Killing In The Name Of God

All the current controversies about the religious foundations of the Islamic State, other radical and violent Muslim organizations, and the danger they represent to the West made me go back to a piece I wrote a few years ago (2010) about religion as an inspiration for violence. See below.

My point was and still is that the Christian faith for centuries was used as a moral justification for violent acts and warfare supposedly inspired and blessed by God. This practice stopped. But not that long ago.

Sadly, within the Muslim world there are significant minorities who still cling to the idea of Holy War: killing in the name of God. We can hope that they will evolve and stop using religion as a moral justification for violence. In the meantime, they are very dangerous; because they view us as enemies and therefore legitimate targets. 

WASHINGTON – A number of recent opinion polls indicate that Americans on the whole distrust Muslims and that they believe that there is a violent, intolerant ingredient that is essentially an integral component of this faith. Most recently, a majority of Americans polled indicated that Muslim organizations should not build a cultural center and mosque very close to the site where the Twin Towers stood in New York City.

While large numbers recognize the American constitutional right to worship freely and build a place for prayer where one pleases, it is considered inappropriate to have an Islamic center so close to where thousands of Americans were murdered by Islamic radicals. So, Islam, notwithstanding official efforts aimed at reaffirming American tolerance, is not particularly welcome in the land that prides itself for being the home of religious freedom for all. How so? Let’s try a bit of reconstruction.

Conciliation after 9/11

In the immediate aftermath of the al Qaeda 9/11 attacks, President George W. Bush made the effort to reassure Americans of Muslim faith and Muslims in general that the US Government had no issue with them.

The problem was with the radical fringes that had hijacked Islam to justify an ideology of indiscriminate violence against us, their perceived enemies. The problem was (and ostensibly still is) with the radical groups –and not with the Muslim Faith as such.

The reality of conflict

In the intervening years, a deliberate attempt was made to uphold this distinction, for the benefit of all, Muslims and Christians. The objective was to reassure Muslims, so that they would not feel persecuted, while explaining to Americans that we were only after specific groups of dangerous extremists, and not after Muslims in general.

The trouble is that, official statements and rhetoric notwithstanding, the only thing that was and is truly visible for the public at large –Muslims and Christians alike– is America’s direct military engagement in two Muslim states: first Afghanistan and then Iraq, with thousands of soldiers killed and ten of thousands wounded and mutilated by insurgents and road side bombs.

So, here is the picture. Muslims felt under attack, with consequent negative reactions against the US; Americans saw their own people getting killed by Muslims. The fine distinctions between moderate and radical Islam were and are lost on both sides.

Barack Obama proposes more dialogue

With Barack Obama as President in 2009 there was an attempt to create a friendlier climate with the Muslim world. And so Obama floated conciliatory proposals to Muslim countries, all based on dialogue and respect, during the 2008 campaign.

At the time, the political objective was to create a contrast between himself and the more belligerent George W. Bush who, reassuring words to Muslims notwithstanding, had been the Commander in Chief who ordered Islamic countries invaded and thousands of Muslims killed.

Cairo Speech

Then we had the much publicized Cairo Speech to the Muslim world, (Cairo University, Egypt, June 4, 2009), delivered by President Obama. But all this friendly build up, delivered by a half African US President with a distinctively non-Christian name, apparently was not enough to create the hoped for turn around resulting in warmer relations between Americans and Muslims. While we are winding down the military effort in Iraq, the engagement is still there. [This was written in 2010]. In a separate theatre, Afghanistan, we are actually ramping up, with expanding engagements in Pakistan and now Yemen, not to mention the widely perceived pro-Israel bias in all matters, first and foremost the issue of Palestinian statehood.

Given all this, America’s popularity among Muslims world-wide has not risen much. Not many would say that today, because of Obama’s new tone, America is definitely a friend of Islam.

Americans consider Muslims hostile

And Americans, almost two years into Obama’s presidency, what are they thinking now about Muslims, at home and abroad? Well, it would appear that the attempts to draw a clear distinctions between the religion and most believers on the one hand (mostly good), and the fringes of fanatics (very bad), while understood and upheld by the US intellectual elites, (not by all within them), has not been grasped and embraced by public opinion at large.

As indicated above, various American opinion polls show a general distrust of Muslims, down to harboring doubts as to whether they can be loyal US citizens. In all this, Barack Obama who won the Nobel Peace Prize last year on account of his emphasis on dialogue is not helped much politically by the bizarre belief held by sizable minorities in America, (between 18 and 20 per cent in various opinion polls), whereby he himself is thought to be a Muslim. And certainly this mischaracterization, however totally unfounded, is not meant as a compliment. “Muslims bad. Obama Muslim. Obama, oh well, bad”.

The new conventional wisdom: Islam is inherently violent

But in all this, what I find fascinating is the increasingly accepted new conventional wisdom whereby Islam as such –no distinction between majorities and radical fringes– is an “inherently violent” religion bent on Holy War against people of other faiths. At the same time, it is widely believed that most, if not all, Muslims –whether they partake in violent acts or not– generally rejoice when Christians or others are targeted by radicals.

