High School Social Media and Free Speech

I thought these two New York Times articles were about the same incident. They are similar but not identical.  The first one, “A Racial Slur, a Viral Video, and a Reckoning,” was about a high school cheerleader who used the N-word on social media referring to a classmate when she was 15.  The second story, “A Cheerleader’s Vulgar Message Prompts a First Amendment Showdown,” was about a ninth grade girl who failed to make the cheerleading squad and expressed her dissatisfaction with the school in four letter words on Snapchat. 

Since both of these stories seem to involve pretty cheerleaders, they might the basis for an episode of “Mean Girls.”  Both illustrate the increasing coarseness of conversation on social media, and often in person, in the United States.  But beyond the question of what is polite and decent is the question of what is legal?  The N-word has been part of the English language for hundreds of years, as have four-letter words.  Whatever happened to the old adage that “Sticks and stones may break my bones, but words will never hurt me.”  Before social media, these words and actions would have evaporated into thin air.  Today they are preserved forever. 

Does the fact that are not preserved in black and white mean that they are legally different from the same sentiments expressed verbally?  If Facebook has liability protection under section 230, why don’t these cheerleaders? 

In the first case, the thought-police who run the University of Tennessee thought it was more important to recruit black athletes than white cheerleaders, and thus denied admission to the cheerleader in the first story in order to help them recruit black football and basketball players. 

The family in the first case involving the University of Tennessee probably doesn’t have the millions of dollars necessary to pursue a case to the Supreme Court, or maybe they would just like to go about their lives without fighting the though-police at every turn.  They may not want to repay their accuser, Jimmy Gilligan, with the unbelievable hatred and vindictiveness he displayed in getting the girl refused admission to the University of Tennessee. 

To me, these are not hard cases for the Supreme Court, I think they should come down on the side of free speech except in the oft-cited example of crying “Fire!” in a crowded theater.  Actions that may follow disliked words are another matter, but the words should be protected. 

Fox News reported on the story in an article entitled, “New York Times accused of 'glorifying' cancel culture, 'celebrating teenage revenge narratives.' “The subtitle said, “’The tone of the NYT piece wasn't skeptical or unnerved; it was nearly celebratory,' one critic noted.” The Fox News piece concluded:

The framing of the story was ridiculed on social media as readers felt the Times was glorifying cancel culture. 

"It's interesting that the NY Times uses the word *reckoning* in their story on the revocation of a college admission, three years after the teenage girl used a racial slur in a video. *Reckoning* implies that the cancelation was deserved, rather than an outrageous overreaction," one critic observed.

 

"The tone of the NYT piece wasn't skeptical or unnerved; it was nearly celebratory. It was also filled with scattered accusations of racism to make the behavior of the student who sat on it and released it *three years later* seem more reasonable," another reader added.

 

 

Russian Hacking

The media is overly excited about the Russian hacking using the SolarWinds update process. 

First, was it Russia?  It seems likely that it was Russia, but not certain.  Anyone who is good enough to develop the SolarWinds hack would be smart enough to cover his tracks.  He may not have covered them perfectly, and we may be able to track down the hacker, but he may also have successfully covered his tracks.  He could be a Chinese hacker who copied the trademark signatures of the Russian hackers and who routed his hacks through Russian servers or websites.  It could be a hacker anywhere who did the same thing.  It requires computer expertise, but there are a lot of computer geniuses out there, including in the Middle East and Latin America.  I am surprised that no one has mentioned Edward Snowden in connection with the hacking.  He is a computer genius living in Russia who knows American computer security extremely well.  Is it possible that the Russians have gotten some help from him? 

Second, I think that whatever this was, it was not an attack or the start of a war.  It looks more like intelligence gathering and testing of hacking techniques.  The test worked pretty well, since it went undetected for six months, but of course there may be other hacks out there that have been even more successful and have still not been detected.  In any case, nothing major has been damaged.  They have not even emulated the ransomware hackers, who have captured and held important data from hospitals and government offices for ransom.  They have not shut down the electric grid or turned off the water or sewage treatment in any cities. 

