Three Failures or One Failure?

From New York Magazine via MSN Eric Levitz proposes that three policy failures are “killing the American Dream”:

The United States has never been richer. In 2018, American households boasted a collective net worth of over $98 trillion. If that wealth were divided evenly across the U.S. population, every human being in our country would have roughly $298,000 to their name — and every family of four would be millionaires.

Few Americans feel entitled to full communism. But many do have trouble reconciling their nation’s unprecedented wealth with the increasing insecurity of middle-class life. In the 1960s, economists worried that 21st-century Americans would struggle to find purpose once economic progress turned full-time employment into an archaic chore practiced solely by the eccentric, like churning butter or collecting CDs. And yet, in 2019, middle-class Americans are working harder than ever. We were promised flying cars. Instead, we got 60-hour workweeks.

So, what went wrong? How did we miss the exit for fully automated comfort-plus capitalism?

The three failures he cites are:

  1. We let the wages fall too damn low.
  2. We let the costs of housing, health care, and higher education rise too damn high.
  3. We let our social welfare institutions (such as they are) grow too damn outdated.

and concludes:

The American Dream isn’t dying of natural causes. We know what must be done to revive it. The problem is simply that a lot of powerful people would rather pull the plug than pay for the cure.

Let’s assume arguendo that he has identified our three biggest policy failures. Are they not actually one big policy failure? Is not immigration of low-skill workers, particularly illegal immigration, a major contributing factor in all three. A reliable, predictable, unending supply of workers places employers in control of wages. Further, when the workers are unskilled jobs are tailored so they can be done by people with minimal skills.

The cost of housing, health care, and education are all affected by immigration as well. In New York City 40.6% of public school students are Hispanic, in Los Angeles Unified 64.9% are Hispanic, and in Chicago 47% are Hispanic. Most of these kids are either immigrants themselves or the children of immigrants and have low comprehension of English. The cost of education for each child are $17.5, $11K, and $15K respectively. A little basic arithmetic tells you that immigration brings high costs and immigration of people who will receive low wages means a high net cost.

As to his third “policy failure”, I know of cases in the LAUSD in which primary school classes of ten students have six different first languages. What sort of institutions would be required to deal with that situation? In Chicago the voting instructions are the size of a small phonebook because of the multiple language in which the instructions are printed. I don’t believe any institution is capable of dealing gracefully with such a situation.

It isn’t merely housing, health care, and education that are too expensive. We pay more per mile of road constructed, more per mile of pipe laid, more for our military, and more for just about every service for which government at any level pays than any other OECD country. Spending more because we have more people than we otherwise might is one thing but it doesn’t explain why everything that government pays for costs so much more here. I think it is a more general lack of social cohesion which is exacerbated by our present very high percentage of immigrants but which has deep societal roots. That limits the range of issues that government is capable of addressing and not merely for lack of funds.

I’m open to other explanations but those seem to make the most sense.

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Jacksonian Trump

Meanwhile, Walter Russell Mead, in his most recent Wall Street Journal column, explains Trump’s actions:

Under investigation for impeachment he may be, but President Trump can still shake the world with his tweets. Explaining his decision to pull U.S. troops away from the Turkish-Syrian border at the cost of the Kurdish-led Syrian Democratic Forces, and open the way for Turkish forces to create what Ankara calls a “safety zone,” President Trump tweeted early Monday that “it is time for us to get out of these ridiculous Endless Wars, many of them tribal, and bring our soldiers home.”

Hitting the caps-lock button, Mr. Trump went on to restate one of his bedrock beliefs, and a cornerstone of Jacksonian foreign-policy thinking: “WE WILL ONLY FIGHT WHERE IT IS TO OUR BENEFIT, AND ONLY FIGHT TO WIN.” As for concerns that a U.S. withdrawal would allow Islamic State to re-form, Mr. Trump was dismissive. “We are 7000 miles away and will crush ISIS again if they come anywhere near us!”

