Research Library

2011
Rogoff, Kenneth S, and Leon Neyfakh. 2011. The I-Word. WebsiteAbstract
Like corruption, crime, and asbestos, “inflation” is a word that many Americans imagine in all-red capital letters, flashing across TV screens amid warnings of crisis. For anyone who remembers the gloomy, scary 1970s, when the inflation rate in the United States reached double digits, the word is shorthand for an economy that has spiraled out of control, the dollar losing value and prices climbing feverishly. “Inflation is as violent as a mugger, as frightening as an armed robber, and as deadly as a hit man,” said Ronald Reagan in 1978, as nervous citizens imagined the day when they’d have to push a wheelbarrow full of cash to the grocery store in order to buy a loaf of bread.That particular nightmare never came to pass, thanks to drastic measures taken by the Federal Reserve. For the better part of the past 30 years, the dollar has stayed stable, reassuring American families and the nation’s trading partners, with the central bank standing guard over the economy and doing everything necessary to keep inflation low.You might say that Kenneth Rogoff has been one of the guards. As a research economist at the Federal Reserve during the first half of the 1980s, he helped ensure that the word “inflation” would never again flash across American TV screens. His reputation as a conservative-minded inflation hawk followed him from the Fed to the International Monetary Fund to his current position in the economics department at Harvard.But then came the financial crisis of 2008, and the ensuing slump. And as the economy has continued to stagnate, Rogoff, 58, has become the flag-bearer for an unlikely position: that as we struggle to help the economy find its way out of the darkness, inflation could be the answer. It’s time, Rogoff says, to put Reagan’s “hit man” to work for the good guys.Over the past several years, Rogoff has emerged as one of the world’s leading experts on the history of financial crises and how they work, a unique perch that has given him a long view on what is happening to our economy and what lies ahead. In the bestselling 2009 book “This Time Is Different,’’ he and Carmen Reinhart, currently a senior fellow at the Peterson Institute for International Economics , laid out a detailed analysis of financial crises that have taken place around the world going back 800 years, and they put forth an alarming idea about our current predicament. What we’re going through, they argued—what we’ve been going through ever since the subprime mortgage crisis—has not been just a typical recession, as our leaders have been treating it, but something much worse, something that demands altogether different tools to stop it.One of these tools, Rogoff believes, is a temporary burst of inflation. And for the past several weeks, as the stock market has convulsed and debate raged over the Fed’s next move, he has been making his case publicly, through syndicated opinion columns, high-profile TV appearances, and numerous interviews. It’s an argument that Rogoff himself admits is “radical,” and one he says he’d rather not be making. But as he sees it, what’s holding the country back from recovery is not just a lack of consumer confidence or suppressed demand, as in a normal recession, but an immense overhang of debt: thanks to the collapse of the real-estate bubble, millions of American families owe so much to banks that they’re focusing all their energy on paying down their debts instead of spending their money on new investments. There will be no recovery until the painful process of working through that debt is behind us, Rogoff argues, and an increase in the annual inflation rate, which has floated around 2 percent since the early 1990s,would make it easier for debtors to pay down what they owe.“There’s no penicillin for this,” he said in an interview. “There’s no quick getting better. What you’re really talking about is taking the edge off the downturn and coming back to normal growth somewhat faster.”Rogoff’s call to raise inflation has come under attack from several different directions. Some economists think it wouldn’t do any good—that trying to raise inflation wouldn’t create demand or spur growth the way Rogoff thinks—while others believe that, given that prices actually seem to be in danger of falling at the moment, the Fed couldn’t make it happen if it wanted to. But perhaps the biggest problem for Rogoff is that, for most policymakers, elected and otherwise, the idea of courting inflation on purpose sounds downright crazy—not to mention politically disastrous.“Going around the country saying, ‘We need more inflation’ is not going to be a big seller,” said Michael Mussa, a senior fellow at the Peterson Institute and a former adviser to Reagan. “Inflation means that the costs of everybody’s goods and services are going up … And I believe it’s a substantial symbol of mismanagement by the government and the central bank.”Rogoff, however, remains convinced that as the situation grows more desperate, our leaders will feel pressure to start considering their options with more open minds. “As more and more people realize that we’re not quickly going back to normal,” he said, “they become more flexible.”Though Rogoff speaks with unflinching steadiness, hearing him explain how badly our leaders misdiagnosed the economy after the crash, one imagines a doctor banging his fists against the door of a surgery ward, trying to warn his colleagues that he has checked their patient’s chart and realized they’re about to make a huge mistake.The mistake we all made, as Rogoff sees it, was thinking this was going to be nothing more than a regular recession, the same kind of thing that has happened in the United States once or twice every decade for the past 150 years. These cyclical recessions come and go, and we have a pretty reliable playbook for dealing with them: usually, an increase in government spending and lower interest rates to encourage money to flow. Recessions tend to end after about a year, at which point unemployment starts to fall and normal growth resumes.Far less frequently, something more serious grips an economy: a financial crisis that breaks the pattern, and from which it is much more difficult to recover. Rogoff and Reinhart’s book suggests that such contractions are characterized above all by severe, widespread debt, which leads to long periods of economic stagnation and uncertainty. Rogoff puts our current situation in that category, along with the Great Depression, and he fears that if we do not act quickly and creatively to dig ourselves out of it, we risk settling into a long-term slowdown along the lines of what Japan has been going through since the 1990s. Mistaking this crisis for a typical recession, he says, is like mistaking pneumonia for a stubborn cold. “They’re very, very different animals.”The animal we’re wrestling with today, of course, was born of the vastly overheated real estate market that collapsed in 2007, temporarily paralyzing the global financial system and taking some powerful banks down with it. Today, its legacy is a towering mountain of consumer debt, government debt, and millions of underwater mortgages that are gumming up the economy and preventing it from coming back to life.“It’s very unlikely that all these debts are going to get repaid in full,” Rogoff said. Banks have loans on their books that people simply don’t have—won’t have—the money to pay off, and expecting it to happen means we’ll just stay frozen in place, waiting. What needs to happen, Rogoff says, is “some transfer from creditors to debtors.” The ideal way for that to happen, he says, would be through loan renegotiation, whereby banks would forgive some homebuyers and strike repayment deals with others. But that sort of piecemeal renegotiation has proved very difficult to carry out.A more viable way to start fixing the nation’s balance sheets, Rogoff argues, is by inducing a temporary bout of inflation. If the Federal Reserve raises its target inflation rate by several percentage points—up from around 2 percent, where it’s been for the past decade, to somewhere in the neighborhood of 4 to 6 percent—and injects new money into the economy until it gets there, then debtors will get some relief and the wheels of the economy will once again start to turn.Rogoff first laid out the argument for embracing inflation in one of his columns in December of 2008—a move that came as such a surprise to people who knew his reputation that he got letters from central bankers who were sure they’d misunderstood him. Rogoff had worked at the Fed under none other than Paul Volcker, whose mandate as Fed chairman was to drive inflation down at any cost. Under Volcker’s watch, inflation fell from 13.3 percent in December of 1979 to just 3.8 percent four years later. And though Rogoff at the time was just starting out as an economist—indeed, he was still transitioning from his first career as a professional chess player—he soon became an intellectual force in the movement to make central banks the economy’s first defense against inflation. In 1985, he published what would become one of his most widely cited academic papers in the Quarterly Journal of Economics, arguing that healthy economies depended on central banks being reliably committed to holding inflation down in all but the most extreme circumstances.Rogoff says he hasn’t changed his mind on how central banks should behave, and still thinks our fears of runaway inflation are well-founded. He just thinks that right now, it’s a risk worth taking. “There’s certainly some benefit in a society having a very, very strong conviction about keeping low inflation,” Rogoff said. “But I think right now it’s not helpful. You can have a very strong conviction that you don’t want to take medicines … And I respect that, but there are times when there’s really no choice.”Though Rogoff’s idea about raising inflation has so far not gained much purchase in the economics profession - Mussa, for instance, called it “a hare-brained crackpot scheme”— he is not alone in his thinking. Versions of the same call have been taken up by several prominent economists across the political spectrum, including Olivier Blanchard, the chief economist at the International Monetary Fund; Joshua Aizenman, co-editor of the Journal of International Money and Finance; Harvard’s Greg Mankiw, a former adviser to George W. Bush; and Paul Krugman, the Nobel Prize-winning New York Times columnist.THOSE WHO disagree with Rogoff cite several key objections. One is that inflation can be hard to stop once it starts: if the Fed turned on the spigot, there’s no guarantee they’d be able to turn it off before inflation got out of hand. Another objection is that if the Fed does raise its inflation target, pumping more money into the system and allowing the dollar to lose some of its value, lenders here and abroad will lose faith in the currency and respond by raising interest rates, which would ultimately make it harder for Americans to borrow money. A third objection is practical: that even if the Fed tried to trigger inflation, it simply might not be able to. The problem with the economy right now, some critics say, is a lack of demand for workers and products, and blowing air into the money supply would not change that.“This idea that there’s some separate policy instrument called ‘creating inflation,’ I think, is a little problematic,” said Lawrence Summers, the former secretary of the Treasury and Harvard president who also served as the director of President Obama’s National Economic Council. Increasing demand should be the primary goal, with inflation a possible byproduct, Summers said. “I don’t think the idea that you could simply get more inflation by saying you want more inflation is a promising one.”Rogoff is not swayed by these arguments. He emphasizes that the level of inflation he is calling for is very modest—and that there’s no really no reason to think that the Fed would be incapable of inducing it or reining it in at will. As for damaging the central bank’s credibility, Rogoff reiterates the extraordinary nature of the present circumstances. “This is a very exceptional situation—a once in Halley’s Comet kind of phenomenon,” he said. As he wrote in his column earlier this month, “These are times when central banks need to spend some of the credibility that they accumulate in normal times.”Trying to persuade central bankers to go for that plan involves a different kind of problem: a political one. Inflation devalues the dollar and makes things more expensive, making it an easy political target. Earlier this month, as Wall Street and Washington waited to hear how the Fed would approach monetary policy going forward, Texas Governor Rick Perry more or less threatened Fed chairman Ben Bernanke with violence if he “prints more money” before the next election. What he was talking about wasn’t even inflation, but a policy called “quantitative easing,” in which the Federal Reserve injects new money into the economy by buying billions of dollars worth of Treasury bonds from banks. The Fed has already tried this twice since 2008, and each time it has been controversial. While Rogoff’s plan to raise the inflation rate target is conceptually different from quantitative easing, it would involve the same mechanism, and would push the same political buttons in an even more extreme way.Underlying that opposition is more than just patriotism: it’s also a moral objection. Transferring the debt burden from borrowers to creditors, after all, effectively bails out borrowers by punishing the banks that lent them money, as well as devaluing the savings of their more prudent neighbors. That kind of rescue plan strikes many as fundamentally unfair.Rogoff understands this objection, and doesn’t dispute that what he’s proposing is on some level unfair. But ultimately, he argues, this contraction is dragging us all down together, and even those lenders and savers will be better off if America’s debt overhang is taken care of swiftly. Once that happens, and the economy starts to recover properly, we’ll be able to focus on designing better policies that will make us less vulnerable to financial crisis in the future. For now, a little inflation might just be the cost of getting us to where that might be possible.“One way or another,” said Rogoff, “we’re going to be doing things we would not dream we would ever do before this is over.”
