lithwick has never attacked, and would never attack, Samuel Alito as extreme, since Alito served with distinction as a career prosecutor in the Carter Administration. And how does Koh’s confirmation 11 years ago foreclose examination of what we have learned about him, and about the transnationalist threat, in the meantime? Again, would Lithwick maintain that because, say, Justice Scalia was confirmed unanimously, she couldn’t and wouldn’t oppose his elevation to Chief Justice? Ridiculous.
* I have no idea what the second half of this sentence is supposed to mean. I’ll presume an editing glitch.
Bench Memos/NRO, Thursday, April 02, 2009
A follow-up to my post agreeing with Dahlia Lithwick that those of us who are alarmed by State Department nominee Harold Koh should not base our case against Koh on a remark that Koh allegedly made about the possible application of sharia law in cases in U.S. courts:
Let me briefly discuss just a couple of the many things that Lithwick gets wrong in her essay. (I’ll leave aside Lithwick’s ongoing effort, which Jonathan Adler has aptly remarked on before, to reposition herself from her previous role as a perpetrator of the “vicious slash-and-burn character attack” to her new role as a hypersensitive bemoaner of any criticism of nominees.)
Lithwick contends:
The underlying legal charge from the right is that Koh is a "transnationalist" who seeks to subjugate all of America to elite international courts. We've heard these claims from conservative critics before. They amount to just this: The mere acknowledgment that a body of law exists outside the United States is tantamount to claiming that America is enslaved to that law. The recognition that international law even exists somehow transforms the U.S. Supreme Court into a sort of intermediate court of appeals that must answer to the Dreaded Court of Elitist European Preferences.
Set aside Lithwick’s apparent insinuation that “transnationalist” is an epithet invented by conservatives to stigmatize folks like Koh, when in fact Koh himself, as author of articles like “Transnational Public Law Litigation” and “Why Transnational Law Matters,” has championed the label. As she often does, Lithwick, rather than accurately presenting and engaging opposing arguments, proceeds with argument by wild distortion. The italicized passages are an absurd misrepresentation of conservative critiques of Koh. (See, for example, my post here and John Fonte’s post. And for conservative critiques of transnationalism generally, see the article by John Fonte linked to in his post and John Bolton’s recent Commentary essay, “The Coming War on Sovereignty.”)
Lithwick also asserts:
Harold Koh is not a radical legal figure. He has served with distinction in both Democratic and Republican administrations (under Presidents Clinton and Reagan), and in that capacity he sued both Democratic and Republic [sic] administrations.* He was confirmed unanimously 11 years ago, and yet this time around, he is a threat to American sovereignty.
Here Lithwick resorts to insipid makeshift arguments that she herself would not apply to others. So what that Koh was a junior career lawyer in OLC during the Reagan Administration? Is that evidence that he is not now a radical legal figure? Well, then, I guess that Lithwick has never attacked, and would never attack, Samuel Alito as extreme, since Alito served with distinction as a career prosecutor in the Carter Administration. And how does Koh’s confirmation 11 years ago foreclose examination of what we have learned about him, and about the transnationalist threat, in the meantime? Again, would Lithwick maintain that because, say, Justice Scalia was confirmed unanimously, she couldn’t and wouldn’t oppose his elevation to Chief Justice? Ridiculous.
* I have no idea what the second half of this sentence is supposed to mean. I’ll presume an editing glitch.
Existential Crisis at the G20 Summit
Existential Crisis at the G20 Summit. By Ruth Conniff
The Progressive, April 2, 2009
The global financial crisis has created an existential problem for American capitalism. The theory that deregulation, free markets, and policies that serve the interests of big banks and multinational corporations are best for all of us has never looked so weak. Protesters at the G-20 summit in London are driving home this point.
As the activist group G20 Meltdown puts it: "While two million are now out of work in Britain alone, the G20 ministers still resist nationalizing the banks, instead continuing to pour trillions into the black hole of bankers' bad gambling debts." Various groups, from Save the Children to the Stop Climate Chaos Coalition are pushing to expose the global trade club as the insider group for the wealthy that it is. And they are insisting on democratic policy changes that put needs of people--especially the poor and vulnerable-- ahead of the needs of hedge fund managers and corporations.
Talking openly about class is not as taboo in the rest of the world as it is here in the United States. Americans have been living for decades with what European Marxists like to call "class transference": the idea that the interests of multimillionaire bankers and businessmen are exactly the same as the interests of line workers and school teachers. After all, we all plan to be millionaires one day, right? This mentality allows us to accept the idea that a CEO who presides over the collapse of a major corporation should be "punished” by being pushed out with a $35 million golden parachute, but family-supporting wages and benefits are "fat" that needs to be trimmed so companies can become more competitive and profitable.
Favoring Wall Street at the expense of Main Street is nowhere more obvious than in our government's very different treatment of the banks and GM. Why is it that we see the need to spend tax money to protect bondholders from losing money on risky bets, but massive job loss from the collapse of the auto industry is an acceptable price to pay for GM's poor management?
Why is AIG "too big to fail," but the entire American auto industry is not?
Don't get me wrong. There is no greater example of American hubris than the story of GM. It reads like Shakespearian tragedy--the rise and fall of this giant company that once bragged, "What's good for General Motors is good for America." That our country was still building giant showrooms for Hummers and consumers were blithely trading in 10-mile-per-gallon SUVs for newer models even as war raged in Iraq is incredible. At some point we were going to start paying for this monumental shortsightedness. It turns out that point is now.
But there is a lot that government can do to decide who will suffer the most from the excesses and hubris of unsustainable business practices. Businesses can be counted on to look out for their own interests: to seek higher profits and to push and lobby federal and international government for the best possible deal. But it is government's job to look out for the taxpayers, homeowners, line workers, and school children who are going to bear the brunt of the financial crisis. The more we recognize that our interests as human beings are not the same as the interests of the big companies that want to maximize their profits, the more effective we can be as citizens pushing our government to change its ways.
The Obama Administration needs to be held to account.
As mutual fund manager John Hussman puts it: "Make no mistake - we are selling off our future and the future of our children to prevent the bondholders of U.S. financial corporations from taking losses. We are using public funds to protect the bondholders of some of the most mismanaged companies in the history of capitalism, instead of allowing them to take losses that should have been their own. All our policy makers have done to date has been to squander public funds to protect the full interests of corporate bondholders. Even Bear Stearns' bondholders can expect to get 100% of their money back, thanks to the generosity of Bernanke, Geithner and other bureaucrats eager to hand out the money of ordinary Americans."
Meanwhile, by threatening GM with bankruptcy, the Obama Administration is toying with massive job loss throughout the industrial Midwest. With hundreds of billions already pledged to save the banks, there is neither political nor economic capital left for a massive bailout of the bloated auto industry. Still, human needs--and protecting the homes, health care, retirement funds, and childrens' future of the auto industry's workforce--must come ahead of a toxic asset plan that protects investors against feeling the downside of their risky bets.
