Playing by the rules

This morning’s NYTimes proclaimed that:“The Biden administration, responding to the death of Aleksei A. Navalny, unveiled its largest sanctions package to date as the war in Ukraine enters its third year.”

On November 30, 2023, Phillip Dean Hancock was executed in Oklahoma. As the death penalty has been eliminated in most countries and such killing is considered immoral by millions of people around the world, what sanctions would be appropriate for them to impose on the U.S.?

A quite different case arises from killing an enemy in someone else’s country (aside from in war, where anything seems to be “allowed.”)  On February 13 of this year, Maxim Kuzminov, a former Russian military pilot who defected to Ukraine, was found dead with multiple bullet wounds in Villajoyosa, a city on Spain’s Mediterranean coast. The murder is suspected to have been organized by Moscow. What measures should Spain take against Russia in response (hopefully the U.S. will keep its nose out of other people’s business—fat chance)?

On January 3, 2020, the U.S. assassinated Qasem Soleimani, an Iranian major general and the commander of the Iranian Quds Force, in Baghdad. More recently, on February 7, 2024, Abu Baqir al-Saadi, a senior commander in Kataib Hezbollah, an Iran-backed Iraqi militia, was killed in a U.S. drone strike in Baghdad. What measures should Iraq (and Iran) take against the U.S.?

The rule of law is a fundamental aspect of our freedoms and the prosperity it has made possible. The international rules based order is an extension of those principals internationally and has served, though imperfectly, the same purposes globally. The U.S. has become an Imperial power who doesn’t obey the rules it tries to impose on others. Thus, American influence in the world is declining rapidly. We will all suffer as a result.

Abortion

Views on abortion have always been difficult to reconcile. Under our constitution, anyone born here is a citizen and has all of the rights of all other citizens. But when does a human fetus or embryo become a person with such rights? The question can be most challenging when the rights of two people—the mother and the fetus—conflict. My own view is that a fetus obtains the status of person with the right to protection, when it is viable, i.e., capable of living when removed from the womb.

The recent ruling by the Alabama Supreme Court that an embryo is a person that must enjoy the protections of the law, moves the goal post to a whole new level. Dr. Ito Briones (MD, Ph.D) argues that, if that is true and applied into practical terms, then women will be subject to a whole new level of restrictions on their behavior in the interest of the unborn person. His interesting observations follow:

The recent ruling by the Alabama supreme court to equate the embryo as a person started when embryos frozen in tubes were accidentally destroyed in a fertility clinic. The parents sued the clinic based on Alabama’s  law of “wrongful death of a minor’s act”. The lower courts said that this law does not apply but the Alabama Supreme Court overturned that decision. And so here we are.

As a practical consequence of this ruling, IVF clinics in Alabama have expectedly suspended treatments. There are already numerous outlets online and in the news that discuss this topic and so I will not discuss this here anymore. Unfortunately, there are also other unintended consequences from this decision that might turn the mundane day to day life of a woman into a dystopian mess.

Here are other issues that may need to be considered because of this ruling. 

  1. Is a restaurant owner liable for serving alcohol to a pregnant woman even if she didn’t know she was pregnant and does not inform the establishment? Presently, restaurants and stores can be held legally liable if they serve or sell alcohol to minors. The liability is valid even if they were not aware of the age status of the patron. To solve this issue, restaurants ask for an ID to confirm age. Does this mean women should also be required to show a negative pregnancy test before being served any alcohol? 
  • Coffee has been scientifically proven to be harmful to the embryo. Do women also have to show a negative pregnancy test before being served coffee? Caffeine is the main culprit in harming embryos and caffeine is also present in tea, chocolate, soft drinks and other foodstuff. Should the government limit the sale of these items to women?
  • How about pregnant women who have breast cancer or any cancer? Can they get treatment even if it will most probably harm if not kill the embryo? 

Before this ruling, a medical case of a pregnant woman with cancer will involve an intimate discussion with the woman, her husband and family, and the doctor. Because of this ruling, the government and law enforcement will have to join the already hypersensitive and impossible dilemma that she will face.

Additionally, any medical treatment on a pregnant woman will have to be reviewed by lawyers to make sure that the embryo’s rights are taken into consideration.

