Peter L. Berger's Blog, page 218

Greece Clears a Bailout Hurdle

Greece has moved one step closer to unlocking a crucial tranche of bailout aid, according to the FT:

Greece has struck a deal with its creditors on reforms the country must carry out in exchange for continuing to receive money from its €86bn bailout programme.

The deal, which encompasses pension cuts, a widening of the tax base, and other reforms has been months in the making and was closed during intensive talks this week. […]

The deal, which requires Greece to legislate now on reforms that it will roll out in 2018 and 2019, is a key stepping stone in bringing the International Monetary Fund into the bailout as a full financial partner, a key requirement for Europe’s largest creditor state Germany.

Eurogroup negotiators are already patting themselves on the back for the progress made, but it’s not time to break out the ouzo just yet. For one, Alexis Tsipras’ government hardly has an inspiring track record in actually implementing the belt-tightening fiscal reforms he has promised. And such commitments have always been made on the basis of vague and fuzzy expectations. The new reform package, we are told, is supposed to help Greece reach its 3.5% budget surplus target by 2018 and maintain it over the “medium term”. That figure alone sounds insanely optimistic, and there is no consensus between Greece and its creditors over what the “medium term” even means.

With the IMF now looking more likely to finance the bailout, the next round of talks is likely to get more heated. Next up for discussion is the delicate topic of Greek debt relief—which is opposed by Germany as staunchly as it is insisted upon by Greece and the IMF. Expect a lot more haggling and grandstanding before any potential deal is reached.

A Liberal Talking Point Put to Rest

During the second half of the Obama era, it became an article of faith among many Democrats that Republicans had essentially stolen the House of Representatives and polarized the government by nefariously redrawing district lines in their party’s favor. But it was always clear to impartial observers that the impact of gerrymandering had been greatly exaggerated, and that demographic changes in the distribution of the population played a far greater role. A new analysis from the nonpartisan Cook Political Report confirms this:

As it turns out, gerrymandering wasn’t as much of a factor in the House’s polarization as some redistricting reform advocates might argue. Of the 92 “Swing Seats” that have vanished since 1997, 83 percent of the decline has resulted from natural geographic sorting of the electorate from election to election, while only 17 percent of the decline has resulted from changes to district boundaries.

This doesn’t mean that gerrymandering isn’t worth paying attention to. The decline in competitive seats over the last two decades has been significant and regrettable, and even a 17 percent contribution from redistricting chicanery is too high. And because Republicans have more power in the states, recent redistricting has favored the GOP, on the whole: The report estimates that “the number of Republican (R+5 or greater) seats has grown by 14 as the result of changes to district lines, while the number of Democratic (D+5 or greater) seats has increased by just two.”

But however comforting it might be to imagine that Congressional polarization is the result of reversible partisan machinations, the fact is that it has much more to do with broad-based geographical sorting. Democrats trying to break out of their “built-in” disadvantage in the House and state legislatures should spend less time railing against gerrymandering and more time trying to reach voters outside of their dense, hyper-sorted urban strongholds.

The Pacific Power

By More Than Providence: Grand Strategy and American Power in the Asia Pacific Since 1783

Michael J. Green

Columbia University Press, 2017, 762 pp., $45

Standing in front of the Australian Parliament in November 2011, President Obama announced his signature foreign policy initiative, the “pivot” to the Asia-Pacific region. There he stated that “our enduring interests in the region demand our enduring presence in the region. The United States is a Pacific power, and we are here to stay.”

While President Obama invoked America’s history in the region to justify this position, it is highly unlikely that he—or anyone else for that matter—had Chester A. Arthur in mind. But it was the 21st President who declared in his 1881 Address to Congress that the United States would be the “chief Pacific power.”

Similarly, when President Trump recently climbed aboard the USS Gerald R. Ford, the Navy’s newest nuclear-powered aircraft carrier, he promised that the Navy was “going to soon be the largest it’s been.” He too invoked history to make his point, claiming that “our Navy is the smallest it’s been since World War I.” While Trump’s thinking was rooted in history, there is no evidence to support—or even suspect—that he was thinking about Lincoln’s Secretary of State William H. Seward. But Trump’s calls for an expanded navy that can potentially be used to check aggressive Chinese actions in the South and East China Seas has the same motivation as Seward’s 1853 demand that the U.S. Navy must “multiply your ships and send them forth to the East.”

From the earliest days of the republic to its current travails, America has had an abiding fascination with, deep commercial ties to, and grave security concerns about Asia. And in the long sweep of our historical ties to this important region, a persistent underlying logic has sustained U.S. engagement. That logic has demanded access to the East for American commerce and ideas, and the prevention of threats flowing from the west to American shores. In so doing, that logic has set the course of American grand strategy toward the region, as Michael Green argues in his authoritative, incisive, and instructive new book By More Than Providence: Grand Strategy and American Power in the Asia Pacific Since 1783.

In the preface to his substantial tome that sweeps across the entirety of American history, weighing in at 548 dense pages of text and another 138 pages of notes, Green describes why he undertook such a daunting task.1 After spending more than five years at the highest level of American statecraft, serving as George W. Bush’s Senior Director for Asian Affairs on the National Security Council, he became convinced about just how much history informs policy, and how greater historical understanding can produce better American strategy. But Green could find no comprehensive study detailing American statecraft toward Asia.

To his surprise, Green found that “this same gap in knowledge” existed among his colleagues in government. They were certainly enormously practical and knowledgeable about many issues, ranging from the current state of North Korea’s ballistic missile development to the state of ethnic tensions in Burma’s Rakhine state to the always-evolving leadership dynamics in Beijing. But when he pressed them about why we define American interests in the region as we do, or what accounts for the various successes and failures of past policies, he often received blank stares. This is hardly surprising, for the interagency process prioritizes actionable recommendations and brevity for policymakers, whose most precious commodities are time and attention. In practice, this means that at the highest levels there is an abundance of practical knowledge but little time or attention given to how policies and ideas have played out through the years. As Green puts it, for all the extraordinary work it does, even “the intelligence community does not analyze the roots of American strategy or policy.” Yet he knew from experience that the best work produced by he and his staff not only analyzed the prospective choices facing the President but also set them in broad context, defined the evolution of the policy issue and the national interest at stake, and discussed the trade-offs any particular option would incur. Such analysis demanded an understanding that only informed historical knowledge could offer.

Returning to academia from the White House—the commute wasn’t far for Green, who teaches at Georgetown University and holds the Japan chair at Washington DC’s Center for Strategic and International Studies—he decided to teach a course covering the history of American strategy in Asia. However, his initial impressions when working on the NSC were confirmed: Nothing in the academic literature adequately and comprehensively addressed the subject. So Green decided to fill the gap himself.