Criticism of Mr. Trump’s withdrawal decision has been intense, with prominent supporters like Sen. Lindsey Graham and former officials like Nikki Haley joining longtime opponents of the White House. Much of that criticism is justified, and the erratic nature of Trump-era policy making, as well as the often-unpredictable policy mix that results, are undercutting American prestige and influence in much of the world. But not all of the problems dogging the Trump administration Middle East policy are caused by Mr. Trump’s sometimes idiosyncratic views or policy-making style. As two other news stories from the Middle East last week make clear, the American position in the region is an odd mix of dominance and impotence that makes good policy making hard—and that makes the task of building domestic support for smart policy even harder.

The first development is a success story that underlines how dominant the U.S. has become: Fearing U.S. sanctions, China National Petroleum Corp. has abandoned plans for a multibillion-dollar investment in Iran’s South Pars gas field. This is part of a broader Chinese retreat from Iran in the face of American pressure; the Middle Kingdom isn’t yet ready to challenge the U.S. in the Middle East.

The second development—the violent protests shaking Iraq—tells us something equally important. The U.S. may be the paramount power in the region, but nobody has a solution to the developmental and political crisis that continues to destabilize too many countries across the Middle East.

In Iraq there is no political party or social movement with the vision, discipline and competence to create the kind of country the protesters say they want. Iraq’s politicians can’t deliver the goods. Nor can its civil society, military or religious leadership. More, the U.S., the European Union and the international financial institutions engaged in Iraq don’t know how to bridge the gap between the aspirations of the Iraqi people and the shambles of the nation’s political life. The “reforms” a desperate Iraqi government is proposing in hope of quieting the unrest will mostly make things worse. Parliament Speaker Mohammed al-Halbousi has promised, for example, to place every Iraqi with a master’s degree or above on the Education Ministry’s payroll. Such measures would degrade the country’s finances, tighten the grip on power of corrupt political parties and block the kinds of change that might someday put Iraq on the road to success.

Iraq isn’t the only country in the region that is trapped in a cycle of dysfunctional governance and blocked development. The forces that produced the Arab Spring—and those that frustrated it—remain at work in the region. Until and unless a path opens for serious economic development, the Middle East will continue to produce despotism, revolution, large streams of migrants, and fanatical religious armies and cults.

Mr. Trump isn’t the first U.S. president to try to hold America back from a Middle East conflict. President Obama made a similar, and similarly hasty, decision in 2013 when he chose not to respond to Syria’s violation of his chemical weapons “red line” with a military strike. Many of the same people criticizing Mr. Trump today criticized Mr. Obama then, and the subsequent course of the Syrian war underlined both the humanitarian and the strategic case against Mr. Obama’s decision. Mr. Trump’s Syria decision may also prove to be a mistake, but it should give the establishment pause that two presidents as different as Messrs. Obama and Trump reached similar conclusions about the political risks in the Middle East.

The U.S. may be the most powerful actor in the region, but it can’t resolve the economic and social conflicts that destabilize the Middle East. As long as this is the case, those who want presidents to commit to long-term military engagements, however limited and however advantageous, must expect a skeptical hearing in the Oval Office.

Dr. Mead is no Jacksonian but he does understand the viewpoint. If the Wilsonians who have been running our foreign policy for the last half century want to continue their proselytization of the world, they need to convince the Hamiltonians to fund those ambitions sufficiently and they might consider taking up arms themselves rather than merely sending Jacksonians to do the heavy lifting for them.

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What’s Your Endgame?

The likewise ever-hawkish editors of the Wall Street Journal hold views similar to those of the WaPo editors:

Mr. Erdogan says the U.S.-armed Kurdish fighters in Syria, known as the YPG, have ties to the Kurdistan Workers’ Party, a domestic Kurdish insurgency within Turkey. On that exaggerated claim he justifies an exercise that could amount to ethnic cleansing. Mr. Erdogan last month proposed a “safe zone” extending some 20 miles into Syria from the Turkish border, where he would resettle millions of Syrian refugees. This could require the forcible resettlement, or worse, of Kurds already living in the area.

Mr. Erdogan seems to have believed that the U.S. would help in this exercise. But after a phone call with the Turkish strongman, Mr. Trump made clear that Turkey is on its own. That also means so are the Kurds, and the U.S. withdrew its troops from two border posts. A Kurdish spokesman tweeted, “We are not expecting the US to protect NE #Syria. But people here are owed an explanation.”

