Wednesday, November 25, 2015

Divide and Be Conquered

“When President Obama took office, Iraq was calm, al-Qaeda was weakened and ISIS did not exist. Iran, meanwhile, was under pressure from abroad … and at home … The Obama administration threw it all away.”
 —Weekly Standard editor William Kristol, writing in USA Today
Here is an observation that is guaranteed to please no one. Despite their personal and political differences, President Obama and Donald Trump are strangely more alike than not in their underlying rhetorical strategies.

Trump has clearly mapped out a segment of the electorate to which he wants to appeal, and he is making that appeal by setting up other segments as the enemy. Whether he is slandering Mexicans or Moslems, he is tapping into a rich vein of insecurity among white working class Americans and it has kept him high in the polls—so far.

But hasn’t President Obama has been employing the same tactic, albeit from the other end of the political spectrum? Since he has gotten past the point of needing to contest elections ever again, he has increasingly directed his rhetoric ever more specifically toward his own Democratic base at the expense of the rest of the country. As numerous commentators noted, in his press conference in Turkey, he showed much more passion in his criticism of Republicans—and by extension the majority of voters who sent them to Congress—than he did in condemning ISIS.

This politics of division is not at all appealing in a primary candidate like Trump, but—to tap into John Kerry’s mindset vis-à-vis terrorism—at least it is understandable. He is trying to win a presidential nomination. It is, if anything, even less appealing in a sitting president, who occupies the highest office of the land and is meant to represent all citizens—not just his own party.

When it comes to the issue of admitting refugees, the president certainly has reason and sanity on his side. Yes, taking in Syrians fleeing their homeland’s civil war is the civilized and humane thing to do. Yes, the vast majority of them are people like anybody else who only want to survive and provide safety for themselves and their families. And, it is worth noting, they are fleeing a terrible situation that possibly (of course, we can never know for sure) could have been ameliorated by a firmer grasp of foreign and military policy by the administration. Let us not forget that the vast numbers of refugees are not fleeing ISIS but the onslaught of Syria’s own wanton president, Bashar al-Assad, and that President Obama has deferred to Russia’s lead in that violent civil war—even though Russia’s aim is to keep Assad in power at a terrible cost to the Syrian people.

Two-thirds of Americans, according to polls, are against admitting the refugees. This is because they are fearful—and not completely without reason. One or two of the terrorists who attacked Paris on November 13 apparently slipped in through refugee queues. This represents a drop in the bucket in terms of the numbers involved, but it demonstrates that the fear of terrorists masquerading as refugees is not crazy. And it doesn’t help that the president’s own FBI director told a House committee last month that there is precious little data against which incoming refugees can be scanned.

So how does the president react to this pervasive—and not unreasonable—fear among the American people? When asked about it, rather than explain and reassure, he siezes the opportunity to attack Republicans and, by extension, a majority of the citizens he is supposed to be leading. In other words, he does what Donald Trump does. He divides the country into groups and pits one against the other in an attempt to whip up political support. The mystery is, to what end? It certainly doesn’t help grow support for admitting refugees. It might rally those who already agree with him, but he gains no political advantage because he will not be seeking office again. And it is hard to see how this helps his party. Hillary Clinton already has more than enough to deal with, rationalizing and separating herself from an administration’s foreign policy about which few, if any, have found much to praise.

If the House of Representatives provided a veto-proof majority in voting to cripple the administration’s refugee plan, it might be because they have little confidence in the president’s assurances about the efficacy of its security. They may be remembering other assurances—from the situation in the Middle East to the ongoing execution of the Affordable Care Act—that turned out to be overstated. What is really interesting and, I think, has not gotten the attention it deserved was the president’s stated rationale for not worrying about terrorists coming in through the refugee program. It is much easier, he said, for them to simply come over as tourists. He is certainly right about that. If a terrorist happens to hold a European passport, he or she can travel to the U.S. under the visa waiver program with only cursory scrutiny. What an interesting way to reassure people!

