Letter 114: The dilemma of Syrian refugees.

UPDATE: February 12th 2016

This proposal is not as restrictive as it sounds. Safety is a concern and it can be respected without consigning thousands to misery, illness and death. The percentage of military age males among refugees is relatively small. The solution proposed here is costly. If we have the will, the United States can admit many thousands of refugees safely. The profiling may have, unfortunately, to be widened to include women from places known for radicalizing people.

UPDATE: January 30th 2017
This idea may have worked under a President Obama or another President (i.e., Senator Clinton, Governor Kasich or Governor Bush). Under President Trump, with Steve Bannon on the N.S.C., this cure would likely end up being, quickly, far worse than the dis-ease.

UPDATE: February 2nd 2017
This essay was originally based upon an assumption that the Democratic governors tacitly agreed with their Republican counterparts. With the reactions of Minnesota and Washington -- as well as other liberal states seeking to provide sanctuary to Muslim immigrants or refugees -- it is evident that my prior assumption was incorrect. This latter-day nullification crisis was precipitated by an over-reach by President Trump in issuing an Executive Order that is written like a piece of legislation and not executive guidance. 

Additionally, the Executive Order singles out Muslims by targeting 'Majority Muslim' countries. By itself, this language does not constitute a ban. Nevertheless, the ban has an explicit preference for Xians and other non-Muslim segments, thereby implying a targeting of the Muslim majorities, clearly unconstitutional in the case of citizens or aliens in good standing seeking to leave from, or return to, the United States. The solution proposed fifteen months ago, with the caveats noted, would still be my recommendation. 

This letter is in response to an article in the Pittsburgh "Post Gazette" directed to me by a Facebook friend; it is, in actuality my response to him. The article discusses the Christian-right's hypocrisy, well documented, and then uses that repugnance to discredit concerns about allowing Syrian refugees into the United States. Here is a link to that article.

http://www.post-gazette.com/opinion/tony-norman/2015/11/17/Tony-Norman-Bashing-Syrian-refugees-Christian-hypocrisy-on-parade/stories/201511170085

The “Post Gazette” article is, well, naïve. There is a quote of Jesus, not long after the beatitudes that states, "Behold, I send you forth as sheep in the midst of wolves: be ye therefore wise as serpents, and harmless as doves."

Jesus is not telling the faithful to go kill people, nor is he saying be defenseless. Look at the photos of the refugees. Among the adults are men of fighting age, many of whom look fit and robust (as if they are trained militarily). We have no information on them.

Now, I personally do not want to see refugees turned away and so I propose that we re-open facilities that are available and place all military-age males in them until we are comfortable that they pose no threat to the larger population.

Remember, at least one of the attackers in Paris was one of these "poor, bedraggled refugees"; an ISIS invader determined to murder as many innocents as possible. Eight more homicidal impostors have been arrested in Turkey. It took one narcissistic gangster and a Schweppes can to murder two hundred fourteen Russians, people like you and me.

This approach of segregating military age males, obviously, has many historical overtones that are unpleasant to any American of conscience, Democrat or Republican: the turning away of the S.S. Saint Louis; the detention of Japanese Americans during World War II; as well as, the wanton murder of refugees by the Nazis (another gangster régime) in concentration and death camps.

Thus, we make sure that these people are cared for; that the facilities are open to U.N.H.C.R. and Red Cross surprise inspections; as well as, that family visits be permitted but supervised for security reasons. The key will remain the transparent maintenance of individual human dignity, balanced with a realistic caution for the collective welfare.

Those that turn out to be ISIS? Hello, Guantánamo.

But short of that, I would -- as a governor -- certainly state that I would be unwilling to admit refugees until there is a demonstrable procedure in place that protects the people whom I am elected, among others things, to protect.

As far as hypocrisy goes, the "Post Gazette" reporter is right in that respect. Yet we are all hypocrites; I am, at least 2x a day. Many of the motives of these Xian right-wingnuts may seem unsavory -- and they most likely are -- but their repugnance ought not lower our vigilance toward a real threat facing us.

