“Well written and an interesting perspective.” Clan Rossi --- “Your article is too good about Japanese business pushing nuclear power.” Consulting Group --- “Thank you for the article. It was quite useful for me to wrap up things quickly and effectively.” Taylor Johnson, Credit Union Lobby Management --- “Great information! I love your blog! You always post interesting things!” Jonathan N.

Saturday, February 25, 2012

American Regional English: Vestiges of an Empire

In 2012, a mere fifty years after the project had begun, the fifth volume of the Dictionary of American Regional English (DARE) was finally done. Sadly, the project’s director, Frederic Cassidy, had died in 2000 at the ripe old age 90. “On to Z” had been his typical way of ending phone conversations. Visiting the dictionary’s offices some years ago—ironically to use their French dictionary—I had no idea of the size of the project. Instead, I engaged a few of the staff on my thesis that regional “Englishes” in the U.S. are only natural, given the empire-scale of the republic of republics. In fact, I would argue that it is unnatural that there are not more linguistic differences from Maine across the continent and up to Alaska and over to Hawaii.

The E.U. is perhaps more natural with its linguistic diversity. On the other hand, the Europeans may have gone to the other extreme. Not only is there a myriad of dialects even within a given region, such as Normandy, in a state; the number of languages within the E.U. can give one the false impression that the E.U. is yet another U.N.—an international house of pancakes without any syrup. Even with the perhaps-exaggerated extent of linguistic diversity (given local pride) in the E.U., linguistic diversity is apt to be on the losing end of the homogenizing forces of technology, mass media, and “ever closer union” as the twenty-first century takes hold after a few warm-up decades too reflexive of the previous century. Already by 2012, the increasing use of English in the E.U. means that such English is properly “European English” rather than being identified exclusively with one state (i.e., Britain). That is to say, there are different regional dialects of European English just as there are different regional dialects of American English.

In the U.S., the tendency toward an empire-wide lexicon has been facilitated greatly by the political consolidation that had already been achieved beginning with the war between the CSA and USA. By the 1970s, there was essentially one empire-wide conversation. This can be seen in the efforts of the national news networks to direct “a conversation.” It is odd that “a conversation” would span an empire that produces 25% of the world’s economic output and goes from the North American coast of the Atlantic to some islands in the middle of the Pacific Ocean. Joan Hall, the director of DARE as of 2012, points to technology and globalization as threatening American regional English. Her orientation to culture ignores the effects from the political consolidation. Put another way, she views the global and local as a dichotomy without considering the impact of the levels in between.

Europeans counting on the existing linguistic diversity within the E.U. to thwart such convergence as the U.S. had achieved since 1861 might want to remember that the process took a century or so in the U.S. just to get started. The expanding use of English as a common language, particularly among the political, cultural and economic elites, and the homogenizing effect of technology on the mass media could result in the E.U. being like India—with a common language in addition to local or provincial languages. Clinging to the existing diversity, Europeans will not likely see this change coming. Indeed, it may not fully arrive until the generation of children in 2012 have reached full-functioning adulthood. Their reference point concerning European integration will doubtless be different than the ones in 2012.

Source:
Jennifer Schuessler, “Regional Dictionary Finally Hits ‘Zydeco’,” The New York Times, February 25, 2012. http://www.nytimes.com/2012/02/25/books/dictionary-of-american-regional-english-reaches-last-volume.html

Friday, February 24, 2012

Limiting Bank Size: Crude But Advisable

In February 2012, Tyler Cowen claimed in the New York Times that people across the political spectrum were “talking about splitting up America’s large banks.” At the time, I could discern no such talk, although this does not mean that it was not going on. As the Dodd-Frank financial reform law was being written in 2010, the option of splitting up banks like Bank of America, Goldman Sachs, and JP Morgan Chase was quietly but assiduously kept off the front burners. It is difficult to believe that the big banks would have relaxed in their efforts to relegate such threats in early 2012 as if the passage of the legislation in 2010 meant that more astringent options were no longer possible. In his article, Cowen includes some other questionable claims. Reading between the lines, he seems to have been “playing by the rules” in support of the big guys.