The Progressive, April 2, 2009
The global financial crisis has created an existential problem for American capitalism. The theory that deregulation, free markets, and policies that serve the interests of big banks and multinational corporations are best for all of us has never looked so weak. Protesters at the G-20 summit in London are driving home this point.
As the activist group G20 Meltdown puts it: "While two million are now out of work in Britain alone, the G20 ministers still resist nationalizing the banks, instead continuing to pour trillions into the black hole of bankers' bad gambling debts." Various groups, from Save the Children to the Stop Climate Chaos Coalition are pushing to expose the global trade club as the insider group for the wealthy that it is. And they are insisting on democratic policy changes that put needs of people--especially the poor and vulnerable-- ahead of the needs of hedge fund managers and corporations.
Talking openly about class is not as taboo in the rest of the world as it is here in the United States. Americans have been living for decades with what European Marxists like to call "class transference": the idea that the interests of multimillionaire bankers and businessmen are exactly the same as the interests of line workers and school teachers. After all, we all plan to be millionaires one day, right? This mentality allows us to accept the idea that a CEO who presides over the collapse of a major corporation should be "punished” by being pushed out with a $35 million golden parachute, but family-supporting wages and benefits are "fat" that needs to be trimmed so companies can become more competitive and profitable.
Favoring Wall Street at the expense of Main Street is nowhere more obvious than in our government's very different treatment of the banks and GM. Why is it that we see the need to spend tax money to protect bondholders from losing money on risky bets, but massive job loss from the collapse of the auto industry is an acceptable price to pay for GM's poor management?
Why is AIG "too big to fail," but the entire American auto industry is not?
Don't get me wrong. There is no greater example of American hubris than the story of GM. It reads like Shakespearian tragedy--the rise and fall of this giant company that once bragged, "What's good for General Motors is good for America." That our country was still building giant showrooms for Hummers and consumers were blithely trading in 10-mile-per-gallon SUVs for newer models even as war raged in Iraq is incredible. At some point we were going to start paying for this monumental shortsightedness. It turns out that point is now.
But there is a lot that government can do to decide who will suffer the most from the excesses and hubris of unsustainable business practices. Businesses can be counted on to look out for their own interests: to seek higher profits and to push and lobby federal and international government for the best possible deal. But it is government's job to look out for the taxpayers, homeowners, line workers, and school children who are going to bear the brunt of the financial crisis. The more we recognize that our interests as human beings are not the same as the interests of the big companies that want to maximize their profits, the more effective we can be as citizens pushing our government to change its ways.
The Obama Administration needs to be held to account.
As mutual fund manager John Hussman puts it: "Make no mistake - we are selling off our future and the future of our children to prevent the bondholders of U.S. financial corporations from taking losses. We are using public funds to protect the bondholders of some of the most mismanaged companies in the history of capitalism, instead of allowing them to take losses that should have been their own. All our policy makers have done to date has been to squander public funds to protect the full interests of corporate bondholders. Even Bear Stearns' bondholders can expect to get 100% of their money back, thanks to the generosity of Bernanke, Geithner and other bureaucrats eager to hand out the money of ordinary Americans."
Meanwhile, by threatening GM with bankruptcy, the Obama Administration is toying with massive job loss throughout the industrial Midwest. With hundreds of billions already pledged to save the banks, there is neither political nor economic capital left for a massive bailout of the bloated auto industry. Still, human needs--and protecting the homes, health care, retirement funds, and childrens' future of the auto industry's workforce--must come ahead of a toxic asset plan that protects investors against feeling the downside of their risky bets.
Drug Decriminalization in Portugal: Lessons for Creating Fair and Successful Drug Policies
Drug Decriminalization in Portugal: Lessons for Creating Fair and Successful Drug Policies. By Glenn Greenwald
Cato, Apr 2, 2009
On July 1, 2001, a nationwide law in Portugal took effect that decriminalized all drugs, including cocaine and heroin. Under the new legal framework, all drugs were "decriminalized," not "legalized." Thus, drug possession for personal use and drug usage itself are still legally prohibited, but violations of those prohibitions are deemed to be exclusively administrative violations and are removed completely from the criminal realm. Drug trafficking continues to be prosecuted as a criminal offense.
While other states in the European Union have developed various forms of de facto decriminalization — whereby substances perceived to be less serious (such as cannabis) rarely lead to criminal prosecution — Portugal remains the only EU member state with a law explicitly declaring drugs to be "decriminalized." Because more than seven years have now elapsed since enactment of Portugal's decriminalization system, there are ample data enabling its effects to be assessed.
Notably, decriminalization has become increasingly popular in Portugal since 2001. Except for some far-right politicians, very few domestic political factions are agitating for a repeal of the 2001 law. And while there is a widespread perception that bureaucratic changes need to be made to Portugal's decriminalization framework to make it more efficient and effective, there is no real debate about whether drugs should once again be criminalized. More significantly, none of the nightmare scenarios touted by preenactment decriminalization opponents — from rampant increases in drug usage among the young to the transformation of Lisbon into a haven for "drug tourists" — has occurred.
The political consensus in favor of decriminalization is unsurprising in light of the relevant empirical data. Those data indicate that decriminalization has had no adverse effect on drug usage rates in Portugal, which, in numerous categories, are now among the lowest in the EU, particularly when compared with states with stringent criminalization regimes. Although postdecriminalization usage rates have remained roughly the same or even decreased slightly when compared with other EU states, drug-related pathologies — such as sexually transmitted diseases and deaths due to drug usage — have decreased dramatically. Drug policy experts attribute those positive trends to the enhanced ability of the Portuguese government to offer treatment programs to its citizens — enhancements made possible, for numerous reasons, by decriminalization.
This report will begin with an examination of the Portuguese decriminalization framework as set forth in law and in terms of how it functions in practice. Also examined is the political climate in Portugal both pre- and postdecriminalization with regard to drug policy, and the impetus that led that nation to adopt decriminalization.
The report then assesses Portuguese drug policy in the context of the EU's approach to drugs. The varying legal frameworks, as well as the overall trend toward liberalization, are examined to enable a meaningful comparative assessment between Portuguese data and data from other EU states.
The report also sets forth the data concerning drug-related trends in Portugal both pre- and postdecriminalization. The effects of decriminalization in Portugal are examined both in absolute terms and in comparisons with other states that continue to criminalize drugs, particularly within the EU.
The data show that, judged by virtually every metric, the Portuguese decriminalization framework has been a resounding success. Within this success lie self-evident lessons that should guide drug policy debates around the world.
Download the PDF (4 MB)
Glenn Greenwald is a constitutional lawyer and a contributing writer at Salon. He has authored several books, including A Tragic Legacy (2007) and How Would a Patriot Act? (2006).
