Touting the upcoming report from the Aspen Economic Strategy Group, Hank Paulson, Erskine Bowles, and Melissa Kearney have an op-ed in the Washington Post on the steps we need to take to keep Americans from “being left behind”. In my estimate they’re whistling past a graveyard:

First among them is a commitment to truth, which must be rooted in rigorous analysis. There can simply be no good policymaking without first establishing a common set of facts about what is happening in the world and what any given policy or proposal will likely accomplish.

Second, good policymaking requires that lawmakers trust one another. This takes time, the ability to convene in confidence and a mutual commitment to shared goals. This is precisely how, in 1997, President Bill Clinton, Senate Majority Leader Trent Lott (R-Miss.) and House Speaker Newt Gingrich (R-Ga.) negotiated the first balanced-budget agreement in a generation, and how, in 2008, a bipartisan majority in a Democratic-controlled Congress gave President George W. Bush the unprecedented powers necessary to stem the financial crisis and prevent another Great Depression. And both Bush and his successor, President Barack Obama, had the courage to take highly unpopular actions to save our economy, resisting pressure from their base to put the national interest ahead of partisan politics.

Third, our leaders must be willing to make principled compromises. Finding the middle ground has never been easy, and nobody wants to lose a negotiation. But today, our leaders are equating compromise with moral failure, making it that much harder to begin a discussion, much less reach agreement.

In a day in which everyone has their own facts, slogans are more important than an understanding of basic principles, and politics is strictly zero sum, I see no prospect for any of those guidelines being followed either in this Congress or probably the next. However in the interest of bonhomie here are my prescriptions:

1. We should adopt a point system for immigration like those of Canada, Australia, and New Zealand.
2. We should expand the number of H2-B visas available.
3. We should adopt a system of reciprocity with respect to trade.
4. We should start phasing out the subsidies we’re providing to so many industries.
5. We should stop using the tax system as a device for promoting social change or influencing economic behavior. It should have no purpose other than raising revenue.
6. Congressmen should be required to spend at least half their time in their home districts and/or home states to be eligible for re-election.
7. The power of the Congressional leadership should be decreased.
8. We need to control prices in health care. The mechanisms for doing that are less important than the fact of it.

I’m under no illusions. None of my prescriptions will be implemented. But none of the Aspen Economic Strategy Group’s recommendations are likely to be implemented, either, so we’re even.

In an op-ed in the New York Times Algerian Kamel Daoud asks an important question? Why doesn’t France produce its own imams?

PARIS — What to do about Islam in France? Considering Islamist terrorist attacks, communalism and the international manipulation of Muslim communities, the matter is pressing. But it’s contentious, because managing Islam seems to go against laïcité, France’s staunch version of state secularism, and a 1905 law that mandates the separation of church and state.

Wouldn’t revising that law be an admission that secularism is bowing to Islamism? On the other hand, if the law isn’t revised, or if the French state cannot find other ways of monitoring and steering Islam, then Islam in France risks falling under the control of foreign states or the influence of radicals. That is already the case, actually: Since laïcité prohibits the French authorities from using public funds to build mosques or train imams, Algeria, Morocco, Turkey and Saudi Arabia have stepped in. According to the newsmagazine L’Express, 70 percent of imams practicing in France are not French.

In the United States it is estimated that 80% of imams are foreign-born and most of those are Wahhabis from Saudi Arabia. That suggests that the lack of native imams has nothing to do with U. S. or French policy but with Muslim preference. Indeed, in the U. S. polling has suggested that American Muslims don’t trust American-educated imams.

In order to be an effective imam you must speak Arabic, preferably the dialect of Arabic spoken in Saudi Arabia because that is closest to the classical Arabic of the Qur’an.

My answer will probably sound harsh to many. Modern Islam is, as it has always been, a stalking horse for Arab cultural imperialism. It does not thrive in contact with the secular Western world without being replenished from the source. That we tolerate the funding of mosques and imams by foreign governments is one of the unhinged things about our modern life.

Montenegro is a country on the eastern side of the Adriatic. It has a population about the size of Tucson and an area about the size of Connecticut. The primary languages of its people are Serbian and Montenegrin, a dialect of Serbian. Serbian is sometimes referred to as “Serbo-Croation”. The primary difference between Serbian and Croatian is orthography—Serbian uses Cyrillic while Croatian uses Roman. Other languages spoken by Montenegrans include Croatian and Bosnian, also dialects of Serbian, and Albanian which isn’t.

Montenegro was formerly a Yugoslav republic which made sense and is now a member of NATO which doesn’t. On its own Montenegro could not defend itself against a concerted attack by Serbia let alone by Russia. Montenegro’s NATO membership increases Montenegro’s security while decreasing that of the other NATO members.

