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Posts For: April 2, 2013

Eurozone Unemployment Crisis

Whatever the U.S. unemployment figures turn out to be on Friday, they will be far better than what the eurozone—the 17 countries that use the euro currency—released today. The eurozone economy is contracting, which is to say it’s in recession, and the overall unemployment is a dismal 12 percent, up from 11.9 percent last month.

But the spread among the 17 countries is far, far wider than among the 50 American states. Unemployment is a mere 4.8 percent in Austria and 5.4 percent in neighboring, but far larger Germany. Both figures are much better than U.S. unemployment, which is at 7.7 percent. Germany and Austria are adding jobs, not shedding them like the rest of the zone. That includes jobs in manufacturing, an economic sector that is bleeding jobs elsewhere. The purchasing manager activity index, a measure of manufacturing strength, dropped sharply last month to 46.8 from 47.9 the month before. Anything less than 50 is an indication of economic contraction.

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Whatever the U.S. unemployment figures turn out to be on Friday, they will be far better than what the eurozone—the 17 countries that use the euro currency—released today. The eurozone economy is contracting, which is to say it’s in recession, and the overall unemployment is a dismal 12 percent, up from 11.9 percent last month.

But the spread among the 17 countries is far, far wider than among the 50 American states. Unemployment is a mere 4.8 percent in Austria and 5.4 percent in neighboring, but far larger Germany. Both figures are much better than U.S. unemployment, which is at 7.7 percent. Germany and Austria are adding jobs, not shedding them like the rest of the zone. That includes jobs in manufacturing, an economic sector that is bleeding jobs elsewhere. The purchasing manager activity index, a measure of manufacturing strength, dropped sharply last month to 46.8 from 47.9 the month before. Anything less than 50 is an indication of economic contraction.

In France, the second largest economy in the eurozone, the unemployment rate is 10.8 percent, double Germany’s. In Spain it’s a staggering 26.3 percent, about what American unemployment was at the very bottom of the Great Depression. In Greece, the youth unemployment rate is 58.4 percent. In other words, nearly six out of ten of the young in Greece have nothing better to do than riot in the streets. Now that the weather is improving, they might well do exactly that.

Together with the crisis of the euro itself, most recently manifested in the bail out of the banks in tiny Cyprus, Europe is in deep economic trouble and the solutions are not easy to see.  And Europe is this country’s largest trading partner. The collapse of the euro, or even a severe recession, will not be confined to Europe.

As Bette Davis famously advised, “Fasten your seatbelts, it’s going to be a bumpy night.”

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Lift the Combat Ban, Keep the Standards

Secretary of Defense Leon Panetta’s decision, on his way out the door, to lift the ban on women serving in combat units has engendered much consternation among traditionalists both in and out of uniform. On a recent visit to Quantico, the base near Washington where Marine Corps University is located, I got an earful from combat veterans who fretted that standards would be lowered to allow women to serve in combat units. The concern is especially acute when it comes to infantry units, because infantrymen have a particularly arduous and important specialty, one that has long accounted for the majority of casualties suffered in America’s wars. I supported Panetta’s decision to lift the ban but I have to acknowledge that the concerns are valid. How they are addressed will determine whether lifting the ban is a success or not.

A New York Times reporter who was allowed to observe the Infantry Officer School at Quantico found out why two recent female candidates washed out—and why future female candidates are likely to face steep barriers. Literally. As James Dao notes: “It all begins with the Combat Endurance Test, a slog through rolling forests that requires physical strength, endurance, military knowledge and willpower. Students must swim, assemble weapons from jumbled parts, navigate from point to point and carry weight over distances.

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Secretary of Defense Leon Panetta’s decision, on his way out the door, to lift the ban on women serving in combat units has engendered much consternation among traditionalists both in and out of uniform. On a recent visit to Quantico, the base near Washington where Marine Corps University is located, I got an earful from combat veterans who fretted that standards would be lowered to allow women to serve in combat units. The concern is especially acute when it comes to infantry units, because infantrymen have a particularly arduous and important specialty, one that has long accounted for the majority of casualties suffered in America’s wars. I supported Panetta’s decision to lift the ban but I have to acknowledge that the concerns are valid. How they are addressed will determine whether lifting the ban is a success or not.

