Peter L. Berger's Blog, page 545

The Collapse of Brazil’s Economy

Brazilian inflation is now at 10 percent and the economy is shrinking by 3 percent, according to the FT. Dire economic conditions and a massive corruption scandal have now paralyzed the country’s political leadership, adding to the dysfunction created by a constitution that makes real financial reform virtually impossible anyway. Moreover, a whiff of panic has both both foreign and domestic investors ready to bolt.

That’s life in Brazil these days, and it’s hard to see better news coming for the country any time soon.Brazilians know a thing or two about financial panics, having suffered them in the 1980s and again in the early 1990s (when monthly inflation sometimes hit 30 percent). At one point, all the bank accounts in the country were frozen and depositors couldn’t get at their money. At other times, hyperinflation has turned life into a crazy carnival and you couldn’t use credit cards or buy anything on time because inflation would wipe out the value of debts. Supermarkets and other stores stopped marking items with prices. Instead, they put letters and numbers on the shelves—A17, say, for a pair of sneakers. Customers would then have to check the notice at the front of the store telling you how much money A17 cost. Overnight, or sometimes in the middle of the day, the price would change and new sheets would be printed. Workers ran to the store on the day they got paid to buy what they needed before the money lost value.That hasn’t happened for a while in Brazil, thanks to former President Fernando Henrique Cardoso and his Real Plan (Cardoso governed Brazil from 1996 to 2003). And for a time, the Worker’s Party president who followed him, Luíz Inácio da Silva, kept with the program. But gradually the Worker’s Party turned out to be a lot like Mae West, who famously said, “I used to be Snow White, then I drifted.” The Worker’s Party under President Dilma Rousseff has indeed drifted into dangerous territory.The Olympics are coming to Rio next summer (ironically, it will be winter in Brazil), and that might give the economy a shot in the arm. But overall, things have not looked this bad in Brazil since Fernando Henrique took the oath of office. That’s not good news for the region, or for the United States. Brazil accounts for about 50 percent of Latin America’s GDP, and acts as a stabilizing force in a sometimes troubled part of the world. With other Latin lefty economies melting down as falling commodity prices, populist economic policies, and growing corruption crowd out growth, Latin America could make more news in 2016 than it has for some time. Strong Brazilian leadership will be needed, but Brazil may be too consumed by its own problems to help.Foreign investors, portfolio managers, and diplomats need to be on the alert: Storm warnings are up in Latin America.

Paris Mastermind Used Migrant Route

French authorities have admitted that the mastermind behind the Paris massacre, Abdelhamid Abaaoud, who was killed in a shootout with police in the Paris suburb of Saint Denis on Wednesday, had re-entered France by way of the Greek migrant route. France’s interior minister said that French intelligence, which kept Abaaoud on a terror watch list, had no idea he had re-entered the country. A senior member of France’s spy agency told reporters that “Schengen is a sieve. A guy with a CV and history like this, wherever he turned up in Schengen, he should have sparked a red flag.” As many as two other gunmen participating in Friday’s attacks had also used the migrant path.

Politically, this will definitely inflame the refugee debates in both Europe and the U.S. Policy-wise, though, its immediate impact will likely be felt on the Schengen Zone. EU interior ministers are set to agree today at an emergency meeting to French demands that Schengen’s external borders be strengthened, and that additional checks on EU citizens traveling within the area be implemented. But strengthening the external borders of the Schengen zone, which includes 30,000 miles of coastline and about 6,000 miles of land, is a daunting and costly task in practice. Any announcements are likely to be big on rhetoric but short on implementation details.One alternative solution being mooted: The creation of a mini-Schengen zone, comprising only Germany, Austria, Belgium, the Netherlands, and Luxembourg. The plan has apparently long been favored by the Netherlands, but has not gotten any traction until the recent strains on Schengen appeared. The plan conspicuously does not include France, and is still opposed by Germany. Discussions of the plan have taken place, however, and Germany did participate.These discussions bear a striking resemblance to plans put forward to “save” the euro by reducing it to a much more evenly balanced, economically suitable “northern euro” zone. Like those plans, it’s unlikely to be acted upon—the European elite has too much invested in the idea of “ever-closer Union” to roll the EU project backward. But in both cases, some of the Eurocrats seem to have learned that their initial, good-intentions-conquer-all idealism was overblown, and that they should have started with more modest goals. As the EU confronts multiple crises, we hope at the very least that this lesson will be remembered going forward.