Frieden, Jeffry, and Menzie D Chinn. 2011. The Downgrading of a Debtor Nation. WebsiteAbstract
The Treasury can cry foul all it wants, but the decision by Standard & Poor’s to downgrade America’s credit rating by one notch last Friday, and the subsequent plunge in the stock market, are serious symptoms of a loss of confidence—an assessment that is fundamentally political, not economic. There is little question about the technical ability of America to make good on its debts—but there are grave questions about the political system’s ability to resolve our nation’s financial problems. The debt-ceiling deal between President Obama and Congressional Republicans merely staved off a crisis of confidence for the moment. It does not address our immediate need to avoid falling back into recession, or our longer-term need to raise enough revenue to pay for the social spending Americans want. Moreover, the deal sidesteps the fundamental challenge the country now faces: who will pay to fix what was broken during the past decade by irresponsible tax cuts, ruinously expensive wars, failures of regulation and the resulting housing and financial booms and busts? In the short term, the plan cuts a bit of discretionary nondefense spending, a category that in fact has not grown particularly rapidly. This is a mistake. With unemployment at 9.1 percent, and long-term joblessness at record levels, we need more spending, not less. But the agreement all but rules out new spending to boost the economy, at a dangerous time. The chances of a double-dip recession are growing—and a further slowdown will increase, not reduce, the budget deficit. The longer-term spending and revenue commitments are no better. Certainly spending, in particular on Medicare and Medicaid, needs to be restrained. But the deficits cannot be reined in without tax increases, and the “framework” does little or nothing in this regard. The S. & P. decision to downgrade reflects, in large part, the expectation that Republicans will not allow the Bush tax cuts to expire. The recent skirmishes all dance around the central issue: the United States is in the midst of the world’s largest debt crisis. The Treasury now owes the public almost $10 trillion, including $4.5 trillion to foreigners—and that doesn’t include what households and companies owe. For decades to come, Americans will face the core problem of every heavily indebted nation: who will bear the burden of adjustment? Countries borrow for many purposes: canals and railroads in the 19th century, factories and highways in the 20th, and in the last decade, a housing and financial boom in Europe and America. When the projects don’t pan out and the debtor country falls into crisis, what happens to the accumulated debts? Who pays? Creditors or debtors? Workers or investors? Rich or poor? The European Union is tearing itself apart over this question, which divides creditor nations from debtor nations and which divides groups within nations. The American variant of this conflict is just beginning. Perhaps, some Americans believe, we can shunt the adjustment costs onto foreigners. Indeed, our creditors worry that the United States will reduce its debt burden the old-fashioned way, by inflating it away. A few years of moderate inflation, and a weaker dollar, would significantly lessen the real cost of servicing the country’s debts—at our creditors’ expense. But adjusting to the reality of America’s accumulated debts will inevitably require sacrifices at home. The battle over who will be sacrificing has already begun, albeit under veils of rhetoric. The Republicans seem unconcerned about stimulating recovery, and primarily concerned that none of the long-term costs of balancing our budget be paid by upper-income taxpayers. No surprise: unemployment among the one-third of Americans with the highest incomes is barely 4 percent, while for the lowest third it is more than four times that level. The Democrats, for their part, seem content to insist that the adjustment burden not fall on beneficiaries of government spending, whether public employees or recipients of social spending. This reflects their base in the labor movement, the public sector and the poor. We lost the first decade of the 21st century by squandering our wealth and borrowing as if there was no tomorrow. We risk losing this decade to an incomplete recovery and economic stagnation. An economically responsible, politically feasible distribution of the costs of working our way out of the crisis will require higher taxes, a more efficient tax code, and restrained growth of social spending, particularly Medicare. To ignore these realities, and the contentious choices they entail, is merely to postpone the inevitable day of reckoning—and probably to make it worse.
Nye, Joseph S., Jr. 2011. The Right Way to Trim. WebsiteAbstract
The recent debt deal will slash the defense budget over the next decade. And if Congress can’t agree on an additional $1.5 trillion in cuts, the law’s “trigger mechanism” will lead to deeper reductions in military spending. The initial cuts will not imperil America’s national security, but the deeper cuts could. The administration of George W. Bush nearly doubled the defense budget following 9/11. With the winding down of Mr. Bush’s two wars, we could cut our ground forces to 1990s levels, reduce the planned purchases of F-35 Joint Strike Fighters, make greater use of cheaper drones and other technologies, and deal with the escalating costs of the defense health care system — without serious damage to national security. Indeed, President Obama’s budget had already planned for $400 billion in defense savings by 2023. But it is not enough to tinker with the defense budget. We also need to rethink how we use our military power. Unlike the state of affairs during the cold war, the United States and its allies today account for over 70 percent of world military expenditure. The No. 1 power no longer has to patrol every boundary and seek to police every country. Opponents of defense cuts are raising the specter of isolationism and the weakening of American power. But there is a middle way. At the height of the cold war, President Dwight D. Eisenhower decided against direct military intervention on the side of the French in Vietnam in 1954 because he was convinced that it was more important to preserve the strength of the American economy. Today, such a strategy would avoid involvement of ground forces in major wars in Asia or in other poor countries. While it will take time to extricate ourselves from Mr. Bush’s post-9/11 strategy, we must start, as the National Security Strategy of 2010 states, “by recognizing that our strength and influence abroad begins with the steps we take at home.” Eisenhower could have said that — and no one could accuse Ike of being an isolationist. Counterinsurgency is attractive as a military tactic but it should not lead us into a strategy of nation-building in places where we do not have the capacity to engineer change. The maxim of avoiding major land wars in poor countries does not mean withdrawing our military presence from places like Japan and South Korea, or ending military assistance to countries like Pakistan and Egypt. Some analysts call this “off-shore balancing,” but that term must mean more than just naval and air force activity. For example, in Japan and South Korea, our allies pay a significant portion of the cost for basing American troops there because they want an insurance policy in a region faced with a rising China and a volatile North Korea. Over the course of this century, Asia will return to its historic status, with more than half of the world’s population and half of the world’s economic output. America must be present there. Markets and economic power rest on political frameworks, and American military power provides that framework. Military security is to order as oxygen is to breathing: underappreciated until it becomes scarce. That is why the new bipartisan Congressional commission must provide the revenues that allow America to continue to play this vital role while avoiding the trap of overly ambitious nation-building. Such a strategy is also sustainable at home. The British historian Niall Ferguson, an enthusiast for empire, lamented at the time of the Iraq war that the United States lacked the capacity for empire because of three domestic deficits: personnel (not enough boots on the ground); attention (not enough public support for long-term occupation); and financial (not enough savings and not enough taxation relative to public expenditure). He was correct. Lacking a stomach for empire or colonial occupation is one of the important ways in which American political culture differs from that of imperial Britain. Americans like to promote universal values. But rather than succumbing to the temptation to intervene on the side of “the good,” we can do it best by being what Ronald Reagan called “a shining city on a hill.” The alternatives we face today are not an untouchable defense budget or isolationism. A smart strategy for preserving America’s power and global role will depend on wisely tailoring our foreign policy to fit the cloth we have. Eisenhower knew this well.
