July 4, 1976

On July 4, 1976, I was working in the Current Intelligence Office of the State Department Operations Center. It was the 200th anniversary of US independence. The glitterati were having a big party in the eighth-floor diplomatic reception rooms of the State Department. My shift happened to be in the evening while the fireworks on the mall were going off. The powers that be invited all the officers working in the Operations Center to come up for a few minutes and watch the fireworks from the eighth-floor balcony overlooking the mall. I went, and although I could only stay a few minutes, it was memorable. A few years later while I was working on the Brazil desk, President Jimmy Carter held a dinner for all the Latin American ambassadors in Washington. I had to meet the Brazilian Ambassador and escort him up to the dinner, they wait and escort him out of the building after dinner, along with the desk officers for the other Latin American countries. While we were waiting, Rosalynn Carter came down to thank us all for helping out with the dinner. She demonstrated the Carters’ concern for the little guys, and I appreciated it.

Nixon and the Gold Standard

David Westin’s “Balance of Power” show on Bloomberg is often insightful. Today I learned of Jeffrey Garten’s new book Three Days at Camp David: How a Secret Meeting in 1971 Transformed the Global Economy. It is a bout President Nixon’s decision to take the US off the gold standard, under which gold had been pegged at $35 per ounce. It was a momentous decision by Nixon, but one that has received less attention than other momentous Nixon decisions: the opening to China, pursuit of the Vietnam War, creation of the Environmental Protection Agency, and of course Watergate. I haven’t read the book, but I should because it’s time someone recognized how important that 1971 decision was. It changed the way the world economy worked. It opened up the global financial system but also made it more unstable. Jimmy Carter got a lot of grief for the high inflation that took place during his administration. I think at least part of it was due to Richard Nixon taking the US off the gold standard, making it much easier for inflation to take place. Markets were adapting to the new reality of depending on the Federal Reserve, rather than the gold in Fort Knox to control the value of the dollar. Central banks around the world became more important. Despite being on the gold standard, Nixon was faced with inflation of over 5%, as well as high unemployment. He was under pressure to devalue the dollar’s price against gold. Wikipedia says that Nixon conferred with recently appointed Treasury Secretary Connelly, Fed chair Arthur Burns, Treasury Under Secretary Paul Volker (later to be Fed chair under Jimmy Carter), and others, probably including OMB chair George Shultz (later to be Secretary of State under Reagan). A Wall Street Journal article said that Fed chair Arthur Burns played only a minor role there and that Henry Kissinger, who may have been preoccupied with China, was not there. Garten says Nixon’s decision showed that the US could no longer support the world economy alone. To Nixon’s credit, he took the initiative, rather than waiting for a crisis when the world came calling all at once to collect gold for dollars and there was not enough gold to pay everybody. Taking preemptive action was the right decision, even if it left Jimmy Carter holding the bag a few years later. Whether it was exactly the right action is debatable, but the United States and the world have prospered in the fifty years since then. In his interview on Bloomberg, Garten mentioned that there are some similarities between 1971 and today. Financial conditions are unsettled today and there is a potential big change in the offing, in the form of cybercurrencies. I don’t think that Bitcoin is necessarily the future of cybercurrencies, but I think some new form of it may be, probably a currency connected in some way to a central national bank, or maybe several central banks. It may use blockchain, or some new improvement for authenticating transactions that uses less energy. Will Bitcoin be to the new cybercurrency what gold is to the dollar? I doubt it, but it could be. Many people are betting that it will be. Will a new international conference set up a new system, as Bretton Woods did after World War II? Or will individual nations set up their own mechanisms as Nixon did in 1971?

Stop Idolizing George Floyd

It is sad that Black Lives Matter has made such a point of honoring George Floyd.  He is a human being and should not have been killed by the police.  However, he was a convicted felon for a violent crime, in addition of being a drug user, a poor father, and generally a failure in life.  He was being arrested for committing a crime while being high on drugs.  He was a drag on the US economy and a bad example of the human race. 

The fact that he is being held up to such esteem by the black race indicates what a terrible state the black race is in.  There are many wonderful black individuals, but the black race looks pretty awful.  Africa is a failed continent, populated by the black race.  Why haven’t blacks made something of Africa.  Latin America is dark or brown because of the black intermarriage, and it too is a failed continent compared to the Northern Hemisphere.  Is the Southern Hemisphere failing because if is Southern, or because it is mainly populated by black and brown people? 