Violence in the Sinai Peninusla, Beirut, Paris and Mali—plus security alerts in France and Belgium and a worldwide travel advisory from the U.S. State Department—have put the western world on edge. And when western Europeans feel on edge, that is good for nativist and isolationist parties—the likes of the UK Independence Party and France’s National Front. Is Donald Trump their American equivalent? That’s very hard to say—at least in terms of political consequences. He hasn’t exactly been consistent ideologically. He may be the only contender of either party for whom it is harder to predict what he would actually do as president than Hillary Clinton.

But on an emotional level, Trump is indeed the equivalent of the anti-immigration parties of Europe. Like them, he is obviously saying things in which a lot of people—whether justifiably or not—find some level of comfort and reassurance, which they are not getting from their current leaders.

Wednesday, November 18, 2015

Treize Novembre

“The analogy we use around here sometimes, and I think is accurate, is if a jayvee team puts on Lakers uniforms that doesn’t make them Kobe Bryant. I think there is a distinction between the capacity and reach of a bin Laden and a network that is actively planning major terrorist plots against the homeland versus jihadists who are engaged in various local power struggles and disputes, often sectarian.”
—President Obama in a January 2014 New Yorker interview, answering a question about advances by ISIS/ISIL in Iraq

“Well, no, I don’t think they’re gaining strength. What is true is that from the start, our goal has been first to contain, and we have contained them.”
—President Obama on ABC on Thursday, answering a question about criticism of his ground strategy against ISIS

“I have never been more concerned. I read the intelligence faithfully. ISIL is not contained. ISIL is expanding. They’ve just put out a video saying it is their intent to attack this country.”
—Senator Dianne Feinstein on Monday on MSNBC

“We have the right strategy and we’re going to see it through… What I do not do is take actions either because it is going to work politically or it is going to somehow, in the abstract, make America look tough or make me look tough.”
—President Obama on Monday in Turkey
It is all so depressingly familiar. And it is all so new and scary and different than before. This is life in 21st century Europe. Add Friday’s outrage in Paris to the list that includes Madrid 2004, London 2005 and Paris January 2015—not to mention the various smaller-scale attacks that have not been large enough to dominate international headlines for days.

It has been interesting to listen to all the media chatter in Ireland in the wake of the mass murder. Paris is geographically close to Ireland. From where I live, as the crow flies, Paris is about the same distance as from Seattle to Eureka, California. Lots of Irish people go to Paris all the time—on a holiday, for a weekend, for business. So an atrocity like this feels as though it has hit very close to home. In the discussions on TV and radio, there is nothing but sympthathy for the victims and condemnation for the perpetrators—at least initially.

After a day or two, though, you start to hear the occasional pundit drawing a lesson. These are what I call the “but” heads, the people who say things like, of course, there is never any justication for this type of violence but…

After the January attack on the offices of Charlie Hebdo, one began to hear, on both sides of the Atlantic, the usual disclaimers about violence always being wrong followed by the inference that insulting someone’s religion was intolerant and that the violence was, if not justifiable, then at least understandable. Indeed, weren’t the attackers provoked? Weren’t the cartoonists really kind of asking for it? Not that this justifies the violence, one is quick to add.

The November 13 attacks have not facilitated those sorts of rationalizations. You could actually Secretary of State John Kerry struggling with it yesterday at the U.S. embassy in Paris. “There’s something different about what happened from Charlie Hebdo,” he said, “and I think everybody would feel that. There was a sort of particularized focus and perhaps even a legitimacy in terms of—not a legitimacy, but a rationale that you could attach yourself to somehow and say, ‘Okay, they’re really angry because of this and that.’ This Friday was absolutely indiscriminate.”

I find those remarks absolutely mind-blowing. Yes, he caught himself and backed away from calling the January attack legitimate, but it was obviously what was in his head. This might help explain why I have heard little, if any, confidence expressed here in the Obama adminstration’s foreign policy.

