In Search of Growth Strategies

Michael Spence

Michael Spence, a Nobel laureate in economics, is Professor of Economics at NYU’s Stern School of Business, Distinguished Visiting Fellow at the Council on Foreign Relations, Senior Fellow at the Hoover Institution at Stanford University, Academic Board Chairman of the Asia Global Institute in Hong … read more

In Search of Growth Strategies

MILAN – In 2008, the Commission on Growth and Development, which I had the privilege of chairing, produced a report updating our knowledge about sustainable growth patterns. Then, as now, one thing is clear: the policies that underpin multi-decade periods of high growth, structural transformation, rising employment and incomes, and dramatic reductions in poverty are mutually reinforcing. The impact of each is amplified by the others. They are ingredients in recipes that work – and, as with recipes, missing items can substantially undermine the outcome.

To understand the weak, deteriorating, and fragile growth patterns seen today in many countries and in the global economy as a whole, one should compare what is actually happening with what reasonably comprehensive growth strategies might look like. Of course, there are many policies that sustain high growth, and to some extent they are country-specific. But a few key ingredients are common to all known successful cases.

Andrés Velasco

Andrés Velasco, a former presidential candidate and finance minister of Chile, is Professor of Professional Practice in International Development at Columbia University's School of International and Public Affairs. He has taught at Harvard University and New York University, and is the author of num… read more

The World’s Reluctant Central Banker

NEW YORK – This is supposed to be the era of powerful central banks, ready to wield their firepower worldwide. Yet the most powerful of all central banks – the United States Federal Reserve – is also the most reluctant to acknowledge its global reach.

Like all central banks, the Fed has a local mandate, focused on domestic price stability and employment. But, unlike most central banks, the Fed has global responsibilities. This tension is at the root of some of the most threatening problems facing the world economy today.

The Fed has global responsibilities for two closely related reasons, neither of which has much to do with the need to avoid the “currency wars” that so concerned former Brazilian Finance Minister Guido Mantega.

Marcel Fratzscher

Marcel Fratzscher, a former head of International Policy Analysis at the European Central Bank, is Committee Chairman and President of the think tank DIW Berlin.

Germany’s Strange Turn Against Trade

BERLIN – The window of opportunity to complete the Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union is closing quickly. National elections will be held this year and next in the US, France, and Germany, and the campaigns will play out in an environment that is increasingly hostile to international agreements in any form. The biggest risk might come from the least likely source: Germany, an export powerhouse.

As it stands, some 70% of Germans citizens oppose the TTIP, almost twice the average in other European countries. They overwhelmingly believe that Germany will not benefit economically, that lower-skill workers’ wages will suffer, that large corporations will gain power at the expense of consumers, that data and environmental protection will be compromised, and that citizens’ rights will be undermined.

Kenneth Rogoff

Kenneth Rogoff, Professor of Economics and Public Policy at Harvard University and recipient of the 2011 Deutsche Bank Prize in Financial Economics, was the chief economist of the International Monetary Fund from 2001 to 2003. His most recent book, co-authored with Carmen M. Reinhart, is This Time is… read more

The Overselling of Financial Transaction Taxes

CAMBRIDGE – However November’s presidential election in the United States turns out, one proposal that will likely live on is the introduction of a financial transaction tax (FTT). While by no means a crazy idea, an FTT is hardly the panacea that its hard-left advocates hold it out to be. It is certainly a poor substitute for deeper tax reform aimed at making the system simpler, more transparent, and more progressive.

As American society ages and domestic inequality worsens, and assuming that interest rates on the national debt eventually rise, taxes will need to go up, urgently on the wealthy but some day on the middle class. There is no magic wand, and the politically expedient idea of a “Robin Hood” tax on trading is being badly oversold.

Mohamed A. El-Erian

Mohamed A. El-Erian, Chief Economic Adviser at Allianz and a member of its International Executive Committee, is Chairman of US President Barack Obama’s Global Development Council. He previously served as CEO and co-Chief Investment Officer of PIMCO. He was named one of Foreign Policy's Top 100 Glob… read more

Latin America’s Rising Right

LAGUNA BEACH – From changes in government in Argentina and Brazil to mid-course policy corrections in Chile, Latin American politics appears to be undergoing a rightward shift. But rather than being “pulled” by the attractiveness of the economic policies that the right is advocating, this complex phenomenon is predominantly a reflection of the “push” implied by anemic growth and the disappointing provision of public goods, especially social services.

