Politcal Change is Oh So Hard


Speaker Gillett Signing the Bill that became the Nineteenth Amendment

During the sixty-two years ending in 1971, the U.S. Constitution was amended eleven times. In the forty-three years since then, there have been no amendments. Two proposed amendments passed Congress but were not ratified by the states. Clearly there is significantly less willingness to see change in government today then there was in the middle of the twentieth century. When someone suggests amending the Constitution today, people just laugh. Similarly, during that same period in history, the United States produced such major political initiatives as the New Deal, the construction of the Interstate Highway system, the race to put a man on the moon and the whole array of civil rights legislation as well as President Johnson’s “Great Society.” Today, the introduction of such programs and changes would hardly be imaginable.

In 2008, I had a lengthy conversation with a well-heeled and well connected Republican fund raiser who was very excited about candidate Obama. Why? Because he represented the potential for change. After all, what was his rallying cry (and the title of his book)? “Change We Can Believe In.”  Many of those who supported him, and even some of those who didn’t, expected significant changes when he was elected. There can be many debates as to why he was unable to bring about the expected level of change, but it is pretty clear to all but his most diehard supporters and detractors that the Obama Presidency has not brought about a major transformation of the political landscape. The fact that an African American could be elected President was certainly an indication of dramatic change in the United States, but his administration has not been radically different from what preceded it.


Student Protests Helped Bring About the 26th Amendment

It is worth asking why there has been so little change in American government over the last four decades. While there has been significant social, economic and technological transformation over that period, and certainly the international political landscape is radically different (e.g. the collapse of the Soviet Union, the rise of China and the new prominence of terrorism), nevertheless, the United States government pretty much keeps on chugging along with little new initiative. Gridlock in Washington is the order of the day and while there have been a few additions to the list of entitlement programs such as Obamacare and President Bush’s prescription drug benefit for seniors, there have been no developments as transformative as those prior to 1970.

One possible explanation to this relative stagnation could be that people are simply happy with the status quo and see no need for change. However, this flies in the face of essentially all the polling that is ever done, which indicates Americans are profoundly dissatisfied with the direction the country is taking. Again, the election of Barack Obama was a strong indication that people are eager for change.

It is also true that different segments of society do not necessarily agree on the changes they would like to see. But still, most people would probably like to see a simplified tax code. Everyone agrees that our immigration system is broken. Inequality and the loss of the “American Dream” are widely acknowledged as significant concerns across the political spectrum. The loss of American jobs and manufacturing are topics that concern everyone.  There is a bipartisan realization that education in America is losing its former edge and that this will have long term consequences. The demographic time bomb of an aging population desperately needs to be addressed, and our infrastructure is deteriorating rapidly. There are many problems and issues that Americans know need to be fixed, but the political system seems incapable of getting the job done.

Some people look to the mechanics of the electoral system for explanations. For example, some experts complain that gerrymandered congressional districts lead to more intra-party competition during the primaries than in the general election, meaning that candidates need to be especially attentive to their party’s base which is always more radical than the general population. This leads to greater divisions and less compromise in Congress. Others blame the outsized role of money and special interests in the political process, arguing that they make office holders beholden to those that fund them. Still others blame the primary system in Presidential elections, because it gives too much power and influence to a small number of activists and fundraisers.

While all of these technical issues may have a certain impact on creating gridlock and limiting change, they appear to me to be symptoms of the problem, rather that the cause. Each one of these issues could be fixed. Why is it that reformers cannot resolve these problems? If people really want to see change, why can they not effect it? There are many possible explanations, but I believe at least one reason is fundamentally social. There is something in the way our society operates that makes change in government increasingly difficult.

Looking at the process of change in most organizations one can quickly discern that a key element of success is leadership. If, for example, a company wants to change its strategic direction, it needs an effective leader that has a clear vision, is able to articulate goals and strategies and is able to convince a significant percentage of the employees that the new approach will bring results. We see the same phenomenon in sports. Winning teams need strong leadership and that is even more pronounced when a turnaround is in the works.  In most endeavors, leadership is the key to successful change.

Over the past few decades, American society has become extremely skeptical of leadership in general, and especially in government.  Whereas the mid-twentieth century was marked by a willingness to accept the authority of leaders, we have entered an age where leadership is constantly questioned. In politics, we see that the role of party leaders has been vastly diminished. The level of respect given to political leaders has dropped dramatically. Just listen to the opponents of the party in power speak of the President and you will see how little respect there is.

This lack of respect is not just limited to politics. Americans have much less respect for authority figures of all types, be it teachers, religious leaders, parents, bosses. We believe much more in the power of the individual to achieve results and question the very nature of authority. This is not an issue where people are divided along political lines, rather it is just a social phenomenon that is increasingly widespread.

