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Posted: 05 Jan 2018 02:00 AM PST
In the early 1960s, at the dawn of the Kennedy administration, Edward Lansdale had an enviable reputation as a can-do covert-action specialist. An advertising executive turned air force officer and CIA operative, he had in the early 1950s masterminded the defeat of the Huk Rebellion, a communist uprising in the Philippines, and helped to elect his friend, Defense Minister Ramon Magsaysay, as that country's president. That earned Lansdale a ticket to Saigon in 1954, where, again on behalf of the CIA, he took under his wing another neophyte leader—Ngo Dinh Diem—and helped him to solidify power against heavy odds.
Lansdale's growing fame led people to say (wrongly) that he was the model for the protagonist in The Quiet American and (rightly) that he was the inspiration for one of the few positive characters in The Ugly American. Some called him the "T.E. Lawrence of Asia" and the "American James Bond." John F. Kennedy became an admirer, and turned to him for advice about Vietnam and counterinsurgency in general. As head of special operations for the Department of Defense, Lansdale appeared to be well on his way to becoming a dominant force on Vietnam policy within the U.S. government.
Yet by the beginning of 1963 Lansdale had been all but sidelined from Vietnam policy and was on his way to an early retirement from his powerful Pentagon post. By then the secret agent once seen as a Svengali who was able to cause the rise and fall of governments with a few notes from his famous harmonica was being derided by bureaucratic rivals as a "Madison Avenue … con man" and "lucky amateur." That caricature would seep into journalistic and eventually historical accounts, coloring perceptions of Lansdale for decades to come.
What happened? How did Lansdale plummet so quickly and so far from the heights of power and prestige? His career—like many other promising elements of the Kennedy administration—foundered on the island of Cuba, with ramifications that would in time be felt on the other side of the world in Vietnam.
* * *
Lansdale received a thankless assignment at the end of 1961: to overthrow Fidel Castro, the bearded young revolutionary who in 1959 had had seized power in Havana. The Kennedy administration initially had tried to topple Castro, who was seen as a communist threat in America's "backyard," by backing a CIA-organized invasion of exiles at the Bay of Pigs in April 1961. That had turned into a fiasco. Now the Kennedys were hell-bent on getting rid of Castro any way they could, and they saw Lansdale as just the man for the job. His lack of experience with Cuba was seen as a recommendation: He was not tainted by the Bay of Pigs operation, which he had opposed.
Lansdale, who by now was special operations chief at the Pentagon and no longer on the CIA payroll, was assigned as chief of operations of a top secret, interagency task force known as the Caribbean Survey Group—soon to be designated, for cover purposes, Operation Mongoose. Lansdale had to rely on liaison officers from the State Department, the CIA, the U.S. Information Agency, the Defense Department, and other government agencies that were supposed to voluntarily cooperate with him. That ideal was not easy to achieve in practice, given the level of skepticism within the CIA and State Department toward the project in general and to Lansdale in particular—he had long feuded with bureaucratic rivals. "It was the most frustrating damn thing I've ever tackled," Lansdale wrote two years later. "I was given full responsibility for a US effort, but had no say on disciplining or giving orders to US personnel working in this effort. Most of these were State and CIA folks who made it plain to me that they hated my guts. So about once a week I would formally request relief from this duty, and be told that this was unacceptable."
Attorney General Robert F. Kennedy, who took on Castro's overthrow as his personal project, put intense pressure on Lansdale to achieve results. At meeting after meeting, the president's younger brother stressed that there had to be "maximum effort" and that "there will be no acceptable alibi" for failure. "Let's get the hell on with it," he would say. "The president wants some action, right now." His performance at Mongoose meetings reminded the CIA's deputy director, Marshall Carter, of "the gnawing of an enraged rat terrier."
After having sifted through various ideas to topple Castro, Lansdale on February 20, 1962, produced a detailed, if delusional, plan. The operation was supposed to start in March and culminate in October with what Lansdale described as the "touchdown play": Castro's overthrow. How on earth could Lansdale expect the weak and divided Cuban opposition, decimated at the Bay of Pigs, to prevail within less than a year? He prided himself on being unafraid to tell unpleasant truths "point blank" to his superiors, and he often had in Vietnam, but when it came to Cuba he succumbed to the temptation to tell his superiors what they wanted to hear in the hope that they would allow him to return to Saigon to once again chart American policy in South Vietnam. In his own defense, the best that Lansdale could say was: "I was hopeful and I put it down as a date without believing myself that it was a firm date—it was a prospective date of the early fall of 1962."
The only realistic way that Castro could have been toppled that fast was through an American military intervention. That is why Lansdale demanded an "early policy decision" on the fundamental question: "If conditions and assets permitting a revolt are achieved in Cuba, and if U.S. help is required to sustain this condition, will the U.S. respond promptly with military force to aid the Cuban revolt?" The answer from the White House was that President Kennedy was no more willing in early 1962 than he had been a year earlier, during the Bay of Pigs, to wage open war against Castro. Lansdale and his colleagues in Operation Mongoose were supposed to find some magical way to get rid of Castro quickly without ensnaring U.S. troops in combat. It was an impossible assignment, and led them to come up with ludicrous shortcuts.
Years later, Lansdale would be mocked for one far-fetched scheme in particular. Testifying to the Senate's Church Committee in 1975, the CIA veteran Thomas Parrott related to incredulous committee members a plan Lansdale had developed for a U.S. submarine to surface near the Cuban coast and fire star shells into the sky in order to convince Cubans "that the Second Coming of Christ was imminent and that Christ was against Castro." Parrott said that "by this time Lansdale was something of a joke in many quarters and somebody dubbed this Elimination by Illumination," a catchy nickname that stuck to Lansdale thereafter like a tropical rash. In response, Lansdale indignantly wrote to Senator Church, "I assure you that this is absolutely untrue. I never had such a plan nor proposed such a plan."
A document declassified long after Lansdale's death and not previously cited by any other author makes clear that, notwithstanding Lansdale's protestations, this story was mostly true. On October 15, 1962, Lansdale wrote a memorandum on "Illumination by Submarine." It proposed firing "star shells from a submarine to illuminate the Havana area" after dark on November 2, All Souls' Day, in order "to gain extra impact from Cuban superstitions." The memo did not mention the Second Coming, but it did suggest that the star shells could be coupled with a CIA-generated "rumor inside Cuba, about portents signifying the downfall of the regime and the growing strength of the resistance."
The "Elimination by Illumination" scheme did lasting damage to Lansdale's reputation, but he was hardly the only or even the main culprit behind such far-fetched plots. Long before Lansdale was assigned to work on Cuba, CIA officers in 1960 had come up with brainstorms such as slipping Castro a box of cigars contaminated "with some sort of chemical" that would lead him to "make a public spectacle of himself" or feeding him a depilatory drug to make his beard—supposedly a source of his power—fall out. It was almost as if the Marx Brothers had been put in charge of America's premier intelligence agency. Once Mongoose got under way, the flow of far-fetched ideas turned into a deluge.
Brigadier General William H. Craig, the Defense Department representative to Mongoose, submitted proposals such as Operation Free Ride ("Create unrest and dissension among the Cuban people … by airdropping valid Pan American or KLM one-way airline tickets good for passage to Mexico City, Caracas, etc") and Operation Good Times: "To disillusion the Cuban population with Castro image by distribution of fake photographic material … such as an obese Castro with two beauties in any situation desired, ostensibly within a room in the Castro residence, lavishly furnished, and a table brimming over with the most delectable Cuban food with an underlying caption (appropriately Cuban) such as 'My ration is different.'" An Air Force lieutenant colonel came up with an even more outlandish idea in response to a shortage of toilet paper and sanitary napkins in Cuba. He suggested that the CIA air-drop toilet paper into Cuba with pictures on alternate sheets of Fidel Castro and Nikita Khrushchev to "drive Castro mad."
A more sinister plot, known as Operation Northwoods, was submitted by General Lyman Lemnitzer on behalf of the Joint Chiefs of Staff. It laid out a host of "pretexts which would provide justification for US military intervention in Cuba," such as having friendly Cubans in Cuban army uniforms attack the U.S. base at Guantánamo Bay, Cuba; sabotaging an empty U.S. ship in the harbor and blaming Cuba in a "'Remember the Maine' incident" (the United States had declared war on Spain in 1898 after the USS Maine mysteriously exploded in Havana harbor); or carrying out "terror campaign in the Miami area, in other Florida cities and even in Washington" that could be blamed on Castro. The U.S. armed forces could respond to such provocations, the chiefs gleefully recommended, by commencing "large scale United States military operations."
It is hard to imagine a more outlandish or distasteful document, redolent of the ruse that Hitler used on August 31, 1939, to start World War II: Wehrmacht soldiers in Polish uniforms attacked a German radio station on the border with Poland. That the Joint Chiefs would seriously offer these suggestions shows the fevered atmosphere of the day. "We were hysterical about Castro at the time of the Bay of Pigs and thereafter," Defense Secretary Robert McNamara was later to say.
None of these plans were adopted, but the CIA did try to kill Castro. This part of the operation was run by William King Harvey, the pistol-packing, martini-swilling CIA representative to Mongoose. He had been assigned by the White House to run a program known as ZRRIFLE that tried to use mobsters to bump off the Cuban dictator. But Harvey did not tell Lansdale what he was up to. Everything was on a strictly "need to know" basis, and Harvey did not think that Lansdale, as an outsider no longer on the CIA payroll, needed to know. In any case, the CIA plots failed to eliminate the Cuban dictator.
The CIA had no more success, under Lansdale's prodding, in mobilizing an internal insurgency against Castro despite a massive expenditure of resources. The CIA station in Miami, operating under the cover name Zenith Technical Enterprises, became its largest in the entire world, with some 15,000 Cuban exiles connected to it and so many boats ferrying agents and supplies to Cuba that it controlled the third-largest navy in the Caribbean. The CIA's agents carried out a few sabotage operations, but, as future CIA Director Richard Helms was to write, "the notion that an underground resistance organization might be created on the island remained a remote, romantic myth."
As 1962 progressed and Mongoose failed to produce results, tempers frayed all around. The relationship between Bill Harvey and Bobby Kennedy, a CIA officer recalled, was "bad from the beginning, and then it deteriorated steadily." At Langley, a story was making the rounds that when Bobby Kennedy demanded to know why a team of exiles had not yet been infiltrated into Cuba, Harvey replied they had to be trained first. "I'll take them out to Hickory Hill and train them myself," Kennedy snorted, referring to his mansion in northern Virginia. "What will you teach them, sir?" Harvey shot back. "Baby-sitting?"
Confidence was also faltering in Lansdale. In a contemporaneous memorandum, a CIA officer wrote, "Practically everyone at the operating level agrees that Lansdale has lost his value." It was hardly Lansdale and Harvey's fault that they had not been able to achieve impossible results, but they were set to become the fall guys.
Once the Cuban Missile Crisis began on October 16, 1962, following the discovery of a Soviet missile base in Cuba, President Kennedy prudently suspended Operation Mongoose. The only positive outcome of the operation was that it generated the intelligence which tipped off Washington that the Russians were placing nuclear missiles in Cuba. Leaks about Mongoose had also, however, encouraged Nikita Khrushchev to send missiles in the first place to safeguard the Castro regime from Yanqui aggression. After the crisis ended, Mongoose was formally disbanded early in 1963. Efforts to overthrow Castro resumed shortly thereafter, but Lansdale was no longer in charge.
Having failed to achieve the Kennedys' most cherished objective, Lansdale lost their favor, and was left naked before his bureaucratic enemies. His military career ended less than a year after Mongoose did. "I think the thing that hurt me the most in the long run was the task that Kennedy gave me on Cuba," he reflected decades later. "I'm sorry I ever got mixed up in those Cuban things."
Lansdale's Cuban failure was to prove historically significant not just for the future of that island nation but also for Indochina, because it ensured that he was cut out of American policymaking toward Vietnam just as relations between the Kennedy administration and the Diem government were reaching their breaking point over Diem's handling of an uprising by militant Buddhists. The Kennedys were convinced that Diem's heavy-handed repression was costing his government critical support in the struggle against communism—without considering whether the generals scheming to succeed him would prove any more popular. Throughout 1963, Lansdale presciently warned that giving the go-ahead to a military coup against Ngo Dinh Diem would be a catastrophic mistake. While Diem was flawed, Lansdale believed he was the best available choice, because he was not corrupt and he had nationalist credentials, having opposed both the communists and the French colonialists. By contrast, the leaders of the military plot against Diem were not only corrupt and lacking in democratic legitimacy but also tainted by their earlier service in the French army. Lansdale warned against Americans "trying to play God, by trying to pick a leader for Vietnam," when a leader, no matter how imperfect, was already in place.
Lansdale's warnings would be amply vindicated after the anti-Diem coup, which began on November 1, 1963, the very day Lansdale was forcibly retired from the Pentagon as a two-star general. One military dictator would follow another in South Vietnam, destabilizing that country and encouraging North Vietnam to step up its slow-motion invasion. President Lyndon Johnson concluded in 1965 that he had no choice but to commit American troops to save South Vietnam. Lansdale warned against a large-scale American troop deployment, just as he had warned against the anti-Diem coup, but his advice was again ignored.
South Vietnam was falling into the abyss, and it was going to drag America, tethered to it by an umbilical cord of commitments, down with it. Lansdale was left to watch this slow-motion tragedy unfold as a powerless spectator—a prophet without honor—his career having been ruined, and his reputation tarnished, by his inglorious association with Operation Mongoose.
This article has been adapted from Max Boot's new book, The Road Not Taken: Edward Lansdale and the American Tragedy in Vietnam.
Posted: 05 Jan 2018 01:30 AM PST
On Thursday, Attorney General Jeff Sessions rescinded the Cole Memorandum, an Obama-era policy that took a hands-off approach to marijuana in states where it was legal. Instead, federal prosecutors, Sessions wrote, should decide for themselves whether to crack down on marijuana businesses.
This likely spells trouble for recreational marijuana, which is now legal in seven states and Washington, D.C. The move prompted an outcry from legalization advocates. "Enforcement is up to individual U.S. Attorneys, but this is a clear directive from their boss to start going after legitimate, taxpaying businesses," said Morgan Fox, the communications director for the Marijuana Policy Project, via email.
What's not as clear is how this might affect medical marijuana, long considered the more acceptable cousin to recreational weed.
A provision called the Rohrabacher-Blumenauer amendment protects medical-marijuana programs in states from federal interference. But that provision expires on January 19, unless the new federal spending bill renews it. It's not clear whether it will be included in however Congress decides to fund the government next. Justice officials told the Associated Press they "would follow the law, but would not preclude the possibility of medical-marijuana related prosecutions."
Sessions' memo opens up an interesting rift between anti-drug Republicans and states-rights Republicans. "Jeff Sessions has forgotten about the constitution and the 10th Amendment," said Representative Dana Rohrabacher, a Republican from California and sponsor of the amendment, on a call with reporters.
"People see the impact of this stupid mindset from the 1950s and early '60s," he later added. "That's what Jeff is representing, I'm afraid."
If the Rohrabacher-Blumenauer amendment goes away, federal agents could start raiding and shutting down medical-marijuana dispensaries with renewed vigor.
Under the Bush administration, DEA agents shut down 30 to 40 medical dispensaries, sometimes raiding them even if they appeared to be lawful. Eric Holder, the attorney general under President Obama, signaled he would end law-enforcement raids on legitimate medical dispensaries in 2009. Still, medical-marijuana dispensaries in New Mexico, California, Colorado, and elsewhere were being raided throughout the Obama administration, sometimes for allegedly violating rules that came with the Obama administration's supposedly more lenient approach, like trafficking marijuana outside state lines.
"There's no question that Obama's the worst president on medical marijuana," Rob Kampia, the executive director of the Marijuana Policy Project, told Rolling Stone in 2012.
But now, 60 percent of states have a medical-marijuana program, so the pressure might be on Congress to renew the amendment. Medical marijuana is more popular than the recreational kind since some find it helps PTSD, epilepsy, and other ailments. "It's harder for a politician to say, 'you wounded Iraq veteran, go ahead and suffer, because we want to shut down your program,'" said Franklin Snyder, a professor of law at Texas A&M University. "It's much easier to say, 'you Colorado hippie potheads, we don't want you smoking dope to get high.'"
On the call, Rohrabacher suggested that the move by Sessions would "mobilize people" and that he hopes to get a law passed that says "the federal government will respect all of the decisions of the states when it comes to cannabis." He also said he plans to hold the president's "feet to the fire," since on the campaign trail Trump seemed rather neutral on marijuana.
Doug Berman, a professor of law at Ohio State University, thinks the policy change might not end up being that radical, especially if it mainly targets "bad players"—dispensary owners who don't follow regulations. Even so, "an effort even to take a scalpel to the industry might knick the more responsible players."