You know that I have stated many times that President Obama is a very decent human being, with a moral rudder (perhaps better than mine) and a fineness of character. Now, I had help on the essay (link below) from one of my best friends -- a native of Syria -- two years ago.

Since I had failed to pay attention, my thoughts expressed in that letter were already a year -- maybe two years -- late. My concern was much the same as these governors exhibit now: keeping al Qaeda (not aware of ISIS back then) out of the refugee camps.

If an average Joe like me can think this through, why couldn't our President? No, as good a man as President Obama is -- and, sadly, all too often subjected to racist attacks (not overtly so) from shameful members of my own party -- he simply dropped the ball on this question.

http://nedmcdletters.blogspot.com/2013/08/letter-83-thoughts-on-syria-case-for.html  

Yes, I have conceded many times that any alternative proposed, often as a criticism of a policy in place, is simply a best case scenario. This proposal certainly fits that bill. Yet, I am hard-pressed to see how this proposal could have made things worse for these refugees than the absence of decisive moral leadership at a critical cross-roads in contemporary history.

Letter 113: Do we say 'Iran' or "I ran"?

"Never negotiate out of fear but never fear to negotiate." 

-- President Kennedy

OPENING THOUGHTS. For months, I have wanted to favour this arrangement negotiated among the United States, the European Union, the United Kingdom, France, China, Germany, Russia and Iran for three reasons. First, I have felt that Iran has its reasons for seeking a nuclear deterrent versus Pakistan; that notion proved to be incorrect. Second, I have felt that the best approach to Iran is to empower its middle class and moderates by bringing them into the community of nations.

Third, the behavior of Republicans toward President Obama has been disrespectful. The letter sent by most Senate Republicans to the Iranian leadership and the speech of Prime Minister Netanyahu to Congress, at the invitation of Republicans and without the courtesy of consulting the President, strike me as repugnant. The concern by conservatives toward this arrangement is understandable, as are the worries expressed by their more dovish brethren if no rapprochement with Iran can be achieved.

BLUF: I cannot support proceeding with this arrangement, at least at this time. Though I lean against the accord, I do so barely. There are some great arguments in favor of the accord by none other than President Obama via the social medium, QUORA:

• http://www.quora.com/What-is-it-about-the-Iran-nuclear-deal-that-keeps-them-from-getting-nuclear-weapons
• http://www.quora.com/Would-a-rejection-of-the-Iran-nuclear-deal-by-the-US-Congress-be-a-vote-for-war
• http://www.quora.com/Can-Irans-leaders-be-trusted 

Summary. We need to lessen tensions with Iran. Nevertheless, before moving ahead with this arrangement, there has to be a resolution of the situation in Syria; or, at least, a decisive move toward that resolution. Certain sanctions – for banking, peaceful nuclear development and weapons – should not be lifted unconditionally. Nor should frozen government-owned assets be released immediately.

Conclusion. This arrangement is not going to affect Iran’s calculations in deciding in whether or not to develop nuclear weapons. This accord may prove to be a guided pathway for Iran to follow toward developing nuclear weapons in a universally acceptable manner and timeline. 

Further, a nuclear Iran will not materially change the level of danger the world currently faces. The danger lies in the nature of the society hosting such weapons and its geopolitical pressures. The larger issue here is how to engage the Iranian people so they can throw off, peacefully, the shackles of a religious dictatorship.

Open questions. Though much of the agreement cites in detail many technical terms and concepts which I do not know, I have finally wandered through the arrangement. ¡UGGH! There are questions in this debate, the answers to which are not visible to the casual observer and will go a long way toward colouring the complexion of the agreement.

1. Are there side-agreements that may bind the United States to future commitments? If such commitments exist, they may be helpful or they may not.
2. Does the agreement represent a quiet coup (or shift of power) from the theocracy in Iran to the moderates and the cosmopolitan middle class of that country? Were such a shift of power to occur, the arrangement could well be a milestone in constructive engagement with the Iranian people.
3. Are the European leaders under pressure to lift the sanctions against Iran? If true, this arrangement might be an exercise of making a virtue of a necessity.

