APSIA Conference 2017 Keynote Address by Singapore’s DPM


March 5, 2017

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APSIA Conference 2017 Keynote Address by Singapore’s DPM Tharman Shanmugaratnam at LKY School of Public Policy

COMMENT:

Geo-Politics, Disruptive Social Developments and Technological Change: Has the Game Changed? Yes, that is easy part of the answer.  How we wish that life is simple and outcomes are predictable. But it is not. I  have been grappling a few questions. I asked myself questions like What has changed? How it has changed?  What is driving the change?What this change means to us in Asia.

China, North Korea, Islamic and Christian evangelism, terrorism and so on are making the headlines.I  also see increasing polarisation and the need for understanding and rebuilding trust. I expect our politicians to reconnect with people they are mandated to serve and  want leaders to lead with integrity, honesty and hope. Listen to DPM Tharman Shanmugaratnam for some insights.–Din Merican

 

 

President Donald J. Trump’s Address at the Joint Session of the US Congress–February 28, 2017


March 1, 2017

President Donald J. Trump’s Address at the Joint Session of the US Congress–February 28, 2017

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Mr. Speaker, Mr. Vice President, Members of Congress, the First Lady of the United States, and Citizens of America:

Tonight, as we mark the conclusion of our celebration of Black History Month, we are reminded of our Nation’s path toward civil rights and the work that still remains.

Recent threats targeting Jewish Community Centers and vandalism of Jewish cemeteries, as well as last week’s shooting in Kansas City, remind us that while we may be a Nation divided on policies, we are a country that stands united in condemning hate and evil in all its forms.

Each American generation passes the torch of truth, liberty and justice — in an unbroken chain all the way down to the present.

That torch is now in our hands. And we will use it to light up the world. I am here tonight to deliver a message of unity and strength, and it is a message deeply delivered from my heart.

A new chapter of American Greatness is now beginning.

A new national pride is sweeping across our Nation.

And a new surge of optimism is placing impossible dreams firmly within our grasp.

What we are witnessing today is the Renewal of the American Spirit. Our allies will find that America is once again ready to lead.

All the nations of the world — friend or foe — will find that America is strong, America is proud, and America is free.

In nine years, the United States will celebrate the 250th anniversary of our founding — 250 years since the day we declared our Independence.

It will be one of the great milestones in the history of the world. But what will America look like as we reach our 250th year? What kind of country will we leave for our children?

I will not allow the mistakes of recent decades past to define the course of our future. For too long, we’ve watched our middle class shrink as we’ve exported our jobs and wealth to foreign countries.

We’ve financed and built one global project after another, but ignored the fates of our children in the inner cities of Chicago, Baltimore, Detroit — and so many other places throughout our land.

We’ve defended the borders of other nations, while leaving our own borders wide open, for anyone to cross — and for drugs to pour in at a now unprecedented rate.

And we’ve spent trillions of dollars overseas, while our infrastructure at home has so badly crumbled.

Then, in 2016, the earth shifted beneath our feet. The rebellion started as a quiet protest, spoken by families of all colors and creeds — families who just wanted a fair shot for their children, and a fair hearing for their concerns

But then the quiet voices became a loud chorus — as thousands of citizens now spoke out together, from cities small and large, all across our country.

Finally, the chorus became an earthquake — and the people turned out by the tens of millions, and they were all united by one very simple, but crucial demand, that America must put its own citizens first … because only then, can we truly MAKE AMERICA GREAT AGAIN.

Dying industries will come roaring back to life. Heroic veterans will get the care they so desperately need.

Our military will be given the resources its brave warriors so richly deserve.

Crumbling infrastructure will be replaced with new roads, bridges, tunnels, airports and railways gleaming across our beautiful land.

Our terrible drug epidemic will slow down and ultimately, stop. And our neglected inner cities will see a rebirth of hope, safety, and opportunity.

Above all else, we will keep our promises to the American people.

It’s been a little over a month since my inauguration, and I want to take this moment to update the Nation on the progress I’ve made in keeping those promises.

Since my election, Ford, Fiat-Chrysler, General Motors, Sprint, Softbank, Lockheed, Intel, Walmart, and many others, have announced that they will invest billions of dollars in the United States and will create tens of thousands of new American jobs.

The stock market has gained almost three trillion dollars in value since the election on November 8, a record. We’ve saved taxpayers hundreds of millions of dollars by bringing down the price of the fantastic new F-35 jet fighter, and will be saving billions more dollars on contracts all across our Government. We have placed a hiring freeze on non-military and non-essential Federal workers.

We have begun to drain the swamp of government corruption by imposing a 5 year ban on lobbying by executive branch officials — and a lifetime ban on becoming lobbyists for a foreign government.

We have undertaken a historic effort to massively reduce job‑crushing regulations, creating a deregulation task force inside of every Government agency; imposing a new rule which mandates that for every 1 new regulation, 2 old regulations must be eliminated; and stopping a regulation that threatens the future and livelihoods of our great coal miners.

We have cleared the way for the construction of the Keystone and Dakota Access Pipelines — thereby creating tens of thousands of jobs — and I’ve issued a new directive that new American pipelines be made with American steel.

We have withdrawn the United States from the job-killing Trans-Pacific Partnership.

With the help of Prime Minister Justin Trudeau, we have formed a Council with our neighbors in Canada to help ensure that women entrepreneurs have access to the networks, markets and capital they need to start a business and live out their financial dreams.

To protect our citizens, I have directed the Department of Justice to form a Task Force on Reducing Violent Crime.

I have further ordered the Departments of Homeland Security and Justice, along with the Department of State and the Director of National Intelligence, to coordinate an aggressive strategy to dismantle the criminal cartels that have spread across our Nation.

 We will stop the drugs from pouring into our country and poisoning our youth — and we will expand treatment for those who have become so badly addicted.

At the same time, my Administration has answered the pleas of the American people for immigration enforcement and border security. By finally enforcing our immigration laws, we will raise wages, help the unemployed, save billions of dollars, and make our communities safer for everyone. We want all Americans to succeed — but that can’t happen in an environment of lawless chaos. We must restore integrity and the rule of law to our borders.