Indeed, we can think of the shift as a Latin American variant of the West’s blossoming romance with anti-establishment movements. And that means that the region’s governments must be seen to deliver to their citizens. Otherwise, the shift will prove to be only a stop on an uncertain path – politically more complicated and economically harder to navigate – toward an even less stable destination.

The Sociology of War

Brought to light by an American journalist and an Austrian economist

by Dan Sanchez

The breakout of World War I upended many lives, including those of two great thinkers: the Austrian economist Ludwig von Mises and the American journalist Randolph Bourne.

The young Mises had just revolutionized the economics of money and the business cycle. And he was on the verge of still more breakthroughs when his career was interrupted by the Great War. Other economists in Austria were given cushy assignments in war planning offices. But Mises, who was radically out of step with prevailing politics, was sent to the front lines as an artillery officer.

Bourne had been pursuing independent study in Europe under Columbia University’s prestigious Gilder Fellowship for travel abroad. The continent-wide hostilities drove him back to the States where he resumed his previous career as a magazine writer. But Bourne was radically out of step with the militarism then sweeping America. His anti-war writing got him censored and shunned, both professionally and socially.

by Thomas Gale Moore

The Bush Administration has made much of Iraq's oil reserves. It wants to use the proceeds from the sale of petroleum to pay off the country's debts, cover the costs of reconstruction and government expenses. It has been hectoring European governments and the Russian government to write off much of the debt that Iraq owes them so that the money can be spent on rebuilding that devastated country. In general, most people and governments have viewed Iraqi oil as a boon; but its existence has major downsides. Oil is more of a curse than a benefit.
First is the quandary it creates for possession of the oil fields. Kirkuk is surrounded by the northern oil fields, which represent about 40 percent of all oil in Iraq. The city of Kirkuk includes Kurds, Arabs, Turkmens, and Assyrian Christians. Except for the Christians, each group claims to be the largest. During Saddam Hussein's regime, Arabs were encouraged to migrate to the region and occupy farms and houses.

by Thomas Gale Moore

We have all heard Lord Acton's admonition, "Power corrupts and absolute power corrupts absolutely." Most of us believed this referred only to absolute rulers, but its scope is much more widespread. Today the U.S. is the only superpower; as such it has almost absolute power. It can go anywhere, wipe out any state, conquer any army, and ruin any economy with economic sanctions. As such it sees itself as the existential authority, the chosen state, the "city on a hill" that can bring democracy, freedom, and virtue to the world, if necessary through the barrel of a gun.
While the neocons have emphasized the use of power to bring enlightenment to the world, especially the Middle East, the U.S. has a long history of bearing the "White Man's Burden," of conquering foreign territories, either to bring Christianity to Roman Catholic Filipinos, to annex pagan Hawaii, to install friendly governments in Central America or to rid Cuba of the colonial rule of Spain by installing our benevolent governance. Manifest destiny, a staple of our social studies courses in grade school, led us to remove the uncivilized and pesky "redskins" to fulfill our goal of a coast-to-coast empire.

by David R. Henderson
"I thought that when we showed up for class, someone else would be teaching it," said one of my students at the start of my class on Monday, April 7, 2014.
"Really?" I asked. "Why?"
"Because of that question you asked the Admiral on Friday," he answered.
I looked around and saw the looks on the faces of a number of other students. They weren’t necessarily surprised that I was still in my job, but some of them did say that if they had asked the question I had asked, their careers in the military could well be over. That’s too bad because all I did was ask a question, a question that gave the Admiral an easy way out.

An Economist’s Case for a Non-Interventionist Foreign Policy

My talk at the Hoover Institution

by David R. Henderson

The Naval War College, based in Newport, Rhode Island, runs a special 11-month course for foreign Navy officers. On February 3, the Naval War College held a special morning session at the Hoover Institution, where I am a research fellow. I was invited to speak. The best invites, in my experience, are those for which I get to choose the topic. That happened in this case. So the topic I chose was “An Economist’s Case for a Noninterventionist Foreign Policy.”
The four speakers, in order, were Gary Roughead (Admiral-Retired), formerly the Chief of Naval Operations and a Distinguished Visiting Fellow at Hoover, me, Bruce Thornton, a professor of classics and humanities from Fresno State University and a research fellow at Hoover, and George P. Shultz, formerly Secretary of State under Ronald Reagan and a Distinguished Fellow at Hoover.
The audience was, I believe, all Navy officers. There were 47 of them, representing 44 countries. I was warmly received by many of them, especially the officer from Bangladesh, and courteously received by the few U.S. military officers in attendance.