Black and brown people need good models for their race like Colin Powell, not failed criminals like George Floyd.  The fact that they honor George Floyd shows how violent, how uncivilized, how uneducated their race is.  They blame it on white oppression, but slavery ended 150 years ago.  Many blacks left the segregated South, but still failed to succeed in the northern US, turning cities like Detroit into spreading slums.  I would like to see an example of a failing city with a majority white population that improved itself as black people moved in and made it a better city.  I would like to see one; most examples are the opposite – nice cities that ran down as more black people moved in. 

When I was at the American Embassy in Warsaw, Poland, I went down to Silesia to survey the coal mines there and to see what their environmental impact was.  The Pole who was escorting me made a point of taking me to an apartment house lived in by coal miners. He wanted me to see how neat and clean they were at home, despite their dirty occupation.  This is the kind of example the blacks need. I’m sure such an example exists, but I don’t know of it.  Blacks should publicize it, instead of praising a criminal like George Floyd. 

Election Interference

 

President Biden’s meeting with President Putin has brought the issue of election interference back into the spotlight.  Although this is a genuine issue, it is not as serious or one-sided as the Democrats claim it is.  Democrats are obsessed with it because they need someone to blame for Hillary Clinton’s loss to Donald Trump in the 2016 election.  They cannot accept that they lost the election because they ran a bad campaign on issues that did not appeal to the American people.  The Democrats failed to understand that there are millions of Americans who are very unhappy with the policies pursued by Democrats. 

To me, one of the main failures of the Democrats was their policy on immigration.  When I served as a US vice consul in Sao Paulo, Brazil, I felt that one of my main duties in issuing tourist or immigrant visas was to avoid giving visas to people who were going to be a drain on the United States.  Under US law, the US was open to people who could support themselves and make a contribution to the success of the country, but it was not open to people who were going to become a “public charge” by going on welfare after their arrival.  Immigrants also had to have a job or skill that would not displace an American worker.  Many of the people currently being admitted to the US will be public charges, at least for several years.  Adults will have no jobs at first.  Unaccompanied children will have no one to support them for years.  They are unskilled and the jobs they eventually get will probably not be very productive.  Many Americans support generous immigration laws, but current Democratic policies ignore the existing laws and just let people in.  If the US wants more generous immigration laws the Congress should pass them, and the administration should enforce them.  Currently there are restrictive laws and no enforcement. 

Trump recognized that the Democrats had alienated a large part of the electorate by promoting free immigration.  Economically, he wanted to reduce many restrictions on American business, such as taxes and regulations.  Hillary’s main appeal was to intellectuals on the one hand, and to Hispanics and blacks on the other.  She and the Democrats ignored the great American middle, which ended up electing Trump. 

Putin or his henchmen did not do anything that American political players have not done.  Dirty tricks are part of electoral politics.  So, would it be okay if the Republicans did the same thing to the Democrats that Putin did?  What the Russians did may have been somewhat illegal, but it was not egregious.  It was sad that so many silly Americans were influenced by it, but that’s the fault of the American education system, not Putin.  So, the main offence was “foreign” interference.  But Putin over the years he has been in power has certainly seen what he would interpret as American interference in Russian elections and in his other efforts to retain power.  We say we only want fair elections, but Putin sees it as a direct attack on his leadership.  He maintains power by undemocratic means, but he does not share Americans’ attachment to free and fair elections.  There have been very few free and fair elections in the thousand years of Russia’s existence.  We say we are spreading democracy; Putin says we are interfering in his government.  Should the CIA inspire Russian citizens to rise up and assassinate Putin, and if not, where do we draw the line on what is proper or improper in interfering in Russian politics?  He

In an ideal world, Putin would mind his own business, but this is not an ideal world.  The US is not perfect.  Black and brown Americans shout their condemnation of America from the housetops.  Putin quoted American protesters in his meeting with Biden.  In theory, American democracy is strong enough to withstand criticism from Putin and from domestic protesters.  Let’s hope that it is. 

Argentine Inflation

 

From an Economist Magazine newsletter: Argentina releases its monthly report on consumer prices today. High inflation is a persistent problem for the country. In April, the year-on-year figure was a staggering 40.3%. Food costs play a significant role in Argentina’s inflation, and attempts to reduce them have pushed the government into a bitter battle with the farmers who supply the country’s famous bife. Last month Alberto Fernández, Argentina’s president, slapped a 30-day ban on meat exports. The country is the world’s fifth-largest exporter of beef and Mr Fernández hoped a glut would help freeze domestic prices. His plan temporarily backfired when the cattlemen went on strike, reducing supply, and prices rose. They have since levelled off. The government must decide whether to extend or re-work the ban to allow some exports. Producers warn that thousands of jobs are at stake if the president does not stop trying to cure the meat market for his own ends.