These questions tend to argue in favor of subjecting this arrangement to the scrutiny and accountability of a treaty.

Observations. There are certain observations that I tentatively make from my reading of this arrangement. Truthfully, I should be candid about feeling tentative since the text is complicated and detailed. My confidence in my understanding of the arrangement is modest; I wanted to see for myself what the agreement said, even if I am utterly confused by its twisted terminology.

• Sanctions do not lift immediately. They lift after six months or so, depending upon the lag between the 'Adoption Day’ of formal approval and the 'Implementation Day' when sanctions lift and Iran does her part to restrict enrichment activities.
• The snap-back provision is tenuous and will not work. This illusion may be in place to shroud the pressure overwhelming European and other policy makers that private companies are exerting to open up the Iranian market by jettisoning the sanctions.
• Certain time-lines are not readily apparent. There is no twenty-four day notice period for inspections (at least that I could find within the basic text). From my reading, adjudication of violations gives Iran more like six-to-eight weeks to shift prohibited materials around to avoid detection. Additionally, I could find no reference to a one-year break-out period.
• Oversight will be easier than it was in Iraq.  Since few sites (only two that I recall) will be active for eight years, the International Atomic Agency will have considerable enforcement powers, if, and only if, Iran complies with the arrangement and restricts activities to these stipulated sites.
• This agreement depends on good faith. Several requirements for following “the letter and spirit” of the arrangement make the complicated language unsettling in its inherent difficulty to understand and enforce.

There will be ample room for competing interpretations, giving Iran the latitude to violate the agreement before the international community can plausibly react. On the other hand, while good faith sounds ‘gooey’, that commitment is the bedrock underlying any international agreement.

Concerns with the Arrangement. There are two fundamental concerns for me. First, I am not convinced that this arrangement really changes anything going forward. The accord comes across more as a complicated communiqué than some hard-and-fast agreement. The value of the accord may well lie in empowering the pro-democracy elements in Iran for a moderate policy to prevail over the pugnacious preferences of authoritarian theocrats. 

Many Iranians are sophisticated. Outside of Israël, Iran was once the most progressive culture in a historically backward region. Second, the elements of timing, and not the arrangement itself, also trouble me. My specific concerns – at least those that I remember – include:

• superseding a settled bi-partisan sanctions policy, perhaps even Congressional resolutions or laws, via waivers;
• the possibility of secret and binding commitments extended by the United States – unilaterally or as part of the working group – to Iran or other stake-holders;
• the lifting of all sanctions -- including nuclear development, weapons, banking and frozen assets – in the short-to-medium term, thereby removing a potent deterrent against Iran violating the arrangement;
• the eventual willingness (sic) of the United States (and our working partners) to resist violations by Iran through snap-back sanctions;
• the current context of Iran’s and Russia’s activities in Syria and, to a far lesser extent, Iran’s continued funding of Hizbulah precluding the efficacy of a ‘good-faith agreement’; as well as,
• the likelihood that the days of comprehensive allied sanctions being numbered, with that pressure driving an accord deleterious to American interests.

The context issue is crucial but also very subjective. In view of the several events since 2008, American policy has come to be viewed by many friends and foes as prone to appeasement. Sadly, a 'good-faith' agreement, written within the current context of perceived appeasement, may end up looking weak to our cynical counterparts in Teheran.

The critical question here – and one I can not answer – is who is cynical and who is not, and the relative distribution of power between those two factions in Iran (and in Russia). Again, this arrangement may have a million things wrong with it but still be worthwhile if it empowers those in Iran ready to renounce terrorism, work with Israël and rejoin the community of nations at the expense of theocratic tyranny.

The vacillating ambivalence expressed above shakes out, on balance, in an adverse manner for me. The possibility of the scenario immediately below, embedded in a climate of such uncertainty, remains high enough to make this arrangement – in its current form and with its current timing – too risky to pursue, at least for now. 

