The Benghazi Scandal: Now Under GOP Ownership

The GOP intended Benghazi to be the big scandal that would tear down Hillary Clinton. Benghazi is still hurled about by conservatives seeking to invoke the belief that Democrats are dishonest, soft on security and naive in international dealings. But now Benghazi is fast becoming a byword for the GOP’s incompetence in governing, and their preference for posturing and obstructionism in place of policy making and problem solving.

House majority leader Kevin McCarthy’s public statement – that congressional investigations into Benghazi are deemed successful because they have negatively impacted Hillary Clinton’s poll numbers – should come as a shock to no one. And now a whistleblower has emerged, claiming that the GOP was directing investigative efforts almost exclusively at Clinton. Major Bradley Podliska told CNN that he was dismissed for seeking the truth of the matter, not going along with the witch hunt. Podliska, an Air Force Reserve intelligence officer, is a self-described libertarian who plans to vote for the GOP nominee in 2016.

The nominal purpose of the investigation was to gain insights on making American diplomats safer. When McCarthy revealed that it was really about slinging mud at Hillary Clinton – with taxpayers footing the nearly five million dollar bill – he collapsed under the burden of simultaneously managing reality, along with the GOP lie to conceal it. And now McCarthy is out of the running for Speaker – for speaking the truth!

Consider the extent to which we’ve reduced expectations for the GOP-controlled Congress. As one might praise a puppy who succeeds in watering a square of newspaper, Americans today are encouraged when Congress narrowly avoids government shutdowns, or keeps the nation from defaulting on its debts. No one expects them to address the major issues of the day. Immigration? Banking reform? Tax reform? Entitlements? Gun control? The GOP cant even select a House Speaker – one can hardly expect them to actually govern.

The difference in substance between GOP and DNC presidential debates is striking. Democrats offer specific, workable solutions to real-world issues. The Affordable Care Act is just one example of Democratic legislation, which has since succeeded in reducing the budget deficit, slowing the growth of healthcare costs to the lowest rate ever recorded, while insuring millions more than ever before, with the economy and employment growing all along the way.

By comparison, when GOP presidential candidates are asked about how they would improve the economy, they trot out the same tax cuts for the wealthy that drove the country deeply into debt when similar policies were enacted in the distant and recent past. When asked about their solution for health care, they tell you to pay through the nose, go to the ER, and accept impoverishment and early death – though never in so few words. Gun control? Stuff happens. Global warming? Far better would it be to evacuate Florida than to tax wealthy GOP patrons job creators. Simply put: the GOP has a problem with reality.

Just as McCarthy strained to separate the real world from GOP-scripted fictions, so the real Benghazi is breaking through the facade. It is the story of a tragedy, exploited for political gain, by a party that has lost its ability to govern, for whom leadership is all about the maintenance of fictions, not the identification of issues and the elaboration of solutions.


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Putin’s Syrian Sideshow

On the right, there’s a bizarre narrative. Obama is cast as a weak and ineffective leader, and Putin as strong and decisive. Though those depictions are utterly ludicrous, they are superficially reinforced by goings-on in Syria today, where Putin has deployed the Russian Air Force, ostensibly to support the Assad regime, while the Obama administration quietly funnels aid to the Free Syrian Army.

For the record, Obama has the most successful foreign policy of any president since World War II. He didnt just get the US out of two dead-end wars, killing Osama bin Laden along the way. The Iran deal was an outright coup. The US got China to agree to reductions in greenhouse gas emissions, and reversed decades of bad policy when it restored relations with Cuba. Obama secured an ABM treaty with Russia, but also, audaciously, presided over Ukraine’s defection to the US sphere. History books will look back on Kiev’s alignment with the US, EU and NATO as marking the end of the Russian Empire.

By comparison, Putin has overseen a period during which Russian power and influence has shrunk to its lowest ebb in three centuries. While he was President in 2004, the Baltic States – each former constituents of the USSR – joined NATO; as did former Warsaw Pact members Bulgaria and Romania. Albania, another former Warsaw Pact member, joined NATO in 2009, while Putin was Prime Minister.