For that reason, we will soon begin the construction of a great wall along our southern border. It will be started ahead of schedule and, when finished, it will be a very effective weapon against drugs and crime.

As we speak, we are removing gang members, drug dealers and criminals that threaten our communities and prey on our citizens. Bad ones are going out as I speak tonight and as I have promised.

To any in Congress who do not believe we should enforce our laws, I would ask you this question: what would you say to the American family that loses their jobs, their income, or a loved one, because America refused to uphold its laws and defend its borders?

Our obligation is to serve, protect, and defend the citizens of the United States. We are also taking strong measures to protect our Nation from Radical Islamic Terrorism.

According to data provided by the Department of Justice, the vast majority of individuals convicted for terrorism-related offenses since 9/11 came here from outside of our country. We have seen the attacks at home — from Boston to San Bernardino to the Pentagon and yes, even the World Trade Center.

We have seen the attacks in France, in Belgium, in Germany and all over the world.

It is not compassionate, but reckless, to allow uncontrolled entry from places where proper vetting cannot occur. Those given the high honor of admission to the United States should support this country and love its people and its values.

We cannot allow a beachhead of terrorism to form inside America — we cannot allow our Nation to become a sanctuary for extremists.

That is why my Administration has been working on improved vetting procedures, and we will shortly take new steps to keep our Nation safe — and to keep out those who would do us harm.

As promised, I directed the Department of Defense to develop a plan to demolish and destroy ISIS — a network of lawless savages that have slaughtered Muslims and Christians, and men, women, and children of all faiths and beliefs. We will work with our allies, including our friends and allies in the Muslim world, to extinguish this vile enemy from our planet.

I have also imposed new sanctions on entities and individuals who support Iran’s ballistic missile program, and reaffirmed our unbreakable alliance with the State of Israel.

Finally, I have kept my promise to appoint a Justice to the United States Supreme Court — from my list of 20 judges — who will defend our Constitution.

I am honored to have Maureen Scalia with us in the gallery tonight. Her late, great husband, Antonin Scalia, will forever be a symbol of American justice. To fill his seat, we have chosen Judge Neil Gorsuch, a man of incredible skill, and deep devotion to the law. He was confirmed unanimously to the Court of Appeals, and I am asking the Senate to swiftly approve his nomination.

Tonight, as I outline the next steps we must take as a country, we must honestly acknowledge the circumstances we inherited.

Ninety-four million Americans are out of the labor force.Over 43 million people are now living in poverty, and over 43 million Americans are on food stamps.

More than 1 in 5 people in their prime working years are not working.We have the worst financial recovery in 65 years.

In the last 8 years, the past Administration has put on more new debt than nearly all other Presidents combined.

We’ve lost more than one-fourth of our manufacturing jobs since NAFTA was approved, and we’ve lost 60,000 factories since China joined the World Trade Organization in 2001.

Our trade deficit in goods with the world last year was nearly $800 billion dollars. And overseas, we have inherited a series of tragic foreign policy disasters.

Solving these, and so many other pressing problems, will require us to work past the differences of party. It will require us to tap into the American spirit that has overcome every challenge throughout our long and storied history.

But to accomplish our goals at home and abroad, we must restart the engine of the American economy — making it easier for companies to do business in the United States, and much harder for companies to leave.

Now, American companies are taxed at one of the highest rates anywhere in the world.

My economic team is developing historic tax reform that will reduce the tax rate on our companies so they can compete and thrive anywhere and with anyone. At the same time, we will provide massive tax relief for the middle class.

We must create a level playing field for American companies and workers

Currently, when we ship products out of America, many other countries make us pay very high tariffs and taxes — but when foreign companies ship their products into America, we charge them almost nothing.

I just met with officials and workers from a great American company, Harley-Davidson. In fact, they proudly displayed five of their magnificent motorcycles, made in the USA, on the front lawn of the White House.

At our meeting, I asked them, how are you doing, how is business? They said that it’s good. I asked them further how they are doing with other countries, mainly international sales. They told me — without even complaining because they have been mistreated for so long that they have become used to it — that it is very hard to do business with other countries because they tax our goods at such a high rate. They said that in one case another country taxed their motorcycles at 100 percent. They weren’t even asking for change. But I am. I believe strongly in free trade but it also has to be FAIR TRADE.

The first Republican President, Abraham Lincoln, warned that the “abandonment of the protective policy by the American Government [will] produce want and ruin among our people.”

Lincoln was right — and it is time we heeded his words. I am not going to let America and its great companies and workers, be taken advantage of anymore.

I am going to bring back millions of jobs. Protecting our workers also means reforming our system of legal immigration. The current, outdated system depresses wages for our poorest workers, and puts great pressure on taxpayers.

Nations around the world, like Canada, Australia and many others — have a merit-based immigration system. It is a basic principle that those seeking to enter a country ought to be able to support themselves financially. Yet, in America, we do not enforce this rule, straining the very public resources that our poorest citizens rely upon. According to the National Academy of Sciences, our current immigration system costs America’s taxpayers many billions of dollars a year

Switching away from this current system of lower-skilled immigration, and instead adopting a merit-based system, will have many benefits: it will save countless dollars, raise workers’ wages, and help struggling families — including immigrant families — enter the middle class.

I believe that real and positive immigration reform is possible, as long as we focus on the following goals: to improve jobs and wages for Americans, to strengthen our nation’s security, and to restore respect for our laws.

If we are guided by the well-being of American citizens then I believe Republicans and Democrats can work together to achieve an outcome that has eluded our country for decades.

Another Republican President, Dwight D. Eisenhower, initiated the last truly great national infrastructure program — the building of the interstate highway system. The time has come for a new program of national rebuilding.

America has spent approximately six trillion dollars in the Middle East, all this while our infrastructure at home is crumbling. With this six trillion dollars we could have rebuilt our country — twice. And maybe even three times if we had people who had the ability to negotiate

To launch our national rebuilding, I will be asking the Congress to approve legislation that produces a $1 trillion investment in the infrastructure of the United States — financed through both public and private capital — creating millions of new jobs.