One point that has been made regularly is that none of this would not be happening if George W. Bush had not decided to invade Iraq in 2003. Like all such assertions, that one is impossible to either prove or disprove. The counter-assertion is that it was the complete withdrawal of U.S. forces from Iraq that created the vacuum that gave ISIS the opportunity to flourish. That is almost certainly true, but what is unclear is whether keeping U.S. forces in Iraq would have actually deterred ISIS or would have become a quagmire for the U.S. Assigning blame on past actions or inactions may make armchair analysts feel better but, unless you have a time machine handy, it is really only a useful exercise if it provides some wisdom as to what should be done in the short and long term going forward.

Let’s say, for the sake of argument, that the U.S. invasion and occupation of Iraq definitely led to the violence that is currently bedeviling Europe. So then what? France’s answer is to double down on bombing ISIS positions in Syria. The usual voices on the left find this counter-productive, but otherwise there is widespread support. It is interesting to note that, when Israel has reacted similarly to attacks on its citizens, many of those now supporting France have criticized Israel. I guess it may come down to how close to home the attacks hit. That may explain why Britain’s new Labour Party leader Jeremy Corbyn reacted by saying the West had “created a situation” that had contributed to the terrorist attacks on Paris and questioned the legality of last week’s strike on the militant dubbed “Jihadi John,” while Socialist Party leader François Hollande was busying ordering the bombs to be dropped.

The problem with merely dropping bombs is that, short of massive carpet bombing, they cannot win a war—and collateral damage is inevitable. And collateral damage can have the effect of growing support—either passive or active—for your enemy.

Any nation has the right to defend itself. But what does that mean in today’s world where the threat comes from individuals who are already inside the country, working at the behest of planners in the Middle East? Americans and Europeans may be loath to put boots on the ground in Syria, but ISIS clearly has more than a few boots on the ground in Europe.

Friday, November 13, 2015

Taxing Sanity

“The difference between death and taxes is death doesn’t get worse every time Congress meets.”
—Will Rogers
In December 2011 Susan Rice, the United States’ UN representative, took to the floor of that organization in support of a resolution condemning the Eritrea for destabilizing its region of Africa and, specifically, for funding that destabilization by taxing the income of its expatriate citizens (variously called citizenship-based taxation or a diaspora tax) in violation of universal human rights. Eritrea is one of only two countries in the world that impose citizenship-based taxation. Ironically, the other one is the United States.

All governments—excepting those two—collect income tax from residents living within their borders but not from their citizens who have established residency in other countries. If a European citizen lives and works in the U.S. for an extended period of time, she files a tax return with the U.S. government but not with her government back home. On the other hand, an American living and working in Europe must file tax returns with both the government of the country where he is living as well as with the U.S. government. While this is an extra burden, in most cases it does not actually result in having to pay full taxes to both governments. A series of taxation treaties generally allow tax paid in one place to be applied as a credit against tax owed in another place.

What has changed since 2010, however, is a law that was passed by Congress called the Foreign Account Tax Compliance Act (FATCA). Aimed at sniffing out bad guys who are into things like money laundering (including terrorists) or tax evasion, it has made lives of ordinary citizens living abroad much less convenient and, in some cases, nightmarish. As a result, the numbers of American renouncing their citizenship has skyrocketed. In 2014 there were 3,417 such renunciations—well over double the number of just two years earlier.

FATCA is mainly a problem for two categories of Americans. One is the so-called “accidental Americans,” people who do not really consider themselves American but who have U.S citizenship because they happened to be born on U.S. soil while their parents were working or holidaying abroad. A surprising number of people fall into this category including (to name just one random example) London mayor Boris Johnson. These people may have little or no attachment to America, but they have the convenience of being able to travel, live and work in the States without the bother of acquiring a visa. The other category is Americans who, for whatever reason, have elected to live in another country.