This looks like a betrayal of the YPG, which lost 11,000 soldiers fighting against ISIS. America armed the Kurds in that fight, and they trusted the U.S. when they were asked to dismantle defensive positions near the Turkish border as part of the buffer-zone negotiations with Ankara. The Kurds are less likely to aid an insurgency in Turkey if they’re allowed to govern themselves in a safe area in Syria policed by the U.S. and Turkey.

Okay, let’s start with the Kurds. The Kurds did not fight DAESH on our behalf but to defend themselves and their homeland. They would have opposed DAESH under any circumstances.

I’m not as convinced that the Kurds are modern liberal democrats as the editors of the WSJ and WaPo and other U. S. worthies seem to be. It’s hard for me to believe that about any group whose heads of “political parties” are coincidentally traditional tribal chieftains. What I think has happened is that the Kurds have done a great PR job in Washington. Any hypothetical Kurdish state will necessarily be carved out of Turkey, Iraq, and Iran and I find it totally unsurprising that the non-Kurdish peoples of those countries are not down with the deal. If the Kurds want their own country they should do it the way other people do—they should seize it. And it is not in our interest to help them do so.

What in the world do the editors see as the endgame? Should the U. S. colonize all of North Africa, the Middle East, and West Asia? Presumably, they assume that everyone else in the world, e.g. the Russians and Chinese, would sit idly by as we did that.

Or do they believe that multi-ethnic states are unsustainable? What about the United States? Either way doesn’t that make them white supremacists?

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What Did They Expect?

The editors of the Washington Post, who never met a war they didn’t like, are distraught that President Trump, without consulting his advisors, allies, or the military, has ordered that U. S. troops be withdrawn from Syria:

Betrayed by the United States and forced to fight a potentially bloody conflict with Turkey, the Kurdish-led forces could quickly abandon any further effort to control the Islamic State. They might well set free the tens of thousands of former militants and family members held in SDF-controlled camps. The 1,000 U.S. troops in Syria could be forced to withdraw entirely, which would be a major victory for Russia and open the way for Iran to entrench its forces along Israel’s northern border. U.S. allies around the world meanwhile will have reason to question whether they should cooperate with a government that so casually abandons military partners.

Just for the record, I think that President Trump’s remarks about retaliation against Turkey were Turkey to overreach and “great and unmatched wisdom” are overblown and border on the unhinged. They will, no doubt, be trumpeted by the media.

I wonder what the editors think the legal pretext for the U. S.’s maintaining troops in Syria might be? It certainly isn’t Security Council authorization. None has been forthcoming. In fact we are in violation of our obligations with respect to the United Nations already.

It also can no longer be that Syria is “unwilling or unable” to to defend itself, the explanation on which the Obama Administration relied heavily.

I also note that the editors of the WaPo never complained about our supplying Al Qaeda in Syria which we have in fact done.

I wonder what the editors not to mention the Kurds expected? Did they expect the U. S. to occupy Syria permanently? That was never going to happen and it has always been obvious that it wouldn’t happen.

Removing our troops peremptorily from Syria is another case of a typically Trumpian approach to policy—doing the right thing in the wrong way for the wrong reason. Given only the choices between that and doing the wrong thing in the right way for the right reason, I think I prefer the former.

I would much rather be doing the right thing in the right way for the right reason but if there is one thing I have learned it is that I don’t get what I want.

Meanwhile, what about Erdogan’s Turkey? Kemalist Turkey was admitted to NATO not Islamist Turkey. Is there really a role for an Islamist Turkey in NATO? Rather than pieties about the fate of the Kurds we should be concerning ourselves with addressing that.

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Nuclear Jihad?

That more attention isn’t being paid to this by the major news outlets is a scandal and an outrage. At the Washington Times, take a look at this rundown on the escalating tensions between India and Pakistan by Shak Hill:

Pakistan and India have fought three wars since the 1947 partition created the two states; two of the three were over Kashmir. None of those wars occurred when either country possessed nuclear weapons.

Pakistan’s Prime Minister Imran Khan addressed the United Nations on Sept. 29 and threatened to change that. Mr. Khan took the 15 minutes of speaking time allotted him and went nearly an hour, using the entire speech to speak of “jihad” over Kashmir and rail against his Indian counterpart, Prime Minister Nehendra Modi.