Going back to the famous Sam Huntington’s theory, according to this thinking, there is indeed a “Clash of Civilizations” that makes the Muslim world writ large into an existential threat for Western, (mostly Christian), Civilization. If this were indeed so, then conflict with Islam is inevitable. It may flare up more or less according to historic circumstances, but it is here and it is not going away.

According to this tenet, real, lasting peace with the Islamic world is as fanciful as real peace with committed Russian Bolsheviks in the aftermath of the October Revolution.

There is no peace with mortal enemies who see it as their most sacred duty to eventually destroy all of us. We are at peace with Russia now; but only in as much as Russia abolished the Soviet regime and abandoned its hostile ideology.

Exaggeration, only marginally correct

I do believe that, as in any exaggeration, there is some truth in this dire characterization. But only “some truth”, and it rests in the unassailable fact that Islam, just as other religions, has been used as a justification for violent undertakings many times in human history.

More to the point, there is something in the idea that large segments within traditional Muslim societies, seeking orientation in a modern world in which they are at a historic disadvantage in terms of technical resources, scientific knowledge, capital and management skills, sought solace in reverting to religious orthodoxy, including fanaticism. Religion, with all its clear-cut revealed truths, can become a source of strength for disoriented societies seeking a moral compass.

Religious orthodoxy is reassuring

Blind, rigid adherence to one’s own faith then becomes –at least for some– reassurance. And beyond that, a faith that could be construed to contemplate enemies, enemies that we could reasonably view as oppressors and responsible for whatever under achievement we decry, is a good tonic. It boosts morale. “We are essentially good. Our unsatisfactory present conditions are due to the nefarious behavior and sinister plots concocted by our enemies. The bad guys are outside. They want to get us. And so it is our moral imperative, our sacred duty, to destroy them first”. And so it goes.

But my point is that the surge of fanaticism, while empirically observable, has not been embraced by the majority of Muslims. The evidence that there are indeed tens of thousands of fanatics and others cheering does not demonstrate that the bulk of Islam (1.5 billion people) has become militant.

Fanaticism in Islam and in Christianity

We know about the radicalization of many Muslims in recent times. Hence al Qaeda, all its affiliates and copy cats around the world. [There was no ISIL in Syria and Iraq when I wrote this]. But I am not at all sure that a violent bent is the recognizable imprint of Islam as such. Different Islamic societies have been belligerent and have been at peace in different times. Therefore, to characterize the entire faith and all of its adherents as zealots always inclined to resort to violence is clearly an exaggeration, not validated by the historic record.

Of course, a different but quite relevant issue is whether or not –today–the so called “moderate” Muslims are truly and honestly committed to isolate and suffocate the virus of radicalism now in their midst.

And this is a real problem with no clear answer. Many assert that the reluctance displayed by mainstream Muslims in forcefully condemning violence in the name of Islam is an indication that –deep down– they are all in agreement.

Many in the West strongly believe that, while only some Muslims resort to violence, especially against all Westerners, most of the others approve of it. And so, they are essentially all biased against us.

History points to significant similarities

But, even if we could stipulate that Muslims are inherently violent, can we correctly juxtapose a peaceful Christianity forced into battle by a hostile Islam? Indeed, if we use the same yardstick that we want to use to measure religion inspired violence in Islam to the history of Christianity, are we really all that different? I’m afraid not. It is true that broadly speaking we can say that today one does not detect large segments within Christian societies mobilized to commit religiously inspired violent acts.

But this is peaceful evolution is quite recent. So, while it is true that nowadays Christian societies are in general more peaceful, it is equally true that they evolved to this stage from a very long history of violence. And this evolution occurred without modifying the old Christian dogma.

Which is to say that for many centuries violence prone Christians used to justify their actions on the basis of the same Scriptures upheld today by their mellower, peace-loving descendents. The Scriptures did not change, the state of mind of the believers did –and with that the interpretation given to Scriptures was modified to go with the new, more peaceful state of mind.

From this we get that what changes is people’s interpretation of dogma, following other social and cultural transformations. While we recognize that Muslim societies today on the whole are far less tolerant than their Christian counterparts, we can hope that the same evolutionary process that made Christianity progressively more peaceful will apply to Islam as well.

As for Christianity’s really bloody past, in case we forgot, let’s briefly summarize it.

Early Christianity, quite violent

Whatever the teachings of Christ, whatever the broad message of love within the Scriptures, the history of Christianity is largely, (albeit not exclusively), a history of violence among Christians and against non Christians that goes all the way to modernity, culminating in two world wars waged by Christians against other Christians.

After centuries of persecution and martyrdom, in the III Century the Christians were accepted and emerged as the new sustaining force of the late Roman Empire.

Legend has it that  Emperor Constantin converted after a revealing dream in which he was told that he would win a mighty battle if he adopted the Holy Cross. (“In Hoc Signo Vinces“, “In This Sign [the Cross] You Shall Win”). The story says that the Emperor ordered the Sign of the Cross to be painted or stitched everywhere and that he won the battle.