I doubt that the hackers knew exactly what organizations they were going to be hacking into.  They knew that SolarWinds had lots of important clients, but they probably weren’t sure exactly which ones they would end up getting access to.  They may have succeeded far beyond their expectations, or it might have gone exactly as planned.  We don’t know.  Were their main targets government agencies, or private companies?  We don’t know.  The fact that the hackers did not steal money indicates to me that they were probably government-backed, and not private citizens hacking for fun and profit. 

Sen. Mitt Romney compared the hack to the US invasion of Iraq, when we took out many of Iraq’s communications hubs with our missiles.  I do not think this is an appropriate comparison.  The hackers did not use their weapons, if indeed they have weapons that could bring down facilities in the US.  It was like developing and demonstrating new missiles, putting the enemy on notice that you have these capabilities and can use them if you choose to.  But they (whoever they are) have not chosen to.  But just as Saddam should have been wary of provoking the US, we should beware of provoking these hackers. 

As nations develop new weapons they often turn to arms control to prevent the new weapons from leading to war.  We don’t have much experience with arms control type agreements for computer hacking, but some of the same principles apply, like Reagan’s maxim, “Trust buy verify.”  I am not sure how you verify an agreement to control hacking.  Bombs and missiles usually need to be tested in the open, where detection by satellites or other means is often possible.  Hackers can experiment on their own internal networks, which may be difficult or impossible for outsiders to monitor.  Of course the best test would be to see if you can penetrate the actual defenses of the country or business you might want to attack in the future. 

Nevertheless, arms control agreements are like speed limits.  Not everyone obeys them, but they set standards of behavior and provide a basis for at least discussing violations, if not definitively proving and punishing them. 

Another complication is non-state actors who hack for their own personal purposes.  It is a lot easier for an individual or small group to hack into a network than it would be for them to develop a bomb or missile.  Governments have developed systems for dealing with violent terrorists that are different from those for dealing with other governments.  We already have criminal penalties for individual hackers although they may be hard to apply to hackers operating from foreign countries. 

I think it is worthwhile to begin discussions of some kind of arms control agreement covering hacking to get some idea of what’s possible and what’s not.  In an ideal world leading tech countries would work together to control individual bad actors and well as to monitor each other’s conduct. 

Asset Inflation

The Fed has decided that creating asset inflation is the best response to the pandemic.  Thus, if you owned a $1 million house before the pandemic, you now probably own a $1.5 million house.  But if you don’t own a house, you will probably never be able to own a house.  If you had a $1 million stock portfolio before the pandemic, you probably now have a $1.5 million portfolio, but if you didn’t own lots of stock before the pandemic, you will probably never be able to own any. 

The Fed has decided the only way to save the US economy is to make the rich richer and starve the poor. 

Healthcare Crisis

The US healthcare system is set up to make money, not to take care of people.  That is one reason why hospitals are having so much trouble dealing with the COVID-19 pandemic. 

To start with, the US limits the number of doctors it trains to keep their salaries high.  It brings in foreign trained, foreign doctors to do the dirty work in emergency rooms and family clinics, so that American doctors can do the highly paid specialist work.  If American medical schools trained more doctors, Americans would have better healthcare.  The focus of doctors on money is illustrated by how many have been implicated in the use – illegal and legal – of painkillers like Oxycontin, how many doctors accept gifts or paid speaking (vacation) opportunities if they prescribe a certain, expensive drug.    

Secondly, American hospitals are set up to maximize profits, not to improve the healthcare they provide.  The buildings, staffing, administration are all organized for profit, not for care.  Just in time inventories and small staffs do not work well for epidemics. 

The health insurance industry adds further distortion to the healthcare business.  It means that consumers don’t care about the cost because insurance pays most of the costs.  All the negotiations are between the insurers and the providers, without any consumer input. 

This business model has left the healthcare industry unprepared for a pandemic where the treatment is not cost effective, i.e., lots of expensive treatment for poor people.  But if the poor people are not treated, they will spread the infection to everybody else.  Most of the patients are old and sick, requiring extensive care, while the virus hardly affects young, healthy people. 