Elkins, Caroline M. 2011. Strong Evidence. WebsiteAbstract
The work of a Harvard history professor has bolstered the case of a group of elderly Kenyans who are seeking reparations from the British government for rape, castration, beatings, and other abuses that they say were part of systematic colonial-era efforts to suppress Kenya’s Mau Mau uprising.The case passed a critical milestone in July when a British judge allowed it to move forward despite government arguments that, if the abuses happened, the current government isn’t liable for colonial transgressions.The Kenyans are former detainees in British prison camps set up during the 1950s Mau Mau rebellion, which set the stage for Kenyan independence in 1963. The plaintiffs allege that their abuse came at the hands of British jailers in what was a systematic and government-sanctioned campaign to break the rebellion.Though there had been talk of reparations for colonial atrocities for years, the case was given new life by Professor Caroline Elkins’ Pulitzer Prize-winning book, Imperial Reckoning: The Untold Story of Britain’s Gulag in Kenya. The book, published in 2005, blended government documents and eyewitness accounts to tell a compelling story of a horrific, systematic campaign by the British colonial government to crush the rebellion not only in the field, but through abuse of those held in camps around the country.“Caroline’s work has been absolutely fundamental to the case,” said Daniel Leader, a barrister for the London law firm Leigh Day & Co., which is representing the former Kenyan detainees. “She was uniquely responsible for beginning to change the public’s understanding of that period in history….The victims are forever in her debt. She put their stories on the map.”It was Elkins’ work, Leader said, that indicated that the abuse was not only systematic, but known by the British government in London.George Morara, program officer for the Kenya Human Rights Commission, which has worked to identify plaintiffs who could bring the case before the courts, said that Elkins’ research built an important foundation that allowed the case to move forward.“Without her seminal work,” Morara said, “this story wouldn’t have come to the fore.”Elkins’ critics, however, have charged that, though there may have been abuses in the system, there was no systematic effort by the government to abuse detainees.The July 21 ruling denied a motion to dismiss the case on the grounds that the current British government has no responsibility for actions by the colonial government in Kenya. While the judge didn’t rule on the merits of the case itself, the decision represents a key victory for the former detainees.“I have decided that the claimants have arguable cases, fit for trial,” High Court Judge Richard McCombe wrote in a summary explaining his judgment. “I emphasize that I have not found that there was systematic torture in the Kenyan camps nor that, if there was, the U.K. government is liable to detainees, such as the claimants, for what happened. . . . I decided that the FCO [Foreign and Commonwealth Office] have not established that the claimants are bound to fail.”The decision sets up a hearing on a second government motion to dismiss the case, Elkins said, this one based on a statute of limitations for such cases. The court can make exceptions to the statute of limitations, however, and Leader said the plaintiffs will use examples of other atrocities cases that have been prosecuted long after the acts were committed to illustrate that a fair trial is possible. Should the case clear that hurdle, expected in early 2012, Elkins expects the trial itself to begin next spring or summer.In addition to revelations contained in “Imperial Reckoning,” Elkins and two other historians acting as expert witnesses have submitted lengthy reports to the court; they’re also reviewing thousands of pages of previously undisclosed, colonial-era documents the government has brought forward because of the case. Elkins said the experts’ review of these documents has already yielded numerous memoranda that further substantiate both her thesis of systematized violence and the witness testimony she collected recounting abuse and torture in the camps.For Elkins, the court decision and the new documents substantiating her work provide a bit of vindication. Though her book garnered a great deal of praise in the U.S., winning the 2006 Pulitzer Prize for general nonfiction, it was also attacked in both Britain and Kenya as inaccurate and based on unreliable witness testimony.Elkins said she’s grateful for those at Harvard who stood by her while, as a graduate student, she worked on her dissertation, which was the basis for “Imperial Reckoning,” and when, as a junior faculty member, she endured the attacks on her work.In 2006, Morara and the Kenya Human Rights Commission began interviewing veterans in hopes of bringing a case to British courts. Three men and two women were chosen, one of whom, Susan Ciong’ombe Ngondi, has since died.  The four remaining plaintiffs, Ndiku Mutua, Paulo Nzili, Wambugu Wa Nyingi, and Jane Muthoni Mara, are all elderly, in their 70s and 80s. The case was filed in 2009.The case itself seeks an apology from the British government for abuse in the camps and establishment of a welfare system for former detainees, some of whom, Leader said, were unable to have children due to their treatment. In Kenya’s traditional culture, where children provide for their elderly parents, detainees’ inability to have a family leaves them with little means of support, he said.From a historian’s viewpoint, the case is one of what actually happened versus what people say happened, Elkins said. The government and its supporters have dismissed the firsthand testimony and eyewitness accounts of those who suffered, compounding what occurred in the detention camps decades ago.“It’s now a duel between colonial-inspired history and revisionist history,” Elkins said. “On top of it all, some have called the people who survived these horrific tortures liars. The British government behaved badly in Kenya, and many have continued to do so in an effort to conceal or minimize colonial abuses.” 
Paarlberg, Robert L. 2011. Famine in Somalia: What Can the World Do About It?. WebsiteAbstract
In Somalia today, there are ominous parallels with 1992: pervasive fighting among rival clans, far too little rain, and an inability among international peacekeeping forces to restore order or ensure that food aid reaches those in need. Nineteen years ago, the result was the death by starvation of 300,000 Somalis. Will it happen again?It doesn't have to. But everything depends on how the world responds.In some ways, the current situation is more complicated. One reason lies outside of Somalia altogether: the painful set of memories associated with our attempts to help in 1992, particularly in the United States. Then, the U.S. response was a forceful military intervention. President George H.W. Bush dispatched 25,000 American troops to Somalia, allowing food deliveries to resume, and preventing as many as 200,000 additional deaths. But in October 1993, famously, two Black Hawk helicopters were shot down in Mogadishu, 18 U.S. soldiers died, and the body of one dead American was dragged triumphantly through the streets. Public outrage forced President Clinton to terminate the mission. As a consequence, it's unlikely that U.S. policy makers will come close to taking similarly dramatic steps today.Meanwhile, two factors on the ground in Somalia itself threaten to make the current crisis more dangerous than the previous one. First, the drought is much worse this time -- perhaps the worst of its kind in 60 years. Second, there is now an Islamist militant organization, Al-Shabab, controlling the southern region of Somalia, where the drought has been most severe. The 2 million people living in this region cannot get food aid, because Al-Shabab's leadership, which brags about its close ties to Al-Qaeda, distrusts food-aid workers as spies. The propaganda they project among those living under their control is that it is better to starve than to accept help from the West.Under these seemingly intractable circumstances, what can those outside Somalia do to prevent mass deaths on the scale of the 1990s? Setting up relief camps in neighboring countries and waiting for starving Somalis to walk across the border is not a good option, because many do not survive the trip, and those that do become helpless refugees. Camps along Somalia's borders with Kenya and Ethiopia already hold 500,000 destitute people. Paying large bribes to Al-Shabab fighters could get some food through on the ground, but it is obviously not a sustainable solution, among the reasons being that the government agencies financing the aid will not ultimately tolerate it. Dropping food from UN airplanes will help, but not nearly on the scale needed to make a significant difference.The best policy option that the international community has available to it in Somalia is to support as much as possible the feeding operations now underway in the sizeable territories not controlled by Al-Shabab. The United Nations World Food Programme (WFP) is currently feeding 1.5 million people in Somalia, including 300,000 in Mogadishu itself, but these operations are constantly in danger of running out of resources. For the Horn of Africa as a whole, WFP is facing a funding shortfall of $252 million, so those wishing to help can start by focusing on ways to make up this shortfall.The international community can also do things beyond Somalia, and indeed beyond the exigencies of emergency food aid. Rich nations, including the United States, can start by delivering the support they have promised to build Africa's own food-production capabilities. Small farmers throughout sub-Saharan Africa need help to boost their productivity. If you visit a typical farming community in Uganda, or Kenya, or Cameroon, or Benin, most of those you meet will be women, most will be illiterate, and most will be living at least a 30-minute walk from the nearest paved road. As well, most will be farming with hand hoes, no irrigation, no electrical power, no modern seeds, and no veterinary medicine for their animals. These women are hardworking and highly resourceful, yet the returns on their labor are minimal because they have so little to work with. Their cereal crop yields are only one-tenth as high as those in Europe or North America, their average income is only $1 a day, and one-in-three of them is undernourished.What these farming communities need, above all else, is increased public investment in rural roads, electrical power, irrigation, clinics, schools, and agricultural research. But in recent decades, most African governments failed to make these investments because of a lack of international support. Between 1978 and 2006, the share of World Bank loans that went to agricultural development fell from 30 percent to only 8 percent.The United States has also reduced its aid to small farmers since the 1980s. U.S. official development assistance to agriculture in Africa fell from $400 million annually in the 1980s to only $60 million by 2006. The political right promoted this abandonment of agricultural-development assistance on the erroneous assumption that private investment alone could do the job. The political left went along on the equally erroneous belief that modernizing African farming might be bad for social justice and the environment.As international donors walked away from long-term agricultural-development efforts in Africa, per capita food production fell, leading predictably to an even greater need for emergency food aid. By 2006, perversely, the United States was spending 20 times as much shipping free food to Africa as it was spending to help Africans produce their own food.A shock of much higher world food prices in 2008 finally led donors to promise revived support for Africa's smallholder farmers. President Obama announced in 2009 that he would ask Congress for a doubling of U.S. agricultural-development assistance worldwide, up to more than $1 billion by 2010. Later that year, at a summit meeting of the G8, he convinced the world's rich nations to pledge $22 billion collectively over three years to promote food security and agricultural development. By 2010, however, donors in Europe were facing a debt crisis, opted for budget austerity, and began backing away from these promises.In the United States, the right - and the Tea Party movement, in particular -- began demanding budget cuts as well. In fiscal year 2011, Congress accordingly cut the expected U.S. contribution to a new Global Agricultural Food Security Program from $400 million down to only $100 million. And now a House Appropriations subcommittee has just cut FY 2012 funding for the Obama Administration's Feed the Future program by 18 percent. Only about half of 1 percent of our federal budget goes to poverty-focused foreign aid, so cutting these programs will have no significant budget impact at home -- only damaging humanitarian effects abroad.In Somalia, if these effects are to be prevented from cascading into a full-scale disaster of the kind the country suffered through in the 1990s, the international community will have to focus as much effort as possible, as quickly as possible, where we can be most effective. This will mean covering shortfalls to protect current WFP feeding operations in the Horn of Africa. But also, especially from the United States, it will mean delivering on promised support for farming across Africa (which in turn will depend on Congressional appropriations committees feeling as much pressure as the U.S. public can muster that they deliver on this promised support). Around the Horn of Africa today, roughly 11 million people face food risks, while on the continent as a whole there are now an estimated 390 million Africans consuming less than the nutritional target of 2,100 calories per day. Most of these hungry people are farmers. Understanding what they need for a sustainable response to the food crisis they face, and responding to that need directly, will be the pivotal challenge in alleviating African famine.