As Ukraine Collapses, Europeans Tire of US Interventions

by Ron Paul

On Sunday Ukrainian prime minister Yatsenyuk resigned, just four days after the Dutch voted against Ukraine joining the European Union. Taken together, these two events are clear signals that the US-backed coup in Ukraine has not given that country freedom and democracy. They also suggest a deeper dissatisfaction among Europeans over Washington’s addiction to interventionism.
According to US and EU governments – and repeated without question by the mainstream media – the Ukrainian people stood up on their own in 2014 to throw off the chains of a corrupt government in the back pocket of Moscow and finally plant themselves in the pro-west camp. According to these people, US government personnel who handed out cookies and even took the stage in Kiev to urge the people to overthrow their government had nothing at all to do with the coup.

Vietnam War at 50: Have We Learned Nothing?

by Ron Paul

Last week Defense Secretary Ashton Carter laid a wreath at the Vietnam Veterans Memorial in Washington in commemoration of the "50th anniversary" of that war. The date is confusing, as the war started earlier and ended far later than 1966. But the Vietnam War at 50 commemoration presents a good opportunity to reflect on the war and whether we have learned anything from it.
Some 60,000 Americans were killed fighting in that war more than 8,000 miles away. More than a million Vietnamese military and civilians also lost their lives. The US government did not accept that it had pursued a bad policy in Vietnam until the bitter end. But in the end the war was lost and we went home, leaving the destruction of the war behind. For the many who survived on both sides, the war would continue to haunt them.

What Do Terrorists Want?

by Sheldon Richman

After the terrorist violence in Brussels many people, including Barack Obama, said we should not change our way of life and live in fear because that is what terrorists want. Maybe, but is that all they want? It seems that something important is left out of the story. In the classical model of terrorism, instilling fear (along with causing death and injury) is not an end in itself. It’s a means to an end.
Terrorists don’t necessarily get a kick out creating carnage and fear (though it is possible). Primarily they want the survivors’ fear converted into action aimed at changing their government’s policy. Thus terrorism, if it is to have any meaning, is a political, not a sadistic, act. In the paradigmic case a weak nonstate group, unable to resist a state’s military or to change its policy directly, terrorizes the civilian population of that state in the hope it will demand a change in foreign or domestic policy. (Let’s leave aside for this discussion that terrorism has been strategically (re)defined by the United States and its allies such that it can apply only to their adversaries, even when they attack military targets instead of civilians.)

The Ongoing Rape of Japan ... by the US military

by Justin Raimondo

When President Obama went to Hiroshima, the American media focused on what he would – or wouldn’t – say about Harry Truman’s horrendous war crime against the Japanese people. Would he apologize? Leaving aside how one apologizes for such a monstrous act – short of committing seppuku – as it turned out he just spoke in harmless generalities about the dangers of nuclear weapons, expressing a commendable albeit vague wish to rid the world of them. What the pundits mostly ignored, however, was Japanese Prime Minister Shinzo Abe’s outrage at the latest murderous sex crime committed by an American soldier stationed on Okinawa; the brutal murder of 20-year-old Rina Shimabukuro by a US military contractor.

Rehearsing for World War III

Operation “Anakonda 16” is a dangerous provocation

by Justin Raimondo

As I write this, US troops are building a bridge across Poland’s Vistula river, and conducting a nighttime helicopter assault to secure the eastern part of the country against a Russian assault.
Has World War III started? Well, not quite yet, although it’s not for want of trying.
This is Operation “Anakonda 16.” Thirty-one thousand troops, 14,000 of them American, are conducting war games designed to secure an Allied victory in World War III. The exercises involve “100 aircraft, 12 vessels and 3,000 vehicles,” and precede the upcoming NATO summit, which is expected to approve the stationing of yet more troops – mostly Americans – in eastern Europe.
NATO claims this is all strictly “defensive” in nature, designed to deter Russian “aggression” – but who is the real aggressor?

Comey Claims 'Typo' in Law Not Giving Him That Power

by Jason Ditz,

Protracted debate about the federal government’s ability to collect Americans’ telephone metadata without a warrant, a matter which never was resolved, looks to be taking a back-seat, as the FBI is now pushing for a dramatic expansion of that power to include Internet metadata.