In so doing, Green has helped explain America’s remarkable, and remarkably perplexing, grand strategy in Asia. To baffled observers of America’s inconsistent, dramatic, and continuously surprising engagement with the world, the best explanation can be found in Otto von Bismarck pithy, and perhaps apocryphal, remark that “God has a special providence for fools, drunkards, and the United States of America.” The American Interest’s own Walter Russell Mead, of course, played on that sentiment in his landmark 2001 work, Special Providence: American Foreign Policy and How It Changed the World, arguing that American foreign policy success can best be understood as the creative synthesis of the clash between several distinct and competing schools of thought. In By More Than Providence, Green engages both Mead’s analysis and Bismarck’s observation by characterizing America’s emergence “as the preeminent power in the Pacific not by providence alone, but through effective (if not always efficient) application of military, diplomatic, economic, and ideational tools of national power to the problems of Asia.”

As an early American diplomat to China noted with excitement, Asia was “a theatre for the exercise of the most ambitious intellect.”2 Green’s work demonstrates that what was true in the mid-19th century is equally true today. And while the book is long, the prose clips along, and the comprehensiveness of the approach makes the read well worth the time invested. Moreover, the work is not simply a survey of America’s encounters with and reactions to the Asia-Pacific region. It is Green’s argument that this engagement demands a higher level of analysis.

Starting with the launching of the China trade in 1783 and concluding with President Obama’s “pivot,” Green identifies enduring tensions that have shaped America’s approach from the outset. In his analysis, those challenges have remained remarkably persistent across American history. For even as the relentless pace of technological change “replaced sail with steam, steam with internal combustion, and then internal combustion with jets, ballistic missiles, and eventually cyberspace,” he writes, Asia still lies separated by some 7,000 miles from the America’s West Coast. It is a region historically defined by hierarchy, subject to the fluctuations in Chinese power, uneven economic growth, and contending sources of political legitimacy. These same circumstances have formed the basis of choice for American policymakers from Thomas Jefferson and John Quincy Adams in the late 18th and early 19th centuries to Richard Nixon and Barak Obama in the 20th and 21st.

In response to those challenges, Green identifies one enduring theme in “American strategic culture as it has applied to the Far East over time.” The purpose of American power in the Far East, Green writes, “is that the United States will not tolerate any other power establishing exclusive hegemonic control over Asia or the Pacific.” This singular theme, however, has two policy implications that move in different directions. One is negative and aimed at preventing the emergence of a regional hegemon that can threaten the American homeland from the west. The other is positive, intended to retain access for American goods and ideas to the west.

But if these are the persistent twin objectives of American grand strategy in the Far East, Green argues that there are five enduing tensions that cut across the centuries to shape America’s grand strategy at any particular moment. These include: the struggle between Europe and Asia as a strategic priority for American policymakers; the debate over whether U.S. policy should pursue a continental or a maritime approach to Asia, and subsequently whether American strategy should give China or Japan pride of place; the challenge of drawing redlines and deciding how far forward America ought to place its defensive perimeter in Asia; the difficult question of how best to expand democratic space in Asia while balancing self-determination with the promotion of universal values; and, the perennial fight, now back with a vengeance, between protectionism and free trade.

In case after case, Green makes the point that American policymakers have often struggled to find the right balance between these impulses. But just because there is a tension between opposites, Green asserts, does not mean that some approaches are not better than others. In particular, his admiration for John Quincy Adams, William Seward, Teddy Roosevelt, Richard Nixon, and Ronald Reagan reflects a bias for strategists whose vision harnessed American values to American power in the search for a stable Asian strategic equilibrium.

To understand the evolution of American strategy in Asia, Green organizes the book around successive European, Japanese, Soviet, and Chinese systemic challenges to the maintenance of a free and open trans-Pacific order. The story begins with the rise of European competition amid the collapse of a traditionally Sinocentric Asian world, and the problems that European imperialism presented for the spread of American trade, values, and projection of military power. The narrative continues with the spread of Western values and technology eastward, and the diminution of European strength in the World War; it then chronicles the challenges that a rising and modernizing Japan presented the United States. Following Japan’s surrender in September 1945, the threat of an acquisitive Soviet empire and an expansionist communist ideology focused U.S. efforts throughout the Cold War. Part of America’s Cold War strategy eventually came to involve engaging Beijing, which the United States promoted as a balance to Moscow. The extraordinary rise of China began in the 1970s as America opened and then normalized relations with China, and it accelerated after Deng Xiaoping instituted a series of market-based reforms in 1978. The final section of the book examines the implications of China’s rise, resulting in an increasingly aggressive clash between China, championing a hierarchical Sinocentric order, and America, leading and undergirding a rules-based order.

From this expansive sweep through history Green draws some suggestions about how best to balance the enduring tensions inherent in America’s Asian project. The conclusion is that the modern and timeless imperatives of American strategy in Asia are as straightforward in theory as they are challenging in practice. These imperatives include: making sure that Asia receives the highest of priorities in terms of U.S. resources and policymakers’ time and attention; demanding that China (or any other state for that matter) remain embedded within a larger Asian policy, and not vice versa; understanding the geopolitical importance of the first island chain and undertaking a credible if flexible commitment to America’s forward defensive line; committing to the promotion of both free trade and a realistic and consistent position on human rights and democracy; and, above all else, insisting that American strategists work to shape a balance of power in the region favoring openness and remaining free from coercion.

Green’s background as both a professor and a policymaker informs his analysis throughout, making By More Than Providence a uniquely valuable guide to the past, present, and future of American strategy in the Asia-Pacific region. His thesis is that, organically and relentlessly (despite some setbacks and occasional inconsistencies), American military, commercial, and missionary activity has expanded across the region. Political scientists explain this expansion as deriving from international relations theory, debating whether offensive realism (the ability to expand) or defensive realism (the perceived need to expand to preempt others’ expansion) best accounts for America’s actions. Meanwhile, historians of this period gravitate toward the Wisconsin school of interpretation that argues that America’s expansion primarily stemmed from the relentless search for new markets. Green points out that to American strategists in the late 19th century these competing interpretive frames “would probably have been a difference without a distinction. Threats, commerce, and capacity all went into the soup that became the American strategy for expansion into the Pacific.” While this is an oversimplification of the literature, Green’s point here and throughout the book is that both theory and history can only serve as partial frameworks through which to understand strategy.

In this he sounds remarkably like Clausewitz, who wrote that

it would indeed be rash . . . to deduce universal laws governing every single case, regardless of all haphazard influences. Those people, however, who “never rise above anecdote” . . . and would construct all history of individual cases—starting always with the most striking feature, the high point of the event, and digging only as deep as suits them, never get down to the general factors that govern the most. Consequently their findings will never be valid for more than a single case; indeed they will consider a philosophy that encompasses the general run of cases as a mere dream.3

In other words, theory—offensive, defensive, or otherwise—divorced from context, circumstances, and particular details will produce little of value for the strategist. Similarly, history—economic, intellectual, political, or otherwise—isolated from comparison reveals nothing of utility to the policymaker struggling to respond to his unique set of circumstances. This narrative might not be as theoretically coherent or as historically deep as some other academic works, but what it lacks in that regard is more than made up for by its many strategic insights born of combining theory, history, and experience. For even as he explores American grand strategy toward Asia in a given historical context, Green thoughtfully links that history to contemporary challenges.

