Invest Now to Grow Later

The economy isn't in good shape these days really just about anywhere in the world.  This global economic doom and gloom, though, has created a rather Un-Greek opportunity for the United States.  In an op-ed piece former Treasury Secretary, Larry Summers lays out the situation very succinctly:

 In real terms, the world is prepared to pay the U.S. more than 100 basis points to store its money for five years and more than 50 basis points for 10 years. Maturities would have to reach more than 20 years before the interest rates on indexed bonds becomes positive.

Basically, the U.S. can sell bonds, the market will buy, and we'll pay less than the face value to service that bond for over 20 years.  In other words this is free money.  So what could we do with this money?  Well Matt Yglesias brings up the issue of aging water infrastructure in the nation's capitol where the average water main is 77 years old.  This sort of infrastructure investment will be necessary at some point, and that point, after 77 years, is probably sooner rather then later.  Much like healthcare, it's cheaper to maintain the health of our infrastructure then to pay to replace it after a calamity.  Back to Sec. Summer, he notes: 

Any rational chief financial officer in the private sector would see this as a moment to extend debt maturities and lock in low rates – exactly the opposite of what central banks are doing.

In other words, we're missing our moment, because we've become afraid of debt.  But we aren't Greece and while we have some systemic debt issues we must address, I'm comfortable in suggesting we're still going to want roads, bridge, and running water.  Why not lock in a ridiculously low rate to make that investment now?

Egypt - Different Obvious Lessons

Matthew Yglesias, writing in The American Prospect online, advocates for the United States to be on “the right side of history” and reconsider our support of at least un-democratic and at worst authoritarian regimes in the Middle East.  “The status quo in the Middle East is not sustainable and won’t be sustained,” Yglesias declares.  I think the sentiment is right, but the rose-colored glasses with which he reviews the region and revolution gives an incomplete picture.

The first issue is a matter of perspective.  I agree, the status quo is not sustainable and the U.S. concern is what comes next.  Don’t we still fear what will happen in Egypt?  Aren’t we still concerned that of an Islamist emergence a la Iran 1979 will take hold?  I think Yglesias discounts those concerns because he believes, “the longer the U.S. government stays in bed with kleptocrats, the more severe popular discontent against the United States becomes.”  I would contend there are limits to enmity, and a few decades of support to Middle Eastern autocrats builds a level of enmity that takes a long time to erase.  I subscribe to the “in for a penny, in for a pound” approach.  This would seem to conflicts with my post on reevaluating our alliances in the Middle East, but as I said in that post, we can’t turn our backs on these alliances.  From the perspective of the United States, autocrats give stability until they don’t. If the situation changes we will need to recalibrate our allegiances.  I would argue our most recent experience in Egypt is a strong example of the recalibration we can execute if we find a country at its tipping point.

Secondly, we have to work with the countries that are in power now.  Mr. Yglesias would have us side with the dissidents, causing immeasurable harm to our national security projections in some of the hottest corners of the world.  Mr. Yglesias might argue that it is our patronage of the governments in the region that makes them so hot, and I would not entirely disagree, but to my first point, ceasing that patronage would create good will, yes, but also undermine current stability, and limit our force projection in the region.  The cost-benefit analysis just doesn’t add up to a full-scale reversal of decades of U.S. foreign policy.

I’ll end by saying this: what happened in Egypt over the past three weeks may prove to be the turning point for the land of the pharaohs, but the jury is still out.  It’s a momentous thing to see people break the shackles of authoritarianism.  Regardless of the brotherhood I feel with the Egyptian people, from the perspective of the United States we can’t hop on the bandwagon of every protest or every dissident group.

The United States, by most accounts, managed the revolution in Egypt quite well.  I actually have confidence we can manage a similar situation as well, if not better, in the future.  I would like nothing more then to stick it to all the strongmen and monarchs that limit the freedom of their people in the Middle East, but the ideal and the practical are not one in the same.

Healthcare - File under "Captain Obvious"

Matt Ygelsias called my attention to this story out of Vermont, where Harvard healthcare economist William Hsiao was hired by the Vermont legislature to find new designs for Vermont's healthcare system.  Hsiao has offered a single-payer system.  Hsiao outlined in the report that, "getting one entity to process claims, reforming medical malpractice and taking other steps would save $2.1 billion in health spending by 2025."  My initial thought was "Well, duh."  I then rolled my eyes and tossed my hair back dismissively.