Politicians and government officials understand that the people are not really looking for, or willing to accept, strong leaders. They adapt their style to the environment they work in. When the citizens refuse to accept leadership or accord leaders the appropriate respect, is it surprising that political figures decide that what they really need to do is take care of their most ardent supporters? Since they cannot count on the authority of their office to get things done, they focus on small things that please their electoral base. And if they were real leaders, they would never get elected in the first place.

Basically in life you get what you pay for. Americans have adopted social and political attitudes that minimize authority and leadership. Sometimes there are advantages to that.  Personal freedoms are maximized. Entrepreneurship may be easier under these circumstances. But certainly government becomes much more difficult. Changing what ails the nation is very difficult without strong leadership. Gridlock in Washington is not the fault of corrupt politicians. It is not the fault of our electoral system. It is the direct result of the way we look at the world. It is our fault.

Is Boko Haram America’s Problem?


Parents of Nigeria kidnapping victims

One of the most prominent stories in the news these days relates to the kidnapping of about 300 girls by a terrorist group in Nigeria. On April 14th, Boko Haram fighters moved into a village in Northern Nigeria, went to a boarding school for girls in the middle of the night, loaded them into trucks and headed off into the bush. The international outcry has been intense. Although it is too early to say how the saga will end, the American response has been a case study of what is wrong with our foreign policy. So let’s take a brief look at that response.

A few general points need to be kept in mind as we consider U.S. actions in response to the Nigerian kidnapping. The first is that this is not a national security issue. While Boko Haram could eventually pose some sort of threat to the United States or its interests, this current situation does not involve us at all. If anything, our rush to become involved would be more likely to pose a risk to our long-term interests than would staying out of the fight. So far Boko Haram has not targeted the United States. Our involvement in this kidnapping could change that, but for the moment we are not in their crosshairs. So we need to be clear – we have no national security interests pushing us to act.

The second point is that while the kidnapping certainly is a heartbreaking event for the families and friends of the girls involved, we are not talking about one of the major humanitarian disasters in Africa. According to the World Health Organization, an estimated 627,000 people died of malaria in 2012, most of them “African children.” Far more than 300 teenage girls die of this disease on the continent every year. Horrible things happen to Africans all the time, and many of them hardly make the news at all. This kidnapping just happens to be a story that struck a cord, primarily because it involves Islamic militants doing nasty things to girls, which is always a narrative that garners international attention, especially in the United States.

Michelle-obama-bringbackourgirlsSo what has been the U.S. response? The story is all over the press.  The President has addressed the issue, and his wife took over his weekly radio address to say “I want you to know that Barack has directed our government to do everything possible to support the Nigerian government’s efforts to find these girls and bring them home…In these girls, Barack and I see our own daughters. We see their hopes, their dreams, and we can only imagine the anguish their parents are feeling right now.”

And indeed the U.S. government is springing into action. A “coordination cell” is being established in the embassy there, and the interagency process in Washington is running at full tilt. The military and the intelligence agencies are trying to find ways to help find the missing girls. Our diplomacy is pushing the Nigerians to do as much as possible and Secretary of State Kerry has spoken via phone with Nigerian President Goodluck Jonathan. The American press is actively engaged, mainly by berating the Nigerians for being corrupt and not taking a more proactive approach to resolving the crisis.

Now we can begin to see the beginning of what is wrong with this picture. On May 7, the State Department Spokesperson, Jen Psaki, got into a long discussion with reporters over the proposed assistance the United States was offering Nigeria. She said “Obviously, this is in the interests of the Nigerian Government to accept every aspect of our assistance. They conveyed that they were willing to do that yesterday, and it continues to be in their interest to be as cooperative as possible.” Her comments tell us much about what has gone wrong.

First of all, consider the statement that “Obviously, this is in the interests of the Nigerian Government to accept every aspect of our assistance.” If it was obviously in their interests, there would be no discussion about whether or not they would accept it. There are few things as condescending as telling another country what is in its interests. How would we like it if someone were to lecture us on what is in our interest? At the beginning of her tenure as Secretary of State, Hillary Clinton spoke about how we would need to persuade third world leaders that it was in their interest to provide for the welfare of their citizens. We have the same dynamic at work here. The clear implication is that we know what is best for others, even if they are too stupid to see it. African leaders view these kinds of statements with bitter resentment.

The rest of Psaki’s statement was just as problematic when she said “they conveyed that they were willing to do that yesterday, and it continues to be in their interest to be as cooperative as possible.” Who is in the lead here? We should be cooperating with the Nigerians, not they with us. Yes, in the same press conference she said that the Nigerians were “in the lead,”  but this statement clearly shows that they are not.