This effort will be guided by two core principles: Buy American, and Hire American.

Tonight, I am also calling on this Congress to repeal and replace Obamacare with reforms that expand choice, increase access, lower costs, and at the same time, provide better Healthcare.

Mandating every American to buy government-approved health insurance was never the right solution for America. The way to make health insurance available to everyone is to lower the cost of health insurance, and that is what we will do.

Obamacare premiums nationwide have increased by double and triple digits. As an example, Arizona went up 116 percent last year alone. Governor Matt Bevin of Kentucky just said Obamacare is failing in his State — it is unsustainable and collapsing.

One third of counties have only one insurer on the exchanges — leaving many Americans with no choice at all

Remember when you were told that you could keep your doctor, and keep your plan? We now know that all of those promises have been broken.

 Obamacare is collapsing — and we must act decisively to protect all Americans. Action is not a choice — it is a necessity.

So I am calling on all Democrats and Republicans in the Congress to work with us to save Americans from this imploding Obamacare disaster.

Here are the principles that should guide the Congress as we move to create a better healthcare system for all Americans:

First, we should ensure that Americans with pre-existing conditions have access to coverage, and that we have a stable transition for Americans currently enrolled in the healthcare exchanges.

Secondly, we should help Americans purchase their own coverage, through the use of tax credits and expanded Health Savings Accounts — but it must be the plan they want, not the plan forced on them by the Government.

 Thirdly, we should give our great State Governors the resources and flexibility they need with Medicaid to make sure no one is left out.

Fourthly, we should implement legal reforms that protect patients and doctors from unnecessary costs that drive up the price of insurance — and work to bring down the artificially high price of drugs and bring them down immediately.

Finally, the time has come to give Americans the freedom to purchase health insurance across State lines — creating a truly competitive national marketplace that will bring cost way down and provide far better care.

Everything that is broken in our country can be fixed. Every problem can be solved. And every hurting family can find healing, and hope.

Our citizens deserve this, and so much more — so why not join forces to finally get it done? On this and so many other things, Democrats and Republicans should get together and unite for the good of our country, and for the good of the American people.

My administration wants to work with members in both parties to make childcare accessible and affordable, to help ensure new parents have paid family leave, to invest in women’s health, and to promote clean air and clear water, and to rebuild our military and our infrastructure.

True love for our people requires us to find common ground, to advance the common good, and to cooperate on behalf of every American child who deserves a brighter future.

An incredible young woman is with us this evening who should serve as an inspiration to us all.

Today is Rare Disease day, and joining us in the gallery is a Rare Disease Survivor, Megan Crowley. Megan was diagnosed with Pompe Disease, a rare and serious illness, when she was 15 months old. She was not expected to live past 5.

On receiving this news, Megan’s dad, John, fought with everything he had to save the life of his precious child. He founded a company to look for a cure, and helped develop the drug that saved Megan’s life.

Today she is 20 years old — and a sophomore at Notre Dame. Megan’s story is about the unbounded power of a father’s love for a daughter.

But our slow and burdensome approval process at the Food and Drug Administration keeps too many advances, like the one that saved Megan’s life, from reaching those in need.

If we slash the restraints, not just at the FDA but across our Government, then we will be blessed with far more miracles like Megan. In fact, our children will grow up in a Nation of miracles.But to achieve this future, we must enrich the mind — and the souls — of every American child.

Education is the civil rights issue of our time. I am calling upon Members of both parties to pass an education bill that funds school choice for disadvantaged youth, including millions of African-American and Latino children. These families should be free to choose the public, private, charter, magnet, religious or home school that is right for them.

We want all children to be able to break the cycle of poverty just like Denisha. But to break the cycle of poverty, we must also break the cycle of violence. The murder rate in 2015 experienced its largest single-year increase in nearly half a century.

In Chicago, more than 4,000 people were shot last year alone — and the murder rate so far this year has been even higher. This is not acceptable in our society.

Every American child should be able to grow up in a safe community, to attend a great school, and to have access to a high-paying job. But to create this future, we must work with — not against — the men and women of law enforcement.

We must build bridges of cooperation and trust — not drive the wedge of disunity and division.

Police and sheriffs are members of our community. They are friends and neighbors, they are mothers and fathers, sons and daughters — and they leave behind loved ones every day who worry whether or not they’ll come home safe and sound. We must support the incredible men and women of law enforcement. And we must support the victims of crime.

I have ordered the Department of Homeland Security to create an office to serve American Victims. The office is called VOICE — Victims Of Immigration Crime Engagement. We are providing a voice to those who have been ignored by our media, and silenced by special interests.

Joining us in the audience tonight are four very brave Americans whose government failed them.Their names are Jamiel Shaw, Susan Oliver, Jenna Oliver, and Jessica Davis.

Jamiel’s 17-year-old son was viciously murdered by an illegal immigrant gang member, who had just been released from prison. Jamiel Shaw Jr. was an incredible young man, with unlimited potential who was getting ready to go to college where he would have excelled as a great quarterback. But he never got the chance. His father, who is in the audience tonight, has become a good friend of mine.

Also with us are Susan Oliver and Jessica Davis. Their husbands — Deputy Sheriff Danny Oliver and Detective Michael Davis — were slain in the line of duty in California. They were pillars of their community. These brave men were viciously gunned down by an illegal immigrant with a criminal record and two prior deportations

Sitting with Susan is her daughter, Jenna. Jenna: I want you to know that your father was a hero, and that tonight you have the love of an entire country supporting you and praying for you.

To Jamiel, Jenna, Susan and Jessica: I want you to know — we will never stop fighting for justice. Your loved ones will never be forgotten, we will always honor their memory.

Finally, to keep America Safe we must provide the men and women of the United States military with the tools they need to prevent war and — if they must — to fight and to win.

I am sending the Congress a budget that rebuilds the military, eliminates the Defense sequester, and calls for one of the largest increases in national defense spending in American history.