Rhetoric & Violence

I’ll admit it. The moment I heard that an Arizona Democratic congresswoman was shot, I thought, “Oh great! One of the Tea Party-ers took all that rhetoric seriously and shot someone.” Judging from the initial blog posts of some in the blogosphere, notably Klein, Krugman, and Yglesias, I was not alone in that initial thought.

We seem to be wrong, or at the very least not completely right. Despite the facts not supporting, completely, the notion that the perpetrator was politically motivated the pundit-ocracy has tee-ed off on this tangent and I don’t think that’s an entirely bad thing.

Will Wilkinson disagrees and I think his post is important to keep us all tethered to the real reasons this particular gunman perpetrated this particular heinous act, but I also think his post fails to address something connected to the incident.

Why did so many commentators believe, just like I had believed, that the shooting was politically motivated and specifically why did we think it was entirely probable such an incident was perpetrated by a member of the Tea Party?

There’s a lot of baggage to that question. Clearly I’m citing “liberal” bloggers and there is the perceived “liberal bias” of the mainstream media. Maybe we are fearful of people who identify with the Tea Party and/or the people further right than people in the Tea Party. Maybe we’re concerned the ramparts of our urban utopia, bastions of liberalism that they are, will be stormed by gun-toting “patriots” from the “real America” and those first shots fired in Arizona are the opening salvo in a broader struggle yet to come that will be decided by “Mr. Smith and Mr. Wesson” as Glenn Beck once said.

I would follow up those potential reasons for our response and ask, why do we feel that way? The answer, to my mind, is the hateful, violent rhetoric that has become part and parcel of the message of the right.

Also, let’s be honest with ourselves and admit that the violent rhetoric in recent years has been coming more from the far right then the far left. It’s not being partisan if it’s true. I didn’t hear anybody threaten to shoot John Boehner if he became speaker (though plenty of people threatened to move to Canada if McCain was elected president, which would seek to confirm leftist pacifism). It hasn’t always been that way in America, but that’s the way it is right now.

We’ve heard this litany before. Sarah Palin’s crosshairs map, basically anything that Glenn Beck says about Obama, Senate candidate Sharron Angle’s “second amendment remedies” for Congress, and who can forget the original innovator, Rush Limbaugh. Michelle Goldberg has a web-only piece in The American Prospect that recounts some of the history and urges some restraint in the rhetoric we use. This isn’t an assault on free speech, this is a call for some personal responsibility. Does Sharron Angle believe we should actually shoot members of Congress? I would imagine not. Does Glenn Beck truly think we have exhausted all options and armed opposition to the government is the only way to bring change? I doubt it (advertisers don’t have products to sell during a full-scale civil war and that’d be an issue for a radio program).

If they don’t believe it, then they have a responsibility not to say it. I’m not talking about being at a point were we can disagree without being disagreeable, I’m just asking that you not advocate for a violent solution to what is a political problem. And I’ll go on record and say this, we don’t need legislation about speech to handle this, we don’t even need forced civility, we just need not encourage the violent elimination of political opponents. That strikes me as a low bar.

What happened in Arizona on Saturday was a tragedy of the first order. Two public servants were shot and one has already died. Five other people died for doing nothing more offensive than being in that parking lot at that Safeway at that moment. As we learn more about the perpetrator, hopefully we will begin to understand why this particular incident happened. It does not appear to be what so many of us thought it was when we first heard the news, but maybe this is an opportunity. Perhaps this violence, though not springing exclusively from violent rhetoric, will give us all a moment to consider our words, what we want them to mean, what they may mean to others, and what actions that perception could lead to.

This time it wasn’t politically motivated, but if I heard the same story again, right now, I’d have the same first thought I had on Saturday. I’m hoping we get to a point where that’s not the case.

Facebook, Freedom, and a New Political Structure

Spurred on by Malcolm Gladwell's piece on social networks and the way they could potentially undermine autocratic states (I haven't read Gladwell's piece because I never received the refund I requested for buying and attempting to read Blink) set off a conversation between Matt Steinglass, Matthew Yglesias, and then a response by Steinglass.

The whole debate seems a little too much like navel-gazing to me, but in Steinglass's response he makes a statement I 100% agree with, but couldn't have said so well:

It is possible that single-party rule by a self-selecting, self-reproducing political elite that allows cultural and entrepreneurial freedom is a viable model for a modern state.

I think this is the lesson of modern China, and it is a lesson that won't be lost on future aspiring autocrats. Remember when capitalism would lead to democracy? I read an awful book about it in college. I think it's a flawed hypothesis.