The clearest indication that the American healthcare system is in a mess is the fact that it is one of the main campaign issues in every election.  Obamacare would not be such an issue if the overall healthcare system were not so messed up.  Americans are afraid to criticize their doctors because they fear that if they do, their doctors will let them die screaming in pain.  However, they do criticize the general healthcare system of which the doctors they fear are a critical part.  Healthcare is always the number one issue in elections because people think it is bad. 

Those highly paid, American trained specialists are good at treating the illnesses in which they specialize, orthopedics, cardiology, cancer, etc., but they are less good at keeping their patients heathy, because there’s no money in healthy patients who don’t visit the doctor.  The American healthcare system maximizes treatment, not health.  Healthy patients are bad for doctors’ bank accounts. 

Individual doctors should be aware that they are part of a corrupt system that s not taking care of the American people.  They may be rich financially, but they are ethically poor. 

The Fed and the Bond Market

I worry that the Fed has permanently damaged the bond market.  The bond market has been a relatively stable institution for hundreds of years.  The idea was that people with money would loan it to other, usually poorer people, for things like starting businesses.  In return they would get enough interest to make the risk of the loan worthwhile. If wealthy people did not like the risk outlook, they would demand higher interest, which meant that fewer and fewer borrowers would be willing or able to borrow at the higher rate. 

The Federal Reserve has eliminated the risk in the bond market and thus reduced the interest rate to about zero.  By buying up a substantial part of the entire bond market, it has reduced the risk associated with bonds is almost zero, because the Fed will buy almost anything.  The lenders may not be happy with the interest rate, but they like the security of no risk.  The borrowers like what is essentially free money.  This looks like an ideal situation, but it works only because the US government finances at least part of it.  In essence the Fed pays the risk premium, eventually causing the national debt to skyrocket.  The Fed can also print paper money. At some point printing money should be inflationary.  It may be that currently it is creating asset inflation, driving up the stock market and house prices, while not yet driving up consumer prices.  It may be that consumer inflation is kept down because so many of our consumer products come from China and other Asian countries.  If inflation takes off in Asia, we may quickly feel it here. 

One thing that helps the US is that most international trade is done in dollars.  As long as the dollar is the world’s reserve currency, we are less affected by economic conditions in other countries.  If the US continues to be a spendthrift, running continual huge budget deficits, and printing huge amounts of dollars, then the dollar’s status as the world’s reserve currency may be threatened.  If so, then we become less insulated from vagaries of the world financial markets. 

Basically, interest rates have been zero since the 2008 great recession.  This was when “quantitative easing,” bond buying by the Fed, started, which drove down interest by reducing bond risk.  So far, it seems to be working, but it’s not clear what it means for the long term. 

There may be a price to pay in the future.  Asset inflation of stocks and real estate may worsen income inequality, which is already a problem.  It will solidify and worsen class differences and/or create social unrest.  It might undermine the value of the dollar, which would be good for exporters, but bad for every other sector of the economy, particularly consumers.  Prices of clothes, TVs, computers, etc. will skyrocket. 

So far, though, the Fed’s machinations seem to be working. 

In Friday’s New York Times, Paul Krugman wrote a whole column about the national debt and the future of interest rates without mentioning the Federal Reserve.  His explanation for why interest rates are so low is:

That’s a longish story, probably mainly involving demography and technology. Basically, the private sector doesn’t seem to see many opportunities for productive investment, and savers who have no place else to go are willing to buy government debt even though it doesn’t pay much interest. The important point for current discussion is that government borrowing costs are now very low and likely to stay low for a long time.

So Krugman says interest rates are low because there is nothing worth investing in in the US; so, rich people just buy low-interest bonds.  He doesn’t mention that the Fed is buying bonds like there is no tomorrow.  Then he also says the US government should not be afraid to spend money to deal with the pandemic.  Isn’t that investing, isn’t that the very thing he said was not worth doing because there is nothing to invest in?  His is an unpersuasive argument for doubling the national debt.  

Saturday’s Barron’s “Up & Down Wall Street” column blames the Fed for zero interest rates.  It quotes Mark Grand of B. Riley as saying, “I assert … that you are not getting paid for credit risk….”  Barron’s adds, “This bond-market veteran put the blame on the Fed and other central banks for creating a ‘borrower’s paradise’ and a ‘fixed-income investor’s hell’ by holding interest rates down, in part to help finance the massive fiscal deficits.”

