25 July 2023
Excerpts from recent editorials in the United States and abroad:
The Washington Post on
The Federal Reserve is almost certainly going to lift the benchmark interest rate Wednesday to nearly 5.5$, a stunning rise from practically zero in March 2022. The Fed was too slow to recognize inflation’s painful bite, which reached more than 9 percent year-over-year last summer, but the Fed’s credibility has been restored. The central bank acted aggressively, helping cool inflation to a fairly tolerable 3%.
Now, the path is murkier. As anyone alive in the 1970s knows, the biggest danger is to give up too soon. Fed Chair Jerome H. Powell has made this case repeatedly. “Is there a risk that we would go too far? Certainly, there is a risk, but I wouldn’t agree that it’s the biggest risk to the economy. The bigger mistake to make would be to fail to restore price stability,” he said last July. That’s still true today.
The Fed needs to project that it’s still in inflation-fighting mode. Congress gave the central bank two goals: maximum employment and price stability. With the unemployment rate at a half-century low, jobs still easy to obtain and labor force participation of Americans ages 25 to 54 at the highest level since 2002, the Fed deserves an A grade on employment but a C on price stability. Yes, there has been significant improvement, but inflation is still well above the 2% target.
Even more troubling, the inflation gauge that strips out volatile food and energy prices is sitting at 4.8%. Inflation, like unabated mold, has a tendency to return, and spores of it are still lurking in the services side of the economy: restaurants, travel, entertainment, car insurance.
Of course, Mr. Powell and his fellow board members cannot be blind to what is going on in the rest of the economy. There’s rightly concern about the Fed triggering an unnecessary recession by raising rates too high. But so far, the economy and labor market have been far more resilient than expected. In fact, recession fears are fading. More and more economists and business leaders are starting to believe inflation can subside without substantial pain in which millions of workers have to lose their jobs and incomes. This resilience gives the Fed leeway to hike more if needed.
If the economy starts to deteriorate rapidly, Mr. Powell will likely reconsider. He has a proven knack for pivoting. He shows both humility and a recognition that economic forecasts have a poor track record. He reversed course in 2019, bringing rates down somewhat during the Trump trade wars, and took fast action in March 2020 when the pandemic began.
Some have suggested reconsidering the 2% inflation target. It is an arbitrary number that New Zealand policymakers came up with around 1990. But this is not the moment to change it. The Fed’s credibility has been a major factor in helping inflation cool. The public now believes the Fed will win this fight. Abandoning the target now risks undermining that hard-won confidence.
Wall Street expects this to be the last rate hike in this series. But what matters most is that the Fed do what’s needed to ensure inflation returns to target.
The Wall Street Journal on immigration
The U.S. has a people problem. The birth rate has been sliding for years, and it’s about to translate into a shrinking labor force. By 2040, according to a study out this week, America could have more than six million fewer working-age people than in 2022. The only way to counter the domestic trend is by attracting workers from abroad.
“The working-age U.S. population has peaked absent additional immigration,” writes Madeline Zavodny, in a forthcoming paper from the National Foundation for American Policy. “New international migrants are the only potential source of growth in the U.S. working-age population over the remainder of the next two decades.” Ms. Zavodny is an economics professor at the University of North Florida, and her analysis is based on data from the Census Bureau and Bureau of Labor Statistics.
At a time when some Americans view foreign workers as cheap competition, she offers a prescription for growth and vigor. In particular she notes that, although foreign-born workers accounted for nearly half the gain in U.S. employment from January 2021 through May 2023, “employment among prime-aged U.S.-born workers also soared during this period.”
Unemployment has been historically low, she adds, and difficulty of finding good workers will increase if the pool of working-age people shrinks.
The domestic trend lines aren’t good, for two big reasons. The declining birthrate is one. The other is Baby Boomers are both living longer and aging out of the work force. Anyone who imagines that a shrinking population is pleasant should spend some time in Japan and Italy. As these countries are finding, decline means fewer people to produce goods and services, as well as less innovation. Even China’s Communists now admit that owing to their pursuit of a one- child policy, they now face, as Milton Friedman predicted, a huge worker shortage that will challenge economic growth.