His chapter on Teddy Roosevelt, aptly titled “I wish to see the United States the dominant power on the shores of the Pacific,” is a case in point. Green describes the intellectual, political, and geopolitical context in which Roosevelt was operating. He points to the influence of Alfred Thayer Mahan, who argued for a sustained forward presence in the Pacific as necessary for both access to the region and as defense of the homeland. Forward presence would help prevent the emergence of a regional hegemon as it aided in promoting American commerce and spreading American values. But it was events—in this case the 1898 Spanish-American War—that propelled these ideas into meaningful policies as the United States acquired various island territories, or “stepping stones” across the Pacific, promoted the territorial integrity of China and ensured its own commercial access, and calculated the right mix of diplomacy and military deterrence to maintain a favorable balance of power in the region that would preclude the emergence of any major rivals. Roosevelt, in Green’s telling, shaped events in the region by promoting the Open Door policy, mediating the Russo-Japanese War, initiating the largest peacetime buildup of naval forces in American history, and restraining American expansion after its 1898 victory. These deft moves greatly enhanced America’s prestige and power, despite the error—which Roosevelt came soon to recognize—of annexing the Philippines. Green makes a compelling case for the success of Roosevelt’s grand strategy at the turn of the 20th century.

What emerges from this, however, is of more than historical interest. For here, with careful attention to context and circumstance, Green makes a compelling case for the requirements of a successful and sustainable American ability to shape events in the region while promoting its values and protecting its interest. Articulated in this chapter but weaving in and out of the entire narrative are several interrelated propositions: that America’s interests require a deft balance between self-restraint and assertion to maintain an accessible, open, and liberal economic and political order; that America’s values are best protected by the promotion of friendly and self-governing republics; that American power is augmented through the emergence of other strong, like-minded states that can constrain aspiring regional hegemons; that America’s credibility is advanced through the maintenance of a strong naval presence and military deterrent; that America’s economic dynamism depends on lowering barriers to trade and that such trade liberalization is most likely to extend American influence in the region; that American values are furthered through Washington’s advocacy of rules, norms, and institutions; and, finally, that America’s ability to shape the region is proportional to Asia’s perception of Washington’s level of engagement and sense of legitimacy.

Of course, Asian history is riddled with the inconsistencies of America’s approach. It is to Green’s credit that he examines the failures alongside the successes of American statecraft. In so doing, he offers something far deeper and practical than a mere history. Giving equal weight to historical context, general principles, and political judgment, Green provides a comprehensive framework for how American policymakers and students of history ought to evaluate America’s grand strategy in the Asia-Pacific. It is one of those rare works that should be required reading for all those who seek to shape and understand American statecraft. In the Trump era, when it is virtually impossible to distinguish between the signal and the noise of American statecraft, Green has provided a guide to understanding the past, making sense of the present, and charting a course into the future for American grand strategy in Asia.

1When Green was researching this book, we corresponded about my own work on John Quincy Adams.

2U.S. commissioner to China Humphrey Marshall, quoted in Green.

3Carl von Clausewitz, On War, edited and translated by Michael Howard and Peter Paret (Princeton University Press, 1976, 1984 indexed edition), Book VI, Ch. VI, p. 374.

What the Syria Strikes Mean

Last night, President Trump ordered cruise missile strikes against Syrian government targets believed to have carried out the chemical weapons attack against civilian areas of Khan Sheikhoun in rebel-held Idlib in northwest Syria. Fifty-nine Tomahawks were launched against the Al Shayrat air base in Homs province from the destroyers USS Porter and USS Ross, currently stationed in the eastern Mediterranean. The Pentagon said it was still assessing damage, but early reports indicate that the airfield’s planes and support infrastructure were severely damaged or destroyed.

The missile strikes are the first direct U.S. military action against the Syrian government. In a brief statement to the media, President Trump defended the attack partly as punishment for the deaths of innocent civilians—specifically children—but more pointedly as the reinforcement of a norm that he suggested his predecessor failed to uphold. “It is in the vital national security interest of the United States to prevent and deter the spread and use of deadly chemical weapons,” Trump said. “There can be no dispute that Syria used banned chemical weapons, violated its obligations under the Chemical Weapons Convention, and ignored the urging of the U.N. Security Council.”

Russia was warned of the strikes in advance as part of what have become a regular channel of deconfliction communications between U.S. and Russian forces in Syria. According to Defense One, there were Russian bombers at the base, but the strikes gave a wide berth to these aircraft.

It will be interesting to see how the “Manchurian candidate” narrative about the President fares going forward. The most deranged paranoids on the Left are sure to see some kind of five-dimensional chess game being played here, wherein Trump acts against Russia’s interests in Syria, Putin blusters, but the puppet strings remain in place. Others will no doubt accuse Trump of ordering the attack simply to change the subject from the serial failures of the early days of his Presidency. Ironically, Vladimir Putin himself has provided a draft of those talking points, accusing the United States of attacking under false pretenses, primarily as a means of changing the subject: “an attempt to divert the attention of the international community from numerous civilian casualties in Iraq.”

Back in the real world, however, the strike was being read for what it is: a demonstration that this Administration is less reluctant to use force than the one that preceded it. And though Russia was the big power most directly challenged by the strike, Putin was perhaps not even the primary intended recipient of the message. The strikes occurred just as President Trump was having dinner with Xi Jinping of China, and, according to AFP, Trump delivered the news to Xi personally. The subtext was unmistakeable: Get serious about North Korea; our recent threats were not idle. Don Corleone himself couldn’t have set a better table.

Reports coming out of the White House ahead of the strikes indicated that Trump was consulting primarily with Secretary of Defense James Mattis. Mattis is a strategic thinker, and establishing a precedent about the use of force is something that he would be very likely to counsel. It’s also important to note that shortly after the attack, Secretary of State Rex Tillerson cautioned that it shouldn’t necessarily be seen as a dramatic about-face on Syria policy, implying that regime change may not be in the cards.

For his part, Putin complained that the attack “substantially impairs Russian-U.S. relations, which are in a deplorable state as it is.” The Russian Ministry of Defense vowed to upgrade Syria’s air defenses as soon as possible and immediately suspended its de-conflicting agreement with the United States. If Putin leaves it at that, we’re at a new normal that’s probably not that much different than the old, but with an important message sent. If he escalates further, all eyes will be on Team Trump. Precedents, after all, require follow-through.

Trucking Is the Latest Industry to Experience Self Driving Innovation

A California-based software company has a plan to partially automate commercial trucking to allow one driver to pilot two vehicles. Peloton, as the company is aptly called (though one wonders if the name Convoy was already taken), just received $60 million in a second round of funding, and hopes to put its self driving system on the road next year. The WSJ reports:

Peloton’s system allows two trucks traveling front-to-back to be controlled by a driver in the front vehicle, creating what the company calls a platoon system. Trailing the lead vehicle by as little as 30 feet, the second truck uses about 10% less fuel because of reduced wind resistance from the lead truck, Peloton says. […]

Still, Peloton initially envisioned platoons of three or four trucks, with one person operating the front truck while those behind it were entirely driverless. That proved more complicated than planned and regulatory approval could take years. Peloton is focused instead on a two-truck system for highway travel in which each truck would be staffed by a driver who can take over when weather or traffic dictate.