Medical studies have shown that stress on pregnant women may harm the embryo. Stress can induce sleepless nights, hypertension, loss of appetite or a tendency to overeat, headaches, etc. 

Can pregnant women (at any trimester including the first) work as nurses (exposing the embryo/child to harm) or police officers? Should women in these jobs show a monthly negative pregnancy test while at work?

Driving can be very stressful for the woman. Can pregnant women drive? 

Do women have to show a negative pregnancy test while enrolled in college?

By the way, is every miscarriage going to be handled as a possible homicide?

If I have any recommendation about this ruling it is that one should invest in pregnancy test kits soon. The stock value of these tests in the market will surely skyrocket. 

Should the State mandate or advise?

It depends of course. But in America, which was established to empower each individual to make their own decisions, the state should only regulate those individual activities that might harm others such as violating property rights. This attitude presumes that each of us cares more about our wellbeing than does anyone else and know better how to achieve it taking account of our differences in tastes, interests, and risk preferences. It has resulted in a society of more prosperous and happier members.

This can be contrasted with the view that the average person is not intelligent enough or self-motivated enough to maximize their potential and needs to be guided by smarter, wiser people.

A society in which each individual enjoys the maximum freedom of choice hardly means that the government has little or no role in our wellbeing. In addition to providing public safety, shared institutional and physical infrastructure development, and the adjudication and enforcement of contracts (the rule of law), government can contribute to the provision of the knowledge to help inform the individual choices we each make. I want to review two very different areas of government involvement that have reflected the above conflicting attitudes of the government’s best role—monetary policy and public health policy.

Section 8 of the US Constitution gives the federal government the power “To coin Money, regulate the Value thereof,…” Our twelve Federal Reserve Banks and the Board of Governors of the Federal Reserve System carry out that mandate via a system of market determined prices of goods and services and an inflation target of 2%. While I would prefer a monetary policy in which currency was issued or redeemed at a fix price for a hard anchor (traditionally gold) in response to market demand (currency board rules), the Fed has behaved very well within its inflation targeting regime over the past two years (after keeping its policy interest rate too low until two years ago).

A successful inflation targeting policy requires keeping inflation expectations anchored to the target (2% in the US) so that economic wage and price decisions are made in light of that expectation. But todays’ policy actions are only fully felt over the next year or two (what Milton Friedman called “long and variable lags” in the effects of policy). Federal Reserve policy is implemented largely by setting the rate at which it supplies the money it creates to the market. If it sets that rate below the so called neutral rate, it must supply money to keep the rate low. If it sets the Fed Funds (and related) rate above the neutral rate, it must absorb money from the market to keep the rate high. Setting its policy interest rate is the lever by which it controls the rate at which the money supply grows. Each Federal Reserve President and Governor must evaluate all available information about economic activity most likely over the next one to two years and determine in like of that what monetary growth is most likely to result in 2 percent inflation over that period. If market participants believe that the Fed’s choice is most likely to result in achieving the stated target in the future, their wage and price decisions will anticipate that inflation and thus bring it about.

It should be obvious that if Fed officials are honest it attempting to achieve their target and explain as fully as they themselves understand the prospects to the public and the public has confidence in the Fed’s commitment, this is the best that can be done. In fact, the Fed deserves high marks for such transparency in our uncertain and evolving world. Each person and firm make their own forward looking decisions in light of their best guesses of future conditions. The Fed’s guidance is the best and most the Fed can do to bring or keep inflation on target.  

When governments don’t trust “the people” to make their own decisions (they are not smart enough or are two lazy or whatever), they must mandate the “proper” behavior. Consider our approach to the public’s health during the Covid pandemic. Whether government should offer advice and provide information on what is known about a disease such as Covid-19 is complicated by the fact that we should not be free to expose others to communicable diseases. In the case of Covid the government’s understanding of its nature and best protection grew and evolved over time. But the US public heath agencies lost credibility from the beginning by telling well intentioned lies.