My budget will also increase funding for our veterans. Our veterans have delivered for this Nation — and now we must deliver for them.

The challenges we face as a Nation are great. But our people are even greater. And none are greater or braver than those who fight for America in uniform.

We are blessed to be joined tonight by Carryn Owens, the widow of a U.S. Navy Special Operator, Senior Chief William “Ryan” Owens. Ryan died as he lived: a warrior, and a hero — battling against terrorism and securing our Nation.

I just spoke to General Mattis, who reconfirmed that, and I quote, “Ryan was a part of a highly successful raid that generated large amounts of vital intelligence that will lead to many more victories in the future against our enemies.” Ryan’s legacy is etched into eternity.

For as the Bible teaches us, there is no greater act of love than to lay down one’s life for one’s friends. Ryan laid down his life for his friends, for his country, and for our freedom — we will never forget him.

To those allies who wonder what kind of friend America will be, look no further than the heroes who wear our uniform.

Our foreign policy calls for a direct, robust and meaningful engagement with the world. It is American leadership based on vital security interests that we share with our allies across the globe.

We strongly support NATO, an alliance forged through the bonds of two World Wars that dethroned fascism, and a Cold War that defeated communism.But our partners must meet their financial obligations.

And now, based on our very strong and frank discussions, they are beginning to do just that.

We expect our partners, whether in NATO, in the Middle East, or the Pacific — to take a direct and meaningful role in both strategic and military operations, and pay their fair share of the cost.

We will respect historic institutions, but we will also respect the sovereign rights of nations.

Free nations are the best vehicle for expressing the will of the people — and America respects the right of all nations to chart their own path. My job is not to represent the world. My job is to represent the United States of America. But we know that America is better off, when there is less conflict — not more.

We must learn from the mistakes of the past — we have seen the war and destruction that have raged across our world.

The only long-term solution for these humanitarian disasters is to create the conditions where displaced persons can safely return home and begin the long process of rebuilding.

America is willing to find new friends, and to forge new partnerships, where shared interests align. We want harmony and stability, not war and conflict.

We want peace, wherever peace can be found. America is friends today with former enemies. Some of our closest allies, decades ago, fought on the opposite side of these World Wars. This history should give us all faith in the possibilities for a better world.

Hopefully, the 250th year for America will see a world that is more peaceful, more just and more free.

On our 100th anniversary, in 1876, citizens from across our Nation came to Philadelphia to celebrate America’s centennial. At that celebration, the country’s builders and artists and inventors showed off their creations.

Alexander Graham Bell displayed his telephone for the first time.Remington unveiled the first typewriter. An early attempt was made at electric light Thomas Edison showed an automatic telegraph and an electric pen.

Imagine the wonders our country could know in America’s 250th year. Think of the marvels we can achieve if we simply set free the dreams of our people.

Cures to illnesses that have always plagued us are not too much to hope. American footprints on distant worlds are not too big a dream.

Millions lifted from welfare to work is not too much to expect. And streets where mothers are safe from fear — schools where children learn in peace — and jobs where Americans prosper and grow — are not too much to ask.

When we have all of this, we will have made America greater than ever before. For all Americans. This is our vision. This is our mission. But we can only get there together. We are one people, with one destiny. We all bleed the same blood. We all salute the same flag.And we are all made by the same God.

And when we fulfill this vision; when we celebrate our 250 years of glorious freedom, we will look back on tonight as when this new chapter of American Greatness began.

The time for small thinking is over. The time for trivial fights is behind us. We just need the courage to share the dreams that fill our hearts.

The bravery to express the hopes that stir our souls. And the confidence to turn those hopes and dreams to action. From now on, America will be empowered by our aspirations, not burdened by our fears —inspired by the future, not bound by the failures of the past and guided by our vision, not blinded by our doubts.

I am asking all citizens to embrace this Renewal of the American Spirit. I am asking all members of Congress to join me in dreaming big, and bold and daring things for our country. And I am asking everyone watching tonight to seize this moment and —

Believe in yourselves. Believe in your future. And believe, once more, in America.

Thank you, God bless you, and God Bless the United States.

Senator (Vermont) Bernie Sanders’ Response to President Donald Trump’s Address to Congress

Trump and New World Order


February 28, 2017

Trump and New World Order

Brought to you by Lee Kuan Yew School of Public Policy featuring Dr. Amitav Acharya

Published on Feb 27, 2017

The election of Donald J. Trump as the US President has caused much anxiety about its damage to the liberal international order. But Trump is the consequence, rather than the cause, of the crisis and decline of the existing order. That decline, as foretold in Acharya’s 2014 book, The End of American World Order, has to do with the liberal order’s own internal limitations – aggravated by a long-power shift in world politics – that a complacent liberal establishment in the West had glossed over earlier. Recognizing the broader and multifaceted nature of those challenges is key to any hopes for building world order 2.0: a decentered and pluralistic Multiplex World, with its own challenges and opportunities.

Amitav Acharya is the Boeing Company Chair in International Relations at the Schwarzman Scholars Program, Tsinghua University, Beijing, and Distinguished Professor of International Relations and the UNESCO Chair in Transnational Challenges and Governance at the School of International Service, American University, Washington, DC.

This talk is moderated by Prof Kishore Mahbubani, Dean of the Lee Kuan Yew School of Public Policy, NUS.

The Anatomy of Populist Economics


February 27, 2017

The Anatomy of Populist Economics

by Economist Brigitte Granville*

http://www.project-syndicate.org

Today’s populist movements are all following a similar economic prescription, and governments in Hungary, Poland, and the US are giving the world an early dose of what the future may hold. Will voters swallow the medicine, or will they soon start seeking a second opinion

For at least the past year, populism has been wreaking havoc on Western democracies. Populist forces – parties, leaders, and ideas – underpinned the “Leave” campaign’s victory in the United Kingdom’s Brexit referendum and Donald Trump’s election as President of the United States. Now, populism lurks ominously in the background of the Netherlands’ general election in March and the French presidential election in April and May.