Peloton, based in Mountain View, Calif., wants to introduce the system by 2018. Omnitracs LLC, a provider of remote monitoring systems for truck fleets, led the new funding round.

We’ve seen speculation that self driving cars might bunch together on the highway to reap reductions in drag and thereby increase fuel mileage, but that strategy makes even more sense for long-haul trucking, which has defined routes that allow for coordination between trucks.

There’s also a potential synergy here for trucking companies to exploit: because their routes can be planned ahead of time, autonomous 18-wheelers would make ideal candidates for compressed natural gas (CNG) vehicles. In this way, our country’s fleet of trucks could gas up on natural gas, and take advantage of the shale boom in the process.

We remain on the cusp of a transportation revolution whose impacts will be felt across industries at a rate and depth that will likely surprise us. This new method of moving people and things from point A to point B (to points C, D, and E, etc…) is going to increase efficiencies and likely produce both cost and environmental savings while increasing quality of life. There’s still so much to work through as these technologies mature that at a certain point it makes sense to sit back and parse these ripple effects as they come, but at a macro level we’re watching a disruptive suite of technologies come rolling in from the horizon, bringing with them the promise of a better way of life.

Turkey and Russia Troll NATO in the Black Sea

The strange and opportunistic partnership between Turkey and Russia was on full display in the Black Sea this week, as the two sides conducted joint naval exercises sure to irk NATO. Newsweek:

Russia’s Black Sea Fleet joined the Turkish navy in the strategic body of water, which has been a source of heightened tensions due to parallel military exercises by Russia and members of NATO, of which Turkey was a part. […]

“As part of the drill, ships of the two countries practiced… exit from a naval base, joint maneuvering and communication, as well as repelling an attack of a small-sized high-speed target, an inspection operation, search for and rescue of a person in the water,” Trukhachev told reporters, according to Russia’s Sputnik News.

In one sense, this is a dynamic that has been obvious for a while: Turkey is restless and Russia is happy to be a flirt. Erdogan, for his part, has been fanning the flames of anti-Western sentiment at home leading up to the big referendum on expanding the powers of the Presidency. Doing war games with Russia serves similar domestic needs: it signals that Turkey has geopolitical options outside Western institutions, and that Erdogan has global clout. For Russia, the drills provide a golden opportunity to pick at growing schism between NATO allies.

At the end of the day, everyone concerned knows that there are strict limits to the relationship between Russia and Turkey. (It’s already a Potemkin friendship.) But games like this are not without consequence. The mistrust being generated is real, and will impact the Alliance going forward.

Revamping the Retirement System

Good afternoon, Mr. Chairman, Ranking Member Heitkamp, and members of the subcommittee: It is an honor to be invited to testify before this subcommittee and its distinguished members.

Moreover, it is a privilege to testify alongside former Senator Kent Conrad. I congratulate the subcommittee on its interest in creating a sustainable and viable retirement system for the 21st century.

My testimony today is divided into three parts. In the first, I look at the history of federal policy with respect to the economic security of the American people, how that policy changed in response to changing economic conditions, and how our current set of retirement programs and policies emerged from these changes. In the second section, I draw the subcommittee’s attention to the ways in which the economic changes our country is currently undergoing are deep enough and pervasive enough to require fresh thinking about economic and retirement policy. Finally, I offer some suggestions that I hope will assist the subcommittee’s distinguished members as they work to craft novel retirement security policies for an approaching economic order while preserving programs like Social Security that remain essential to the economic security of older Americans.

The American Dream & Government

Many believe that the federal government’s promotion of the economic security of the American middle class is a relatively recent development, dating back to Franklin Roosevelt and the New Deal. This is far from the truth. From the revolutionary period to the present day, American Presidents and Congresses have worked to develop policies and laws that promote the American Dream—to help the American people build dignified and secure lives through hard work. Our understanding of the American Dream has changed over the centuries, and successive generations have changed the methods by which they seek to promote the common welfare, but the prosperity and the security of the American people has remained at the center of national policy from the time of George Washington into the 21st century.

For much of our history, the majority of the American people earned their living in agriculture. In the 18th century, farmers comprised approximately 90 percent of the American labor force. Only in the 20th century did the percentage of agricultural workers fall significantly below 50 percent of the labor force. For both American citizens and the immigrants drawn to our shores, the American Dream at this time meant a freehold family farm; elected officials understood that the opportunity to own a farm was what constituents most wanted, and they made it their business to ensure that federal policies supported that goal.

Politicians also understood that the independence and security of family farming was the foundation of the American political system. Political theorists like Thomas Jefferson believed that independent free farmers made the American democratic system possible. Freed from the servile dependency that characterized so much of peasant agriculture in Europe, and trained in the habits of responsibility and hard work by the requirements of property owning, American farmers could be safely entrusted with the choice of elected officials. Federal support for the independence and prosperity of farmers was not just in the country’s economic interest; such support strengthened the foundations of American society in line with Jefferson’s belief that “Agriculture…is our wisest pursuit, because it will in the end contribute most to real wealth, good morals, and happiness.”

Indeed, the Land Ordinance of 1785 and the Northwest Ordinance of 1787, both of which were adopted by Congress before the Constitution was signed, already envisioned a future of independent, yeoman farmers in early America. These ordinances helped create a system that organized the sale of federal land west of the Appalachians to private citizens, and remain a basis of the Public Land Survey System and the Bureau of Land Management that we know today.

The Federal government continued to promote the establishment of the family farm throughout the 19th century with a full range of economic, diplomatic, and even military policies. President Jefferson’s Louisiana Purchase opened up over 800,000 square miles of land for Americans to settle. The 1862 Homestead Act gave away millions of acres of land to settlers who were willing to brave the treacherous westward journey and settle in the interior.1 The early diplomatic emphasis on gaining free access to the Port of New Orleans for western farmers, like the later promotion of railroads to open up the vast western territories, was designed to ensure that farmers in the remote American interior were able to sell their goods on world markets. The establishment of land grant colleges at the end of the 19th century sought to both train young farmers and to conduct important research into new farming methods. Taken together, these policies, among others, formed what might be called the “Green Model”—a coordinated government effort to provide Americans, who lacked opportunities to own large tracks of farmland on the coast, with the ability to seize the 19th century American Dream if they moved to the interior.

By promoting land ownership at low cost and encouraging agricultural education, the Green Model sought to deliver for Americans the unique financial and societal security that a family farm could provide. Besides the revenue and sustenance from working the land, family farming helped Americans accumulate wealth. Additionally, family farms provided for retirement. Grown children could continue tending the land while taking care of their elderly parents, or the family farm could be rented or sold, providing an income for farmers who could no longer work the land for themselves.