Thereafter, Christianized Roman soldiers marched into battle with the motto “Nobiscum Deus“, “God is with Us”. So, the concept of the righteous fight, the good fight blessed by God, is pretty old stuff in Christianity. Nazi soldiers had it on their belt buckles: Gott Mit Uns, “God is with us”.

And European history is mainly a history of warfare among Christians. They all went to Mass to invoke God’s blessings for soldiers who would kill and be killed by other soldiers blessed like them only by other priests in other churches. All this was done, by all parties, in the Name of God.

The Crusades, the complex expeditions aimed at regaining Christian control over the Holy Sites were essentially religious wars aimed at accomplishing what was defined as a divine imperative. When the Crusaders conquered Jerusalem they piously slaughtered the entire Muslim population.

Christians slaughtering other Christians

And when Western Christianity broke into opposing camps after the Protestant Reformation, violence among opposing Christian factions became blind ferocity. The 30 Years War practically destroyed Europe –and Germany most of all. Violence, savagery and persecution were routinely visited upon Christian religious sects by Catholics and vice versa by Protestants against Catholics.

The Catholic “Counter Reformation”

The Catholic Church reacted against the Protestant threat by upholding and forcing the strictest adherence to orthodoxy via the so-called “Counter Reformation”. This was a brand of uncompromising fundamentalism that would make contemporary Iranian Ayatollahs blush. In Europe, religious tribunals were routine. The charge of heresy was serious business, as it would lead to death, in most cases after the most vicious torture. The “Spanish Inquisition”, the religious courts that put countless people to death, (most victims were burnt alive), on charges of heresy is not just a matter of legend or a funny subject for Monty Python TV comedy sketches. It was an awful period in the history of civilization.

Intolerance and religious persecution

For centuries, in theoretically pious and loving Christian Europe freedom of thought and freedom of expression were unthinkable, and in fact sinful by definition. In 1559 the Catholic Church started compiling, (and updated throughout the centuries), an “Index Librorum Prohibitorum“, “Index of Forbidden Books”. To legally publish a book, an author needed to receive an “imprimatur”, “let it be printed” authorization by the local ecclesiastical authority.

Sure enough, while it built hospitals and schools and other charitable institutions, the Catholic Church became predominantly a force of genuine reaction for centuries, opposing modernity in any form, including science and technology. This long period was labeled by later critics as the era of “oscurantismo“, the age of “darkness”. And this tendency, while progressively less relevant over the centuries, given the increased secularism within many societies, lasted well into modernity.

Believe it or not, the last version of the the Vatican issued Index of Forbidden Books, incredibly, was compiled by the Roman Catholic Church in 1948, while the Index itself was abolished only in 1966, practically yesterday, by order of Pope Paul VI. (The legacy of this era is so resilient that in Italy there is still today the colloquial expression “mettere all’indice“, “to place in the index”, as a way to recommend the exclusion from society of people or subjects so totally dangerous or unpalatable that they should have no legitimate place anywhere).

Protestants also intolerant

And the Protestants, while on the whole more tolerant of other faiths, (witness the refuge offered by the Protestant Dutch to Jews escaping from persecution in Catholic Spain), killed and slaughtered Catholics and other Protestants just as cheerfully during the religious wars. Calvin’s Geneva was certainly not a care free city where people could act as they pleased. There were rigid norms of probity. Sinners were publicly shamed and punished. The brutality associated with this administration of justice was not that different from what we may witness in contemporary examples of places administered via Sharia law.

America different; but still flawed

Americans may hold a more benign vision of a tolerant Christianity because this Republic was founded on a principle of basic religious freedom by people who in some measure had come here to escape from religious persecution. Hence the principles of freedom of worship for all, of the separation between state and religion, with no religious denomination enjoying special privileges at the expense of any other. But let’s keep in mind that it was tolerance among a variety of Christian denominations. It did not deal much with other religions, as they were not there, (except for Jews who were not particularly welcome). Still the system on the whole worked well. Except, of course, for slavery.

The stain of slavery

The notion that loving Christians, as most slave owners professed to be, would see no contradiction between the principles of their faith and the practice of slavery is truly baffling. 

And to fight slavery the mighty, and incredibly bloody, American Civil War became in some measure a modern religious war. The North after all believed that it was on the side of God, as the lyrics of “The Battle Hymn of the Republic” attest. But ostensibly non-Christian behavior remained the norm in the very Christian South even after the defeat of their cause in the Civil War.

Segregation

The whole long and unhappy “reconstruction” period, with all its segregation laws, intimidation against Black would-be voters and the subsequent surge of the KKK, lynching, violence and routine intimidation against Blacks, was another demonstration of blatant injustice visited on Black people by Southern States whose leaders in most cases professed to be very good Christians. Apparently they saw no problem reconciling the principles of their faith and their laws, policies and brutal behavior.

We had to wait until the 1960s

Needless to say, we had to wait until the end of the 1960s –not so long ago—to see at least the formal abolition of racial discrimination as a matter of legally binding principle in America. In practice, discrimination in some fashion lingers, perpetuated mostly by good Christians who still do not see any contradiction between their faith and the racial prejudice they harbor.