But, despite populism’s seeming ubiquity, it is a hard concept to pin down. Populists are often intolerant of outsiders and those who are different; and yet Geert Wilders, the far-right Dutch populist leader, is a firm believer in gay rights. In the US, Trump’s presidential campaign was described as an anti-elite movement; and yet his administration is already practically a subsidiary of Goldman Sachs.

While today’s populist resurgence comes from the nationalist right, some of the leading populist exponents in recent decades – such as Venezuela’s late president, Hugo Chávez – were firmly on the left. What they share is a zero-sum view of the world, which necessitates the creation of scapegoats who can be blamed for all problems. Moreover, because populist leaders claim to embody the uniform will of a mythical “people,” they consider democracy to be a means to power, rather than a desirable end in itself.

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But populists have more in common than an obsession with cultural boundaries and political borders. They also share a recipe for economic governance, one that Project Syndicate commentators have been tracking since long before today’s brand of populism began dominating the world’s headlines. Guided by their insights, we can begin to understand the origins of today’s populist resurgence, and what is in store for Western countries where its avatars come to power.

Diagnosing the Problem

Given populism’s many faces, is it really possible to identify a root cause? For Warwick University’s Robert Skidelsky, it is no coincidence that the two major political upheavals of 2016 – the Brexiteers’ success in last June’s referendum and Trump’s election victory – occurred in “the two countries that most fervently embraced neoliberal economics.” The US and the UK’s economic model over the past few decades, Skidelsky observes, has allowed for “obscenely lavish rewards for a few, high levels of unemployment and underemployment, and curtailment of the state’s role in welfare provision.” And this widening inequality, he writes, “strips away the democratic veil that hides from the majority of citizens the true workings of power.”

But Gavekal Dragonomics Chief Economist Anatole Kaletsky sees another dynamic at work, and offers “several reasons to question the link between populist politics and economic distress.” For starters, he points out that “most populist voters are neither poor nor unemployed; they are not victims of globalization, immigration, and free trade.” Having analyzed Brexit exit polls and voter-survey responses, Kaletsky concludes that “cultural and ethnic attitudes, not direct economic motivations, are the real distinguishing features of anti-globalization voting.”

At first blush, these arguments may seem incompatible; but their disagreement is really only between ultimate and proximate causes. For Skidelsky, “It is when the rewards of economic progress accrue mainly to the already wealthy that the disjunction between minority and majority cultural values becomes seriously destabilizing.” Likewise, for Kaletsky, “The main relevance of economics is that the 2008 financial crisis created conditions for a political backlash by older, more conservative voters, who have been losing the cultural battles over race, gender, and social identity.”

Harvard political philosopher Michael Sandel warns against focusing exclusively on “the bigotry in populist protest” or viewing it “only in economic terms.” The fundamental issue, he argues, is “that the upheavals of 2016 stemmed from the establishment’s inability to address – or even adequately recognize – genuine grievances.” And, because these grievances “are about social esteem, not only about wages and jobs,” they are difficult to disentangle “from the intolerant aspects of populist protest” – namely, anti-immigrant sentiments.

Nobel laureate economist Edmund Phelps also links populist voters’ anger to their loss of dignity in the larger political economy. As the share of US employment in manufacturing has steadily declined, blue-collar workers, Phelps notes. “have lost the opportunity to do meaningful work, and to feel a sense of agency.” In other words, “losing their ‘good jobs’” meant losing “the central source of meaning in their lives.” And while many of the lost manufacturing jobs were replaced with new jobs in new sectors, as Oxford University historian Margaret MacMillan cautions, nuanced economic arguments “cannot counter the unhappiness of people who feel marginalized, undervalued, and scorned.”

A Democratic Disease

Princeton University’s Jan-Werner Mueller, who published a highly regarded book about populism last year, has identified such “feelings of dispossession and disenfranchisement” as “fertile ground” in which populist politicians can sow seeds of resentment. And, in an earlier commentary that long predated the current news cycle, Mueller explained that, “Populism cannot be understood at the level of policies; rather, it is a particular way of imagining politics.” Above all, he observes, the populist imagination is inherently divisive: “It pits the innocent, always hard-working people against both a corrupt elite (who do not really work, other than to further their own interests) and those on the very bottom of society (who also do not work and live off others).”

In its more virulent forms, populism can be thought of as being akin to an autoimmune disease, whereby democracy gives rise to forces that attack it. Andrés Velasco, a former finance minister of Chile, laments that the nature of representative democracy can create an impression that politicians are “distant and untrustworthy.” The “rhetoric of modern democracy,” he writes, “emphasizes closeness to voters and their concerns.” But elected representatives cannot spend all of their time interacting with constituents when they have a duty to govern. When this dissonance between rhetoric and reality becomes “too glaring,” Velasco notes, “political leaders’ credibility suffers.”

This loss of trust leads disaffected citizens to put a premium on perceived authenticity. So, “although populist policies reduce overall economic welfare,” Velasco notes, “rational voters choose them because they are the price of distinguishing between different types of politicians.” In fact, such a willingness to suffer further economic pain in order to avenge elite betrayals and strike back at scapegoats may be a defining element of today’s populist resurgence.

Populist leaders in Hungary and Poland, who are currently advancing their own brand of “illiberal democracy,” seem to have staked their governments’ future on this presumption. As Central European University’s Maciej Kisilowski points out, it may not even matter that “the high economic costs of illiberal democracy are already apparent.” These countries’ electorates, Kisilowski surmises, “may regard economic stagnation as an acceptable price to pay for what they want most: a more familiar world where the state guarantees the dominant in-group’s sense of belonging and dignity, at the expense of ‘others.’”

Sławomir Sierakowski of the Institute for Advanced Study in Warsaw provides further support for this point. When Jarosław Kaczyński’s Law and Justice Party (PiS) returned to power in Poland a year ago, many assumed that it would quickly fail. Instead, it has succeeded, because Kaczyński mastered the politics of “two issues near and dear to voters: social transfers and immigration,” Sierakowski explains. “As long as he controls these two bastions of voter sentiment, he is safe.” Of course, given the PiS government’s politicization of the courts, the civil service, and the press, the same cannot be said for Poland’s democratic institutions.

