It's a strange sensation when a place where you have lived and known well is suddenly everywhere in the news.
For example, as a student, I lived in Chile from 1977 to 1978. Generally, outside of Latin America you don't hear much about Chile unless you go looking for information. But this past year Chile has been the focus not once but twice of intense international media attention. In February there was an 8.8 magnitude earthquake centered near the city of Concepción, where I lived and still have friends. It was a very strange experience seeing so much news coverage of a place I knew so well. Then in August there was a mining accident in the north of the country, in which 33 men were trapped underground for 69 days. Again, international attention focused on Chile, reaching a media frenzy in October when they were finally rescued.
For the past eight years I have lived full-time in Ireland. It's a country that everybody knows and many people have visited. But since things quieted down in the North in the late 1990s, you don't really see or hear much news about what goes on in the country in the American or international media. But lately I am hearing about Ireland from all sorts of American, British and international news sources. And, as with the two examples above regarding Chile, it is not for a happy reason.
The Republic of Ireland is on the verge of going broke. The country has become newsworthy because, like Greece before it, it has found itself on the verge of a sovereign debt crisis. The implications go beyond the fortunes of one relatively small European country. The rising cost of Ireland's borrowing has a knock-on effect on other European Union countries, particularly Portugal and Spain, as it affects their ability to borrow as well. Ultimately, the situation threatens the euro currency, as it could lead to countries dropping the currency or countries being expelled from the euro club. Since the euro was born in 1995 (euro notes and coins have been used since 2002), member countries have learned that, when you share a currency with other sovereign nations, it puts you at the mercy of other countries.
At the moment the United States is dealing with its fiscal problems by printing money. Technically, this is called "quantitative easing," and the current second round is abbreviated as QE2, which makes it sound more like a luxury cruise than the diluting of the dollar which it actually is. Unlike the U.S., Ireland has not had the option of currency manipulation to mitigate its economic problems because it does not control its own currency. Indeed, being a euro country probably exasperated Ireland's problems in the first place because, while the European Central Bank may have kept interest rates a reasonable level for Europe as a whole, they were really much too high for Ireland's already over-heated economy. But the ultimate fault for Ireland's current mess has to rest squarely with Fianna Fáil, the political party which has led the country's government continuously for the past 13 years.
But, depressingly, it's hard to imagine that any of the other political parties would have done any better at avoiding the current crisis since their main complaint about Fianna Fáil has always been that it is too stingy. Of all the possible causes of the present mess, clearly government stinginess wasn't among them. This is a country where the politicians delight in taking the citizens' money and then handing it back to them. During the Celtic Tiger tech and housing bubble, they found more and more ways to win voter loyalty by handing out entitlements or funding schemes. The problem was that the new or expanded programs were not financially sustainable in the long run or, as it turned out, even in the medium-short run. Especially, when the banks realized (this will sound very familiar to us Americans) they had lent out a huge amount of money that was never coming back. When the whole house of cards started tumbling, it gob smacked everybody.
There is a lesson here for the United States. Of course, Ireland and the U.S. are very different in lots of ways, but one thing they have in common is that neither can defy gravity forever. The most crucial difference may be that at least Ireland has Germany to bail it out. Will there be anyone to bail out the U.S. and, if so, what will China's price be?
Wednesday, November 17, 2010
Wednesday, December 2, 2009
A Victory for Democracy
Let us give credit where credit is due. The Obama administration eventually got things right on Honduras.
When the military removed President Manuel Zelaya in June and sent him into exile, the U.S. government echoed countries like Brazil, Argentina and Chile in calling the ouster a coup and demanding Zelaya's reinstatement. The fact is that one can argue over whether what the military did was actually a coup, but the more pertinent question was whether or not it was illegal.
The crucial fact in the matter was that the military was not acting on its own but at the behest of the Honduran Congress and Supreme Court. The soldiers were merely following orders issued by two branches of the civilian government. And were those orders legal? According to an analysis by the U.S.'s Directorate of Legal Research of the Law Library of Congress, which was issued way back in August, the order to remove Zelaya from office was legal under the Honduran constitution. What was not legal, however, was exiling the president. That is specifically prohibited by the constitution.
Zelaya was nearing the end of his term of office. He was trying to stay in office by changing the constitution with an illegal referendum. The Supreme Court and the Congress put an end to that. End of story.
In the end, the Obama administration backtracked by helping to broker an agreement between Zelaya and the Honduran government and, in the process, switching its support away from the would-be usurper Zelaya and to the legitimate Honduran government. The result is that this past Sunday an election was held. It was the same election that was always going to be held on that date. Things in Honduras are now exactly where they would have been if the constitution had been followed all along. Nearly 400 foreign observers were in the country for the election and the broad international community has endorsed them. Thanks to the U.S. government coming to its senses, an actual coup was avoided.