The security provided by the family farm began to erode in the late 19th century. As more settlers took advantage of Green Model land policies, the remaining unsettled land became ever more marginal. At the same time, a more competitive, large-scale, and capital-intensive farming model emerged, which gradually made family farming riskier and less rewarding. The share of farmers in the labor force declined from approximately 64 percent in 1850 to 27 percent in 1920.

As the American economy shifted away from American agriculture and toward factories and mines, Americans experienced growing inequality and uncertainty between 1865 and 1900. Following the Civil War, portions of American society clung to the Green Model way of life even as the rural economy fell behind the manufacturing economy of the great cities.

Farmers lobbied for federal assistance to achieve “parity” with urban workers, but the relative decline of the agricultural economy continued. While pro-farm policies aimed to preserve Jefferson’s idyllic vision of a nation of yeoman farmers, these policies were no match for larger economic trends that were recasting American society as well as the economy.2 It became increasingly clear that the Green Model could no longer serve as the ordering principle for federal policy, but the dynamics of the new economy were not well understood and its full wealth creating potential had not yet been realized.

As the 20th century witnessed a clear transition from an agricultural to an industrial era, a new version of the American Dream appeared and a corresponding federal policy model began to take shape. Teddy Roosevelt capitalized on widespread calls for reform and ushered in a new kind of politics. Past Presidents made history by opening new land for settlement; Theodore Roosevelt made history by protecting federal lands from settlement and establishing our system of national parks. Franklin Roosevelt’s New Deal policies further advanced the evolution of a new system tailored to an urban society with a manufacturing economy.

The process of transition was a slow one, with many setbacks and upheavals, but by the 1950s, a new and stable social system had emerged. Americans had learned to manage the forces of industrialism, to regulate the power of finance, and to use the vast resources an industrial society creates to address the unprecedented social problems that the rise of the modern city and the modern factory system brought into being. In post-World War Two America, both blue-collar and white-collar workers increasingly had stable, lifetime jobs in a growing economy. Within this new economy, high school graduates were essentially guaranteed lifetime employment in a job that, at a minimum, provided a comfortable, lower middle-class lifestyle. Likewise, college graduates could expect an equally secure future with an even greater standard of living.

The new economy led to a new American Dream. Americans no longer dreamed of owning a family farm, rather they dreamed of owning a suburban home accompanied by a consumer lifestyle. To ensure that Americans willing to work for it could have that dream come true, the United States government created a novel policy system during the 1950s and 1960s – a set of policies and practices sometimes called the “Blue Model.” New transportation measures, like the Federal Aid Highway Act of 1956, aimed to link cities and employment centers with cheap, suburban housing, so that geography would not prevent Americans from achieving the new American Dream. Likewise, thirty-year mortgages with low interest rates allowed lower- and middle-class Americans to own suburban homes and accumulate wealth. Tax advantages for the municipal bond market allowed American cities and towns to build the infrastructure the new suburbanites wanted at an affordable cost.

The United States government demonstrated its commitment to promoting opportunities for working Americans. While Blue Model policies differed significantly from those of the Green Model, both models aimed at the same goal – to provide as many Americans as possible with the opportunity to realize the American Dream in accordance with the economic and societal conditions of the time. Neither model sought to accomplish this goal through ‘handouts’ or guaranteed outcomes. Rather, they provided Americans with the ability to accumulate wealth through hard work.

Sadly, both the Green Model and the Blue Model developed policies to the exclusion or even the detriment of American minorities and particularly African-Americans. American slavery and the sharecropping era under Jim Crow meant that free black farmers were virtually absent from the independent yeoman-farmer vision of Jefferson and his 19th century successors. In the 20th century, red lining prevented many African-Americans from attaining the financial security and independence of home ownership, while New Deal programs often excluded domestic workers, wait-staff and farm hands—occupations that were disproportionately held by minorities or women. Nonetheless, for a large majority of Americans, these policies contributed to the enormous growth of economic prosperity of 19th and 20th century America.

Retirement policy was one of the areas in which policy had to change in response to new conditions. Factory jobs did not provide the same kind of economic security that farm ownership did. Especially in the early years of the factory system, and again during the Depression, many ordinary working people lacked the ability to save for retirement, but the factory system was unforgiving.

Like the Green Model, the Blue Model began to fail over time. As foreign manufacturers recovered from the devastation of World War II, German and Japanese companies challenged complacent American firms.

In this new and often more challenging environment, companies had to become more flexible. Industry became more competitive, private-sector managers shed bureaucratic habits of thought, and defining characteristics of the economy, like lifetime employment and defined benefit pensions, began to disappear. Additionally, the combination of low wage competition from the developing world and automation in advanced country manufacturing began to cut into manufacturing employment in the United States. The process of change started in the 1970s; in subsequent decades it became clear that the global economy, and the American economy with it, were caught up in a process of transformation as dramatic and far reaching as the industrial revolution itself.

A New Economic Revolution

Americans today are caught up in a whirlwind of change, and most basic assumptions on which our social policy are based are coming under challenge. Old jobs and old industries are disappearing, and new ones are sometimes frustratingly slow to emerge. Wages for many workers have stagnated as well paid jobs, especially in manufacturing, become scarcer. The percentage of nonfarm workers in manufacturing has declined from a World War II-high of approximately 38 percent to approximately 8.6 percent in 2016, and many clerical jobs have also disappeared.

New technology and competition also have pushed out, and will continue to push out, many legacy 20th-century employers and the jobs and job security they provide. For example, nearly 88 percent of the employers featured on the 1955 Fortune 500 list did not make the 2014 Fortune 500 list. The rise and fall of companies like Blockbuster highlight the pace and intensity of change in the 21st-century economy.

In addition to the decline of stable companies and the lifetime assurance of stable employment that they brought, the traits that define jobs today vary significantly from the traits that defined mid-20th-century jobs. Workers today are no longer guaranteed long careers with a single employer or within a single industry, nor do many of them want to be confined by a lifetime job, and the percentage of the labor force employed by the same company for twenty years or more continues to decline.

Workers today, especially millennial workers, are more likely to “job hop” than past generations. According to the employment-based, social networking website LinkedIn, “the number of companies people worked for in the five years after they graduated [from college] nearly doubled” from 1.6 jobs in 1986 to 2.85 jobs in 2010. Polling data has also shown that millennials view job-hopping more favorably than other generations. Gallup found that 60 percent of millennials are open to a new job opportunity (as compared to 45 percent of non-millennials) and that millennials are the “least engaged generation in the workplace.”

The advent of the technologically facilitated gig economy also has added to the high level of “churn” in the workplace today. The McKinsey Global Institute estimates that between 20 and 30 percent of working-age Americans currently participate in the gig economy. As apps and websites like Uber, Lyft, Airbnb, TaskRabbit, Ebay, and Etsy have become commonplace in our society, there has been a growing acceptance of gig jobs. Indeed, out of the 68 million independent workers in the United States, McKinsey estimates that 72 percent of them chose to be independent workers by choice. As technology continues to engrain gig work into the ethos of American workers—especially younger workers—I believe that gig work will contribute to an increased restlessness in the future workplace and could well become a defining characteristic of the information era.