The problem is that FATCA requires foreign financial institutions that want to have any dealings with the U.S. (in other words, most or all of them) to collect and pass on a whole bunch of information on any of their account holders who have U.S. citizenship. A lot of banks have decided that they don’t want the hassle and so have chosen to simply not to accept Americans as customers. A report on this topic this week on the BBC World Servce included an interview with a Frenchman who had lived his entire life in France and knew no English but, because he happened to have been born in California, was being required by his bank to either close his account or go through the trouble and expense of formally renouncing his U.S. citizenship. An American woman, who had lived thirty years in France, was being given the same choice of options, and she tearfully told of how she had arrived at the painful decision to give up her U.S. citizenship—despite still identifying as American, as she had all her life—in order to be able to stay in France.

Renouncing American citizenship is not just a simple matter of signing a piece of paper. As a solicitor friend once explained to me, the IRS essentially treats an American renouncing his citizenship more or less the same as if he had died, requiring a big tax settlement before letting him go peacefully into the next life.

This is a classic example of the U.S. government taking aim at a legitimate problem and then punishing multitudes of people, few if any of whom are the actual targets. The fat cats trying to avoid tax by hiding money abroad will always have the resources to locate and exploit a loophole. Criminal money launderers will always find another way to move their money around. Instead it is many of the estimated 8.7 million Americans living abroad who are left to deal with (at best) the annoyances, inconveniences and extra costs of the law or (at worst) are left with no practical choice but to cut ties to their home country. After all, it is pretty hard to function in the modern world when banks do not want to deal with you.

Happily for me personally, FATCA has so far not caused my bank to issue such an ultimatum. There are so many Irish people with U.S. ties, I am not sure Irish banks could afford to bar them from holding accounts. But not all banks operating in Ireland are Irish-based. We have come across at least one Dutch-based bank operating here that would not take customers with U.S. citizenship.

Some clear thinking on this problem was articulated by Pepperdine law professor (and former Deputy Assistant Secretary of State) Colleen Graffy, writing last month in The Wall Street Journal: “The best solution is for the U.S. to join the rest of the world in taxing based on residency rather than citizenship. Congress could address both the need for global banking transparency and the negative effects of FATCA by including this in the comprehensive tax reforms likely to take place under the next administration. Doing so would advance American fairness, mobility and economic competitiveness, in addition to protecting the country’s most valuable global asset: its people.”

Thursday, November 5, 2015

Only a Year to Go

“I want to repeat this because the public apparently never believes it. Since I took office, we’ve cut our deficits by two-thirds. The deficit has not been going up; it has been coming down—precipitously. We’ve cut our deficits by two-thirds. They’re below the average deficits over the past 40 years.”
—President Obama on October 2

“The U.S. national debt shot up $339.1 billion Tuesday—the largest daily increase in the national debt in history, according to Treasury Department data.”
USA Today, in a November 5 article about the overall national debt, which is distinct from annual deficits
Republicans like to fall in line, goes the old aphorism, and Democrats like to fall in love.

In the past couple of election cycles, that rule of thumb has turned out to be pretty accurate. Leading up to the 2012 presidential election, Republicans cast about wildly from one new face to another—wanting to fall in love—before eventually coalescing around next-in-line Mitt Romney. Four years earlier, similarly, they passed the polling lead around until settling on next-in-line John McCain. At the same time, Democrats gave every indication of falling in line behind Hillary Clinton—until they fell in love with the much-less-experienced Barack Obama.

Will those patterns hold true this time around? It’s difficult to see how. For one thing, there is no logical next-in-line candidate for the Republicans. They have no incumbent president or vice-president in the field. Nor is there is a clear second-place finisher from the last cycle. In fact, polling so far—whatever it is worth this far out from the actual voting—suggests that Republicans are not only intent on not nominating a next-in-line but prefer to have someone with the least political experience possible. Meanwhile, if Democrats mean to fall in love with their nominee, then they are doing their best to fall in love with the person who is not only clearly next in line but who has been taking aim at the presidency forever. Early on they gave every indication of wanting to fall in love with Elizabeth Warren or even Joe Biden, but they are not running.