So plenty of violent –ostensibly non Christian– behavior in the history of this mostly Christian land of tolerance created with the primary purpose of defending the individual rights of all human beings, as these rights, according to The Declaration of Independence, are given by God.

European colonialism

Back to Europe, let us not forget the violent conquest and subjugation of most of the world by the Very Christian Monarchs, starting in the XVI Century and continuing until there was any scrap of real estate left to grab. And this included the pillaging of South America, the submission of India, the imposition of the opium trade to China, the complete take over of Africa, and so on.

World Wars and religious symbolism: “God with Us”

Regarding the modern, gigantic slaughters of WWI and WWII in which millions of Christians were killed by other Christians, German soldiers in WWI had the inscription “Gott Mit Uns“, “God with US” on their helmets. This inspiring motto stayed on, and was carried by Hitler’s armed forces in WWII. Nazi Germany’s Wehrmacht soldiers had “Gott mit Uns” inscribed on their belt buckles during the conquest of Europe, thus creating the nice idea that the whole war of aggression was somehow blessed by God.

While the actual Christian faith of the Nazis leaders is debatable, they certainly did not want to remove this notion of a divine blessing for their military undertakings, something that they could have easily done, given their complete control over the entire German state and society.

The Allied Forces engaged in a “crusade”

If we look at the other side of the divide, the Allied Forces wanted to create the belief that they were fighting a “bellum justum“, a “just war”, according to recognized Christian established doctrine.

At the 1941 Placentia Bay meeting that led to the drafting of the Atlantic Charter, FDR and Churchill, while on board of the British cruiser HMS Prince of Wales, joined their British and Americans crews as they sang together “Onward Christian Soldiers“, a famous religious hymn. As Winston Churchill himself put it later on to explain why he personally chose that hymn:

 
“We sang “Onward, Christian Soldiers” indeed, and I felt that this was no vain presumption, but that we had the right to feel that we were serving a cause for the sake of which a trumpet has sounded from on high. [bold added]. When I looked upon that densely packed congregation of fighting men of the same language, of the same faith, of the same fundamental laws, of the same ideals … it swept across me that here was the only hope, but also the sure hope, of saving the world from measureless degradation”.
 
So, in the words of a key architect of the war, this was not just a mighty conflict; but “a cause for the sake of which a trumpet has sounded from on high”, in other words a war that fit very well within the long history of divinely inspired and blessed religious wars.
 
Today’s Holy Wars
It is regrettable that today many Muslims have yet to embrace a more peaceful and tolerant approach to relations with others, both within their societies and outside of them. Unfortunately this inability to welcome modernity, tolerance and the principle of peaceful relations among societies created a major problem for the West.
We are indeed under attack, even though the exact extent of the threat is difficult to measure, because we do not know how many enemies we face, how strong they are, and how long are they willing to keep this “Holy War” going.
Still, while we devise the best way to defend ourselves against an enemy we certainly did not provoke, let’s not forget that Christianity became peaceful only very recently. 



In A Slowing Economy Invest In R&D, Education And Infrastructure

WASHINGTON – America is doing OK, (if compared to declining Europe and Japan),  but not great. The once powerful US economy is not firing on all its cylinders. In fact, it would be appear that some cylinders are missing. 

What happened?

What happened to the once large, sustained US public and private investments in science and technology? And where are all the new start-ups courageously pushed forward by legions of young, enthusiastic entrepreneurs? (Contrary to popular belief, business formation in America is at a 35 year low. These days there are fewer new companies created in the US than in many slow moving European countries). And what happened to the once highly respected US public education system?

Lawrence Summers has good suggestions

Economist Lawrence Summers is aware off all this and has a few good suggestions. The Harvard Professor, and former Secretary of the Treasury (under Clinton) and Director of the US National Economic Council (under Obama), talked to McKinsey. They put this interesting interview on-line.

More R&D

Summers reflects on many different economic issues. He says that we have to redouble our commitment to science and technology. In fact (contrary to popular belief) we never spent a lot on this critical sector. But now we are spending much less than we used to. This is a very bad sign.

Our future prosperity and global competitiveness depends on the pace and quality of innovation. And a big portion of tomorrow’s breakthrough ideas that will be translated into commercial applications will come from basic science programs funded today.

Of course, innovation cannot be willed into place. And spending more money on R&D is no guarantee of a good return. Many new projects lead to nothing. But a few may lead to incremental innovation, or even to epochal, transformative discoveries.

For sure, if we do not even try, we shall get nothing.

Education is key

We also have to improve the standards of our public education, says Summers. Our future will largely depend on the quality and drive of our human capital. It is a well-known fact that the quality of American public education has deteriorated, a lot. All credible international surveys place American high school kids in the lower half, or worse of all the academic achievement rankings encompassing developed countries.

And this alarming mediocrity in most cases is not due to lack of funding. It is about entrenched and politically protected bad systems that allow the hiring and retention of unqualified teachers. This is unacceptable.

Let’s take care of our infrastructure

And then we have basic infrastructure. Although this issue has become very political, (who sets priorities? Where do we spend the money? Who benefits politically?), common sense would dictate that we should do something, and fast, at least about basic repairs and maintenance. With interest rates at 2%, Summers points out, borrowing money today for public works is extremely cheap. If this is not the right time to build new structures at Kennedy Airport in New York City, (they were built 50 years ago), then when will the right time come?