Even as Cowen notes that “before its collapse, Lehman had a capitalization of about $60 billion, compared with the $143 billion capitalization of JPMorgan Chase [in early February 2012],” he goes on to characterize breaking up the biggest banks as penalizing size rather than failure. In doing so, he is conflating a regulation with the market mechanism. Whereas the latter is supposed to penalize failure, there is nothing wrong with a regulation limiting size, as it is often correlated with market (and political) power at the expense of competition (and democracy). Moreover, limiting size is not to penalize it. As Cowen himself admits, “banks are usually wealthier, nimbler and smarter than their regulators, at least when it comes to finding loopholes in the regulations or making their moves more opaque.” Limiting the power of bankers by limiting their respective bank’s assets makes perfect sense in protecting the regulators from being unduly pressured from their regulatees.

Furthermore, Cowen conflates bailing out a big bank with bailing out its parts after a spin-off as if a small bank failing were somehow as damaging as a big one going down. He argues that “if the resulting parts of a divided bank cannot turn a profit, the split-up may prompt the very bailout it was trying to avoid.” This is not true, as “the very bailout” to be avoided pertains to that of the big bank rather than any of its parts.

Cowen also assumes that the smaller banks would necessarily be bumping their heads against the maximum size allowed. He argues that “the incentives for the new, smaller banks would be unhealthy. Those banks could make mistakes or take on bad risks without being punished very much in terms of capitalization or revenue, because of their legally capped size. Even if they made big mistakes, these banks would probably be pushing on the frontier of maximum allowed growth.” In other words, he assumes that a limit on size would somehow eclipse any remaining market mechanism. Perhaps he is assuming an overly astringent limit, such as 50 employees. There is a lot of room for limits below a $143 billion capitalization without eviscerating the market mechanism.

In fact, Adam Smith would doubtless maintain that a market with smaller competitors functions better in terms of competition “rewarding” good performance and “penalizing” incompetence. It is as if we are so used to corporate capitalism that we assume that Adam Smith’s version cannot work. I would argue that Smith’s version is actually superior with regard to the market mechanism. Because that mechanism can “freeze up” rather than price-adjust for added risk, we should not rely exclusively even Smith’s competitive market. Given the downsides of the market mechanism itself, limiting the size (and thus power) of the participants is certainly justified. It is not “penalizing size.” I do not believe that Cowen has a firm grasp on either the market mechanism or the nature of government regulation.

Source:
Tyler Cowen, “Break Up the Banks? Here’s an Alternative,” The New York Times, February 11, 2012. http://www.nytimes.com/2012/02/12/business/making-shareholders-liable-for-big-banks-economic-view.html?scp=1&sq=%2520%25E2%2580%259CBreak%2520Up%2520the%2520Banks?%2520Here%25E2%2580%2599s%2520an%2520Alternative%25E2%2580%259D&st=Search




Wednesday, February 22, 2012

The Fed as a Regulatory Agency

According to the Wall Street Journal, the Federal Reserve “has operated almost entirely behind closed doors as it rewrites the rule book governing the U.S. financial system.” The paper notes that this has been in sharp contrast to the trend at the Fed toward greater transparency in its interest-rate policies and emergency-lending programs. The complaint of a dearth of public meetings misses, however, not only the scripted nature of such displays, but also the more fundamental question of whether a central bank buffered from political pressure should play such a salient role as regulator. At the very least, the democratic deficit and a lack of accountability may be exacerbated by the Fed’s greater role as a regulator of banks—particularly after the major investment banks become commercial banks, and thus subject to the Fed’s regulations.

“While many Americans may not realize it,” the Journal continues, “the Fed has taken on a much larger regulatory role than at any time in history. Since the Dodd-Frank financial overhaul became law in July 2010, the Fed has held 47 separate votes on financial regulations.” This was as of February 22, 2012. In the process, the Fed was “reshaping the U.S. financial industry by directing banks on how much capital they must hold, what kind of trading they can engage in and what kind of fees they can charge retailers on debit-card transactions.” Unlike other regulatory agencies, not even the Fed governor’s votes were made public. Considering the contact that Fed officials had with their regulated banks on these issues and the Fed’s ties to banking itself, the lack of public meetings (only two on the 47 votes) suggests an opportunity for a conflict of interest to operate below the radar in the interest of the banks while the public holds the risk.