Reparations

Reparations is not about slavery; it’s about being black.  Slavery ended over 150 years ago. Blacks may claim the segregation lasted much longer, but many blacks moved from the South to the North where there was supposed to be no segregation.  They had the opportunity to make something of themselves, but they didn’t do much with it.  So now they just want money. 

America seems to be undergoing a transition in which blacks want a huge transfer of wealth from whites to blacks.  In fact, the immigration dispute reflects this same agenda.  Black and brown people around the world have been less successful than white people.  As a result, we see the mass migration from the southern hemisphere to the northern.  Africans are flocking to Europe.  Latin Americans are flocking to the United States.  These black and brown people are seeking a better life because they have failed to build one for themselves, just as black Americans failed to build themselves better lives after the Civil War. 

Now they have given up trying to better themselves and are just saying, “Give us money.”  Reparations are for being black, not for slavery.  It is easy to discriminate against blacks because blackness is so easily discernable, as opposed to religious beliefs or nationality.  Nevertheless, there are many successful blacks whose success demonstrates that blackness is not an insurmountable obstacle.  In fact, if blackness were identified with some particular skill or knowledge, it would be an asset instead of a liability. This seems to be the case in sports.  Blacks excel in sports, where football and basketball have both become dominated by black players.  If the same percentages were applied to sports that blacks want applied to other endeavors, teams could have only one black basketball player on the floor and football teams could have only two black football players on the field. 

Success in sports is good, but blacks need to do the same thing in other areas of life.  The last Oscars was devoted to awarding blacks, but the Oscars lost prestige because everyone recognized that they were given because of race and not because of the quality of the movies.  Blacks just ended up devaluing the Oscars, rather than improving their own image.  

Blacks need to prove themselves in areas other than sports and show business, rather than just asking for reparations payments because they were born black. 

Remembering Fallen FSO Colleagues

 On Memorial Day I posted a blog remembering the men who were killed in Army artillery battery during the Vietnam War. I thought I should also remember the Foreign Service Officers I Knew who died in the line of duty, although not while I was serving with them. Their names of listed on the State Department Memorial Plaque.

John Patterson was in my A-100 class in Washington for beginning Foreign Service Officers. His first assignment was Mexico. He was killed while he was serving there. The AFSA (American Foreign Service Association) note says:

John S. Patterson served as U.S. vice consul in Hermosillo, Mexico. He was kidnapped by terrorists on March 22, 1974 and later found dead.

Tom Doubleday served with me in Bangkok, Thailand. He died while serving in the American Embassy in Monrovia, Libera. The AFSA note about him says:

Thomas P. Doubleday, Jr., was born in New York City in 1942. He earned a bachelor’s degree from Yale University and a master’s degree from the Fletcher School of Law and Diplomacy.

Doubleday joined the Foreign Service in 1965. He served in Bangkok, Saigon, Luanda, Lagos, the Bureau of Intelligence and Research, the Bureau of International Organizational Affairs, the Bureau of African Affairs, the Bureau of Personnel and the Bureau of Refugee Programs.

Doubleday’s final post was as a political counselor at the U.S. Embassy in Monrovia, Liberia. He died of a heart attack on February 8, 1993. During his lifetime, he received the Meritorious Honor Award.

Richard Perle

 

Much of my early career at the State Department was spent dealing with Richard Perle’s office at the Pentagon on nonproliferation and technology transfer issues.  Perle was Assistant Secretary of Defense for Global Strategic Affairs under President Reagan. 

Perle’s political career started with a job as a staffer for Senator Henry “Scoop” Jackson of Washington.  Perle was one of several Jewish staffers for Jackson who went on to have long, influential careers in Washington, including Paul Wolfowitz, Eliot Abrams, William Kristol, and perhaps others.  Their most notable accomplishment was their work on the Jackson-Vanik Amendment, which eventually enabled hundreds of thousands of Jews to emigrate from the Soviet Union to Israel and the United States. 

He is most famous as the reputed leader of the advisers who persuaded President Reagan not to agree at the summit in Reykjavik, Iceland, with Soviet President Mikhail Gorbachev to eliminate all nuclear weapons in the US and the Soviet Union.  However, some claim that Perle’s role is an urban myth, and that Reagan would not have agreed in any case. 

The two issues on which I clashed most frequently with Perle and his staff were missile proliferation and the COCOM regime which controlled exports to the Soviet Union.  Perle was a hawk on both of these issues; he wanted an agreement that allowed zero missile proliferation, and wanted the allies to approve zero high tech exports to the Soviet Union.  These issues came together because they both involved very specific lists of hardware and technology that could not be exported. 