Putin’s greatest defeat is the loss of Ukraine, which has been politically united with Russia for most of the past 300 years. Ukraine’s population is one-third of Russia’s. An analogous loss for the US would be every state from the Rockies to the Pacific – California, Oregon, Washington, Idaho, Montana, Nevada, Arizona, Colorado, Utah, New Mexico, Wyoming, Alaska and Hawaii – seceding to form an alliance with China. That’s Putin’s legacy.

Even Putin’s efforts to hang on to Crimea and Donetsk – crumbs from the table – have come at a steep price: US and EU sanctions, coupled with low oil prices, have wrecked the Russian economy. And in the end, that’s really what Russia’s ongoing foray in Syria is all about: a cynical sideshow to distract Russians from the consequences of Putin’s disastrous tenure.

Putin has otherwise chosen an odd time to come to the aid of Syrian dictator Bashar al-Assad. Between defections, casualties, and lack of support among Alawites, Assad has lost sixty to seventy percent of his army since 2012, and now controls perhaps twenty percent of Syria. In the wake of Russian bombing runs, Assad lacks the infantry to move in and capture new territory – loyalist forces are straining to hang on to the little they still hold.

There remains little role for foreign powers in the Syrian Civil War, and Obama is wise to largely remain on the sidelines, and not add to the misery of a conflict that has now killed more than 300,000, and displaced upwards of seven million. Funneling aid to the Free Syrian Army – the most liberal of the several belligerents – is a reasonable policy. Bombing ISIS assets from the air might be constructive, but it’s a messy business, with frequent loss of innocent life. Comparable US policies in Iraq have had limited success, even when coordinated directly with the Iraqi army.

With the GOP paralyzing Congress, Obama has been focusing on foreign policy for years, and the fruits of those efforts are impressive. Obama’s reserve in dealing with Syria is to be commended. Putin’s dalliance, by comparison, is an act of desperation, and yet another hardship for the beleaguered Syrian people to endure.


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VW Buggin’ Out

News of Volkswagen’s fraudulent evasion of EPA and EU regulations is astonishing. Emerging facts show that VW sold 11 million cars and trucks that were secretly designed to run clean only when they were being emissions-tested, but to run dirty otherwise. The difference between clean and dirty performance is enormous. Under dirty operation, VW diesels emit up to forty times more nitrogen oxides (NOx) than they do under clean operation. NOx is known to cause respiratory problems – sickening and killing many thousands of people each year.

The consequences that VW now faces are no less staggering. In the US alone, where fewer than 5% of the relevant vehicles were sold, potential EPA fines exceed $18 billion. Individual states might also sue, and about 25 class-action suits on behalf of consumers have already been initiated. Criminal prosecution is also a possibility.

VW officials have admitted to covertly incorporating a “defeat device” in some of its diesel engines. According to EPA regulations,

(§86.1803-01) Defeat device means an auxiliary emission control device (AECD) that reduces the effectiveness of the emission control system under conditions which may reasonably be expected to be encountered in normal vehicle operation and use….

VW isnt the first automaker to get caught trying to sneak one past EPA. In the 1990s, Ford, GM, and several truck manufacturers paid fines for employing similar cheats, to misrepresent vehicle emissions for the benefit of EPA, while enabling those vehicles to have far better fuel economy than they could have otherwise attained.

And thus we come to our point. Lots of waste comes out of a car’s tailpipe, and present technology allows us to make tradeoffs between different kinds. In many cities – Los Angeles, Phoenix, Houston, London, Paris and Beijing, for example, where air pollution is a problem – we prefer to minimize the release of NOx. But we pay a price with diminished fuel economy, releasing significantly more carbon dioxide (CO2) per mile driven. While NOx directly harms human health, CO2 contributes to global warming. And there are many parts of the world that arent given to air pollution, where it would be preferable to allow cars to achieve better fuel economy, releasing more NOx, but less CO2.