On the Volker Rule, which is the part of the Dodd-Frank law that prohibits banks from proprietary trading using their own funds because doing so is too risky for a bank too big to fail, Fed officials met with bankers at JP Morgan Chase sixteen times, Bank of America ten times, Goldman Sachs nine, and Barclays and Morgan Stanley seven each. On the Dodd-Frank provision on regulating derivatives—something a dissenting Fed governor claims has exemptions that are too wide—Fed officials met with JP Morgan Chase fourteen times, Deutsche Bank and Goldman Sachs twelve each, and Bank of America, Barclays, Morgan Stanley and Wells Fargo eleven each. Even just in relying on these banks for information and feedback, the Fed risks getting biased input on which to make judgments.

Bank of America, for instance, may insist that it must trade on its own books or it will fail. Other things equal, a Fed governor would vote against the Volker Rule. Morgan Stanley may insist that the regulation of commodity derivatives would put farmers who rely on the futures market at risk. Moreover, the bankers could insist that an exemption would not be abused, or they could coordinate their own pressure with a farming lobby and U.S. senators from farm states. The bankers’ intent is obviously to minimize the cost to them in the regulations that are put in place. The public interest, or risk to the public, is beside the point.

The banks played a similar role in the late 1990s as they lobbied the White House and Sen. Phil Gramm to keep derivatives unregulated. That unseen monster winded up biting us in the ass in 2008. Therefore, putting the public interest at risk is not just part of some theory; giving the regulated too much influence in the writing of regulations involves a conflict of interest that can literally result in the collapse of the global financial system. A public-level perspective, rather than that of a firm or industry, must be primary among regulators or the system itself is put at risk.

Pointing to the lack of public meetings in the Fed’s approach as a regulator, Sheila Bair, former chair of the FDIC, stated, “People have a right to know and hear the discussion and hear the presentations and the reasoning for these rules. All of the other agencies which are governed by boards or commissions propose and approve these rules in public meetings.” Fed officials point out that open meetings tend to be scripted and even perfunctory. As if to state good intentions are sufficient, Fed chair Bernanke said in a 2010 speech, “As an agent of the government, a central bank must be accountable in the pursuit of its mandated goals, responsive to the public and its elected representatives and transparent in its policies.” However, a central bank is closer to its banks in many ways that it is to the public or its elected representatives. In fact, a central banks is supposed to be buffered from political influence. While this makes sense in terms of monetary policy, regulating is a separate function and a democratic deficit there is problematic.

I think the public meeting issue is a red herring. The real problem lies in a central bank going beyond monetary policy and acting as a bank for the banks to also be a regulatory agency. That the Fed’s regulatory process differs from those of the “real” agencies suggests that the Fed officials do not even seen the Fed as such an agency. As Bernanke said, “a central bank is . . .” This is the Fed’s identity. It is distinct from a regulatory agency. Accordingly, Congress should establish a separate regulatory agency to cover the banks, leaving the Fed officials to concentrate on their core functions in operating a central bank. It is not as if Bernanke “got it right” leading up to September 2008. Even in 2007, he did not think the declining housing market would cause much of a problem. He had no idea that the swap and derivative markets were about to implode. This is not a good basis on which take on additional responsibilities, particularly writing new banking regulations. In other words, it is not like much would be lost were banking regulation written and enforced by a regulatory agency rather than the Fed. In addition, such an agency would not be so closely tied to the banks as the Fed is, as hinted at by its myriad of meetings with them. Such an agency would not be explicitly distanced from political pressure as the Fed is.

There is nothing wrong with elected lawmakers and executive branch officials making sure that the laws they have passed and are enforcing, respectively, are being operationalized and enforced by regulators who keep the public interest foremost in mind. As a central bank, the Fed is neither under the U.S. President in the executive branch nor under Congress. Meanwhile, Fed officials are very close to the banks they regulate. The problem of accountability that is in the Fed’s independence from the two branches added to the conflict of interest of the Fed being so close to the banks it regulates sets the public up for the sort of thing we saw in September 2008. That crisis did not come out of nowhere, and the reasons for it go beyond the housing market. At the very least, relying so much on an “agency” (and chair!) that failed to anticipate September 2008 and then geared a bailout to the banks rather than to the millions of foreclosed borrowers (hint: conflict of interest!) to write and enforce additional banking regulations on an industry that does not want them is beyond stupid; it is suicide. Meanwhile, the issue is presented as one of public meetings, which are scripted anyway and do not prevent the Fed from meeting with its bankers.