I think Barron’s has a better understanding of the situation than Paul Krugman.  

Strategic Arms Control in a Trilateral World

The website warontherocks.com looks at how the US might use strategic arms control negotiations, such as the new Start treaty wth Russia, to affect the overall relationship between the US, Russia and China.  It thinks the negotiations with Russia might tend to weaken Russia-China ties and give the US more leverage with both of the other parties.  It says:

The United States and the Soviet Union both used arms control to, among other objectives, drive a wedge in adversarial coalitions. The Limited Test Ban Treaty exploited Sino-Soviet differences in terms of the nuclear balance, and SALT I emphasized different Chinese and American policies toward the Soviet Union. In both cases, the wedge drivers achieved some limited success. Washington aggravated the Sino-Soviet split beyond repair. Moscow delayed and dampened encirclement by the United States and China for six years, from Nixon’s visit to China in 1972 to the normalization of Sino-American relations in 1978. The success of these wedge strategies turned upon different strategic circumstances. The test ban treaty capitalized on an already disintegrating alliance, while SALT I countervailed anti-Soviet convergence by conciliating the United States on key issues.

Risk of India-China Nuclear War

The Carnegie Endowment for International Peace has published an article, “After the Border Clash, Will China-India Competition Go Nuclear?” evaluating the possibility of nuclear war between India and China.  It concludes there is low probability of the conflict turning nuclear. 

China’s nuclear capabilities are far in advance of India’s.  The conflict in the mountainous region of their border does not lend itself to nuclear warfare.  Neither country sees the other’s nuclear capabilities as a significant factor in the current faceoff. 

China perceives the likelihood of an India-Pakistan nuclear conflict as more likely, and as something that could draw in China on Pakistan’s side.  Even that possibility, however, seems remote. 

So, the Carnegie Endowment’s conclusion as to whether the conflict might go nuclear seems to be no. 

Outer Space Arms Control

The Hill newspaper published an article on “How to avoid a space arms race” by several authors, including Bill Courtney, with whom I used to work at the State Department. 

The article reports that Putin has proposed an agreement to prohibit the stationing of weapons in space and the threat or use of force against space objects, but that there is nothing new in Putin’s proposal  Despite the Outer Space Treaty, which bans stationing weapons of mass destruction in orbit, Russia, China, and the US are all concerned about the possibility of warfare in space.  They all use space assets for gathering intelligence, for communications, for GPS location services, for monitoring weather, land use, etc.  These assets are potentially threatened by activities that are on their face peaceful, such as servicing old satellites.  If you can maneuver close to a satellite, you can probably destroy it.

A new space arms control agreement will be difficult, but the increasing importance of space for commercial and military purposes makes it more desirable as time goes on. 

Gates on Foreign Policy

In an article in Foreign Affairs, former Defense Secretary Robert Gates calls for less emphasis on military power in America’s foreign policy. 

Regarding the use of military power, Gates criticizes the failure to define clear goals for US military involvement and to let mission creep change the goals after military intervention starts.  There are many examples of this in the Iraq and Afghanistan wars, but also in the US intervention in Libya, which changed from humanitarian assistance to regime change. A new national security threat, cyber warfare, needs more attention

While he was Secretary of Defense, Gates often called for a bigger role for the State Department in Iraq.  He often pointed out that there were more members of military bands than Foreign Service officers.  Trump’s gutting of the State Department has made this situation even worse.  Gates calls for strengthening State and making it less bureaucratic, saying that the National Security Council cannot perform all the functions of the State Department, and he calls for re-establishing the roles of the related agencies, the US Agency for International Development, and the old US Information Agency.  USAID has withered while Chinese assistance to developing countries has expanded dramatically un the Belt and Road Initiative.  USIA has been rolled into the main State Department and has basically ceased to exist while the battle for world public opinion continues. 