Campbell, David E, and Robert D Putnam. 2011. Crashing the Tea Party. WebsiteAbstract
Given how much sway the Tea Party has among Republicans in Congress and those seeking the Republican presidential nomination, one might think the Tea Party is redefining mainstream American politics. But in fact the Tea Party is increasingly swimming against the tide of public opinion: among most Americans, even before the furor over the debt limit, its brand was becoming toxic. To embrace the Tea Party carries great political risk for Republicans, but perhaps not for the reason you might think. Polls show that disapproval of the Tea Party is climbing. In April 2010, a New York Times/CBS News survey found that 18 percent of Americans had an unfavorable opinion of it, 21 percent had a favorable opinion and 46 percent had not heard enough. Now, 14 months later, Tea Party supporters have slipped to 20 percent, while their opponents have more than doubled, to 40 percent. Of course, politicians of all stripes are not faring well among the public these days. But in data we have recently collected, the Tea Party ranks lower than any of the 23 other groups we asked about—lower than both Republicans and Democrats. It is even less popular than much maligned groups like “atheists” and “Muslims.” Interestingly, one group that approaches it in unpopularity is the Christian Right. The strange thing is that over the last five years, Americans have moved in an economically conservative direction: they are more likely to favor smaller government, to oppose redistribution of income and to favor private charities over government to aid the poor. While none of these opinions are held by a majority of Americans, the trends would seem to favor the Tea Party. So why are its negatives so high? To find out, we need to examine what kinds of people actually support it. Beginning in 2006 we interviewed a representative sample of 3,000 Americans as part of our continuing research into national political attitudes, and we returned to interview many of the same people again this summer. As a result, we can look at what people told us, long before there was a Tea Party, to predict who would become a Tea Party supporter five years later. We can also account for multiple influences simultaneously—isolating the impact of one factor while holding others constant. Our analysis casts doubt on the Tea Party’s “origin story.” Early on, Tea Partiers were often described as nonpartisan political neophytes. Actually, the Tea Party’s supporters today were highly partisan Republicans long before the Tea Party was born, and were more likely than others to have contacted government officials. In fact, past Republican affiliation is the single strongest predictor of Tea Party support today. What’s more, contrary to some accounts, the Tea Party is not a creature of the Great Recession. Many Americans have suffered in the last four years, but they are no more likely than anyone else to support the Tea Party. And while the public image of the Tea Party focuses on a desire to shrink government, concern over big government is hardly the only or even the most important predictor of Tea Party support among voters. So what do Tea Partiers have in common? They are overwhelmingly white, but even compared to other white Republicans, they had a low regard for immigrants and blacks long before Barack Obama was president, and they still do. More important, they were disproportionately social conservatives in 2006—opposing abortion, for example—and still are today. Next to being a Republican, the strongest predictor of being a Tea Party supporter today was a desire, back in 2006, to see religion play a prominent role in politics. And Tea Partiers continue to hold these views: they seek “deeply religious” elected officials, approve of religious leaders’ engaging in politics and want religion brought into political debates. The Tea Party’s generals may say their overriding concern is a smaller government, but not their rank and file, who are more concerned about putting God in government. This inclination among the Tea Party faithful to mix religion and politics explains their support for Representative Michele Bachmann of Minnesota and Gov. Rick Perry of Texas. Their appeal to Tea Partiers lies less in what they say about the budget or taxes, and more in their overt use of religious language and imagery, including Mrs. Bachmann’s lengthy prayers at campaign stops and Mr. Perry’s prayer rally in Houston. Yet it is precisely this infusion of religion into politics that most Americans increasingly oppose. While over the last five years Americans have become slightly more conservative economically, they have swung even further in opposition to mingling religion and politics. It thus makes sense that the Tea Party ranks alongside the Christian Right in unpopularity. On everything but the size of government, Tea Party supporters are increasingly out of step with most Americans, even many Republicans. Indeed, at the opposite end of the ideological spectrum, today’s Tea Party parallels the anti-Vietnam War movement which rallied behind George S. McGovern in 1972. The McGovernite activists brought energy, but also stridency, to the Democratic Party—repelling moderate voters and damaging the Democratic brand for a generation. By embracing the Tea Party, Republicans risk repeating history.
Elliott, JH. 2011. How They Made the Empire. NY Books. Website
Rogoff, Kenneth S, Paul Krugman, and Fareed Zakaria. 2011. How to fix the U.S. economy. WebsiteAbstract
On Sunday, I talked about about Wall Street's wild week with two of the world's top economists. We discussed what the market volatility means or doesn't mean, and what may lay behind it and what lies ahead of us.Paul Krugman won the 2008 Nobel Prize in Economics, and he is a columnist for The New York Times. Kenneth Rogoff is a former chief economist at the International Monetary Fund, now a professor of economics at Harvard University. Here's a lightly edited transcript of our conversation:Fareed Zakaria: Paul, let me start with you. The one thing we saw over the week was markets up, markets down, but the one trend that seemed persistent was there is a great demand for U.S. treasuries despite the fact that the S&P downgraded it.You've been talking a lot about this. Explain in your view what does it mean that in moments like this U.S. treasuries are still in demand and what that does is push interest rates even lower than they are.Paul Krugman: Well, what it tells you is that the investors, the market, are not at all afraid of what the policy elite or people like Standard & Poor's are telling them they should be afraid of.You know, we've got all of Washington, all of Brussels, all of Frankfurt saying debt, deficits, this is the big problem. And what we actually have in reality is markets are terrified of prolonged stagnation, maybe another recession. They still see U.S. government debt as the safest thing out there, and are saying, if this was a reaction of the S&P downgrade, it was the market's saying, "We're afraid that that downgrade is going to lead to even more contractionary policy, more austerity, pushing us deeper into the hole."So it's a reality test, right? So we just had a wake-up call that said, "Hey, you guys have been worrying about the entirely wrong things. The really scary thing here is the prospect of what amounts toa somewhat reduced version of the Great Depression in  the Western world."Fareed Zakaria: Ken Rogoff, worrying about the wrong thing?Ken Rogoff: Well, I think the downgrade was well justified. It's a very volatile world. And the reason there's still a demand for treasuries is they've been downgraded a little bit to AA plus. That looks pretty good compared to a lot of the other options right now.It's a very, very difficult time for investors. There is a financial panic going on at some level. Some of it's adjusting to a lower growth expectations, maybe a third of what we're seeing. Two-thirds of it is the idea no one's home – not in Europe, not in the United States. There's no leadership. And I really think that's what's driving the panic.Fareed Zakaria: But you wrote in an article of yours that you think that this is part of actually a broader phenomenon which is that people are realizing this is not a classic recession, this is not a classic cyclical downturn. This is what you call a "Great Contraction". Explain what you mean by that.Ken Rogoff: Well, recessions we have periodically since World War II, but we haven't really had a financial crisis as we're having now. And Carmen Reinhart and I think of this as a great contraction, the second one, the first being the Great Depression, where it's not just unemployment, it's not just output, but it's also credit, housing and a lot of other things which are contracting. These things last much longer because of the debt overhang that we started with. After a typical recession, you come galloping out. Six months after it ended, you're back to where you started. Another six or 12 months, you're back to trend.If you look at a contraction, one of these post-financial crisis events, it can take up to four or five years just to get back to where you started. So people are talking about a double dip, a second recession. We never left the first one.Fareed Zakaria: So, Paul Krugman, what the implication of what Ken Rogoff is saying is spending large amounts of money on stimulus programs is not going to be the answer because, until the debt overhang works its way off, you're not going to get back to trend growth. So, in that circumstance, you'll be wasting the money. Is that – is -Paul Krugman: No, that's not at all what it implies. I think my analytical framework, the way I think about this, is not very different from Ken's. At least I certainly believed from day one of this slump that it was going to be something very different from one of your standard V-shaped, down and up recessions, that it was going to last a long time.One of the things we can do, at least a partial answer, is in fact to have institutions that are able to issue debt - namely the government - do so and sustain spending and, among other things, by maintaining employment, by maintaining income, you make it easier for the private sector to work down that overhang of debt.Fareed Zakaria: Ken, are you in favor of a – a second or a significant additional stimulus in the way that I think Paul Krugman is?Ken Rogoff: No. I think that's where we part ways on this. I think that creates a debt overhang in the terms of future taxes that is not a magic bullet because it's not a typical recession. I do think, if we used our credit to help facilitate one of these plans to bring down the mortgage debt in this targeted way, and it could involve a significant amount - that I would definitely consider. I mean, that's how I would do it.Now, obviously, things go from bad to worse, then you start taking out more and more things from the toolkit, but I would start with targeting the mortgages, then higher inflation, try to do some structural reforms and, of course, if things are still going badly, I'm open to more ideas.Paul Krugman: I would say things have already gone from bad to worse. I mean, this is a terrible, terrible situation out there. You know, we talk about it, we look at GDP, whatever. We have nine percent unemployment and, more to the point, we have long-term unemployment at levels not seen since the Great Depression. Just an incredibly large number of people trapped in basically permanent unemployment.This is something that desperately needs addressing. And I would be saying we should not be trying one tool after another from the toolkit a little bit at a time. At this point, we really want to be throwing everything we can get mobilized at it.I don't think fiscal stimulus is – is a magic bullet. I'm not sure that inflation is a magic bullet in the sense that it's kind of hard to get, unless you're doing a bunch of other things. So we should be trying all of these things.How did the Great Depression end?  