A Populist Placebo

But how long can populist governments sustain generous transfers in the absence of strong economic growth? The answer will depend on how long their supporters remain convinced that they can have their cake and eat it – which is precisely what former Brexit leader and current British Foreign Minister Boris Johnson promised to Leave voters. Indeed, as Columbia University’s Jeffrey Sachs observed just after the Brexit vote, “Working-class ‘Leave’ voters reasoned that most or all of the income losses would in any event be borne by the rich, and especially the despised bankers of the City of London.”

Given the UK economy’s unexpected resilience last year, the populists probably feel vindicated. But, though most economists misjudged “the immediate impact that the United Kingdom’s [vote] would have on its economy,” writes Chatham House’s Paola Subacchi, “a gloomy long-term prognosis is probably correct,” given British leaders’ desire for a complete break from the European Union’s single market and customs union.

Such delayed effects can create an alibi for unsustainable policies, which, according to Velasco, is precisely “how economic populism works.” For example, the approach that Trump seems likely to take – tax cuts, growth-stimulating measures, and protectionism, with little thought given to inflation or public debt – is untenable, and will ultimately fail. But, as Velasco puts it, “‘Ultimately’ can be a very long time.” And that can give populist governments more staying power than many observers assume. “Populist policies are called that because they are popular,” he notes. “And they are popular because they work – at least for a while.”

In the meantime, populist leaders can pursue policies favored not only by their base, but also by many of their opponents. In the whirlwind of his first days in office, for example, Trump fulfilled his campaign promise to abandon the 12-country Trans-Pacific Partnership (TPP). This, Princeton University’s Ashoka Mody believes, was actually a welcome move, given that “international trade agreements, propped up by powerful interests, have become increasingly intrusive.” Similarly, before Trump’s election, Harvard University economist Dani Rodrik called for a rebalancing “between national autonomy and globalization.” In Rodrik’s view, it should go without saying that “the requirements of liberal democracy” must come before “those of international trade and investment.”

Trump’s promise of corporate tax reform has also wide appeal beyond his electoral base. For Harvard’s Martin Feldstein, who chaired President Ronald Reagan’s Council of Economic Advisers, current legislative proposals to overhaul the US’s outdated tax system could “have a highly favorable impact on business investment, raising productivity and overall economic growth.” Assuming that Trump, working with congressional Republicans, can strike the right policy balance, he will have bought himself some time with the business community.

Princeton University economic historian Harold James makes a related point, arguing that “the economics of US populism will not necessarily fail, at least not immediately,” owing to the US’s “uniquely resilient” position in the global economy. “Because [the US] has historically been the global safe haven in times of economic uncertainty,” James notes, “it may be less affected than other countries by political unpredictability.”

A Turn for the Worse

But even if Trump can extend his honeymoon, James does not discount the possibility that “today’s contagious populism will create the conditions for its own destruction.” One way that could happen, argues Benjamin Cohen of the University of California, Santa Barbara, is if the US loses its “exorbitant privilege” as the issuer of the dominant international reserve currency. If Trump “pursues his protectionist promise to put ‘America first,’” Cohen writes, “investors and central banks could gradually be impelled to find alternative reserves for their spare billions.”

Trump’s version of economic populism could also face a reckoning if it results in a new boom-bust cycle – one that could end in a period of stagflation around the 2018 US congressional elections. Just before the election, Feldstein warned that “overpriced assets are fostering an increasingly risky environment.” Given that the US economy is already at full employment, with an inflation rate near 2%, Trump’s planned fiscal stimulus could push it into overdrive, and force the Federal Reserve to raise the federal funds rate.

Such a scenario would certainly worsen the plight of Trump’s constituency of white working-class voters in America’s former manufacturing heartland. But so, too, would his trade proposals, which could easily precipitate trade wars with China, Mexico, and other trading partners. Trump has told displaced blue-collar workers to blame trade deals and competition from imports for the loss of their jobs. But, “with productivity gains exceeding demand growth” worldwide, Nobel laureate economist Joseph Stiglitz points out, America “would have faced deindustrialization even without freer trade.”

Given this, Trump’s prescription of trade protectionism, Stiglitz says, will only “make all Americans poorer.” One reason, explains former World Bank Chief Economist Anne Krueger, is that imports create and sustain jobs, too. The irony of Trump’s proposed import tariffs is that they threaten American exporters. Many export-industry jobs, Krueger points out, exist because inexpensive imports enable American manufactures to compete domestically and abroad; and “exporting to the US gives foreigners more income with which to buy imports from the US and other countries.”

Simon Johnson of MIT also fears such a lose-lose scenario. If Trump starts taxing imports, Johnson argues, “the cost per job will be high: all imports will become more expensive, and this increase in the price level will filter through to the cost of everything Americans buy.”

Botching the Operation

Other Project Syndicate commentators have pinpointed a deeper flaw in populist economics, apart from any specific policy proposal: recklessness. Populists often overplay their hand by flouting legal, economic, or political conventions, or by exerting inappropriate influence in markets to try to funnel benefits to their supporters. In fact, according to a classic study of economic populism in Latin America by Sebastián Edwards of UCLA and the late Rüdiger Dornbusch of MIT, it is standard populist practice to show “no concern for the existence of fiscal and foreign exchange constraints” in the pursuit of faster growth and redistribution.

New York University’s Nouriel Roubini suspects that Trump may be similarly tempted to interfere inappropriately in currency markets. As his stimulus measures push up the value of the dollar, Roubini says, “Trump could unilaterally intervene to weaken the dollar, or impose capital controls to limit dollar-strengthening capital inflows.” But if Trump is too reckless with his “damage-control methods,” already-wary markets will succumb to “full-blown panic.”