Mark Kleiman, a professor of public policy at New York University, said "the most likely practical consequence of this decision is to drive young voters to the polls this November."
Either way, this adds to the chilling effect for an industry that already faces strict regulations and an awkward dance between state permissiveness and federal prohibition.
Would-be dispensary owners might think, Berman said, "Wow, another headache, another hurdle, another layer of uncertainty. I shouldn't bother putting my money in this."
Posted: 04 Jan 2018 09:01 PM PST
At the height of his fame and influence, Steve Bannon set in motion his downfall. According to Michael Wolff's new book—containing Bannon's remarks about President Trump's family that have caused a furor —almost exactly a year ago, weeks before becoming the White House chief strategist, Bannon was freely holding forth about the president-elect at a dinner with the late Fox News chief Roger Ailes in Wolff's New York City townhouse.
It was apparently one of many conversations he had with Wolff over the past year that have come back to haunt Bannon. His description of Donald Trump Jr.'s Trump Tower meeting with a Russian lawyer in which he sought dirt on Democratic rival Hillary Clinton as "treasonous" has infuriated President Trump. And the episode has caused Bannon to lose the support of his wealthy conservative patrons, the Mercer family, at the time he needs them most as he tries to launch an intra-party insurgency in the 2018 midterms.
Rebekah Mercer issued a rare on-the-record statement to the Washington Post on Thursday disavowing Bannon and saying the family was not supporting his political endeavors. (The family's most recent public comment was Robert Mercer's disavowal of former Breitbart tech editor and right-wing provocateur Milo Yiannopoulos.) In her statement, she said she had not communicated with Bannon in months. According to a source with direct knowledge of her comments, who asked for anonymity to discuss private conversations, Mercer told people she was finished with Bannon about six weeks ago.
Though Mercer told the Post she will continue to support Breitbart News, Bannon is reportedly in trouble there as well as the board debates whether to keep him. Breitbart's owners, according to a disclosure made by the company last year during negotiations to obtain congressional press passes, are Larry Solov, the company's CEO and lifelong best friend of its founder Andrew Breitbart; Breitbart's widow Susie Breitbart; and the Mercers, who own a minority stake. Thus dismissing Bannon is not solely the Mercers's decision. Former Breitbart editor-at-large Ben Shapiro, a frequent Bannon critic, argued that the final decision would be Solov's, as Susie Breitbart has been largely absent from decision-making at the company. "The only question is whether Larry Solov has the stones" to make a move against Bannon, Shapiro said.
But even if he hangs on at Breitbart, Bannon's other big project—his "season of war" against the Republican establishment this year—looks dead in the water. Though Bannon met with a series of donors over the past few months, he has not been able to find a Mercer replacement. Sheldon Adelson publicly distanced himself from Bannon in November, and others courted by Bannon never signed on. A planned 501(c)(4) group appears to have stalled.
Even before the fallout from the Wolff book, Bannon's 2018 plans were off to an inauspicious start. He stuck by Roy Moore in the Alabama Senate race despite explosive allegations against him by women who accused him of preying on them when they were teenagers, and took much of the blame from the party establishment—and now Trump himself—for Moore's stunning loss, which handed the seat to a Democrat for the first time in 25 years.
Without the backing of the Mercers or other major donors, and crosswise with the president, Bannon's usefulness to candidates is limited. His 2018 favorites have not been full-throated defenders. Arizona Senate candidate Kelli Ward's spokesman described Bannon on Wednesday as just one of many endorsements, and former New York Representative Michael Grimm criticized Bannon for the comments to Wolff.
Matt Drudge kicked off the speculation about Bannon's possible ouster with a tweet on Thursday that specifically mentioned Solov and Susie Breitbart, as well as the site's editor-in-chief Alex Marlow, who has been with the company since the beginning. "The terrific Larry Solov and Susie Breitbart will take Breitbart into the fresh future. Has it really been 10 yrs since Andrew told me on Santa Monica pier he was going to do it?! His first hire Alex Marlow [he was 21] became one of the best news editors in the world! MORE" The tweet featured a photo of the late Breitbart, who began his media career as Drudge's right hand.
At nearly every opportunity, Drudge has gone after Bannon, using the influential Drudge Report to take him down a notch. His cryptic tweet could be read as an offer of his support to Breitbart leadership in a post-Bannon era.
It's difficult to imagine modern-day Breitbart without Bannon at the helm; the site has become inextricably bound up in his persona and weaponized in service of his political goals. Bannon soldiered on in a business-as-usual mode on Thursday, according to people who spoke to him, and led the evening editorial call as usual. When I asked if he could talk this evening, he declined, saying he was getting ready for the Sirius XM radio show he helps host.
The loquacious Bannon has said little publicly about the fiasco, apart from comments on Breitbart's radio show praising Trump as a "great man" and vowing to remain loyal to him. A person familiar with the events who spoke on condition of anonymity to characterize internal discussions confirmed a report in The Hill that Bannon's inner circle encouraged him on Wednesday, as news of his comments to Wolff broke, to release a statement to calm the situation down, believing there was a window to crawl back into Trump's good graces. But Trump's vehement disavowal made the plan moot. In case anyone missed the point, Trump's lawyers then threatened to sue Bannon for defamation.
Wolff's book will be released on Friday morning, four days ahead of its planned launch, spurred forward by Trump's legal team's attempt to stop the book's publication. Washington is waiting with bated breath to see what else is in there, having been consumed for two straight days by the book's drama. Whether Bannon can stay in his last remaining port in the storm remains unresolved as of Thursday evening.
"It's like a mob hit," said the former Breitbart spokesman Kurt Bardella, who resigned last year and has since left the Republican Party. "Everybody knows something's going down, it's just a matter of where they pull the trigger."
Posted: 04 Jan 2018 03:41 PM PST
What We're Following
Trump vs. Bannon: President Trump is now threatening lawsuits over the inflammatory interviews his former aide Steve Bannon gave to the journalist Michael Wolff. Bannon's harsh critique risks cutting him off from the base of support he shares with the president, making it hard to discern why he chose to split so dramatically from Trump. (Conor Friedersdorf posits six possible motivations.) But as James Fallows writes, the version of Trump that Wolff's book portrays—an unstable and ill-prepared president—has been an open secret to political leaders. Why won't they do something about it?
The Trump Administration: The State Department said it will suspend most security assistance to Pakistan. The announcement comes just days after a tweet from Trump decried the amount of aid money the U.S. pays to its counterterrorism ally. Trump also dissolved his controversial commission on voter fraud, and Attorney General Jeff Sessions reversed an Obama-era recommendation that prosecutors should exercise restraint in enforcing marijuana laws.
Economic Efforts: The U.S. inflation rate looks poised to rise above the Federal Reserve's target of 2 percent in 2018, and if it does, it's likely to stimulate economic growth. But as workers continue to confront the changes wrought by technology and globalization, efforts to diversify their skills may not succeed in keeping them in the workforce. Lolade Fadulu explores why America's worker-retraining programs have repeatedly failed, and why future plans need to pay more attention to employers.
From Behzane, Iraq, Cathy Otten reports on how Yezidi worshippers are rebuilding their community after it was targeted by ISIS:
Keep reading here, as Otten explores how ISIS changed the Yezidi religion.
What Do You Know … About Global Affairs?
The near-defeat of the Islamic State was one of the Trump administration's key foreign-policy successes of 2017. But the strategic ambiguities that helped propel the U.S. campaign forward are likely to bring new risks of confrontation with counterterrorism allies as the fight winds down. For Iraqi Prime Minister Haider al-Abadi, who declared "final victory" over ISIS in his country last month, addressing political and military threats inside and outside Iraq remains an ongoing challenge.
Can you remember the key facts from this week's global coverage? Test your knowledge below:
1. The U.S. nuclear launch codes are nicknamed the "football" because of their role in a plan for nuclear war, which was code-named ____________.
Scroll down for the answer, or find it here.
2. The country of ____________ produces about 3.8 million cars a year, making it the world's sixth-largest auto manufacturer.
Scroll down for the answer, or find it here.
3. In 2016, Japan's entitlement programs cost more than $____________.
Scroll down for the answer, or find it here.
For more updates from the urban world, subscribe to one of CityLab's newsletters.
Robinson Meyer wrote about the frequent bleaching events that have affected coral reefs worldwide, in which increased ocean temperatures cause a coral colony to turn white. Gail comments:
Read the article here.
Time of Your Life
Happy birthday to Dave's daughter Grace (twice the age of Instagram); to Sarah's husband, Bill (twice the age of the International Space Station); and to another Bill, who's a year younger than T-shirts.
Posted: 04 Jan 2018 03:21 PM PST
On Wednesday in The Washington Post, Vice President Mike Pence contrasted his boss's response to protests in Iran to President Obama's response in 2009. Obama, he said, had "stayed silent" and "declined to stand with a proud people who sought to escape from under the heavy weight of a dictatorship." But "under President Trump," Pence crowed, "the United States is standing with them."
This is a lie. Obama did not "stay silent." He declared himself "appalled and outraged by the threats, beatings and imprisonments" of Iranian protesters. His administration also leaned on Twitter to ensure that Iranians could continue using it to organize their demonstrations. Obama did, however, temper his public comments, so as "to avoid the United States being the issue inside of Iran." Given its history, Obama argued, if the U.S. were "seen as meddling," it could harm the protesters' cause.
Trump, by contrast, as is his nature, has put himself center stage. Three times since the beginning of the year, he's tweeted his condemnation of the government in Tehran and his support for the people demonstrating against it. And overwhelmingly, conservatives—even those who dislike Trump—have declared his approach superior. Which is odd. Because it is conservatives, of all people, who should recognize its risks.
They should recognize its risks for two reasons. First, because American conservatives have spent the last half-century warning that virtuous rhetoric, and even virtuous intentions, do not necessarily produce virtuous results. Think about the right's critique of government intervention to alleviate poverty. It's built on the contention that while liberals may denounce poverty more passionately than do conservatives, their policies, even when well-intentioned, actually hurt the poor. Why? Because human behavior is too complex for government planners to understand, so when they try to make people zig, people often zag instead. Irving Kristol, among the most influential conservative intellectuals of the 20th century, declared in 1972 that, "I have observed over the years that the unanticipated consequences of social action are always more important, and usually less agreeable, than the intended consequences."
Kristol's journal, The Public Interest, focused mostly on domestic policy. But later in that decade, Jeane Kirkpatrick employed the same logic to critique Jimmy Carter's foreign policy. Carter, she acknowledged in her famous essay "Dictatorships and Double Standards," was genuinely "repelled by frankly non-democratic rulers." But in his efforts to engineer a democratic transfer of power in Nicaragua and Iran, he ended up ushering in more brutal dictatorships instead. "History," she lectured, "is a better guide than good intentions."
None of this means Trump's high-profile approach to the Iranian protests is necessarily wrong. Conservatives don't believe that government actions always backfire. But it is odd to hear a conservative like Pence speak as if government intentions inherently bring about their desired result, that because Trump is embracing the protesters more loudly than Obama did, he's necessarily doing a better job of advancing their cause.
It's particularly odd because American policy toward Iran is exactly the kind of situation most likely to produce unintended consequences. If translating intentions into results is difficult domestically, it's even harder overseas, especially in a country like Iran—from which the United States has been largely isolated since 1979—and whose domestic political dynamics American officials only dimly understand.
In fact, American policy in the Middle East since September 11 has been a festival of unintended consequences—measured mostly in innocent lives lost. In addition, America's war in Afghanistan, which was expected to highlight American power, has helped China deepen its economic influence in Central Asia. America's war in Iraq, which was expected to vanquish terrorism and weaken Iran, helped create ISIS and extend Tehran's power. The "war on terror," which was designed to prevent terrorism from the world's ungoverned spaces, has instead ended up creating more: from Iraq to Libya to Mali.
One reason for these unintended consequences is nationalism. People in Afghanistan, Iraq and Libya have not behaved as the United States hoped they would, in part, because many Afghans, Iraqis, and Libyans—despite loathing their anti-American leaders—also deeply distrusted the United States. That's likely also the case in Iran. Pence may believe, as he claimed in his op-ed, that the United States "has long stood with those who yearn for freedom." But most Iranians don't. In 1953, after all, the United States helped overthrow a democratically elected Iranian leader and then spent the next several decades propping up Iran's repressive shah. The U.S. supported Saddam Hussein in a war in which he gassed Iranians. And it has still never apologized for accidentally downing an Iranian passenger jet in 1988, and killing 274 people. The United States is also largely responsible for the economic sanctions that have impoverished ordinary Iranians, and which, according to polls, they bitterly resent.
Trump has added to this ugly record by banning Iranians from entering the United States and repeatedly denigrating Muslims and Islam. It's hardly surprising, therefore, that according to a 2016 survey by the University of Maryland's Center for International and Security Studies, 87 percent of Iranians held a negative view of the United States government. And that by a margin of three to one, according to a Zogby Research Services poll taken last summer, Iranians think Trump has made U.S.-Iranian relations worse.
Given these conditions, it's quite plausible to fear—as Obama did—that heavy-handed American intervention could provoke a nationalist backlash that helps Iran's regime perpetuate its repressive ways. Conservatives should understand this because they, more than liberals, grasp nationalism's appeal. To the extent Trumpism means anything, it means the celebration and exploitation of American nationalism against a series of adversaries—immigrants, trade deals, the UN, disloyal minorities, globalist elites—who supposedly threaten the sovereignty and integrity of the United States. Trump celebrates that kind of nationalism in Europe too. Thus, his supporters, of all people, should understand that Iranians value their sovereignty too, and are unlikely to welcome American interference, no matter how badly they want their regime overthrown.
Why can't Pence understand that? I suspect a lot of it has to do with Ronald Reagan. Reagan, according to conservative legend, denounced the USSR—calling it an evil empire and demanding that it tear down the Berlin Wall—and thus helped inspire the revolts that brought down the Soviet empire. Pence wants to do something similar in Iran. But it's a poor analogy. Eastern European countries like Poland were suffering under Soviet domination, and had little history of being dominated by the United States. Thus, Reagan was able to help stoke a Polish nationalism that expressed itself largely against Moscow. Iranians, by contrast, are rising up against homegrown dictators who use the specter of American domination to justify their hold on power. Iranians are thus less like Poles in the 1980s than Nicaraguans in the 1980s, who distrusted Reagan's denunciations of their repressive Sandinista government because of their long, ugly experience with American power.
It's ironic that Pence, in his oped, called Iranians "proud." It's precisely because they are proud—because, like Americans, they desire both individual freedom and national self-determination—that they can reject Ayatollah Khamenei while also rejecting Donald Trump.
Posted: 04 Jan 2018 02:57 PM PST
This is a bad week for Pakistan—and it's still Thursday.
On Monday, President Trump tweeted the U.S. has "foolishly" given the country more than $33 billion in aid over the past 15 years, "and they have given us nothing but lies & deceit, thinking of our leaders as fools. They give safe haven to the terrorists we hunt in Afghanistan, with little help. No more!" Then on Thursday the longtime but troublesome U.S. ally, whose relationship with Washington has seen far better days, was placed a on special watch list of countries that severely violate religious freedom.
Then came the big move. Later Thursday Heather Nauert, the U.S. State Department spokeswoman, said the U.S. will suspend most security assistance to Pakistan until Islamabad "takes decisive action" against militant groups that are "destabilizing the region and targeting U.S. personnel." She did not say how much money was involved, but noted it was a significant figure, and in addition to the $255 million in military aid the U.S. has already withheld. The suspension does not include non-military aid, but it does include about $1.1 billion in funds the U.S. pays Pakistan for the cost of its counterterrorism operations, the so-called Coalition Support Funds.
Nauert added, however: "There may be some exceptions that are made on a case-by-case basis if determined to be critical to national security interests."
"It's very profound," C. Christine Fair, an associate professor at Georgetown University who is a critic of Pakistan's support of militant groups, said of the Trump administration's decision. "It's huge."
She pointed out that the Coalition Support Funds (CSF) were more than what the U.S. pays Pakistan as security aid in the form of foreign military financing (FMF). CSF is what the U.S. pays Pakistan to fight terrorist groups. FMF is a mechanism through which Pakistan buys American military equipment.
Signs of deteriorating relations between the two countries came last August when Trump unveiled his strategy for Afghanistan: He increased the U.S. military presence in the country; accused Pakistan of sheltering "the same organizations that try every single day to kill our people"; and called on India "to help us more with Afghanistan, especially in the area of economic assistance and development." Last month, while announcing his national-security strategy, Trump said Pakistan must take "decisive action against terrorist groups operating on their territory."
Pakistan's support for groups like the Taliban has long been an irritant to its relations with the United States and Afghanistan. The Taliban is key to Pakistan's strategic interests because it is not interested in being buffeted by two unfriendly nations on its borders—Afghanistan and India. But that support could cost it an alliance with the United States, its most important partner since 1947, when the country was created.