Cato, Apr 2, 2009
On July 1, 2001, a nationwide law in Portugal took effect that decriminalized all drugs, including cocaine and heroin. Under the new legal framework, all drugs were "decriminalized," not "legalized." Thus, drug possession for personal use and drug usage itself are still legally prohibited, but violations of those prohibitions are deemed to be exclusively administrative violations and are removed completely from the criminal realm. Drug trafficking continues to be prosecuted as a criminal offense.
While other states in the European Union have developed various forms of de facto decriminalization — whereby substances perceived to be less serious (such as cannabis) rarely lead to criminal prosecution — Portugal remains the only EU member state with a law explicitly declaring drugs to be "decriminalized." Because more than seven years have now elapsed since enactment of Portugal's decriminalization system, there are ample data enabling its effects to be assessed.
Notably, decriminalization has become increasingly popular in Portugal since 2001. Except for some far-right politicians, very few domestic political factions are agitating for a repeal of the 2001 law. And while there is a widespread perception that bureaucratic changes need to be made to Portugal's decriminalization framework to make it more efficient and effective, there is no real debate about whether drugs should once again be criminalized. More significantly, none of the nightmare scenarios touted by preenactment decriminalization opponents — from rampant increases in drug usage among the young to the transformation of Lisbon into a haven for "drug tourists" — has occurred.
The political consensus in favor of decriminalization is unsurprising in light of the relevant empirical data. Those data indicate that decriminalization has had no adverse effect on drug usage rates in Portugal, which, in numerous categories, are now among the lowest in the EU, particularly when compared with states with stringent criminalization regimes. Although postdecriminalization usage rates have remained roughly the same or even decreased slightly when compared with other EU states, drug-related pathologies — such as sexually transmitted diseases and deaths due to drug usage — have decreased dramatically. Drug policy experts attribute those positive trends to the enhanced ability of the Portuguese government to offer treatment programs to its citizens — enhancements made possible, for numerous reasons, by decriminalization.
This report will begin with an examination of the Portuguese decriminalization framework as set forth in law and in terms of how it functions in practice. Also examined is the political climate in Portugal both pre- and postdecriminalization with regard to drug policy, and the impetus that led that nation to adopt decriminalization.
The report then assesses Portuguese drug policy in the context of the EU's approach to drugs. The varying legal frameworks, as well as the overall trend toward liberalization, are examined to enable a meaningful comparative assessment between Portuguese data and data from other EU states.
The report also sets forth the data concerning drug-related trends in Portugal both pre- and postdecriminalization. The effects of decriminalization in Portugal are examined both in absolute terms and in comparisons with other states that continue to criminalize drugs, particularly within the EU.
The data show that, judged by virtually every metric, the Portuguese decriminalization framework has been a resounding success. Within this success lie self-evident lessons that should guide drug policy debates around the world.
Download the PDF (4 MB)
Glenn Greenwald is a constitutional lawyer and a contributing writer at Salon. He has authored several books, including A Tragic Legacy (2007) and How Would a Patriot Act? (2006).
Afghanistan Is Not Iraq - Propagating the myth of the "moderate Taliban" is a leap backward in American understanding
Afghanistan Is Not Iraq. By Stephen Schwartz
Propagating the myth of the "moderate Taliban" is a leap backward in American understanding.
The Weekly Standard, Apr 01, 2009
Many of the initiatives by President Obama in the Middle East and Muslim countries rest on unrealistic expectations--desert mirages, one might say--surrounding the motives of terrorists and other enemies of freedom. The most obvious example has been Obama's flattery toward the Iranian dictatorship, expressed in his address to the authorities of the "Islamic Republic" on March 20, in which he offers friendship to the Iranian clerical tyrants while they torture dissenting intellectuals, and repress protesting students and spiritual Sufis.
On its face, this immoral option resembles the old "realism" toward China--and, lately, Putinite Russia--that puts "stability" in relations with authoritarians and mass murderers ahead of democratic principles. Let the Tibetans and Uighurs be subjected to cultural genocide, Falun Gong be brutally persecuted, and individual Chinese dissidents--some of the bravest of the brave--be tormented in horrific ways, the argument seems to go, as long as Washington can claim a "breakthrough" in relations. But other, and much more dangerous tendencies, are also evident in recent U.S. outreach to the Muslim world. To flirtation with Tehran, the attempted installation of Chas Freeman, a prime apologist for Saudi Wahhabism, as head of the National Intelligence Council, and the hallucinated concept of a "unity" government comprising the Palestinian Authority and Hamas, critical observers of American official initiatives toward Muslim countries may add a new gimmick: the search for "the moderate Taliban."
This latest delusion is often promoted by the State Department's Richard Holbrooke. Afghanistan, we are told, may become the scene of a "civilian surge" comparable to the strategy that diminished terrorism in Iraq. The "moderate Taliban" could furnish the Afghan equivalent of the Sunni Awakening, which provided allies for the U.S.-led coalition and the Baghdad government in fighting the so-called Iraqi insurgency.
But the differences between the Iraqi death squads that eventually split and produced partners for the battle against brutalization, and the Taliban, are unarguable.
* The Iraqi malcontents comprised an assortment of the disaffected--secular Baathists, Sunnis suddenly deprived of long-held privilege and power, simple religious bigots (rather than committed doctrinal fanatics, and there is a difference), and, to be honest, Iraqis who merely resented the 2003 intervention. Notwithstanding Beltway blather denying its existence--some emitted by now vice-president Biden--an Iraqi national identity, however limited, exists.
* The Sunni Awakening was encouraged when the Iraqis found their alleged "resistance" increasingly dominated by Saudi Wahhabis who had come over the long Saudi-Iraqi border in the "second Iraq intervention," as detailed here, here, and here. When "Al Qaeda in Iraq" manifested its Taliban characteristics--executing women caught without covered faces, possessors of music CDs, Sufis, and others they deemed apostates--the anti-coalition combatants perceived that the United States and Baghdad authorities were a preferable alternative to governance by lynching.
Wide as the horizons of their global ambition doubtless were, and dedicated as they were to using Iraq as a platform for reinforcement of Wahhabism in their own country, the Saudi radicals who streamed north were primarily interested in striking at the coalition, to stimulate new support for their perverse cause, and did not aim at immediate expansion into Jordan or Kuwait.
By contrast, the Taliban is not a mélange. They include no secular types comparable to the Baathists and few "Afghan patriots." Afghan national identity is much weaker than that found even in Iraq. The Pashtun base of the Taliban is tribal, but they have a lesser presence in local history than the Iraqi Sunnis that usurped power in Mesopotamia. The Taliban embody monolithic radicalism in the Wahhabi style, rooted in the Deobandi school of fundamentalism, and consider all Muslims who fail to share their ideology to be unbelievers deserving liquidation. The Iraqi Arab Sunnis, even at the height of their influence under Saddam, could not wipe out the Iraqi Shias or the Kurds, but the Taliban massacred the indigenous Hazara Shias in Afghanistan, effecting a nearly-successful genocide.