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China Policy

Foreign Affairs has published a dialogue on US policy toward China between Princeton Professor Aaron Friedberg and a number of China hands, including Stapleton Roy, with whom I served in Bangkok, before he was Ambassador to China. 

The group responding to Professor Friedberg’s article basically argues for treating China more or less like any other important country, trying to work with it, not singling it out a threat to the US which requires special economic and security policies to rein it in.  They argue:

U.S. policymakers must adopt a more careful and considered approach. The United States must coordinate with allies and partners not only to deter and compete with China when needed but also to incentivize Beijing to cooperate in addressing shared concerns such as global warming and current and future pandemics. Washington should aim to diminish the likelihood of nuclear war, the proliferation of weapons of mass destruction and missiles, a costly arms race, and the spread of terrorism. It should seek a stable power balance in the Asia-Pacific region that respects the interests of all countries—including those of China. And it should revise and expand multilateral trade and investment agreements and foster international efforts to better address natural disasters and human rights abuses in all countries.

 

New North Koran Missile

 

The Bulletin of the Atomic Scientists has commented on two unknowns about the new, large North Korean ICBM. 

One question is how mobile the new missile will be.  It is liquid fueled and huge, which means it will be hard to move, although it was displayed on a mobile vehicle.  Since it is liquid fueled, it  most likely would have to be moved to a fixed launch site and then fueled, allowing some advance notice that it is about to be launched. 

The other question is how many warheads it will carry.  After weighing the pros and cons of a multiple, MIRVed payload versus a single large warhead, the Bulletin seems to come down on the side of a single warhead as more likely to be within the technical prowess of the North Koreans. 

Biden Election

 

Joe Biden is saying all the right things since the election.  Unlike Trump, he has tried to soothe the national psyche by calling for calm and patience.  His decency is a welcome change from Trump’s vulgarity.  I believe he did win the election and should be inaugurated as the next President of the US. 

That said, however, this was not a good election.  The polls all predicted a “blue wave” and an easy election for Biden.  That did not happen.  Boden barely squeaked by.  The way the media hyped the incorrect polls indicates there was something rotten behind the media support for Biden.  The cities which put him over the top were all cities with large black populations known for political corruption.  There may not have been any, but the appearance is bad.  Atlanta, Philadelphia, Detroit, and Milwaukee were the key cities where the black vote put him over the top. 

The black votes in these black cities were clearly racist.  While whites and Asians vote on a number of issues – economics, education, taxes, social issues, etc. – blacks vote on only one issue – race.  As a result, the black vote is monolithic.  Something like 90% off all blacks vote Democratic.  They don’t care if the schools are good, only if they are integrated.  They don’t care about the economy as long as they get their welfare. 

I’m not sure anything illegal happened to sway the election but it looks bad.  The black vote in the black cities was the last to come in.  Courts in those states ruled that voting on election day was too complicated and that blacks couldn’t manage it; they needed extra time to vote.  So, they counted ballots that arrived long after election day, although in theory they were turned in by election day.  In fact, because of all the special provisions, who knows exactly what happened?  The courts made it easier to commit voter fraud, whether fraud was actually committed is another question. 

The 2000 election showed that all this moralizing about every vote should count is ridiculous.  Most votes are counted, and some votes may be counted several times, but the election gives a general indication of what the voters want, and as long as the election is not too close, the voters get what they actually voted for.  If the vote is really close in places where there are more than a few thousand votes, it would be just a fair and accurate to flip a coin to choose the winner.  George W. Bush was not elected by the American people, he was chosen by the Supreme Court.  Al Gore did the right thing and conceded because he was an American patriot who ended the election nightmare, not because he was actually defeated at the polls.  Who knew that Gore was ceding to a man who would fail to protect America from foreign invasion and start a war that has lasted 20 years with not discernable benefit to the US. 

Hopefully, Joe Biden will be a better President than George W. Bush and Donald J. Trump were. 

The Politicization of the State Department

 The Atlantic features an article on the politicization of the State Department under Trump, Tillerson and Pompeo.  They have tried to demand complete loyalty from State Department officers to the Trump agenda.  They have forced out some senior Foreign Service officers, and many others left what they felt was a politically charged atmosphere which accepted no input from career officers.  It reached a peak during the Trump impeachment hearings, and was illustrated by the drafting of an Orwellian " professional ethos statement" that seemed to challenge professional officers' loyalty.  