So far the U.S. has been able to compensate via immigration, which was “the sole source of growth in the U.S. working-age population in 2021 and 2022,” Ms. Zavodny says. But this isn’t guaranteed. She suggests a future of competition among countries hit by the double whammy of a declining birth rate and aging society. Canada recently rolled out a new work permit to lure away foreigners in the U.S. on high-skill H-1B visas. The target of 10,000 applicants was met in two days.
Amid Donald Trump ’s talk about a wall and Joe Biden ’s chaos at the southern border, it’s hard to imagine any solutions from Congress before 2025. But Ms. Zavodny identifies labor-force trends that will have damaging consequences if they aren’t addressed. Someone needs to make the case that admitting foreign workers is good for Americans.
The Los Angeles Times on ethics and the US Supreme Court
After months of reports about questionable conduct by justices of the U.S. Supreme Court, the Senate Judiciary Committee on Thursday will consider legislation that would lead to a binding code of conduct for members of the high court. Given the failure of the court to establish a code on its own — despite suggestions from some justices that such an initiative is under consideration — congressional action is overdue.
Unfortunately, enactment of such legislation is clouded by the same partisanship that has infected the selection of Supreme Court justices. But that mustn’t deter Congress from pressing for reforms that would make the court more transparent and accountable.
Although Chief Justice John G. Roberts Jr. has said that justices “consult” the Code of Conduct for United States Judges, justices aren’t formally covered by it. Justices are subject to financial-disclosure requirements, but Pro Publica reported this year that Justices Clarence Thomas and Samuel A. Alito Jr. accepted travel from wealthy individuals without disclosing that largesse. (Both justices said they didn’t believe they were obliged to disclose that information. Earlier this year the Judicial Conference of the United States clarified its guidance to say that judges must disclose travel by private jet.)
As for transparency, justices are not required to explain why they choose not to participate in some cases, though, according to a statement by the justices sent to the Senate Judiciary Committee, a justice “may provide a summary explanation of a recusal decision.” “May” should be “must.”
The bill to be taken up on Thursday, the Supreme Court Ethics, Recusal and Transparency Act of 2023, would require the court to establish a code of conduct for its members; mandate public written explanations for all recusal decisions; and provide a mechanism for investigation of complaints that a justice had behaved unethically. These are all important objectives.
Ideally, improving judicial transparency would be a bipartisan cause. But the parties are mostly split on this issue. The bill is sponsored by Sen. Sheldon Whitehouse (D-R.I.), a caustic critic of the current court, and has only Democratic co-sponsors. Meanwhile, Senate Minority Leader Mitch McConnell (R-Ky.) has ridiculed Democrats on the Judiciary Committee for “trying to tell a coequal branch of government how to manage its internal operations, ostensibly to clean up its ‘ethics.’”
This criticism is rich coming from McConnell, who did more than anyone in recent memory to politicize the Supreme Court when he and his colleagues in 2016 shamefully refused to consider President Obama’s nomination of Merrick Garland to the court. McConnell’s original rationale for leaving that seat open was that 2016 was an election year, and that “(t)he American people should have a voice in the selection of their next Supreme Court justice.” Yet McConnell supported Donald Trump’s 2020 nomination of Justice Amy Coney Barrett, who was confirmed in an election year.
Not all Republicans oppose court reform. Sen. Lisa Murkowski (R-Alaska) has co-sponsored an ethics bill with Sen. Angus King of Maine, an independent who caucuses with Democrats. In some respects their proposal, the Supreme Court Code of Conduct Act, is preferable to the Whitehouse bill. For example, it provides that the court designate an individual, who could be a court employee, to process complaints against justices, with the possibility of an investigation commissioned by the marshal of the court. By contrast, the Whitehouse bill would have chief judges of federal appeals courts investigate.
Questions about ethics aren’t the only or even the principal reason for dissatisfaction with the Supreme Court. It has sullied its reputation for being above politics with a series of politically charged decisions in which Republican appointees predictably lined up on one side and Democratic appointees on the other. The court’s image also has suffered, deservedly, because of its disastrous decision last year to overrule Roe vs. Wade and dismantle nearly half a century’s judicial protection for abortion rights.