It ended, actually, of course, with World War II, which was a massive fiscal expansion, but also involved a substantial amount of inflation, which eroded the debt. What we need - hopefully we don't need a world war to get there - but we need this kind of all-out effort which we're not going to get.Fareed Zakaria: You say World War II got us out of the Depression. This was a massive stimulus, massive fiscal expansion. But aren't we in a different world?We are, right now, the United States with a budget deficit 10 percent of GDP, which is the second highest in the industrial world. In two our debt-to-GDP ratio goes to 100 percent. That strikes me as a situation, which presumably has some upper limit. You can't just keep spending money and incur these larger and larger debt loads.Paul Krugman: I think those numbers are a bit high, about the debt levels a couple years out. It takes longer than that.But the main thing to say is, look, think about the costs versus benefits right now. Basically, the U.S. government can borrow money and repay in constant dollars less than it borrowed. Are we really saying that there are no projects that the federal government can undertake that have an even slightly positive rate of return? Especially when you bear in mind that many of the workers and resources that you employ on those projects would be otherwise be unemployed.The world wants to buy U.S. bonds. Let's supply some more, and let's use those bonds to do something useful which might, among other things, help to get us out of this terrible, terrible slump.Ken Rogoff: Well, I think you have to be careful about assuming that these low interest rates are going to last indefinitely. They were very low for subprime mortgage borrowers a few years ago. Interest rates can turn like the weather.But I also question how much just untargeted stimulus would really work. Infrastructure spending, if well spent, that's great. I'm all for that. I'd borrow for that, assuming we're not paying Boston Big Dig kind of prices for the infrastructure.Fareed Zakaria: But, even if you were, wouldn't John Maynard Keynes say that if you could employ people to dig a ditch and then fill it up again, that's fine. They're being productively employed, they pay taxes, so maybe the Boston's Big Dig was just fine after all?Paul Krugman: Think about World War II, right? That was actually negative for social product spending, and yet it brought us out. I mean, partly because you want to put these things together, if we say, "Look, we could use some inflation." Ken and I are both saying that, which is of course anathema to a lot of people in Washington, but is in fact what the basic logic says.It's very hard to get inflation in a depressed economy. But if you have a program of government spending plus an expansionary policy by the Fed, you could get that. So if you think about using all of these things together, you could accomplish a great deal.If we discovered that space aliens were planning to attack and we needed a massive buildup to counter the space alien threat - and really inflation and budget deficits took secondary place to that - this slump would be over in 18 months. And then if we discovered, oops, we made a mistake there aren't actually any space aliens.Ken Rogoff: So we need Orson Wells is what you're saying?Paul Krugman: There was a Twilight Zone episode like this, which scientists fake an alien threat in order to achieve world peace. Well, this time we need it in order to get some fiscal stimulus.Fareed Zakaria: But Ken wouldn't agree with that, right? The space aliens wouldn't work -Ken Rogoff:  I think it's not so clear that Keynes was right. I mean, there have been decades and decades of debate about whether digging ditches is such a good idea.And my read of the debate is when the government does really useful things and spends the money in useful ways, it's a good idea. But when it just dig ditches and fills them in, it's not productive and leaves you with debt.I don't think that's such a no-brainer. There are people going around saying, "Oh, Keynes was right. Everything Keynes said was right." I think this is a different animal, with this debt overhang that you need to think about from the standard Keynesian framework.Paul Krugman: I guess I just don't agree. I mean, the debt overhang was an issue in the '30s, too - private sector debt overhang. We came into this with higher public debt than I would have liked, right? We're really, in some ways, paying the cost to the Bush tax cuts and the Bush unfunded wars, which leave us with a higher starting point of debt.But the thing that drives me crazy about this debate, if I can say, is that we have these hypothetical risks. All those hypothetical things are leaving us doing nothing about the actual thing that's happening, which is mass unemployment, mass waste of human resources, mass waste of physical resources.This is what's happening. We are hemorrhaging economic possibilities and also destroying a lot of lives by letting this thing drift on. And we're inventing these phantom threats (sometimes ghosts are real, I guess) to keep us from acting.Fareed Zakaria: Do you think that the lesson from history, Ken, in terms of these kind of great contractions - we have not had something like this since the 1930s, but there have been other examples - tells you that until you get these debt levels down, no matter what the government does, it's not going to get you back to robust growth?Ken Rogoff: I do, because what happens as you're growing slowly, the debt problems start blowing up on you. That's happening very dramatically in Europe. They had a philosophy and approach of things are going to get much better - 'if we can just hang on, we're going to grow really fast, the debt problems will go away.'Well, guess what? They're not growing fast enough. The debt problems are imploding. That's slowing growth, and it's a self- feeding cycle.Paul Krugman: I guess I'm a little puzzled here because, again, the thing that's holding us back right now in the United States - although there are those peripheral European countries that are having a very different kind of problem, partly because they don't have their own currencies - but, in the United States, what's holding us back is private sector debt. And, yes, we're not going to have a self sustaining recovery unless that private sector debt could be brought down.Fareed Zakaria: Just to be clear, Paul, what you mean by that is individuals have a lot of debt on their balance sheets?Paul Krugman: Yes, that's what's holding us back, and we do need to bring that down - at least bring it down relative to incomes. So what you need to do is you need to have policies to make incomes grow.That can include government spending, which is going to add to public debt, but it's going to reduce the burden of private debt. It can include inflationary policies, and it can include deliberate forgiveness.The idea that this has all faded, that we cannot do anything to grow because we have to wait for some natural process to bring that debt down, that doesn't follow from the analysis. There is a huge overhang of debt, which is, at least as I see it, exactly the reason why we need very activist government policies.
Dignity: The Essential Role It Plays in Resolving Conflict
Hicks, Donna. 2011. Dignity: The Essential Role It Plays in Resolving Conflict. Yale University Press. WebsiteAbstract
The desire for dignity is universal and powerful. It is a motivating force behind all human interaction—in families, in communities, in the business world, and in relationships at the international level. When dignity is violated, the response is likely to involve aggression, even violence, hatred, and vengeance. On the other hand, when people treat one another with dignity, they become more connected and are able to create more meaningful relationships. Surprisingly, most people have little understanding of dignity, observes Donna Hicks in this important book. She examines the reasons for this gap and offers a new set of strategies for becoming aware of dignity's vital role in our lives and learning to put dignity into practice in everyday life.Drawing on her extensive experience in international conflict resolution and on insights from evolutionary biology, psychology, and neuroscience, the author explains what the elements of dignity are, how to recognize dignity violations, how to respond when we are not treated with dignity, how dignity can restore a broken relationship, why leaders must understand the concept of dignity, and more. Hicks shows that by choosing dignity as a way of life, we open the way to greater peace within ourselves and to a safer and more humane world for all.
Foreword by Archbishop Emeritus Desmond Tutu.
The Inner Life of Empires: An Eighteenth-Century History
Rothschild, Emma. 2011. The Inner Life of Empires: An Eighteenth-Century History. Princeton University Press. WebsiteAbstract
They were abolitionists, speculators, slave owners, government officials, and occasional politicians. They were observers of the anxieties and dramas of empire. And they were from one family. The Inner Life of Empires tells the intimate history of the Johnstones—four sisters and seven brothers who lived in Scotland and around the globe in the fast-changing eighteenth century. Piecing together their voyages, marriages, debts, and lawsuits, and examining their ideas, sentiments, and values, renowned historian Emma Rothschild illuminates a tumultuous period that created the modern economy, the British Empire, and the philosophical Enlightenment. One of the sisters joined a rebel army, was imprisoned in Edinburgh Castle, and escaped in disguise in 1746. Her younger brother was a close friend of Adam Smith and David Hume. Another brother was fluent in Persian and Bengali, and married to a celebrated poet. He was the owner of a slave known only as "Bell or Belinda," who journeyed from Calcutta to Virginia, was accused in Scotland of infanticide, and was the last person judged to be a slave by a court in the British isles. In Grenada, India, Jamaica, and Florida, the Johnstones embodied the connections between European, American, and Asian empires. Their family history offers insights into a time when distinctions between the public and private, home and overseas, and slavery and servitude were in constant flux.Based on multiple archives, documents, and letters, The Inner Life of Empires looks at one family's complex story to describe the origins of the modern political, economic, and intellectual world.