50 Countries Ratify Treaty to Prohibit Nuclear Weapons

 Fifty countries have ratified the Treaty on the Prohibition of Nuclear Weapons, according to the UN, as reported by the New York Times.  The US and other countries with nuclear weapons have refused to accept it.  

Leading Candidates to Be Biden's Secretary of State

 Politico lists the leading candidates to be Biden's Secretary of State:

• Senator Chris Coons of Delaware
• Senator Chris Murphy of Connecticut
• Susan Rice, former National Security Adviser
• Anthony Blinken, former Deputy Secretary of State
• Samantha Power, former Ambassador to the UN
• Tom Donilon, former National Security Adviser
• Wendy Sherman, former Under Secretary of State
• William Burns, retired Foreign Service officer, former Deputy Secretary of State
• Nicholas Burns, retired Foreign Service officer, former Under Secretary of State for Political Affairs

State Department Needs More Science Specialists

An op-ed in The Hill newspaper calls for more scientists in the State Department

https://thehill.com/opinion/international/521444-the-state-department-needs-more-scientists

I was one of the first (and last) career science officers in the Foreign Service.  See my website.

Fareed Zakaria on the Future after the Pandemic

In his hopeful WP column on the world’s future after the pandemic, Fareed Zakaria cites Lawrence of Arabia and World War I peace terms.  From Lawrence of Arabia he cites, “Nothing is written” about the future.  For post-World War I, he cites the failure of the US to embrace the League of Nations, while Europeans imposed harsh terms on Germany. He does not mention that many of the harsh terms were perceived as coming from Jewish financiers, whether they actually were or not, and that this perception that Jews were trying to destroy Germany and the German people led in about a decade to the Holocaust. 

There is a danger that people will perceive the current financial crisis similarly as a K-shaped recession, benefitting the richest, many of whom are Jews like Jeffrey Epstein, George Soros, Larry Ellison, Sheldon Adelson, and many others.  They are at the top of the K, while many ordinary Americans are at the bottom of the K.  Will those Americans at the bottom of the K rebel in the future like the Germans did in the1930s.  Fareed basically hopes that the 2020s will be more like the 1950s than the 1930s.  Both periods were marked by the end of World Wars.  World War I ended with anger and oppression.  World War II ended with cooperation and generosity.  If the 2020 pandemic is similar to a World War, Fareed wants it to end like World War II, rather than WW I. 

The pandemic has gotten Europe to develop cooperation more strongly among the EU countries in the last few months.  Brexit is propelling Britain toward more separation.  Trump is distancing the US from Europe and most all of its long-term allies.  Fareed says the US need to develop a better relationship with China.

It is surprising to me that no one seems concerned whether the pandemic is some kind of Chinese plot against the West and the US in particular.  China seems to have almost completely recovered from the pandemic, presumably because of its authoritarian government, but also because it followed the advice of its scientists on how to deal with a pandemic.  The US may have been significantly weakened by its freer lifestyle.  Ironically, Trump and his conservative allies are saying maintain that freedom, while the liberal Democrats are saying that the US needs a more authoritarian approach to dealing with the pandemic.  Schumer and Pelosi believe America should follow the authoritarian Chinese model.  In any case, the Chinese will almost certainly emerge from the pandemic stronger vis-à-vis the US and the rest of the world.  Whether that is by plan or accident is still too early to tell for sure, although all the evidence available to date indicates that the corona virus release by China was accidental. 

At the moment I see the pandemic as a sign of worse things to come, but who would have seen the beginning of World War II as the beginning of the greatest growth in prosperity in the history of the world?  Maybe, as Fareed hopes, our better angels will take over, and we will be able to make something good out of something bad. 

Health Care and the Election

Three of the main issues in this election concern health care: the Covid-19 virus, Obama Care, and Roe v. Wade.