Further, the Taliban have demonstrated that their current goal, rather than mere power in Afghanistan, is the "Talibanization" of Pakistan, a nuclear-armed failing state. This would provide the running dogs of al Qaeda with unconcealed weapons of mass destruction as well as millions of fresh foot-soldiers in an environment that, along with its large and problematical diaspora in Britain, has become the main breeding ground of Islamist extremism worldwide.
Where, then, are the "moderate" Taliban? The Taliban themselves, and their Pakistani promoters, scorned news reports about the Obama conception of a "civil surge," in Urdu and Pashto comments translated and posted by the Middle East Media Research Institute. History affirms that there were moderate Italian fascists but no moderate German Nazis; moderate socialist labor radicals but no moderate Stalinists. Moderate Taliban, like "moderate Nazis" or "moderate Stalinists," are a fantasy. The only and unavoidable response to such extremists is to defeat them.
The Obama administration seems to have fallen back into American thinking about the Muslim world before the atrocities of September 11, 2001. Like Bill Clinton and his cohort, they see Islamist violence as an expression of protest against Western policies rather than as a manifestation of a very real and threatening phenomenon called radical Islam. To the new president, neither Ahmadinejad, nor Hamas, nor the Taliban represent an ideological movement capable of wholesale bloodshed and long-term atrocities. This misapprehension defies the knowledge shared by every ordinary Muslim in the world. Rather than a step toward a new and more benevolent relationship, propagating the myth of the "moderate Taliban" is a leap backward in American understanding. But the American way has always put freedom before peace, and Afghanistan should offer no exception to this rule.
The Afghan war cannot be won by trying to factionalize an ideological hard core or, as President Obama has lately suggested, by recruiting malcontents and deserters. Victory must be clear and be seen to be clear.
Stephen Schwartz is a frequent contributor to The Weekly Standard.
Propagating the myth of the "moderate Taliban" is a leap backward in American understanding.
The Weekly Standard, Apr 01, 2009
Many of the initiatives by President Obama in the Middle East and Muslim countries rest on unrealistic expectations--desert mirages, one might say--surrounding the motives of terrorists and other enemies of freedom. The most obvious example has been Obama's flattery toward the Iranian dictatorship, expressed in his address to the authorities of the "Islamic Republic" on March 20, in which he offers friendship to the Iranian clerical tyrants while they torture dissenting intellectuals, and repress protesting students and spiritual Sufis.
On its face, this immoral option resembles the old "realism" toward China--and, lately, Putinite Russia--that puts "stability" in relations with authoritarians and mass murderers ahead of democratic principles. Let the Tibetans and Uighurs be subjected to cultural genocide, Falun Gong be brutally persecuted, and individual Chinese dissidents--some of the bravest of the brave--be tormented in horrific ways, the argument seems to go, as long as Washington can claim a "breakthrough" in relations. But other, and much more dangerous tendencies, are also evident in recent U.S. outreach to the Muslim world. To flirtation with Tehran, the attempted installation of Chas Freeman, a prime apologist for Saudi Wahhabism, as head of the National Intelligence Council, and the hallucinated concept of a "unity" government comprising the Palestinian Authority and Hamas, critical observers of American official initiatives toward Muslim countries may add a new gimmick: the search for "the moderate Taliban."
This latest delusion is often promoted by the State Department's Richard Holbrooke. Afghanistan, we are told, may become the scene of a "civilian surge" comparable to the strategy that diminished terrorism in Iraq. The "moderate Taliban" could furnish the Afghan equivalent of the Sunni Awakening, which provided allies for the U.S.-led coalition and the Baghdad government in fighting the so-called Iraqi insurgency.
But the differences between the Iraqi death squads that eventually split and produced partners for the battle against brutalization, and the Taliban, are unarguable.
* The Iraqi malcontents comprised an assortment of the disaffected--secular Baathists, Sunnis suddenly deprived of long-held privilege and power, simple religious bigots (rather than committed doctrinal fanatics, and there is a difference), and, to be honest, Iraqis who merely resented the 2003 intervention. Notwithstanding Beltway blather denying its existence--some emitted by now vice-president Biden--an Iraqi national identity, however limited, exists.
* The Sunni Awakening was encouraged when the Iraqis found their alleged "resistance" increasingly dominated by Saudi Wahhabis who had come over the long Saudi-Iraqi border in the "second Iraq intervention," as detailed here, here, and here. When "Al Qaeda in Iraq" manifested its Taliban characteristics--executing women caught without covered faces, possessors of music CDs, Sufis, and others they deemed apostates--the anti-coalition combatants perceived that the United States and Baghdad authorities were a preferable alternative to governance by lynching.
Wide as the horizons of their global ambition doubtless were, and dedicated as they were to using Iraq as a platform for reinforcement of Wahhabism in their own country, the Saudi radicals who streamed north were primarily interested in striking at the coalition, to stimulate new support for their perverse cause, and did not aim at immediate expansion into Jordan or Kuwait.
By contrast, the Taliban is not a mélange. They include no secular types comparable to the Baathists and few "Afghan patriots." Afghan national identity is much weaker than that found even in Iraq. The Pashtun base of the Taliban is tribal, but they have a lesser presence in local history than the Iraqi Sunnis that usurped power in Mesopotamia. The Taliban embody monolithic radicalism in the Wahhabi style, rooted in the Deobandi school of fundamentalism, and consider all Muslims who fail to share their ideology to be unbelievers deserving liquidation. The Iraqi Arab Sunnis, even at the height of their influence under Saddam, could not wipe out the Iraqi Shias or the Kurds, but the Taliban massacred the indigenous Hazara Shias in Afghanistan, effecting a nearly-successful genocide.
Further, the Taliban have demonstrated that their current goal, rather than mere power in Afghanistan, is the "Talibanization" of Pakistan, a nuclear-armed failing state. This would provide the running dogs of al Qaeda with unconcealed weapons of mass destruction as well as millions of fresh foot-soldiers in an environment that, along with its large and problematical diaspora in Britain, has become the main breeding ground of Islamist extremism worldwide.
Where, then, are the "moderate" Taliban? The Taliban themselves, and their Pakistani promoters, scorned news reports about the Obama conception of a "civil surge," in Urdu and Pashto comments translated and posted by the Middle East Media Research Institute. History affirms that there were moderate Italian fascists but no moderate German Nazis; moderate socialist labor radicals but no moderate Stalinists. Moderate Taliban, like "moderate Nazis" or "moderate Stalinists," are a fantasy. The only and unavoidable response to such extremists is to defeat them.