A New York Times reporter who was allowed to observe the Infantry Officer School at Quantico found out why two recent female candidates washed out—and why future female candidates are likely to face steep barriers. Literally. As James Dao notes: “It all begins with the Combat Endurance Test, a slog through rolling forests that requires physical strength, endurance, military knowledge and willpower. Students must swim, assemble weapons from jumbled parts, navigate from point to point and carry weight over distances.

The endurance test is no anachronistic remnant of a sexist culture—it is the closest approximation possible in training conditions of the kind of stress and challenges that infantry marines will encounter in battle. Those who cannot pass the test in training should not be allowed to lead marines in battle: lowering the standards endangers lives on the battlefield.

Lifting the ban on women in combat makes sense only if it does not result in a distortion of the hard standards that combat soldiers must pass. If women can make the grade, by all means let them in—but the standard must be the same for men and women because the battlefield does not discriminate based on gender. The odds are that, if standards are maintained, few if any women will be able to qualify for the infantry—but they will still be able to serve on the battlefield, as they do today, in a variety of billets from military police to intelligence to pilots.

The fact that Chuck Hagel has served in battle as an enlisted man gives him perspective unique for a secretary of defense in making the crucial decision about whether to redefine the standards or not. If he maintains current standards, he can still offer opportunities to women without endangering the combat performance of the armed forces. But if he knuckles under to pressure to change the standards, he will be doing serious damage to the forces that he once served in and now leads.  

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Social Justice: A Solution in Search of a Problem

The left has always had a knack for the high-sounding phrase, such as New Deal, Great Society, etc.  One that is increasingly in vogue these days is Social Justice.  It sounds noble—everyone’s in favor of justice, right?—but when you look closely, it’s nothing more than the old redistribution of income in the name of “equality.” The left argues that free markets inherently produce unequal results and these inequalities need to be corrected for justice to be achieved.

Over at the Library of Law and Liberty, my friend David C. Rose, a professor of economics at the University of Missouri—St. Louis, brilliantly eviscerates the whole notion of Social Justice. He calls its basic assumption into question:

But is the premise actually true? Do free market societies inevitably produce unjust outcomes, or are social justice theorists incorrectly inferring injustice from what is actually innocuous inequality? In my view the latter is true and the former is false, so social justice theory amounts to a solution in search of a problem. As such, it constitutes a massive straw man argument against the free market society. Making matters worse, it is a particularly attractive straw man argument because it comports well with incorrect but very plausible folk wisdom about what a market economic system is and how it functions. An affirmative defense of this claim is beyond the scope of this essay, but it will become clear below that an affirmative defense of this claim is not required to reject social justice theory. 

You can read his short essay here. It is well worth your time.

The left has always had a knack for the high-sounding phrase, such as New Deal, Great Society, etc.  One that is increasingly in vogue these days is Social Justice.  It sounds noble—everyone’s in favor of justice, right?—but when you look closely, it’s nothing more than the old redistribution of income in the name of “equality.” The left argues that free markets inherently produce unequal results and these inequalities need to be corrected for justice to be achieved.

Over at the Library of Law and Liberty, my friend David C. Rose, a professor of economics at the University of Missouri—St. Louis, brilliantly eviscerates the whole notion of Social Justice. He calls its basic assumption into question:

But is the premise actually true? Do free market societies inevitably produce unjust outcomes, or are social justice theorists incorrectly inferring injustice from what is actually innocuous inequality? In my view the latter is true and the former is false, so social justice theory amounts to a solution in search of a problem. As such, it constitutes a massive straw man argument against the free market society. Making matters worse, it is a particularly attractive straw man argument because it comports well with incorrect but very plausible folk wisdom about what a market economic system is and how it functions. An affirmative defense of this claim is beyond the scope of this essay, but it will become clear below that an affirmative defense of this claim is not required to reject social justice theory. 

You can read his short essay here. It is well worth your time.

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Global Warming Alarmism Cools Down

The Economist – which has long been concerned about the rise in Earth’s temperature and its consequences for civilization — has a significant article in the current issue. It begins this way:

Over the past 15 years air temperatures at the Earth’s surface have been flat while greenhouse-gas emissions have continued to soar. The world added roughly 100 billion tonnes of carbon to the atmosphere between 2000 and 2010. That is about a quarter of all the CO₂ put there by humanity since 1750. And yet, as James Hansen, the head of NASA’s Goddard Institute for Space Studies, observes, “the five-year mean global temperature has been flat for a decade.”