EPA has always taken a one-size-fits-all approach to automobile emissions, which is reasonable, given that cars are mobile. A car sold in Florida, which has good air quality, can readily find itself in California or New York. But today, used in conjunction with a GPS sensor, VW’s engine software could be husbanded for a good purpose. Depending on a vehicle’s location and the time of year, an engine could alternatively tune itself to achieve the highest possible fuel economy – releasing the least possible CO2 in areas where NOx pollution is not a health hazard – but then tune down to minimize NOx release in localities where air quality is problematic, accepting poorer fuel economy as a tradeoff.

We arent excusing VW for its considerable wrongdoing. Rather, we’d take this occasion to consider the options that modern engine technology affords us, in light of our competing environmental objectives.


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Sick Pay Pays II

Last week we discussed how the problem of “adverse selection” works to undermine insurance markets, including the market for paid sick leave and unemployment insurance. We noted that the cure is to make insurance mandatory for all – as President Obama did recently, by making paid sick leave mandatory for employees of federal contractors. In developed countries, many forms of insurance are mandatory: disability, unemployment, old age, auto, and health are among the most common.

But even universal insurance faces the “moral hazard” problem. That’s the fact that people, for good and bad, behave differently when they have insurance. Old age insurance (like social security) may diminish your incentive to save for retirement. Auto insurance may facilitate riskier driving. Unemployment insurance may make you less deferential to your boss. And indeed, all else being equal, people with paid sick leave should be expected to miss work more often than people without it.

But the key insight about moral hazard, is that we are still better off with insurance than without it. In other words, while it imposes a cost, that cost is almost invariably exceeded by the benefits. For example, it’s been suggested that unemployment insurance and social security have the combined effect of allowing people to take riskier decisions on where to work – giving a hi-tech start-up a chance, for example, instead of playing it safe with an established firm. In the aggregate, such risk-taking may be a significant boost to a modern economy dependent upon constant innovation.

Auto insurance makes transportation risks more manageable, letting people commute to their job of choice; while also facilitating distribution networks, giving consumers more options. Health insurance correlates with better health, and can reduce costs when people make use of preventive care before a problem gets out of hand and lands them in the ER.

There is no free lunch. Paid sick leave, ultimately, is paid for by employees, reducing their wage compensation, leaving total compensation (including benefits) unchanged. The same is true for paid maternity leave, unemployment insurance and even social security. While an employer nominally pays out for those items, direct employee compensation is reduced by the same amount.

Taken together, benefits like paid sick leave confer a further benefit: they seem to make employment more desirable, such that more people offer themselves on the labor markets. This is seen in higher labor-force participation rates in the working-age population of countries that have liberal labor standards; and in relatively low labor-force participation rates in the US.

Most people want benefits with employment – including caps on hours, unemployment insurance, paid holiday and vacation time, and paid sick and maternity leave. But the market has no route from this equilibrium (their absence) to another equilibrium (their ubiquity), without help from legislation.

The point is not that a central planner knows better than individuals at the point of contract. Rather, we must recognize that there are obstacles that prevent market participants from coming to terms. Well-tailored labor regulations can ameliorate these obstacles, to let the market work its magic.


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Sick Pay Pays

On Labor Day, President Obama issued an executive order mandating that federal contractors offer paid sick leave to their employees. Such mandates serve as a back-door means of improving labor standards, albeit for a relatively small number of workers.

Most countries make paid sick leave mandatory for full-time employees. The US is alone among developed countries is not doing so. Outside of a few American cities and states that legally require paid sick leave, most Americans are at the mercy of their employer.

One can fairly ask why we shouldnt simply leave it to the markets. If paid sick leave is really so desirable, one can argue, laborers will ask for it, and employers will offer it. But the problem is that paid sick leave – like paid maternity leave – is a lot like insurance, and beset by the same problems. Chief among them is that insureds typically have better information on their own circumstances than might a would-be insurer. And so when someone asks for insurance, an insurer can reasonably infer that that person – for reasons that may be undetectable – is more likely to be a bad risk than someone taken at random.

That simple fact naturally leads to a feedback loop, whereby insurance gets pricier, making the people who are willing to pay that price even worse risks; which in turn makes insurance pricier still, and so on and so on until the market fails – with many people who want insurance, and firms who would provide it, unable to come to terms.