So what is the problem with the United States taking the lead? Well, what we have done is taken ownership of the Nigerians’ crisis. In reality, the fundamental problem belongs to Nigeria. The hostages and the hostage takers are Nigerians. The kidnapping took place in their country. They are ultimately responsible for resolving the issue, not the United States. It is perfectly acceptable for Nigeria to ask others for help, but when we foist it on them, when we see it as them cooperating with us, then the tables are turned. We have taken ownership of their problem.

The United States does this all the time. We see a crisis. It grabs the attention of public opinion or the press or perhaps influential groups (read activists) in Washington. We decide that “we have to do something.” Pretty soon, we have taken ownership of a problem. We care more than the country involved and that is almost always a recipe for disaster. In Africa, we often care more about a development program than does the host country. In Afghanistan and Iraq, the fact that we took ownership of the rebuilding programs was largely responsible for their failures.

One problem with our taking ownership of a crisis is that it is incredibly ineffective. For programs to work properly, the people involved have to be responsible for resolving the problem. When outsiders come in with their solutions, people tend to sit back and let others do the work. The solutions are not theirs, and they are humiliated that others presume to know what is best. This is not really surprising, in human terms.  How many people want others to tell them how to solve their problems?

Let’s put the shoe on the other foot, for a moment. In the United States, 14,827 people were murdered last year. In Chicago alone, that number was 415, more than the number of girls kidnapped in Nigeria. These numbers are much higher as a percentage of our population than in other developed countries. How would we like it if people from Japan, for example, came up with a solution to the problem of violent crime in America, told us it was in our interest to accept their help to resolve the issue and that they hoped we would cooperate? Of course we would be outraged. Why should the Nigerians feel differently when we take this approach?

Some might say that Ms. Psaki’s statement was a slip of the tongue. I can tell you it is not. American foreign policy works like this all the time. We see a problem somewhere in the world, we foist our solutions on the country involved and then we are surprised and hurt when their leaders and public respond, just as we would, with amazement and annoyance.

How do we get around this? Just start thinking about other countries as if they were actually sovereign nations that respond much as we do. Just because they are less wealthy or powerful than we are does not mean they react differently when faced with perceived arrogance and condescension. This should just not come as a surprise, but no matter how often we fail at trying to solve other people’s problems, we just can’t seem to figure this one out.

Two Rights Make a Wrong In the Middle East

One of the most intractable conflicts of the past one hundred years is the one between Israel and the Palestinians. It is also one of the most discussed and debated problems in the world with many commentators and analysts discussing the issue from different angles. Although I am not an expert in the area, there is one aspect of the problem that I have not often seen discussed but bears mentioning. It is the fact that both parties to the conflict are in the right. So often we hear why this or that side is to blame, or is untrustworthy or is acting in bad faith. But it seems to me that we often forget that both sides in this conflict have right on their side. This may indeed be a partial explanation of why it has been so difficult to find a solution.

Budapest, Festnahme von Juden

Jewish Women Taken During the Holocaust in Budapest

Let’s consider first the Israeli perspective. Basically the justification for the existence of the present state of Israel is the Holocaust. While it is true that Zionism as a movement started before the Second World War, nonetheless, the real impetus for the founding of Israel was the mass slaughter of Jews by the Nazis. This was one of the most vicious crimes against a set of people ever perpetrated. A group of people was targeted for mass extinction and an efficient and ruthless apparatus was put into place to carry it out. This is not to say there have not been other injustices or cases of genocide in history, just that this one stands out in an exceptional manner.

It is no wonder that, after this experience, Jews from many parts of the world felt that they could only be safe in their own state. Similarly, the international community recognized the legitimacy of these sentiments while at the same time expressing its own sense of guilt for not having done more to stop the killings. There was widespread sympathy for the creation of this new state after the war.

This need for security continues to be a major factor for the state of Israel today. The Holocaust remains very much alive in the memory of Jews (and others) around the world, and politicians in Israel frequently point out that their state offers a measure of security to its people that Jews cannot experience living in the diaspora.  Even today, Israelis hear the calls in some quarters that their state is not legitimate and should be destroyed. They view these calls as giving added credibility to their concerns for their existential safety. Maintaining a strong defensive capability and the ability to inflict harm on potential adversaries is perfectly understandable and legitimate in this context. Israel is in the right.


Palestinian Refugees, 1948

Viewed from the Palestinian perspective, things look a bit different. The Palestinians had inhabited their lands for a long time when suddenly an alien state was established in their midst. Many Palestinians lost homes that had been theirs for generations and large numbers of people ended up in wretched refugee camps. Many lost everything they owned and have been unable to rebuild their lives elsewhere.