Cutting off military aid to Pakistan will impose costs on the U.S. too, however. Pakistan controls many of the supply lines for material into Afghanistan. When Pakistan shut these lines off for about eight months between November 2011 and July 2012, the cost of supplying the U.S. military effort in Afghanistan through an alternate route increased from $17 million a month to $104 million a month. But Fair pointed out the additional cost incurred by the U.S. was still less than what the U.S. paid Pakistan as part of the Coalition Support Funds.
"I hope [the Trump administration has] considered what the countermeasures are if [the Pakistanis] shut the" supply lines, she said, adding ultimately she didn't believe Thursday's action "is going to make Pakistan change its behavior." She said sanctions that specifically target the country's military or pressure on the International Monetary Fund, which lends the country money, are the only kinds of actions that could prompt a change. She acknowledged, however, this would be a "nuclear option."
Security aid to Pakistan has been falling for some time. It was about 1.6 billion in fiscal 2003, but dropped sharply to $319.7 million by fiscal 2017, according to data maintained by the Security Independence Monitor, which tracks such figures. (Pakistan received $422.5 million in economic and development aid in fiscal 2017. That aid is unaffected by Thursday's announcement.)
Pakistani officials have publicly expressed outrage at Trump's tweets and the administration's statements this week, pointing out that Pakistan has been one of the biggest victims of terrorism. Nauert acknowledged the losses in Pakistan, but said officials in the country will not be surprised by the suspension of security aid.
"We have contributed and sacrificed the most in fighting international terrorism and carried out the largest counter terrorism operation anywhere in the world," Maleeha Lodhi, the Pakistani ambassador to the United Nations, said earlier this week. "We can review our cooperation if it is not appreciated."
Posted: 04 Jan 2018 02:46 PM PST
Today in 5 Lines
Attorney General Jeff Sessions rescinded an Obama-era policy that paved the way for the legalization of marijuana in states. The Trump administration said it will expand offshore oil and gas drilling, reversing a ban on drilling imposed by former President Obama. President Trump's lawyer sent a cease-and-desist letter to the author and publisher of a forthcoming book on the White House, claiming that the book is defamatory. Republican David Yancey won a tie-breaking "lot draw" in the race for Virginia's House of Delegates, but his opponent, Democrat Shelly Simonds, still hasn't ruled out seeking another recount. And Republican Representative Gregg Harper of Mississippi, the chairman of the House Administration Committee, announced that he won't run for reelection.
Today on The Atlantic
Follow stories throughout the day with our Politics & Policy portal.
What We're Reading
'You Can't Make This S--- Up': In another excerpt from Michael Wolff's forthcoming book on the Trump presidency, Wolff writes that the president's advisers "all—100 percent—came to believe he was incapable of functioning in his job." (The Hollywood Reporter)
A Lot at Stake: The midterm elections will decide the future of American democracy, argues Matthew Yglesias: If Republicans maintain control of Congress in 2018, "the Trumpocracy will be upon us." (Vox)
What Else Is New?: The Justice Department is reportedly looking into former Secretary of State Hillary Clinton's private email server again to better understand how she handled classified material. (Betsy Woodruff, Daily Beast)
Good Riddance: David French explains why Donald Trump's blistering statement attacking Steve Bannon on Tuesday was one of the best moves of his presidency. (National Review)
Where Is Marijuana Legal?: Take a look at this map. (Charlie Savage and Jack Healy, The New York Times)
Question of the Week
The Senate's longest-serving Republican, Orrin Hatch, announced on Tuesday that he'll retire at the end of his term, which opens the door for former Massachusetts Governor Mitt Romney to run for his seat. But what would a Senator Romney look like? The Atlantic's McKay Coppins asks: "Would he see himself as an anti-Trump truth-teller defending conservative principles from the poison of Trumpism? Or would he try to use his influence to pass major Republican legislation?"
This week, we want to know: Should Romney run? And if he did, what would you expect from him as a senator?
Share your response here, and we'll feature a few in Friday's Politics & Policy Daily.
-Written by Elaine Godfrey (@elainejgodfrey)
How are we doing? Send questions or feedback to firstname.lastname@example.org.
Posted: 04 Jan 2018 01:42 PM PST
When Attorney General Jeff Sessions issued a memo on marijuana to federal prosectors Thursday, reiterating their leeway to prosecute federal marijuana laws as they see fit, regardless of whether the plant is legal under state and local law, he likely spurred future infringements on liberty, struck a blow against federalism, and defied public opinion. But he also acted in a manner consistent with the rule of law as it has been clearly interpreted by the U.S. Supreme Court.
To defang the prohibitionism that Sessions has a legal right to advance—and that rescinds what some saw as an overstep of executive authority by his predecessors in the Obama administration, who urged federal prosecutors to hold back from enforcing pot laws in some states—Congress must repeal federal statutes, returning marijuana policy and regulation to the states where it belongs.
Reforms in the War on Drugs of that sort are long overdue.
Since 1970, the federal government has paid men with guns to cage human beings for growing, possessing, or selling the popular marijuana plant. But over time, public opinion has turned against that morally dubious assault on human freedom: The people of 29 states, the District of Columbia, Puerto Rico, and Guam have passed laws allowing the use of the plant for medicinal purposes, while the people of eight states have legalized the recreational use of marijuana, even as the federal prohibition against the drug remains in effect.
Those state efforts are in keeping with the text of the Tenth Amendment, which declares, "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." But they run afoul of a long series of court decisions that warped the Constitution so sweepingly that by 2005, the Supreme Court was declaring that the delegated power "to regulate interstate commerce" somehow allowed Congress to criminalize a cancer patient growing pot in their own garden for personal use, even in states where the substance was legal. "By holding that Congress may regulate activity that is neither interstate nor commerce under the Interstate Commerce Clause," the conservative Supreme Court Justice Clarence Thomas observed in his dissent, "the Court abandons any attempt to enforce the Constitution's limits on federal power."
Broadly speaking, progressives have cheered absurdist expansions of the commerce clause and the erasure of states rights, while conservatives have urged a recovery of the clause's original meaning and championed the Tenth Amendment, even to excess, as when states' rights were cited to oppose civil-rights laws.
But drug policy has made hypocrites of both sides.
Even many progressives who've otherwise treated states' rights as a simple code for racism have been very supportive of efforts, most popular in blue states, to legalize or decriminalize marijuana; and even many older conservatives who cheered Barry Goldwater and William F. Buckley even in their wrongheaded, states' rights-based opposition to civil-rights laws have always wanted the feds to keep investigating, prosecuting, and caging people caught with weed.
The reefer madness afflicting prohibitionists of all stripes is unpopular.
"Americans continue to warm to legalizing marijuana, with 64 percent now saying its use should be made legal," Gallup noted a few months ago. "This is the highest level of public support Gallup has found for the proposal in nearly a half-century."
Nevertheless, Congress has so far declined to let states decide. On Thursday, Senator Cory Gardner, a Republican from Colorado, one of the first states to legalize marijuana for recreational use, declared on Twitter, "This reported action directly contradicts what Attorney General Sessions told me prior to his confirmation. With no prior notice to Congress, the Justice Department has trampled on the will of the voters in CO and other states. I am prepared to take all steps necessary, including holding DOJ nominees, until the Attorney General lives up to the commitment he made to me prior to his confirmation."
The commentator Charles C.W. Cooke wrote in response, "As a proponent of robust federalism and opponent of the Drug War in toto, I agree with Gardner on the substance, but it's beyond preposterous that our legislators perpetuate this incessant focus on the executive when they are the ones who write the law. We've reached a point at which senators are threatening to understaff the executive if the executive doesn't decline to enforce the laws over which senators have control."
With more than half of states running afoul of the marijuana provisions of the Controlled Substances Act, you'd think a Senate bill to amend it would pass easily; given how populous the marijuana-friendly states are compared to the prohibitionist states, you'd think a House bill could pass, too. For heaven's sake, President Trump said during the 2016 campaign that the matter should be left to the states. But whether due to cowardice, the fact that Congress is so much more elderly than the population it represents on this generationally divided issue, or some other factor, the unpopular federal policy remains in effect.
Among those in the Senate who've championed the federalist position, some with regard to medical marijuana and some encompassing even recreational use: Senators Cory Booker, Kirsten Gillibrand, Rand Paul, Lisa Murkowski, and Mike Lee.
As Cooke put it at National Review, "If Colorado or Oregon want to legalize weed while Mississippi and Utah ban it, that's fine. In fact, that is how the country is supposed to work. The United States is a collection of … well, of states; it is not a giant centralized democracy with fifty regional departments. Congress should make it a priority to get the federal government out of this area, and to let the states, not the attorney general's fealty, determine which rules are best for their citizenries. And conservatives, of all people, should celebrate that. The Founders did not write the Constitution to impose uniformity on hemp. Rarely will we get a better teaching moment than this one."
But for now, the conservative attorney general in a Republican administration is thwarting federalism, the Tenth Amendment, and an exercise of liberty that the states are advancing. May history remember him as the last federal attorney general to preside over the moral abomination that is America's federal war on pot.
Posted: 04 Jan 2018 12:56 PM PST
From the Arctic to the Amazon, almost no part of the world has been left untouched by the human-caused warming of the Earth's climate system. But one ecosystem seems to be disintegrating faster than almost anywhere else: coral reefs, the tropical rainforests of the undersea world.
A new study, published Thursday in the journal Science, quantifies this discipline-wide impression of a vast and fast-moving destruction. It brings together observations of 100 coral-reef sites around the world going back to 1980, and it finds that severe bleaching events are far more common now than they were 35 years ago.
"I do not like to say: Reefs will die. But we will not have reefs as we currently have them," says Howard Lasker, a professor of ecology at the University at Buffalo, who was not connected to the study.
Lasker has spent three decades studying the biology of coral reefs. Specifically, he focuses on gorgonian corals: sea fans and sea plumes, "the stuff you see waving back and forth when you look at a TV special," as he puts it. Through his career, he has witnessed an impoverishment of these natural treasures, and he predicts it will only continue.
"I personally believe that people will get in the water 20 years from now and they will go dive on things that people call 'reefs,'" he told me. "And the reefs will still have some corals on them, still have lots of fishes on them, and they will still have gorgonian corals on them—and people will be impressed by them. But they will be dramatically, dramatically different than the reefs we have now, and certainly than the reefs that were present 30, 50, 100 years ago."
A bleaching event is one of the fastest ways to kill a coral reef—and it's the main way that corals react to the hotter oceans of climate change. Corals are tiny animals that live in huge, branching colonies of limestone. (Each "tree" of coral might contain hundreds of thousands of tiny, individual coral organisms.) Each coral polyp also contains a small amount of photosynthetic algae, which provides food to the coral and helps keep it healthy.
When the water gets just a few degrees warmer than usual, coral polyps expel their algae out of stress, and the entire branching colony turns white—that is, it bleaches. If the water does not cool down fast enough, the coral colony can then starve to death or get infected, and die. Even if the corals survive the episode, it takes about 10 years for them to fully recover.
"I studied coral reefs for 20 years before I first saw mass bleaching in 1998—the first global coral-bleaching event. It was also the first time that severe bleaching occurred along the Great Barrier Reef," said Terry Hughes, an author of the new study and the director of the ARC Center of Excellence for Coral Reef Studies, the government agency that leads coral research in Australia.
"Since then then GBR has bleached three more times, in 2002, 2016 and 2017. We've gone from zero bleaching to back-to-back bleaching in just two decades," he said.
The study finds that, in the early 1980s, bleaching events were rare, occurring at a rate of once every 25 to 30 years. By 2016, they had increased fivefold. Mass coral-bleaching events now strike about every six years, on average, far too fast for ecosystems to recover.
The region hardest hit, so far, are the reefs of the Caribbean and Western Atlantic, which include those in the U.S. Virgin Islands. The Western Atlantic began warming before other parts of the global ocean did, so more than half of the region's reefs have bleached seven times since 1980. And the average reef in the Western Atlantic has bleached 10 times since 1980.
This devastation has targeted American reefs with particular ferocity. Half of all Caribbean coral reefs in the United States were lost in 2005, when sweltering waters swaddled Puerto Rico and the U.S. Virgin Islands.
Other parts of the world have so far avoided this blight. More than half of the reefs near Australia and in the Indian Ocean have bleached three times since 1980. But reefs in Australia seem to be getting worst fastest.
"The sense that everyone had, that, wow, this is a very different world than it was 30 years ago, was a correct impression," said Lasker. "The nice thing about an analysis like this is it makes clear to people who make policy that this isn't an impression, it's actually occurring. It is important to do this."
"Now, the impact it has on those officials ... that's another issue," he added.
Perhaps most worryingly, the study argues that soon it will not take a global heat wave—such as an El Niño event in the Pacific Ocean—to kill corals. "As global warming progresses, average tropical sea-surface temperatures are warmer today under La Niña conditions than they were under El Niño events only three decades ago," says the paper. "We are already approaching a scenario in which every hot summer, with or without an El Niño event, has the potential to cause bleaching and mortality at a regional scale."
This isn't unexpected. Last year, a study conducted by Australian government scientists and published in Nature Climate Change found that even if the world warms by an average of only 1.5 degrees Celsius—the "reach" goal of the Paris Agreement—the Great Barrier Reef could suffer a major bleaching event every other year.
"By the time we're seeing bleaching temperatures there every year, there probably will not be a reef anymore. There's only five or six times bleaching can happen before a reef is essentially dead," Ruth Gates told me at the time. Gates is a coral biologist at the University of Hawaii and the president of the International Society for Reef Studies; she wasn't connected to either study.
"It will be a magnification each time a coral bleaches," she said. "You will lose a portion of the reef each time, and there comes a point where it's no longer functionally a reef."
Bleaching is not the only way to kill a reef. One month after Hurricanes Irma and Maria struck, Lasker visited the coral reefs he studies near St. John, in U.S. Virgin Islands National Park. While not all areas were ravaged, the back-to-back hurricanes had effectively sandblasted many of the corals.
"Some colonies were severely damaged, and you could see organisms beginning to grow on parts of the colony. It will lead to the eventual death of the colony," Lasker said. "Stony corals were toppled, sea fans, sea plumes were ripped up from the bottom, he said.
You could, in other words, see the degradation of another kind of climate-addled weather system, and the corals starting to adapt to that change. But he said that bleaching was the most dreaded risk. "Hurricanes have occurred over the millennia," he told me. "Bleaching is a much more modern phenomenon and in some ways more insidious. While hurricanes are going to increase in intensity, we have to worry more about bleaching on reefs."
Posted: 04 Jan 2018 05:10 PM PST
Yesterday, Turkish banker Mehmet Hakan Atilla was found guilty in a Manhattan courtroom for a range of financial crimes. His dramatic trial revealed that tens of billions in dollars and gold moved from Turkey to Iran through a complex network of businesses, banks, and front companies.
The trial was a long time coming. In late October of 2016, Justice Department officials paid a visit to the Foundation for Defense of Democracies, the Washington-based think tank where I serve as senior vice president. They wanted to talk about Reza Zarrab. A dual Iranian-Turkish national, Zarrab was the swashbuckling gold trader who had helped Iran evade sanctions with the help of Turkish banks in 2013 and 2014, yielding Iran an estimated $13 billion at the height of the efforts to thwart Tehran's nuclear ambitions. A leaked report by prosecutors in Istanbul in March 2014 suggested that Zarrab spearheaded a second sanctions-busting scheme involving fake invoices for billions more in fictitious humanitarian shipments to Iran that were processed through Turkish banks.
At FDD, we'd spent considerable time digging into Zarrab's activities. Our think tank already had an established track record of identifying and exposing Iran's malign activities. We had also just launched a new program to explore Turkey's recent drift into Islamist authoritarianism. The more we investigated, the more we realized that Zarrab's schemes, which could have helped Iran pocket more than $100 billion, rank among the largest sanctions evasion episode in modern history.
Despite the headlines generated by the gold trade and leaked report, the Turkish government insisted that everything was above board. The Obama administration seemed to echo this sentiment, saying that the gold trade had slipped through a legal loophole (a loophole the White House inexplicably left open for an additional six months, even after the problem was flagged). We soon learned Ankara's political motivations: The gold trade helped boost Turkey's flagging export numbers at a moment when those numbers might have hurt President Recep Tayyip Erdogan's chances for reelection. Zarrab, who became fabulously wealthy by taking a percentage from every transaction (he later estimated his take at $150 million), even received a reward for his efforts from a Turkish trade association in 2015, with Erdogan applauding from the audience.
But it all came to an abrupt halt last March, when Zarrab inexplicably brought his family to America for a vacation at Disney World. With the 2015 nuclear deal in effect, he may have believed that the sanctions laws he violated before the deal were no longer in force. Some suggest that Zarrab was trying to flee Iranian justice, particularly as the regime came to grasp just how much he skimmed off the top. Either way, when he arrived in Florida, U.S. authorities arrested him for engaging in conspiracies to violate sanctions, commit bank fraud, and launder money.