Neither the Soviet Union nor Russia has ever attacked Montenegro or, indeed, Yugoslavia. NATO has and without UN Security Council authorization. Over the period of the last 30 years NATO has attacked two countries without provocation: Yugoslavia and Libya. During the same period Russia has attacked none. The diction used to characterize Montenegro’s admission to NATO is “to deter Russian aggression”. The most effective way to deter whatever Russian aggression there might be would be to discourage another NATO member, Germany, from cozying up to Russia. That is more of a threat to NATO members than Serbia attacking Montenegro or whatever threat Russia poses to Montenegro.

That’s the context of the editors of the New York Times’s full-throated defense of NATO:

The Democratic-led House on Jan. 22 voted 357-22 for a bipartisan bill that would tie Mr. Trump’s hands by refusing him any federal money to pay the costs of leaving the alliance.

The Republican-led Senate should quickly follow, either approving the House measure or a separate bill proposed by a bipartisan group of senators that requires Mr. Trump to obtain approval from two-thirds of the Senate to “suspend, terminate or withdraw U.S. membership in NATO.” If the president refused to abide by a Senate vote preserving NATO membership, the bill would then prohibit the use of federal funds for withdrawal.

It seems obvious that leaving NATO would be a foreign policy debacle, eroding American influence in Europe and emboldening Vladimir Putin, the Russian leader, who wants to weaken NATO so he can expand his political and military sway.

Despite all that, there is no sign that Mitch McConnell, the Senate majority leader, would stop such a move if Mr. Trump were to make it, as he has repeatedly threatened to do.

The actions most necessary to preserving NATO cannot be taken by the United States and will not be promoted by admitting new members to NATO. They would be for France, Germany, the United Kingdom, Italy, and other NATO members to increase their military readiness. I do not know whether that would require 2% of their GDPs, 5% of their GDPs, or 10% of their GDPs. Of them only France remains at the highest level of readiness and that diminishes by the day. If there is a threat, they should act more like there is. If there is no threat, why should we act as though there were?

To put a little meat on the bones of a comment I made in an earlier post, consider the graph above. Amazon’s share of the important web services marketplace is very nearly larger than the next 14 players put together, and not far from being larger than all of the other players put together.

And its market share is not decreasing over time. Most of the competition is among the players in the lower tier rather than between AWS and what you might think were its main competition, e.g. Microsoft, Google, IBM, etc.

Anyone who’s taken microeconomics courses beyond Econ 101 will recognize that as a classic structure of an oligopoly. Additionally, that Amazon is using its market power to extend its way into other markets is obvious, cf. home automation, advertising, artificial intelligence, even home cleaning.

In case you’ve forgotten just how awful the countries of the Gulf are, there are two stories that should remind you. The first is about Iran. Apparently, they’ve just publicly hanged a man for the crime of being a homosexual:

The Islamic Republic of Iran publicly hanged a 31-year-old Iranian man after he was found guilty of charges related to violations of Iran’s anti-gay laws, according to the state-controlled Iranian Students’ News Agency.

The unidentified man was hanged on January 10 in the southwestern city of Kazeroon based on criminal violations of “lavat-e be onf” – sexual intercourse between two men, as well as kidnapping charges, according to ISNA. Iran’s radical sharia law system proscribes the death penalty for gay sex.

while Saudi Arabia jailed and tortured a woman for advocating women’s rights:

M.B.S. isn’t a great reformer, and he isn’t coming clean about Khashoggi’s murder.

Nor is he releasing Hathloul, who, along with others, had peacefully and persistently campaigned for years to allow women the right to drive.

In 2014, she was arrested when she tried to drive into Saudi Arabia with a driver’s license from the United Arab Emirates, nominally valid also in Saudi Arabia. Then in 2015, Hathloul was one of the first women to run for a seat on a municipal council. (She lost.)

She moved to the emirates. But in 2017, Saudi security forces effectively kidnapped her and her husband and returned them to the kingdom. The couple have divorced, and while accounts differ, some believe this is because of pressure the government placed on the husband.

Shortly before women were allowed to drive last June, the government rearrested Hathloul, along with other women’s rights activists who had fought for the right the government was about to grant.

“She said she had been held in solitary confinement, beaten, waterboarded, given electric shocks, sexually harassed and threatened with rape and murder,” her sister, Alia al-Hathloul, who lives in Belgium, wrote in a searing Op-Ed in The Times this month, recounting what Loujain had told their parents when they saw her. “My parents then saw that her thighs were blackened by bruises.”