Rogoff, Kenneth S. 2011. After the Scandal, More of the Same at the I.M.F. WebsiteAbstract
As the world struggles to emerge from the greatest financial crisis since the Depression, the institution at the heart of the global economic system is facing a profound crisis of governance. Since the International Monetary Fund’s inception at the end of World War II, Europe and the United States have dominated decision-making. Incredibly, and possibly dangerously, decisions are now being made to keep the backward-looking status quo for at least another five years.True, the final stage of the race for the top job at the I.M.F. still offers the possibility that a Mexican candidate might beat out the French front-runner. Unfortunately, with Europe still controlling an excessive voting share, the outcome has all the suspense of a Soviet-era election. Worse, the I.M.F. board does not seem to feel the need to establish even a pretext of legitimacy for the powerful No. 2 position; everyone takes for granted that the board will rubber-stamp whomever the Obama administration nominates.In a world where markets already pay more attention to what happens in China than in Europe, and where loans from emerging economies are keeping the debt-challenged United States economy on life support, the I.M.F.’s outdated governance practices have become an accident waiting to happen. The I.M.F. has long been the last line of defense in emerging-market debt crises, combining big short-term loans with technical assistance that has proven effective far more often than not. Today it is on the front lines of the European debt crisis, with Greece, Ireland and Portugal teetering on the brink. Given Japan’s huge debts and demographic implosion, and China’s runaway growth boom, it is not hard to imagine a vast I.M.F. program in Asia in the next decade. Even the United States is a potential customer if it continues for another 10 or 15 years to neglect its soaring debt burden.If the fast-growing economies of Asia and Latin America feel disenfranchised from the I.M.F. — there is still a strong undercurrent of hostility in Asia over the fund’s handling of the 1997-98 Asian financial crisis — it will be difficult for the I.M.F. to raise money to deal with Europe and potentially Japan and to credibly do its work in emerging markets now and in the future. And because American and European leaders do not want to hear when their monetary, fiscal or regulatory policies are out of whack, the I.M.F. is really the only strong voice that can deliver the message; a non-European is best-equipped to deliver it.Until a few weeks ago, everyone seemed to agree that it was high time for a change. The presumption was that the I.M.F. board would choose its next managing director from the handful of supremely qualified candidates from emerging markets, thereby strengthening its claim to be a truly global institution. The incumbent, Dominique Strauss-Kahn of France, was on record supporting a transparent, merit-based approach for choosing his successor. Given the prestige he had amassed leading the I.M.F. during the crisis, it was assumed that he would use his influence to shepherd in the new era.Everything changed in mid-May. Mr. Strauss-Kahn was forced to resign after being accused of sexually assaulting a hotel housekeeper. Suddenly, the I.M.F. became tabloid fodder and the plans for an open and meritocratic selection process were tossed out the window. With the I.M.F.’s legitimacy now under unexpected attack on a second front, gender inequality, European leaders inventively coalesced around the French finance minister, Christine Lagarde.Just a short while ago, the fact that Ms. Lagarde is French would surely have been disqualifying, given that the French have held the I.M.F. leadership for most of the last three decades. Ms. Lagarde’s training as a lawyer, rather than as an economist, might also have been an obstacle. The head of the I.M.F. is like the head of a central bank, and is frequently confronted with difficult judgments on the sizing and timing of debt programs, not to mention on monetary policy and regulation. Ms. Lagarde has provided a strong and clear voice on the need for dramatic financial sector reform. But weighed against Mexico’s candidate, Agustín G. Carstens, she might have come up short, at least prior to the Strauss-Kahn debacle. Mr. Carstens, who has a Ph.D. from the University of Chicago, has a golden C.V. for the job. The head of the I.M.F. routinely deals with central bankers as well as finance ministers, and Mr. Carstens had held both positions in Mexico. He has also served as a deputy managing director of the I.M.F. and knows the institution inside and out.Mr. Carstens has rightly argued that a European is going to be hugely conflicted in managing the central challenge facing the I.M.F. today: Europe. Soon, the I.M.F. will likely have to help manage government debt defaults in more than one European nation, starting with Greece. European leaders want to kick the can down the road by bribing the Greeks with more loans to prevent them from defaulting. This is where the I.M.F. normally preaches tough love.The I.M.F. board has given itself until June 30 to decide. The circumstances of Mr. Strauss-Kahn’s departure have to be taken into consideration, and the fallout on gender issues is not over. There has never been a woman as head of a major multilateral lending institution, and Ms. Lagarde is a highly credible candidate. It seems a done deal, though perhaps there is some way to cap the length of her tenure and improve the selection process next time.And the managing director is not the only position that matters. At the end of August, John P. Lipsky, the first deputy managing director, who was named to the job by the Bush administration, is due to step down. Why not see if one of the top emerging-market candidates can be a replacement? An effective No. 2 would also be well-positioned to take over when Ms. Lagarde herself steps down. (The last three I.M.F. managing directors have departed without completing their terms.)There is still time to set in place a merit-based selection process that could eventually form the basis for filling the top job. The I.M.F. may be a poorly understood institution, but it does not have to be a poorly governed one.
Friedman, Thomas L, and Michael Sandel. 2011. Justice Goes Global. WebsiteAbstract
You probably missed the recent special issue of China Newsweek, so let me bring you up to date. Who do you think was on the cover—named the “most influential foreign figure” of the year in China? Barack Obama? No. Bill Gates? No. Warren Buffett? No. O.K., I'll give you a hint: He's a rock star in Asia, and people in China, Japan and South Korea scalp tickets to hear him. Give up?It was Michael J. Sandel, the Harvard University political philosopher.This news will not come as a surprise to Harvard students, some 15,000 of whom have taken Sandel's legendary “Justice” class. What makes the class so compelling is the way Sandel uses real-life examples to illustrate the philosophies of the likes of Aristotle, Immanuel Kant and John Stuart Mill.Sandel, 58, will start by tossing out a question, like, “Is it fair that David Letterman makes 700 times more than a schoolteacher?” or “Are we morally responsible for righting the wrongs of our grandparents' generation?” Students offer competing answers, challenge one another across the hall, debate with the philosophers—and learn the art of reasoned moral argument along the way.Besides being educational, the classes make great theater—so much so that Harvard and WGBH (Boston's PBS station) filmed them and created a public television series that aired across the country in 2009. The series, now freely available online (at http://www.JusticeHarvard.org), has begun to stir interest in surprising new places.Last year, Japan's NHK TV broadcast a translated version of the PBS series, which sparked a philosophy craze in Japan and prompted the University of Tokyo to create a course based on Sandel's. In China, volunteer translators subtitled the lectures and uploaded them to Chinese Web sites, where they have attracted millions of viewers. Sandel's recent book—Justice: What’s the Right Thing to Do?—has sold more than a million copies in East Asia alone. This is a book about moral philosophy, folks!Here's The Japan Times describing Sandel's 2010 visit: “Few philosophers are compared to rock stars or TV celebrities, but that's the kind of popularity Michael Sandel enjoys in Japan.” At a recent lecture in Tokyo, “long lines had formed outside almost an hour before the start of the evening event. Tickets, which were free and assigned by lottery in advance, were in such demand that one was reportedly offered for sale on the Web for $500.” Sandel began the lecture by asking: “Is ticket scalping fair or unfair?”But what is most intriguing is the reception that Sandel (a close friend) received in China. He just completed a book tour and lectures at Tsinghua and Fudan universities, where students began staking out seats hours in advance. This semester, Tsinghua started a course called “Critical Thinking and Moral Reasoning,” modeled on Sandel's. His class visit was covered on the national evening news.Sandel's popularity in Asia reflects the intersection of three trends. One is the growth of online education, where students anywhere now can gain access to the best professors from everywhere. Another is the craving in Asia for a more creative, discussion-based style of teaching in order to produce more creative, innovative students. And the last is the hunger of young people to engage in moral reasoning and debates, rather than having their education confined to the dry technical aspects of economics, business or engineering.At Tsinghua and Fudan, Sandel challenged students with a series of cases about justice and markets: Is it fair to raise the price of snow shovels after a snowstorm? What about auctioning university admissions to the highest bidder? “Free-market sentiment ran surprisingly high,” Sandel said, “but some students argued that unfettered markets create inequality and social discord.”Sandel's way of teaching about justice “is both refreshing and relevant in the context of China,” Dean Qian Yingyi of Tsinghua’s School of Economics and Management, explained in an e-mail. Refreshing because of the style and relevant because “the philosophic thinking among the Chinese is mostly instrumentalist and materialistic,” partly because of “the contemporary obsession on economic development in China.”Tsinghua's decision to offer a version of Sandel's course, added Qian, “is part of a great experiment of undergraduate education reform currently under way at our school. …This is not just one class; it is the beginning of an era.”Sandel is touching something deep in both Boston and Beijing. “Students everywhere are hungry for discussion of the big ethical questions we confront in our everyday lives,” Sandel argues. “In recent years, seemingly technical economic questions have crowded out questions of justice and the common good. I think there is a growing sense, in many societies, that G.D.P. and market values do not by themselves produce happiness, or a good society. My dream is to create a video-linked global classroom, connecting students across cultures and national boundaries—to think through these hard moral questions together, to see what we can learn from one another.”
This artice is about Weatherhead Center Faculty Associate, Michael J. Sandel.