It was about time. For three years, my colleagues and I had been briefing the Treasury Department, the State Department, and Congressional offices. We had tracked the export data (which, remarkably, Turkey did not hide), showing an astronomical spike in Turkish gold exports. We identified the companies and players, with the help of the 2014 prosecutor's report. It was painstaking work, but it was all out there in open sources for a think tank like ours to document.
Yet, it was an inconvenient moment to reveal unsavory truths about Iran, amid the push for the nuclear agreement. Nor did anyone, Democrat or Republican, want to touch the third rail of relations with Turkey, a NATO ally that had recently begun backing terrorist groups like Hamas (which still maintains a disturbing presence in Turkey) and a range of Sunni jihadi groups fighting the Assad regime in Syria (including al-Qaeda's affiliate, according to senior U.S. government officials we interviewed). Stable allies in the Muslim world were scarce, and decision-makers seemed reluctant to take any chances with Ankara.
It may also have been difficult for officials to hear that the sanctions tools we have in place to prevent bad actors from moving money are just that—tools. Without intense vigilance and enforcement, there is ample opportunity for Iran and other sanctioned countries to find workarounds. But if we're going to follow the money, we'd better be prepared to follow it to the most inconvenient places.
That's why it was a pleasant surprise when the Justice Department came knocking on FDD's door. It had never dawned on us that they might be interested in our work. But they were. They wanted to see what we already knew of the complex web of companies, networks, and schemes, that Zarrab employed to move money out of Turkey and into Iran. After all, even with the vast evidence they had collected, our research predated their investigation.
In the weeks and months that followed, one visit begat another. Both I and Mark Dubowitz, FDD's CEO, were asked by the assistant U.S. attorney to serve as an expert witness for the prosecution. We pored over invoices tracking the transactions that turned gold into Iranian cash. We analyzed spreadsheets detailing the dizzying trail of sales and purchases designed to obfuscate the illicit nature of the transactions. There were also photos, including one of Zarrab himself standing next to a six-foot high tower of plastic-wrapped bricks of $100 bills. The documents were privileged at the time, but will soon be made public now that the trial is over. The documents are damning, with textbook examples of money-laundering techniques like over-invoicing (charging significantly more for a given product to yield more margin) and circular invoicing (making multiple transactions involving the same funds or goods to hide a money trail or even benefit from arbitrage). The figures themselves were astounding: hundreds of millions of dollars in transactions in every stack of papers we viewed.
The case took a wild turn on March 28, when, Justice Department officials from the Southern District of New York arrested Atilla, the deputy CEO and general manager at Turkey's state-owned Halkbank. They accused him of conspiring with Zarrab to launder hundreds of millions of dollars through the U.S. financial system on behalf of Iran. It was Halkbank that held one of the oil escrow accounts for Iran. The escrow accounts constituted a creative method of withholding petrodollars from Iran, as mandated by the Iran Threat Reduction and Syria Human Rights Act (ITRA) of 2012. In brazen defiance of U.S. sanctions, Halkbank released those funds to buy gold, which was then shipped off to Iran. Halkbank was also accused of helping to process Zarrab's aforementioned fictitious invoices, the ones first exposed in the 2014 prosecutor's report.
Halkbank was clearly in trouble. In September, it hired Ballard Partners, a U.S. lobbying firm that already represented the Turkish government, for a whopping $1.5 million. Separately, Zarrab hired former New York Mayor Rudy Giuliani and former Attorney General Michael Mukasey in an attempt to derail the proceedings. But the real drama came in late November when Zarrab pled out, making him a witness for the prosecution. Atilla would stand trial alone.
That's when the Turkish government got angry. They took their anger out on me and Mark Dubowitz, who testified on the first day of Atilla trial about the Iran sanctions architecture. The state media called us terrorists, alleging we were affiliated with Turkish cleric Fethullah Gulen's network, the group Erdogan blamed for the attempted coup in July of last year. Ankara also issued an arrest warrant for my colleague Aykan Erdemir, a former Turkish parliamentarian. Turkish authorities froze his assets and even seized the apartment that his grandfather had bequeathed to the family. They said he "destroyed paperwork relating to state security" and "stole documents with the intention of using them abroad." They also falsely identified him as being on the witness list.
But Ankara could not stop Zarrab from delivering seven days of sensational testimony. On day one, he appeared in court wearing a beige prison jumpsuit; for the remainder, he was allowed to wear a blazer. He was a natural in front of the jury, using diagrams to coolly explain how he orchestrated the scheme. He looked like a business school professor teaching a class on corruption.
Here's what Zarrab testified: The scheme began in 2010, when Iran began to feel the squeeze from U.S. sanctions for its nuclear drive. Zarrab said that around 2012 the Iranian government gave him explicit directions to conduct these illegal transactions. Turkish officials were also on the take, Zarrab said, with its economy minister allegedly taking $50 million in bribes to help facilitate the scheme. He said other Turkish officials were on the take, too—many of whom were in Erdogan's inner circle. According to Zarrab, other Turkish banks may have been involved at the government's behest. All this might explain why the Turkish government, even after the prosecutor's report was leaked in 2014, killed all inquiry into the Zarrab scheme.
Testimony from David Cohen and Adam Szubin, two former Treasury Department undersecretaries would also reveal that Halkbank officials repeatedly reassured them their gold-trader clients, including Zarrab, were in compliance with U.S. sanctions against Iran. (Zarrab testified that he continued his operations up until his arrest in March 2016, which meant that Halkbank would have been lying to U.S. officials.)
In the end, the trial ran long. With the judge calling for the prosecution to wrap things up quickly, I managed to avoid taking the stand. Atilla testified in a last-ditch self-defense, and the jury began its deliberations on December 20.
Yesterday, after spending 11 days away for Christmas and New Years, the jury returned to deliberate again, and after only a few hours delivered their verdict: guilty on five out of six counts. Atilla's rap sheet now includes four conspiracy counts, including conspiracy to defraud the United States, plus one count of bank fraud. (He was acquitted for money laundering.)
All eyes are now on the United States government and whether it issues a fine against Halkbank, particularly now that it has proven in a court of law that the bank engaged in a massive, illegal financial scheme. French Bank BNP Paribas was fined $8.9 billion for far lesser transgressions in 2015, for its violations of sanctions against Sudan, Cuba, and Iran.
Fine or no fine, it's hard to envision tranquil U.S.-Turkish relations going forward. Erdogan, who now rivals Russia's Vladimir Putin in autocratic style, has already instructed his spokesman to decry the trial as a "plot" against Turkey, while slamming "the scandalous verdict of a scandalous case."
Then there is the question of Iran. In all likelihood, Tehran probably gave little thought to the Atilla verdict, given its ongoing domestic turmoil. The people are calling for better economic conditions, and a foreign policy that doesn't squander Iran's wealth on adventurism outside the country's borders. One can only guess that would include complex sanctions busting schemes to enable an illicit nuclear program.
And now that Zarrab has finally clarified a few things about the Iranian role in his scheme, one troubling question lingers: Why did the U.S. government continue to negotiate the nuclear deal with Iran in 2013 and 2014 while Treasury was warning Halkbank about enormous sanctions violations? We may never know. Then again, from the documents I viewed, I wouldn't be surprised to see other sanctions busters come in the DOJ crosshairs—creating new and uncomfortable challenges for our existing alliances and diplomatic agreements. Perhaps other future indictments will tell us more.
Posted: 04 Jan 2018 08:05 PM PST
Three months ago, when Jodi Kantor and Megan Twohey of The New York Times unloaded their first big report about Harvey Weinstein's pattern of sexual aggressiveness and abuse, the depth of detail made the story unforgettable—and as it turned out, historic. Real women went on the record, using their real names, giving specific dates and times and circumstances of what Weinstein had said or done to them.
Of the reactions that flowed from this and parallel accounts—about Roger Ailes and Bill O'Reilly in the Fox empire, or Matt Lauer and Charlie Rose in mainstream TV, or Kevin Spacey and Louis CK in the film world, or Michael Oreskes and John Hockenberry in public radio, or Mark Halperin and Leon Weiseltier in print and political media, and down the rest of the list—one response was particularly revealing. It was that the behavior in question had been an "open secret."
In the very short term, a few people reflexively offered "open secret" as an explanation, even a rationalization. Of course everybody knew that Harvey/Roger/Kevin was this way (the reasoning went). If you were smart, you kept your distance, and you'd never take the bait of going for "a meeting" up in the hotel room. Want to give, or get, a "massage"? No way!
But you rarely hear rationalizations of that sort any more. Now the open-secret premise usually leads to a follow-up question. If "everyone" knew what was going on, why didn't anyone do more to stop it? And this in turn has led to institutional and personal self-examinations.
In the best circumstances, organizations have asked: How could we have failed that badly? What should we do differently? Individuals have asked: What should I have known, that I merely suspected (or willfully ignored)? What more could I have done, based on what I actually knew? For powerful illustrations in this last category from members of the Atlantic family, involving episodes at The New Republic, see this by Michelle Cottle, this by Peter Beinart, and this by Franklin Foer.
In the worst circumstances, details have piled up about organizations that made deals, payoffs, or threats to keep ugly specifics of what they knew from getting in the way of their business plans. Thus the tens of millions of dollars in harassment settlements while Bill O'Reilly was still a Fox cash cow; thus the payoffs and investigations by the Weinstein organization to placate or intimidate women who might otherwise go public with their complaints against Harvey Weinstein.
In all these cases, the malefactor remains most to blame. But "it was an open secret" now properly seems a broadened indictment, of all those who quietly let him get away with it, rather than an excuse.
The details in Michael Wolff's new book Fire and Fury make it unforgettable, and potentially historic. We'll see how many of them fully stand up, and in what particulars, but even at a heavy discount, it's a remarkable tale.
But what Wolff is describing is an open secret.
Based on the excerpts now available, Fire and Fury presents a man in the White House who is profoundly ignorant of politics, policy, and anything resembling the substance of perhaps the world's most demanding job. He is temperamentally unstable. Most of what he says in public is at odds with provable fact, from "biggest inaugural crowd in history" onward. Whether he is aware of it or not, much of what he asserts is a lie. His functional vocabulary is markedly smaller than it was 20 years ago; the oldest person ever to begin service in the White House, he is increasingly prone to repeat anecdotes and phrases. He is aswirl in foreign and financial complications. He has ignored countless norms of modern governance, from the expectation of financial disclosure to the importance of remaining separate from law-enforcement activities. He relies on immediate family members to an unusual degree; he has an exceptionally thin roster of experienced advisers and assistants; his White House staff operations have more in common with an episode of The Apprentice than with any real-world counterpart. He has a shallower reserve of historical or functional information than previous presidents, and a more restricted supply of ongoing information than many citizens. He views all events through the prism of whether they make him look strong and famous, and thus he is laughably susceptible to flattering treatment from the likes of Putin and Xi Jinping abroad or courtiers at home.
And, as Wolff emphasizes, everyone around him considers him unfit for the duties of this office. From the account in The Hollywood Reporter:
This is "news," in its detail, just as the specifics of Weinstein's marauding were real, hard-won news. But it also is an open secret. This is the man who offered himself to the public over the past two-and-a-half years.
* * *
I feel this way because I believe I chronicled signs of every one of these traits through the campaign cycle, in The Atlantic's 162-installment "Trump Time Capsule" series. But practically anyone else in political journalism can make a similar claim. Who and what Trump is has been an open secret.
It was because of this open secret that nearly 11 million more Americans voted against Trump last year than for him, including the three million more who voted for Hillary Clinton. (The rest were for Gary Johnson, who got nearly 4.5 million; Jill Stein, with nearly 1.5 million; Evan McMullin, with about 700,000; and a million-plus write-ins.) It was because of this open secret that virtually every journalistic endorsement in the country went against him, including from publications (like The Dallas Morning News or The Arizona Republic) that are ordinarily rock-ribbed Republican, and others (like USA Today) that had not offered endorsements before or (like The Atlantic) generally did so only once per century. It was because of this that his party's previous nominee, Mitt Romney, publicly denounced him—and that most of the political establishment, Democratic and Republican alike, assumed that no person like him could ever reach the White House.
(The shared certainty that Trump would fall short, which Wolff demonstrates extended to every part of the Trump campaign as well, may explain one of the major journalistic failures of the campaign: the disproportionate harping on Hillary Clinton's email "problems," as if this objectively third-tier failing were on a par with Trump's grossly disqualifying traits. Most of the press assumed she would soon be in office; this was a warm-up for the kind of inspection real presidents should be prepared to undergo.)
Who is also in on this open secret? Virtually everyone in a position to do something about it, which at the moment means members of the Republican majority in Congress.
They know what is wrong with Donald Trump. They know why it's dangerous. They understand—or most of them do—the damage he can do to a system of governance that relies to a surprising degree on norms rather than rules, and whose vulnerability has been newly exposed. They know—or should—about the ways Trump's vanity and avarice are harming American interests relative to competitors like Russia and China, and partners and allies in North America, Europe, and the Pacific.
They know. They could do something: hearings, investigations, demands for financial or health documents, subpoenas. Even the tool they used against the 42nd president, for failings one percent as grave as those of the 45th: impeachment.
They know. They could act. And they don't. The failure of responsibility starts with Mitch McConnell and Paul Ryan, but it doesn't end with them. Every member of a bloc-voting majority shares responsibility for not acting on their version of the open secret. "Independent" Republicans like Susan Collins and Lisa Murkowski share it. "Thoughtful" ones, like Ben Sasse and Jeff Flake. Those (in addition to Flake) who have nothing to lose electorally, from Bob Corker to Orrin Hatch. When they vote as a majority against strong investigations, against subpoenas, against requirements for financial disclosure, and most of all against protecting Robert Mueller and his investigation, they share complicity in the open secret.
We are watching the political equivalent of the Weinstein board paying off the objects of his abuse. We are watching Fox pay out its tens of millions to O'Reilly's victims. But we're watching it in real time, with the secret shared worldwide, and the stakes immeasurably higher.
Posted: 04 Jan 2018 02:35 PM PST
This is the first installment in an ongoing series examining kids' worldviews and how they are shaped.
When the sociolinguist Calvin Gidney saw The Lion King in theaters two decades ago, he was struck by the differences between Mufasa and Scar. The characters don't have much in common: Mufasa is heroic and steadfast, while Scar is cynical and power-hungry. But what Gidney noticed most was how they each spoke: Mufasa has an American accent, while Scar, the lion of the dark side, roars in British English. In a climactic scene in which Scar accuses Simba of being the "murderer!" responsible for Mufasa's death, the final "r" in his declaration floats up into a sky bursting with lightning, and it's hard to imagine it sounding quite as monstrous in another tone.
Gidney, an associate professor in child study and human development at Tufts University who specializes in sociolinguistics, saw Scar's accent as part of a disturbing pattern in the film: Foreign accents and non-standard dialects were being used to voice all of the "bad" characters. Gidney also noticed that Scar's minions, the hyenas, spoke in either African American English or English with a Spanish accent. Gidney found this trend concerning, especially since the theme of the movie could be described as "the 'natural order of things,'" he said. "I thought it was really disturbing that it was necessary to 'take back the jungle' from the British-sounding evil lion, plus the African American-sounding and Latino-sounding hyenas."
Gidney was inspired to embark on a study of language patterns in animated kids' entertainment, teaming up with Julie Dobrow, a senior lecturer at Tufts who specializes in issues of children and media, to study how these trends play out on kids' television shows. They've since analyzed about 30 shows and 1,500 characters, and they're still at work on the project.
For their initial study in 1998, Gidney and Dobrow had a team of coders analyze 323 animated TV characters using measures such as ethnic and gender identification, physical appearance, hero/villain status, and linguistic markers. The coders tested a random sample of 12 shows, which spanned a variety of networks, air-times, and genres. Their findings suggested that lots of kids' shows use language to mark certain traits in a given character. All but two of the shows studied correlated dialect (a term that refers here to any particular variety of a language) with characters' personality traits in some way.
The kicker: In many of the cases studied, villains were given foreign accents. A modern-day example is Dr. Heinz Doofenshmirtz, the bad guy in Phineas and Ferb who speaks in a German(ish) accent and hails from the fictional European country Drusselstein. Meanwhile, the study found that most of the heroic characters in their research sample were American-sounding; only two heroes had foreign accents. Since television is a prominent source of cultural messaging for children, this correlation of foreign accents with "bad" characters could have concerning implications for the way kids are being taught to engage with diversity in the United States.
The most wicked foreign accent of all was British English, according to the study. From Scar to Aladdin's Jafar, the study found that British is the foreign accent most commonly used for villains. German and Slavic accents are also common for villain voices. Henchmen or assistants to villains often spoke in dialects associated with low socioeconomic status, including working-class Eastern European dialects or regional American dialects such as "Italian-American gangster" (like when Claude in Captain Planet says 'tuh-raining' instead of 'training.') None of the villains in the sample studied seemed to speak Standard American English; when they did speak with an American accent, it was always in regional dialects associated with low socioeconomic status.