Antarctica Isn’t Melting as Fast as We Thought

Once again, our climate models have betrayed us. Though scientists previously warned that melting Antarctic ice could raise global sea levels by a full meter by the end of the century, it seems those reports of our collective demise have been greatly exaggerated. Carbon Brief reports:

While some earlier studies, using different approaches, have posited that Antarctic ice sheets could add as much as a metre to sea levels by 2100, this new evidence suggests ice loss on this scale is “implausible”, the paper says.

The new findings show that for ice to be lost that quickly from Antarctica, one of two things would have to happen, says Payne. Either the glaciers would have to flow into the ocean at unrealistic rates, or rapid melting would have to be triggered over a much larger area of the ice sheet than current evidence suggests.

The paper also warns that melting Antarctic ice sheets will contribute to sea level rise, albeit at a much smaller rate—between 10 and 30 centimeters by 2100. That’s an order of magnitude smaller, but still worth paying attention to. There are other potential sources of sea level rise, too: melting continental glaciers, melting Arctic ice, and the simple fact that warmer water occupies more volume than colder water.

And let’s be clear about what we do know: Humans are emitting enormous quantities of gases that trap more of the sun’s heat in our atmosphere, which then leads to rising global surface temperatures. We can expect a hotter planet to have both less ice (and therefore more water) and warmer (and therefore more voluminous) water. From that, it’s not unreasonable to expect rising sea levels.But this new study highlights the folly of calling climate science “settled” when we are constantly confounded by the specifics. The devil, as they say, is in the details. Our latest projections of Antarctica’s effect on our oceans are a fraction of what they were just a few years ago, and there’s no reason to expect that scientists won’t drastically revise those expectations yet again in the future as we continue to deepen our understanding of our immensely complex climate. It’s like this with virtually every macro-level natural process on earth, from trade winds to ocean currents to sea level rise to, yes, surface temperature changes. There are countless variable at work and complex feedback loops and relationships between those variables that frustrate any attempt to predict what comes next.That doesn’t mean we have to disregard the threats posed by climate change, or scrap promising efforts to curb emissions. It does mean that the book isn’t closed on the science undergirding all of this, and the sooner greens understand the harm they do to their movement by overstating our ability to comprehend our climate, the better. We’ve said it before, but it bears repeating: Overconfident greens are the number one source of climate denialism.

US Senate Sends the World a Climate Message

52 U.S. Senators voted to block an Environmental Protection Agency (EPA) rule this week that would curb carbon emissions from existing coal-fired power plants. Passing the resolution without a veto-proof vote (the President has already promised not to sign it) makes this act of defiance symbolic only. But with the Paris climate summit just a week and a half away, it’s powerful symbolism indeed. The Senate is sending a clear message to the world’s climate delegates, who are busy prepping for the impending COP21 conference: This legislative body won’t ratify any kind of binding Global Climate Treaty (GCT), so don’t even try.

Secretary of State John Kerry tried to side-step this problem last week when he insisted negotiators wouldn’t be working on a treaty in France, a comment that immediately inspired backlash and spurred the French foreign minister to suggest that Mr. Kerry was probably “confused.” But let’s clear any confusion up now: The United States won’t sign on to a binding, enforceable GCT. So what else is there for UN delegates to work towards, if such a treaty is off the table?Harvard economist Robert Stavins sketched out a scorecard for the talks recently, saying Paris would be successful if the following goals are met: 90 percent of emissions are covered by national commitments; a robust review process is put in place to make sure nations are working towards these pledges; a mechanism is established to review national targets periodically; talks aren’t bogged down by “unproductive disagreements”; and a climate financing system is set up. Those are five big asks, and while Stavins is fairly sanguine about most of them, we don’t share his optimism for what may be the most important topic in that list: the money.Here, once again, the U.S. Senate is key. That body says it will not contribute government money to a global climate fund that’s meant to spend $100 billion annually on helping poorer countries mitigate and adapt to a changing climate. Reuters reports:

“This president is going to go (to Paris) with no money,” said Republican Senator Shelley Moore Capito of West Virginia, who chaired a hearing in the Senate environment panel on the international climate negotiations, which begin on Nov. 30.