This dynamic was famously observed in the market for used cars, in a piece entitled “The Market for Lemons,” which won for its author, George Akerlof, the Nobel Prize for economics. People are suspicious about used cars because some defects are readily known to the seller, but are exceedingly difficult for a buyer to ascertain. Because of the buyer’s perception of risk, his offer price drops. As a consequence, sellers of good used cars cant get fair compensation, making them less likely to bring them to market. This dynamic feeds on itself until the market contains only the worst used cars.

You can readily envision the same problem occurring in the market for unemployment insurance, if it werent mandatory. A worker asking for such insurance at the time of hire would flag himself as a bad risk – one who is likely to be let go. He might be passed over for a position simply for asking! Consequentially, we should expect unemployment insurance to get more and more expensive; and as it does, only the most at-risk employees would be willing to pay for it – and so on and so on, as the market fails.

This same problem befalls virtually every form of insurance – including disability, old age, and health. The cure is to make insurance mandatory, so that people cant “self-select” into or out of insurance. Insurers are then better able to estimate the risks, because they can look at the population as a whole.

Once you solve the “adverse-selection” problem (also known as the “asymmetrical information” problem), you run into the next big issue in insurance markets: moral hazard, which we’ll take up when the Field Guide returns next week.


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Stupid Originalist Tricks

Why should liberals expend energy bashing conservatives – when conservatives do the job so much better? This week, the Field Guide takes aim at “originalism,” to again demonstrate that conservatism, at its roots, has no principles. It is not a political philosophy – it’s just a bunch of crap packed together by historical accident, and held together through a firm commitment to not thinking it to death.

Originalism, nominally, holds that the US Constitution should be interpreted the way the people who wrote it and-or ratified it would have interpreted it. Take the 14th amendment’s birthright citizenship clause:

All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.

Hard to imagine how anyone who ever complained about judicial activism could suggest that the 14th amendment means anything but what it says: if you are born in the US, you are a US citizen. But it hasnt prevented conservatives from claiming that the US-born children of illegal aliens are exempt from the 14th amendment’s plain meaning.

Their argument seizes on the “subject to the jurisdiction thereof” requirement, somehow asserting that illegal aliens are not subject to US jurisdiction. Anyone who knows a little bit about law should know what the consequence of that would be. It would mean that illegal aliens could not be tried for any crime, nor compelled to appear for civil disputes either. They would have the same immunity as do diplomats (the actual, intended targets of the jurisdiction requirement), who can be expelled from the country, but cannot be brought to court to answer for their misdeeds. If that sounds crazy, wait – there’s more.

At the time of the 14th amendment’s ratification, the US had never had an illegal alien. The borders were open, and had been since colonial times. Anyone could emigrate to the US – and, under the common law, their children automatically became citizens. How could the writers and ratifiers of the 14th amendment possibly have intended an exception for a class of people that didnt exist!?

Moving on to the next stupid originalist trick: If you saw the GOP debate, you may have caught Marco Rubio advancing the loopiest anti-abortion argument to date. Per Rubio, the 5th amendment’s due process clause,

No person shall… be deprived of life, liberty, or property, without due process of law….

applies to fetuses and embryos. And so we dont need state or federal anti-abortion statutes – abortion is already illegal under the US Constitution – we just need five justices to say so.

We happen to know that Rubio is an originalist, because after the Supreme Court’s decision in Obergefell, (legalizing gay marriage nationwide), Rubio said,

It must be a priority of the next president to nominate judges and justices committed to applying the Constitution as written and originally understood.

So did the 5th amendment, “as written and originally understood”, really include fetuses and embryos as “persons” – and outlaw abortion from way back in 1791?

To answer that question, it helps to know that abortion was legal in all 13 states at the time the Bill of Rights was adopted – as it had been in all 13 colonies previously – as it had been for several hundred years under the common law. And so Rubio will have to find some other pretext for his political beliefs. Or he can simply abandon originalism, and interpret the Constitution according to some other style. We at the Field Guide are betting that he does neither – self-contradiction, after-all, is the conservative way.