“Jihad” is not a word the world wants to hear from a man atop a self-described Islamic republic that owns more than 100 nuclear weapons.

Read the whole thing. This is the most dangerous issue in the world today.

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The UAW Strike

In case you’ve lost sight of it, the autoworkers are still striking against General Motors. The Wall Street Journal reports:

Analysts estimate GM is losing $50 million to $100 million a day from lost factory production, a sum that is expected to make a bigger dent in the company’s second-half performance the longer the work stoppage goes on. JPMorgan Chase last week pegged GM’s losses at more than $1 billion through two weeks of the strike.

GM last week idled its pickup-truck plant in Mexico because of strike-related parts shortages, fully cutting off output of its most-profitable vehicle line.

Workers get $250 a week in financial assistance from the union’s strike fund but that figure is a fraction of their full wage, which is anywhere from $630 to $1,200 for a 40-hour workweek.

Looming behind the strike is GM’s long-range bet on building more electric cars, which require far fewer workers and have more foreign-sourced parts. For the UAW, such plans are a threat to wages and job security.

Issues include the tiered pay system that now prevails in the auto industry with new hires being paid less than veterans, holding the line on the number of workers employed, and preserving the union’s “Cadillac” health care plan.

Possibly the most serious issue is that the union just doesn’t trust GM management and the recent setback in negotiations suggests that the workers’ trust in management is eroding if anything.

When I was a kid a strike like this might well have paralyzed the entire country. That this strike has not shows just how much the auto industry and the whole economy have changed. There used to be thousands of feeder companies, large and small, that were idled when the UAW struck against GM. Now a lot of those U. S. companies have gone out of business, replaced by overseas suppliers. I wonder if the strike is having a measurable effect on the economies of Japan, South Korea, and other countries where today’s auto suppliers are located.

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Tribune of the Elite

At The Week Matthew Walther speculates about Elizabeth Warren’s becoming the Democratic nominee:

Warren, meanwhile, is the only candidate showing signs of doing what I and many other observers said would be necessary for the eventual Democratic nominee — namely, splitting the difference between DNC establishment types and progressive activists. On paper Warren might have a great deal in common with Bernie Sanders, but her style is fundamentally different. Yes, she talks about breaking up the world’s largest corporations and increasing taxes (and even creating new ones) and single-payer health care, but she also talks about the importance of party unity. She understands that you can say “I agree with Bernie” in a debate as long you explain to donors behind closed doors that you are not here for a “revolution.” She does not shout or rant.

For all of these reasons, Warren is a great candidate in a Democratic primary and the one most likely to win the nomination if Joe Biden implodes. (Nancy Pelosi’s recent decision to make his son Hunter’s extensive knowledge of Eurasian mining infrastructure a 24/7 cable news talking point probably won’t help forestall that possibility.)

but he’s less confident of her being able to run a successful campaign against Trump:

If you don’t think Trump is capable of getting under her skin, remember that last year he single-handedly convinced her to take a freaking DNA test, the results of which she proudly reported, not-so-accidentally endorsing the “one-drop” theory. Native Americans were, rather understandably, appalled. Everyone else, with the possible exception of Trump himself, was confused. This is not how a sober-minded person responds to jibes from someone who has spent his entire life insulting people.

The Native American ancestry controversy is not going away, even if Warren does somehow manage to beat the current Super Tuesday math, which still favors Biden. How many Pocahontas jokes do you think she can stomach? Is she ready for Trump to tweet “Colors of the Wind” with her face superimposed on the Disney princess character by some teenaged alt-right sludgelord?

IMO Sen. Warren’s problems with resume-padding merely begin with her pretense of American Indian ancestry. A retort that Trump lies all of the time won’t help. We need a real straight-shooter not a complement to Trump.

Sen. Warren’s gravest problem is that she represents a single constituency of the Democratic Party—college-educated whites—and winning that constituency isn’t enough to win the election. Will she able to bring out enough blacks and Hispanics to win? We don’t know.

And don’t underestimate Trump. We only know the campaign he’s been running not the campaign he will run. He’s a wily opponent. Don’t underestimate his ability to adapt.