While at least some of the Palestinians may have been sympathetic to the suffering of the Jews during the Holocaust, they nonetheless did not view it as their problem nor did they see that the burden of providing relief should land on their shoulders. In individual terms, it is as if Peter has robbed John, but now David is asked to make John’s loss good. It is very clear that the Palestinians suffered an injustice. An additional issue was that many Palestinians viewed the creation of Israel as a continuation of the British colonial rule to which they had been subjected since the end of Ottoman control after World War One.

The Palestinians’ sense of injustice continues to be fed by how they have been treated by the Israelis. Palestinians view Israeli actions such as continued settlements in the West Bank as well as policies restricting access to Israel as very hostile. One can point to a whole litany of legitimate complaints that the Palestinians raise, which strengthen their sense that they are in the right.

Once again though, we have to remember, that Israel has undertaken many of these measures in self-defense. Israel has been the target of numerous terrorist attacks over the years, and various Palestinian groups have launched rocket attacks into Israel. Just think of the measures the United States took after 9/11. Many Israelis feel completely justified by the measures they have taken to protect themselves.

None of this is to say that there is not wrong on both sides as well. Terrorism is really never justified and the Palestinians have not always made the best political choices. There is no question that Israel has overreacted at certain times and its policy of allowing continued settlements in the West Bank probably hasn’t helped the situation either. So both sides have done wrong, but that is not the key issue.

The real point is that fundamentally both sides have right on their side. Now generally speaking, when a person or group wants to establish the legitimacy of its cause, they tend to  challenge the other side’s position, to negate the “rightness” that their opponents lean on. The Israeli-Palestinian conflict is no exception to this rule. The Palestinians and their supporters, both in the Arab world and elsewhere, seem to have trouble conceding that in its own way, Israel is right. Similarly, Israel and its supporters often seem unable to acknowledge the basic rightness of the Palestinians perspective and experience. Both sides want to deny the validity of the other’s position in order to confirm their own.

None of this may in any way be helpful in resolving the conflict. And yes I know, the situation on the ground is in reality quite complicated and there are many important actors. Arab states, other countries and individuals around the world have their roles to play. Not all Palestinians or Israelis are equally hostile to the other side. But in general, neither Israelis nor Palestinians have been able to see that the other side is in the right as well. It seems to me, though, that unless the two sides get over this issue of casting blame, it will be hard to resolve the problem. Right now, everyone is focused on how the other side is wrong. I think what needs to happen is that they understand they are both in the right.

The Failed Legacy of the Marshall Plan in International Development

50thThere are few policies or programs that have a more unchallenged reputation in American history than the Marshall Plan. Although there have been revisionist historians who have found fault with the Plan’s impact, the general consensus is that it was an unquestionable success. The United States demonstrated after the end of the World War II that by spending significant amounts of money to help Europe rebuild its destroyed infrastructure and economy, defeated enemies could become prosperous and faithful allies. How different this was from the approach after the first World War when Germany was saddled with huge reparation payments. Even if the the Plan was only partially responsible for the success of Europe’s economic reconstruction, its political impact was huge. The Marshall Plan helped lay the foundations of postwar Europe, with erstwhile allies and foes benefiting, and the rest, as they say, is history.

How could such a clear success story leave a failed legacy? The failure lies not in the Marshall Plan itself, but in how its success has provided a false basis for international development. A quick demonstration of this lies in the various calls for “Marshall Plans” in various other places, such as Africa or the Middle East. Following the Iraq War, the reconstruction efforts there were based in many ways on the Marshall Plan, and then Secretary of State Condoleezza Rice drew the parallel very explicitly. But as we can see, neither international development, nor the reconstruction of Iraq have been in any way as successful as the Marshall Plan.

One basic problem is that most people drew conclusions from the success of the Marshall Plan that were far too broad. To understand this point, we need to look at what the Marshall Plan actually demonstrated. It showed that industrial economies and countries devastated by a war could be helped in their rebuilding efforts by a significant influx of funds from another state or states. And that is it. There is nothing in the lesson that extends further than this, at least in economic terms.

So let’s compare this with the case of Iraq. The Iraqi economy had been heavily damaged during the war and by economic sanctions in the years leading up to it, but was fundamentally a petroleum based economy, not an industrial one. The economic conditions were completely different from those of post-war Europe. Of course the security and political conditions were also not the same and these factors played a role as well. But the real point is that no one should have expected that what worked in Europe after the war would produce similar results in Iraq.

President Kennedy Speaks to USAID Directors in 1962

President Kennedy Speaks to USAID Directors in 1962

More significantly, there is a broader problem with the Marshall Plan’s legacy, and that is in the field of international development. While development did not stem solely from the Marshall Plan, nonetheless, the ideas are closely interwoven. The United States Agency for International Development explicitly traces its history back to the Marshall Plan. In development, however, the idea is that one country or group of countries can provide money and know-how to a non-industrialized economy to further development. But this is a much broader concept than what happened in Europe. It is a very different thing to rebuild an economy than to develop one in the first place.