Are we really so superficial and narrow-minded? Quoting from Forest Gump, stupid is as stupid does. Hearing that line several times in the movie, I finally thought to myself, that makes absolutely no sense, but then, well, maybe I’m just stupid. If so, at least I’ve got lots of company in the Wall Street Journal—or maybe it is incredibly smart for the financial press to “sidebar” the issue to public meetings while the Fed, which is close to the banks (having even allowed bonuses amid bailouts), continues in the driver’s seat as both central bank and the (non-executive branch) banking regulatory agency. Maybe stupid is as stupid does applies to the rest of us. It is definitely the prefect motto for my hometown, whose hockey team is suitably called the Ice Hogs.

Source:
Victoria McGrane and Jon Hilsenrath, “Fed Writes Sweeping Rules From Behind Closed Doors,” The Wall Street Journal, February 22, 2012.

Germany’s Wulff Toppled While Wisconsin’s Walker Fights On

At the beginning of 2012, Wisconsin and Germany were both suffering from the plight of compromised figureheads. In the case of Wisconsin, the figurehead is also the chief executive, whereas in Germany they are distinct offices, so the situation in Wisconsin was more intractable. Germany’s figurehead office has much less political power, so any occupant is more dependent on maintaining credibility and stature.

In Wisconsin, Scott Walker faced a petition for a recall vote. Assuming Walker is recalled, the vote would be followed by an election for the office. Even if recalled, he could be a candidate in that election. Wisconsinites could vote to recall him then conceivably vote him back into office. Because recall pertains to a duly elected incumbent, the bias in the procedure is to respect the result of the election (i.e., “elections matter”). This bias makes sense in the case of the recall movement against Walker because it was not predicated on scandal or any charge of illegality against him. The recall is not an impeachment. Rather, the movement was in reaction to a piece of legislation that Walker had supported that took away some bargaining rights of the government employees’ union. The law’s intent was to help reduce a $3 billion projected budget deficit in 2011. Walker did manage to balance the budget, with help from the law to enabled the government to save money on public employees.

                                            Opponents of Walker gather as the recall petitions are turned into the government.  
                                                                     Tannen Maury/European Pressphoto Agency

In terms of the recall, the issue is thus whether the four year term of Walker’s office as figurehead and chief executive of Wisconsin should be cut short because of disagreement with a law that Walker signed. In other words, the matter is not an impeachable offense; rather, the question is whether the popular sovereign—the people—should have the right to circumvent one of the hallmarks of a republic (i.e., representative government): the fixed term of office, which is meant to protect the officeholder from the popular passions of the moment in order to make difficult decisions. Put another way, if it were easy to recall an elected representative, none would be likely to make the difficult decisions that we look to be made for our own good. While valid from the standpoint of direct democracy, easy recall undercuts what distinguishes a republic.

In Germany, Christian Wulff was facing a vote from the legislature removing “immunity from prosecution” from his figurehead office. On February 17, 2012, with the SPD and Green parties having come out in favor of making Wulff subject to charges of improper ties to business executives, he resigned. The scandal first broke in the previous December. It gained traction not only because of the special gifts that Wulff had received while the executive of what is comparable to a county in Wisconsin. Meanwhile, one of Scott Walker’s aids was being convicted of corruption from when Walker was the executive of a county in Wisconsin (Milwaukee county). The immediate difference is that Walker was not implicated whereas Wulff was (by the Hanover prosecutor’s office). I would add that Walker could make use of the political power that came with his authority as the chief executive whereas Wulff had no such power and thus succumbed to the pressure by resigning. In both cases, the man at the top was compromised and this in turn impacted the respective states dramatically. Because of the “dual” nature of Walker’s office, Wisconsin faced a prolonged fight over Walker in 2012 whereas German parties already settled on a new figurehead just days after Wulff resigned. It might be wise of Wisconsites to consider splitting the head office into two—one a figurehead and the other the leader of the majority party in the lower legislative chamber. Wisconsin would still be a republic.