“In early March 2020, Dr. Fauci said ‘there’s no reason to be walking around with a mask.’ In the same interview he said people could wear masks if they liked, but they wouldn’t get perfect protection, and it would further pinch what at the time was a short supply of masks for doctors and nurses.” PolitiFact | Marco Rubio says Anthony Fauci lied about masks. Fauci didn’t.

But more to my point, CDC officials thought that their shut down and isolation mandates would be more effective than allowing individuals to determine how best to protect themselves and others. The subsequent evidence suggested that they were wrong. Any benefits were outweighed by very substantial costs. Read the following articles and studies for examples.

Scott Atlas on Lies

“I explore the association between the severity of lockdown policies in the first half of 2020 and mortality rates. Using two indices from the Blavatnik Centre’s COVID-19 policy measures and comparing weekly mortality rates from 24 European countries in the first halves of 2017–2020, addressing policy endogeneity in two different ways, and taking timing into account, I find no clear association between lockdown policies and mortality development.” https://academic.oup.com/cesifo/article/67/3/318/6199605?login=false  

“The most restrictive nonpharmaceutical interventions (NPIs) for controlling the spread of COVID-19 are mandatory stay-at-home and business closures. The most restrictive nonpharmaceutical interventions (NPIs) for controlling the spread of COVID-19 are mandatory stay-at-home and business closures. Given the consequences of these policies, it is important to assess their effects. We evaluate the effects on epidemic case growth of more restrictive NPIs (mrNPIs), above and beyond those of less-restrictive NPIs (lrNPIs)….

“After subtracting the epidemic and lrNPI effects, we find no clear, significant beneficial effect of mrNPIs on case growth in any country…. While small benefits cannot be excluded, we do not find significant benefits on case growth of more restrictive NPIs. Similar reductions in case growth may be achievable with less-restrictive interventions.”  January 2021 study

Worrying About Mandates and Lockdowns as Delta Variant Hits Unvaccinated Californians

What is Israel’s Objective in Gaza?

Following Hama’s brutal October 7 attack on Israel, Israel announced its “revenge” attack on Gaza to destroy Hama’s capacity to endanger Israel. In what looked at first like a human gesture, Israel urged the Palestinian residence of northern Gaza to move south to avoid Israel’s bombing of the north. But it didn’t take long before Israel began to attack Palestinians in the south as well.

“Israeli forces shelled the outskirts of the last refuge on the southern edge of the Gaza Strip on Friday [February 2], where the displaced population, penned against the border fence in their hundreds of thousands, feared a new assault with nowhere left to flee.

“More than half of Gaza’s 2.3 million residents are now homeless and crammed into Rafah. Tens of thousands more have arrived in recent days, carrying belongings in their arms and pulling children on carts, since Israeli forces last week launched one of the biggest assaults of the war to capture adjacent Khan Yunis, the main southern city.

“If the Israeli tanks keep coming, “we will be left with two choices: stay and die or climb the walls into Egypt,” said Emad, 55, a businessman and father of six…. Israeli Defence Minister, Yoav Gallant, said on Thursday that troops would now “eliminate terror elements” in Rafah, one of the few areas not yet taken in an almost four-month-old assault. But this is the same Israeli line used since the start of the war, which has killed and wounded tens of thousands of innocent civilians.

“As the only part of Gaza with access to the limited food and medical aid trickling across the border, Rafah and nearby parts of Khan Yunis have become a warren of makeshift tents, clogged by winter mud.”  “Nowhere left to flee-Rafah to become Israel’s new battlefield”

What is Israel trying to accomplish? “Hamas, which Israeli Foreign Minister Eli Cohen said on Tuesday ‘must be erased off the face of the planet.’… Israeli officials have vowed a merciless campaign of retribution against ‘human animals.’” “Defending Israel”

Israel’s far right officials have not been shy in proclaiming their purpose. It is to remove Palestinians (one way or another) from Israel’s occupied territories in to enable a democratic Jewish state to rule all of Palestine. Jewish Israelis blocking access of food and medicine to Gaza’s starving Palestinians are equally explicit about their Genocidal objective.

While Israel’s objective is explicitly clear, facts of the war, as with any war, are harder to confirm. The Israeli claims that Gaza invaders on Oct 7 raped women and beheaded babies were never supported with any evidence and are surely propaganda lies of war.