Some shows also gave foreign accents to comic characters, though British English was almost never used in this way. "Speakers of British English are portrayed dichotomously as either the epitome of refinement and elegance or as the embodiment of effete evil," the study concludes. "What general sociolinguistic theory would suggest," Gidney added, "is that American adults tend to evaluate British dialect … as sounding smarter." Funny characters, on the other hand, often speak in German or Slavic accents (Dobrow offered as an example the associates of the evil Dr. Claw in Inspector Gadget), as well as in regional American dialects associated with the white working class.
Animated shows aren't too careful in depicting how dialects actually work; they often use sloppy approximations of an accent as opposed to accurate renderings. The two generalized indicators of a Slavic accent, according to the study, are pronouncing words like "darling" as "dah-link," and "we" as "vee." Often, accents have a combination of features associated with a patchwork of nationalities. But what's true in all of these cases is that the accent is portrayed as foreign in a way that's clear to the viewer. To Gidney, the common denominator in all of these vague foreign accents is "the binary distinction of 'like us'" versus "not like us." "Villainy is marked just by sounding different," he added.
But Gidney and Dobrow's findings suggest that there's something more specific at play than a general American bias against foreign accents. They said that the use of German, Eastern European, and Russian accents for animated villains is likely reflective of America's hostility toward those countries during World War II and the Cold War. They have continued to find these same accent trends through the past few decades, even as the political and social climate changes and the nation's zeitgeist is marked by different ethnic and global tensions. Gidney and Dobrow noted that, contrary to what researchers might have expected, children's TV today is no more likely to use, say, Middle Eastern or Korean accents for villains than it was in the past. Slavic accents, German accents, and the like are still the voices of choice for "bad" characters.
Since the publication of their initial research, Gidney and Dobrow have expanded their study to better understand the rationale for accent trends by speaking with kids' TV executives involved in casting and development. What they've been finding in conversations isn't that the showrunners think this custom is "a good idea"; rather, "it's a conventional idea," said Dobrow. Dobrow and Gidney suggested that these showrunners are simply imitating the tactics of commercially successful shows. Rosina Lippi-Green, a linguist who has written on the uses of language in Disney movies, added that these tendencies likely have to do with the "age and training" of the showrunners themselves. In other words, showrunners may be making decisions on the basis of what was popular and successful in the shows they grew up watching.
Yet Dobrow and Gidney noted that stereotyped uses of language aren't an industry-wide norm; they said that networks such as PBS make a concerted effort to prioritize racial and ethnic diversity and accuracy in their programming, and that progress is being made in the industry more broadly. Accent signaling is also a more subtle form of ethnic stereotyping that can coexist with improvements to the ways in which children's shows depict the world and the people who occupy it; many of the shows that Gidney and Dobrow have studied in recent years feature a broader array of ethnicities or more females in traditionally male-dominated roles than do older shows—even shows that continue to use foreign-accent tropes. Take Kim Possible, for example: while the protagonist, Kim, is a female superhero, she also encounters many villains with non-American accents.
The next iteration of Gidney and Dobrow's study will focus on how children are processing the messaging of animated television. They plan on having actors record basic sentences such as "please pass the water" using various dialects. The researchers will tell children ages 6 to 12 that they have a voice but aren't sure what kind of character the speaker should be—whether it's a villain, hero, jester, or so on—and they'll have the kids make suggestions. The goal is to better understand kids' tendencies in correlating dialect with character traits. It will be hard to ascertain whether kids' perceptions are the result of television's messaging or other sources of cultural messaging, but given the fact that TV is an important source of information for kids today, the researchers hypothesize that if they do find biases in kids' responses that match up with the accent trends they've already found, then TV's messaging has likely played at least some role.
Language tropes can have far-reaching consequences, both for kids' perceptions of those around them and their understandings of themselves. Research has shown that kids use TV as a key source of information about other ethnic groups, as well as about their own ethnic and racial identities. Linguists have also found that not only do people make judgements about their peers' intelligence and education levels based on language characteristics (with those who speak standard dialects usually being viewed as smarter and better-looking), but also that those judgments often shape how a person or group of people is treated. These patterns imply that when children see a correlation between evil and foreignness, or between evil and low socioeconomic status, there's a good chance they are internalizing negative perceptions of themselves or other groups.
The study's findings are noteworthy in part because television's entertainment value makes it a particularly powerful mode of messaging: Kids are easily mesmerized by TV and willing to watch the same show over and over. Lippi-Green refers to entertainment as a "spoonful of sugar" with a sour aftertaste for in-the-know adults—TV and movies "take [bias] and pour concrete over it," she said. "They etch it in." That, according to Lippi Green, is because children learn through repetition. "You show them a pattern, you keep showing them that pattern … of course they're going to assimilate that," she continued.
Even civilization's earliest storytellers likely used accents as markers of the "foreign," Lippi-Green said. From the beginning, "people who were the best storytellers changed their voices"—doing so is, after all, one of the easiest ways to effectively mark an outsider.
So what are parents to do with the knowledge that many kids' TV shows and movies are brimming with cultural biases? Dobrow points to intentional, collaborative TV-watching. "What's really important is to be able to make your children into media-literate viewers," she said. "If a parent or sibling or caregiver is there with a child watching television or a film, this ... can make anything into an educational experience."
Posted: 04 Jan 2018 03:02 PM PST
The premise of Ridley Scott's All the Money in the World can be summed up in one famous word, uttered by the oil tycoon J. Paul Getty (Christopher Plummer) to the press regarding the kidnapping of his grandson Paul (Charlie Plummer) in 1973. How much would Getty, at that point the richest man alive, pay to have the teenage boy returned safely? "Nothing," he says, almost chortling at the thought. It was a real-life moment that seems worthy of Greek tragedy, and it's at the core of Scott's dramatic re-creation of the kidnapping. After all, what could possibly motivate a man of such means to think something so callous?
That's the question underlying this quasi-biopic, quasi-thriller, which touches on how Getty got his riches and his miserly nature, as well as on the broad beats of the kidnapping story. This is a fable about the poisonous quality of wealth, one that attempts to burrow into the mind of a man who'd publicly announce his disinterest in rescuing his own grandson. But the film spends too much time in the gummy details of Paul's kidnapping, a disturbingly farcical series of events that saw him passed around by Italian gangsters like a faded trophy, when all of its best material involves the elder Getty's recalcitrance.
All the Money in the World is destined to be remembered best for the unique story of its production, in which Kevin Spacey (who originally played Getty) was replaced with Plummer less than two months before the film's release after a slew of sexual-assault allegations against Spacey. That Scott somehow managed to reshoot every scene involving Getty is nothing short of miraculous given the methodical nature of movie production. Plummer's role isn't small—he's all over this film. Still, it's telling that the behind-the-scenes drama looms larger than the movie itself. All the Money in the World is watchable and at times quite gripping, but it's little more than a middling entry in Scott's long career.
The film begins with Paul's kidnapping. A flaxen-haired 16-year-old living in Rome, Paul was the son of John Paul Getty Jr. (Andrew Buchan), an erstwhile heir to the Getty Oil empire who struggled with substance abuse and had divorced Paul's mother Gail (Michelle Williams). So when Gail gets the ransom call, demanding $17 million for her son's safe return, she has to petition her former father-in-law for help, not having a fortune of her own to tap. The only problem being that J. Paul Getty was not known for his generosity.
For much of the movie's action, Getty is shut up inside a sumptuous English estate, with fine art crowding the walls and a stock ticker spitting out ceaseless information about just how rich he is. It's here that he turns down Gail's request for money and tells the press he wouldn't pay a cent in ransom, his ostensible reason being that it would put his other family members at risk of being kidnapped in hopes of similar payouts. But Scott's clear distaste for Getty's kingdom of avarice is obvious: The tycoon's mansion is a dark, gloomy place filmed with gray and green filters lorded over by an imperious grump.
Plummer is so good in his role that it's genuinely hard to imagine a whole other movie exists with a whole other performance (one audiences will never see). He plays Getty with a soft touch, aware that his gruff inaction is horrifying enough and weirdly thrilling to behold without additional theatrics. As a tearful Gail demands Getty's help, he waves her off, saying the markets are too volatile for him to put up $17 million at the moment, even though that's the kind of money his company makes in a day.
It's when Scott shifts his focus to the rescue attempts that things become more snooze-worthy. In the scenes in Getty's manse, the film feels alive with energy, giving viewers a peek behind the curtain at a world most people couldn't begin to fathom. The rest of the movie (written by David Scarpa) has all the drama of a long Wikipedia entry, shuffling from event to event with dull functionality. Unwilling to pay the ransom, Getty assigns his adviser Fletcher Chase (Mark Wahlberg), a former CIA operative, to work with Gail and retrieve his grandson.
Wahlberg is horribly miscast—he's best when he's playing a guy on the bottom rung trying to nudge his way into acceptability, like in Boogie Nights or The Fighter. Fletcher is supposed to be a cool-headed expert, projecting calm authority as he guides Gail through the hostage-recovery process. In Wahlberg's hands, Fletcher feels like a dope, a stuffed suit trying (and failing) to convince his boss to pay up once he realizes the very real danger Paul is in. Williams is better, affecting a blue-blooded New England twang, but her role is largely limited to worrying about her son; her performance only comes alive when she's clashing with Getty.
At 132 minutes, the film is too long, indulging in many scenes of Paul's imprisonment, which eventually takes a dark and very violent turn. But every time Scott swivels back to Getty, ensconced in his gilded tower, you get a glimpse of a masterpiece that might have been—as well as another chance to marvel at the 80-year-old director's rapid-fire reshoots. All the Money in the World ultimately ends up feeling like a curio, albeit one with hints of something much grander hiding behind those Getty Estate walls.
Posted: 04 Jan 2018 05:35 PM PST
On December 17, 2014, then-President Barack Obama announced that the United States would restore its international relations with Cuba. In addition to many expected diplomatic consequences, the decision had an odd effect: boosting the popularity of a small, closed-end fund that trades as CUBA.
Despite its name, CUBA's holdings in Cuba are minor and have little value.* There was no rational financial explanation for why investors would buy up this fund—which nearly doubled in price—on this particular day.
The investments in CUBA are a reminder that the market isn't always "efficient": Investors don't always make rational decisions and go with whatever gives them the greatest risk-adjusted return. Yet stock prices often are relatively predictable based on rational, mathematical models. CUBAs in the stock market don't happen all the time, nor do unexpected dips and crashes.
In a complex system like the stock market, rationality and irrationality coexist. Determining what strategies make the most sense depends on the constantly changing conditions, says Andrew Lo, a professor at MIT's business school.
To better understand complex financial markets, a growing number of economists are looking beyond math and physics, the roots of the field's historic models, to what might seem an unrelated discipline: evolutionary biology. Much like a biological organism living in an ecosystem, the stock market is a network. As cells do within a human body, or as bacteria do in their colony, investors and companies interact with, influence, and compete with each other—and they need to adapt for survival.
Proponents of this so-called adaptive-markets approach, sometimes known as "evolutionary economics," believe it has big implications for investment strategies, from how to make financial systems more stable to understanding innovation, growth, and inequality.
The theory reconciles behavioral economics—which examines psychological factors in economic decision-making—with traditional efficient-markets economics by taking into account that things change over time, says Lo, who has written a book called Adaptive Markets. Neither alone is the complete story, he says.
One of the hallmarks of networks is that properties emerge from them that you can't predict from a one-on-one relationship, says Laura Reed, a biologist at the University of Alabama in Tuscaloosa who doesn't study economics. These emergent properties can be beneficial, such as when some innovative solution to a problem is generated from crowdsourcing. But they can also spiral the other direction, like a virus that jumps species to infect humans.
Think of investor panic leading to a run on a bank, or more commonly these days, the stock market. The panic incited by a plummeting Dow Jones average is driven because the behaviors of other players in the system are intertwined, namely that each can see that others are selling in the market and react to it. Even though crashes occur regularly, the spark that sets them off catches most financial wizards off-guard each time precisely because the crashes are properties that emerge from this complex system.
Predicting instability in a complex system is difficult, and therefore probably the biggest limitation of the evolutionary-economics approach. But to improve the understanding of what the outcomes will be, you need to understand the structure of the system, says Reed, who studies the biological system of how fruit flies react to poor diets and a lack of exercise. "If you want the complete story, you have to think about it as a whole," she says.
In evolutionary thinking, understanding the history is important, too, she says. Appreciating the pressures that shape the organism into the way it is could help predict what will happen in the future. Like a virus that morphs to become resistant to an antibiotic, long-term survival—financial payoff, in the case of investing—may require adapting to the current or future environment rather than using one static strategy.
As Reed notes, evolution is less about survival of the fittest than it is about survival of the "good enough": An organism may survive one crisis because it has enough of the right characteristics to do this, but it still may be at risk in the future. This makes it all the more important to understand the entire network to figure out who is best set up to succeed under different types of duress, or to influence systemic forces to better serve the individuals in the network. Understanding the network also can help identify critical vulnerabilities, the pieces of the system that, if perturbed, can lead to collapse of the whole.
Historically, economists have been drawn to the idea of equilibrium that physics offered, which allowed tidy algorithms of supply and demand, says Eric Beinhocker, the executive director of the Institute for New Economic Thinking, or INET, at the University of Oxford. But the stock market isn't about achieving and maintaining balance; it's really about disequilibrium, more like a ship lurching from one crisis to another, trying to right itself.
Real-world economic crises are great laboratories for learning, Beinhocker says. Lehman Brothers, an investment bank that collapsed spectacularly and suddenly in 2008, was hugely connected to others in the industry, and its failure set off a chain reaction. There's a biological concept at play here known as pleiotropy, which means that one particular aspect of a system has multiple functions. It can't be fiddled with in isolation; it will cause ripple effects.
Beinhocker and his group are working on a new generation of models to map out the conditions and interactions involving real human behavior to show when markets might crash and contagion might spread. Their goal is to help develop policies that can restructure those networks so one player isn't so dependent on another that the system spirals out of control. "The problem is not so much too big to fail, but too connected to fail," Beinhocker says.
One study spearheaded by Beinhocker's colleague at INET, J. Doyne Farmer, looked at the 2008 financial meltdown to model what would happen if banks today followed something like the regulations that existed at that time. They found that over time, under rules that controlled the amount of capital versus debt banks could hold, a "boom and bust" cycle always emerged. Attempts to actively manage how much capital companies could borrow depending on how volatile or stable the market is didn't help. But when companies were required to maintain a particular amount of borrowed capital regardless of circumstance, the market didn't exhibit such dramatic swings. This suggests that a policy change, while perhaps not erasing the risk of any crash, could minimize it.
At this big-picture level, adaptive-markets ideas can help policy makers improve regulatory laws to stabilize the system. By modeling the system as a system, one can see what properties emerge—or fail to emerge, such as feedback warning a system that bad things are happening—and try to implement the missing piece in order to reduce the volatility of the market cycles, says MIT's Lo.
On an individual level, a more accurate model of financial-market dynamics would allow workers to develop more effective retirement plans, Lo says. Or, taken to an extreme, he notes, the adaptive-markets theory allows one to imagine "roboadvisors," or software that could customize and manage portfolios to achieve people's short- and long-term financial goals, or alert us when some of those goals simply aren't achievable given the current circumstances.
Think of different funds and investments as new species on a never-before-explored island, says Lo. Who adapts better or worse to that environment? And what's the goal for approaching the ecosystem? "If I'm trying to protect the new island and keep the ecology relatively stable, what kinds of policies or interventions do I consider to maintain stability?" he says. "If the goal is to enhance growth and innovations, there are specific policies one wants to undertake."
* This article previously stated that CUBA invests in no stocks related to Cuba. We regret the error.
Posted: 04 Jan 2018 10:28 AM PST
Here is a brief summary of the 2017 economy: In a tug-of-war between political surreality and global reality, reality won.
While President Donald Trump has been an instrument of chaos—goading nuclear powers, blasting the FBI, and mocking his enemies—the global economy scarcely seems to have noticed. In Europe, manufacturing confidence hit a 10-year high, according to JP Morgan. In Japan, business confidence has hit a 30-year high. The U.S. labor market has added jobs for 75 consecutive months—a record. In the likely event that the economy is still expanding in May, this will be the second-longest period of economic growth since the end of World War II. (GDP would have to keep growing for another 18 months to catch the all-time record, the 1991–2001 expansion.) On Wednesday, the Dow Jones Industrial Average surpassed 25,000 for the first time ever, after another round of strong jobs data.
It's impossible to say for certain how long any of this will continue in 2018. The 2017 economy benefited from several trends, like the nice bump in oil and metal prices, that could be temporary boons. But if 2018 is indeed a redux of 2017, we may finally glimpse an emerald-rare phenomenon in the post-1970s economy: inflation higher than 2 percent.