Yes, we need oil pipelines

In an indirect jab at the Obama administration, Summers also argues in favor of more modern oil and gas pipelines. He observes that without permits to build these pipelines, large amounts of oil are transported by rail. This is cumbersome, very expensive, inefficient, and very dangerous; as a number of recent tragic accidents have demonstrated. (Yes, Mr. President, approve the TransCanada Keystone XL pipeline that will allow oil from Alberta to get to Texas. Canadian oil is better than oil from Saudi Arabia. And right now much of this Canadian oil gets to the US via rail cars).

Expedite environmental reviews

And, finally, there is environmental protection. While we should all be mindful of our duty to protect the environment, says Summers, getting a permit from the competent environmental protection authorities should not take years. By delaying review and approval for this and that, the government slows the economy down.

Companies have to spend larger and larger amounts of time, resources and money to get new projects off the ground. This is a business disincentive. And unjustified delays are often a way to kills projects by bureaucratic suffocation.

Facing “The Great Stagnation”

Yes, we may be indeed in the new era that economist Tyler Cowen appropriately named  “The Great Stagnation”, (this is the title of his seminal book). We are indeed going through a long period characterized by little innovation.

Indeed, with the exception of IT, electronics and biotech, we are still using the basic technologies that were developed 50 or 60 years ago. We have had very few economic breakthroughs. And this is no fun. But we can still bet on the future by investing now in people and in new ideas that may take us somewhere new.

Let’s do something

And, yes, even though this is not glamorous, we should also build a new Terminal at jFK Airport in NYC, and we should finally approve the Keystone XL pipeline that will get us more oil from Canada. No, this is not as exciting as the perfect $ 15,000 electric car that goes a thousand miles on one battery charge, or knee replacement surgery performed by a robot for $ 100.

But it is a lot better than doing nothing.




Mountains of Debt in Greece…And In China

WASHINGTON – There is nothing promising in the outcome of the “European Tour” taken by Greek Prime Minister Alexis Tsipras and Yanis Varoufakis, his Finance Minister. Winning an election on the basis of a populist plan to resist Brussels’ mean spirited austerity is one thing, negotiating real debt relief when you are poor and weak is quite another.

Greece is ruined

We could discuss all sorts of possible options. But I see no workable solution that will satisfy both Greece and its creditors. The fact is that Greece is ruined. In part because of its idiotic policies, and in part because of counterproductive EU-imposed medicine, Greek output declined by 25% in the years since the troika-engineered (EU-IMF-ECB) rescue. As its GDP sank, its debt to (real) GDP ballooned. It is now at 175% of GDP. This is far worse than Italy at 130%.

Now you tell me how can a small, non competitive, unproductive economy get out of this mess. And keep in mind that Greece is surviving only thanks to the bailout provided mostly by its EU “partners”. That’s $ 286 billion obtained at favorable conditions, in exchange for a promise to implement structural reforms that would reduce public spending, privatize assets, and more.

No more austerity?

However, now the Syriza leaders want to stop, and in fact reverse, the EU-imposed austerity. They want to increase public jobs, (all this implies increased public spending), give everybody in Greece a raise, and renegotiate the terms of their gigantic loans.

This is impossible. But it is also unrealistic for the rest of Europe to believe that the Greeks –with this government in charge– will be disciplined and pay back little by little all what they owe, according to plan.

Greece will never pay back

Greece will never pay back this debt. Especially since now its elected leaders tell the people that it is not really the nation’s fault. Greece was somehow tricked by rapacious foreigners. It is all a big conspiracy, you see.

The fact is that Greece is essentially bankrupt. The bailout obtained from its EU partners has now become an inflammatory political issue. It is impossible that this anti-austerity, far left, populist government will forget all its campaign promises and enforce the existing –extremely unpopular– agreements.

Will Greece literally go bankrupt? Will it be forced to get out of the Eurozone? Will it voluntarily leave? I have no idea. But I find it hard to believe that this far left government in Athens and the rest of Europe will find a mutually acceptable, workable agreement that will allow creditors to be paid and the Greeks to be happy.

China is worse

Well, if Greece is bad news, give a look at China. Its fantastic GDP growth in the last few years was driven in large measure by an unprecedented construction boom financed entirely by debt. And this building frenzy, totally disconnected from real demand, led to “ghost cities” with no people, empty shopping malls, and plenty of under utilized infrastructure. This is “malinvestment” on a colossal scale. Yes, it made GDP go up. But none of this is real.

Fake growth

As bad as Greece is, China is certainly far worse. In only 14 years, China accumulated $ 26 trillion in new debt in order to get mostly fake growth. As David Stockman observes in his Contra Corner, (China’s Monumental Debt Trap—-Why It Will Rock The Global Economy, February 5, 2015), China’s GDP doubled since 2007. Its growth expanded by $ 5 trillion in just 7 years. Yes, but in order to get there, it increased its debt by $ 21 trillion. In other words, for every $ 1 dollar of new growth, China added $ 4 of new debt.