Puaschunder, Julia M. 2011. On the Emergence, Current State and Future Perspectives of Socially Responsible Investment (SRI).Abstract
In recent decades Socially Responsible Investment (SRI) emerged into an en vogue investment philosophy. Originating from religious and moral considerations, SRI evolved in the wake of socio-political deficiencies and corporate social conduct. In the global rise of financial social conscientiousness, differing national legislations and regulatory traditions have led to various SRI practices, which are harmonized by the United Nations (UN). Building on the historic advancement of Financial Social Responsibility in the wake of socio-ethical deficiencies, this paper highlights the future potential of SRI in the aftermath of the 2008/09 World Financial Crisis as a means to avert economic market downfalls. During the current financial market reform, additional micro- and macro-research on financial social conduct could foster the idea of Financial Social Responsibility and aid a successful implementation of SRI.
Julia Puaschunder is a faculty associate at the Center for the Environment at Harvard University.Download PDF
McElroy, Michael B. 2011. Time to Electrify. Harvard Magazine. Website
Energy: Perspectives, Problems, and Prospects (Chinese Edition)
McElroy, Michael B. 2011. Energy: Perspectives, Problems, and Prospects (Chinese Edition). Beijing: Science Press. WebsiteAbstract
The book offers a comprehensive account of how the world evolved to its present state in which humans now exercise a powerful, in many cases dominant, influence for global environmental change. It outlines the history that led to this position of dominance, in particular the role played by our increasing reliance on fossil sources of energy, on coal, oil and natural gas, and the problems that we are now forced to confront as a result of this history. The concentration of carbon dioxide in the atmosphere is greater now than at any time over at least the past 650,000 years with prospects to increase over the next few decades to levels not seen since dinosaurs roamed the Earth 65 million years ago. Comparable changes are evident also for methane and nitrous oxide and for a variety of other constituents of the atmosphere including species such as the ozone depleting chlorofluorocarbons for which there are no natural analogues. Increases in the concentrations of so-called greenhouse gases in the atmosphere are responsible for important changes in global and regional climate with consequences for the future of global society which, though difficult to predict in detail, are potentially catastrophic for a world poorly equipped to cope. Changes of climate in the past were repetitively responsible for the demise of important civilizations. These changes, however, were generally natural in origin in contrast to the changes now underway for which humans are directly responsible. The challenge is to transition to a new energy economy in which fossil fuels will play a much smaller role. We need as a matter of urgency to cut back on emissions of climate altering gases such as carbon dioxide while at the same time reducing our dependence on unreliable, potentially disruptive, though currently indispensable, sources of energy such as oil, the lifeblood of the global transportation system. The book concludes with a discussion of options for a more sustainable energy future, highlighting the potential for contributions from wind, sun, biomass, geothermal and nuclear, supplanting currently unsustainable reliance on coal, oil and natural gas.
Ecologies of Human Flourishing
Swearer, Donald, and Susan Lloyd McGarry. 2011. Ecologies of Human Flourishing. Harvard University Press. WebsiteAbstract
In 2009–2010, in conjunction with the Weatherhead Center for International Affairs, the Harvard University Center for the Environment, and the Initiative on Religion in International Affairs at the Harvard Kennedy School, the Center for the Study of World Religions at the Harvard Divinity School presented a series of programs to explore several dimensions of an ecology of human flourishing—economic, sociological, religious, ethical, environmental, historical, literary; how notions of human flourishing, quality of life, and common good have been constructed; and in the contemporary world, how they are illuminated or are challenged by issues of distributive justice, poverty and economic inequality, global health, and environmental sustainability.
Miller, Ian. 2011. Bitter Legacy, Injured Coast. WebsiteAbstract
The rugged Sanriku Coast of northeastern Japan is among the most beautiful places in the country. The white stone islands outside the port town of Miyako are magnificent. The Buddhist monk Reikyo could think of nothing but paradise when he first saw them in the 17th century. “It is the shore of the pure land,” he is said to have uttered in wonder, citing the common name for nirvana. Reikyo’s name for the place stuck. Jodogahama, or Pure Land Beach, is the main gateway to the Rikuchu Kaigan National Park, a crenellated seashore of spectacular rock pillars, sheer cliffs, deep inlets and narrow river valleys that covers 100 miles of rural coastline. It is a region much like Down East Maine, full of small, tight-knit communities of hardworking people who earn their livelihoods from tourism and fishing. Sushi chefs around the country prize Sanriku abalone, cuttlefish and sea urchin. Today that coast is at the center of one of the worst disasters in Japanese history. Despite the investment of billions of yen in disaster mitigation technology and the institution of robust building codes, entire villages have been swept out to sea. In some places little remains but piles of anonymous debris and concrete foundations. I taught school in Miyako for more than two years in the 1990s, and it was while hiking in the mountains above one of those picturesque fishing villages that I came across my first material reminder of the intricate relationship between the area’s breathtaking geography, its people — generous and direct — and powerful seismic forces. On a hot summer day a group of middle-school boys set out to introduce me to their town, a hamlet just north of Pure Land Beach. While I started up the steep mountainside the children bounced ahead of me, teasing me that I moved slowly for someone so tall. “Are you as tall as Michael Jordan, Miller-sensei?” yelled one boy as he shot past me up the trail. “Not quite,” I told him, pausing on a spot of level ground to look out over the neat collection of tile roofs and gardens that filled the back of a narrow, high-walled bay. “What is this?” I asked, pointing to a mossy stone marker that occupied the rest of the brief plateau. A chorus of young voices told me that it was the high-water mark for the area’s biggest tsunami: more than 50 feet above the valley floor. “When was that?” I asked, but the boys couldn’t say. They had learned about it in school, they said, but like children everywhere they had little sense of time. Everything seemed like ancient history to them, but the thought of a wave reaching so high over the homes of my friends sent a chill down my spine, and I began to investigate the region’s history. A major tsunami has hit the Sanriku Coast every few decades over the last century and a half. Waves swept the area in 1896, 1933 and 1960. The small monument was put there, high above the village, to mark the crest of the 1896 tsunami. The wave killed more than 20,000 people. The boys’ village, a place called Taro, was almost entirely destroyed. Seventy-five percent of the population died. The force of those waves was amplified by the area’s distinctive geography. The same steep valley walls and deep inlets that make Sanriku so beautiful also make its villages and towns especially hazardous. The valleys channel a tsunami’s energy, pushing swells that are only a few feet high in the open ocean up to stunning heights. Fast-moving water topped 120 feet in one village in 1896. In a landscape where earthquakes are a regular occurrence but major tsunamis happen irregularly, people naturally forget. The small monument— one of several commissioned for towns up and down the coast — was a mnemonic whose purpose was not commemoration but vigilance. “When there is an earthquake, watch for tsunami,” reads the rather practical poem engraved into one such slab. Japan became a modern industrial state between the 1896 tsunami and the next major one, in 1933. The country’s radio and newspapers brought the story of rural fisher-folk swept out to sea to metropolitan audiences. Three thousand people died in the disaster and the humanitarian crisis elicited strong feelings of sympathy. The Sanriku region was portrayed as the nation’s heartland, a place where tradition remained intact, and the disaster threatened that preserve. Once again, Taro was particularly hard hit: all but eight of its homes were destroyed and nearly half of the village’s population of 1,800 souls went missing. The hamlet became an embodiment of agrarian loss. It is paradoxical that the response to this threat to traditional ways was the application of cutting-edge engineering and technology. A huge concrete seawall was planned for Taro. Completed in 1958, that wall, 30 feet high at points, stretches over 1.5 miles across the base of the bay. Faith in technology over nature appeared to be vindicated in 1960 with the great Chilean earthquake, a 9.5-magnitude quake that remains the largest ever recorded, which set off a Pacific-wide tsunami that killed 61 people in Hilo, Hawaii, before surging unannounced into the Sanriku Coast seven hours later. More than 120 Japanese died, but Taro remained largely unaffected, safe behind its sluice gates and concrete wall. Based in part on this success, a new program of coastal defense was initiated. The Sanriku Coast is now one of the most engineered rural coastlines in the world. Its towns, villages and ports take shelter behind state-of-the-art seawalls and vast assemblages of concrete tetrapods designed to dissipate a wave’s energy. The region is home to one of the world’s best emergency broadcast systems and has been at the forefront of so-called “vertical evacuation” plans, building tall, quake-resistant structures in low-lying areas. In 2003 Taro announced that it would become a “tsunami preparedness town.” Working with teams from the University of Tokyo and Iwate University, the town instituted a direct satellite link to accelerate the arrival of tsunami warnings. Public education was expanded and mayors from other towns visited to study this model village. Detailed maps showing projected maximum tsunami heights — using 1896 as a baseline — informed the selection of evacuation markers: a reassuring thick line defined the projected maximum reach of a tsunami. Evacuation sites were placed above that line on the maps. Similar calculations were made up and down the coast. The lines were drawn in the wrong place. Despite the substantial infrastructure and technological investments in Sanriku, the wave on March 11 overwhelmed large portions of Taro and Miyako. Some of the evacuation points were not high enough. The walls were not tall enough. And the costs are still being tallied. Thousands of people are missing along this beautiful, injured coast, hundreds in the town that I called home. I am still waiting to hear from one of the groomsmen from my wedding, the owner of Miyako’s best coffee shop and a sometime reader of this newspaper. Google’s people-finder app tells me he is alive, but I have no idea where he is or how our other friends fared. As for those rambunctious boys and all of my other students, I can only hope for the best. Technology allowed me to learn my friend’s fate. It has also helped to inspire a worldwide humanitarian response. It may be, however, that a greater application of technology in the same direction is not the answer to the problems posed by the March 11 tsunami. As a historian, I am forced to recognize that there is nothing purely natural about this catastrophe. It is the result of a far longer negotiation between human culture and physical forces. Disasters have the counterintuitive tendency to reinforce the status quo. As the terrifying events at the Fukushima Daiichi nuclear plant continue to underline, there are very real costs to an uncritical application of technology. I look forward to returning to my old Japanese home, but I also look forward to finding something new and different when I make that journey. 