My connection to the issues was supplying intelligence on potentially damaging high tech exports by other countries and by American firms involved in illegal transactions.  My first introduction to Perle was when he tried to end the US participation in IIASA.  IIASA (International Institute for Applied Systems Analysis) still exists, but was much more controversial in the 1970s because it served as a meeting place between Soviet and American scientists in Austria.  Perle was concerned that technology was leaking to the Soviets.  I first heard of it because the Secretary of State’s science adviser came down from the seventh floor to ask me to help him research IIASA and hopefully defend continued American participation in it.  Since IIASA still exists, Perle lost, but I presume he restricted US participation while he was focused on it. 

COCOM stood for Coordinating Committee, a group of export control experts who met periodically in Paris to coordinate guidelines for exports to the Soviet Union.  For me, the main intelligence focus was on whether a member was exporting something on the controlled list.  Perle would have sold nothing to the Soviets, but American businesses were interested in selling, as were companies in other countries that were members of the committee.  There were a lot o gray areas about whether something was covered or not, and how restrictive should the controls be.  Should they cover all computers, even small, personal ones, or only big, powerful ones?  There was a lot of argument about sophisticated, numerically controlled machine tools.  What tolerances should be allowed? 

My main interaction with Perle’s office was regarding missile proliferation.  President Jimmy Carter’s adminsitration had been working on a treaty that would apply to missiles the same kind of limits that the Nuclear Non-Proliferation Treaty (NPT) applied nuclear weapons.  When Carter was defeated, the Reagan administration picked up the idea and pursued it.  A big problem was that the NPT was in deep disfavor among the nations that we most wanted to join it, potential proliferators like India, Pakistan, Argentina, Brazil, North Korea, Israel.  They saw the NPT as highly discriminatory, allowing nations that already had nuclear weapons to keep them, while preventing non-nuclear states from getting them.  This perception of unfair treatment of the haves versus the have-nots carried over into the issue of missile proliferation.  Other friendly, developed countries like the G-7 were reluctant to try to push a new, similar treaty down the throats of the developing countries.  Gradually the idea of an arms control treaty evolved into a suppliers’ agreement not to sell missile hardware and technology to problem countries.  Perle and his office wanted the absolute maximum controls, while American businesses and other countries wanted to be about to sell items that were less sensitive.  Arguments over lists went on endlessly. 

The head of the COCOM office in the State Department was Bill Root, who had been doing export control for years.  Before Richard Perle arrived on the scene, his office was probably somewhat of a backwater, routinely working with the military, American businesses and other interested parties on what should be controlled.  When Perle arrived, his office was suddenly front and center.  Perle’s intransigence led to many disputes with our allies in Paris, who wanted a less restrictive regime. 

Because I was working on developing lists of controlled items for the missile proliferation agreement, I sometimes worked with Bill Root and his office because they had similar lists for COCOM.  The specifications in the COCOM list were a good model for the missile list, so that they would be understandable by businesses who wanted to know what they could sell.  One day while Bill Root was helping me with the lists, he got an urgent call.  It turned out to be Richard Perle.  I left so that he could take the call.  When I came back later that afternoon, his office told me that he had retired from the State Department and left. 

 

 

Covid Was Not a War

 

The Covid pandemic was often compared by news media to a war. The war analogy has been used to justify the huge expenditures and budget deficits associated with the response to Covid.  However, Covid was not like a war.  Wars kill young people in the prime of life; Covid killed unproductive old people a few years before they would have died anyway.  Covid took much less of a toll on the economy than a war involving the same number of people would have.  You could even argue that Covid was a net plus because it reduced the amount that would have been expended to care for old people in nursing homes and other care situations.  There was a corresponding increase in medical payments for end-of-life treatment in hospitals by doctors and nurses.  But overall, the effect of Covid was much less than a war would have caused. 

The only corresponding increase in deficits and debt has been those incurred during World War II. In World War II, people made many sacrifices to support the country. Food and gasoline were rationed. People bought war bonds to finance the war.  Neither the Trump nor the Biden administration has asked Americans to sacrifice anything for the war on Covid.  Instead, the government has handed out more and more benefits, such as the $9,000 FEMA payment for funerals of people who died from Covid.  Medicare and Medicaid paid many of the Covid medical expenses.  In short, it was almost the reverse of World War II; instead of the people helping the government fight Germany and Japan, the government helped people fight Covid. 