The United Nations Relief and Works Agency for Palestine Refugees (Unrwa) is the largest relief agency operating in this war zone, delivering critical food and medical suppliers to displaced Palestinians. Its relief work is critical for the survival of hundreds of thousands of displaced Palestinians.
When Israel claimed that Unrwa had been infiltrated by Hamas, “the international media reproduced without question the ‘dossier’ of alleged evidence Israel distributed to journalists, a dossier which it never formally handed to Unrwa itself…. The UN agency first knew about the allegation that initially 12, then 190, then 1200 of its employees were ‘members of Hamas’ when they read about it in the media. Unrwa regularly shares lists of its employees with Israel….

“The Israeli army that has killed over 152 Unrwa staff in Gaza, turned, in their minds, into the victim of the UN agency which had been ‘infiltrated by Hamas’….  I still find it hard to understand how readily governments across the western world swallowed the bait, without any fact checking, and how, in the blink of an eye, accounting for just over $440m, half of the Unrwa’s operational budget, suspended funding.” “Gaza war-why west is falling to stop Israel’s plan to destroy Unrwa”

Biden’s pleas for Israel to be more careful about killing innocent Palestinians are pathetic. We must demand an immediate cease fire in Gaze and the end of all Jewish settlements in the West Bank and their return to their Palestinian owners or our aid to Israel will end. Jews and Palestinians deserve safety, and fair and equal treatment. Peace and justice will not be achieved in the area without that. “One state solution for Palestine and Israel” More and more Americans and Europeans are speaking up in protest of our complicity with Israel’s atrocities. Even many within the American and European governments are speaking up  Over 800 Western Officials Denounce Pro-Israel Policies | TIME  American Jew Yoav Litvin put it very bluntly: “Liberation, reconciliation and an end to Israel’s genocidal violence can only be achieved within a steadfast and unwavering anti-Zionist framework that aligns with wider leftist, antiracist, anticolonial values.”  Yoav Litvin is a Postdoctoral Fellow in The Laboratory of Neurobiology and Behavior at The Rockefeller University, New York, NY.  He was born in Jerusalem. “The anatomy of Zionist genocide”

But our attention is now being distracted by more reckless wars in the Middle East.

Anne with an E

Several weeks ago I complained that the biggest winners of this year’s Emmy awards were series I had stopped watching after a few episodes because there were virtually no characters in them to like and the real world already has enough bad apples. In response to my complaint my former IMF colleague, Marta Castello Branco, who had been a member of the IMF technical assistance missions that I led to the central banks of Kazakhstan and Kyrgyzstan in 1992-3, recommended that I watch “Anne with an E.”  Boy was she right.

In three seasons with ten episodes each, “Anne with an E” follows the adventures of a brilliant, well-read but socially inept orphan girl adopted at the age of 13 by a relatively old brother and sister who had never married. The drama takes place in Canada around 1800. Anne is super smart and used her expansive imagination and extensive reading of the classics to survive the cruelties of 12 years in an orphanage before her adoption. She talks faster than a speeding bullet and is rarely quiet. The series is essentially about the coming of age experiences of children in a small farming community as seen largely through Anne’s eyes.

Being a homely red head, Anne’s growing up challenges are more than most, which can be difficult enough for the average child.  The series frankly and honestly treats the racial biases toward blacks, native Indians, gays, and other minorities at the time, the ugliness of school bullies, and the ridged moral codes of the towns people. But through the ups and downs of life most members of the farming community learn and grow in their understanding of their fellow community members.  Anne plays a large role in the struggle to make the world a better place while trying to understand her own place in it. There are plenty of people to like. The show is excellently cast and performed and gripping and uplifting. I can’t recommend it highly enough. Thank you Marta.

SALT

In these United States, power over each of us is passed up on a limited bases to our communities, to each state, and finally and ultimately to the Federal Government. Thus, each of our communities and states may free choose different levels of services. We Virginians may choose whatever level of services we are willing to pay for and the same for those of you in New York or Illinois. Deducting the state and local taxes that we pay for the service levels we choose from our federal income taxes passes on some of that financing to those in other states that might have choses less expensive service levels for themselves. Such deductions are a clear violation of the principles outlined above. Fairness and adherence to these principles requires that State and Local Tax deductions (SALT) from federal income taxes be zero. We are at risk of moving in the wrong direction.