Presently, we reckon Iran as our adversary and Saudi Arabia as our ally. I don’t see a lot to choose between them. And it’s not just Iran and Saudi Arabia and it’s not just the countries of the Gulf. I could produce similar stories about just about every country from the Bosporus to the Pacific, from the Mediterranean to the Cape of Good Hope, and from the Rio Grande to the Cape Horn.

This sounds like a good opportunity to remind you of John Quincy Adams’s remarks on American foreign policy:

America, with the same voice which spoke herself into existence as a nation, proclaimed to mankind the inextinguishable rights of human nature, and the only lawful foundations of government. America, in the assembly of nations, since her admission among them, has invariably, though often fruitlessly, held forth to them the hand of honest friendship, of equal freedom, of generous reciprocity.

She has uniformly spoken among them, though often to heedless and often to disdainful ears, the language of equal liberty, of equal justice, and of equal rights.

She has, in the lapse of nearly half a century, without a single exception, respected the independence of other nations while asserting and maintaining her own.

She has abstained from interference in the concerns of others, even when conflict has been for principles to which she clings, as to the last vital drop that visits the heart.

She has seen that probably for centuries to come, all the contests of that Aceldama the European world, will be contests of inveterate power, and emerging right.

Wherever the standard of freedom and Independence has been or shall be unfurled, there will her heart, her benedictions and her prayers be.

But she goes not abroad, in search of monsters to destroy.

She is the well-wisher to the freedom and independence of all.

She is the champion and vindicator only of her own.

As I have remarked and documented in the past when people come to the United States to live they may not bring their possessions but they do bring their political and social views.

I don’t care about the colors of the skins of the immigrants who will come here in the coming years but I do care about their political and social views. Most of the people coming here now aren’t “yearning to breathe free” but for a raise. Being human they will long to rebuild their old lives here. We need to be free to criticize those old lives without being charged with bigotry.

I actually liked a lot of what was in Anand Giridharadas’s sweeping criticism in the Guardian of the United States (not limited to the United States but actually extending to most of what is called “the West”). I presume it will cause smoke to come out of the ears of some readers. He opens with stating an apparent paradox. Here’s a snippet of it:

The tools for becoming an entrepreneur appear to be more accessible than ever, for the student who learns coding online or the Uber driver – but the share of young people who own a business has fallen by two-thirds since the 1980s. America has birthed both a wildly successful online book superstore, Amazon, and another company, Google, that has scanned more than 25m books for public use – but illiteracy has remained stubbornly in place, and the fraction of Americans who read at least one work of literature a year has dropped by almost a quarter in recent decades. The government has more data at its disposal and more ways of talking and listening to citizens – but only a quarter as many people find it trustworthy as did in the tempestuous 1960s.

It’s lengthy and bruising. I disagree with Mr. Giridharadas’s explanation of the reasons but it’s a strong criticism nonetheless. He’s on shakier ground when it comes to his remarks about “the new elites”:

This genre of elites believes and promotes the idea that social change should be pursued principally through the free market and voluntary action, not public life and the law and the reform of the systems that people share in common; that it should be supervised by the winners of capitalism and their allies, and not be antagonistic to their needs; and that the biggest beneficiaries of the status quo should play a leading role in the status quo’s reform.

This is what I call MarketWorld – an ascendant power elite defined by the concurrent drives to do well and do good, to change the world while also profiting from the status quo.

I am flabbergasted that he doesn’t recognize that these are the same neoliberal policies, dominant in U. S. thought over the period of the last 70 years, that have led to the situation in which we find ourselves now. Clearly, neoliberalism is alive and well.

What I think he misses and what all too many miss is that there are only two ways of allocating resources, whether they be raw materials, labor resources, or any other resource: a command economy or a market economy. Command economies have failed miserably wherever they have been tried.

Before you wrap yourself in the flag and rise in defense of our present system we do not presently have a market economy. We have a form of command economy known as “crony capitalism”. Between state socialism (what most of those presently mounting the rhetorical barricades advocate) and crony capitalism I don’t see a great deal to commend one or the other. They are both institutionalized corruption.

I think we need a major re-engineering of how we organize our affairs but I have no hope that the reorganizations that are likely to take place will be to the good. Command economies will continue to allocate resources inefficiently and (miraculously!) to benefit those in power. I am concerned that at the end of my life the United States will more closely resemble today’s Venezuela than it will today’s Switzerland.

You might be interested in looking at this piece at Politico by Doug Palmer and Wendy Wu. After a substantial amount of build-up they finally get to the subject with these two paragraphs:

While China might be willing to agree to an enforcement mechanism as part of the deal, they “probably don’t want the United States to be judge and jury” of whether they have faithfully implemented the pact, said Scott Kennedy, a China expert at the Center for Strategic and International Studies.