The Treasury and Federal Reserve expended trillions of dollars to make sure than no one suffered economic hardship as a result of Covid.  In retrospect, they may have done too much because Covid was not as damaging as people thought it would be.  Information technology kept many businesses going.  The main losers were restaurants and in-person retail stores, but many retail stores successfully converted to on-line sales.  There were dislocations, but certainly not a depression, or even a recession.  It was pretty much business as usual but carried out in different ways.  At first, people thought the housing market would collapse because people would be afraid to show homes for sale or to visit them.  Instead, the housing market turned white hot, with sales and prices going through the roof, in part spurred by interest-free money made available by the Fed.  The stock market has also gone through the roof after the initial losses around March 2020 when the pandemic first began to hit the population.  Many investors make huge profits in the markets.  Again, people expected the devastation to be much worse than it was.  Many people died, but not so many productive people.  Service and travel industries were hit hard, but others not so much.  Gains in information technology largely made up for losses in the service industries, like restaurants and airlines.  Even many restaurants adapted by converting to take-out. 

After the initial losses in early and mid-2020, the US economy came though fairly well, with relatively few sacrifices required of the American people, except a request to wear masks.  It’s ironic that the supposedly patriotic Republicans were the most vocal resisters to the few sacrifices that the government requested, wear a mask and get vaccinated. 

While there are still questions about how Covid started in China, it looks like as soon as the government became aware of it, it cracked down strongly.  The epidemic stated just as the 2019 Chinese New Year would normally have created the biggest travel days of the year, but the government stopped or postponed it.  As a result, China came though the epidemic much better than the US did and in a much shorter time.  This has benefitted the Chinese economy significantly vis-à-vis the US economy. 

Although the US came through the pandemic much better than I initially expected, I remain worried about what comes next. The Fed and the Treasury have made sure that no one suffered terribly from it, but there may be a cost in out years.  There are now huge government debts that must be repaid somehow someday, and it looks like there will be further budget deficits into the foreseeable future.  One way to escape debts is inflation; if money is worth less, the debt is easer to pay off, because you are paying cheaper dollars.  This inflationary pressure is in addition to more normal wage and price inflation caused too much money in circulation, thanks to the largess of the Fed and the Treasury.  If US inflation increases significantly, it will undercut the world’s use of the dollar as the international currency, perhaps replaced by China’s currency if it becomes the world’s leading economy.  Cryptocurrencies will further complicate the situation, if not bitcoin, perhaps cyber currencies backed by national governments. 

The US dollar because the world’s currency partly because of World War II.  The US was much less affected than the other belligerent countries.  The Marshall Plan revived western Europe, and benign occupation of Japan and Germany allowed them to recover.  Meanwhile the US had suffered fewer casualties than many of the other warring countries, hundreds of thousands, rather than millions (Soviet Union, China, Japan, Germany).  The US became the factory and the banker for the world.  There is a possibility that the pandemic will do the same for China.  China may not be as generous following the pandemic as the US was following World War II. 

Nuclear Power and the Environment

 

If environmentalists were serious, they would embrace nuclear energy.  It has downsides, but it does not contribute to global warming.  Environmentalists oppose nuclear energy on political grounds, not scientific ones.  Wind and solar energy are becoming more productive and reliable, but they still cannot supply the base load for electrical power.  They are too dependent on the vagaries of the weather. 

Nuclear power cannot be made 100% safe, no power system can, but it can probably be 99.9% safe, and if well designed the 0.1% failures can be managed without great loss of life, while global warming could destroy a substantial portion of the world’s population through rising sea levels, crop failures, fierce storms and so on. 

Part of the new infrastructure plan could finance more research on safer reactor designs, and construction of new reactors because new nuclear power stations are needed sooner, rather than later.  New nuclear power reactors will be expensive and take a long time to build, so we need to get started sooner, rather than later. 

Biden as President

My last few blog posts have been critical of Biden, but I am glad he won.  Trump was a terrible President, but his strong point was that he represented and stood up for the cultural ideas that are espoused by many ordinary, middle class people.  He is the ultimate illustration of the problem highlighted by the book “What’s the Matter with Kansas?”  Many people vote against their economic interests because they believe cultural interests are more important.  In Trump’s case it is even more surprising because he is a bad cultural icon.  He is course, crude, immoral, impolite, selfish, stupid, and the list goes on and on.  However, regular old white people see themselves under attack from all sides, and Trump is someone who is willing to take on the hatred from American intellectuals and minorities.  That one trait got him elected and it almost got him re-elected.  The Democrats were smart to change the voting laws right before the election to make it easier to vote.  Democrats could get apathetic, uninterested blacks to make the minimal effort to vote by mail for Biden, and it worked.  This Denver Post article illustrates the two approaches to voting requirements, although it clearly comes down on the side of making voting as easy as possible.   