Trump’s second go

JPMorgan CEO Jamie Dimon recently stated that:  “I don’t think people are voting for Trump because of his family values. If you just take a step back and are honest, he’s kind of right about NATO, kind of right on immigration, he grew the economy quite well, tax reform worked. He was right about some of China….  I don’t like how Trump said things, but he wasn’t wrong about those critical issues. That’s why they’re voting for him. People should be more respectful of our fellow citizens. When you guys have people up here [on a CNBC panel] you always ask them why — not like it’s a binary thing that you’re supporting Trump or you’re not supporting him– but why are you supporting him.” “Jamie Dimon on Trump”

In addition, during Trump’s administration many excessive regulations were revoked or reduced. Secretary of Education Betsy DeVos promoted school choice and restore due process to college rape cases. Andrew Wheeler, Trump’s administrator of the United States Environmental Protection Agency (EPA) reduced greenhouse gas emissions, improved water quality, and cleaned up contaminated sites while strengthening cost benefit assessments of environmental regulations. And much more.

His administration did many bad things as well.  His advisors Stephen Miller and Peter Navarro implemented protectionist, buy American trade policies that hurt our economy. His crazy withdrawal from the Trans Pacific Partnership was an ill advised gift to China. He Imposed a travel ban on citizens from seven Muslim-majority countries, rescinded the Deferred Action for Childhood Arrivals (DACA) Program, separated families at the US-Mexico border and withdrew from the Paris Climate Agreement and the Iran Deal (Joint Comprehensive Plan of Action), which was designed to prevent Iran from developing nuclear weapons.

Trump’s promise to leave Afghanistan was not kept (and was later very badly executed by President Biden). His initial love affairs with North Korea’s President Kim Jong Un and China’s Xi Jinping exploded into hostility. If reelected Trump promises revenge against his enemies. He promises to strip tens of thousands of career employees of their civil service protections in order to dismantle the “deep state.” He promises to impose tariffs on all imported good and to revoke the visas of students studying in the U.S. who are critical of the U.S. None of these is keeping with the traditions and policies that have helped make America great.

On the other hand, I hope that he would keep his promise not to send American soldiers to Taiwan should China attack it militarily, which would be insane. Whether we would get the better or worse policies under another Trump administration would also depend on the team that he would bring with him.

Trump’s small-minded pettiness, dishonesty, vindictiveness, and egotism are on daily display. He is not someone I would invite into my home. But we are right to look at the policies he pledges and is likely to pursue if elected President again in 2024. As with his previous administration, his next one, if reelected, will depend on those who join and run his administration.

My expectation is that Trump will be more careful next time to choose loyalists rather than the most capable. It is also likely that the most capable people would refuse to be part of another Trump administration. I expect the worst.

The Houthi’s and Us

After almost a decade of trying to end Saudi Arabian bombing of the Houthi government in Northern Yemen, President Biden has ordered multiple American bombing attacks on Northern Yemen because of Houthi attacks on ships sending arms to Israel in support of its genocide in Gaza. You might need to read that sentence again to get all its parts.

The first point is that once again the U.S. Constitution’s requirement that the Congress must authorize war before the President can launch one, has been violated. And why did Biden think it necessary to bomb Yemen? Because the Houthi attacks were interfering with our shipment of weapons to Israel in support of Israel’s vicious murder of Palestinians by bombing and starvation. “The group’s official spokesman reiterated that attacks on vessels transiting the Bab el-Mandeb Strait toward the Suez Canal will continue until “Gaza [receives] the food and medicine it needs.” That shouldn’t be hard to accomplish.