A more attractive alternative for Beijing would be for the agreement to be enforced through the World Trade Organization. But the United States might not be willing to accept that because the WTO dispute settlement process is notoriously slow.

I believe that the circumstances under which the so-called “trade war” between the U. S. and China ends depend upon what happens in 2020 and the Chinese are well aware of that. If President Trump is re-elected the negotiations will stretch on, a little insignificant sweetener added here, a bit of saber-rattling there, for the next four years thereafter. If President Trump is defeated, his tariffs will quickly be rescinded unilaterally and that will be that.

In my view the way this particular negotiation is being conducted is wrong. It is being assumed that it is a Dutch auction when the opposite is the case. Our issues with China are increasing not decreasing and the consequences should be increasing as well. China’s WTO membership should be put on the table. We should be talking about increasing and extending the tariffs or even embargo.

The Chinese authorities are the world’s heavyweight champions at waiting out their opponents or announcing concessions that are never actually implemented. We should be talking about decreasing or removing tariffs after whatever measures China puts into place are implemented and not a moment before and settle for not a whit less than China living up to its international obligations fully.

In an op-ed in the Washington Post Mitch Daniels explains why we should do away with the State of the Union message. He covers many of the bases: it has an inherent propensity to become a “throne speech”, as Jefferson noted when he demurred from delivering a SOTU message, it’s a public relations opportunity from a presidency that no longer needs them, the “shout outs” that have become a standard part of the SOTU since Reagan are undignified. Its increasingly participatory quality lacks the energy and honesty of the British Parliament’s “question time” which is a daily event and is highly staged. Its institution matches the growth in the “imperial presidency”, something that should be diminished, if anything.

Under the Constitution the president’s power is supreme in conducting foreign policy, with respect to the military, and in the day to day management of the executive branch of government. Recent court decisions limiting those should be thrown out as the trash that they are.

Under our system as defined the president’s power is limited and narrowly defined. The real power is in the hands of the Congress. What makes the president powerful is Congress’s deliberate abrogation of responsibility. Steadfastly refusing to do anything means you won’t be blamed for anything other than doing nothing nothing which the members of Congress seem to be able to survive better than angering their constituents by doing things they dislike.

Congress is furiously busy in idleness but make no mistake—its members are idle. Work is defined in terms of motion. This is not new. As some of you may recall I’ve been listening to old Burns and Allen radio programs. In one exchange between George and Gracie, Gracie urges George to run for Congress:

George: I can’t run for Congress. I don’t even know what a Congressman does. I’d be sitting there twiddling my thumbs.

Gracie: And you say you don’t know what Congressmen do.

and then there was Sam Clemens’s remark: “There is no distinctly native American criminal class save Congress” or Will Rogers’s wisecracks “Papers say: ‘Congress is deadlocked and can’t act.’ I think that is the greatest blessing that could befall this country” and “The rest of the people know the condition of the country, for they live in it, but Congress has no idea what is going on in America, so the President has to tell ’em”, in direct reference to the State of the Union message. A better way for the members of Congress to be informed about the condition of the country would be to return to their constituencies.

Since its very earliest days Congress has been crude, crass, and fractious. There is a reason that Congress conducts so little of its business in public. If it were to do so, people would lose respect for it which in my opinion would be all the better.

I was pretty amused by this piece at Ozy by Claire Jones and Valentina Romei. It seems that Germany’s export business is slowing down:

Alexander Hinterkopf, a maker of digital industrial printers, built his business through regular trips from the company’s German headquarters to big markets around the world. But in recent months his travels have been less fruitful.

“The environment can be summed up in one word — uncertainty,” says the Baden-Württemberg-based businessman. “Uncertainty is never a good thing in business, it means you always postpone decisions. Since the summer, I’ve been to China three times, and each time customers come up with another reason to postpone.”

After a decade of boom, a darkening political climate is beginning to cloud the international economic outlook. The global economy is forecast to grow less than 3 percent for the first time since 2009 in 2019, according to Consensus Economics, which polls economists worldwide. Germany, the world’s fourth-largest economy, with an export machine of 1.6 trillion euros a year, is among those most exposed.

First off Germany’s imports from China are growing faster than its exports to China. That’s not hard to understand. China doesn’t need Germany any more to build its factories for them which is what a lot of Chinese-German trade has been. The Chinese can build their own factories now. And the Chinese authorities manage their trade so as not to import too much. Welcome to the club, Germany.

But it’s not just China that poses a problem for Germany’s export-driven prosperity. Fellow EU members are tapped out, largely due to German policies. They can’t borrow any more to import more from Germany.

When you take a “beggar thy neighborh” approach to trade and your neighbors become beggars, doesn’t that mean that your plan is working?