There are two important questions regarding inflation: Can higher inflation, which can sometimes spin out of control, be good; and why aren't we getting more of it?
The first question is easier to answer. Inflation in the economy is like yeast in bread; both too much and too little ruins the loaf, but a little bit makes the dough rise. The right amount of inflation—say, between 2 and 3 percent—can push up wages and stimulate economic expansion. Since the Great Recession ended, the most common measure of inflation, the "core" consumer price index (which discounts volatile food and energy costs), has been under the Federal Reserve's target of 2 percent. That's one reason why so much of the economic recovery has felt so feeble.
The second question—why is higher inflation so elusive—is one of the larger mysteries of the last few years. Since March 2009, the world's central banks have pumped more than $11 trillion in stimulus into the global economy. Stock prices have tripled. But U.S. inflation hasn't surpassed the Federal Reserve's target of 2 percent for more than a few months total. Price and wage growth are dormant across developed economies like the U.S., Europe, and Japan.
There are several possible reasons. First, lower inflation is a natural feature of a moribund recovery following a financial crisis, like the Great Recession, when families spend less after they lose jobs and their housing values plummet. Second, aging populations in advanced economies might be restraining economic growth, since pensioners, by definition, don't work much. Third, internet companies and communications technology might be keeping prices low; for example, Uber has made urban transit cheaper, and Amazon and Walmart have held down retail prices. Finally, it's possible that larger companies—not necessarily monopolies, but monopoly-ish—have fewer competitors, so they can afford to restrain wage growth. (The average market cap of a public U.S. company is 10 times higher than it was four decades ago, according to JP Morgan.)
The specter of inflation haunts goldbugs and bond investors looking for risk-free returns. But 2018 might finally be the year where the apparition enters the realm of reality. This materialization would be great for workers, since median wage growth is still far below its late-1990s levels.
The first reason why inflation might finally be right around the corner is that the U.S. seems awfully close to full employment. The official unemployment rate is 4.1 percent, which is lower than any time between 1971 and 1999. But that's not all: The share of part-time workers is lower than any time in a decade, and a survey of small businesses' intention to hire recently returned an all-time high (the survey began in 1974).
Wage inflation and overall inflation are somewhat interlinked, since having to pay workers more can force companies to raise prices. One of the key signs of impending wage inflation is that industries struggle to fill low-wage jobs, since workers are constantly threatening to leave for a higher-paying position. Indeed, restaurants like Cheesecake Factory are finding it harder to keep workers around without raising wages and prices. Another low-wage job, delivery drivers who drop off packages for UPS or FedEx, is in such high demand that the occupation was the third–most popular job listing on Monster.com in 2017. More competition for low-wage workers should push up wages, and prices will likely follow.
Second, the Republican tax cut might provide an interesting experiment for 2018, because it does something rather unprecedented in U.S. budget policy. It purposefully increases deficits deep into a recovery with unemployment under 5 percent. And while the overall tax cut skews toward the rich, the 2018 distribution is more progressive because it includes the largest tax benefits for middle-class families, which later expire.
The last time that unemployment was this low, President Bill Clinton was presiding over budget surpluses. But the Joint Committee on Taxation estimates that the tax cut signed by Trump will add $135 billion to the deficit in the first nine months of 2018 (the remainder of the fiscal year) and another $280 billion to the deficit in the following 12 months. This is a bold experiment in expansionary fiscal policy. No modern American government has ever passed a tax cut this large with such low unemployment. It would be awfully surprising if cutting taxes by more than $100 billion a year in a growing economy with near full employment didn't produce at least a little bump in inflation (even if the overall bill is largely a sop to the ultra-rich).
In the 1970s, inflation teamed up with high unemployment to deliver a miserable few years for working Americans. But a little bit of inflation isn't a disaster. It would raise wages and stimulate economic growth after years of steady but sluggish expansion. The Federal Reserve has the power to quickly raise rates to cool the economy. But perhaps it should allow just a bit of overheating. We know what a decade of sluggishness looks like. Let's see what a little bit of inflation can do.
Posted: 04 Jan 2018 09:35 AM PST
Last month, Jared Kushner began seeking the help of a crisis-communications firm. Perhaps the White House senior adviser could make a referral for his father in law, too. There's no scenario in which Michael Wolff's new book on the Trump administration wouldn't be a bombshell, but Donald Trump's strategy for responding to the book seems certain to only increase the scrutiny on it.
So far, the pushback has included an astonishing statement from the president on Wednesday: "Steve Bannon has nothing to do with me or my Presidency. When he was fired, he not only lost his job, he lost his mind." Wednesday night, lawyers for Trump sent Bannon a cease-and-desist letter, accusing him of libel, slander, and breach of confidentiality and non-disparagement agreements. On Thursday, The Washington Post reported, lawyers also sent a letter to Wolff and his publisher, Henry Holt, alleging libel and demanding they "immediately cease and desist from any further publication, release or dissemination of the book."
Trump is represented in the matter by Charles Harder, the Beverly Hills attorney who, paid by billionaire Trump ally Peter Thiel, sued on Gawker on behalf of Hulk Hogan, effectively shutting the site down.
But Trump's double-barreled response is risky, both as a matter of law and as a matter of politics.
"It would surely be another terribly self-destructive act by the president if some sort of action were commenced on his behalf," the First Amendment lawyer Floyd Abrams told me Thursday. "The chances of success in such an action are all but nonexistent and the risks to the president of commencing such an action are overwhelming."
A suit against Wolff and his publisher would be especially tough. In order to win, Trump would likely have to prove that Wolff and the publisher printed information that they knew was false. In the United States, it's very hard to win a libel suit against a publisher or media outlet—as Trump knows well, since he has repeatedly complained that libel laws need to be loosened for plaintiffs. Many of the most damaging quotes to emerge from the book so far, like Bannon's description of the June 2016 Trump campaign meeting with a Russian lawyer as "treasonous," or aides repeated assessments of the president as unintelligent and distracted, are matters of opinion and not fact, and therefore not subject to libel laws.
Besides, the book is already printed and shipped. There's no real way to stop it reaching the public at this point; the first quotes emerged when The Guardian found a copy at a bookstore ahead of the release date.
The open question is what sort of confidentiality or non-disparagement agreements Bannon might have signed. While Abrams said such contracts wouldn't likely affect Wolff's right to report what Bannon told him, it could open Bannon up to lawsuits.
Trump is a longtime aficionado of NDAs, and many former campaign staffers seem to have signed them, including former manager Corey Lewandowski and aide Sam Nunberg, whose NDA was entered into the record as part of a lawsuit Trump filed against Nunberg for leaking. Trump might have a case against Bannon for anything Bannon said about Trump before he was president, but Abrams doubted there'd be any enforceable equivalent that applied to Bannon's work in the White House. "Once Bannon was in the government I think it highly unlikely that anything he said could be the basis of a contractual lawsuit by the president," he said.
NDAs often serve largely as a deterrent. When Lewandowski joined CNN as a commentator, legal experts told The Washington Post that it might be tough to enforce his NDA, but that threat of defending a costly lawsuit for people who break such a contract tends to keep them from doing so. If they do violate the deal, though, the damage is done, and a lawsuit can be punitive but never restorative.
There are, however, considerable risks for Trump in filing suit. Some observers have claimed the simple fact of a lawsuit would validate the book. "The White House can't argue simultaneously that the book is completely incorrect and Bannon violated a non-disclosure agreement," Politico's Playbook argued. "If he violated a non-disclosure agreement then something he said was right!" But Abrams said that argument, while not ridiculous, was overblown. For example, Trump made his ex-wife Ivana sign an agreement in which she agreed not to say anything about him—positive, negative, or neutral. It's conceivable (if hard to believe) that Bannon could have signed a similar agreement.
If a lawsuit did go forward, however, Trump would open himself up to defense lawyers poring through all sorts of information he probably doesn't want made public. Presidents are largely immune to litigation while in office, but if Trump initiated a suit, he'd open himself up to discovery.
"It would be an opposition researcher's dream," Abrams said. "The sort of discovery which would result from a challenge to this book, which deals with issues as broad as the president's intelligence, would allow enormous discovery. His college grades! It's very hard to minimize the potentially relevant areas that discovery could go into."
Of course, the chances of Trump going forward with the actual lawsuit are somewhere between slim and none. On the one hand, Trump is more litigious than any president before him. Yet on issues of libel and defamation, Trump has repeatedly promised to pound nemeses with lawsuits and failed to follow through. In October 2016, he threatened to sue The New York Times over a story about allegations of sexual harassment against him; no suit has emerged. (The suit against Nunberg was a notable exception, but that case was quickly dismissed.)
Trump is unlikely to sue, and if he does sue, he is unlikely to win. But threatening the lawsuits and delivering bellicose statements like the one he did about Bannon on Wednesday carries a risk of its own—as Trump's frequent antagonist Barbra Streisand could remind him. Fifteen years ago, Streisand sued a little-known website, seeking the removal of a picture of her Malibu home from an archive of California coastline photos. Streisand's suit was dismissed, she had to pay the defendants' legal fees, and—worst of all, from her perspective—the suit brought exponentially more attention to the website than it had before. The phenomenon of lawsuits or threats to sue that only call more attention to something the plaintiff had sought to suppress is popularly known as the Streisand Effect.
Perhaps Trump wishes to replace her name with his own, as is his wont. Such intense presidential agitation can only bring more attention to the book, though it's already leading bestseller lists. "Is there a place on the best-seller list that's higher than #1?" Times media critic Jim Rutenberg quipped in response to the letter to Holt and Wolff.
Since the days when he was leaking gossip about himself to New York tabloids, Trump has taken the position that all publicity is good publicity, so it wouldn't be a great surprise for him to espouse the same view now. But what works when one is trying to build up a name is less useful when one is already president of the United States and world famous, but needs to be able to govern. The threats against Bannon, Wolff, and Holt are not only unlikely to go anywhere, but they also offer unintentional validation of the misgivings about his judgment that aides voice in the book.
Posted: 04 Jan 2018 10:30 AM PST
There is a temptation, when a new presidential administration comes into office, for its members to assume everything the previous administration did was idiotic, and that a wiser course of action would have been to do the precise opposite. We saw this in 2017, for example, when President Trump and some of his aides had an almost pathological obsession with the former president's team and policies. But the Obama administration, too, seemed overly eager to distinguish itself from the Bush administration in its early years.
The problem is that presidential administrations are almost always filled with talented, hard-working people, and it's a mistake to reflexively jettison whatever it was they decided upon for policy. And so those of us who left the last administration—who have been all too ready to criticize this new one—should keep an open mind regarding the things this administration might be doing well. It's perhaps especially important to look for these things when each new day brings a fresh irresponsible tweet or poorly staffed policy decision. With that in mind, and writing as someone who is genuinely concerned about the soul of the Republic, here are four things I think the Trump administration got right in 2017.
The fight against the Islamic State
I've always admired the way the Bush administration approached the financial crisis in 2008, when it cast aside a lot of conservative orthodoxy to bail out banks and spend what was necessary to stabilize the markets. The Obama administration, for its part, largely carried on the good work that had been done.
The same can be said for the Trump administration and the fight against the Islamic State. I wrote a year ago that the Trump administration would preside over the defeat of the Islamic State, because anyone with even a passing understanding of the conflict knew the momentum was on the side of the coalition by the end of 2016. That said, give Donald Trump some credit for keeping the Obama administration's campaign plan and field commanders in place. Are you angry he's now claiming credit for what the previous administration accomplished? Well … who cares? The Islamic State has been largely defeated, and that's what is most important.
(Also, as an important aside, don't be so quick to blame him for the spike in civilian casualties we saw in 2017: My gut always told me the civilian casualties would get worse as the campaign moved to Mosul and Raqqa—the last two urban strongholds of the Islamic State. It's also entirely possible civilian casualties during the Obama administration were worse than previously thought.)
Critical national-security appointments
Okay, the less that is said about the state of the State Department, the better. Aside from that, the personnel situation in the critical national security departments and agencies looks a lot better.
At the Department of Defense, the balance of power between the uniformed and civilian leaders is still heavily weighted toward those in uniform. That's somewhat natural at the start of any administration, but it's more pronounced in this one, where the secretary has run the Department more like a combatant command and less like a government department. (No surprise, since his last major command was U.S. Central Command or CENTCOM—civilians at the Pentagon jokingly refer to it as "Pentacom" now.) It's also worth noting that it's taken a lot of time—too much time—for key civilian billets to be filled. But a lot of the civilians that have been hired have been great selections, with several particularly talented individuals coming into the building in the latter half of the year, and I believe that in 2018 they will begin to prove their worth to a secretary who isn't used to having so many civilians working for him. As for the secretary himself, by all accounts, he has forged a tight relationship with the president and continues to provide wise counsel. The Pentagon thought it hit the cabinet secretary jackpot in January of 2017, and it still feels that way a year later.
Mike Pompeo has also grown close to the president, and that's especially important given his role as the director of the Central Intelligence Agency. The CIA is in the customer service business, and it serves one customer over everyone else. If Mike Pompeo has to spend half his day at the White House explaining the world to the president, well, that's not ideal, but it's fine.
And H.R. McMaster had always been seen as a future national-security adviser. Since being selected as such to replace Mike Flynn, he has empowered some seriously talented individuals beneath him, from Nadia Schadlow and Fiona Hill to the Bajraktari Brothers, Ylber and Ylli—two of the most important and best people in the federal government you've likely never heard of. Nadia wrote the recently published national security strategy, while Fiona Hill has been fighting the good fight on Russia. Ylber and Ylli, meanwhile, are among those who understand how to actually get things done in government, which is something this administration needs more of, having disqualified so many previous Republican officials from serving after they criticized the president during the election.
Picking sides in Saudi Arabia
Another administration would have hedged its bets on Mohammed bin Salman. Not this one. This one has—with very few exceptions—largely endorsed the young crown prince's reform agenda and claim to the throne.
And I don't think that's unwise. I think that's a highly defensible strategic decision.
First, if Mohammed bin Salman ascends to the throne, he could be the king for half a century. The United States will want a close relationship with him. Second, the economic and social dynamism in the Kingdom is real. Sorry folks, it is. The reflexive cynicism about Saudi Arabia you find among most Western observers of the region has blinded us to what is going on there. Tom Friedman's interview with Mohammed bin Salman may have been cringe-worthy for its obsequiousness, but Friedman wasn't all wrong: the reform agenda—to include the crackdown on corruption—is broadly popular, and we should all be rooting for a more liberal and economically diverse Saudi Arabia. (Besides, the alternative is a nightmare for U.S. interests and global security.)
That having been said, my question for the Trump administration and Saudi Arabia is the same one I have for it with regard to Israel: It's great that personal relations are better, but what exactly does the administration intend to do with them? With Saudi Arabia, the Trump administration's message to the Saudis should be the following: You are embarking upon one of the most ambitious economic and social programs the world has ever seen. You need as few external distractions as possible. So stop obsessing about Iran—let us do that—and wind down your engagement in Yemen and your spats with Qatar and Lebanon as soon as possible. Focus on the Kingdom.
Asking dumb questions
Apparently Donald Trump made all of his generals and diplomats explain to him, in detail, why the hell we need all these thousands of troops and bases abroad.
I don't mind when senior decision-makers ask dumb questions or float dumb ideas (so long as they don't ultimately choose them). Doing so forces everyone to review their initial assumptions—which may not have been reviewed in some time—and rearticulate why we have been doing business as usual for as long as we have been doing it. (Besides, my rule for policy-making has always been that if I can't quickly explain a policy's merits to a family dining in a Cracker Barrel back home in Tennessee, I probably need to revisit the policy in question.)
In this case, politicians need to be reminded that there is an actual cost to asking the U.S. military and others in security-related departments or agencies to be doing all of the things they ask them to do. Yes, our global footprint far outstrips that of any peer competitor. But no one is asking France or China to deter both Iran and North Korea—both of which are 6,000 miles from the continental United States.
If you want the U.S. government to do less abroad, great. But until you tell the Department of Defense and its sister departments and agencies where they're allowed to start assuming more risk, don't complain about the price tag.
Posted: 04 Jan 2018 10:44 AM PST
Arianna Huffington, who once called gratitude a "gateway to grace," was so invested in the idea that she created an entire gratitude section for the Huffington Post in 2015. Among the exercises she advocated for was the gratitude list—a record of appreciations used as a motivational tool.
The list has become enormously popular. The motivational speaker Tony Robbins claims to start each day with one, in order to cultivate an "abundance mindset." Steve-O, of the MTV show Jackass, has said he makes daily gratitude lists "for good luck." Proponents recommend the lists to cope with everything from anxiety over racial conflict to the daily grind of office work. Oprah has even assigned the list, claiming that it can "open up the spiritual dimension of your life."
