Favorite sports teams

  • My favorite sports teams
  • (1) Braves
  • (2) Yankees
  • (3) Hawks
  • (4) Falcons
  • (5) Panthers
  • (6) UNC (basketball)
  • (7) UGA (Football)
  • (8) Alabama (Football)

Sunday, October 26, 2014

Why the Middle Path is often the worse option (regarding U.S. foreign policy)

       Ever since the Buddha spoke of the middle path over 2400 years ago, it has become an attractive option. To navigate between two extremes seems like a good idea, and it is often the most stable one. However, as the past 60 years have shown, regarding wars and foreign policy, this can be the worst.

     A classic example of this was the Vietnam War. In 1961, as tensions between the North and South were shapely escalating, the Pentagon gave Kennedy a report, the December 1961 White Paper. It proposed a sharp increase in military and civilian assistance to South Vietnam. Had Kennedy ignored the report, the war could have been avoided all together, and had he fully done what it recommended, these actions would have strengthened the South Vietnamese government and allowed it to better defend itself against North Vietnam. But instead, Kennedy went for the middle path, which dragged the U.S. into a long war but did not support Saigon as much as it could have. Another decisive mistake was made in 1968. In the Tet offensive, after initial victories the Viet Kong was beaten back  and faced heavy losses. General Westmoreland, the general in charge of the war in Vietnam, requested 206,000 addition troops to deliver a decisive blow against North Vietnam. By granting his request, it is possible that the Vietnam War could have been won, or ended in a stalemate. Alternatively, by withdrawing completely, the U.S. would have saved billions of dollars and thousands of lives. Instead, Johnson choose the middle ground, neither a decisive counter-offensive nor a complete withdrawal. Because of this mistake, the U.S. allowed its ally to be defeated at a high cost of both human lives and U.S. dollars.  A few years after the U.S. eventually withdrew, South Vietnam was conquered, with 58,220 American casualties and about 758.4 billion American dollars (in today's dollars) spent. However, the war was not a complete failure, for it did help prevent communism from spreading anywhere else in South-East Asia. It also cost the U.S.S.R. money in aid, training, weapons and solders stationed there, thus indirectly leading its demise. However, an inefficient economy and the Soviet-Afghan War more directly effected its collapse, and since the actual costs cannot be obtained easily, the real impact of the Vietnam War on the U.S.S.R. is uncertain. Additionally, the countries on the Southeast Asian mainland that were not hostile toward the U.S. (Laos, Cambodia and Thailand) had a combined population of 53.935 million at the end of the Vietnam War in 1975, while Vietnam had a population of 48.03 million, nearly the same amount. Thus the most populous country in the region had completely fallen to communist. The middle path led to the worst of all plausible outcomes: a costly war in both lives and dollars that ended in defeat.






Thursday, August 28, 2014

The decline of the tea party

     The Tea Party is a somewhat vague term that has been used for far right conservatives for the past ten years. It sprung up quite suddenly, during 2010, in the first mid-term election. In some ways it is similar to Gingrich's Contract With America. This contract was a list of promises made by Republicans in the 1994 elections, and influenced Gingrich and the Republican House for large parts of the Clinton administration. It was a conservative reaction to the electing of a Democratic President in a tough economy. Both of these movements managed to help Republicans regain the House. However, there is a crucial difference. While the Contract With America was organized and under direct leadership of Gingrich, the Tea Party has no such leadership or organization, there are many potential leaders, and it is a very grassroots organization that is often organized locally.

    Some of the long term causes of the rise of the Tea Party are cultural changes in America. According to Gallup, In 1996, support for Gay marriage was 27%, while in 2010 it had risen to 44%. Legalization of Recreational Marijuana rose from 25% in 1996 to 44% in 2010. The percent of Americans who were Christian (Protestant, non-specific or Catholic) was 83% in 1994, and had fallen to 74% in 2010. In 2010, with 81% of people identifying with the Tea Party being Christian, and only 18% in favor of Gay marriage, the Tea Party became more distinct from the general electorate. 