Temperatures fluctuate over short periods, but this lack of new warming is a surprise. Ed Hawkins, of the University of Reading, in Britain, points out that surface temperatures since 2005 are already at the low end of the range of projections derived from 20 climate models. If they remain flat, they will fall outside the models’ range within a few years.

“The mismatch between rising greenhouse-gas emissions and not-rising temperatures is among the biggest puzzle in climate science right now,” The Economist adds.

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The Economist – which has long been concerned about the rise in Earth’s temperature and its consequences for civilization — has a significant article in the current issue. It begins this way:

Over the past 15 years air temperatures at the Earth’s surface have been flat while greenhouse-gas emissions have continued to soar. The world added roughly 100 billion tonnes of carbon to the atmosphere between 2000 and 2010. That is about a quarter of all the CO₂ put there by humanity since 1750. And yet, as James Hansen, the head of NASA’s Goddard Institute for Space Studies, observes, “the five-year mean global temperature has been flat for a decade.”

Temperatures fluctuate over short periods, but this lack of new warming is a surprise. Ed Hawkins, of the University of Reading, in Britain, points out that surface temperatures since 2005 are already at the low end of the range of projections derived from 20 climate models. If they remain flat, they will fall outside the models’ range within a few years.

“The mismatch between rising greenhouse-gas emissions and not-rising temperatures is among the biggest puzzle in climate science right now,” The Economist adds.

The article rightly does not argue that anthropological global warming is a delusion. But it does make the point that an awful lot depends on whether the climate is less sensitive to CO2 emissions than previously believed. It makes (almost literally) a world of difference if Earth’s temperature increases 0.8-1.9°C v. 4.0-6.0°C. The low end would be something we could easily absorb; the high end would justify drastic interventions. So much depends on the model one uses and the confidence one places in them.

Based on the latest science, the Economist summaries things this way: 

given the hiatus in warming and all the new evidence, a small reduction in estimates of climate sensitivity would seem to be justified: a downwards nudge on various best estimates from 3°C to 2.5°C, perhaps; a lower ceiling (around 4.5°C), certainly. If climate scientists were credit-rating agencies, climate sensitivity would be on negative watch. But it would not yet be downgraded.

When I wrote on this subject a couple of years ago (see here  and here), I pointed out (a) the concentration in the atmosphere of carbon dioxide has increased markedly during the past 150 years; (b) humans have been responsible for a significant increase in atmospheric CO2 concentration during the past two centuries; (c) as a result, the earth is getting warmer; but (d) there’s a good deal of uncertainty based on future climate projections and what needs to be done. In light of that, adaptation rather than a completely unworkable system of global carbon rationing may be the way to go.

Here’s how I put it at the time:

Many climate scientists fear that unless dramatic steps are taken soon, we’ll see rising sea levels, contracting ice sheets, more floods and intense tropical cyclones, the spread of tropical diseases like malaria, the submergence of parts of continents, alterations in our ecosystems, and food and water shortages. Perhaps so; those concerns are certainly worth considering. But as Jim Manzi – who combines a sophisticated understanding of the scientific and economic stakes of the climate-change debate — has pointed out, pumping out more CO2 triggers an incredibly complicated set of feedback effects, and the most important scientific debate is really about these feedback effects. In Manzi’s words, “Climate models generate useful projections for us to consider, but the reality is that nobody knows with meaningful precision how much warming we will experience under any emissions scenario. Global warming is a real risk, but its impact over the next century could plausibly range from negligible to severe.”

Conservatives should be part of that conversation. There’s an intellectually credible case to be made that it’s unwise to embrace massive, harmful changes to our economy in the face of significant uncertainties based on incomplete knowledge of how the climate system will respond in the middle part of the 22nd century.

That is, I think, very much where we are today. Even the Economist is beginning to think so. 

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Time for a Thoughtful Egypt Policy

The latest news from Egypt is literally beyond satire: Bassem Youssef, often described as the “Egyptian Jon Stewart,” is being prosecuted on charges of insulting President Mohamed Morsi and Islam in general.

As Eric Trager of the Washington Institute for Near East Policy, one of the smartest Egypt analysts around, notes, this is of a piece with Morsi’s general crackdown on opposition and attempts to give the Muslim Brotherhood control of all aspects of Egyptian society: “According to the Egypt-based Arabic Network for Human Rights Information, four times as many lawsuits for ‘insulting the president’ were filed during Morsi’s first 100 days in office than during Hosni Mubarak’s thirty-year reign.”