Aldrich, Daniel P. 2011. With a Mighty Hand. WebsiteAbstract
As the ongoing nuclear crisis at the Fukushima Daiichi plant in the town of Ohkuma continues, and plant engineers and first responders endanger their lives to keep fuel rods and containment units cool, it is critical to consider how Japan’s commitment to nuclear power arose in the first place. It was no twist of fate or invisible market-hand that created 55 nuclear reactors in a seismically active country smaller than the state of California. Japanese bureaucrats and politicians have made it a priority to create an indigenous source of power that provides an alternative to imported oil and coal.Despite this understandable rationale, it’s still surprising that the only nation in the world against which atomic weaponry has been used—twice, no less—has created the world’s most advanced commercial nuclear program. It is especially surprising when you consider that countries like France, Germany, and the United States have given up their attempts at fast breeder reactor technology because of concerns about proliferation and hazard. What has driven Japan to pursue its advanced program of nuclear power, and why have nuclear power plants ended up in incredibly vulnerable positions along Japan’s coasts?While the United States has provided some support for nuclear power (for example, the Price-Anderson Act, which commits the federal government to absorbing some of the financial costs of potential nuclear accidents), as a source of alternative energy, it has never been fully embraced. This tradition of fence-sitting continues today, as seen in the Obama administration’s decision to end funding for the planned high-level radioactive waste repository at Yucca Mountain after two and a half decades of struggle over the site. Completion of the facility would have helped pro-nuclear groups convince skeptics that offsite waste disposal was possible. (The difficulty in securing permanent storage sites for nuclear waste is what leads U.S. and Japanese nuclear power plants to store their used fuel rods on site where they are most vulnerable.)In contrast, the Japanese government has gone far beyond this approach. The origins of its enthusiasm can be traced to the postwar period. In 1955, at the urging of then-Diet Memberand later Prime Minister Yasuhiro Nakasone, the Japanese government granted more than 5 billion yen—about $14 million in 1955 currency—to the Japan-based Agency for Industrial Science and Technology to begin research under the aegis of the “atoms for peace” banner raised by Dwight Eisenhower. In recent decades, the Japanese central government has supported the regional power utilities—including Tokyo Electric Power Company (TEPCO), which runs Fukushima, and its counterparts—through research funding, risk amortization, and financial and logistical support. Unlike France, for example, which explicitly nationalized and then partly privatized their main nuclear-power-promoting utility company, Japan did not nationalize its energy industry, and some Japan experts have characterized the relationship between the state and utility firms as contentious. Yet both sides got what they wanted over the past 50 years: The government guided Japanese firms to produce nearly one-third of the nation’s power through nuclear plants, and the utilities obtained credible commitment against risk and financial backing for their expensive investments. The Japanese people, as readers might imagine, have not been solid supporters of these government-initiated policies. Just as the government hoped to start its nuclear program in 1954, a highly publicized accident—in which crewmates onboard the poorly named Lucky Dragon Number 5 ship were exposed to radioactive fallout from an American hydrogen bomb test—resulted in the death of a radioman from radiation exposure. This spurred the creation of one of the world’s first national anti-nuclear movements (known as Gensuikyō) and a petition against nuclear weapons that obtained more than 20 million signatures. Attempts to build a number of plants around the country since the mid-1950s have resulted in petitions, public outcries, demonstrations, sit-ins, marches, and the occupation of town councils by anti-nuclear activists. While the anti-nuclear movement has not demonstrated the kind of violence shown by the anti-Narita Airport protests in the 1960s—during which a number of police officers and anti-airport farmers and students were killed in struggle over land expropriation—the success rate for the building of nuclear power plant has been roughly 50 percent. (That is, for every two attempts to construct a new plant, only one has gone forward.) To minimize these fights over nuclear power in a society where people are deeply sympathetic to victims of atomic energy, the government has taken a two-pronged approach. First, it has worked tirelessly with the regional utilities to map out villages and towns that are the best locations for plants, according to the utilities’ needs. Bureaucrats within MITI (the Ministry of International Trade and Industry, which became METI, the Ministry of Economy, Trade, and Industry, as of 2001) provided funding for geographical and demographic surveys of potential grounds. Power companies have often targeted rural, depopulated coastal communities, where the population of local fishermen are declining. But, while legitimate criteria, such as distance from high-population areas, shock-resistant bedrock, and access to cooling water, have played a role in such plant site selections, the inability of the local population to coordinate anti-nuclear mobilization has often been the dominant factor.Second, the government has created an extensive framework of policy instruments to manage and dampen anti-nuclear contestation. Where the Japanese authorities have been content to use standard, Weberian tools against anti-facility movements in other areas—such as dam construction and airport building—they have never resorted to land-expropriation in struggles over nuclear power plants, despite clear legal precedent for them to do so. Rather, the government has created a series of hard- and soft-control tools alongside deep incentives for communities willing to take on nuclear reactors. For example, students in Japanese middle schools may take science courses emphasizing the safety and necessity of nuclear power plants, with curricula written by government bureaucrats rather than teachers. Farmers and fishermen in these communities are regularly offered jobs at government-sponsored facilities to compensate for signing away sea rights in the surrounding fishing area. To further assuage the resistance that fishermen and farmers have shown in the past (because of concerns over “nuclear blight”—potential customers avoiding crops or fish because of fears of nuclear contamination), the government sponsors a yearly fair in Yokohama, in which only communities that host nuclear power plants can display and sell their goods. Finally, the government has created a monumental program called The Three Power Source Development Laws (Dengen Sanpō), which funnels roughly $20 million per year to acquiescent host communities. The money—which comes not from the politically vulnerable and annually vetted budget, but, instead, from an invisible tax on all electricity use across the nation—purchases roads, buildings, job re-training, medical facilities, and good will. In these far-flung rural communities that are, by and large, dying through depopulation and aging, these funds can provide vital support. Japan’s choices—to sway public opinion through subsidies, social control tools, and manipulation—have left little room for public debate on the issue of nuclear power. The local residents—whom we see bearing the heaviest burden of the ongoing crisis in Fukushima and who have been exposed to radiation by past accidents at the Monju FBR, the fatal accident at Tokaimura, and elsewhere—are seen not as partners, but as targets for policy tools. A plan-rational approach, as Chalmers Johnson might have called it, has placed reactors in areas vulnerable to the threat of tsunami and pushed rural communities into dependence on the economic side payments which accompany these facilities. Now, as Japan struggles to avert catastrophe, it is the time for a real discussion between civil society and state over the future of nuclear power.
Daniel P. Aldrich is a former Advanced Research Fellow (2006–2007) of the Program on U.S.-Japan Relations and a former Graduate Student Associate of the Weatherhead Center (2002–2005).
Liss, Daniel. 2011. Black, White, and the Limbo in Between: The Precarious Position of the South African Chinese Under Apartheid.Abstract
The South African Chinese have long labored to manipulate their racial position to advance their individual and collective economic and political interests. Their negotiation reached its peak under apartheid, the oppressive system of segregation instituted by the National Party in 1948. Under various concurrent tenets of apartheid law, the Chinese were classified as non-white, Coloured, Asian, and Chinese. Like other non-white groups, the Chinese were subject to discrimination because of their race. Yet over the course of apartheid, the Chinese slowly gained more rights. By the late 1970s, they were still Chinese but had won many of the privileges reserved for Whites. The Chinese population managed this success through their small size and specific political strategies intended to portray their community as diligent, law-abiding citizens. Instead of protesting the existing social order, they sought to manipulate the apartheid apparatus to their advantage. Ultimately, the South African Chinese managed to manipulate racial policies to their advantage because of the apartheid state’s overarching concerns about its political and economic relations with the Republic of China’s government. Chinese South Africans represent a miniscule fraction of South Africa’s population and have received a commensurately small amount of historiographic attention. However, their experiences offer a privileged vantage point into the connections between South Africa’s domestic racial policies and international relations during the apartheid years. Ultimately, this study demonstrates that the international context deeply shaped the construction and reconstruction of racial and ethnic categories in apartheid South Africa—a regime too often dismissed as exceptional and divorced from a changing international order. This work not only engages the literature on the experiences of the South African Chinese, but also provides a critical case study for the larger literature on the functional utility of race in the policy formation of apartheid.
Guo, Elizabeth Congcong. 2011. Conceiving Conception: The Bioethics of Assisted Reproductive Policy in China.Abstract
My thesis explores the ethics behind assisted reproductive policy in China by examining how ethical issues are identified, framed, and implemented among three groups of professionals: academic bioethicists, policymakers, and medical personnel. I will then examine how these issues are transferred across groups and identify the factors that shape their formation. Finally, I argue that while ethical priorities are heavily shaped by traditional cultural structures and definitions, they are simultaneously being altered by international influences. My research draws on ethnographic data collected through in-depth qualitative interviews and is supplemented with non-participant observation conducted at field sites in Beijing.