There are many reasons why this is true. But the difference can be seen at the level of an individual factory. Rebuilding a destroyed European steel factory, for example, was basically an issue of re-creating a system that had existed previously. There would be some people left who knew how to run such a factory, where to purchase inputs, how to manage the personnel, how to produce steel and where to sell it. If these people could have access to funds, they could build a new factory or enterprise and be back in business fairly quickly. This is completely different from trying to establish a steel factory in a third world country where none had existed previously. In this latter instance, not only would one need to train people in all the intricacies of the steel manufacturing process and the business side of things, one would need to create the national infrastructure that would support the steel industry, including government regulations that would make it possible. Clearly this is a much more difficult and time consuming process than simply rebuilding what existed before.

But the problem is even more difficult than this. In the case of the rebuilt European factory, there were already educated workers who could be easily trained to work in the reconstructed facility. In non-industrial economies, these educated workers are lacking  and cannot be created quickly out of thin air. The banking system to support the factory would not be in place either, and of course there are few or no trained bankers. While not all the countries that had been through World War II had experience with democracy, they did all have functioning bureaucracies. While government is often unpopular in America, the reality is that it is very difficult to have a vibrant economy without an effective governing bureaucracy. It need not necessarily be democratic, but it needs to function.

What all this means is that getting a country to develop is very, very different from rebuilding one that has been damaged by war. So to even speak of a “Marshall Plan for Africa” for example, demonstrates a complete misunderstanding of this difference. The lessons from post-war Europe simply have little or no bearing on how development should work.

This is not to say that there has been no development around the world. Just look at the “Asian Tigers” or China and you will see that development happens. But it does not happen in a way in which the Marshall Plan would provide a template or model. Nor is it even clear whether foreign funds or technical knowledge play much of a role. They certainly did not in China. What made the difference was a clear commitment to development by the countries’ governments together with a functioning bureaucracy and access to export markets.

A few years ago I asked the local head of the British Department for International Development what had been the biggest success story in his personal experience in the development world. His answer was that his agency had helped NGOs in Burma to reach a certain level of self-sufficiency. I think the answer is actually not all that uncommon in his world. People can point to programs that they viewed as successful, but countries that have been “saved” by development are hard to find.

The problem does not lie in the incompetence of development agencies. Nor does it rest with the venality of third world countries and their rulers. Rather, there is a fundamental problem with the concept of development. People assume that money and knowledge from developed countries can bring about transitions in third world countries that are similar to what was produced by the Marshall Plan in Europe. So far, there is very little evidence that this is possible. The burden of proof rests with the development world and its agencies to demonstrate, not how programs work, but rather that the concept of “development assistance” can be successful. If that proof does not yet exist, perhaps we need to reexamine some of the basic assumptions concerning how the Marshall Plan can serve as a model for development.

Racism Means What?!

The subject of race in America continues to make periodic appearances on the political stage. Supreme Court decisions on affirmative action and voting rights, the shooting of Trayvon Martin, and a Department of Justice eager to promote racial equality have all guaranteed to keep the topic of race in the public discourse. Politicians are routinely accused of using “coded” racist speech, such as when Wisconsin Republican Congressman Paul Ryan spoke of “this tailspin of culture, in our inner cities in particular, of men not working and just generations of men not even thinking about working or learning the value and the culture of work.” Given the continued prominence of the subject, it is worth pondering how the issue is perceived among Americans.


Civil Rights March in Tallahassee

One certainty concerning the issue of race is that whites and blacks view it very differently. Already in 1970, the late Senator Daniel Patrick Moynihan said that “The time may have come when the issue of race could benefit from a period of ‘benign neglect’. The subject has been too much talked about. The forum has been too much taken over to hysterics, paranoids, and boodlers on all sides. We need a period in which Negro progress continues and racial rhetoric fades.” Many whites believe that racism still exists, but is no longer a defining issue for the country. On the other hand, many African Americans believe that racism is a persistent problem that defines their daily lives. How can these views be so different?

One problem with the question of racism is what exactly people mean with the word. I think that if you asked most whites, they would define racism something along the following lines: a process by which people discriminate against others based on their race or skin color. On the other hand, for many African Americans racism means something rather different. Racism for them simply means white oppression of blacks. This is a phenomenon that has its roots in slavery, continued under Jim Crow and segregation and persists today in the inequality that marks the differences between the races on so many levels. These are very different views, and although whites and blacks both use this one word, what they mean by it is not at all the same. This is obviously somewhat of a generalization, and not all whites or all blacks share these views, but it is a general portrayal of a very real difference in perception.