Mody, for his part, sees serious risks in Trump’s interference in corporations’ practices and business decisions. By bullying companies over Twitter to keep jobs based in the US (or to punish them for dropping his daughter Ivanka’s clothing line), Trump has already begun to undermine “the norms and institutions that govern markets.” And in Phelps’s view, Trump’s Twitter interventions, combined with his deregulation agenda, risk entrenching corporatism at the expense of the innovation and competition necessary to sustain economic dynamism and income growth.

The Search for a Cure

With populist movements leaving political establishments reeling, could a positive counter-populist economic policy agenda soon emerge? The Nobel laureate economist Michael Spence sees an opportunity in disaffected voters’ rejection of an insufficiently inclusive economic-growth model. “With previous presumptions, biases, and taboos having been erased,” he writes, “it may be possible to create something better.” Likewise, for Stiglitz, Trumpism’s silver lining is that its opponents are experiencing “a new sense of solidarity over core values such as tolerance and equality, sustained by awareness of the bigotry and misogyny, whether hidden or open, that Trump and his team embody.”

An implicit argument running through many Project Syndicate commentaries is that the only prophylactic against economist populism is more aggressive redistribution. As Rodrik puts it, populism – and poor governance generally – emerges when elites prove unwilling to “make adjustments to ensure that everyone does indeed benefit” from the existing economic model.

Behind recent, large-scale rejections of the “system” is a widely shared sense among certain groups of voters that the “establishment” has subordinated citizens’ interests to cosmopolitan goals such as globalization, immigration, and cultural diversity. Most commentators agree that economic shocks such as the Great Recession or the eurozone sovereign-debt crisis are neither necessary nor sufficient to explain the rise of populism. Rather, populism is more a response to prolonged economic malaise, deteriorating living standards, declining trust in established institutions, and a common perception that incumbent leaders have feathered their nests at the people’s expense.

These are complex economic and political problems for which populism offers fancifully simple solutions. Efforts by the media to move the populist mind have proved counter-productive, and will likely continue to do so.Those opposed to the populist cure will have to come up with an equally powerful alternative, or look on helplessly as economic uncertainty and despair overwhelm the patient.

Economists in Denial


February 27, 2017

Economists in Denial

By Lord Skidelsky*

https://www.project-syndicate.org/columnist/robert-skidelsky

*Robert (Lord) Skidelsky, Professor Emeritus of Political Economy at Warwick University and a fellow of the British Academy in history and economics, is a member of the British House of Lords. The author of a three-volume biography of John Maynard Keynes, he began his political career in the Labour party, became the Conservative Party’s spokesman for Treasury affairs in the House of Lords, and was eventually forced out of the Conservative Party for his opposition to NATO’s intervention in Kosovo in 1999.

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View from above of the Bank of England. The central bank of the UK manages the sterling currency and regulates financial transactions. Banker to Central Banks.

Early last month, Andy Haldane, Chief Economist at the Bank of England, blamed “irrational behavior” for the failure of the BoE’s recent forecasting models. The failure to spot this irrationality had led policymakers to forecast that the British economy would slow in the wake of last June’s Brexit referendum. Instead, British consumers have been on a heedless spending spree since the vote to leave the European Union; and, no less illogically, construction, manufacturing, and services have recovered.

Haldane offers no explanation for this burst of irrational behavior. Nor can he: to him, irrationality simply means behavior that is inconsistent with the forecasts derived from the BoE’s model.

It’s not just Haldane or the BoE. What mainstream economists mean by rational behavior is not what you or I mean. In ordinary language, rational behavior is that which is reasonable under the circumstances. But in the rarefied world of neoclassical forecasting models, it means that people, equipped with detailed knowledge of themselves, their surroundings, and the future they face, act optimally to achieve their goals. That is, to act rationally is to act in a manner consistent with economists’ models of rational behavior. Faced with contrary behavior, the economist reacts like the tailor who blames the customer for not fitting their newly tailored suit.

Yet the curious fact is that forecasts based on wildly unrealistic premises and assumptions may be perfectly serviceable in many situations. The reason is that most people are creatures of habit. Because their preferences and circumstances don’t in fact shift from day to day, and because they do try to get the best bargain when they shop around, their behavior will exhibit a high degree of regularity. This makes it predictable. You don’t need much economics to know that if the price of your preferred brand of toothpaste goes up, you are more likely to switch to a cheaper brand.

Central banks’ forecasting models essentially use the same logic. For example, the BoE (correctly) predicted a fall in the sterling exchange rate following the Brexit vote. This would cause prices to rise – and therefore consumer spending to slow. Haldane still believes this will happen; the BoE’s mistake was more a matter of “timing” than of logic.

This is equivalent to saying that the Brexit vote changed nothing fundamental. People would go on behaving exactly as the model assumed, only with a different set of prices. But any prediction based on recurring patterns of behavior will fail when something genuinely new happens.

Non-routine change causes behavior to become non-routine. But non-routine does not mean irrational. It means, in economics-speak, that the parameters have shifted. The assurance that tomorrow will be much like today has vanished. Our models of quantifiable risk fail when faced with radical uncertainty.

The BoE conceded that Brexit would create a period of uncertainty, which would be bad for business. But the new situation created by Brexit was actually very different from what policymakers, their ears attuned almost entirely to the City of London, expected. Instead of feeling worse off (as “rationally” they should), most “Leave” voters believe they will be better off.

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Justified or not, the important fact about such sentiment is that it exists. In 1940, immediately after the fall of France to the Germans, the economist John Maynard Keynes wrote to a correspondent: “Speaking for myself I now feel completely confident for the first time that we will win the war.” Likewise, many Brits are now more confident about the future.

This, then, is the problem – which Haldane glimpsed but could not admit – with the BoE’s forecasting models. The important things affecting economies take place outside the self-contained limits of economic models. That is why macroeconomic forecasts end up on the rocks when the sea is not completely flat.

The challenge is to develop macroeconomic models that can work in stormy conditions: models that incorporate radical uncertainty and therefore a high degree of unpredictability in human behavior.

Keynes’s economics was about the logic of choice under uncertainty. He wanted to extend the idea of economic rationality to include behavior in the face of radical uncertainty, when we face not just unknowns, but unknowable unknowns. This of course has much severer implications for policy than a world in which we can reasonably expect the future to be much like the past.