The structural employment changes that have taken place in the information era have coincided with important societal changes. Americans have a dramatically different concept of retirement than previous generations. American living standards and life expectancy have increased. (In 1935, American average life expectancy was 61 years; by 2016 it had risen to 78.) Now, Americans need enough retirement income to facilitate an active lifestyle defined by travel and leisure. Historically, many people saved to avoid poverty in old age; Americans want more out of their later years—but neither as individuals nor as a society are we making the choices that can sustain these expectations.

At the same time that Americans expect to spend more years, and more active years, in retirement, they are increasingly delaying their entry into the world of work. In 1900, many Americans went to work after eight or even fewer years of formal schooling; more and more young Americans today spend 16 or more years in education before they begin their life’s work. In 1935, many Americans entered the workforce at 15, stopped working at 60, and died soon thereafter. Today, many don’t enter the workforce until they are almost thirty, retire between 65 and 70, and live for 15 to 25 years longer. In 1935, Americans spent almost 75 percent of their lives in the workforce; today, we are only in the labor force for about 50 percent of our lifespan, but the income from those years must support the costs of child-raising and the costs of a long retirement. As a people, our savings patterns do not reflect these realities.

In the long run, this pattern cannot be sustained. We must either save more, work longer, or consume less in retirement. Yet even as we contemplate this uncomfortable reality, many Americans feel their choices are constrained. Stagnant or falling wages make it harder for many families to save. The costs of college continue to rise, and ‘degree inflation’ means that more students must spend more years in school – during which time their parents, instead of saving to fund their own retirement, must struggle to support their children in school. Rising health care costs continue to press on family budgets. As employers shift insurance costs onto the workforce, and as more gig workers and self-employed people buy insurance in the individual markets, Americans often have a harder time setting money aside for old age.

Two hundred and fifty years of American history tell us that the Federal government cannot and will not remain indifferent to the difficulties of the American middle class. But in both agrarian and industrial America, the government found ways to give an assist to hard-working Americans seeking to build stable and prosperous lives, rather than providing handouts and creating dependencies. Providing a policy framework so that young people could clear the land and start a farm is very different from creating a lifetime income entitlement; supporting the development of a financial system and transportation network so that young families could buy their own homes is very different from offering each citizen a housing voucher.

The question for retirement policymakers in this time of transition isn’t, or shouldn’t be, how to give Americans a retirement that they can’t afford. It is how to set up a system that makes it possible for hard working Americans to build the kind of future they want through their own efforts.

A New Vision for Retirement

Today, we are caught between an old system that is getting less effective and a new one that is still developing. This is not, of course, just true for the retirement system; it is true of the economy and society at large. But the retirement crisis is rapidly becoming one of the most serious and damaging consequences of the decay of American social order, and the outdated assumptions on which the retirement system relies make matters worse. To put it simply: Our three-legged retirement system—public savings (that is, Social Security), employer-provided retirement plans (pensions, for example), and private savings and investments—is failing Americans.

It is important to remember that Social Security was never intended to serve as the only source of retirement income for older Americans. Social Security payments were to be supplemented by employer pensions and from individual savings and investments. While Social Security faces some financial challenges, the real problem we see today is that the other two legs of the system are in much worse shape. Increasing numbers of American workers face a future in which Social Security is their only significant source of income in retirement; this places a burden on Social Security, and on the Federal treasury, that will be difficult to bear.

In the Blue Model era, the idea was that for more and more workers, employer-provided pensions would supplement Social Security. From the 1930s to the 1960s, the percentage of workers covered by employer-provided pensions tied to length of service tended to rise. This system fit the needs of a workforce that looked to stable, long-term employment from big business and stable non-profit employers like hospitals and state and local governments. But as the economy began to change, the private pension system came under increased stress. The percentage of workers covered by employer plans began to decline, and the plans themselves tended to become less generous and less secure.

At the same time, the third leg of the stool, personal savings and investments, is also under stress. Stagnating wages and the rising costs of raising children make it hard for families to save. As Americans delay starting families and raising children until later in life, parents are older when their children start college, and there are fewer “empty-nest” years in which parents, free at last from the financial responsibility of raising their children, are able to focus on funding their own retirements.

Policymakers have, of course, been aware of these problems, and the past few decades have seen a number of initiatives, like the rise of 401(k) programs and the IRA system, to strengthen private pensions and personal savings. Thanks to these programs, a significant number of Americans have more assets for retirement than would otherwise be the case. But those programs have not lived up to the hopes that were placed in them. Only 58 percent of workers today, for example, have access to employer-based retirement plans. Of that 58 percent, fewer than half participate in these plans. At the same time, only 10 percent of workers contribute to private savings plans like IRAs, which were meant to help augment employer-provided retirement plans and Social Security.

As a result, we now face a retirement problem that is both serious and complex. More and more Americans are approaching retirement age without having the savings needed for the kind of retirement they want. Moreover, the millennial generation is currently set on a dangerous course that would make this generation even less well prepared for retirement than their parents and grandparents.

Clearly, our programs for employer-based retirement systems and for encouraging private savings have not accomplished what we hoped they would do. We must think more deeply and act more decisively to create a system that will work in the new economy taking shape around us. The paradigm is shifting and we must shift with it. Just as policy made at the end of the 19th century could not fully account for the needs of the 20th-century economy, our new policy model will have to adapt to the profound changes we now face.

While these failures owe something to larger social challenges (hard pressed families are less likely to set money aside for future needs even if such savings are tax-advantaged), there are some ways in which our retirement programs don’t align well with the emerging new economy. In particular, the link between the employer and the individual was at the center of Blue Model era social policy. Firms were expected to provide defined benefit pension plans and promote personal savings, even as firms were expected to handle health care, tax collection, and a variety of other social missions.

With the end of lifetime employment and the shift to a job hopping and gig economy—to say nothing of the decreased stability of many larger firms in an era of global competition and rapid technological change—the employer is losing the capacity to act as the intermediary between the individual worker and government, while simultaneously being the locus for government mandates, tax collection, and social policy. For retirement policy especially, the focus needs to be on the individual rather than the employer. Employees will have many employers over the course of a career and, often, many income streams at the same time. The same person may simultaneously be a full-time employee in one job, a part timer in another, while moonlighting as an Uber driver, renting out a spare bedroom to travelers, or selling goods on eBay. Such a worker still needs to think about retirement, and still has taxes to pay, but there is no single employer who plays a role in this person’s life comparable to that of, say, General Motors in the heyday of the old industrial system.