Capito and other Republican members of the committee said they will ensure any deal the U.S. strikes in Paris will face congressional scrutiny, and warned they will block President Barack Obama’s 2016 budget request for the first tranche of the $3 billion pledged last year to the U.N. Green Climate Fund.“Without Senate approval (of a climate agreement), there will be no money,” added Senator John Barrasso of Wyoming, acknowledging that guarantees of climate aid to developing countries is “the linchpin” of the Paris climate conference.

This sends yet another powerful message to climate delegates. Even if negotiators stay away from a binding treaty for fear of America’s lack of participation, they won’t be able to entice the developing world to stick to national emissions reductions plans if the carrot in all of this—the climate fund—isn’t being backed by the developed world.

UN spokespeople have been busy this year hedging (read: lowering) expectations so that when the inevitable happens and Paris doesn’t produce some international climate breakthrough, negotiators can still claim some sort of success. The closer we get, though, it’s become clearer and clearer that the cards are stacked against this quixotic green quest.

ISIS Seeks Chemical Weapons “Aggressively”

The fruits of inaction: ISIS is now reported to be “aggressively” attempting to create chemical weapons. The AP:

[The group is] setting up a branch dedicated to research and experiments with the help of scientists from Iraq, Syria and elsewhere in the region, according to Iraqi and U.S. intelligence officials.

Their quest raises an alarming scenario for the West, given the determination to strike major cities that the group showed with its bloody attack last week in Paris. U.S. intelligence officials don’t believe IS has the capability to develop sophisticated weapons like nerve gas that are most suited for a terrorist attack on a civilian target. So far the group has used mustard gas on the battlefield in Iraq and Syria […]Still, French Prime Minister Manuel Valls on Thursday warned that Islamic extremists might at some point use chemical or biological weapons.

What the White House wants us to think of as its “masterly inactivity” in Syria continues to produce disaster. What we’ve seen so far in Syria is nothing like as bad as things can get. Day by day, President Obama’s decision to stand aside and let Syria fall apart is looking less and less like a wise restraint and more and more like a decision that could cost the West dearly, in lives and blood as well as economic unrest and political dysfunction.

Refugee Fight Splinters Democrats

Despite President Obama’s high-minded moral posturing, Americans remain deeply concerned about the White House’s resettlement plan for Syrian refugees in the wake of the Paris attacks. A Bloomberg poll found that only 28 percent of Americans want to proceed with the plan. Even high-ranking Democratic politicians are not persuaded by the president’s hectoring, as forty seven House Democrats have joined with virtually all Republicans to pass a bill toughening refugee screening with a veto-proof majority. Moreover, Democratic governors, including California’s Jerry Brown, reportedly sparred with the White House over its plans in a recent conference call.

The bill now moves to the Senate, where Democrats have sworn to filibuster it. Even if Democrats cannot muster the votes for a filibuster, it seems unlikely that the GOP will be able to pick off enough Democratic votes to override the veto that President Obama promises is awaiting the bill if it arrives at his desk. So the White House’s plan to accept 10,000 refugees over the next year (a symbolic and relatively inconsequential gesture at a time when ten million Syrians are displaced, thanks in part to the White House’s Middle East failures) seems likely to move forward one way or another.It’s unfortunate that the main political fallout in the United States from the tragic attacks in Paris has been an ugly and divisive culture war eruption. The president bears no small share of responsibility for this. The most impassioned part of his post-Paris remarks were his attacks on Americans who were worried about the security implications of the refugee program. Instead of addressing and responding to these concerns, he denounced them as bigoted on their face. And instead of offering even token concessions on security and screening to Republican governors and legislators pushing refugee bills, he immediately promised to veto them, ruling out any changes to the program.The president is right that there is an ugly side to the anti-refugee politics of the last week. Donald Trump is veering into fascist territory, suggesting that the identities of Muslim Americans should be put in a database. But the president’s moral lectures have amplified, not ameliorated, this problem. By writing off all concerns as illegitimate, and by contemptuously talking down to large swathes of his constituents, the president has turned what should be a period of mourning, unity, and productive discussion about anti-terror strategy into a political brawl over an issue with little long-run significance.