Studies on gratitude cite a range of benefits, including greater life satisfaction, less envy, better sleep, and stronger resilience in the face of stress and depression. As the list becomes a folk cure for the globalized age, it might benefit from a warning label: Gratitude lists are not magic. Sometimes they don't work, and their power can both backfire and be misused.
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To study the effect of the gratitude list, researchers have had to define gratitude and decide how to measure it. Some psychologists contend that gratitude has two emotional components: a "thank you" combined with a recognition that a benefit came from an outside source. This idea sits at the heart of the list's place in 12-step programs. The list provides a daily structure to modify habits of thought over time, training participants to notice their positive accomplishments rather than dwelling on worries or resentments that might trigger self-destructive behavior.
Some studies suggest that a focus on gratitude improves the ability to assess life quality, the willingness to help others, and the quality of sleep and overall physical health. In a study among Israeli youth exposed to missile attacks, researchers go as far as proposing that gratitude increases resilience against PTSD. And in a quest to find a "gratitude mechanism," the Greater Good Science Center at UC Berkeley funded a multiyear grant program in 2011, along with a gratitude summit in 2014. Researchers have also attempted to pin down a genetic component—a sort of gratitude gene that could play a role in oxytocin processing.
But gratitude long predates social-scientific study of the concept. Benjamin Franklin, influenced by the Puritans and Quakers of Boston, expressed the essence of this can-do mode of character reformation by publishing daily logs of productivity and virtue. His schedule for writing and working started at 5 a.m., with the question, "What good shall I do this day?"
As Franklin described it in his autobiography, his system was "not wholly without religion," though he steered clear of "distinguishing tenets of any particular sect." To improve his character—at age 20, mind you—he devoted a week each to 13 virtues, outlined as "A Plan for Attaining Moral Perfection."
Almost two centuries later, the sociologist Max Weber would cast Franklin's can-do practicality as an expression of the Protestant work ethic—part of the former's theory on the underpinnings of capitalism. Franklin wanted virtue for its own sake, but also for the dividends: happiness and success. Rather than trusting the weighing of souls to a judgmental deity or powerful priest, Franklin expressed the egalitarian and democratic urge to empower people to do this weighing themselves.
Franklin was tapping into the ancient impulse to pray by saying "thank you" combined with the spiritual guidance to reflect on what one takes for granted, which also percolated through Christian communities in 19th century. The phrase "count your blessings," an apparent predecessor to the gratitude list, first appeared in a sonnet by John Charles Earle, in 1878. In 1897, Johnson Oatman Jr. penned a popular hymn that recommended counting blessings as a way to endure troubled times and to remember the good things in life.
Today's gratitude list is usually more secular, seeking to change thought and action. Yet for some, the list wields a mystical, mind-over-matter magic. This too is not new: The pragmatic-mysticism movement of the late 1800s preached that one's thinking could change every element of one's life. New Age bibles like Rhonda Byrne's book The Secret offer a similar message, and the accompanying The Secret Gratitude Book promises to help readers "live the secret" by using the power of gratitude to realize desires.
As the gratitude-list practice has spread, its forms have evolved. Some people list five or 10 gratitudes. Others choose a gratitude for each letter of the alphabet. Many post their lists on social media, and challenge others to do the same. Others accessorize. The Dailygreatness Journal offers gratitude-list templates and techniques for "self-mastery"—for a fee. A four-quadrant, printable gratitude template can be had for a few dollars on Etsy. Personalized gratitude journals are available for teens, men, grandparents, Christians, Muslims, pregnant women, and cancer patients. There are even smartphone apps that allow users to rate their entries and add photos.
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Does it work? Results are mixed on the science of gratitude. Some research indicates that gratitude lists are about as helpful as other methods of paying attention or monitoring one's feelings. Even so, people stick with the gratitude practice, maybe because it makes them feel good, or perhaps because it's easy. And there can be too much of a good thing: Some researchers have argued that a weekly practice might be more effective than a daily tune-in and tune-up, because too much gratitude can lead to a kind of numbing out.
Not all studies show a benefit, however. The practice seems to help those in despair more than those who are already even-keeled. Sharing gratitude with others seems to be beneficial, but only if the listener appears appreciative and engaged. Some studies indicate that when used with children, such lists either have no effect or might be counterproductive. One study indicated that children seemed to respond more positively to the idea of envisioning their "best possible selves" when tested against the gratitude list, though this hasn't stopped the George Lucas Educational Foundation from touting gratitude lists in the classroom.
In some cases, the stability offered by the list could bring about a harmful stasis. The writer Liz Brown kept a gratitude list for about 100 days during a challenging time in her life, and it made her feel ashamed, depressed, and angry. Only when a new therapist suggested an "ingratitude list" did things start to turn around, allowing her to "grieve the things that I'd lost, missed out on, been cheated out of and all the times life had kicked me straight in the heart." Suffocating sorrow with gratitude doesn't make it go away, Brown concluded. And being told to focus on gratitude when angry might lead to shame for having other, less positive, feelings.
As the gratitude trend spreads, the practice can feel compulsory. I developed a suspicion of compulsory gratitude after a workplace meeting several years ago. A supervisor announced a wage freeze and layoffs, followed with advice that sounded suspiciously like a threat: "You should be grateful you have jobs." Researchers have even studied whether gratitude alleviates stress among workers.
Perhaps the solution to these problems might not be found in lists but in less-stressful working conditions. As Barbara Ehrenreich observed in her book Bright-Sided, a focus on positivity can be more ideological than temperamental: "If your business fails or your job is eliminated, it must be because you didn't try hard enough, didn't believe firmly enough in the inevitability of your success."
* * *
Perhaps that's why gratitude has become corporatized. The practice known as corporate gratitude includes methods for how to say "thank you" to employees and customers with trinkets and cookies and how to use gratitude as a career builder. The Harvard Business Review is chock-full of gratitude advice, calling it "the new willpower" and analyzing why General Motors' expression of gratitude after the auto-industry bailout topped Chrysler's. An HBR case study asks, "Do You Thank the Taxpayer for Your Bailout?" Another piece, "How Leaders Can Push Their Employees Without Stressing Them Out," advocates a thank-you as a way to increase productivity.
But even the Harvard Business Review warns, "Stop Making Gratitude All About You." The gratitude list began as a tool for private reflection. Public and compulsory performances can edge close to recitation of privilege, offering cover to revel in schadenfreude: I'm so grateful for my safe home, my great family, my good job, as opposed to some other sucker's terrible life. The often-derided #blessed hashtag appended to one's social-media posts can cross the line from private reflection into a brag that inoculates itself from blame: A boaster cannot be so easily be condemned when he or she is also so gosh-darn thankful.
Some studies suggest that the "Count Your Blessings" hymn might offer the best model for gratitude: imagining life without certain blessings or reflecting on how things might have gone wrong. Although popular discussion of gratitude lists doesn't always reference improved social bonds, the psychologists Robert Emmons and Michael McCullough wonder whether the effect of gratitude practice leads to more connection to others, and whether the focus on those social bonds leads to increased happiness. Another study claims that gratitude's power might lie in reorienting focus toward the people in one's lives. If simple gratitude focuses on the self, complex gratitude emphasizes others, too.
Seeing everything as a blessing might be too much to ask. The gratitude list is not a miracle cure, but a set of training wheels to help people think about how they have needed others, and how their own hands should extended in support. I use them with a respect for what they can do, along with a desire to know myself and the world beyond those lists. And for that insight, I am grateful.
Posted: 04 Jan 2018 10:35 AM PST
In the final decades of the 19th century, scientists showed in rapid succession that many of the worst diseases to afflict humanity were the work of bacteria—germs. Leprosy, gonorrhea, diphtheria, tuberculosis, plague, cholera, dysentery: Barely a year went by without assigning an infamous illness to a newly identified microbe. This concept, where one germ causes one disease, has influenced the way we think about infections ever since, and it implies an obvious solution: Remove the bug, and cure the sickness.
But the links between microbes and poor health can be more complicated. Our bodies are naturally home to tens of trillions of bacteria. Most are benign, or even beneficial. But often, these so-called microbiomes can shift into a negative state. For example, inflamed guts tend to house an unusually large number of bacteria from the Enterobacteriaceae family (pronounced En-ter-oh-back-tee-ree-ay-see-ay, and hereafter just "enteros"). There's no villain in this scenario, no single antagonist as there would be in the case of tuberculosis or cholera. The enteros are part of a normal gut; it's the same old community, just altered.
These kinds of shifts are harder to rectify. For a start, it's often unclear if the enteros cause the inflammation, if the inflammation changes the microbes, or both. Even if the microbes are responsible, how do you fix that? Dietary changes are typically too imprecise. Antibiotics are too crude, killing off beneficial microbes while suppressing the problematic ones.
But Sebastian Winter, from the University of Texas Southwestern Medical Center, has an alternative. His team showed that the blooming enteros rely on enzymes that, in turn, depend on the metal molybdenum. A related metal—tungsten—can take the place of molybdenum, and stop those enzymes from working properly.
By feeding mice small amounts of tungsten salts, Winter's team managed to specifically prevent the growth of enteros, while leaving other microbes unaffected. Best of all, the tungsten treatment spared the enteros under normal conditions, suppressing them only in the context of an inflamed gut. It's a far more precise and subtle way of changing the microbiome than, say, blasting it with antibiotics. It involves gentle nudges rather than killing blows.
To be clear, no one knows if this would work in people. "We can cure inflammatory bowel disease in mice, and that's the best we can say at this point," Winter says. "We're far away from having a treatment. And of course, tungsten is toxic, so this is not an endorsement that people with IBD should drink tungsten-contaminated water. But we can now screen for molecules that have the same activity without the toxicity."
"It shows that the microbiome can indeed be edited if we understand how certain organisms thrive in a given environment," says Manuela Raffatellu, from the University of California at San Diego. And that understanding, she adds, takes years of work.
Many teams, for example, have shown how enteros both bloom in inflamed guts, and trigger inflammation themselves. And Winter's team has uncovered several of the tricks behind their ascension. These microbes are typically found in low numbers because they need oxygen to grow, and the gut is an oxygen-free world. But during inflammation, oxygen leaks through, and its presence allows enteros to devour a chemical called formate, produced by other gut microbes. "They can eat the scraps off the table," Winter says. Inflammation also causes host cells to release nitrates, and the enteros can "breathe" using these instead of oxygen.
These discoveries all pointed to a single Achilles' heel. It turned out that the enzymes that allow enteros to process both formate and nitrates—that allow them to eat and breathe—use a single atom of molybdenum. Tungsten is similar to molybdenum, sitting right beneath it in the periodic table. It's chemically similar enough that it can substitute for the other metal in the bacterial enzymes, but different enough that once this happens, those enzymes are dead. They don't work, and the enteros can't grow.
That's what Winter and his colleagues found. Team members Wenhan Zhu and Maria Winter fed tungsten salts to mice that had been previously dosed with DSS—a chemical that inflames the gut. Enteros would normally bloom vigorously in such conditions, but the tungsten reduced the numbers by almost a million times. It didn't, however, affect the rest of the microbiome.
Cathryn Nagler, from the University of Chicago, says the results are intriguing, but she's disappointed that the team used DSS. It's often used to simulate inflammation "because it's quick and easy," she says, but it's also crude, and doesn't capture the full complexity of IBD. Winter acknowledges this, but he says that his team also proved the effectiveness of tungsten in rodents whose guts had been inflamed in other ways. They even showed that tungsten reduces inflammation in mice that had been loaded with the microbiomes of people with IBD. "That's the closest we can get [to showing that this might work in people] without doing clinical trials," he says.
"It's a very important advance," says Gary Wu, from the University of Pennsylvania. First, it shows that the altered bacterial communities that are associated with IBD are actually perpetuating the disease rather than just going along for the ride. Second, it hints at a way of changing those communities "in a way that is nonlethal to bacteria, unlike antibiotics."
Other scientists are working on similar approaches. In 2015, I wrote about a team from the Cleveland Clinic who are searching for chemicals that reduce the risk of heart disease by targeting gut bacteria. Those microbes transform nutrients in our diet into chemicals that can slow the breakdown of cholesterol, causing fat to build up in our arteries. By shutting down the enzymes behind this process, it might be possible to spare our hearts—and again, without actually killing any microbes. This is what medicine might increasingly look like: less a war against specific germs, and more a series of gentle nudges applied to entire communities.
Posted: 04 Jan 2018 06:19 AM PST
Donald Trump hired Steve Bannon as his campaign manager, gave him a job in the White House, and signed an executive order to give him a seat at meetings of the National Security Council's principals committee, giving him access to some of America's most sensitive secrets, even as his erstwhile adviser helped to make him the most powerful man on earth.
But now the two are fighting as if they find one another deplorable and irredeemable.
Bannon is quoted savaging multiple members of the Trump family in excerpts from a forthcoming book by the journalist Michael Wolff. And Trump now insists that a man he recently entrusted with a key national-security post is crazy and has nothing to do with his presidency. "When he was fired, he not only lost his job, he lost his mind," the president declared Wednesday in a statement. "Steve pretends to be at war with the media, which he calls the opposition party, yet he spent his time at the White House leaking false information to the media to make himself seem far more important than he was. It is the only thing he does well."
What happens when an unpopular president propelled to power by the populist right feuds with a man who runs perhaps the most popular website on the populist right?
The answer may turn on unknowns including these:
But it may be that Bannon has destroyed himself regardless. I'm hesitant to reach that conclusion because I do not understand the course that he has chosen, but I don't understand it precisely because it looks so much like self-immolation. His words seem likely to permanently alienate both the National Review-wing of establishment conservatism that already hates him and loyal Trump supporters.
The Bannon quotes excerpted in The Guardian, pertaining to a meeting at Trump Tower with a Russian lawyer and Trump's inner circle, are particularly inflammatory.
My colleague David Graham characterizes their significance:
At Hot Air, Allahpundit asks, "What is Bannon thinking, legitimizing the Russiagate investigation when everyone else in populist media has spent a year insisting it's a witch hunt based on lies and innuendo? At the very least you'd expect him to blame people like Carter Page and George Papadopoulos for driving the suspicion, not the Trump family. He might have gotten away with slamming Jared since their feud is public knowledge but going after Don Jr is an attack on POTUS himself. He's practically forcing Breitbart fans to choose between him and Trump now, particularly by using a term as loaded as 'treasonous.' And Breitbart's not challenging the veracity of the Bannon quotes, mind you."
That this puts Bannon crosswise of much of the right is not speculation. He is as unpopular as ever among Never Trump conservatives, if David French is any indication:
And here's the #MAGA aligned populist Matt Drudge:
So what gives? In conclusion, a few theories that at least lay out some of the possibilities.
The 'Trumpism Without Trump' Theory
The conservative columnist and podcaster Ben Shapiro is the closest thing the right has to someone who opposed Trump and retains a large audience among both populists and establishment conservatives. He worked under Bannon during his time at Breitbart. And in a podcast published on January 1 at National Review, before the explosive book excerpts were published, he told host Jamie Weinstein:
Maybe we're simply watching the manifestation of a belief on Bannon's part that he can be an architect of Trumpism not only without Trump, but while feuding with Trump, who has outlived his usefulness or is doing more harm than good to the Buchananite, white-nationalist platform that Bannon believes in. One can string together past Bannon statements that support this theory, but it still doesn't explain why Bannon would needlessly speak in ways that seem likely to alienate many whose support he could use in his political project.
The 'Guilty as Sin' Theory
Of course, trashing Trump and his family now would make a lot more sense if Bannon is playing a long game and knows something that we don't: that Robert Mueller or someone else is going to expose the sort of collusion with Russia or other wrongdoing that will implicate the president, or at least his inner circle. If Trump is going to be exposed, or if Don Jr., Jared Kushner, or someone else in the inner circle is so dirty or corrupt that they're going to have to take a fall for behavior that will itself alienate a large part of the #MAGA base, then perhaps it is savvy for Bannon to get out ahead of that information by positioning himself as a critic of the corruption rather than a party sullied by it.
This is the only theory that strikes me as likely to end with Bannon in a stronger position as a result of his actions. But it doesn't explain why he would make such a break through a journalist rather than by attacking Trump at Breitbart.
The 'Joker' Theory
In this telling, some people just want to watch the world burn, and Bannon is one of them. This theory could explain a whole lot of otherwise mystifying behavior. But Bannon's past behavior has been ambitious and calculating, not impulsive and chaotic.
The Great Betrayal Theory
If Steve Bannon emerges as the campaign manager for a Sarah Palin 2020 primary challenge to Donald Trump, or chief of staff in Mike Pence's post-impeachment White House, credit this theory. But don't bet on an outcome like that.
The 'He's Running' Theory
Mike Allen is among those who reports that Bannon has his own presidential ambitions. But even if that is so, how would this advance that against-all-odds goal?