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The latest news from Egypt is literally beyond satire: Bassem Youssef, often described as the “Egyptian Jon Stewart,” is being prosecuted on charges of insulting President Mohamed Morsi and Islam in general.

As Eric Trager of the Washington Institute for Near East Policy, one of the smartest Egypt analysts around, notes, this is of a piece with Morsi’s general crackdown on opposition and attempts to give the Muslim Brotherhood control of all aspects of Egyptian society: “According to the Egypt-based Arabic Network for Human Rights Information, four times as many lawsuits for ‘insulting the president’ were filed during Morsi’s first 100 days in office than during Hosni Mubarak’s thirty-year reign.”

The question is what the U.S. should do about this worrisome power grab. Exhorting Morsi to respect freedom of speech is a no-brainer—but what should we do if, like Mubarak before him, he ignores our exhortations? The U.S. has considerable leverage because of all the aid we provide to Egypt and because Egypt needs our support for a $4.8 billion loan from the IMF that it needs to keep its economy functioning. It is easy enough to threaten Morsi with an aid cutoff but harder to follow through because of the disastrous consequences that are likely for Egyptian society.

As the New York Times notes, Egypt is already facing a foreign-reserve crisis. As its hard currency holdings diminish (falling over the past two years from $36 billion to $13 billion) and as its own currency loses value, social instability increases: “A fuel shortage has helped send food prices soaring. Electricity is blacking out even before the summer. And gas-line gunfights have killed at least five people and wounded dozens over the past two weeks.” Do we dare risk exacerbating this crisis by punishing Morsi for his transgressions against liberal principles?

 That is not an easy question to answer because it is hard to predict the consequences of an economic collapse in Egypt—it could discredit Morsi and lead to the rise of a more moderate government or, more likely, it could provide an opening for Salafists even more radical than Morsi to come to the fore. Even if we cut only military, not economic, assistance, the results could backfire by weakening the military, which remains the only institution powerful enough to resist a complete Muslim Brotherhood takeover. 

None of this is to argue that we shouldn’t use our financial leverage—only to wonder what would happen if Morsi calls our bluff.

At the very least we should be working behind the scenes on other policies designed to provide support to more liberal and secular groups that want to resist a Brotherhood crackdown but lack the resources to do so.

What we cannot afford is to remain aloof—as President Obama by temperament and policy prefers to do. The battle going on for the future of the most populous Arab state will have long-term ramifications for the entire region—and for vital American interests. Given the stakes involved we don’t have the option of voting “present” as Obama had a penchant for doing while an Illinois state senator, but figuring out the right policy mix remains devilishly difficult.

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Libya Is Still Unraveling

Barack Obama became president in no small part by castigating the Bush administration for its errors in Iraq. Now, ironically enough, as president he appears bent on repeating the biggest Bush error of all—namely toppling an existing Middle East strongman without doing enough to build up a stable state in his wake.

Jeffrey Fleishman of the Los Angeles Times has filed a disturbing report from the southern Libyan city of Sabha that vividly shows the consequences of administration inaction. He finds, almost a year and a half after Muammar Qaddafi’s demise, a total absence of Libyan security forces. Instead ill-armed, unpaid militiamen are  “battling smugglers, illegal migrants bound for Europe and armed extremists who stream across a swath of the Sahara near the porous intersection of southern Libya, ChadNiger, and Algeria.” That is, they are battling these threats when they are not battling each other—which is a more common occurrence.

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Barack Obama became president in no small part by castigating the Bush administration for its errors in Iraq. Now, ironically enough, as president he appears bent on repeating the biggest Bush error of all—namely toppling an existing Middle East strongman without doing enough to build up a stable state in his wake.

Jeffrey Fleishman of the Los Angeles Times has filed a disturbing report from the southern Libyan city of Sabha that vividly shows the consequences of administration inaction. He finds, almost a year and a half after Muammar Qaddafi’s demise, a total absence of Libyan security forces. Instead ill-armed, unpaid militiamen are  “battling smugglers, illegal migrants bound for Europe and armed extremists who stream across a swath of the Sahara near the porous intersection of southern Libya, ChadNiger, and Algeria.” That is, they are battling these threats when they are not battling each other—which is a more common occurrence.