Even if the US Congress authorized the American bombing of Yemen, it would be bad policy for the U.S., for the Palestinians, and for Israel. “Weighing additional US responses to Houthi Red Sea attacks” America’s interest should be peace and prosperity for all in the Middle East (and all the world). Supporting Israel’s genocidal war in Gaza does not serve that goal and makes the U.S. complicit in Israel’s genocide. Moreover, Europe’s relative silence and the silence of any of us to Israel’s inhuman war in Gaza (including Biden, Trump and Nikki Haley) makes them all complicit. “War in Gaza exposes European philosophy ethically bankrupt”

The march toward the aridification of Palestinians from Gaza and the West Bank is too unbelievably savage to spell out. Such a fate should not be wished on any people. “Unfolding genocide as ever single person in Gaza goes hungry” “Israel’s Netanyahu its Cromwell”

But this war, following a century of Zionist mistreatment of Palestinians in their homeland, is destroying Israel. “Israel is facing existential threats from inside and out-there’s one solution” Israel is committing suicide. To survive, Israel must become a secular democratic state that give equal rights and fair treatment to all who inhabit it. “One state solution for Palestine/Israel”

U.S. leadership is failing once again and is waning. The lust for war by the hawks has overpowered American self-interest once again. War with Iran can’t be far behind. Taiwan can wait (a bit).  “Gaza and Yemen sound death knell for US led rules based global order”

One State Solution for Palestine/Israel

I have long supported the “two state solution” for the Levant envisioned by the Oslo Accords. I led IMF technical assistance teams that launched the Palestine Monetary Authority as called for in the Oslo Accords. “Oslo-the Play”   After listening to the following presentation by two very knowledgeable Jews, I have changed my mind: Max Blumenthal & Miko Peled 

In supporting a Two State Solution I had assumed that the alternative One State Solution had to be a democratic Jewish state as sought by Zionists, which would have required that Israel eliminate, one way or another, enough Palestinians to establish and retain a large Jewish majority. This is, of course, exactly the policy Israel had followed since its founding and most conspicuously in its current devastating attack on Palestinians in Gaza.  “A one state solution”

Miko Peled, the son of a distinguished Israeli general, proposes a One State Solution in which Israel’s Jews give up its being a Jewish State. Rather Israel, from the River to the Sea, would be a democratic state in which all residence would enjoy equal treatment under the law. But can Zionists be convinced to support a secular Israel of Jews and Palestinian, both the descendance of Abraham. In a recent meeting of the Committee for the Republic, Rabbi Yaakov Shapiroargued that Zionism is antisemitic and should be repudiated:  “Antizionism is not Antisemitic”

In a realistic assessment of the current situation, Natan Sachs argues that neither a one state nor two state solution is possible any time soon because of the lack of trust on both sides after 70 years of oppressive Israeli occupation of Palestinian lands and the vicious attack on Israel by Hamas on Oct 7. However, he argues that continuing to kick the can down the road has been a disaster and must end. The U.S., now providing the bombs with which Israel is slaughtering innocent Palestinian men, women, and children, must order an immediate ceasefire before millions in Gaza starve to death and the war escalates to Lebanon and beyond.  “UN Human Rights Experts warm of unfolding Genocide in Gaza”

The U.S. must also use it considerable leverage to end new Israeli settlements in the West Bank and Settler (and Israeli Army) abuse of Palestinians living there and strengthen the Palestinian Authority. Since WWII the U.S. has given Israel more than $260 billion in foreign assistance (over $3.3 billion annually in recent years), more than to any other country.

“It is time, rather, to couple a political horizon with serious, transformative, solution-oriented yet hard-nosed conflict management: imperfect, messy, halting, unsatisfactory for all, and yet preferable by far to the current reality…. The United States must set the ground rules for the long interim period before true conflict resolution might be possible and enforce these rules vigorously…. Even if a solution to the conflict is currently unavailable, aimlessly kicking the can down the road is not a reasonable strategy. That approach was not conflict management; it was a strategy that allowed the conflict to manage both sides.”  “Peace between Israelis and Palestinian remains possible”

In my view a single state with full citizenship with equal rights for all inhabitance would be the best long run outcome but it will not be easy and will take time for interim Israeli occupation to build mutual confidence for drafting and adopting such a constitution (like England, Israel does not have a written constitution). Jerusalem, Bethlehem, and other parts of greater Israel housing important Jewish, Islamic and Christian sites must be fully protected by religious liberty provisions of the constitution.  While such an outcome will take many years to achieve, interim measures must build to that outcome.