While telephone metadata was just who called whom and for how long, the Internet version amounts to unrestricted access to the browser history of every American, including what websites they visit, and what pages in particular they read.
Privacy groups are blasting the move, noting that the data would “paint an incredibly intimate picture of an individual’s life,” including things like political affiliation, medical conditions, religion, and sexual orientation.
FBI Director James Comey, however, insists that the law which lists all the metadata they can collect without a warrant, and which doesn’t mention browser histories, amounts to a “typo” in the law, and is demanding that Congress “fix” the matter so the FBI can force companies to hand over all that personal data. The FBI maintains the list in the law was meant to be “illustrative” of the type of things they can demand, and not all-inclusive.
Facebook, Yahoo, and Google are among a number of technology companies lining up to resist the change in the law, both because of the lack of judicial oversight such a broad new data collection plan would involve, and also because in practice the change in law would force them to do all the heavy lifting of collecting this data for the FBI to sift through.

Tuesday, June 7, 2016

What if the Minimum Wage Increase Is a Fraud?

By Andrew P. Napolitano

What if the latest craze among the big-government crowd in both major political parties is to use the power of government to force employers to pay some of their employees more than their services are worth to the employers?
What if this represents an intrusion by government into the employer-employee relationship? What if this consists of the government’s effectively saying that it knows the financial worth of employees’ services better than the employers and the employees do?
What if the minimum wage, now on the verge of being raised to $15 per hour everywhere in the land, is really the government’s using threats of ruin and force to transfer wealth? What if the $15-per-hour figure is based on a political compromise rather than on free market forces or economic realities?
What if these wealth transfers will have profound unintended economic consequences and will negatively affect everyone?

Who Answers for Government Lies?

By Andrew P. Napolitano

Here is a quick pop quiz. What happens if we lie to the government? What happens if the government lies to us? Does it matter who does the lying?
Last year, the Obama administration negotiated an agreement with the government of Iran permitting Iran to obtain certain materials for the construction of nuclear facilities. It also permitted the release of tens of billions of dollars in Iranian assets that had been held in U.S. banks and that the courts had frozen, and it lifted trade sanctions. In exchange, certain inspections of Iranian nuclear facilities can occur under certain circumstances.
During the course of the negotiations, many critics made many allegations about whether the Obama administration was telling the truth to Congress and to the American people.

Timothy P. Carney @TPCarney

June 1, 2016 | Washington Examiner

Is this the dawn of bake-me-a-cake libertarianism?

Elections, Politics and Public Opinion

The Libertarian Party just nominated two former governors, New Mexico’s Gary Johnson for president and Massachusetts’ Bill Weld for vice president, in a year when more voters than ever may look for a third choice.

Libertarian Party presidential candidate Gary Johnson gives acceptance speech during National Convention held at the Rosen Centre in Orlando, Florida, REUTERS/Kevin Kolczynski

But Johnson and Weld at times seem to be working hard to push away one particularly homeless voting bloc that could ally with Libertarians this year: social conservatives. From their rhetoric to their policy proposals, the Libertarian nominees seem to be running against conservatives more than for liberty.
Weld and Johnson held their first post-nomination joint interview on Tuesday, on liberal network MSNBC. “We’ve never bought into this anti-choice, anti-gay…sense of the Republican Party,” Weld said, as his first comment to the national television audience.

Michael Barone @MichaelBarone

No contemporary political issue has been more controversial, or has been subject to more dubious analyses, than immigration.
Take Donald Trump’s endlessly repeated promise to buy a wall along the U.S.-Mexican border. As I’ve pointed out, that is attacking a problem that no longer exists or has diminished greatly. Net migration from Mexico to the U.S. was around zero between 2007 and 2014.

Protestors play drums while staging an immigration reform rally in Los Angeles. Credit: Twenty20

But Trump’s critics also miss something. Walls can actually work. The wall along the border near San Diego worked well enough a dozen years ago that many migrants crossed into the Arizona desert instead. It may not be feasible to build a wall along the Rio Grande in Texas, but the border there can be patrolled more effectively than it is now.
Trump’s pointing out that some illegal immigrants from Mexico have been rapists drew harsh criticism. But it’s true: Some have been rapists, and on average immigrants from Mexico have had lower skills and less law-abiding backgrounds than immigrants from any other country. That makes sense when you consider that it’s easier to cross a 2,000-mile land-and-shallow-river border than an ocean.

Refugio liberal

Wikipedia

Wednesday, June 8, 2016