     Obama's election and the worsening economy were immediate causes to the rise of the Tea Party. Since Tea Party voters tend to be on the far right of the political spectrum, the election of a leftist President would clearly cause a backlash. This was seen in 1994 with the rise of Gingrich following Clinton's election. Additionally, a poor economy also likely caused the Tea Party to gain momentum. The unemployment rate in the U.S. as of January 2009 was 7.8%. It rose to 10% by October 2009, and stayed very high throughout the entire election season. In November 2010, it stood at 9.8%. The poor economy hurt the President's approval rating. In late January of 2009 President Obama's approval rating stood at 67%. By the week of the mid-term elections, it had dropped to 45%. The unpopularity likely sparked the rise of the Tea Party.

    However the middle 2011 saw the debt ceiling debate. Many in the Tea Party threatened not to raise the debt ceiling if they did not get the spending decreases and tax cuts they wanted, If the debt ceiling were not increased, the U.S. would default on its loans, likely leading to global reccession. As the year went further along, fear that this might actually happen increased. Real GDP growth fell from a good 3% in the 2nd quarter of 2011, to a slow 1.5% in the third quarter of that year. A deal was made, but it was only a short term fix.
       In the 2012 election, there were several Tea Party candidates who were at one point front runners in the polls nationwide: Newt Gingrich, Rick Santorum, Michelle Bachman, and Herman Cain. However, none would be successful, as Mitt Romney was elected the Republican Candidate. Never the less, the prominence of Tea Party candidates showed their rise in influence.

      Not long after the 2012 election was over, the U.S. faced the possibility of the fiscal cliff. This became a major concern in large part because of the Tea Party's refusal to pass a bill preventing it unless certain conditions were met. It was avoided, but taxes on the top income tax bracket did rise from 35% to 39.6%. However, sequestration did go into effect. Although it did not effect the economy as badly as predicted, it did have an significant effect on U.S. GDP.

     From October 1st to October 16th  parts of the government shutdown. The Tea Party refused to avoid this shutdown unless the Affordable Care Act was defunded. There was also a threat of going over the debt ceiling, which would have required the government to stop spending and/or raise taxes by over 500 billion dollars in the course of the next fiscal year. This could have had catastrophic effects on the U.S. economy. However, this was narrowly averted, as the debt ceiling was raised and the government shutdown was ended. In the immediate aftermath of the end of the crisis, Tea Party approval stood at an all time low of 28%, while Republicans approval stood tab a paltry 30%

    The Tea Party had already cost the GOP several winnable seats, such as the one Todd Akin lost on Missouri and Richard Murdock lost in Indiania, both after stupid comments related to rape. And with the prospect of the Tea Party costing the GOP in 2014 and 2016, the establishment was angry with the Tea Party and clamped down on it. 
       Karl Rove's American crossroads began to go against the Tea Party. The Tea Party suffered several electoral defeats in the primaries. Senate candidate House Speaker of North Carolina Thom Tillis,  eight term house incumbent Mike Simpson of Missouri, and Senate Minority Leader Mitch McConnell of Kentucky all crushed their Tea Party opponents with huge margins of victory. In Georgia, the most right wing candidates for Senate also lost.   Senator Lindsey Graham of South Carolina also prevailed to avoid a runoff. The eventual winner of the Georgia primary, David Purdue, was a business friendly non-Tea Party candidate. 
      The Tea Party may be down, but it will not go quietly. A startling example of this is when Eric Cantor of Virginia, the House majority leader, lost to Dave Brat by a significant margin. 
     Despite this, the outlook for the Tea Party looks bleak. Tea Party support is at an all time low and it has several electoral losses. Marco Rubio, Jeb Bush, and Chris Christie, non-tea party candidates, all have a good chances of winning the 2016 nomination, while Rand Paul's popularity has largely been confined to that of the Tea Party and of Libertarians. In all likely hood, the importance of the Tea Party will continue to decline, but it will continue to produce electoral upsets along the way. 


Tea Party candidates Ted Cruise and Rand Paul are considered  contenders for the 2016 nomination.