This Should Be Europe’s Wake-Up Call

For more than four years, Americans and Europeans have largely stood by as Syria descended into a violent and bloody civil war. Only when the conflict started spilling out into Iraq did the United States step in and start to try to contain ISIS—albeit largely from the air.

Starting early this summer, Europe began to more acutely experience fallout from the war. The refugee crisis, which has been in large part driven by the steady flow of asylum-seekers from Syria, has put the Schengen joint border management regime under unprecedented stress. Its unraveling threatens free movement inside the EU—one of the key achievements of the European project. Large parts of Europe refuse to take in war refugees, and right-wing parties are on the rise across the continent. And now the latest blow: the attacks in Paris were apparently masterminded in Syria, with at least some of the perpetrators trained and indoctrinated there.

It should be obvious that it will be impossible for Europe to live in peace and tranquillity when a whole region in the immediate neighborhood goes up in flames—when a so-called government, various warlords, and terrorists fight a ruthless, bloody war of attrition, killing hundreds of thousands of people, destroying infrastructure and shredding a country’s social fabric to tatters. Europe cannot just keep on watching and hoping that the fighting ends. Or can it?

True, France wants a stronger military response, and is in the process of building a coalition to fight ISIS that would include Russia. Answering France’s invocation of a little-known mutual defense clause of the EU Treaty, a number of countries are considering giving some support the French effort, but more out of solidarity with France and than out of conviction.

In Germany, today widely seen as the leading country in Europe, there is not much debate about Syria and even less about what could be done to end the war. The debate about refugees has been instead focused on questions of identity—how much immigration can German stand? A recurring criticism of Merkel from center-right media has been that the chancellor allegedly wants “another Germany”, a more multicultural country.

And after the Paris attacks, the debate about a potential connection between the influx of refugees from the Middle East and terrorism has intensified, at least on the right of the political spectrum. But almost no political leader or commentator argues that Germany should address the root cause of the problems in the Middle East, in Syria, by fighting ISIS. The German consensus is, as foreign minister Frank-Walter Steinmeier has said, that there is no military solution to the war in Syria.

While it is true that just throwing more bombs on ISIS will not make much of a difference, it is also true that the peace process being hashed out in Vienna, which in the words of U.S. Secretary of State John Kerry is based mainly on “hope”, is unlikely to solve much either. The hope is that all the various players will come to an agreement that it is in everyone’s interest to end the war, stick to it, and convince their various clients on the ground to play ball. Why should they do now what they refused to do in the preceding four years?

The containment strategy, devised and implemented by the U.S., has failed to protect Europe from the fallout of the war. Getting beyond mere hope requires a concerted effort and commitment by the West to end the fighting. The U.S. and its European allies would have to exert serious pressure on all the players involved, including Russia, Iran, Turkey and Saudi-Arabia. They would have to invest massive resources into the effort, including military ones, committing themselves to a long and painful slog, in both enforcing a power-sharing agreement, and then guaranteeing its faithful implementation.

But almost none of the Western powers (with the potential exception of France) are ready to do that. They are not ready to fill the vacuum that the destruction of state and society has left in Syria, the space that is now being filled by Assad’s henchmen and an assortment of jihadists. The U.S. wants, at almost any price, to avoid anything that resembles the painful Iraq experience. A major state-building project in the Middle East is something that President Obama, who has made ending wars a cornerstone of his legacy, is very unlikely to start. And most of Europe, which is much more directly affected by the breakdown of order in Syria, is opting to shield itself from the war’s collateral damage rather than addressing it head-on.