1. Iran plays nice until the 'lmplementation Day', when the sanctions are lifted.
2. Iran starts using the global banking system to finance Hizbulah attacks and other covert aggression across the region, prolonging and worsening the appalling carnage in Syria.
3. Once Iran is integrated back into international economy, after six months to a year, she directly violates the treaty and produces a nuclear weapon.
4. The West screams and yells but does nothing, with too much business pressure –together with an unwillingness forcibly to blunt Iranian and / or Russian expansionism –for the mythical snap-back sanctions to occur.
5. Iran does not renounce terror but now has the financial system to expedite it.

Reflections. Now I am neither sure nor convinced that Iran would do these things. Yet the context is key, here, in view of the nation's capacity to act. American policy has been arguably perceived as supporting a trend of appeasement since 2008:

• little push-back on the Russian invasion of Georgia;
• delay of the deployment of missile protections in Poland and the Czech Republic;
• an unintentionally complicit silence in the face of a spontaneous then thwarted democratic uprising in Iran after phoney election results, reminiscent of Soviet charades in the previous century;
• unwillingness to push back on a manipulated election result in Iraq that kept a would-be sectarian dictator in power;
• following colonial powers willy-nilly into Libya, more to satisfy Italy without regard to a difficult régime's repudiation -- in word and deed -- of development weapons of mass destruction and state-sponsored terrorism;
• cancellation of those missile deployments to NATO’s Eastern allies;
• hysterical, then chimerical red-lines in Syria; as well as,
• no reaction to the Russian invasion of Ukraine and reneging on a twenty year old commitment by the United States to guarantee the borders of Ukraine (in exchange for Ukraine giving up to Russia a credible nuclear deterrent).

If my view of perceived appeasement is a plausible one, the likelihood of Iranian non-compliance can be expected to increase materially. This framework would also have a higher probability of success, were it proposed at a more propitious time. 

Additionally, I would add that this agreement does little to address Iran's sponsorship of terrorism, to the extent she really does do that. (Is Hizbulah really any worse than the Contras or the U.S.-sponsored death squads in Central America?) The sanctions being lifted unconditionally ought not include those applying to financial institutions and the capital markets or the release of frozen Iranian assets; they ease the financing of terrorism.

Most of the sanctions are hurting the wrong people in Iran and, in fairness to everyday Iranian innocents, many of the sanctions should be lifted in any case. But those measures mentioned as troublesome (banks, guns and enrichment), together with the release of frozen assets, should be deferred and their lifting earned by deeds recorded not merely by intentions reported.

My recommendation to fellow Republicans. In the end, I think this agreement will be unenforceable and we have yet to receive that best kind of assurance from Teheran -- actual deeds to reduce terrorism and a genuine interest in the peaceful use of the uranium -- vital to forging a strong and self-reinforcing trust between the two sides. So, this is what I think my fellow Republicans should argue for:

• deferring, not scrapping, the agreement until a peace plan for Syria is reached;
• not lifting the sanctions on financial institutions and weapons makers, at least until Iran renounces terrorism;
• not releasing frozen assets until Iran has demonstrated good faith;
• lifting most other sanctions to encourage the Iranian people to push their government toward a more peaceful and democratic stance; as well as,
• requiring that the agreement be viewed, and voted on, as a treaty.

As always, I humbly thank you for your patience with my presumption.

Letter 112: Good parents, the forgotten best of America

"Certainly. When you find a diamond that belongs to nobody, it is yours. When you discover an island that belongs to nobody, it is yours. When you get an idea before any one else, you take out a patent on it: it is yours. So with me: I own the stars, because nobody else before me ever thought of owning them."