Yet the lack of a binding ethics code and inadequate oversight of gifts and travel are also a blot on the court’s reputation. Congress must begin the process of enacting reforms that the court itself has refused to undertake.
New York Times. July 22, 2023.
Editorial: The Risks of One of the Most Severe Tools in America’s Foreign Policy Arsenal
There is nearly universal consensus that certain egregious violations of international laws and norms demand a forceful and concerted response. Think only, for example, of Russia’s invasion of Ukraine or the development of nuclear weapons capabilities in Iran and North Korea. Harsh economic sanctions have long been viewed as the answer.
These are important questions because, over the past two decades, economic sanctions have become a tool of first resort for U.S. policymakers, used for disrupting terrorist networks, trying to stop the development of nuclear weapons and punishing dictators. The number of names on the Treasury Department’s Office of Foreign Assets Control sanctions list has risen steadily, from 912 in 2000 to 9,421 in 2021, largely because of the growing use of banking sanctions against individuals. The Trump administration added about three names a day to the list — a rate surpassed last year with the flurry of sanctions that President Biden announced after Russia’s invasion of Ukraine.
Given their increasing use, then, it is useful to understand not only how sanctions can be a tool for successful diplomacy but also how, when not employed well, they can ultimately undermine American efforts to promote peace, human rights and democratic norms across the globe.
The Invisible Costs of Sanctions
Policymakers turn to sanctions so frequently — the United States accounts for 42 percent of sanctions imposed worldwide since 1950, according to Drexel University’s Global Sanctions Database — in part because they are seen as being low cost, especially compared with military action.
In reality, the costs are substantial. They are borne by banks, businesses, civilians and humanitarian groups, which shoulder the burden of putting them into effect, complying with them and mitigating their effects. Sanctions can also take a toll on vulnerable people — often poor and living under repressive governments, as academics are increasingly documenting.
Officials rarely factor in such costs. While sanctions are easy to impose — there are dozens of sanctions programs administered by multiple federal agencies — they are politically and bureaucratically difficult to lift, even when they no longer serve U.S. interests. What’s worse, sanctions also escape significant public scrutiny. Few officials are held responsible for whether a particular sanction is working as intended rather than needlessly harming innocent people or undermining foreign policy goals.
Mr. Biden came into office promising to rectify that lack of accountability. The Treasury Department conducted a comprehensive review of sanctions in 2021 and released a seven-page summary that October. The review process was an important step. It concluded, among other things, that sanctions should be systematically assessed to make sure they are the right tool for the circumstances, that they be linked to specific outcomes and include our allies where possible and that care should be taken to mitigate “unintended economic and political impacts” on American workers, businesses, allies and other innocent people.
The Treasury Department is making some progress in carrying out the review’s recommendations, but Treasury is just one of many government agencies responsible for fulfilling sanctions. Every one of them should conduct regular, data-driven analyses to ensure that the benefits of sanctions outweigh the costs and that sanctions are the right tool, not just the easiest one to reach for. It is also important that the results of such analyses are communicated to Congress and the public.
Sanctions Need Clear, Achievable Outcomes
What is already known is that sanctions are most effective when they have realistic objectives and are paired with promises of relief if those objectives are met. Perhaps the best example is the 1986 law targeting apartheid-era South Africa, which laid out five conditions for sanctions relief, including the release of Nelson Mandela. Sanctions by the United States and other nations helped convince South Africa’s whites-only government that its policies mandating racial segregation were unsustainable.
Sanctions on Communist Poland in 1981 in response to the crushing of the Solidarity movement are another example of how this can work. The United States and its allies gradually lifted sanctions with the release of most imprisoned activists, helping usher in a new era of political freedom in Poland and elsewhere in Eastern Europe.
It’s notable that the sanctions against South Africa and Poland were aimed at bringing about free and fair elections, not regime change. Sanctions aimed at regime change often incentivize defiance, not reform. They have a terrible track record, as the cases of Cuba, Syria and Venezuela make clear.