“Hope”, then, is what everything hangs on: hope that the war will somehow magically burn itself out, hope that ISIS won’t be able to strike again in Western capitals, hope that Europe can cope with the stream of refugees without losing its precarious internal balance. If this hope-based strategy somehow works, we would be right to call it a miracle.

But a much darker scenario is possible, and if nothing is done, increasingly likely. A never-ending stream of refugees will lead to an increasingly bitter fight between EU countries over borders, immigration and asylum law. Key elements of the EU system of governance, such as the free movement of people, will break down, borders will be reinstated, and much of the trust that has been built up over the last decades between Europeans will be forgotten. Large parts of the population will increasingly vote for xenophobic, far-right parties—parties that make false promises of protecting nervous voters from the the downsides of globalization while vowing to preserve all of its advantages. Additional terrorist attacks will spread fear and sow more discord across Europe, even as draconian anti-terror laws and operations gnaw away at civil liberties.

Both the festering refugee crisis and the brutal attacks on Paris must be seen as proof of the saying “nature abhors vacuum”. The vacuum of governance in Syria and parts of Iraq has been filled by malevolent, dangerous actors. For years Europe could live in the illusions that it wouldn’t be affected by this war.

Now the war has come to Europe. It is time to get real and to start a major effort to end this war. A half-hearted diplomatic process won’t be enough.

Superbugs Breaching Last Antibiotic Barrier

Bacteria with a new gene that makes them resistant to the most powerful antibiotics have been found in humans, according to a new report in The Lancet Infectious Diseases. The Times of London reports:

A gene that makes bacteria such as E. coli resistant to last-resort antibiotics has jumped from animals to humans and is likely to arrive in Britain.

Scientists believe that it is only a matter of time before the new gene combines with existing mechanisms of antibiotic resistance, making infections ranging from pneumonia to salmonella impervious to medicine.

The new gene has been identified in several types of bacteria in 166 animals and 16 hospital patients across China. The bacteria are resistant to colistin, a drug reserved for last resort use on humans in Europe, but routinely used in pig farming in Asia.

The proliferation of resistant bacteria could have disastrous consequences for global health. But people shouldn’t panic: Over the past few hundred years, Malthusian warnings have always been overblown. Scientists have a way of finding new methods to supersede old, ineffective ones. In the case of antibiotics, we’ve already seen signs that replacements and new methods are coming. From techniques which limit the overuse of antibiotics that leads to resistant strains to new antibiotics themselves, there are signs that this crisis, too, can be averted. Still, this is a worrisome story worth keeping an eye on.

Is Winter Coming for the ACA?

The Affordable Care Act has been through a lot since it first became law. It survived a disastrous launch plagued by technical difficulties. It limped on despite a Supreme Court ruling striking down its mandatory Medicaid expansion. And it outlived the existential challenges brought against it at the Court—twice. The administration has massaged various mandates and regulations that would have hurt its popularity, and put a lid on widespread discontent by delaying their implementation. The determined Republican opposition has not led to its defeat, or even to any substantial changes, at least not yet. And all of this was despite the fact that the law has arguably had adverse electoral consequences for Democrats.

Throughout it all, supporters have been confident that the ACA was here to stay—and that it was working. The debate was settled, and continuing to point out shortcomings and potential points of failure was either the product of petulant whining by sore losers or the delusional of ravings of those completely disconnected from reality.But evidence has all along been mounting that the ACA, whatever good it may have done (and it has done some good!), has not and cannot fix the most pressing health care policy problem of our time: our health care system is too expensive and is becoming increasingly unsustainable. Evidence of this has been piling up for a while, and the situation has gotten only more acute recently.The latest shoe to drop: America’s biggest health insurer, UnitedHealth Group, has suffered major losses in the ACA marketplace and may withdraw from the exchanges altogether. WSJ :

UnitedHealth Group’s chief executive, Stephen J. Hemsley, said it made the move, which included a downgrade of its earnings projections for 2015, amid reduced growth expectations, the expected shutdowns of the majority of the health law’s nonprofit cooperative insurers, and signs that its own enrollees continue to increase their use of medical services, raising costs.