I refer to Wisconsin and Germany as states both in the sense of having a government and in being states in unions of states. That is, both republics were at the time semi-sovereign; the U.S. and E.U. taking up the rest of the governmental sovereignty, respectively. This basis of comparison is typically undercut. For instance, Nicholas Kulish of the New York Times writes of Wulff that the “scandal first emerged in December with the news that [he], while serving as governor of the state of Lower Saxony, had taken a private loan from the wife of a wealthy friend worth about $650,000.” However, there is no such office as “governor” within Germany. The Wisconsin office of governor applied to Germany would be to combine the figurehead and chief executive (or chancellor) offices (i.e., Wulff and Merkel) of the German government. Furthermore, Lower Saxony is a Land, not a Staat. Translated into English, Land means land, region or territory whereas Staat means state. You can see how similar English is to German here. Auf Deutsch, the German regions are called Länder, nicht Staaten! Also ist es nicht richtig zu Lower Saxony “state”heissen. [so it is not correct to call Lower Saxony a state]. Lower Saxony is about the size of a county in Montana, and Germany itself is the size of Montana. In addition to scale, both states (Germany and Montana) are semi-sovereign states in unions that in turn have some governmental sovereignty. It would be utterly misleading of a European to refer to Scott Walker as having been the governor of the state of Milwaukee in Wisconsin, but this is how Kulish describes Wulff as the executive of Lower Saxony in Germany. Das ist seltsam. (This is strange).

Germany is not in itself a United States of Europe. Nor for that matter is Britain or France, even though they are large states in the E.U. Neither for that matter is California or Texas a United States. These are all semi-sovereign republics that are member states of comparable scale (though not in population though clusters relative to the populations of the two unions) in unions also of comparable scale (and population) and with both political and economic aspects. Considering Kulish’s “report,” it is no wonder that the category mistake survives as the default. It would be more accurate of me to refer to Merkel, Sarkozy and Cameron as governors (i.e., executives of states in the E.U.) than for Kulish to refer to Wulff as having been the governor of a region of one of those states. Any American state could itself have a federal system. Considering the cultural differences within Wisconsin (e.g., Madison vs. Reinlander—itself a Land or resembling the Länder along the Rein?)—not to mention Illinois and California each being incredibly diverse internally—giving their respective Länder some autonomy might not be a bad idea. Calling the regional or county executives “governors” and the regions or counties themselves “states” would be utterly misleading, as both terms refer to polities that are members of empire-level unions and yet are comparable in scale and government to independent states in the world.

In the cases of Wisconsin and Germany, correcting for the category mistake, we can say that the political risk in the credibility of Walker and Wulff being undercut or weakened in late 2011 was mitigated by the fact that both republics are states in unions of such states. In other words, Wisconsinites did not have to count only on the government of Wisconsin and Germans did not have to count only on the government of Germany. Therefore, the recall and possible prosecution were not so risky to political stability that they should not be undertaken for that reason. It turns out that category mistakes really do get in the way in political analysis, and that correcting them allows for insights that would not otherwise be possible.

Sources:

Nicholas Kulish, “German Chief Could Lose his Immunity,” The New York Times, February 17, 2012. http://www.nytimes.com/2012/02/17/world/europe/president-wulffs-immunity-challenged-in-germany.html

Melissa Eddy, “Merkel Backs Rivals’ Choice for President of Germany,” The New York Times, February 20, 2012. http://www.nytimes.com/2012/02/20/world/europe/former-east-german-activist-nominated-as-president.html

Monica Davey, “Organizers Say 1 Million Signed Petition to Recall Wisconsin Governor,” The New York Times, January 17, 2012. http://www.nytimes.com/2012/01/18/us/organizers-say-1-million-signed-petition-to-recall-gov-walker-in-wisconsin.html



Tuesday, February 21, 2012

E.U. Presses Italy to Tax Church Businesses

One of the chief benefits of federalism is the ability of one system of government to check another within the overall federal system. In the European Union, the state governments have so much power at the federal level—in the E.U. institutions—that it is difficult for the E.U. Government to check excesses and abuses in the state governments. E.U. law, regulation and directives rely on the state governments, albeit to varying extents. In the United States, the case is the reverse. The U.S. Government holds so many of the cards that the state governments cannot act to check abuses in the federal government. Actually, for all of the power that the U.S. Government has amassed, it does a horrible job in aiding citizens against abuses in their own state governments. Fortunately, we can look to Europe for a bright spot: the E.U. Commission and Italy, á grace de Mario Monti who is both governor of the state of Italy and a former commissioner in the E.U. Commission (the E.U.’s executive branch).