In Venezuela, open-ended sanctions with sweeping ambition — to oust the dictator Nicolás Maduro — have so far achieved the opposite. After he dissolved the democratically elected National Assembly in 2017 and was declared the winner of a sham presidential election in 2018, the Trump administration imposed maximum-pressure sanctions on Venezuela’s state-owned oil company to cut off a crucial source of funds to the Maduro dictatorship.
While harsh individual sanctions against Mr. Maduro were necessary, the blacklisting of Venezuela’s oil sector has exacerbated a humanitarian crisis: As this editorial board warned, cutting off oil revenue deepened what was already the worst economic contraction inLatin America in decades. Sanctions on the oil industry, which accounts for about 90 percent of the country’s exports, caused dramatic cuts in government revenue and significant increases in poverty, according to a study last year by Francisco Rodríguez, a Venezuelan economist at the Josef Korbel School of International Studies at the University of Denver.
The policy, meanwhile, failed to push Mr. Maduro out of power. He instead consolidated his grip on Venezuela, blamed its economic misery on American sanctions and drew his country closer to Russia and China. Sanctions are called on Mr. Biden to lift oil sanctions.
Since taking office, Mr. Biden has taken steps to modify the sanctions against Venezuela to add specific, achievable objectives. His administration lifted some oil sanctions by giving Chevron permission to do limited work in the country, prompted by the spike in oil prices after the Russian invasion of Ukraine.
The White House has promised additional relief if Mr. Maduro takes steps toward holding free and fair elections next year. Francisco Palmieri, the State Department’s chief of mission of the Venezuelan affairs unit in Bogotá, Colombia, recently released a detailed list of what has to be done in order for sanctions to be lifted. It includes setting a date for next year’s presidential election, reinstating candidates who have been arbitrarily arrested and releasing political prisoners.
Mr. Maduro hasn’t complied so far. On June 30, he barred yet another well-known opposition figure from holding office. Nevertheless, this more modest policy, which supports a gradual return to democracy rather than abrupt regime change, is a better approach.
The Biden administration should be more explicit about which sanctions in Venezuela would be lifted and when, especially those on the state-owned oil company. That would make American promises more credible. An agreement in November between Mr. Maduro and the opposition to use Venezuela’s frozen assets for humanitarian purposes was another promising step, but it is in limbo because the funds have yet to be released.
The delay is causing Venezuelans to lose hope in a negotiated solution to the crisis, according to Feliciano Reyna, the president and founder of Acción Solidaria, a nonprofit organization that procures supplies for public hospitals in Venezuela. Although he has a special license to import supplies, he said he still had trouble obtaining what he needed. Some companies, he said, preferred not to sell to Venezuela rather than deal with the headache of making sure it was legal — a phenomenon known as overcompliance.
“The situation internally is really dire,” Mr. Reyna said.
The loss of hope is, in part, why more than seven million Venezuelans have fled their country since 2015, with more than 240,000 arriving at the U.S. southern border in the past two years. Many experts view sanctions as an important driver of migration from Venezuela because they worsen the economic conditions that push people to leave. In response, a group of Democratic lawmakers — including Representative Veronica Escobar of Texas, who co-chairs Mr. Biden’s re-election campaign — implored him to lift sanctions on Venezuela and Cuba.
In addition to making good on its commitments in Venezuela, the Biden administration can do much more to show that the United States is changing its sanctions policy to make it more humane. The first step would be to follow through on the recommendations of its 2021 review and formally take the humanitarian cost of any sanction into account before it is imposed. The Treasury Department in May hired two economists to take on that task; that should become standard practice for any agency with the responsibility for carrying out sanctions.
Sanctions Need to Be Reversible
Once the government begins conducting systematic reviews of existing sanctions, it’s crucial to ensure that any sanction imposed can be reversed.
Consider the most glaring failure to do this: the open-ended trade embargo against Cuba. President John F. Kennedy put the embargo in place in 1962 with the stated goal of “isolating the present government of Cuba and thereby reducing the threat posed by its alignment with the Communist powers.”