Small businesses and the self-employed are particularly poorly served by the current system. These businesses and workers often do not have the time or resources needed to scour the marketplace to find the savings plans best suited to their needs. Nor do employers have the capacity or resources for the complex and often expensive work needed to comply with various government mandates about how retirement plans work. This has created a perverse economic reality, in which saving for retirement has become a perceived benefit of working for a large corporation that is less attainable for small businesses and the independently employed.

At the same time, we need to understand that the retirement crisis is part of a larger problem of savings. Young workers may not be focused on retirement savings because more urgent needs preoccupy them: student loan repayment, savings for a down payment, health care costs, and so forth. We cannot look at retirement savings in isolation from the other economic challenges facing Americans today.

What I propose below is intended to stimulate new thought on the committee and elsewhere as a new generation of Americans rethinks the foundations of our social contract and economic system. After looking at what a new approach to retirement and related issues might look like, I also offer some suggestions about how we can help members of the ‘bridge generations,’ people caught up in the transition from the old system to a new one, cope with the challenge of retirement given the financial issues they face.

There are, I believe, two basic things we need to do: first, to begin shifting the tax collection onus and the retirement savings apparatus from employers to private-sector financial institutions. At the same time, we need to blend retirement savings with other forms of savings, so that Americans have multiple, clear-cut avenues toward wealth accumulation in the information era. The creation of a flexible and multifaceted retirement savings system that better aligns with our current and near-term economic conditions and can adapt to the unknown economic conditions of the future will be critical to the 21st-century success of the United States.

One way to move toward this goal would be to offer every American citizen and green card holder the ability to open an account known as an “American Mobility Account” (AMA).3 These “one-stop-shop” accounts would be managed and administered with a financial institution, in which employers or independent workers would deposit gross, pre-tax income. Financial institutions would collect and withhold the variety of different taxes that businesses and contractors are currently required to withhold, thereby shifting the tax collection onus from employers and the self-employed to third-party financial institutions. In addition to managing tax collection and withholding, financial institutions would be able to provide a variety of government-regulated and tax-advantaged financial options within AMAs that promote retirement savings and human capital formation.

With the introduction of AMAs, our tax regime would be better able to accommodate the increasing amount of gig work and job-hopping that I believe will take place in the future. Since all earned income would be deposited into one AMA, an individual could earn income from a variety of different employers, and have a streamlined accounting process. For example, instead of multiple employers filing a collection of W-2 and 1099 forms on behalf of an employee working several gigs, the financial institution would be responsible for compiling all streams of earned income and filing a single reporting form on behalf of the worker.

This system would benefit employers, workers, and government. On the employer end, AMAs would largely shift the accounting and compliance burdens from employers to financial institutions: an important change that would be particularly beneficial for small businesses, the self-employed, and startups. Additionally, AMAs would help workers comply with tax laws and simplify the task of tax preparation while ensuring that they receive all benefits and credits to which they are entitled. Finally, federal, state, and local governments would benefit from the increased transparency and accountability that AMAs would provide them. As part time work and multiple sources of income proliferate (for example, combined income from Uber driving, eBay sales, Airbnb rentals, and so on), tax collection will become more difficult and less fair without reforms along these lines.

The ability to better accommodate self-employed workers who may play a defining role in the 21st century innovation economy is another benefit of an AMA-centered system. In many ways, our current retirement system hinders self-employment since self-employed workers have to pay the regressive Self-Employment Tax of 15.3 percent, which covers both the employee- and employer-end of the payroll taxes levied against traditional businesses and their employees. While this high tax rate discourages many individuals from pursuing self-employment opportunities, it incentivizes others to avoid taxes altogether. Making AMAs cheap and easy to understand for the self-employed population, enabling the holders of these accounts to benefit from various tax savings and other programs, and increasing penalties for those who pay self-employed individuals outside of the financial system will improve tax collection and reduce monitoring and enforcement costs for the government. (Such accounts will also make it easier for the self-employed and gig workers to demonstrate their creditworthiness by documenting their income, an important consideration for promoting home ownership).

Additionally, to promote retirement savings, a Supplemental Retirement Account (SRA) would be embedded within an AMA. A certain percentage of an AMA-holder’s monthly income would be deposited automatically into the SRA. The deposited income could only go toward saving for retirement, with all SRA holdings initially defaulted into a Roth IRA savings plan. AMA-holders would be able to opt out of their monthly SRA deposits, change to a different retirement savings plan with different tax preferences (a traditional IRA, for example), or further diversify their SRA holdings into several different savings plans.

An SRA would solve the issue of workers lacking access to employer-supported retirement plans. Moreover, employers could be given tax incentives to encourage contributing toward employee SRAs, thereby addressing some of the major issues with current individual retirement savings accounts. Further, SRAs would reduce costs for employers since they will no longer need to maintain retirement plans of their own, thereby leveling the competitive playing field for small businesses and startups. Means-tested government programs to promote retirement savings for low-income workers could also be more effectively and transparently administered through the use of these accounts.

Finally, AMAs would promote human capital formation to augment the financial security provided by retirement savings. For example, much like an SRA, a worker could choose to deposit a certain percentage of his or her paycheck into an embedded Human Capital Account (HCA). In turn, individuals could spend HCA monies on certain items deemed important to enhancing individual financial security (e.g. job training, professional licensing, college education, etc.) in a tax-free or tax-preferred fashion up to a lifetime maximum limit.

The formation of human capital will be vital to growing wealth in the future. Giving Americans the opportunity to use savings to take the future version of today’s coding class, for example, will be imperative to both their success and to the success of the nation, and is in line with past social policies like the creation of land grant colleges during the Green Model years.

Following the example of the very successful Singaporean Central Provident Fund, the accounts can also contribute to wealth creation. Through its public social security scheme, which allows Singaporeans to finance the purchase of homes with retirement savings, the Singaporean government has increased home ownership to 90 percent. A simple homeownership savings account option would encourage financially sustainable homeownership and wealth accumulation in the United States. During the housing bubble, well-intentioned lawmakers and officials tried to promote better access to home ownership by relaxing the criteria needed to qualify for a mortgage. It would be much better policy to encourage home ownership by helping more people to qualify legitimately under existing, prudential rules.

In sum, the introduction of AMAs would better fit the current and future direction of our 21st-century economy. The transition would not happen overnight, and a variety of regulatory mechanisms and changes would need to be put into place to make sure that this plan would benefit all Americans in a fair and transparent way. Finally, there would need to be incentives to encourage the adoption of AMAs among employers, workers, and financial institutions, as an outright mandate would be too disruptive in the near-term.

Reducing the Costs of Retirement

While the introduction of AMAs would help transition the United States from an outdated, employer-based system and increase saving for retirement, the reform is primarily geared toward younger and future generations of workers. In order to enhance retirement security for Americans, policymakers must enact reforms that help older generations of workers successfully retire during the transition.