For ten years until 2005, Monti was an antitrust commissioner at the E.U. Commission. In 2010, the Commission opened an inquiry into whether tax exemption for the Roman Catholic Church amounted to illegal state aid and a stifling of competition. Silvio Berlusconi ignored the report, extending the church’s exemption from local property taxes even in cases where the church was using its property for commercial (i.e., not charitable) purposes. Monti, being a former commissioner, took another decision. On February 15, 2012, he told the Commission that he would ask the Italian state legislature to pass legislation ensuring that the Church would pay property tax on the parts of its buildings used for commercial ends. The Church owns vast amounts of property in Italy (as well as in Spain). For church buildings that rent space to shops to be tax-exempt on religious grounds perverts the meaning of religion—effectively making it a tautology. The new law could result in revenues of $650 million to $2.6 billion annually, according to the New York Times.

That Monti had been an official at the federal level undoubtedly made him sympathetic to the Commission’s report, though he was also undoubtedly influenced by the mood of austerity in his home state. In December, 2011, 130,000 people signed an online petition calling for the Italian government to revoke the Church’s tax-exempt status for its commercial properties. Put another way, it was curiously no problem of conscience for the Roman Church officials that commercial uses go untaxed while citizens suffer from austerity due to excessive state deficits.

Rather than religious conscience, federalism played the decisive role á grace de an official who had worked at both the federal and state levels. As Berlusconi’s previous decisions make clear, however, it is not enough to rely on Monti’s past federal experience and his then-current state office as governor or premiere for the benefit of federalism to operate consistently. For a more solid federal basis, a shift of more governmental sovereignty from the state to the federal level would be needed, for the checking function of federalism requires the system itself to be balanced with respect to state and federal power. Unfortunately, with state officials holding so much power at the federal level in the E.U., achieving the requisite balance would mean having to overcome the conflict of interest of those officials—as it is in their personal and state interest to retain power rather than to give it away.

Sometimes we can be blind to conflicts of interest. For instance, the New York Times ends its article on this story by reporting that in a statement, the Italian Bishops Conference wrote, “We are waiting to find out the exact formulation of the text to be able to offer a more precise opinion.” Given the bishops’ institutional financial interest in continuing to be exempt from taxes, it is not difficult to guess what their opinion would be. Put another way, we ought not expect neutrality. Involving the bishops in the formulation of the legislation would necessarily subject them to a conflict of interest. As they were not bothered in conscience in the first place, there is really no obligation to seek their opinion anyway. In any case, the law would be imposed on them, rather than from them, so their input in crafting the law is not necessary or even appropriate.

In general terms, parties with a vested interest in a piece of legislation not being passed should not be considered viable participants in the process. A party in a conflict of interest being in a position to weaken or even kill a bill can be obviated simply by taking the common sense position that writing a law does not extend to parties that can be expected to oppose the law itself. Similarly, in baking a cake, a person doesn’t ask, “Ok, now, everyone who hates cake and doesn’t think any should be baked: come and help me bake it.” That would be a recipe for disaster. Of course they would scuttle it. It is better to announce, “Ok, anyone who wants a piece of cake: come and help me bake it!” The volunteers in this case would not be likely to slip plaster power in the mix. In fact, you might even get some pretty darn good cake out of it.

We human beings can be so naïve. Whether in writing a new law on the state level making commercial property owned by a religious organization taxable or in writing an amendment at the federal level reducing the power of the state governments at the federal level, people should not be so naïve—or self-defeating—in letting people we know from the outset are defeatists into the kitchen. Even so, Wall Street practically wrote the Dodd-Frank Financial “Reform” Act of 2010 in the U.S. and then heavily lobbied on the ensuing regulations (e.g., the Volker Rule). This goes beyond people who don’t like cake doing the baking to embrace the wolf guarding the hen house. Honestly people. We should know better.

Source:
Rachel Donadio, “Italy Plans to Tax the Church on Commercial Property,” The New York Times, February 17, 2012.


Monday, February 20, 2012

Sarkozy’s Electoral Campaign: Not for the U.S. Presidency

On February 15, 2012, France’s President Nicolas Sarkozy formally announced his intent to file as a candidate for the office in what would be his second term. The announcement took place just over two months from the election (April22nd). If no candidate wins an absolute majority, the two top candidates would be on the ballot in a runoff held on May 6, 2012. The European sense of a decent length for a campaign “season” could be taken to heart by Americans.