The In-Over-His-Head Theory
In this telling, Bannon was in over his head in the White House, tried to use a reporter to prosecute his feuds with West Wing rivals for power, showed extreme indiscipline and lack of strategic acumen in what he said, and is now reaping the whirlwind of his shortsighted blabbing as his words are selectively quoted, with months of the most provocative tidbits strung together in a manner that makes it seem like the extremity of his critique was less unwitting than it was.
Or, as one of my Twitter followers put it, "It's tempting to look for some complex motivation involving power or money. Most likely, it's just good old fashioned pettiness." If forced to bet that's how I'd wager—but I'm glad I'm not forced to bet.
Maybe we'll know more about Bannon's motives one day—or maybe the mystery will endure. But one thing is certain, as Josh Barro reminded his readers:
The man charged with staffing the White House, assessing foreign leaders, and making lifetime appointments appears to be a spectacularly bad judge of character. And so does the former adviser who helped tout Trump in that position.
They deserve each other—and Americans deserves better.
Posted: 04 Jan 2018 04:30 AM PST
I'm an Old.
To be clear, I'm not that physically old—it's more that I'm old at heart, and, for the most part, always have been.
From the ages of 14 to 18, I was terrified of crowds, dancing, and alcohol. Then, for the next four years, I inexplicably couldn't get enough of them. I didn't go to prom, then I devoted an entire dresser drawer to going-out tops.
The last time I went out dancing was at a mustache party in Washington, D.C., in the winter of 2009. I was too vain to actually don a fake mustache, so I drew one on my finger and subsequently spent the whole night looking like I was smelling it. Still, I had a blast, to the point that when we left and rode back, hazardously, on our bikes, I remember not realizing it was 30 degrees out.
But my desire to "go out" plummeted in my late 20s. I got busy as hell. Getting hammered is no longer feasible: The thing they say about alcohol and aging is true, and anything more than two beers has me "quitting drinking" the following day.
So in recent years, I've reverted back to my 14-year-old interests. I stay home to watch TV and construct elaborate fantasy worlds, such as the one where I can afford a condo in Dupont Circle.
So why, then, did I respond affirmatively to an email from my friend suggesting, for the first time in years, that we go out dancing? And not just on any eve but on New Year's Eve? And not just to any place but to a silent disco?
These are the things where people dance with headphones on in a silent room. In the United States, the idea apparently originated with the Flaming Lips, who gave FM radio receivers and headphones to their audience at a concert in Texas in 1999. By 2005, The New York Times was on it, explaining that at that year's Glastonbury Festival in England, "neighbors may well wonder if they have lost their hearing" because "plans call for a 'silent' disco, where the dancers will be equipped with headphones through which the music will be piped." The trend came to Washington a few years later with pop-up silent discos at various events. ("People dancing with headphones on? Wacky," The Washington Post noted in 2010.)
To be sure, it was cheaper than other plug-and-play New Year's options in Washington. Novelty seeking is one of the few natural "highs" that works on me (yes, I know about running; no, that doesn't work either). I had, of course, failed to make other plans, and as December wore on, I started feeling guilty about it.
New Year's Eve is the day Soviet Russians celebrated fake Christmas, complete with a Santa proxy (Father Cold) and his child associate (Snow Girl). I forced my Russian family to move our Christmas to December 25 sometime in the early 1990s, but it's clear the 31st is still the real deal to them. Not long after we wrapped up our Christmas dinner, full of American holiday recipes my mom had dutifully Googled, she asked me what my plans were for New Year's.
"Silent disco," I said. "It's where you dance to no music with headphones on."
"Oh," she said. "Why?"
Her question echoed in my mind as I found myself suctioned into my "tummy control" panty hose and clomping up the steps of the Embassy Row Hotel. Why? Why? Why?
We walked past banners advertising the "Silent Dance Society"—the cult-sounding organizers of the event—and found ... a woman pushing her wheelchair through a mostly empty hotel lobby.
It was 10, and the place had not quite filled up yet. We were handed light-up headphones by a very stressed man in a red sequin blazer. "Last song is at 1," he said. "TRUST ME, and I've been doing this for five years, you're gonna wanna turn these in a few minutes before 1 to avoid the crowd."
The disco was staged in the part of the hotel where continental breakfast is normally served, which is perhaps why the "bartender" poured me a full pint of Chardonnay when I ordered a white wine. Next to me, a sweaty guy in running shorts ordered a coffee to go, eyed us warily, then returned to his room.
Soon, though, the wine pint began to do its job, and we warmed to the dorky vibe. Plus, this being Washington, there simply are way more people than things to do, so gradually a respectable throng trickled in, and the dance floor grew downright packed.
The headphones had three channels, each controlled by one of three MacBook-wielding DJs in the corner. The red channel was what one might call wedding music. Another tended toward hip-hop, and another toward Avicii-style EDM.
For people like me, who have between zero and one dance moves anyway, the most fun was had by switching among the channels rapidly. Other people all switched to the same station, then formed tight circles to gyrate together. One woman grabbed onto the edge of a table and commenced twerking her heart out. The world, in other words, was your disco oyster, and as the night wore on it became clear we would be leaving our dignity on the dance floor. During "Shout," I took off my headphones to hear a chorus of off-key "hey-ey-ey-ey"s from around the room.
We bungled the countdown—two crowds of people were looking at two different timers or feeds or something—but everyone promptly resumed dancing anyway. Toward the end, it was lit, as the youths say: A guy in a tuxedo T-shirt joined a group of hot women in the electric slide. A woman in gold muttered, "It's. About. To go. Down," as she walked by me, headphones on and drink in hand. Couples tuned their headsets to the same station, clutched each other lovingly, and swayed.
I felt—could it be?—mirth. The "Despacito," the Backstreet Boys, the chasing "Waterfalls." It reminded me of a foam party I went to in London once, where I danced with a boy I loved, but also everyone else, and also the FOAM, and when the sugary-sweet S Club 7 number "Reach" played, it seemed both cheesy and perfect. Sometimes things can be both.
It was around this time that we took the anxious man's advice to leave a few minutes early. He rubbed our headphones down with disinfecting wipes as we waited for our Uber. Nearby, a crowd of balding men who looked like lawyers had crept out from the darkness of the dance-floor area and were, with headphones flashing, doing a gregarious YMCA under the lobby's bright lights, in full view of any and all hotel guests. Which is good, because everyone deserves to have some fun now and then.
Posted: 04 Jan 2018 07:33 AM PST
Not long ago, India's underwhelming manufacturing industry was symbolized by its best-known car: the Ambassador. Modeled on a British car from the '50s, the boxy Hindustan Motors sedan dominated Indian roads for decades. Well into the 1990s, it was to India what the Lada was to the Soviet Union or the Trabant to East Germany, testimony to the technological shortcomings of an economy cut off from the world and shaped more by bureaucrats than by market forces.
Manufacturing in India still faces problems, including poor infrastructure, red tape, disconnectedness from global supply chains, and restrictive labor laws that have stymied the growth of business and limited economic dynamism. Nonetheless, over the past decade, hardly noticed by much of the world, the country's auto industry has quietly scripted a success story. The land of the clunky Ambassador now houses one of the world's major automobile industries. In terms of output—nearly 3.8 million cars a year, according to the most recent figures—India now nearly matches South Korea, an automobile powerhouse, and is on track to catch up with Germany.
This story holds lessons for Asia's third largest economy. If automobiles, and by extension manufacturing more broadly, take off in India, the country may be able to generate many of the jobs required to employ the 12 million new entrants to the labor market each year. If manufacturing fails to thrive, India's economic future could come into question, and along with it the country's dream of emerging as a global power.
A manufacturing enclave in the high-growth state of Gujarat provides a glimpse of the industry's possible future. Ford Motor Company's sprawling, 460-acre facility can churn out 240,000 vehicles and 270,000 engines a year. Nearly two dozen suppliers have set up shop next door, creating a just-in-time manufacturing ecosystem. The plant manager at the time of my visit, Kel Kearns, a former Royal Australian Air Force flight lieutenant, said the highly automated Ford facility is "more like what you'd see in North America or Europe than traditionally in Asia-Pacific."
It's hard to overemphasize the importance for India of getting manufacturing right. While the country's world-class information-technology sector put it on virtually every global boardroom's agenda, Indian manufacturing trails that of East Asian powerhouses such as South Korea and Taiwan, or even much smaller economies like Vietnam or Bangladesh. As a percentage of GDP, manufacturing in India contributes only about 17 percent, essentially unchanged from the amount it contributed at the advent of economics reforms back in 1991.
To put this in perspective, manufacturing accounts for 29 percent of economic output in China and South Korea, and 27 percent in Thailand, according to World Bank data. Moving millions of workers from farms to factories has played a pivotal role in reducing poverty and raising living standards across East Asia.
It should come as no surprise, then, that India seeks to raise manufacturing as a percentage of GDP from 17 percent to 25 percent, and to create 100 million jobs within a decade. Shortly after his 2014 election, Prime Minister Narendra Modi launched the "Make in India" campaign with the avowed goal of transforming India "into a global design and manufacturing hub."
Against this backdrop of patchy industrialization, the relative success of India's car industry reveals how a once-closed sector gradually—and without receiving much attention—became the world's sixth-largest automobile manufacturer. Ford is just one of many firms with a presence in India. Suzuki, Toyota, Honda, Hyundai, Volkswagen, BMW, General Motors, Mercedes Benz, Mitsubishi, Renault, Audi, Nissan, and Skoda all manufacture in the country now. They add to the variety of models available from India's dominant domestic makers: Maruti Suzuki (a pioneering joint venture now majority-owned by Japan's Suzuki), Tata Motors (which includes Jaguar Land Rover), Mahindra and Mahindra, Hindustan Motors, and Premier Automobile. That list does not include manufacturers focused on the motorcycle and scooter markets that still account for the vast majority of vehicle sales in India.
Even before India's economic opening in 1991, a state-led experiment planted the seeds of India's auto flowering. In 1981, the state-owned enterprise Maruti Udyog sought an international partner to manufacture subcompact cars for India's growing middle class through a government-licensed joint venture. Suzuki was selected the next year, and the partnership flourished. The first car, a boxy white knockoff of the Japanese-made Suzuki Fronte, rolled off a factory floor outside Delhi in 1983.
The Maruti Suzuki brand remains India's top seller; even the tiny Maruti 800 still lives on in the restyled Alto 800. But it was not until the mid-1990s, after liberalization, that India opened the automobile industry to major investment by foreign manufacturers. That's when the major U.S., Asian, and European automakers, faced with stagnating home markets, began streaming into India.
In the 2000s, Indian automakers began to look abroad. Tata Motors acquired Jaguar Land Rover from Ford in 2008, and by 2012 had turned the loss-making company around. Mahindra and Mahindra took a majority stake in Korea's Ssangyong Motor in 2011, and in the Italian design house Pininfarina S.p.A. in 2015. As a showcase for the industry, India's Auto Expo took off internationally in 2008, receiving accreditation from the Organisation Internationale des Constructeurs d'Automobiles, a Paris-based trade group. I attended in 2010, and was blown away by the scale and variety on display, from the micro-sized Tata Nano to sleek Audi sedans to Mahindra and Mahindra SUVs to motorcycles of every variety.
By the early 2000s, supplying to global car manufacturers for their local as well as global supply chains had helped India emerge as a high-quality global source for auto components. (Think radiator caps and the like.) The Chennai-based Sundram Fasteners won Japanese quality awards and became the first Indian company to supply General Motors. But India had not yet emerged as a global auto hub in the way that Thailand and South Korea had become, and lagged far behind China. In 2004, India produced a little under 1.18 million cars, while South Korea produced 3.12 million. By the end of 2016, India's 3.68 million produced had nearly caught up with South Korea's 3.86 million.
India's urge to industrialize reflects its ambition to join the front ranks of the world's powers. But it also reflects a more pressing concern: About 50 percent of India's employed depend on agriculture for a living, but, according to the World Bank, the country's small and unproductive farms contribute only 17.4 percent of GDP. With 12 million Indians coming of working age each year, the country needs to ensure there are enough jobs to employ its fast-growing and youthful (by global standards) workforce. This means creating jobs across a wider range of occupations, unshackling manufacturing from artificial constraints that have limited its growth, and also training workers for available opportunities.
India's automobile industry created 25 million jobs between 2006 and 2016. It accounts for 7 percent of GDP and employs, directly or indirectly, around 19 million people. It has the potential to spur more extensive industrialization, just as it has in every major country that has emerged as an auto powerhouse.
Indeed, the auto industry boasts one of the highest "employment multipliers" of any industry in the U.S., meaning it helps create jobs even beyond the realm of manufacturing. While the structure of the industry in the U.S. differs significantly from that in India, it's nonetheless useful as a point of comparison. According to the Ann Arbor, Michigan–based nonprofit Center for Automotive Research, each U.S. vehicle-manufacturing job creates nearly seven other jobs across the U.S. economy (ranging from supply-chain manufacturing to dealers to finance to after-market services and others). As the case of Maruti Suzuki illustrates, the involvement of foreign manufacturers has provided technology that can bring Indian parts and vehicles up to global standards, and therefore make them export-ready, another major benefit.
For all these reasons, the auto industry offers a special opportunity for Indian manufacturing, and one shared with other advanced manufacturing industries such as defense, steel, aircraft, and shipbuilding. Defense and shipbuilding have been the targets of recent policy reforms—similarly geared toward spurring growth in large industries that can have powerful knock-on employment effects. And for aircraft, not India's traditional strength, change may come soon: Lockheed Martin has just proposed to relocate its entire F-16 production line to India, and is now signed up with the Tata group as its partner. (Whether the Indian government selects this aircraft is of course another matter.)
Car manufacturers have bet on the expansion of India's domestic market. Ford estimated in 2015 that India's compact-car segment, which has accounted for around 45 percent of the passenger-vehicle market, would grow from 1.1 million in 2014 to 1.6 million in 2018.This figure still looks small compared to the size of India's population, because passenger vehicles do not yet dominate Indian roads. But it also indicates India's vast room for further growth as its middle class expands and seeks to transport families more safely by moving up to a car from a scooter or motorcycle. In 2016, Americans bought more than 17.5 million passenger vehicles (meaning cars and SUVs); the Chinese bought a little over 28 million.
Of course, not everybody believes that India will be able to replicate the manufacturing success of its East Asian peers. Even assuming that further (and long-overdue) reforms advance expeditiously, India's manufacturing prospects will intersect with global technological and economic trends. Changes have been unfolding worldwide that raise questions about whether a focus on manufacturing can bring prosperity. Around the world, the rise of automation has raised quality standards and productivity, but at the cost of jobs. The rise of 3-D printing has only just begun, and could affect supply-chain considerations to an as-yet-unknown extent. These two trends alone are just in their infancy.
For the developing world in particular, there are concerns about the prospect of "premature deindustrialization," to cite the Harvard economist Dani Rodrik's work. The term describes a downturn in the share of manufacturing in developing countries well before their economies match those of wealthier nations. Rodrik attributes this in part to the effects of trade and globalization—competition from China and other major manufacturers on the global market—which suggests that India (and sub-Saharan Africa for that matter) would have a hard time patterning its growth on China's labor-intensive strategy.
These developments, while potentially destabilizing, are no reason for Indian officials to stop trying to promote manufacturing. Morgan Stanley's Ruchir Sharma, reflecting on the implications of technological change, notes in his Rise and Fall of Nations that the robotics revolution "is likely to be gradual enough to complement rather than destroy the human workforce." He ventures that "new jobs we can't yet imagine" will help fill the gap. Development institutions like the World Bank, along with management consultancies like McKinsey, continue to see opportunity for India to do more to reform laws and policies that inhibit manufacturing's growth, whether for the domestic market or for export. In 2016, a World Bank report recommended policy changes to help the countries of South Asia, with India a notable focus, benefit from rising wages in China that result in the relocation of apparel sourcing and the potential for job growth. The same year, McKinsey Global Institute issued a set of recommendations that included "Manufacturing for India, in India" in its top five "opportunities for growth and transformation."
McKinsey believes that the technological impact on India may take some time to be fully felt. In a recent discussion paper focused on labor, the firm's researchers cite scenarios in which it could take "two decades or more" for automation to hit more than half of work in some countries, which means India has a window in which to ramp up its manufacturing sector as a job-creating engine before automation becomes more widespread.
India has big ambitions for its place in the global order—and seeks to amp up its economy up to help deliver that transformation. The automobile sector has its own part to play in this vision. India's "Automotive Mission Plan 2026," a joint vision of the country's government and car makers, aims for the auto industry to become one of the world's top three, contribute 12 percent of India's GDP, make up 40 percent of India's manufacturing sector, and generate 65 million jobs by 2026. These goals are part of India's larger quest to emerge as a major industrial power.
If it succeeds, it will likely secure the place it seeks as a leading global power. Like the Hindustan Motors Ambassador, India's status as a country perpetually on the brink of arrival—but never quite there—might at last belong to history.
This article has been adapted from Alyssa Ayres's book, Our Time Has Come: How India Is Making Its Place in the World.
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