On the front end, we should allow workers later in their careers to accelerate their savings. It is human nature to postpone thinking about retirement, and, in any case, younger people often have more immediate needs, whether this involves paying off student loans, buying a home, or caring for their children. Older workers often have more discretionary income, fewer calls on their resources, and a greater focus on the need to save for retirement. Government policy should aim at creating more tax deferred savings opportunities for these people. It is good social policy to encourage savings, and greater savings equate to retirees being better prepared to handle retirement costs. Current policy allows older workers to accelerate their contributions to retirement plans; those allowances should increase.

Many seniors today are not only physically capable of working longer, but they also want to work longer as they find work fulfilling and intellectually stimulating. Advances in medicine and in technology, such as driverless cars and enhanced telework capabilities, will make it easier for older generations of Americans to continue to work well into old age. To encourage more capable seniors to work longer, the government should eliminate the Social Security Payroll Tax for seniors and delay the age-requirement (generally 70.5 years old) that triggers mandatory withdrawals from retirement savings plans. To increase the attractiveness of tax deferred savings plans to lower income Americans—those who have the hardest time saving for retirement and most need the financial security that those savings provide—income from tax-deferred investments below a certain (low) threshold should also be tax free.

Government could also enhance the menu of retirement options available to seniors who cannot or do not want to work longer. Promoting retirement abroad, where income that can barely cover a trailer home in Florida can equate to a luxury condominium in Costa Rica or Mexico, is an easy way to give seniors comfortable retirements. Today, Medicare does not cover health care received abroad, except for in an extraordinarily limited set of circumstances. This lack of health care coverage is a major barrier to retiring abroad. Though health care and prescription drugs can be far cheaper in Latin America and the Caribbean (LAC), serious illness is a financial issue anywhere, and, as younger and active retirees become older and more frail, they often have to return to the United States to obtain better services, which hinders permanent and/or semi-permanent retirement abroad.

Helping seniors move to countries where costs are low could reduce Medicare costs and give seniors more choices during the transition from the Blue Model retirement system to a new retirement system. To that end, the federal government should smooth the path for seniors looking to retire abroad. Congress should pass legislation to allow Medicare to cover eligible seniors using certified, inspected, and qualified providers. Medicare payments should be lower to these providers, reflecting different cost levels.

Much as they did during the transition from the Green era to the Blue era, Americans find themselves at an important, historical inflection point. Like the Industrial Revolution, the Information Revolution has disrupted the economy in unpredictable, complex, and far-reaching ways. Not all of the changes to come can be predicted or understood today, but there is an immediate need to craft policies to account for those changes we can discern before the consequences of the failures of the current system become unbearable. Adopting a system of retirement policies that shifts the burden of taxation and collection from employers to financial institutions while protecting the retirement security of those caught in the gap would do much to promote the emergence of a dynamic new form of the classic American Dream in the 21st century.

1It is important to note that, although the Homestead Act essentially provided free land to settlers, the westward journey inflicted heavy physical, emotional, and fiscal costs on settlers. It would be incorrect to view the Homestead Act as a handout.

2It is worth noting that a disproportionate number of policies seek to aid American farmers today despite the fact that less than 2 percent of the American labor force works in agriculture. One can argue that these policies harken back to Jefferson’s vision of America and the Green Model.

3“American Mobility Account” and the other, subsequent account names are merely descriptive placeholders. Ideally, these programs would be swept into a simpler package, as the proliferation of programs with complicated names, rules, and eligibility requirements itself becomes a disincentive for individuals to participate.

The Senate Detonates

Well, it happened: Mitch McConnell invoked the dreaded nuclear option to overcome a Democratic filibuster of Judge Neil Gorsuch.

Whenever longstanding norms are set aside, there is a question of whether they served a useful function to begin with. Some liberals and conservatives alike have argued that the filibuster for Supreme Court nominees was already dead letter. Indeed, there’s an argument that all the ritualistic bipartisanship surrounding the confirmation process had become a pointless façade—that the Court is a political institution like any other, and that our processes might as well reflect this.

This change in Senate rules promises to have far-reaching consequences. If they only need to satisfy the majority party in confirmation hearings, future nominees might feel free to offer more partisan answers to senators’ questions, instead of sticking to the bland “I will be fair to both sides” generalities that we have become accustomed to. And as Jonathan Adler has pointed out, presidents might now feel free to elevate more colorful or controversial figures to the bench.

In other words, some of the norms and niceties that once characterized the Supreme Court nomination process might now be swept away entirely. There are some upsides to this—more honest and straightforward debate, less evasion about what is really at stake.

But norms and niceties that seem inconvenient or anachronistic can be more important than they appear. Dinner parties might be more interesting if everyone said what they really thought of the food and ate it however they pleased. But we adhere to etiquette because we know that it makes it less likely for the party to dissolve into a brawl.

The ideal of the nonpartisan judge exists to protect the rule of law. That ideal might seem superficial and phony. But we eliminate it at our peril.

Will the U.S. be the Second Country to Move its Embassy to Jerusalem?

The Russian foreign ministry released a statement today that included the unprecedented recognition of West Jerusalem as the capital of Israel. The statement reads:

We reaffirm our commitment to the UN-approved principles for a Palestinian-Israeli settlement, which include the status of East Jerusalem as the capital of the future Palestinian state. At the same time, we must state that in this context we view West Jerusalem as the capital of Israel.

The statement seems to have taken the Israeli government aback, as a spokesman for the Foreign Ministry only commented that “We are studying the matter.” And it’s not clear to what extent the statement represents a serious policy shift for Russia, on either the Palestinian question or on moving its embassy to Jerusalem.

But as the Trump administration considers whether or not to move the U.S. embassy from Tel Aviv to Jerusalem, it’s worth remembering that while the U.S. was the first to de facto recognize Israel 11 minutes after its creation, the Soviet Union was the first country to recognize Israel by law. This time around, the Russians might just make the first move.

China Goes on a Global Oil Buying Spree

Beijing is snatching up crude from every corner of the world these days. OPEC’s production cuts have meant less oil coming out of the Middle East, and as a result the price of crude from that part of the world has risen. China is taking notice, and are shopping around for cheaper (and more reliable) suppliers. We learned earlier this week that China overtook Canada as the world’s biggest buyer of American crude in February, and now, as Bloomberg reports, Beijing is buying record amounts of oil from West Africa:

West African producers led by Angola and Nigeria are poised to send crude to China at the rate of 1.48 million barrels a day in April, the most since Bloomberg began compiling the data in August 2011, according to loading programs and traders. Overall Asian imports of West African crude are poised to reach 2.4 million barrels a day this month, also a record. […]

“The Chinese look to be soaking up a lot of crude again,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. “The economy seems to be doing better, so domestic demand is higher.”

China is also buying a lot more crude from North Sea suppliers as it seeks to meet growing domestic demand. The IEA projects that China could usurp the United States as the world’s top oil buyer by the end of the year, and is on track to become the world’s biggest oil refiner over the next few years.

The latest round of petrostate cuts are a concern for a buyer with growing needs like China, but America’s surging shale supplies (and its ability to now export that tight oil) are giving Beijing a stable option. Still, China is diversifying its crude portfolio to include suppliers from nearly every corner of the planet.