Progressives have sort of fallen in love with Bernie Sanders, but they know he is almost certainly not electable. Despite their penchant for liking to fall in love, Democrats mostly want to win, and so they like their candidates to be electable. They only let themselves fall in love with Senator Obama when it became clear that he could win the general election. Four years earlier they nominated John Kerry despite the fact that he was not strong as anyone’s first choice, but they told pollsters that they thought that other people would like him as the nominee. In other words, they saw him as electable.

Hillary Clinton is certainly electable. There is no doubt in anyone’s mind that she has the intellect, talent and experience to be president. She is much better known than any of the Republican candidates—with the possible exception of Donald Trump. But, while her advantages may seem overwhelming on paper, there are a couple of historical factors working against her. For one, it is rare for a candidate to win a third consecutive presidential term for her party, and it’s unheard of when the incumbent president has less-than-stellar approval ratings, as is the case with President Obama. For another, you have to go back to the 1950s (the wildly popular war hero Dwight Eisenhower) to find a case of a non-incumbent being a front-runner for such a long period and actually winning the office in the end. American political history is littered with “inevitable” presidents who never made it—including Clinton herself in her last bid.

Of course, historical patterns only hold true until they don’t anymore. An awful lot can—and will—happen in the next year, and no one can say how things will look twelve months from now. While the Republican field may look like a clown car to die-hard Democrats, the fact is that there is actually more interest and energy and youth on that side of the political spectrum. And Tuesday’s elections can bring no comfort to Clinton and her team. In the off-year state and local voting across the country, conservatism dominated nationally—just as it has in every election for the past decade or so when the name Barack Obama was nowhere on the ballot. Will young and minority voters turn out for Clinton in the same numbers that they did for Obama? Not only does she not have his natural charisma but it is difficult to maintain grassroot energy levels after the promise of an exciting new leader inevitably doesn’t quite live up to everyone’s highest hopes. In the Democratic debate, the candidates railed against the country’s problems as if they were hoping that voters didn’t remember who was actually in charge of the executive branch for the past seven years.

In the end, the presidency will come down to a choice between two people, so the candidates’ strengths and weaknesses will only matter in comparison to their opponent. So Clinton’s chances are entirely (well except for a very unlikely indictment over her emails or a health problem) up to which candidate the Republicans put forward. The smart brains who have worked it all out going forward seem convinced that it will be a fortysomething Cuban-American. The only question is, which one?

Ted Cruz has been painted as a crazy man in much of the media for years now and, perversely, that could actually be to his advantage. He is articulate and very intelligent and, if voters actually got to know him, he would exceed their expectations. Marco Rubio appears to have no down side whatsoever except perhaps a lack of experience. And didn’t Obama himself cut off that avenue of attack by getting elected (having served an even shorter portion of his Senate term than Rubio) and then getting reelected? In the end, his experience level is a problem only if voters who are unhappy with Obama’s presidency conclude that it was because of his inexperience rather than his political philosophy.

Wait, I forgot about Jeb Bush. Wait, no I didn’t. I don’t think anyone—in either party—really wants to have yet another Bush as president. And the way he’s been campaigning, I’m not sure Jeb Bush really wants it either. I think dynasty fatigue could be a real thing, and that’s another possible problem for Hillary Clinton in the general election.

Needless to say, all bets are off if Donald Trump or Ben Carson were to actually get nominated. Or if Trump or someone like Jim Webb mounted a third-party campaign. And, of course, if war were to break out in the Middle East or somewhere else or if the U.S. were to get hit by a serious terrorist attack, that would definitely scramble things. In other words, there is really no way to know what will happen a year from now.

The only sure thing is that, however it turns out, half the country will wind up more disenchanted and angry than ever.