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A Good Deal with Iran

Last week, the Field Guide took on the critics of the Iran deal. This week we get further into the deal’s specifics, showing why it’s by far the best option for the US and world community, in its effort to head off Iran’s development of a nuclear weapon.

Nuclear weapons can be fueled by plutonium or uranium. The Iran deal, known formally as the Joint Comprehensive Plan of Action (JCPOA), tackles Iran’s ability to use either material as a basis for a weapon.

Plutonium does not occur in nature – it must be produced. Production requires a specific type of nuclear reactor. Iran has such a reactor at Arak. However under JCPOA, Iran will modify that facility to minimize plutonium production. The International Atomic Energy Agency (IAEA) will participate in Arak’s redesign and reconstruction, and the entire site will be subject to constant IAEA surveillance – before, during and after.

Uranium, by comparison, is relatively plentiful in nature. But for uranium to be used in a nuclear weapon, it must first be “enriched.” Uranium enrichment is a complex process requiring, among other things, the use of sophisticated centrifuges. JCPOA controls both the quantity and quality of Iran’s centrifuges, while also placing hard and fast limits on the quantity and quality of enriched uranium that Iran can possess. The reductions in Iran’s nuclear infrastructure are dramatic. Iran’s operational basic centrifuges will be reduced by more than two-thirds. All of their advanced centrifuges will be shut down. Iran’s stockpile of enriched uranium will be reduced by 98%. Relevant sites will be subject to constant IAEA monitoring. Iran’s release from sanctions is contingent on the IAEA’s verification of compliance.

JCPOA’s strictures are tough enough to have won the endorsement of many nuclear scientists. Other commentators suggest that Iran’s considerable concessions are without precedent for a country that was not defeated militarily. Abroad, there is no real debate on the virtues of JCPOA – the other parties (China, France, Russia, UK, Germany) are poised to move ahead. So why, then, does the US Congress appear so divided? The main reason is the influence of pro-Israel lobbying groups. But this only begs the question: why is Israel opposed to the deal, particularly if several leaders within Israel have warned that Iran will shortly be able to obtain nuclear weapons under the existing sanctions regime, in the absence of JCPOA?

Israel has more skin in this game than any other player, and so their trepidation must be taken seriously. As detailed in an insightful article in the Atlantic, Israel is faced with two unattractive and unavoidable outcomes. Under sanctions alone, Iran will remain relatively impoverished, but will obtain a nuclear weapon, and more likely sooner than later. Under the deal just struck, Iran will grow wealthier, but is much less likely to obtain a nuclear weapon. As the article puts it, “Israel either has an Iran with nukes, or an Iran that is powerful regionally in every other way.”

Our best guess is that Israel, wisely or not, wants to have it both ways. They want Iran to be kept in financial straits under sanctions. And should Iran come too close to developing a weapon, Israel would use a military strike to keep them in check, as they did in 1981, when the Israeli air force destroyed Iraq’s nuclear reactor at Osirak.

There is an even more cynical interpretation. Israel remains the beneficiary of three billion dollars of US military aid per year. Having made peace with Egypt and Jordan, and with Syria a shambles, that aid is increasingly difficult to justify. Since Iran is now Israel’s only significant regional threat, it could be that elements within Israel see a warming of relations between the US and Iran as undercutting the remaining rationale for the flow of all that cash.

Taking the broadest of views, over the long haul, the US and Iran are not adversaries across every dimension. JCPOA is not a zero-sum game: as trade between Iran and the US and its allies increases, all sides will grow richer. Over time, close trade relations can become a basis for better relations in all areas, and can grow into a bulwark against aggression. As the Field Guide has frequently noted, trade and affluence are democracy’s best foot-soldiers. As Iranians grow wealthier, they will come to demand political power commensurate with their material well-being. This is the dynamic that secured democracy across the globe, from France, England and the US, to Singapore, South Korea and Taiwan. In the very long term, the wealthier Iran becomes, the more likely that its interests, and those of the West, will align.


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