This is a matter that should be of urgent attention to the United States. As Fleishman notes:

Even under Qaddafi, the nation produced Islamic militants who reached well beyond the country’s borders. Libyan extremists are now connected to an Al Qaeda branch in Algeria, rebels in Syria and the fighters trying to establish an Islamic caliphate in Mali. Security officials also are concerned about reports of militant training camps with caches of weapons hidden in the desert south of Sabha.

Government officials in the south shy away from discussing the region’s chaos. An activist was recently shot and killed after publicly criticizing the lack of law and order. Much of the danger stems from tribal animosities that were suppressed during four decades of Qaddafi’s rule and are now playing out in the kind of security vacuum that Islamic militants have exploited in countries such as Somalia and Yemen.

Yet the Obama administration is doing far too little to buttress the pro-Western government of Libya so that it can field security forces capable of controlling its own soil. We have already paid a heavy price for this inaction with the death of our ambassador and other government employees in Benghazi last September 11. The price of a hands-off American policy will only continue to grow if, as appears likely, Islamist militants have greater success in the future in exploiting the Libyan security vacuum.

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The New Republic’s Sinking Standards

Marc Tracy’s profile of my Ethics and Public Policy Center colleague Yuval Levin is unusually shallow, even by the standards of the “new” New Republic. I suppose that is something of an achievement.

Mr. Tracy’s piece doesn’t deny – it could not possibly deny – the intellectual influence of Levin on modern conservatism. So the next line of attack is that Levin, more operative than anything else, is simply toeing the (Republican) party line: 

Levin, however, doesn’t propose challenging GOP orthodoxy; he simply tries to make it sound less radical. That’s not the most high-minded project. But that’s the job of the state-of-the-art conservative intellectual, more operative than philosopher. … Indeed, it’s hard not to notice that Levin follows the Republican Party line on just about every issue of note—from taxes to education to abortion.

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Marc Tracy’s profile of my Ethics and Public Policy Center colleague Yuval Levin is unusually shallow, even by the standards of the “new” New Republic. I suppose that is something of an achievement.

Mr. Tracy’s piece doesn’t deny – it could not possibly deny – the intellectual influence of Levin on modern conservatism. So the next line of attack is that Levin, more operative than anything else, is simply toeing the (Republican) party line: 

Levin, however, doesn’t propose challenging GOP orthodoxy; he simply tries to make it sound less radical. That’s not the most high-minded project. But that’s the job of the state-of-the-art conservative intellectual, more operative than philosopher. … Indeed, it’s hard not to notice that Levin follows the Republican Party line on just about every issue of note—from taxes to education to abortion.

As David Frum points out in his artful takedown of Tracy’s piece, “What about the possibility that the Republican line is following Yuval? On Medicare, at least, that happens to be the case – for better or worse.”

I can testify on this matter firsthand. When Representative Paul Ryan was developing his first budget in the aftermath of the 2010 election, there was real concern among some members of the House leadership as to whether to include premium support as part of the reform of Medicare. I was in private meetings in early 2011 in which some prominent House members and some very intelligent conservatives argued that this would be a bridge too far, that whatever the substantive arguments in favor of premium support it would be politically catastrophic. That argument was in fact made by real political operatives – pollsters, to be precise – in the meeting.

Some of us, on the other hand, argued that Republicans had an obligation, given the fiscal crisis that is being driven primarily by Medicare, to fundamentally reform the program and that Republicans could not be taken seriously as a party that stood for limited government unless it tackled Medicare. The most articulate and persuasive advocate for that point of view was Yuval Levin.

The point is that the notion that premium support was “GOP orthodoxy” as recently as two years ago is silly and sloppy; and one big reason the idea has now carried the day is because of the intelligent, informed and, yes, high-minded advocacy of Levin. On a supremely important issue he has changed the Republican Party, not the other way around. 

Even using the frivolous Tracy standard that an idea is only meritorious if it runs counter to what the Republican orthodoxy is at any given moment in time, Levin has not followed the conventional GOP line. For example, he argued, to little avail, that Republicans should have been vocal advocates against raising the payroll tax. He has said that in our current situation cutting marginal tax rates is not key to economic growth, hardly a Grover Norquist-like position. And he has been arguing the cause of upward mobility and civil society for quite some time. Only now, post-2012 election, are some Republican lawmakers catching up to him.

It may very well be that Mr. Tracy was unaware of all this, which would make him a bad reporter; or perhaps he was aware of this but chose to ignore it, which would make him a dishonest one. Whatever the explanation, the piece by Tracy is both light and misleading. Which is why it was a perfect fit for The New Republic

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