For example, as Nicolas Sarkozy was undergoing two or three months of campaigning in France, Scott Walker had been campaigning for months already in Wisconsin, well in advance of a recall election that could still be six months away. I suspect that generally speaking, the campaigns in the U.S. states are much longer in duration than in the E.U. states. Perhaps Europeans are less tolerate of excess, or more willing to “just say no.”

Comparing a state-level campaign season with the election of an office at the empire-level (i.e., of a Union of such polities) is problematic. For one thing, at the E.U. and U.S. level, the states themselves would expect to have a say. Hence, primaries and caucuses to nominate a party candidate for the office of the President of the United States are by state. This involves several problems, such as what to do if a state voting later has a narrowed range of possible candidates from which to choose. Having every state nominate on the same date, with a run off a week or two latter, would be an improvement, but it would take away the distinctiveness of the states—something Europeans appreciate.

The American Electoral College, wherein electors vote for the President of the United States by state (literally in the capitols), is also not convertible into elections at the state level. It would make no sense to apply such a mechanism to a state itself (i.e., voting by state). My more general point is that it is hazardous to compare state and federal electoral politics and processes because the nature of a federal union does not apply to a particular state thereof. Yet this is typically ignored and I’m sure many people are trying to compare Sarkozy’s campaign with that of Obama.

This raises a much larger point: what to do with a societal category mistake that has become the legitimate default. The human proclivity of ignorance to presume that it cannot be wrong only complicates the matter of correction. Treating the U.S. as if it were a state in the E.U. with a large backyard conflates apples and oranges. Moreover, the error involves treating an empire as if it were on the kingdom level (i.e., a part of itself). It is like treating one person in his entirety as if he were equivalent to another person’s arm. The problems with such a comparison become clear once clothing is considered. What covers your arm is not going to cover my entire body, and going with it in January in Wisconsin or Wyoming would be dangerous. Similarly, it is dangerous to a polity to disregard what it is and treat it as if it were something else.

Therefore, although the U.S. Presidential campaign “season” (now two years!) is entirely too long and is in urgent need of reform, it would be a mistake to look at Sarkozy’s announcement, coming just two months before of his election, as a basis of comparison. Perhaps it is because empire-level federal unions of states have added elements (as well as scale) that complicate (and thus extend) the selection process of an empire-wide office such as the Presidency of the United States that the European Union has so far decided not to have an elected president. Given the nature of the level and scale of the E.U. and U.S., there is a lot to be said of the proposals in the U.S. Constitutional Convention wherein state legislatures or chief executives select the U.S. President. As it is, the U.S. House of Representatives, voting by state, elects that office where no candidate has an absolute majority of the electors in the Electoral College. Because the delegates in the convention thought it unlikely that any one person could be so well-known even in the empire of 13 republics, I suspect that they presumed that most presidents would be elected by the democratically-elected federal representatives, voting by state as the U.S. is a union of states (i.e., the states being members too).

No one would be happier than me were the American presidential election reformed to have a two or three month campaign season, but given the fundamental difference between the U.S. and E.U. on the one hand and their respective states on the other, we could expect problems because a category mistake would be involved. For instance, two months given the empire scale would mean that grass-roots campaigning would be virtually impossible; the television media would be the conduit, and perhaps with undue manipulation from the funded-pundits and media “personalities.” There is a reason why in traditional federal theory, officials of the states select the empire-wide office holders. The state officials themselves having been elected (after a two month campaign!), their involvement would not be at the expense of democracy. In fact, it would heighten public attention on the state-level elections, as is the case in the E.U. Put another way, were the E.U. to have an overall president (rather than one of a given institution, such as the European Council), I doubt it would be a simple election decided only by the E.U. citizens as a whole. That would be to conflate the E.U. with one of its states. See what I mean? If so, you will see the mistake being made over and over again as a matter of course, as a generally accepted default rather than a gross error. Welcome to my world.