The Honduran episode illustrates the problem with politics generally. Many people who are politically engaged tend to back the politicians or parties that reflect their own ideology, regardless of what the law is. Manuel Zelaya is a fellow traveler of Venezuela's Hugo Chavez and his growing axis of like-minded Latin American leaders. People and governments who supported Zelaya in the controversy were backing him because of what he stood for, or stood against, regardless of constitutional law. If Zelaya had had the law on his side, then Obama would have been correct when he reflexively backed Zelaya on seeing him escorted out of the country by the military. But Zelaya didn't have a legal leg to stand on, and the State Department finally got on the right side of things.
This episode, along with the president's long, hard deliberations on Afghanistan, have shown what happens when an idealistic, well-intentioned new president comes into office. When he has to confront reality himself, he often winds up in the same exact place as the people he used to criticize.
When the military removed President Manuel Zelaya in June and sent him into exile, the U.S. government echoed countries like Brazil, Argentina and Chile in calling the ouster a coup and demanding Zelaya's reinstatement. The fact is that one can argue over whether what the military did was actually a coup, but the more pertinent question was whether or not it was illegal.
The crucial fact in the matter was that the military was not acting on its own but at the behest of the Honduran Congress and Supreme Court. The soldiers were merely following orders issued by two branches of the civilian government. And were those orders legal? According to an analysis by the U.S.'s Directorate of Legal Research of the Law Library of Congress, which was issued way back in August, the order to remove Zelaya from office was legal under the Honduran constitution. What was not legal, however, was exiling the president. That is specifically prohibited by the constitution.
Zelaya was nearing the end of his term of office. He was trying to stay in office by changing the constitution with an illegal referendum. The Supreme Court and the Congress put an end to that. End of story.
In the end, the Obama administration backtracked by helping to broker an agreement between Zelaya and the Honduran government and, in the process, switching its support away from the would-be usurper Zelaya and to the legitimate Honduran government. The result is that this past Sunday an election was held. It was the same election that was always going to be held on that date. Things in Honduras are now exactly where they would have been if the constitution had been followed all along. Nearly 400 foreign observers were in the country for the election and the broad international community has endorsed them. Thanks to the U.S. government coming to its senses, an actual coup was avoided.
The Honduran episode illustrates the problem with politics generally. Many people who are politically engaged tend to back the politicians or parties that reflect their own ideology, regardless of what the law is. Manuel Zelaya is a fellow traveler of Venezuela's Hugo Chavez and his growing axis of like-minded Latin American leaders. People and governments who supported Zelaya in the controversy were backing him because of what he stood for, or stood against, regardless of constitutional law. If Zelaya had had the law on his side, then Obama would have been correct when he reflexively backed Zelaya on seeing him escorted out of the country by the military. But Zelaya didn't have a legal leg to stand on, and the State Department finally got on the right side of things.
This episode, along with the president's long, hard deliberations on Afghanistan, have shown what happens when an idealistic, well-intentioned new president comes into office. When he has to confront reality himself, he often winds up in the same exact place as the people he used to criticize.
Sunday, November 22, 2009
Missing the Point
I'm beginning to think that the Obama administration's decision to try Khalid Sheikh Mohammed in a New York federal court has the same basic motivation as its healthcare reform plan. What ties the two together seems to be a desire to make plenty of work for trial lawyers.
The administration cut off a military tribunal process that was well underway and under which KSM had essentially already pleaded guilty in order to have a civilian trial in New York. Assuming KSM and his four fellow defendants do not plead guilty in that venue (and it's hard to imagine that jihadists such as they would not leap at the opportunity to have such a world stage for airing their beliefs and trying to pick up some new converts), this will make plenty of work for attorneys, much more than a military tribunal would have. It may just be a coincidence, but Attorney General Eric Holder's old law firm, Covington & Burling, has represented no fewer than 17 detainees at the Guantanamo facility.
I resist indulging in any conspiracy theories about that, however. I thought it was a bit silly when it was about Dick Cheney and Halliburton, and it would be silly to make too much of this now. But the Obama administration has a clear bias in favor of making work for trial lawyers in general. In addition to government employees, this is one area where the administration has been successful at keeping and creating new jobs.
A common refrain among people who favor a major overhaul of the healthcare system is that health care in America is the most expensive of any country in the world. They usually add, at the same time, that metrics for healthcare quality show U.S. healthcare way down on the list, despite its high cost. The latter claim is clearly a case of fiddling with statistics. For a while New York Times columnist Nicholas Kristof kept writing that statistics showed that U.S. health care was worse than Slovenia's. Let's use a little common sense. Do you know anyone who has fled to Slovenia, or any other country for that matter, for better health care? American health care is hugely expensive but it certainly isn't of poor quality when compared to other countries.