This is not going to end well. Here is how Stockman sees it:

“In any event, China’s $10 trillion of GDP is exactly at the Greek bulge stage. It’s not replicable and sustainable unless the bosses in Beijing truly do intend to pave the entire country.”

“In fact, the Chinese economy is addicted to construction, and its rulers can’t seem to let go—-even as they recognize they are heading straight toward the wall. At the present time, nearly 50% of GDP is accounted for by fixed asset investment—–that is, housing, commercial real estate, industry and public infrastructure. This ratio is so far off the historical and comparative charts as to be in a freakish class all of its own. Even during the peak “take-off” phase of economic development in Japan and South Korea this ratio never exceeded 30% and did not dwell there for long, either.”  [bold added]

“So China is caught in a monumental debt trap. Its rulers fear social upheaval unless they keep pumping GDP—and the associated rise of jobs, incomes and financial asset values—-with more credit and construction. Even then, they know better and have therefore hop-scotched from credit restraint to credit curtailment almost on alternate days of the week.”

“But now the edifice is beginning to roll over. Housing prices are falling and new footage put under construction has dropped by 30% over the last three months—something which has not even remotely happened during the last 15 years. At the same time, the consequent cooling of demand for construction materials and equipment is evident in China’s faltering industrial production numbers and the global commodity deflation that has resulted from its vast excess capacity in steel, shipbuilding, cement, aluminum, copper fabrication and all the rest.”

Economic growth is a political mandate 

Yes, the trap is that China’s unelected leaders need to deliver sustained economic growth in order to legitimize themselves. But since it is impossible to generate genuine 7% growth (let alone the 10% we were used to see in China) year after year, they faked it. Local governments borrowed in order to finance more jobs-creating construction. The unprecedented construction boom in turn generated a boom in steel, cement, copper, you name it.

How long can this crazy act last?




Very Modest Military Effort Against ISIL

WASHINGTON – With a straight face, White House Press Secretary Josh Earnest announced that while the United Arab Emirates stopped flying bombing missions against ISIL last December, (somehow this development had not been made public until now), this should not be interpreted as a lessened UAE committment to the fight. Really?

UAE has left

Well, in theory the UAE could contribute substantially without fighting, for instance by paying for the cost of military operations. But we have not ben told in what way this staunch ally will help us win.

And how much was the UAE actually contributing before withdrawing? We do not know exactly. But here are some figures that may help shed some light on the issue.

As of December 2014 the “Coalition” had launched 1,371 air striked against ISIL, 799 in Iraq ,and 572 in Syria. (This is a very small number). 81% of these were conducted by the US, the remaining 19%  –yes, this is only 19%– by the rest of the “Coalition”. This would include Great Britain, France, Jordan, Saudi Arabia, the UAE, and others.

It was not doing much anyway

From this we can safely conclude that, whatever the UAE was doing before withdrawing, (a fraction of an already puny 19%), it did not amount to much. And this is not for lack of means. The UAE air force has a total of 368 fixed and rotary wing aircraft. Of these more than 200 are fighter jets (US made F-16, and French made Mirage 2000). Not insignificant numbers for a relatively small country.

62 Coalition Members

And what about the rest of the large “Coalition”? What are they doing to help win the war? We are told that there are 62 countries on board. This sounds impressive. Yes, except that it is not.

Among the members we have: Singapore, Malta, Moldova, Mexico and Andorra. Yes, Andorra, a tiny little place sandwiched between Spain and France, and not exactly a major or even minor political or military anything. While there are others like Hungary, only a handful of countries among those that are nominally Coalition Members are involved in combat operations. And you have seen above how insignificant the total non US military effort is.

In other words, this whole “war against ISIL” is so unimpressive that it looks frankly unserious.

The Kosovo air campaign

Indeed, please compare this anti-ISIL air campaign to the NATO-led 1999 air campaign against Serbia aimed at stopping the Kosovo conflict. Over a period of 78 days NATO combat planes flew 38,000 air sorties, of which 10,484 were strike sorties. (ISIL campaign: 1,371 sorties as of December 2014. Now, February 2015, the number must be a bit higher).

Modest effort

This war against ISIL is a small effort led by a reluctant America with extremely modest military contributions from a handful of countries, plus symbolic nods from 50 or more nations that sent a little money and/or a little humanitarian aid.

Allow me a prediction. Given what I would call a low level of enthusiasm, this war against ISIL will not be won any time soon.




America Needs To Invest $ 3.6 Trillion To Fix Its Crumbling Infrastructure

WASHINGTON – A prominent victim of the policy paralysis caused by Washington’s toxic political climate is America’s basic infrastructure. For the Republicans, any additional public spending is suspect, because all public spending is by definition badly conceived and wasteful.

Pork barrel projects

Of course, there is plenty of anecdotal evidence of egregious “pork barrel projects”, such as “bridges to nowhere” built only because of the political pressure exercised by powerful legislators. All this is true.