The Obama administration seems to have fallen back into American thinking about the Muslim world before the atrocities of September 11, 2001. Like Bill Clinton and his cohort, they see Islamist violence as an expression of protest against Western policies rather than as a manifestation of a very real and threatening phenomenon called radical Islam. To the new president, neither Ahmadinejad, nor Hamas, nor the Taliban represent an ideological movement capable of wholesale bloodshed and long-term atrocities. This misapprehension defies the knowledge shared by every ordinary Muslim in the world. Rather than a step toward a new and more benevolent relationship, propagating the myth of the "moderate Taliban" is a leap backward in American understanding. But the American way has always put freedom before peace, and Afghanistan should offer no exception to this rule.
The Afghan war cannot be won by trying to factionalize an ideological hard core or, as President Obama has lately suggested, by recruiting malcontents and deserters. Victory must be clear and be seen to be clear.
Stephen Schwartz is a frequent contributor to The Weekly Standard.
Estate tax: Spend It in Vegas or Die Paying Taxes
Spend It in Vegas or Die Paying Taxes. By Arthur B Laffer
A 0% tax on carousing, but 55% on thrift.
WSJ, Apr 02, 2009
In most cases, people who inherit wealth are lucky by an accident of birth and really don't "deserve" their inheritance any more than people who don't inherit wealth. After all, few of us get to choose our parents. It's also arguable that inherited wealth sometimes induces slothfulness and overindulgence. But the facts that beneficiaries of inheritances are just lucky and that the actual inheritance may make beneficiaries less productive don't justify having an estate tax. Chad Crowe
These same observations about serendipitous birth can be made for intelligence, education, attractiveness, health, size, gender, disposition, race, etc. And yet no one would suggest that the government should remove any portion of these attributes from people simply because they came from their parents. Surely we have not moved into Kurt Vonnegut's world of Harrison Bergeron.
President Barack Obama has proposed prolonging the federal estate tax rather than ending it in 2010, as is scheduled under current law. The president's plan would extend this year's $3.5 million exemption level and the 45% top rate. But will this really help America recover from recession and reduce our growing deficits? In order to assess the pros and cons of the estate tax, we should focus on its impact on those who bequeath wealth, not on those who receive wealth.
Advocates of the estate tax argue that such a tax will reduce the concentrations of wealth in a few families, but there is little evidence to suggest that the estate tax has much, if any, impact on the distribution of wealth. To see the silliness of using the estate tax as a tool to redistribute wealth, realize that those who die and leave estates would be taxed just as much if they bequeathed their money to poor people as they would if they left their money to rich people. If the objective were to redistribute, surely, an inheritance tax (a tax on the recipients) would make far more sense than an estate tax.
Indeed, from a societal standpoint, inheritance is an unmitigated good. Passing on to successive generations greater health, wealth and wisdom is what society in general, and America specifically, is all about. Imagine what America would look like today if our forefathers had been selfish and had left us nothing. We have all benefited greatly from a history of intergenerational American generosity. But just being an American is as much an accident of birth as being the child of wealthy parents. If you are an American, it's likely because ancestors of yours chose to become Americans and also chose to have children.
In its most basic form, it's about as silly an idea as can be imagined that America in the aggregate can increase the standards of living of future generations by taxing individual Americans for passing on higher standards of living to future generations of Americans of their choice. Clearly, taxing estates at death will induce people who wish to leave estates to future generations to leave smaller estates and to find ways to avoid estate taxes. On a conceptual level, it makes no sense to tax estates at death.
Study after study finds that the estate tax significantly reduces the size of estates and, as an added consequence, reduces the nation's capital stock and income. This common sense finding is documented ad nauseam in the 2006 U.S. Joint Economic Committee Report on the Costs and Consequences of the Federal Estate Tax. The Joint Economic Committee estimates that the estate tax has reduced the capital stock by approximately $850 billion because it reduces incentives to save and invest, has excessively high compliance costs, and results in significant economic inefficiencies.
Today in America you can take your after-tax income and go to Las Vegas and carouse, gamble, drink and smoke, and as far as our government is concerned that's just fine. But if you take that same after-tax income and leave it to your children and grandchildren, the government will tax that after-tax income one additional time at rates up to 55%. I especially like an oft-quoted line from Joseph Stiglitz and David L. Bevan, who wrote in the Greek Economic Review, "Of course, prohibitively high inheritance tax rates generate no revenue; they simply force the individual to consume his income during his lifetime." Hurray for Vegas.
If you're rich enough, however, you can hire professionals who can, for a price, show you how to avoid estate taxes. Many of the very largest estates are so tax-sheltered that the inheritances go to their beneficiaries having paid little or no taxes at all. And all the costs associated with these tax shelters and tax avoidance schemes are pure wastes for the country as a whole and exist solely to circumvent the estate tax. The estate tax in and of itself causes people to waste resources.
Again, a number of studies suggest that the costs of sheltering estates from the tax man actually are about as high as the total tax revenues collected from the estate tax. And these estimates don't even take into account lost output, employment and production resulting from perverse incentives. This makes the estate tax one of the least efficient taxes. And yet for all the hardship and expense associated with the estate tax, the total monies collected in any one year account for only about 1% of federal tax receipts.
It is important to realize that less than half of the estates that must go through the burden of complying with the paperwork and reporting requirements of the tax actually pay even a nickel of the tax. And the largest estates that actually do pay taxes generally pay lower marginal tax rates than smaller estates because of tax shelters. The inmates really are running the asylum.
In 1982, Californians overwhelmingly voted to eliminate the state's estate tax. It seems that even in the highest taxed state in the nation there are some taxes voters cannot abide. It shouldn't surprise anyone that ultra-wealthy liberal Sen. Howard Metzenbaum, supporter of the estate tax and lifetime resident of Ohio, where there is a state estate tax, chose to die as a resident of Florida, where there is no state estate tax. Differential state estate-tax rates incentivize people to move from state to state. Global estate tax rates do the same thing, only the moves are from country to country. In 2005 the U.S., at a 47% marginal tax rate, had the third highest estate tax rate of the 50 countries covered in a 2005 report by Price Waterhouse Coopers, LLP. A full 26 countries had no "Inheritance/Death" tax rate at all.
In the summary of its 2006 report, the Joint Economic Committee wrote, "The detrimental effects of the estate tax are grossly disproportionate to the modest amount federal revenues it raises (if it raises any net revenue at all)." Even economists in favor of the estate tax concede that its current structure does not work. Henry Aaron and Alicia Munnell concluded, "In short, the estate and gift taxes in the United States have failed to achieve their intended purposes. They raise little revenue. They impose large excess burdens. They are unfair."
For all of these reasons, the estate tax needs to go, along with the step-up basis at death of capital gains (which values an asset not at the purchase price but at the price at the buyer's death). On purely a static basis, the Joint Tax Committee estimates that over the period 2011 through 2015, the static revenue losses from eliminating the estate tax would be $281 billion, while the additional capital gains tax receipts from repeal of the step-up basis would be $293 billion.
To counter the fact that economists such as I obsess about the deleterious effects of the estate tax, advocates of the estate tax note with some pride that 98% of Americans will never pay this tax. Let's make it 100%, and I'll get off my soapbox.