In the years since, American presidents have sent wildly different messages about what it would take to remove sanctions. Barack Obama moved to lift many of them in 2014 — an effort that Donald Trump reversed three years later. Last year Mr. Biden lifted some of the Trump-era sanction s. Yet only an act of Congress can end the embargo.
Peter Harrell, who served on the National Security Council staff under Mr. Biden, argues that sanctions should automatically expire after a certain number of years unless Congress votes to extend them. That would cut down on cases of zombie sanctions that go on for decades, long after U.S. policymakers have given up on the sanctions’ achieving their goals.
For sanctions to incentivize change rather than merely punish actions in the past, the United States should be prepared to lift sanctions — even against odious actors — if the stated criteria are met.
Sanctions, as attractive as they are, rarely work without specific goals combined with criteria for sanctions to be lifted. That applies to current as well as future sanctions. Without goals and relief criteria, these measures — among the most severe in the U.S. foreign policy arsenal — risk working against American interests and principles in the long run.
The Guardian on Robert F. Kennedy Jr.
Robert F Kennedy Jr, campaigning to be the Democratic nominee for the presidency, likes to call himself a “Kennedy Democrat”. His own siblings disagree. His uncle’s presidency, like his namesake father’s career and presidential campaign, had an aura of hope and responsibility as well as glamour. RFK Jr talks vaguely of overcoming divisions, but in reality trades upon a peculiar blend of “cynicism and credulity”, as one commentator notes. Most recently he claimed that “COVID-19 is targeted to attack Caucasians and black people. The people who are most immune are Ashkenazi Jews and Chinese,” in comments reported by the New York Post.
However jarring the remarks -– he partially backtracked later -– they sit comfortably with his long history of fomenting conspiracy theories and his nonsensical, anti-scientific views. He has falsely linked childhood immunizations to autism and wifi to cancer and “leaky brain”, claimed that HIV does not cause Aids, and suggested that chemicals in drinking water could make children transgender. One of his sisters warned that his latest comments put people’s lives in danger.
So much for the Kennedy legacy. Nor does he look like much of a Democrat. He is being hyped by billionaires and rightwing broadcasters such as Sean Hannity, and has gained traction among Republicans rather than Democrats. Some see his campaign primarily as a vehicle for his ego and brand, which may be less damaging to President Biden’s chances than a possible third-party bid by Democratic senator Joe Manchin and Republican former governor Jon Huntsman’s No Labels group. A poll this month suggested that a “moderate, independent third-party candidate” could gain about 20% of the vote and result in a second term for Donald Trump. But talk up Mr. Kennedy enough and he might have a marginal effect in denting President Biden. Others suspect that Mr. Kennedy wants the Republican vice-presidential slot. Steve Bannon and Roger Stone have both floated the idea of a Trump-Kennedy ticket.
None of this has prevented him finding up to 20% support among Democrats in polls. Camelot nostalgia and the celebrity factor have clearly played a large part in that. Mr. Kennedy has never run for any public office, still less held it, but boasts that he’s “been around” politics since he was a little boy. The lack of enthusiasm for the sitting president is also potent: most Democrats do not want him to run again, although they indicate that they would vote for him over Mr. Trump. Voters, including independents, are not giving Mr. Biden credit for the improving the economy or other achievements. That may not be fair. But it’s a fact.
Mr. Kennedy’s appeal goes deeper, however. He has found a home in the world described by a new book, Conspirituality, where new age spirituality and the “wellness” industry overlap with the politics of paranoia, as well as alongside the Trumpian right. Distrust of institutions, suspicion at the marriage of state and corporate power, and fear and sadness at the despoliation of the environment are in themselves reasonable concerns. But the political ambition that feeds upon and mutates them into more poisonous beliefs is unpalatable.
Mr. Kennedy’s anti-vaccine conspiracy-mongering has caused enough damage. His latest remarks show how easily conspiracy theories blur into bigotry and scapegoating. It may be farcical to hear a multimillionaire from the country’s most famous political dynasty railing against “elites”, but there is nothing funny about this campaign.