Trump has incorrectly claimed that there was something illegal about the mail-in vote, but the states involved had made it legal.  It probably did cost him the election, but the state Democratic politicians and judges did it legally.  Easier voting favors Democrats.  The Republicans used the 2010 census to gerrymander their states to favor Republicans.  Each side is looking for advantages.  There are arguments on both sides.  When the US was founded, in most states only white adult male property owners could vote.  They wanted to restrict voting to responsible people who had a stake in their country.  Today, the Democrats have completely different priorities from the nation’s founders. 

Anyway, Biden is a much more normal President and good for the country.  He is being pushed by the progressive wing of his party to do a lot of questionable things, questionable because they have never been done before and they are very expensive.  But the Republicans are in a position to block most of them, or to tone them down.  Infrastructure repair is needed, but it needs to be limited, and paying for it right after huge payments for the covid pandemic if bad timing.  It’s good that interest rates are so low now, making it reasonable for the government to borrow money. 

Biden is a welcome change from Trump on foreign policy issues.  Trump tended to alienate our allies and pander to our enemies.  Trump messed up relations with Europe and North Korea, among others.  His China and Russia policies could have been more nuanced.  Biden is currently facing tough decisions on Afghanistan and Israel-Palestine, but he is approaching them rationally and intelligently. 

Biden’s reassuring, comforting tone is another welcome change from the Trump’s often strident, mocking, confrontational approach.  This offsets my concerns that Biden will take the country too far left.  That may be the trade-off for having a more traditional President.  Let’s give Biden a chance. 

Praying for a miracle: Argentina’s debts

From a newsletter from the Econmist magazine

Alberto Fernández, Argentina’s beleaguered president, kicks off his European tour this week. He will meet the leaders of France, Italy, Portugal and Spain to beg for more time to repay Argentina’s enormous debts. The country, led by an increasingly unpopular Mr Fernández, owes $2.4bn to the Paris Club, a group of government lenders, and a record $45bn to the International Monetary Fund. Mr Fernández argues that the debt is unpayable in current conditions—ie, the pandemic. To help his case he is seeking support from his country’s most hallowed son, Pope Francis. Argentina’s economy minister, Martín Guzmán, will also visit the Vatican, to lobby Kristalina Georgieva, the IMF’s chief, before they both attend a seminar with the pope. The politicians are nervous ahead of Argentina’s monthly inflation figure, released on Thursday, which is forecast to show inflation heading towards 50% this year. That’s almost double the government’s target, and another headache for Mr Fernández.

Crypto Coins as Assets

The trouble with cryptocurrency like bitcoin is that it is relatively easy to create new currencies.  The most obvious current example is the dogecoin that Elon Musk has been promoting.  Bitcoin is a potential store of value because there will be a limited number made, a total of 21 million.  However, it is possible using the blockchain security system and other algorithms to develop a new cyber currency with similar or different characteristics. 

Bitcoin was originally developed to serve as a currency to pay for commercial transactions.  The blockchain process makes it relatively easy to make payments.  It appeals to dishonest actors (like drug dealers and hackers who hold data for ransom) because it is hard to trace.  But I don’t see anything particularly unique about bitcoin compared to any other cyber currency, except that the transfer mechanisms are in place and have worked for several years.  Some other organization – a country, a bank, a credit card company – could develop a new cyber currency that might have more political or financial weight behind it, and thus might pass bitcoin as the preferred cyber currency. 

One problem for countries might be that a cyber currency would be harder to inflate.  The Federal Reserve can just print dollar bills (physically or virtually), but it might not be able to make new cyber coins, depending on how the coin algorithm is designed.  If a country mandated that everyone had to accept the new cyber coin, that would certainly make it displace bitcoin as a form of payment. 

As a result, I do not see that bitcoin is an asset that will retain its value indefinitely, like gold.  There are other precious metals like silver, platinum, maybe copper, but they are also physically limited, and their value is determined to some extent by how much physically exists, plus or minus whatever speculative fever surrounds them at any given time.  Bitcoin might be more like gold if it had some intrinsic value, for example, if it were a store of energy that could light a house for year.  But currently, as a store of value, it is not even being used as a means of exchange.  Its skyrocketing value actually makes it a source of currency deflation; no one will spend a bitcoin today if it will buy twice as much tomorrow.  People will not spend them; they will save them.  This tends to be a drain on economic activity, which weakens the economy.  

Old Pictures

 Here is a link to some old pictures from my days in the Foreign Service.  