The Lynching of Two Young Black Men

The Lynching of Two Young Black Men

It is not my intention here to evaluate the relative merits of these two views. When dealing with issues of perception, there is not usually a monopoly on right and wrong. While these differences cannot always be bridged, the only hope of doing so begins with an understanding of the other’s point of view.

The different views of what racism in America entails have a huge impact on how people feel the issue should be handled. If racism is essentially a question of present discrimination, then  the solution is to ban the practice and move on. From this perspective, the civil rights legislation that was passed in the 1960s outlawed racial discrimination in voting, housing, employment and public business and essentially resolved the problem. Any lingering racism should be dealt with by enforcing these laws and letting people be judged as individuals.  Perhaps the clearest articulation of this perspective was made by Chief Justice of the Supreme Court John Roberts when he wrote in 2007 “the way to stop discrimination on the basis of race is to stop discriminating on the basis of race.”

On the other hand, the African American perspective that racism means white oppression of blacks implies a very different approach. In this view, one group of people suffered immensely at the hands of another and the impact of that oppression lingers on today. The problem is not simply the residue of ill will or stereotypes that people have of African Americans, but rather that blacks are at an unfair disadvantage that is essentially systemic. For example, when African Americans moved north during the Great Migration, they were largely confined to certain areas in major cities, leading to a new type of segregation. The black majority urban areas of today are legacies of this process. Therefore, it can be argued,  the poor schools and infrastructure, crime and despair that mark these areas are not primarily issues of personal choice, but rather the result of deliberate oppressive policies.

One of the factors that has increased the difference in views on the topic of race is the large-scale immigration that has occurred over the past fifty years. Historically speaking, there were just two major racial groups in the United States – whites and blacks. WIth immigration, there has been an influx of Asians including Indians, Chinese, Vietnamese and Koreans. More significantly, there has also been a large immigration of Hispanics, who, although not really a racial group, are sometimes considered as such.

From the perspective of white America, this immigration has changed the discussion of race dramatically. Now the United States is a multi-racial society where the imperative to view people as individuals rather than as members of particular national or ethnic groups is strengthened because of the need to avoid social and political fragmentation. In addition, these immigrant groups are not generally viewed as meriting special treatment any more than those immigrant groups that preceded them.

From an African American perspective, immigration has not changed the basic perception of racism at all, since the white oppression of blacks has not and cannot be altered by the addition of other racial groups to the mix. In fact, immigration has mainly meant the dilution of black political power, since African Americans are no longer the largest minority. There is nothing in the process of immigration that alleviates or changes the African American view of their history and position in the United States. Many Blacks would also point out that none of these immigrants came to the United States as slaves, and therefore their situation is entirely different.

These different perspectives on racism can often lead to misunderstandings and charges of double standards. For example, when a group of black bystanders recently beat a white motorist in Detroit, from a white perspective, the beating was clearly racist.  Nonetheless, the beating was denounced by many African Americans, but not as “racist.” Why not? Because it did not relate to the oppression of blacks by whites. Is this a double standard? From a white perspective perhaps so, but not from that of African Americans.

Understanding these divergent perspectives does not resolve the differences, but it may help us understand that we are not all speaking of the same thing when we discuss the subject of race. It may also help us see that the problem is not so much who is right and who is wrong, but rather that there are different perspectives and that each has validity. This understanding may offer a key to taking the first steps toward bridging the differences on the very difficult subject of race in America.

Should Government Stop Gentrification?

Gentrification is a political issue affecting cities coast to coast. In one prominent example, middle class residents of San Francisco have recently been demonstrating against workers at tech companies such as Google and Apple who are making so much money they are driving up real estate prices in the city. Some long time inhabitants can no longer afford to live there as a result. Protesters were particularly upset that a Google executive bought a building containing rental apartments, decided to turn it into condos and sent eviction notices to the tenants. Similarly, during last year’s campaign for Mayor in New York, then candidate Bill de Blasio promised to do something to stop gentrification and focused considerable attention on the problem.

San Francisco

Gentrification in San Francisco

The basic issue stems in part from changing demographics and personal preferences. As young professionals are getting married later in life, many wish to live in cities, either because their work is there, or because of the cultural, entertainment and social opportunities. Those that are well-to-do are buying houses and apartments in urban areas that were previously working or middle class, often inhabited by minority populations. This has focused attention on both class and racial issues. In some cases, such as in New York, gentrification has also been driven by an influx of out-of-town buyers who have bid up prices in prime locations.