Mr. Laffer is the chairman of Laffer Associates and co-author of "The End of Prosperity: How Higher Taxes Will Doom the Economy -- If We Let It Happen" (Threshold, 2008).
A 0% tax on carousing, but 55% on thrift.
WSJ, Apr 02, 2009
In most cases, people who inherit wealth are lucky by an accident of birth and really don't "deserve" their inheritance any more than people who don't inherit wealth. After all, few of us get to choose our parents. It's also arguable that inherited wealth sometimes induces slothfulness and overindulgence. But the facts that beneficiaries of inheritances are just lucky and that the actual inheritance may make beneficiaries less productive don't justify having an estate tax. Chad Crowe
These same observations about serendipitous birth can be made for intelligence, education, attractiveness, health, size, gender, disposition, race, etc. And yet no one would suggest that the government should remove any portion of these attributes from people simply because they came from their parents. Surely we have not moved into Kurt Vonnegut's world of Harrison Bergeron.
President Barack Obama has proposed prolonging the federal estate tax rather than ending it in 2010, as is scheduled under current law. The president's plan would extend this year's $3.5 million exemption level and the 45% top rate. But will this really help America recover from recession and reduce our growing deficits? In order to assess the pros and cons of the estate tax, we should focus on its impact on those who bequeath wealth, not on those who receive wealth.
Advocates of the estate tax argue that such a tax will reduce the concentrations of wealth in a few families, but there is little evidence to suggest that the estate tax has much, if any, impact on the distribution of wealth. To see the silliness of using the estate tax as a tool to redistribute wealth, realize that those who die and leave estates would be taxed just as much if they bequeathed their money to poor people as they would if they left their money to rich people. If the objective were to redistribute, surely, an inheritance tax (a tax on the recipients) would make far more sense than an estate tax.
Indeed, from a societal standpoint, inheritance is an unmitigated good. Passing on to successive generations greater health, wealth and wisdom is what society in general, and America specifically, is all about. Imagine what America would look like today if our forefathers had been selfish and had left us nothing. We have all benefited greatly from a history of intergenerational American generosity. But just being an American is as much an accident of birth as being the child of wealthy parents. If you are an American, it's likely because ancestors of yours chose to become Americans and also chose to have children.
In its most basic form, it's about as silly an idea as can be imagined that America in the aggregate can increase the standards of living of future generations by taxing individual Americans for passing on higher standards of living to future generations of Americans of their choice. Clearly, taxing estates at death will induce people who wish to leave estates to future generations to leave smaller estates and to find ways to avoid estate taxes. On a conceptual level, it makes no sense to tax estates at death.
Study after study finds that the estate tax significantly reduces the size of estates and, as an added consequence, reduces the nation's capital stock and income. This common sense finding is documented ad nauseam in the 2006 U.S. Joint Economic Committee Report on the Costs and Consequences of the Federal Estate Tax. The Joint Economic Committee estimates that the estate tax has reduced the capital stock by approximately $850 billion because it reduces incentives to save and invest, has excessively high compliance costs, and results in significant economic inefficiencies.
Today in America you can take your after-tax income and go to Las Vegas and carouse, gamble, drink and smoke, and as far as our government is concerned that's just fine. But if you take that same after-tax income and leave it to your children and grandchildren, the government will tax that after-tax income one additional time at rates up to 55%. I especially like an oft-quoted line from Joseph Stiglitz and David L. Bevan, who wrote in the Greek Economic Review, "Of course, prohibitively high inheritance tax rates generate no revenue; they simply force the individual to consume his income during his lifetime." Hurray for Vegas.
If you're rich enough, however, you can hire professionals who can, for a price, show you how to avoid estate taxes. Many of the very largest estates are so tax-sheltered that the inheritances go to their beneficiaries having paid little or no taxes at all. And all the costs associated with these tax shelters and tax avoidance schemes are pure wastes for the country as a whole and exist solely to circumvent the estate tax. The estate tax in and of itself causes people to waste resources.
Again, a number of studies suggest that the costs of sheltering estates from the tax man actually are about as high as the total tax revenues collected from the estate tax. And these estimates don't even take into account lost output, employment and production resulting from perverse incentives. This makes the estate tax one of the least efficient taxes. And yet for all the hardship and expense associated with the estate tax, the total monies collected in any one year account for only about 1% of federal tax receipts.
It is important to realize that less than half of the estates that must go through the burden of complying with the paperwork and reporting requirements of the tax actually pay even a nickel of the tax. And the largest estates that actually do pay taxes generally pay lower marginal tax rates than smaller estates because of tax shelters. The inmates really are running the asylum.
In 1982, Californians overwhelmingly voted to eliminate the state's estate tax. It seems that even in the highest taxed state in the nation there are some taxes voters cannot abide. It shouldn't surprise anyone that ultra-wealthy liberal Sen. Howard Metzenbaum, supporter of the estate tax and lifetime resident of Ohio, where there is a state estate tax, chose to die as a resident of Florida, where there is no state estate tax. Differential state estate-tax rates incentivize people to move from state to state. Global estate tax rates do the same thing, only the moves are from country to country. In 2005 the U.S., at a 47% marginal tax rate, had the third highest estate tax rate of the 50 countries covered in a 2005 report by Price Waterhouse Coopers, LLP. A full 26 countries had no "Inheritance/Death" tax rate at all.
In the summary of its 2006 report, the Joint Economic Committee wrote, "The detrimental effects of the estate tax are grossly disproportionate to the modest amount federal revenues it raises (if it raises any net revenue at all)." Even economists in favor of the estate tax concede that its current structure does not work. Henry Aaron and Alicia Munnell concluded, "In short, the estate and gift taxes in the United States have failed to achieve their intended purposes. They raise little revenue. They impose large excess burdens. They are unfair."
For all of these reasons, the estate tax needs to go, along with the step-up basis at death of capital gains (which values an asset not at the purchase price but at the price at the buyer's death). On purely a static basis, the Joint Tax Committee estimates that over the period 2011 through 2015, the static revenue losses from eliminating the estate tax would be $281 billion, while the additional capital gains tax receipts from repeal of the step-up basis would be $293 billion.
To counter the fact that economists such as I obsess about the deleterious effects of the estate tax, advocates of the estate tax note with some pride that 98% of Americans will never pay this tax. Let's make it 100%, and I'll get off my soapbox.
Mr. Laffer is the chairman of Laffer Associates and co-author of "The End of Prosperity: How Higher Taxes Will Doom the Economy -- If We Let It Happen" (Threshold, 2008).
Obama Administration to Release Bin Laden Associate from Gitmo
Obama Administration to Release Bin Laden Associate from Gitmo. By Thomas Joscelyn
The Weekly Standard blog, March 31, 2009 01:30 PM
The U.S. Justice Department has decided to release another detainee from Guantanamo, a Yemeni named Ayman Saeed Abdullah Batarfi. It is not entirely clear why Batarfi has been cleared for release. But we can be reasonably sure, based on Batarfi’s own freely given testimony, that he was no innocent swept up in the post-9/11 chaos of Afghanistan, as his lawyers claim.