More Foreign Service Science Officers Needed

 The Scientific American called for more scientists at the State Department. Nick Pyenson and Alex Dehgan wrote:

"Traditional diplomacy related to territory and place. It was organized by sovereign nation-states with borders and limits that were clearly defined. Those coming into the foreign service, especially in the U.S., came from fields like history, economics and political science, forming the bread and butter of the foreign policy schools. These backgrounds help with the standard set of diplomatic responsibilities for engaging with host country officials, but they are no longer sufficient—nor is it enough to just listen to scientists. Bringing scientists to the front lines of solving our most pressing, complex problems is a necessary step for diversifying and improving the composition of our foreign affairs and foreign assistance institutions."

I came to the Foreign Service with some of what they want. I had a bacherlor's degree in mathematics, not exactly a hard science, and I had a law degree, adding to my liberal arts credentials, rather than my scientific credentials. However, I was more interested in science issues than most of my Foreign Service colleagues. The article continues:

"Even with a richness of talent, we still need more opportunities for integrating scientists on the front lines of U.S. embassies and missions abroad. Programs such as the AAAS fellowships already place postdoctoral scientists throughout the State Department and USAID for pressing problems in diplomacy and development. Scaling up this type of program would have a real impact on global diplomacy and development. At USAID, the Partners for Enhanced Engagement for Research have built hundreds of collaborative research programs to date, in conjunction with American scientific agencies, aimed at building long-term engagements and connections across the global scientific community."

When I was the deputy director of the State Department office dealing with environmental conservation issues, we had two AAAS fellows working on biological issues. The director of the office spent about a year in Nairobi negotiating the Biodiversity Convention, which the US then refused to sign. The main opposition came from then Vice President Quayle's office, mainly his chief of staff William Kristol. President George H.W. Bush said he could not sign two environmental agreements, one on climate change and the other on biodiversity, because of pressure from the Repubilan Party. He felt it was more important to sign the framework climate agreement than the biodiversity convention. So, the work of our office was for naught.

The article points out the advantages of scientific cooperation, expecially since many foreign scinetists have studied in the US. One of my biggest disappointments was whe the US ceased to fund scientific cooperation with Poland shortly after the fall of the Berlin wall, and as Poland was tansitioning from a Communist government. The US had promised several million dollars a year for science cooperation with Poland for five years. I was sent to oversee that cooperation, but the Gingrich Republican revolution occurred about a year after I arrived, and the Gingrich Republicans refused to fund the remaining years of the agreement. One would have thought that the Republicans would have wanted to encourage Polish scientists and welcome them into a free world with a free economy with a little help, but apparently Republicans didn't care about Communism anymore and had moved on the domestic political issues. Meanwhile the State Department had a little money of its own to supplement the cancelled Congressional appropriation, and it decided that China needed the money more than Poland; so, State gave its remaining science cooperation cash to China. At least we know the Chinese put it to good use, outpacing US scientific activity.

Failure of Primaries

One thing the last elections have shown us is the failure of political parties.  In retrospect the old smoke-filled room method of selecting candidates by party insiders worked better than the new open primary system.  Primaries have pushed both the left and the right to choose more extreme candidates.  Since only one-party votes in primaries, the extremists choose candidates that do not appeal to moderates, but when the election comes, you have two extreme candidates, one on the left and one on the right, with no moderate for independent centrists to vote for.  The biggest threat that any politician can make against another of the same party is “We’re going to primary you.”

This split occurs in almost every election from county commissioner to President.  The country is certainly divided between almost irreconcilable Republican and Democratic electorates, but when each party send Congressmen or Senators from its extreme wings to Congress, the split in Washington becomes even worse. 

The biggest failure was in the 2016 presidential primaries.  Hillary Clinton and Donald Trump were two terrible candidates.  Hillary had deep contempt for ordinary Americans.  Her Democratic party believe that ordinary Americans were too stupid, lazy, and uneducated to help themselves, and the Democratic Party had to take care of them.  Her contempt for ordinary Americans was evident in everything she said and did.  Trump on the other hand appealed to ordinary Americans because they were stupid, lazy, and uneducated.  They loved him because he didn’t talk down to them or disrespect them like Hillary did. 

The primary in 2020 made Biden in effect the second black President.  He is not as elitist as Hillary, but more important the black community united to support him over Trump.  Trump did not lose the election because of fraud, but because the black community in the US voted as a block from Biden.  Biden was doing poorly in the primaries until Jim Clyburn helped him win South Carolina, by whipping up the black vote in the South Carolina primary behind Biden.  It’s another example of how small, extremist primaries decide huge national elections.  Sometimes, Iowa or New Hampshire primaries decide elections; in 2020 South Carolina did. 