The downside of this gentrification process is that less affluent people are being displaced.  Sometimes these are long-time residents of an area and they may have a difficult time finding alternative housing that is close to their work. In San Francisco, for example, demonstrators have complained that teachers and firefighters are being uprooted to make way for tech workers. If middle and lower income earners can no longer afford to live in the cities where they work, how will this affect recruitment, for example? If restaurant workers cannot pay for housing in New York, how will the hospitality industry survive? Sometimes elderly residents are displaced, causing considerable disruption and hardship.

What is less clear is whether there is a role for government in dealing with gentrification. Bill de Blasio notwithstanding, there are two related questions we need to ask. The first is whether government, especially at the city level, is actually able to do much to stop or slow the process of gentrification. The second question is whether government should take action if it is able.

Turning first to the question of the government’s ability to stop gentrification, we can see that in fact there are serious limitations to what can be done. The basic problem is that local government has very few tools at its disposal to reverse the demographic and economic trends that cause gentrification in the first place. Short of making a particular city a less desirable place to live, it is hard to keep people from moving in. San Francisco cannot pass an ordinance that prohibits tech workers from buying or renting property. Real estate prices are subject to the law of supply and demand and greater numbers of wealthy people living in a city will simply drive up prices.

New York

Gentrification in New York

Rising prices do not generally bother homeowners since the value of their homes goes up, so those most negatively affected are renters. There are a few potential tools available to protect renters that cities have tried with limited success in the past. A tempting solution has been to establish rent control or rent stabilization schemes. It is possible, for example, to limit how much a landlord is allowed to raise the rent in a given time period. The problem with this in practice is that rents below market value provide a disincentive to construct new housing or to maintain existing housing stock. Over time, these schemes often lead to housing shortages and deteriorating housing stock. They can also lead to efforts to turn rental properties into condominiums. This process can sometimes be limited by city ordinance, but again at the cost of creating distortions in the housing market. Developers for example can buy a rent controlled building, let it deteriorate to the degree that it is no longer habitable, then tear it down and build something that is not rent controlled. Generally speaking, businesses will find ways to beat the regulators over the long haul.

The difficulty of coming up with ways to counter gentrification is demonstrated by the limited options articulated by Mayor de Blasio since taking office. Essentially he has suggested making mandatory a provision for developers who are building housing units to construct a certain amount of “affordable” housing as part of any project. While that may not be a bad thing, it is unlikely to have a major impact on the problem. This proposal does not affect already existing housing and developers will most likely find ways to game the system anyway. De Blasio and his fellow progressives simply have not come up with many ideas to stem the tide.

The other issue is whether government should even try to stop gentrification. As an ethical and political issue, this is somewhat more complicated. It is true that long-term residents may be  disadvantaged when newer and wealthier folks come to town. But that does not necessarily mean government needs to be involved. There are many things in life that are not ideal, but government is not always required to solve those problems. There are many reasons that people have to move, sometimes it is even the government itself that makes them move when it exercises the right of eminent domain. There is no “right” that says a person will not have to move. Yes this problem impacts renters more than homeowners, but perhaps that is just one more reason to buy a home, or to drop the price of renting.

Going back to the case of San Francisco, let’s assume a school teacher is being displaced by a tech worker. Can we say that the teacher has a greater right to live in a particular residence than the guy from Google? What determines a person’s “right” to live in a certain place. In our system it is essentially up to market forces. Is there anyone who really wants to leave those decisions up to government? While the present system may be imperfect, the alternatives appear much worse. If teachers can no longer afford to live in San Francisco, the city may simply have to pay them higher salaries.

What about the argument that minority communities are being disrupted by this process. It also appears to me that this is hardly a reason for government intervention. It is not the role of government to determine the ethnic or racial composition of a neighborhood. That was done in the past and led to legalized segregation. The principle is no better when meant to protect minorities. Just a quick example of this. Harlem in New York City was majority African American for many decades, but now it is no longer so. Should the city government keep out Hispanics and other minorities to keep the area “ethnically pure?” The idea is repugnant. The whole civil rights movement was premised on the idea that a person should have the right to live where he wants, as long as he can afford it.

So yes, gentrification has its downsides. But let’s not forget that there are positive benefits as well, such as the influx of new people into the city, reduction in crime as neighborhoods are renewed, and the benefits that longtime homeowners reap when their property values go up. The city’s tax base may go up as well, perhaps allowing it to pay its workers higher salaries. As is so often the case in life, there are winners and losers to gentrification, and it should not be left up to government at any level to arbitrate the issue.

Nobel Economics

Robert Shiller

American Nobel Prize Winner in Economics, Robert Shiller

Americans have won more Nobel prizes in economics than any other nationality. Since the establishment of the prize in 1969, well over half of all the winners have been citizens of the United States, and many others have lived and worked in the country. One might reasonably draw the conclusion from these facts that the United States should have the best-run economy in the world. After all, if the best economists in the world live in the United States, shouldn’t that translate into some concrete benefit in terms of economic policy?