As a result, UnitedHealth said it is pulling back on marketing its exchange products, as open enrollment is currently under way for plans that will take effect in 2016. And the insurer said it is “evaluating the viability of the insurance exchange product segment and will determine during the first half of 2016 to what extent it can continue to serve the public exchange markets in 2017.” UnitedHealth had previously expanded its exchange offerings to 11 new states for 2016, and said in October it had around 550,000 people enrolled.

What seems to have caught everyone by surprise is just how much demand there is for health care, and just how many medical services enrollees consume. That trend accounts in part for the collapse of many of the ACA’s co-ops, and it is apparently a major factor in this story, too. This pesky fact cannot be easily fudged, and it presents a lethal threat to the whole exchange mechanism. If UnitedHealth and other insurers do in fact choose to leave, the law could be in real trouble.

Moreover, at the same time as consumers are becoming too expensive for insurers to handle, many Americans are themselves finding that unacceptably large chunks of their own budgets are being eaten up by health care spending. Deductibles have been rising alongside the increased medical consumption that is putting the hurt on insurers. And it’s all happening in the context of a medical system that remains inefficient and opaque. This is one of the poorer outcomes imaginable.We’ve offered some ideas about shifts and policies that could help improve things, but nobody seems to know what a complete solution would look like. One thing is clear, however: The authors of the ACA chose to address coverage rather than underlying cost issues, and that decision is slowly but surely coming back to haunt them. The growing recognition of the gap between what the law promised—affordable care—and the reality confronting consumers could lead to repeated political challenges in years to come.

“It’s Going to Get Much, Much Worse”

Jonathan Haidt, a psychology professor at NYU and co-author, with Greg Lukianoff, of a blockbuster Atlantic essay on coddled campus culture, gave a fascinating interview to First Things magazine on November 4—before controversies at the University of Missouri, Yale, and Amherst put campus PC back in the spotlight in a big way. The interview was posted yesterday, and is worth reading in full. His speculation about the potential consequences of campus PC is especially interesting:

I think emotions are going to lead a drive back to rationality. What I mean by that is when you talk to a professor who has been brought up on charges or attacked verbally for saying something innocent—they’re angry. Like a friend of mine, who teaches at a small liberal arts college and once referred to someone “going over to the dark side.” He was called a racist, and warned that such insensitivity would not be tolerated.

Like all far-left political movements, the new PC has shown a tendency to devour its own. That is, PC crusaders often save their most vindictive attacks for people who were formerly leftists in good standing. The response so far from professors and administrators who come under attack has generally been to fold, apologize, and try to make amends. But history shows that this kind of process can’t go on forever; there must be an endpoint somewhere down the line. PC activists probably imagine the endpoint to be a harmonious world ridded of triggers and unsafe spaces. But this, like Marx’s notion of a dictatorship of a stateless society, is an ideological fantasy. More likely, PC will collapse under the weight of its own excesses. Haidt doesn’t expect this to happen anytime soon, though:

It’s going to get much, much worse over the next couple years and at that point some universities may start changing policies. By that point, many or maybe most American parents won’t want to send their children to the top universities, and there will be an enormous market opportunity for second-level universities that offer a much less coddled campus culture.

We’ve said before that there are two campus crises—a crisis of political culture, and a crisis of affordability. These crises could converge if high-profile PC incidents make the American public question whether the existing college economic model, complete with its massive diversity bureaucracy, is actually worth it. However, we are less optimistic than Haidt that the upper-middle class parents who send their children to elite schools will be swayed substantially by stories of campus coddling run amok. If PC does generate a backlash that forces the universities to change their ways, it is more likely to come from state governments, which have historically not responded kindly to extreme campus movements. The American people as a whole stand behind their Bill of Rights, even if college students don’t.