The health industry, particularly doctors’ groups and hospitals, has been remarkable quiet about the Covid crisis.  Only a few academics and government officials have been outspoken.  Local news shows often have individual doctors advising people to wear masks, but the AMA, hospital owners such as the Hospital Corporation of America, or insurance companies such as Aetna, have been quiet.  The exception has been the pharmaceutical companies, because they stand to make tons of money from a Covid vaccine.  They have mainly sung their own praises, rather than work on a strategy for dealing with the Covid-19 crisis.  In fact, the health industry has been reluctant to criticize Trump, because he has been good for their profits, leaving the criticism mainly to the media and some academic pundits. 

The talk about “Obama Care” in this election illustrates how bad the American health care industry has become.  While the political debate is focused on health insurance costs and availability, the real issue has been the inability or unwillingness of the health care industry to care for the American population.  For sure, certain sectors of the population have good care, but the population as a whole is not well served. 

The main problem with the American health care system is its focus on money rather than wellness.  Doctors make money when people get sick; they don’t make money if people stay well.  Therefore, their focus is on treating an acute ailment, rather than on keeping people healthy.  In addition, because of the obsession with money, poor people cannot get treatment for their acute illnesses, much less for care that would keep them well.  Obama Care is basically a way to get treatment for some poor people while keeping doctors very rich.  Doctors have tended to deal with Covid-19 as acutely sick patients to be threated individually rather than as a public health crisis to be dealt with by focusing on keeping people well, just as they treat people for a broken leg or a heart attack, rather than focus on wellness to keep people out of their offices or hospitals.   

Roe v. Wade, the abortion case, is a medical issue because it is a medical procedure.  It is an image problem for some doctors with some people, because they perceive doctors who perform abortions as murders, and being a member of a profession that includes a number of murderers tends to sully the reputations of all the members of that profession, at least with those who avidly oppose abortion. 

The fact that three of the main issues in this election are about health care indicates the depth of the problem for the industry in the US. Health care is a misnomer.  There is no care or love in the health “care” system.  It’s about money.  Many doctors start out performing real health “care” working in emergency rooms or small private practices, but they graduate to high paying specialties or lucrative private practices, and it is these well paid doctors who lead the industry publicly and politically.  They look out for their financial interests. 

Biodiversity Convention COP

 I saw Hank Paulson on Bloomberg TV talking about a report his foundation has done for the 15^th Conference of the Parties of the Biodiversity Convention.  A press release about the report can be found here, and the report itself can be found here. 

At the State Department in the 1992, I was the deputy director of the office of Environment, Health, and Conservation in the Bureau of Oceans, Environment, and Science (OES/EHC).  My boss, Eleanor Savage, spent about a year in Nairobi, Kenya, as the senior US representative negotiating the Biodiversity Convention.  The Convention was one of the three main agreements that were to be adopted at a big UN conference in Rio de Janeiro, the United Nations Convention on Environment and Development (UNCED), held June 3-14, 1992.  The other agreements were the Framework Convention on Climate Change (UNFCCC) and the UN Convention to Combat Desertification. 

President George H.W. Bush (Bush I) attended the conference.  As planning began for it, President Bush said that the Republicans would not let him sign two environmental agreements; he had to choose between the Biodiversity Convention and the Climate Change Convention.  He felt that the climate convention was the most important; so, he could not sign the Biodiversity Convention.  The main opposition to the Biodiversity Convention was led by the office of Vice President Quayle, particularly his chief of staff, the conservative pundit William Kristol. 

The Assistant Secretary for the OES Bureau was Buff Bohlen, a member of the famous Bohlen family. His uncle, Chip Bohlen, was Ambassador to the Soviet Union, among other countries.  Chip’s daughter, Avis, also became an ambassador.  Buff (E.U. Curtis) Bohlen had been president of the World Wildlife Fund before he was named assistant secretary.  In that capacity he had been one of the principal architects of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), and preservation of wildlife was his main personal concern, which meant that he very much wanted the United States to sign the Biodiversity Convention, but political pressure on the President from Republicans like Kristol meant that we would not sign it.  I remember the disappointment on his face at a staff meeting when it became clear that there was no way to reverse the decision not to sign it.  