-- Antoine de Saint-Exupéry, 1943

Christopher Hedges may sound shrill at times; he is one of the most articulate and vocal crtics of the society in which we live, inextricably bound to a culture of subtle toxicity. Times were when such critics were not dismissed as whiners, winoes or social albinos. Watch Mr. Hedges on YouTube; he is not a nut. Marxist sociologist Christopher Lasch anticipated the culture that Hedges indicts in his book, The Culture of Narcissism​, published in 1980. Twelve years later, I remember feeling uneasy when then President George H.W. Bush, whom I admired, campaigned on foreign policy by saying in effect:

• "We won the Cold War." and
• "The values of free-market capitalism prevailed."

I scratched my head and wondered, free market values...¿huh? Free market capitalism has, at best, a utility in allocating scarce economic resources. It doesn't have values per se; we do, or we are supposed to. The winning-the-cold-war remark left me cold, too. That could only humiliate Russia. Instead, I felt then, President Bush should have been praising Mikhail Gorbachev for avoiding bloodshed. Perhaps one of the twentieth century's greatest acts and legacies of statesmanship. 

That led me to vote for Bill Clinton, which still appalls me to this day that I would do that. President Bush was multiples the greater man than Clinton. When I disagreed, at least there was a 'there' there. President Clinton, on the other hand, was a man of the times: a two-dimensional theater stage back-drop; always painted over to suit the next scene. 

That absence of a moral rudder became clear over time – selling out old friends as ‘radicals’ when their thinking was actually quite firmly in the mainstream of America’s erstwhile liberalism; shutting down the Los Angeles International Airport for two hours so some coiffeur to Hollywood could graduate him into the ranks of the glitterati with a snip here and a clip there.

Good men call President Clinton a nice or a good guy. I know of few who ever call him great.  In that sense, I pose this question to supporters of Secretary / Senator Clinton: What would F.D.R have been like had he been married to Hillary Clinton? What would Bill Clinton have been like had he been married to Eleanor Roosevelt? Both men are remarkably similar; their point of divergence comes, I believe, in their married lives. 

Seven years after the sickness I felt when a man like Senator Dole had no chance against President Clinton, I could not support the invasion of Iraq fast enough. I will buy Rumsfeld a drink in Hell. After my first tour in Iraq, I toasted a classmate at his fiftieth birthday, citing him as a real American hero. Why?

Because he and his wife and millions like them do the heroic work of bringing up good kids who grow into great adults. These families are strong enough to shut out the cultural malaise that surrounds them. With divorce rates the way they are tending – with the percentage of dead-beat divorced parents as high as it is – most American children are likely not afforded the benefits of such quiet heroism.

Life goes on and so must we. The poverty rate in dollars and cents may be high today; but the cultural and emotional poverty weighing down on so many young people, forcing larger numbers into a burgeoning underclass is at a tipping point.  But, alas, I show my age. Hedges is correct in asserting -- whether one agrees or not with his assessment -- that the current state of American culture started in the late 1960s. 

If one thinks Hedges is off his rocker, I challenge that person to live overseas, among the people of another country and not in an Embassy or American enclave, for two years and see how the U.S. looks from afar. Not the America I knew; and it makes me feel like a grieving parent. No citizen should ever outlive his country.

Letter 111: concerns about quantitative easing

“Fool me once, shame on you—but fool me twice, shame on me!”

--Chaucer

Overview. I must confess that I have no idea how much money has been printed out of thin air to buy treasury bills and bonds issued from the same ether layer of unreality. So, my concern may be overshooting here. Here is that concern: all those green-backs (dollars) have to go somewhere. Now they seem to be on bank balance sheets as cash and as bonds in off-shore investment funds, insurance companies and mutual funds. What happens when they come back? 

(NOTE: this essay draws the material in the Stalla CFA study course and, my faint recollection of college Economics.) 

Quantitative Easing: historical roots. The rationale of quantitative easing runs along the lines of what President Carter tried to pursue with his ‘locomotion’ monetary policies of the 1970s: if all industrialized countries flood the market with liquidity, inflation will remain low, asset values will rise and the otherwise shrewd investors, too stupid to see the ruse of the massive influx of increasingly worthless paper currency, will invest.