Friday, July 18, 2014

Israel vs Hamas 2014 edition

Recently, Israel and Hamas have engaged in conflict yet again. I haven already discussed the history of this conflict in a prior post, so I shall start with the beginning of the most recent one.

 On June 2nd, a unity government between Fatah and Hamas formed, hurting peace efforts and relations with Israel.  On June 12, 3 Israeli teenagers were kidnapped in the West Bank, presumably by a Palestinian. For the next several weeks, Israel searched throughout the West Bank for the teens, arresting several people and increasing tensions in the process. On June 30th, the three were found dead. Netanyahu blamed Hamas, and Fatah stated they were not responsible for the teenagers deaths. A few days later on July 2nd, an apparent revenge killing of a Palestinian teen occurred. Several suspects were arrested as  rioting occurred in Arab villages. At the same time, Hamas began to fire rockets into Israel. By July 7th, over 200 rockets had been fired into Israel. That same day Israel launched Operation Protective Edge, escalating the conflict.

     Israel's anti-missle defense system, in part funded by the U.S., has been about 90% effective. Sirens warn Israelis to take cover, also limiting causualties. In the next several days, Hamas fired rockets into Tel Aviv,  Haifa, and Be'er Sheva, major Israeli cities, as well less populated areas and places near Gaza. On July 8th, Israel called up 40,000 reserve troops in response. Israel also launched airstrikes and navel strikes onto many targets. Many missile and weapon sites have been hit as well as militants. Unfortunately, up to 70% of casualties have been civilian, however this does not appear to be intentional. Efforts have been made to avoid civilian casualties, such as warning shots and warning leaflets. The high civilian casualty rates have hurt Israel's international reputation. On July 9, with 43 Palestinian deaths and over 370 wounded, Palestinian President Abbas declared that Israel was committing genocide. Meanwhile, neither side appeared to be letting down.

         As the death toll continued to climb, and tensions continued to rise, Egypt proposed a ceasefire. On July 15, Israel accepted it, but Hamas rejected it and continued to fire rockets, leading to more airstrikes, more reserve troops being called up, and more deaths. On July 17 there was another temporary ceasefire, but it was again broken by rocket fire from Hamas. That day, with over 1200 rockets launched from Gaza, Israel launched a ground invasion into Gaza. An invasion was  sure to add to the over 230 Palestinian deaths and 1 Israeli death, although Israel with its heavy artillery and armored vehicles, including tanks, is likely to face far fearer deaths. To this day, over 20 Palestinians and one Israeli solider have died in the ground invasion.

      Whatever the result of the ground invasion, the real question lies with how to resolve this conflict for more than a few years. With the peace-process all but dead, the U.S. has little leverage to resolve it. Thus, it must be resolved among the engaged parties. Hamas will still remain belligerent towards Israel and does not appear to have the will to resolve it. Thus Israel is left with three options, none of them good. The first option is to withdrawal from Gaza after damaging Hamas's military, and have a ceasefire. This is what has happened in the past. However, every time Israel does this, Hamas  breaks the ceasefire within a few years, starting the process all over again. This is appears likely to occur again if Israel goes with the option.

      The second option is to forcibly remove Hamas as the government and replace it with the PLO. This has advantages in that the PLO is less hostile to Israel and has not launched attacks on it in several years. However, this is harder then it seems. Keeping Hamas out of power permanently and propping up the PLO would require some military supervision and could need some action against Hamas. Additionally, it runs the risk of the PLO being seen as a proxy government for Israel, which could lead to it being delegitimized or even overthrown and being replaced by another hostile government. Even if this could be accomplished, the PLO is not an ideal government. It is on bad terms with Israel, and may not be able to maintain power. Despite these risks, this is the option I prefer, in part because it reduces the risks of future attacks while minimizing the negative impacts.