Batarfi first traveled to Afghanistan in 1988 to fight the Soviets. The government claims he was trained at the Khalden camp, which graduated hundreds of al Qaeda members, but Batarfi denies this. Batarfi has admitted to participating in at least one nighttime raid against Soviet forces. This is important because it shows that he was willing to participate in hostilities from a young age--and was not merely a humanitarian adventure seeker in Afghanistan.
Batarfi then went to Pakistan, where he became an orthopedic surgeon. From there, things get really interesting.
There are at least three aspects of Batarfi’s testimony given before his administrative review board hearings at Gitmo that are noteworthy. Keep in mind that these hearings were not interrogations, and the detainees had the option of not participating, or simply issuing blanket denials, as some detainees did.
First, Batarfi admitted that he was an employee of al Wafa, a charity that has been designated a terrorist organization. Al Wafa is discussed in brief in the 9/11 Commission’s report as an al Qaeda front. The unclassified documents released from Guantanamo are littered with references to the organization. It is clear that al Wafa actively supported al Qaeda and the Taliban in a variety of ways--from transporting jihadists to Afghanistan (often through Iran) to purchasing sophisticated weaponry. Al Wafa was not a real charity--it was a terrorist front group, and Batarfi admitted to working for the group for several months in 2001. He says he left the organization after it was designated as a terror-supporter, but this was most likely just Batarfi’s way of trying to explain away his al Wafa ties. As we will see below, he was at Tora Bora after the designation on al Wafa came down.
Second, Batarfi admitted that he met with a “Malaysian microbiologist” and authorized the purchase of medical equipment for this individual. As I have written previously, this microbiologist is most certainly Yazid Sufaat. Batarfi denies knowing that Sufaat was working on anthrax when they met in 2001. Over and over again, Batarfi claimed that he just happened to run into and consort with terrorists without knowing who they were.
Third, the best example of this last point is Batarfi’s admitted ties to Osama bin Laden. Batarfi admitted that he met with bin Laden in the Tora Bora Mountains in November 2001. But he claimed that he sent a letter to someone (he does not say whom) asking to meet with the “head of the mountain” and, somewhat magically, he just happened to get a face-to-face sit down with the world’s most wanted terrorist…at Tora Bora…in November of 2001…you know, when the whole world was looking for him. This was the second time Batarfi claims to have accidentally met bin Laden. The first time came at a funeral in Kabul when, again, bin Laden just happened upon the scene.
Batarfi and his attorneys have apparently been able to sell this story to the DOJ. On its face, it does not make any sense. And there is much more to Batarfi’s story and the unclassified files on him. He admitted he purchased cyanide, but claims it was for dental fillings. He admitted he stayed at various al Qaeda and Taliban guesthouses, but says he didn’t realize they were facilities associated with Osama bin Laden at the time. Batarfi met the Taliban’s health minister in 2001 because, well, that’s just the sort of thing an al Wafa employee would do.
Remember, all of the above comes from his hearings at Guantanamo, not his interrogations. He could have just said, “I deny everything.” But he didn’t. He came up with not-so creative excuses instead. (For an analysis of excerpts from his hearings, go here.)
Batarfi has been cleared for release even though the Obama administration is not sure where to send him. They are still looking for a host country. This is eerily similar to the president’s ordering Guantanamo shuttered by January of 2010 before his administration had even reviewed any of the detainees’ files. That is, the president and his staff were not even sure who is down at Guantanamo when the president ordered the facility closed.
Batarfi’s case was reportedly reviewed by a DOJ board that is going through all of those files. I think it is safe to say the board is off to an inauspicious start.
The Weekly Standard blog, March 31, 2009 01:30 PM
The U.S. Justice Department has decided to release another detainee from Guantanamo, a Yemeni named Ayman Saeed Abdullah Batarfi. It is not entirely clear why Batarfi has been cleared for release. But we can be reasonably sure, based on Batarfi’s own freely given testimony, that he was no innocent swept up in the post-9/11 chaos of Afghanistan, as his lawyers claim.
Batarfi first traveled to Afghanistan in 1988 to fight the Soviets. The government claims he was trained at the Khalden camp, which graduated hundreds of al Qaeda members, but Batarfi denies this. Batarfi has admitted to participating in at least one nighttime raid against Soviet forces. This is important because it shows that he was willing to participate in hostilities from a young age--and was not merely a humanitarian adventure seeker in Afghanistan.
Batarfi then went to Pakistan, where he became an orthopedic surgeon. From there, things get really interesting.
There are at least three aspects of Batarfi’s testimony given before his administrative review board hearings at Gitmo that are noteworthy. Keep in mind that these hearings were not interrogations, and the detainees had the option of not participating, or simply issuing blanket denials, as some detainees did.
First, Batarfi admitted that he was an employee of al Wafa, a charity that has been designated a terrorist organization. Al Wafa is discussed in brief in the 9/11 Commission’s report as an al Qaeda front. The unclassified documents released from Guantanamo are littered with references to the organization. It is clear that al Wafa actively supported al Qaeda and the Taliban in a variety of ways--from transporting jihadists to Afghanistan (often through Iran) to purchasing sophisticated weaponry. Al Wafa was not a real charity--it was a terrorist front group, and Batarfi admitted to working for the group for several months in 2001. He says he left the organization after it was designated as a terror-supporter, but this was most likely just Batarfi’s way of trying to explain away his al Wafa ties. As we will see below, he was at Tora Bora after the designation on al Wafa came down.
Second, Batarfi admitted that he met with a “Malaysian microbiologist” and authorized the purchase of medical equipment for this individual. As I have written previously, this microbiologist is most certainly Yazid Sufaat. Batarfi denies knowing that Sufaat was working on anthrax when they met in 2001. Over and over again, Batarfi claimed that he just happened to run into and consort with terrorists without knowing who they were.
Third, the best example of this last point is Batarfi’s admitted ties to Osama bin Laden. Batarfi admitted that he met with bin Laden in the Tora Bora Mountains in November 2001. But he claimed that he sent a letter to someone (he does not say whom) asking to meet with the “head of the mountain” and, somewhat magically, he just happened to get a face-to-face sit down with the world’s most wanted terrorist…at Tora Bora…in November of 2001…you know, when the whole world was looking for him. This was the second time Batarfi claims to have accidentally met bin Laden. The first time came at a funeral in Kabul when, again, bin Laden just happened upon the scene.
Batarfi and his attorneys have apparently been able to sell this story to the DOJ. On its face, it does not make any sense. And there is much more to Batarfi’s story and the unclassified files on him. He admitted he purchased cyanide, but claims it was for dental fillings. He admitted he stayed at various al Qaeda and Taliban guesthouses, but says he didn’t realize they were facilities associated with Osama bin Laden at the time. Batarfi met the Taliban’s health minister in 2001 because, well, that’s just the sort of thing an al Wafa employee would do.