Trump complained that he was defeated by fraud in the elections, but in fact by legal standards there was not enough fraud to justify reopening the elections.  The problem was that blacks voted as a block, with 90% or more voting for Biden.  I think the mail-in ballots issue did work against Trump.  Blacks who might not have voted ordinarily voted by mail because it was easy.  If there were no mail-in ballots, Trump might have won, but the mail-in ballots were legal. 

If the US is to calm down the extremist rhetoric around politics, an important step is to reform the political parties and the primary system.  I think we might be better going back to the old, smoke-filled room method of having party leaders choose candidates, if only because it looks like nothing could be worse than the current system.  But this would only work if the party leaders were decent men who would choose candidates who they thought would be good for the country. 

Of course, another big problem is money in elections, no matter who gets nominated.  The Citizens United case allowing unlimited spending by corporations in campaigns.  This has made money the be all and the end all of campaigning.  The nominees may be awful, but everybody wants to be on record as financially supporting whoever wins in order to get favorable treatment for their pet issues. 

 

Returning from Vietnam

The media focus on current and former military members’ involvement in the January 6 assault on the Capitol makes me wonder how much longer Americans will honor those who serve in the military.  The press reported that the FBI was investigating the backgrounds of the thousands of National Guardsmen who were called to protect the Capitol during Biden’s inauguration, and that several were told to leave because of detrimental information found about them.  

It reminds me of the horrible way that Vietnam veterans were treated by their fellow Americans when they returned from Vietnam.  I was not actually spit on, and I don’t know anybody who was, but there was a lot of contempt for veterans, even to the point of calling them baby-killing war criminals.  On one hand it is good that there is a Vietnam memorial to remember those killed in Vietnam; on the other, the memorial is anything but heroic.  It could be interpreted as a dark slash in the ground, a stark recognition of those who tragically wasted their lives by dying in Vietnam.   

It is interesting that the Vietnam memorial was built before the World War II memorial.  World War II veterans were widely respected for their service, although the movie “The Best Years of Our Lives” shows that many WW II veterans faced the same kinds of problems that Vietnam veterans faced.  Nevertheless, no one felt when they returned that they needed a memorial.  Their service was memorial enough. 

The World War II memorial and the various Confederate memorials that are being torn down followed similar paths.  Neither set of veterans felt that they needed a memorial, but as they began to die off in greater and greater numbers, the people left behind, often wives and daughters, worked to build them memorials to preserve their memory. 

I fear that after a generation of honoring veterans, mainly starting after the 9/11 attack on the World Trade Center, we are moving back to suspicion of veterans.  Now, instead of being war criminals returning from Vietnam, they are pictured as traitors, insurrectionists, white supremacists who are dangers to the nation.  Now the proportion of the populations serving in the military is even smaller than it was during Vietnam, meaning that less and less of the population has any personal understanding of what military service is like.  No recent President has served in the military, and few senior political or other public officials have.  How many of the “talking heads” pontificating about American politics on TV have served?  Not many.  There is a group of veterans in the Congress, mostly because of 9/11, but it will probably shrink as time goes on. 

I worry that people will more and more view the military as something subversive, a hotbed of Nazi sympathizers and white supremacists, and thus military service will become less and less respected and more and more suspected. 

Ancient Rome and the US

 I have been reading some history of Rome to see if it had any lessons for today.  In the description of Rome around 133 BC, I found Mary Beard’s description apposite.  She writes: 

Looking back over the period, Roman historians regretted the gradual destruction of peaceful politics. Violence was increasingly taken for granted as a political tool. Traditional restraints and conventions broke down, one by one, until swords, clubs and rioting more or less replaced the ballot box. At the same time, to follow Sallust, a very few individuals of enormous power, wealth and military backing came to dominate the state – until Julius Caesar was officially made ‘dictator for life’ and then within weeks was assassinated in the name of liberty. When the story is stripped down to its barest and brutal essentials, it consists of a series of key moments and conflicts that led to the dissolution of the free state, a sequence of tipping points that marked the stages in the progressive degeneration of the political process, and a succession of atrocities that lingered in the Roman imagination for centuries. 

Beard, Mary. SPQR: A History of Ancient Rome (p. 216). Liveright. Kindle Edition.

 Her subsequent, more detailed, discussions brought out more similarities, the growth of parties divided by bitter animosities and points of view, increasing disparities between the wealthy and poor.  Violence and murder was much more common in ancient Rome than in the US today.  But it does make one wonder about where the US is heading, for if history does not repeat itself, it often rhymes.  

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.