While the United States is indeed the largest economy in the world, it would be hard to argue that it has the most effective economic policy. Just think of the Great Recession of 2007-2009 and you will see that neither economists nor the federal government were able to prevent disaster. Over the past few decades, the United States has had neither the fastest growth in the developed world, nor the highest per capita income.

So where does that leave us? We appear to have the best economists, but not the best economy. This is a bit like having the best doctors but not the healthiest patients. Something is wrong with this picture. But what?

soviet workers

Soviet Workers 1971

One might begin by questioning whether the Nobel Prize committee is picking the right people. Given that two prizes were awarded to economists from the Soviet Union, there is some room for doubt. Still, that was probably a political decision at the time (no one wanted to ignore completely the Eastern Bloc countries), but certainly now there is no political imperative to lay false praise at the feet of American economists. Looking at a list of winners, though, one sees a general pattern that there is little relationship between the countries that have won prizes in economics and how their economies are doing. Just as an example, France has more winners than Germany, and Switzerland is not represented at all while Cyprus is.

One explanation could be that economists know the right thing to do, but politicians just won’t do it. After all, sometimes experts make recommendations that go unheeded by the political system. But in terms of our economists, that explanation does not appear to fit. Returning again to the question of the Great Recession, there were very few economists who accurately predicted the coming disaster. Perhaps a few did, but since someone is always making a dire prediction, on occasion these will come true. I do not know of any economists who predicted accurately the danger of a coming collapse, explaining exactly how it would unfold. In other words, the people who get paid to study the issue did not understand our economic system well enough to see what was coming down the pike.

The other problem with the economists versus politicians argument can be seen from looking at the list of Nobel Prize winners. Basically they come in all political stripes, with some being free market advocates and others supporters of Keynesian theories. Furthermore, politicians basically have one goal in life – to get elected (or re-elected).  If they could find an economic theory that really worked, they would jump all over it. The problem is that none of the theories really seem to work that well.

Another possible explanation is that economists study the wrong subjects, or that they are only successful in certain limited areas. Or they may be focusing too much on theoretical subjects. But isn’t that like saying someone studies aerodynamics but cannot actually help make a plane that flies? Not much job security there. It would seem to me that anyone who could actually make accurate economic policy predictions and recommendations that worked would be in high demand. If an economist could really help a country increase growth rates over the long haul, he would be both popular at home and would be high on the list of potential prize winners in the future.

While there are other potential explanations, what seems most likely to me is that economics as field of study in its present form is simply not up to the task of understanding the complexity of a modern economy. If you look at economic literature, it often is cloaked in the language of science. There are many mathematical formulas and the calculus flies fast and furious. Excel spreadsheets generate charts for every page. But that does not actually make economics a science. Something is missing.

One problem of course is that it is pretty difficult to do controlled experiments in economics, at least at the macro level. You cannot really take two identical countries, implement different policies and see which one works. There may be proxies for this, but they are by definition inexact. Furthermore, in any scientific endeavor, there needs to be more than one crack at an experiment. So it would have to be done repeatedly to ensure it was replicable. Although not all science is experimental, on some level at least there has to be a way to judge the truth of various propositions, or else one is no longer in the realm of science. And as far as economics is concerned, that has not been possible on a meaningful level. People can and do analyze data, but the ability to predict is between very limited and nonexistent.

The other part of the problem may lie with the complexity of modern economic systems. There may just be too many variables to allow observers to accurately understand what is going on. One of the valid criticisms of centrally planned economies was that no one group of people could really master all the information needed to plan accurately for the future, which is why communist economies either collapsed or changed. Similarly in market economies, when millions of individual consumers and businesses make decisions, it is simply impossible to predict future events. Economists may be able to understand parts of the economic system, but not the whole.

Why does all this matter to the political system? For one, government dollars flow heavily into economic research. Just about every university in the country has an economics department, and most of these are subsidized on one level or another by the government. We also spend large sums on collecting huge amounts of economic data, which may be interesting, but in the long run does it really help us manage the economy? Perhaps we need to be more focused on where we spend this money, and try to ensure we get concrete results from these funds. For example our economists might study those countries that are doing well even if they are not winning Nobel Prizes.

More fundamentally, though, we need to be more realistic about what economics can do for us. In spite of our expenditures on, and faith in, the field of economics, we are flying blind in terms of what the future will bring. We do not know what will happen, and when disaster strikes, we will largely be guessing about what the best response will be. Kind of a sobering thought, but an accurate reflection of where we really are.


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