When you listen to people talk about health care, their first concern is usually the cost of it. A secondary concern is that they may lose it or that other people may not be able to get it. Proponents of Democratic healthcare reform point out correctly that France has a very good healthcare system and that it costs less. But it doesn't follow logically that the Democratic plan will bring American healthcare costs in line with France's. Similar plans adopted by individual states have tended to make health care more expensive. The critical difference between America's and France's healthcare systems (and that of pretty much all other countries) is the amount of money spent on malpractice insurance and defensive medicine. Simply put, no other country makes it as easy to bring huge lawsuits against doctors and hospitals. If you corrected for this, America's and France's health care would cost about the same.
But, despite President's Obama's stated willingness to "talk about" tort reform, Democrats have refused to include anything that would correct this situation in any of their bills. That's not surprising since trial lawyers, as a group, are big contributors to the Democratic Party. But even Republicans don't focus on this enough. They dutifully include tort reform in their check list of ideas to demonstrate that they are not being simply obstructionist, but they don't emphasize the issue as much as they should. And, as Democrats like to point out, Republicans lack credibility on the issue because they had control of the government for years and never made a move to tackle the problem.
If some form of healthcare reform eventually passes the Congress (and it's by no means certain that it will), let's hope that the congressional system makes the result somewhat reasonable. Inevitably, no one will be particularly happy with the final version. It will be too watered down for many on the left, and those on the right will be unhappy about any increase in the burden of government on the private sector, the only place where money to pay for everything can be generated. As for individuals, some will undoubtedly be better off under a new system, but others will have their lifestyles lowered because of higher taxes and the requirement to purchase insurance they may not want. And there is no reason to believe that people will be any happier about the government's arbitrary decisions about what can and cannot be covered than they were with those of private insurance companies.
But the really depressing thing will be that, barring a miracle, this healthcare reform will completely miss the chance to target the one problem virtually everyone can agree on: health care is too expensive.
The administration cut off a military tribunal process that was well underway and under which KSM had essentially already pleaded guilty in order to have a civilian trial in New York. Assuming KSM and his four fellow defendants do not plead guilty in that venue (and it's hard to imagine that jihadists such as they would not leap at the opportunity to have such a world stage for airing their beliefs and trying to pick up some new converts), this will make plenty of work for attorneys, much more than a military tribunal would have. It may just be a coincidence, but Attorney General Eric Holder's old law firm, Covington & Burling, has represented no fewer than 17 detainees at the Guantanamo facility.
I resist indulging in any conspiracy theories about that, however. I thought it was a bit silly when it was about Dick Cheney and Halliburton, and it would be silly to make too much of this now. But the Obama administration has a clear bias in favor of making work for trial lawyers in general. In addition to government employees, this is one area where the administration has been successful at keeping and creating new jobs.
A common refrain among people who favor a major overhaul of the healthcare system is that health care in America is the most expensive of any country in the world. They usually add, at the same time, that metrics for healthcare quality show U.S. healthcare way down on the list, despite its high cost. The latter claim is clearly a case of fiddling with statistics. For a while New York Times columnist Nicholas Kristof kept writing that statistics showed that U.S. health care was worse than Slovenia's. Let's use a little common sense. Do you know anyone who has fled to Slovenia, or any other country for that matter, for better health care? American health care is hugely expensive but it certainly isn't of poor quality when compared to other countries.
When you listen to people talk about health care, their first concern is usually the cost of it. A secondary concern is that they may lose it or that other people may not be able to get it. Proponents of Democratic healthcare reform point out correctly that France has a very good healthcare system and that it costs less. But it doesn't follow logically that the Democratic plan will bring American healthcare costs in line with France's. Similar plans adopted by individual states have tended to make health care more expensive. The critical difference between America's and France's healthcare systems (and that of pretty much all other countries) is the amount of money spent on malpractice insurance and defensive medicine. Simply put, no other country makes it as easy to bring huge lawsuits against doctors and hospitals. If you corrected for this, America's and France's health care would cost about the same.
But, despite President's Obama's stated willingness to "talk about" tort reform, Democrats have refused to include anything that would correct this situation in any of their bills. That's not surprising since trial lawyers, as a group, are big contributors to the Democratic Party. But even Republicans don't focus on this enough. They dutifully include tort reform in their check list of ideas to demonstrate that they are not being simply obstructionist, but they don't emphasize the issue as much as they should. And, as Democrats like to point out, Republicans lack credibility on the issue because they had control of the government for years and never made a move to tackle the problem.
If some form of healthcare reform eventually passes the Congress (and it's by no means certain that it will), let's hope that the congressional system makes the result somewhat reasonable. Inevitably, no one will be particularly happy with the final version. It will be too watered down for many on the left, and those on the right will be unhappy about any increase in the burden of government on the private sector, the only place where money to pay for everything can be generated. As for individuals, some will undoubtedly be better off under a new system, but others will have their lifestyles lowered because of higher taxes and the requirement to purchase insurance they may not want. And there is no reason to believe that people will be any happier about the government's arbitrary decisions about what can and cannot be covered than they were with those of private insurance companies.
But the really depressing thing will be that, barring a miracle, this healthcare reform will completely miss the chance to target the one problem virtually everyone can agree on: health care is too expensive.
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