However, it is also true that there has been chronic underinvestment in US infrastructure. And I am not talking about ambitious new projects. I am talking about the rather mundane, yet indispensable, upkeep of existing infrastructure, some of it quite old, or decrepit. (The backbone of US Interstate Highway System goes back to President Dwight Eisenhower. We are talking the 1950s! Denver Airport, the last major airport built in the US, opened in 1995. NYC Kennedy Airport Terminal 3 was built 50 years ago).

No money for upkeep

Because of budgetary constraints and political infighting, the US Federal Government does not have a decent plan nor dedicated funding to carry out needed repairs, upgrades and other necessary maintenance to what we have, never mind funding new projects.

This is almost grotesque. We are talking about the United States of America, still the largest economy in the world. And yet our policy-makers have allowed disrepair to reach crisis proportions.

Getting worse

Indeed, the American Society of Civil Engineers, (ASCE) gives America’s infrastructure a D+. Just a bit above failure. The ASCE estimates that we need to invest $ 3.6 trillion by 2020, just to tread water. In other words this is the bare minimum, not an ambitious growth plan.

And what is Washington doing about all this? Practically nothing. Because of the fierce ideological fight about all taxing and spending issues, Republicans and Democrats cannot agree on taking care of the mundane issues that every City Council has to deal with. “Yes, if the bridge is too old, we have to fix it, and find out a way to pay for the fix”. This should not be an issue tainted by ideology.

Obama’s proposal “dead on arrival”

In its budget proposal for Fiscal Year 2016, (beginning on October 1, 2015), President Obama included more spending on infrastructure. But this line item is presented in the context of a politically impossible mix of higher spending and higher taxes. No Republican controlled Congress will never approve any budget like this one. And so it is quite possible that the needed higher infrastructure spending item will be killed, along with everything else.

No PPPs in America

But there is more. Beyond this political gridlock, the US tax system effectively penalizes Public Private Partnerships solutions (PPPs) that could allow state and local governments to lease highways, airports and more, to private consortia (often created by pension funds and private corporations) so that they will upgrade them and run them.

The PPP partners get their money back over time, by collecting tolls and fees on the basis of negotiated rates. Via PPPs the local and state administrations no longer have to set money aside for infrastructure spending. Under the terms of the PPPs, the highways, bridges and airports are properly maintained. The general public gets a modern service, while paying for it via a user fee in the form of a toll.

Heavy taxes

PPP solutions are quite common all over the world, notes John Schmidt, an attorney specialized in PPPs, in a WSJ op-ed piece, (A Sane Way to Upgrade Bridges, Ports and Transit, February 3, 2015). But they are virtually unknown in the US. And this is largely because of taxes imposed on tax exempt financing for public infrastructure when something (a highway) is turned over to private partners. The need to pay all debt upfront, and other onerous financial obligations constitute, a major disincentive for more PPPs in the US.

Where are the policy-makers?

And so, here is the picture. Because of Washington politics, we do not allocate funds for the upkeep of the national infrastructure. And because of our punitive tax system we do not have the PPPs that are common in the United Kingdom, Australia, or Mexico.

As a result of this irresponsible approach, US basic infrastructure, much of it built in the 1950s and 1960s, has not been fixed and upgraded. This is disconcerting, but true.

No way to stay competitive

Look, it does not take a genius to realize that this neglect causes public safety issues and huge economic damage. Hard to believe that the US can remain a globally competitive economy with crumbling bridges and airports built 40 or 50 years ago.




Kiev Should Admit That the War In The East Is Lost

WASHINGTON – The now chronic crisis in Eastern Ukraine is getting worse. The cease-fire did not work. The Russia-backed rebels are on the offensive, while the weaker Ukrainians are slowly losing ground.

Restraint did not work

These developments have prompted some in the West to advocate a totally new strategy. Here is the new thinking. US and European military restraint, highlighted by the refusal to give more than token, non lethal assistance to the Kiev government, did not work.

Instead of convincing Putin that there is room for an honorable diplomatic solution, by signaling to Moscow that we are not going to take any serious action on the military front, we produced the opposite effect. Western restraint in fact emboldened Putin. Right now he can correctly calculate that, even if he escalates, there will be no consequences beyond the economic sanctions currently in place.

Arming Ukraine?

Fine. This may be indeed so. However, it is by no means obvious that a US-Europe reversal –by sending offensive weapons to Kiev– would lead us to a negotiated peace. Likewise, it is really foolish to maintain as some have that arming the Ukrainians would create a deterrent. Arming the Ukrainians may prevent a further deterioration of the situation on the ground, but it will not bring the conflict to an end.

Putin wins by forcing Ukraine into virtual bankruptcy

Let’s get a few things straight. Putin does not need “to win” in the old-fashioned sense of the term. Keeping this conflict going in a sense is already “victory”. He simply wants to bleed an already impoverished Ukraine to death.

It is no secret that the new Ukraine, now led by President Petro Poroshenko, is a sorry mess that is surviving only because of Western loans and other temporary fixes. In this context, by forcing Ukraine to spend money that it does not have to fight a conflict that it cannot win, Putin accomplishes a political goal.