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What We’ve Always Known About China

The editors of the Washington Post say that the Chinese authorities’ response to the demonstrations in Hong Kong is “wrecking Hong Kong’s ideals”:

Under pressure from the streets, Ms. Lam eventually withdrew the objectionable extradition law, and, at almost any point, the demonstrators would probably have been satisfied if she had met relatively modest demands for an investigation into police brutality and an adherence to democratic norms. But neither Ms. Lam nor the overlords in Beijing understood this, and the latest crackdown is the most stark evidence yet of their self-defeating miscalculation. They have entirely destroyed the “one country, two systems” pledge under which the handover was made. For years, Taiwan, a thriving democracy, has watched — warily — how that pledge would unfold. Now the answer is clear: China will stop at nothing to achieve absolute control.

For those whose vision has not been obscured by dollar bill-colored blinders it has merely confirmed what we’ve known all along. Economic liberalization will not bring political liberalization in China. Economic liberalization may well be evanescent. The authorities’ main priority is retaining their own grip on power.

I don’t know what practical effect the editors’ preferred course of action:

Congress ought to send a stronger message by approving legislation requiring a review of whether Hong Kong is sufficiently autonomous from China to deserve its current special economic and legal treatment from the United States.

other than to hurt the people of Hong Kong. Hong Kong is just not that essential to China any more. Unlike 20 years ago China has other financial hubs.

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Blame Congress

Rather than get into an argument about whether David Leonhardt is bouncing back and forth among personal income taxes, marginal vs. effective rates, and corporate income taxes in his latest New York Times column, I will couch my objection this way. If you think “the rich” don’t pay enough of their income in taxes, blame Congress. Just changing the marginal rates (the rates in the 1040 instructions) won’t necessarily achieve the objective you want.

You’ve got to change how income is calculated and what’s deductible from income, too. Take the home mortgage interest deduction, for example. Under present rules the interest on the first $1,000,000 in mortgage debt can be deducted from your income for purposes of calculating the taxes you owe. I feel confident in asserting that very, very few in the bottom 90% of income earners are taking out million dollar mortgages. If we were to want to give most of the benefit of that “tax expenditure” as it’s called to those with incomes in the bottom 90%, we’d reduce the cap to something more reasonable.

That would engender howls of anguish from people living in places with very expensive housing, realtors and home builders, and state and local governments.

But the biggest howls of all would come from Congress. Most of Congress’s power depends on being able to offer something (in this case a tax break) to high rollers. Even with simplification the tax code runs to thousands of pages. That isn’t to keep it simple and comprehensible.

Marginal rates are eye-catching and make good political footballs but the real action is in how income is calculated and what deductions are offered.

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Who Are the Houthis?

There’s a good briefing at Deutsche-Welle on the Houthis. Here’s a snippet:

The Houthis emerged in the 1980s, forming a broad tribal alliance in Yemen’s north based on a revival of Zaydism, a branch of Shia Islam, in opposition to an expanding Salafism.

They were also motivated by what they saw as Saleh’s economic discrimination of the north.

After morphing into a militia in the 2000s, they fought six rounds of war from 2004-2010 against then-President Saleh’s forces, until the 2011 Arab Spring uprising toppled him.

When two years of national dialogue broke down, the Houthis ousted the new Saudi-backed Yemeni leader Abed Rabbo Mansour Hadi and took Sanaa.

After they allied with their former enemy Saleh, fearing their growing power, Saudi Arabia and the UAE, with help from the US and UK, opened an air and ground war against them.

There are several key points to keep in mind. First, the Saudi intervention in Yemen is not the result of attacks by Yemenis on Saudi Arabia but Saudi interference in a Yemeni civil war. Second, although Iranian support for the Houthis is pretty obvious now, it’s not nearly as obvious that the Iranians were supporting the Houthis prior to Saudi Arabia’s effectively installing their man as the ruler of Yemen in 2012.

And then there’s this. Although the “drone” attack on Saudi oilfields have gotten enormous publicity what has received much less is that the Yemenis are, essentially, winning on the ground. The Saudi army is essentially incompetent. The Saudi air force is only able to maintain its campaign against Yemen, in what has been called the “world’s largest humanitarian catastrophe”, deliberately targeting children, hospitals, schools, and other civilian targets, with U. S. support.

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