There have been a few scattered attempts to meet the challenge. In their 2011 book Beyond Mechanical Markets, the economists Roman Frydman of New York University and Michael Goldberg of the University of New Hampshire argued powerfully that economists’ models should try to “incorporate psychological factors without presuming that market participants behave irrationally.” Proposing an alternative approach to economic modeling that they call “imperfect knowledge economics,” they urge their colleagues to refrain from offering “sharp predictions” and argue that policymakers should rely on “guidance ranges,” based on historical benchmarks, to counter “excessive” swings in asset prices.

The Russian mathematician Vladimir Masch has produced an ingenious scheme of “Risk-Constrained Optimization,” which makes explicit allowance for the existence of a “zone of uncertainty.” Economics should offer “very approximate guesstimates,” requiring “only modest amounts of modeling and computational effort.”

But such efforts to incorporate radical uncertainty into economic models, valiant though they are, suffer from the impossible dream of taming ambiguity with math and (in Masch’s case) with computer science. Haldane, too, seems to put his faith in larger data sets.

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A Towering Figure in Economics–Lord Keynes

Keynes, for his part, didn’t think this way at all. He wanted an economics that would give full scope for judgment, enriched not only by mathematics and statistics, but also by ethics, philosophy, politics, and history – subjects dropped from contemporary economists’ training, leaving a mathematical and computational skeleton. To offer meaningful descriptions of the world, economists, he often said, must be well educated.

 

Universal Values, not just Globalisation


February 26, 2017

Universal Values, not just Globalisation

 

We have been so obsessed – and this is a failing – by the economics of globalisation, the trade and finance and free movement of labour, that we do not give higher value to the fundamental human values and intercourse that are at risk.–Dr. Munir Majid

 

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THE gravest threat of the rise of nationalist populism is to the universal values and practices of a civilised world which took several decades to develop. It is this that modern tribalism in Europe and America seeks to cannibalise.

 We have been so obsessed – and this is a failing – by the economics of globalisation, the trade and finance and free movement of labour, that we do not give higher value to the fundamental human values and intercourse that are at risk.

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@http://web.stanford.edu/group/ccr/blog/2009/04/intercultural_communication_in.html

The world has become more possessed by economics than even Marx could have predicted. The disparity of income and wealth is as wide as he saw in post-industrial revolution Europe.

The political turmoil of Leninism, the rise of fascism, the Gulag and the Holocaust – and war – were some of the worst outcomes that followed.

We must recognise this looming threat. We will not get there unless we first recognise the main failing of globalisation, this obsession with economics.

Economic and financial benefit – however ill-distributed – was its driving force, mainly through trade, free movement of capital and labour. Such benefit did not become self-evident truth, however, as too many were left behind for too long.

Would it have made a difference had such benefit been better distributed? It would seem unlikely as non-economic values in the nation-state were disturbed as much as production and income structures were overturned.

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“Give us our country back”, is more than about economics. It is about the deemed imposition of global values and the perceived dilution of national character.

The appeal to nationalist populism, which last year saw the vote for Brexit and the election of Donald Trump as United States president, was primarily occasioned by globalised economic and financial supercharge which isolated the low income and divided societies while the top earners spirited away with handsome benefits, but the potent response came from nationalist reassertion against foreign threat.

Against loss of jobs to….Against loss of country to….Against loss of control because of….All because of globalisation. Global is foreign.

Universal values and international behavioural practices got to be associated with the ills of globalisation. This is the most dangerous threat to civilised world order.

The 1948 Universal Declaration of Human Rights, however extant its violation, for instance, well preceded the wave of globalisation. The 1951 Refugee Convention defines the rights of refugees and the obligations of states towards them which are now part of customary international law.

What might now seem mundane, the Universal Postal Union, was established in 1874, and now has 192 members as it serves a universal communication need. There are many others of this ilk.

Cross-border immigration took place to fill up jobs locals would not or could not do. The world was enriched by these kinds of common necessities, not by an enforcement of globalisation.

The point is that universal and international necessities were and are way ahead of the globalisation against which there is such massive revolt. Their values, standards and practices are in dire threat of being sacrificed on the altar of narrow populism.

We can talk too much about globalisation. It is far better now to talk less and do more – and not to use the term globalisation ad nauseam.

The kinds of demonstrations for the values of good society and nationhood across America and Europe that we have seen in response to rules of dictatorship, rules of violation of rights and universal values, against racism and acts of inhumanity, are significant signs that civilised standards of life will not be allowed to be trampled on and to die.

On the other hand, we must also do more “for” things, before we have to demonstrate for them. The good earth has been so much abused. We now talk about climate change and environmental protection. We need to look at the big picture of course, but we should also do more and more, and highlight more and more significant efforts that can and are being made to save the planet – for the good of mankind.

I know, as a significant example, of a documentary feature, Great Green Wall, being produced by acclaimed Oscar-nominated film-maker Fernando Meirelles, which proposes to tell the story of one of the most ambitious endeavours taking place on the edge of the Sahara desert: “A dream to grow a wall of trees and plants across the entire width of Africa, and stop the ravages of climate change firmly in its tracks.”

I know one of the persons involved at the start of the project in 2007 which when completed in 2030 will make the Great Green Wall the largest living structure on planet earth – three times the length of the Great Barrier Reef.

Businesses and governments should support and get involved in these kinds of global efforts to deliver goods that make and realise the point of universal values that are so much under attack from modern tribalism in the contemporary world.

There is no reason why the government and companies in China which so want to show global leadership cannot support projects such as the Great Green Wall or, indeed, embark on their own projects, such as to reclaim the Gobi desert.

There must in the world – especially among business corporations – be a greater realisation that value-at-risk is not just about dollars and cents. Yes, the good will ultimately come to the economy. But do not talk too much about it as if that is all there is.

Dr. Munir Majid,  Visiting Senior Fellow at LSE Ideas (Centre for International Affairs, Diplomacy and Strategy), is Chairman of CIMB ASEAN Research Institute.