Although the US did not sign the convention, many other countries did; there are now has 196 parties to it.  Every country that is a member of the UN has ratified the treaty, except the US.  It is now about to hold its 15^th Conference of the Parties in Kunming, China, for which the Paulson Institute has prepared its report. 

Fed Market Manipulations

 It is unclear to me what the long term effect will be of the Fed’s huge role in the financial markets, not just for the pandemic, but since the 2008 great recession.  Interest rates have been close to zero despite stock and real estate markets that have been on fire.  Part of the reason may have been the Fed’s program of buying all kinds of bonds. 

When people want to buy bonds, interest rates stay low.  Governments or companies do not have to offer higher rates to entice investors to buy the bonds.  If it is hard to sell bonds, then borrowers have to offer higher interest rates to persuade buyers to buy.  If the bond market is unattractive to ordinary bond buyers, but the Fed steps in to buy at any price, the Fed keeps rates lower than they would be in a free market. 

What happens if these bonds go bad?  The Fed currently holds about $7 trillion in assets.  Presumably most of these are US government bonds.  While the Fed’s ability to purchase assets is unlimited, its ability to sell assets is limited by the amount of assets it holds.  If those assets become worthless, the Fed’s ability to sell them becomes more and more limited.  The Fed sells assets to fight inflation and keep interest rates low.  Currently there is no need to do this, since interest rates are zero. 

At some point, however, the dollar could threaten to become worthless.  Currently the dollar is the main international currency, which means that the US and other countries borrow in dollars.  China holds an enormous amount of US dollars.  According to MarketWatch, China holds $1.2 trillion of US debt; Japan holds $1 trillion, Brazil and Ireland hold $300 billion each, while other countries hold lesser amounts.  If the dollar became worthless, i.e., its value dropped precipitously against the yuan and the yen, the US would have to start paying much more for imports and perhaps pay in other currencies, such as the Euro.  More expensive imports would be inflationary, creating pressure on the Fed to sell assets that are becoming worthless. 

Although this scenario seems unlikely at the moment, with inflation at zero and the economy doing well, it is not out of the question for future.  The Fed should be thinking about how to unwind its huge asset holdings. The last time the US faced a debt problem like this, during World War II, it issued savings bonds and encouraged patriotic Americans to buy them, basically to finance the war effort.  It is not clear that most Americans are patriotic enough to do that again, especially if there is no threat of a physical, military invasion. 

In particular, black Americans do not like America.  They expect the government to give them money.  They are not interested in giving money to the government so that the country can survive.  Blacks probably won’t buy savings bonds, like white Americans did during World War II.  So, the government and the Fed would have to find some other mechanism to help the United States survive a different kind of economic calamity.  For now, we’ll just hope it doesn’t come, and that the government can just keep throwing money into the air for whoever can catch it first, probably Wall Street tycoons. 

Virus Model Numbers Going Down

Something important is happening as the coronavirus crisis continues: Estimates of its lethality keep going down. On March 31, the White House estimated that, even with social distancing policies in place, between 100,000 and 240,000 Americans would die of covid-19. Anthony S. Fauci recently indicated the government’s estimates will soon be revised downward.

The University of Washington model — which has been cited by the White House — predicted on March 26 that, assuming social distancing stays in place until June 1, U.S. deaths over the next four months would most likely be about 81,000. By April 8, it had made more than five revisions, to get to the current number: 60,415. That’s on par with the number of people estimated to have died of the flu in the 2019-2020 season.

 https://www.washingtonpost.com/opinions/without-mass-testing-were-flying-blind-through-this-crisis/2020/04/09/bf61e178-7a9b-11ea-a130-df573469f094_story.html

Wartime President?

In wartime, we expect our leaders to provide truthful accounts of the enemy’s treachery and a sober rendering of the costs of battle, as Franklin Roosevelt did after Pearl Harbor. By contrast, President Trump spent weeks playing down Covid-19, comparing it to the flu, and in January claimed: “We have it under control. It’s going to be just fine.” That caused many Americans to discount the threat and resist essential social-distancing measures.

https://www.nytimes.com/2020/04/07/opinion/trump-coronavirus-us.html?searchResultPosition=1