Source:
Gabriele Parussini and David Gauthier-Villars, “Sarkozy Launches His Bid for New Term,” The Wall Street Journal, February 17, 2012. http://online.wsj.com/article/SB10001424052970204880404577224793514483690.html

Sunday, February 19, 2012

UN’s General Assembly as Nonbinding on Syria

According to the New York Times, “In a powerful rebuke to Syria’s government, the United Nations General Assembly voted overwhelmingly on [February 16, 2012] to approve a resolution that condemned President Bashar al-Assad’s unbridled crackdown on an 11-month-old uprising and called for his resignation under an Arab League peace proposal to resolve the conflict.” The reporter immediately undercuts his use of powerful by observing that the 137-12 vote (with 17 abstentions) is “a nonbinding action with no power of enforcement at the world body.” The “action” does represent “a significant humiliation” for Assad. I doubt very much if he felt humiliated. His UN ambassador “denounced the resolution as a politically motivated scheme to intervene in Syria by the Western powers and others who ‘would like to settle accounts with Syria.’” Altogether, the first two or three paragraphs of Gladstone’s article can be read in terms of logic as “X, not X.” Of course, the first X gets more attention, so the article gives the impression that the UN did something powerful when in fact the exercise was one of exposing the impotence of the world body.

That the resolutions of the General Assembly are nonbinding even for the UN is perhaps the epitome of self-emasculation. That the Security Council, on which just a fraction of the UN’s 193 members sit at any time, could have resolutions binding on the UN while the GA, on which every member sits, is allowed only non-binding “actions” suggests a democracy deficit in the UN itself—or at the very least a serious problem of priorities. The UN would have more legitimacy were its resolutions that are binding on itself voted on by all of the members—none of which having a veto and thus able to dominate the world body. This change would hardly be earth-shattering, as even “binding” resolutions have trouble finding enough respect to be acted on unless by certain members having a strategic geo-political interest in “volunteering” on the enforcement end. It is striking how Assad’s government can kill over 5000 citizens—whom Gladstone curiously refers to as “an uprising” as if Assad had met rather than led with weapons—and still be a valid member of the UN. I’m not convinced that unconditional love should apply to the organization that has a declaration of human rights, after all.

Therefore, rather than being “powerful” or “humiliating,” the nonbinding resolution of the UN’s General Assembly makes transparent just how bad that world body’s inherent flaws are. This conclusion is utterly hidden in the title that Gladstone went with: “General Assembly Votes to Condemn Syrian Leader.” A better, more realistic title would have been: “A lot of UN members mad at Syrian Government.” Let’s not gild the lily. With global warming and nuclear proliferation each being a viable threat to the continuance of our species, not to mention ourselves in particular regions, we can no longer afford to rely on the UN.

I envision a new world body with a General Assembly capable of enacting resolutions that are binding for still-existing members, none of which has a veto, and a Security Council consisting of rotating members that meets only to handle emergencies (again, no veto). The GA would be authorized to instruct the Security Council how to implement enforcement, using members as it will. Of course, countries would be free to leave the body and face isolation with respect to the benefits that membership provides. Behind this new organization is the realization that our species has stepped onto new land in the twenty-first century. This is not exactly a brave new world of terra firma (the frozen tundra melting in fact). We as a species now know that we can put our entire lot at risk.

We are even beginning to suspect that the historical absolutist interpretation of national sovereignty is now too dangerous, given what damage we can inflict on each other and on our species itself. Even for people not buying into this “new era” thinking, it must be obvious that the UN is an embarrassment and an utter failure with respect to protecting human rights and even ourselves from ourselves. Even just on the surface, a resolution that is non-binding even for the body that does the resolving suggests that the body itself is seriously flawed and deserves to be replaced. Yet as apparent as this reasoning may be, politicians are typically creatures of the status quo and won’t likely make a peep—preferring instead to cite Gladstone’s report of the “powerful rebuke.” Both the rebuke and Gladstone's characterization evince a case of the blind leading the blind. The beguiled followers blindly put still more clothes on the emperor while congratulating themselves on such a fine appearance having been achieved. “It looks good to me,” one blind man says to another. “I quite agree,” the other replies. All the while, the world sleeps, dreaming that it is wide awake.

Source:
Rick Gladstone, “General Assembly Votes to Condemn Syrian Leader,” The New York Times, February 17, 2012. http://www.nytimes.com/2012/02/17/world/middleeast/secretary-general-ban-ki-moon-castigates-syria-ahead-of-general-assembly-vote.html