     The last option is a full military occupation. This nearly eliminates the risks of future attacks by a government, all but removes the possibly of sophisticated rocket attacks, and could maintain relative order in the area. However, there are several problems with this option. First of all, a full occupation would be expensive, requiring near constant military supervision, and the potential use of force to maintain order. Secondly, a re-occupation would not be good for Israel's international standing, although based on history relations with the U.S.  would not be damaged severely. Thirdly, relations with the PLO would surely be damaged, making keeping order in the West Bank harder. This leads to the last problem, the potential rise of a third intifada. Re-occupation would anger not only the PLO, but the Palestinian people as well. Uprisings in Gaza and the West Bank could occur, causing many casualties for both the Palestinians and for Israel. This could turn much of the international community against Israel. The effects on its economy and moral would be severe.

      Israel and Hamas seem to be engaged in a never ending conflict. Unless either side changes their strategy, expect to be reading about the same thing in a few years.












Tuesday, May 20, 2014

Secular stagnation part 2

         Another reason for the current secular stagnation is bad trade policies. During the late 1990s, NAFTA had been recently signed. Since then, trade between the the participating countries has surged, although in part this is due to growth in these economies.  A huge increase in trade with China also caused economic growth. In 1995 trade between the U.S. and China amounted to about 57 billion dollars. In 2000, it was about 116 billion dollars. Total U.S. trade grew from 1.3 trillion dollars in 1995 to about 2 trillion in 2000, and average of about 26% a year. It remained stagnant during the recession of 2001 to 2003. In 2004 it amounted to about 2.3 trillion dollars, and grew to about 3.1 trillion in 2007, a slightly larger increase per year. However, since the end of the last recession trade has slowed, in part due to slower growth,  but also due to more trade restrictions, most importantly among the G-20.

             NAFTA, which was signed in 1994, is outdated and needs to be updated.  The greatest gains occurred earlier in NAFTA's lifetime, the late 1990s, and the positive effects have wained over time.  One way to improve NAFTA would be to strengthen infrastructure along the U.S.-Mexico border. According to a U.S. Chamber of Commerce report on U.S.-Mexico trade failing to update current infustructure and build new infrastructure would put efficiency and economic growth at risk.

         Allowing the U.S. to export natural gas would also be helpful, since it would bring in greater profits for natural gas companies, since in Europe natural gas prices are higher than in the U.S. Additionally, it would help wean  Europe off Russian gas, thus allowing greater sanctions by the U.S. and Europe over the crisis in Ukraine against Russia.

     The deals currently being discussed with the Transatlantic Trade and Investment Partnership(TTIP) and the Transpacific partnership(TTP) by many estimates would add $200 billion to the United States annual output. The TTP, which is currently being negotiated would encompass 800 million people and 40% of the world's trade. It would be composed of nearly every Pacific Country except China, Indonesia, and Russia. The TTIP would be between the United States, and E.U. The two economies in 2012 accounted for about 33 trillion dollars in GDP, or about 46% of the world's 72.5 trillion dollars. These two trade pacts cover over 63% of the world's GDP.

       The president has been supportive of both initiatives, but congress has blocked them, especially Harry Reid. Democrats in congress, as well as some Republicans, fear job losses in the U.S. as well as political retaliation among their constituents. Rather than face up to big issues, both parties have tried to rally their base. Here are some examples of issues that parties have focused on to rally their base.  The democrats have used the 77 cents catch phrase on how much women make compared to men on average. However, women work less hours, are in higher paid professions, and do more dangerous jobs. Minimum wage has also been a hot topic for the left, despite uncertainty on how positively a minimum wage raise to $10.10 would help the economy, if at all. Republicans have  focused solely on The Affordable Care act in many instances, which although is problem, and potentially a large one, is not as urgent as some other issues, such as unemployment and low workforce participation(although the law encourages the later). Benghazi has also been raised up yet again recently, despite the fact that it occurred nearly two years ago. Although the president may not have been completely honest about the situation, it is insignificant compared to other problems facing the country, and politicians have lied about much worse things. 

   Rather than focus on partisan politics, the United State's federal lawmakers should focus on issues that can stimulate the economy and bring long term job growth. Alas, it appears that neither party is going to do this anytime in the near future. 