Remember, all of the above comes from his hearings at Guantanamo, not his interrogations. He could have just said, “I deny everything.” But he didn’t. He came up with not-so creative excuses instead. (For an analysis of excerpts from his hearings, go here.)
Batarfi has been cleared for release even though the Obama administration is not sure where to send him. They are still looking for a host country. This is eerily similar to the president’s ordering Guantanamo shuttered by January of 2010 before his administration had even reviewed any of the detainees’ files. That is, the president and his staff were not even sure who is down at Guantanamo when the president ordered the facility closed.
Batarfi’s case was reportedly reviewed by a DOJ board that is going through all of those files. I think it is safe to say the board is off to an inauspicious start.
Libertarian: FDA Regulation Threatens Cigarette Alternatives
FDA Regulation Threatens Cigarette Alternatives. By Jacob Sullum
Reason, April 1, 2009, 1:14pm
This evening the House of Representatives is expected to approve a bill authored by Rep. Henry Waxman (D-Calif.) that would let the Food and Drug Administration regulate tobacco products. The bill, which is supported by Philip Morris but opposed by its smaller competitors, is also supported by the leading anti-smoking groups but opposed by some of their smaller competitors. Recently the dissenters in the anti-smoking movement have been highlighting one of the bill's major flaws: It would grandfather in all current cigarettes (except for those with politically incorrect flavors) while making it virtually impossible to introduce and promote safer alternatives.
One of those alternatives is snus, Swedish-style oral snuff, the health risks of which are negligible compared to those of cigarettes. The Waxman bill would not ban snus, but it would prohibit manufacturers from informing consumers about oral snuff's dramatic safety advantages. Another cigarette alternative, one that probably would be kept off the market altogether under the bill's regulatory standards, is electronic cigarettes, battery-powered devices that deliver odorless nicotine vapor instead of smoke, avoiding all the hazards associated with tobacco combustion products. Sen. Frank Lautenberg (D-N.J.) wants the FDA to take electronic cigarettes off the market "until they are proven safe." Even if the FDA does not ban e-cigarettes under its existing drug authority, their manufacturers probably would not be able to meet the test established by the Waxman bill for products that compete with cigarettes.
One anti-smoking group that supports snus, e-cigarettes, and other harm-reducing alternatives to standard cigarettes is the American Association of Public Health Physicians (AAPHP), which says (PDF):
A variety of non-pharmaceutical alternative nicotine delivery products are already on the market or in various stages of development and market testing. These include sticks, strips, orbs, lozenges and e-cigarettes. The information available suggests risk and benefit profiles similar to widely accepted pharmaceutical nicotine replacement products.
Holding the snus and alternative nicotine delivery to the research standards of pharmaceutical products would cost the manufacturers millions of dollars per product and would deny current smokers the benefits of these products for a decade or more. Furthermore, such studies probably could not be conducted at current American academic centers because Institutional Review Board (IRB) guidelines would likely prohibit case/control studies on products with no therapeutic benefit. Thus, the seemingly reasonable research standards in the Waxman bill would likely result in a de-facto ban on all such products. AAPHP therefore favors the research guidelines from the Buyer bill [alternative legislation introduced by Rep. Steve Buyer (R-Ind.)].
Since both the Waxman and the Buyer bills would approve currently marketed cigarettes, the most hazardous of all tobacco products, the standard for lower risk products for use by current smokers should be the hazard posed by cigarettes, not a pharmaceutical safety standard.
Bill Godshall of Smokefree Pennsylvania (who alerted me to the AAPHP statement), tobacco policy blogger Michael Siegel (who clued me in to the e-cigarette controversy), and the American Council on Science and Health also worry that FDA regulation could stifle the market for cigarette alternatives. I explain why the Waxman bill is bad for smokers here, here, and here. I discuss snus here, here, and here.
Reason, April 1, 2009, 1:14pm
This evening the House of Representatives is expected to approve a bill authored by Rep. Henry Waxman (D-Calif.) that would let the Food and Drug Administration regulate tobacco products. The bill, which is supported by Philip Morris but opposed by its smaller competitors, is also supported by the leading anti-smoking groups but opposed by some of their smaller competitors. Recently the dissenters in the anti-smoking movement have been highlighting one of the bill's major flaws: It would grandfather in all current cigarettes (except for those with politically incorrect flavors) while making it virtually impossible to introduce and promote safer alternatives.
One of those alternatives is snus, Swedish-style oral snuff, the health risks of which are negligible compared to those of cigarettes. The Waxman bill would not ban snus, but it would prohibit manufacturers from informing consumers about oral snuff's dramatic safety advantages. Another cigarette alternative, one that probably would be kept off the market altogether under the bill's regulatory standards, is electronic cigarettes, battery-powered devices that deliver odorless nicotine vapor instead of smoke, avoiding all the hazards associated with tobacco combustion products. Sen. Frank Lautenberg (D-N.J.) wants the FDA to take electronic cigarettes off the market "until they are proven safe." Even if the FDA does not ban e-cigarettes under its existing drug authority, their manufacturers probably would not be able to meet the test established by the Waxman bill for products that compete with cigarettes.
One anti-smoking group that supports snus, e-cigarettes, and other harm-reducing alternatives to standard cigarettes is the American Association of Public Health Physicians (AAPHP), which says (PDF):
A variety of non-pharmaceutical alternative nicotine delivery products are already on the market or in various stages of development and market testing. These include sticks, strips, orbs, lozenges and e-cigarettes. The information available suggests risk and benefit profiles similar to widely accepted pharmaceutical nicotine replacement products.
Holding the snus and alternative nicotine delivery to the research standards of pharmaceutical products would cost the manufacturers millions of dollars per product and would deny current smokers the benefits of these products for a decade or more. Furthermore, such studies probably could not be conducted at current American academic centers because Institutional Review Board (IRB) guidelines would likely prohibit case/control studies on products with no therapeutic benefit. Thus, the seemingly reasonable research standards in the Waxman bill would likely result in a de-facto ban on all such products. AAPHP therefore favors the research guidelines from the Buyer bill [alternative legislation introduced by Rep. Steve Buyer (R-Ind.)].
Since both the Waxman and the Buyer bills would approve currently marketed cigarettes, the most hazardous of all tobacco products, the standard for lower risk products for use by current smokers should be the hazard posed by cigarettes, not a pharmaceutical safety standard.
Bill Godshall of Smokefree Pennsylvania (who alerted me to the AAPHP statement), tobacco policy blogger Michael Siegel (who clued me in to the e-cigarette controversy), and the American Council on Science and Health also worry that FDA regulation could stifle the market for cigarette alternatives. I explain why the Waxman bill is bad for smokers here, here, and here. I discuss snus here, here, and here.
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