Since the Ukrainians refused to be reabsorbed into Russia’s sphere of influence, they will be no asset to Europe or to anybody else. In fact, with their economy in total ruin, they will become a huge liability for the West.

A deterrent?

As for the idea that giving real offensive weapons to the Ukrainians will create a new deterrent, those who think this are really dreaming. A real deterrent is a formidable force, ready and deployable at a moment’s notice, under the command of a determined political leadership. This leadership has successfully conveyed to any potential hostile power that this formidable force under its command will be used swiftly and massively in case of any aggression. In other words, a good deterrent is a preponderant force combined with the unmistakable signal that it will be used in case of aggression. Faced with the assurance of a swift massive retaliation, the would-be aggressor will not act. This way, deterrence worked. The force is so large that the threat to use is enough.

It is obvious that sending some weapons to the Kiev government will not create a  deterrent. In fact it will have the opposite effect. It would be the equivalent of pouring some more gasoline into the fire. A real deterrent would require arming the Ukrainians up to the point in which they would defeat the Russia-funded and trained rebels.

Fear of a certain defeat may change Putin’s calculus. But all this  presupposes an American willingness to escalate what is now an unplesant but still local conflict that does not threaten America directly, while it is technically outside of the areas protected by the NATO alliance. And I see no sign that President Obama wants to engage in what would be in effect a war by proxy with Russia.

Ukraine cannot win

From all of the above, it is clear to me that Kiev will never “win” this regional conflict. It does not have the economic and military resources, nor the outside help necessary to prevail. Getting a few offensive weapons from the West may help a little.

However, unless these Western weapons come in massive amounts, with an American pledge to give as many as it takes for as long as it takes until the final defeat of the rebels backed by Russian aid, some military aid will not change the basic dynamics of an unwinnable war.

In the meantime, as the costly conflict drags on, miserable Ukraine gets even more deeply into debt, while the economy is in ruin. Sadly, a patriotic war does not feed hungry people.

Let the East go, focus on the economy

I said it before and I repeat it now, this war is unwinnable. Therefore it would be wise for the Kiev government to concede defeat, cut its losses and get out of Eastern Ukraine.

Let the Moscow-backed rebels win. Let them create their own pseudo-state or join Russia. The only way to have closure here is to give up the dream that somehow it may be possible to recreate national unity in these provinces inhabited mostly by hostile ethnic Russians. This is now utterly impossible.

Admitting defeat is very unpleasant. But I see no other good option. Once this costly conflict will be over, the Kiev government will have a chance to refocus on the real problem: economic reconstruction.

 

 




The Cure For Many Chronic Diseases Is In Life Style Changes

WASHINGTON – President Obama wants to support pioneering medical research. Hence his proposal to invest hundreds of millions of dollars in what is called now “precision medicine”. The idea is that by creating a detailed map of a person’s genetic make up it is possible to spot variants/abnormalities that become predictors of certain diseases.

The value of new knowledge

This new knowledge in theory will allow physicians to develop targeted preventative treatments and customized therapies. In principle this sounds like a very good idea. You gain detailed knowledge about potential physical vulnerabilities way ahead of time and so doctors intervene before the full-blown manifestation of disease.

Well, this sounds interesting. Except that in most cases it does not work this way. As Dr. Michael Joyner, anesthesiologist and physiologist at the Mayo Clinic, clearly explains in an instructive NYT op-ed piece, (“Moonshot” Medicine Will Let Us Down, January 29, 2015), most diseases do not originate from specific genetic variants. There are literally hundreds of variants that may lead to them. And therefore it is difficult to use an individual’s specific variant as a reliable predictor of anything.

Not so useful

As Dr. Joyner says, for most chronic and debilitating diseases, easy to ascertain life style factors are much stronger predictors of future health problems. For instance, if we look at the explosion of Type 2 Diabetes in the United States and other countries, the roots of the problem are in a bad diet and lack of exercise, as opposed to any individual genetic predisposition.

If people want to avoid Type 2 Diabetes, they should avoid a sugar rich diet and start a regime of moderate but regular exercise. Properly crafted and disseminated medical advice that would explain the value of these life style changes would be much more useful, at this stage, than any sophisticated individualized genome mapping.

The health value of embracing “Wellness”

This is not to say that pushing the envelope and pursuing new knowledge per se is a bad idea. This is to say that, if we really want to help an unhealthy US general population, finding good ways to spread “Wellness” education would give us much faster and far more substantial health gains.

As Dr. Joyner put it: “We would be better off directing more resources to understanding what it takes to solve messy problems about how humans behave as individuals and in groups. Ultimately, we almost certainly have more control over how much we exercise, eat, drink and smoke than we do over our genomes”.

Real results

All this looks terribly unsophisticated and unexciting. But a new focus on our unhealthy habits and how to change them shifts the burden of keeping our own health back to us.

No, we are not all impotent victims of our hidden genetic variants. Yes, there are cases in which individual genome mapping could indeed help doctors develop individualized therapies. But for the millions of Americans who are prisoners of debilitating (and costly) illnesses, such as cardiovascular diseases and Type 2 Diabetes, eating less sugar –this is something that we can control– will bring about much better health outcomes.