Monday, March 17, 2014

The new normal: why low workforce participation rates and bad trade policies mean that the U.S. will be stuck in low growth and high real unemployment for the foreseeable future

     The United States right now is facing a weak economy, high unemployment, and low growth. There have been periods of recovery throughout the recession, but all have been followed by disappointing results. It has been over 4 years since the official end of the recession. Even before the recession, growth was much lower then in the mid 90s. From 1994-2000, the United States averaged an annual growth rate of about 4.05%. From 2003-2006, at the height of the U.S. economy on the last decade, the growth average was almost a full point lower, at about 3.18%. From 1994-2000, unemployment consistently fell or stayed put. In January 1994 it was 6.6%, falling to 5.1% in August of 1996 to 4.5%  in May 1998 and to under 4% in 2000. Although some of the growth toward the end of the period was driven by the technology bubble, the fact that the recession afterward was only made much worse after the terrorist attack of Sept 11, 2001 shows that despite the bubble, underlying economic conditions were still good. The period from 2003-2006 also saw a drop in the unemployment rate, although not to as low as a level as seen in 2000, and the low unemployment lasted for a shorter period of time. This period was driven not by one but two bubbles, a banking one and a lending one, which would prove to be much larger than the technology bubble. Yet despite this, the period from 2003-2006 was worse in regards to both growth and unemployment than from 1994-2000. The fact that conditions were dissapointing even before the recession reveal a worrying reality: that structural, not cyclical factors are hampering the U.S. economy. This is also known as secular stagnation. From 2001 onward, the economy was unable to create many jobs or produce good growth without a bubble, and even with the bubble conditions were not great. Former treasury secretary  Larry Summers admitted this in an interview with the Washington post. The United States is in danger of following a path similar to Japan, and France: consistently poor GDP growth, low workforce participation, and excessive regulation combined with relatively high unemployment and low inflation to create a economy that is permanently bad.

      Even worse news is that when one takes into account lower workforce participation, one can see that the unemployment rate is underestimating the number of people out of work. The workforce participation rate is now at a very low 63.0%. It has been in decline for a while. In 1998 around its peak it was at 67.1%. At that time it was expected to decline to about 63.0%, but in 2025 not 2014. In November 2007, the month prior to the recession it was at 66.0%. As the unemployment rate peaked at 10.0% in October 2009, workforce participation was at 65.0%. Despite the fall in unemployment by over 3.0%, the workforce participation rate has decline by 2.0%. This means not only that much of the decline was artificial, but also that the U.S. will have relatively fewer jobs because relatively fewer people are working. In short, unless this major problem is solved, it is highly unlikely growth can be sustainably what it was in the mid-2000s, let alone the mid to late 1990s.

      One thing that contributes to the low workforce participation rate is the excessive social safety net.  The retirement age had remained 65 ever since 1938. It was not until 1983 until a very small raise in the retirement age was introduced for people born after 1938, gradually rising to 67 for people born 1959 or later. In 1938 the life expectancy in the U.S. was 63.5 years. In 1983, even when in had risen to 74.6 years, the retirement age barley budged. In 2011, the life expectancy was 78.7 years. Despite the over 15 year increase in life expectancy, the official retirement age has barely moved since 1938. This contributes to the low workforce participation rate. The fact that there is an over 15% drop in workforce participation from ages 62-64 to ages 65-69 confirms this.  In addition to an early retirement age, disability claims are also being abused. Disability claims rose by during the recession. From 2008-2009, applications for the program rose by 21%, and from 2007-2011 the number of people collecting disability claims rose by 2.8 million, or about 20%. This is a significant increase that needs to be addressed. The Affordable Care Act makes the problem of less people working even worse. According to the CBO,  from 2014-2024 2.5 million less people will work full time because of disincentives to work by the Affordable Care Act.

      A low workforce participation rate is bad for the economy and country for many reasons. One reason is that with less people working, less income is made, causing both tax revenues to fall and  average household income to fall. It also means that less work and production is done, causing growth rates to fall. Lastly, with less people working, the people who are working will have a bigger average burden to support the people who are not.

I my next segment, I will discus the United State's poor trade policies and how it hampers growth.

      The Economist Feb 22-28 2014