The macro-economic goal of Quantitative Easing grew out of a desire, after the near collapse of the international system in 2008, to avoid a general depression of falling asset values and a psychology that would preclude new investments at any price (i.e., a liquidity trap).  The plan of President Carter did not work in the 1970s because Germany rightly said, “Thanks, but no thanks. The hyper-inflation that helped bring in the Nazis occurred only half a century ago. We remember.”

Why Quantitive Easing failed in the 1970s. As monetary policy became promicuous in the United States, other governments, which had once seen the dollar as a store-value currency now unloaded their green-backs. Those bills flooded back into the Unites States, causing unprecedented inflation. President Carter, as the last Keynesian, loosened the money supply further and treasury yields spiked to 21% within a day, as predicted by the 'continuous learning', or rational, variant of the efficient markets hypothesis.

It seems that people at Goldman Sachs, First Boston, Salomon, et al. were not quite as easily fooled as the Brookings economists seemed to have assumed. What happened then may occur today. The big difference is that many others are out on the dance floor doing the locomotion. In one key respect, the dollar as a store value currency and the helium currencies have one element in common.

Each one either dampens (dollar as a gold equivalent) or coincides with low (Quantitative Easing; still uncertain) velocity.  Velocity is the rate at which a green-back changes hands. The theory goes, the higher the velocity, all things being equal, the higher the inflation rate. That is to say: rather than too many dollars chasing too few goods, one sees a static number of dollars chasing a static number of goods too fast. With higher velocity, fewer dollars are needed to chase the roughly the same number of goods.

So, if dollars remain constant, with the increased velocity, one now sees more dollars chasing the same number of goods. Thus, inflation ensues. First under President Ford, and especially under President Carter, something triggered an increase in velocity. One factor may have been the first full generation of a digitized currency through credit cards. A larger factor was likely the repatriation of dollars by non-U.S. national banks that no longer viewed the green-back as a store value currency.

These sovereign institutions switched into metals and harder currencies like the D-Mark, the Yen and Swiss Franc. All that accelerated the velocity of money changing hands, as people were exchanging dollars for other assets, mobilizing many more dollars chasing a stagnating level of goods. A similar sturm-und-drang swan song for the green-back may be lining up to create a hyper-inflation in our day.

Current effect of Quantitative Easing. These days, it seems that most dollars are dormant. They appear to be parked in foreign funds, in banks as well as in those institutions intimately involved with the welfare of the nation’s senior citizens (i.e., the Social Security Trust Fund). The fact is: all that money has to go somewhere. That somewhere includes buy-and-hold (for now) investments; grotesque valuations for start-ups that have few tangible assets to speak of and create almost no jobs; and, banks’ balance sheets. 

Worst Case. Once that money starts to move, we may see a death spiral for the American economy, perhaps others.

1. Foreign funds start to unload the dollar, preferring €uroes since the latter has shown more fiscal resolve toward wayward states (i.e., Greece).
2. That flight to discipline raises yields and cutting bond values, prompting people to start selling treasury instruments and reinvest somewhere else.
3. Some currency or rate hedges are broken and thus more selling ensues.
4. For people to buy, the real rate goes back to +2% (a hike of two to four percentage points; 200-400 basis points).
5. That craters the real estate and other capital markets and people start to sell off, likely in a panic, while buyers also add inflation premiums.
6. If a panic ensues, and perhaps driven by regulations on balance sheet standards, holders of currency and treasury instruments may ignore their hedges to get out before the market freezes 

Why F.D.R. might fail today. We slide into the menu effect of no published prices since they will be out of date by the time the ink dispensed to publish them is dry. Were anything approaching this scenario to occur, the U.S. economy would grind to a halt, quickly. Without any tricks left to spur the economy along and with the loss of the basic wealth and job creating capacity of manufacturing, even a new F.D.R. may find himself hapless, helpless, hopeless. 

The tragic flaw. The heart-breaking part of this admittedly extreme scenario would be the fact that all this adversity would not arise out of some conspiracy but out of a coincidence of thinking and out of a convergence of interests by people who are, for the most part, loyal and decent Americans.