Peter L. Berger's Blog, page 647

Americans Keep Getting More Independent

More Americans will celebrate the Fourth this year with their own sparklers and bottle rockets, thanks to newly relaxed fireworks regulations in red and blue states alike. The Wall Street Journal reports:

Georgia lifted a longtime ban July 1 on the sale of consumer fireworks that shoot into the air, such as bottle rockets, Roman candles and flying spinners—despite concerns from some legislators about safety. Consumers had been buying them in neighboring states. “We were losing out on revenue,” said former state Rep. Jay Roberts, who co-sponsored the legislation this spring before leaving office to take a state transportation planning job […]

Since 2011, six states—Kentucky, Utah, New Hampshire, Maine and Michigan, along with Georgia—have lifted restrictions on the sale of most types of consumer fireworks, according to Ms. Heckman. Other states have loosened laws about sparklers and other smaller items, including New York, she said. Only three states—Massachusetts, New Jersey and Delaware—still completely prohibit fireworks sales.

At first glance, this development might seem simple: cash-strapped states are looking to balance their budgets in any way they can and lifting firework restrictions will bring in revenue. That’s certainly a factor, but on another level this story is of a piece with a less well-understood trend: the live-and-let-live cultural libertarianism that increasingly defines our age: You want a same-sex marriage? You can have one. You want pot? You can have it. You want guns? Be my guest. You want to play slots? Go ahead. You want fireworks? Here they are.

This libertarian political culture transcends left and right. The left cheers the decline of traditional moral values, but abhors the impact of individualism on economic regulation. The right, for its part, cheers the declining support for ‘group based’ policies like affirmative action and the growing suspicion of government regulation but is horrified by the impact of libertarianism on social issues related to church, sex, and family. Similarly, the liberalization of fireworks laws—in states from Georgia to New York—does not appear to be a traditional left-right issue.But love it or hate it, one thing is clear: Americans are getting more independent. Happy Fourth of July.

Good News for Meat Eaters

The U.S. Department of Agriculture has decided to permit imports of fresh beef from Argentina and Brazil. The two South American countries will be able to sell their considerable beef stocks on the U.S., Canadian, and Mexican markets for the first time since a 2001 foot-and-mouth disease outbreak prompted a ban. The AP reports:

The U.S. Department of Agriculture’s Animal and Plant Health Inspection Service announced Monday that it is amending its regulations to allow imports of fresh (chilled or frozen) beef from Argentina and 14 states in Brazil. It’s “the first step in a process for these regions to gain access to the U.S. market for beef”, the APHIS said in a statement.

Brazil’s Minister of Agriculture, Katia Abreu, said the deal is an outcome of President Dilma Rousseff’s political planning ahead of the meeting with President Barack Obama on Tuesday.Brazil expects to able to export 100,000 tons of beef to the United States in the next five years. Abreu said the decision of the Obama administration is like “getting a pass code” to access other markets. […]Exports of fresh beef from Argentina to the three North American countries could be worth about $280 million, said Economy Minister Axel Kicillof.

We at Via Meadia lean towards support for international free trade for a number of reasons, including but not limited to its power to form alliances, grow economies, and spread liberal capitalism around the world. This news portends all that good stuff, plus a cherry on top: get ready for cheap steak!

Gray Lady Sweats As Obamacare Premium Hikes Loom

A front page story at the New York Times gives some bad news to die-hard blue readers: Obamacare price hikes appear to be coming, and they could be much worse than the President hoped. As Robert Pear tells NYT readers, insurance companies around the country are asking regulators for 20 to 40 percent price hikes as costs under Obamacare are turning out to be higher than expected.

There are some hollow words from unnamed federal regulators who claim to be ‘determined’ to scale the rate requests back, but the pesky numbers appear to favor the insurance companies’ case. The problem? The patients who enrolled in the programs were older and sicker than ‘expected’, meaning that it costs more to cover them.How big of a deal is this? Ask Oregon’s PIRG, which put out a statement after the state’s commissioner found the rate hike requests by the insurance companies were largely justified by the costs. Again, from the NYT:

“Rate increases will be bigger in 2016 than they have been for years and years and will have a profound effect on consumers here. Some may start wondering if insurance is affordable or if it’s worth the money.”

Oops.

These aren’t the kind of Obamacare stories Democrats will want as 2016 approaches, but if next year’s rate resets are anything like the disaster that seems to be shaping up in 2015, Obamacare may be more of an albatross around the party’s neck than a star in its crown. Could John Roberts be the sneakiest GOP partisan ever?

China Celebrates July 4 By Melting Down

As Americans guzzled and gulped their way through the 238th annual celebration of the Declaration of Independence, China’s financial markets writhed in what some analysts warned could be the Big One—the long-expected bust that would end the world’s longest economic boom.

Those analysts won’t be writing from China; the government is cracking down on economic doomsayers, short sellers, and all the other scapegoats that quaking politicians and CEOs blame when stock markets tank—and tanking China’s stock markets definitely are. The widely watched Shanghai and Shenzen indices are down 30 percent in two weeks.You don’t need to be Warren Buffet to see that China’s high flying stocks were due for a hefty correction. The Shanghai market rose 80 percent between Halloween 2014 and April 15 of this year even as China’s economic growth continued to slow. A rational market would never have shot up this far, this fast, but all markets get irrational from time to time and China’s are particularly volatile.There are lots of reasons to think that China’s long-term growth prospects (and, therefore, its geopolitical prospects) have been oversold. Population and labor force growth is slowing; competition in the global manufacturing sector is heating up. The mix of heavy handed state control over much of the economy (including the financial sector) and the wild west spirit of Chinese private business is explosive, and both China’s regulators and its private market participants are relatively inexperienced when it comes to grasping and responding to the vagaries of business and speculative cycles. Serial bubbles in real estate and stocks and the inability of the government to wean the economy away from the need for massive infrastructure spending suggest a shortage of attractive private sector investment opportunities. Meanwhile, the population wants higher living standards, including much cleaner air, water, and food— and the pension and health care systems are woefully out of whack.That said, China’s communist technocrats have a pretty successful track record. For at least twenty years, foreign experts have made sophisticated arguments about why the Chinese economic miracle wouldn’t last, and for twenty years China has gone on booming. Here at the American Interest, we don’t think trees grow to the sky, but we also think trying to time the Chinese market is a mug’s game that we would rather not play.This time, however, there are some ominous signs that the people who know China best are more worried than usual, as are the technocrats who run the country. As the Wall Street Journal reports, seven of China’s top officials huddled Saturday (China is 12 time zones ahead of the U.S. East Coast) to come up with plans to stop the stock meltdown before it spreads panic to the rest of the economy. New IPOs will be banned and it appears that a stabilization fund will be set up to support stock prices by buying up stocks that are falling ‘too fast’. These measures come after earlier steps (like easing interest rates and making it easier to buy stocks on margin) failed to calm panicky investors.The trouble is that after a while an accumulation of measures intended to be comforting can no longer reassure. People start to think that the government wouldn’t be going to all this trouble unless the managers were deeply worried. The more people feel it necessary to tell you not to panic, the more you start to wonder if panicking might not be a bad idea.Some commentators are calling the Chinese stock meltdown a bigger problem than the Greek crisis, and in some ways they are right. More than $2 trillion disappeared from Chinese asset portfolios as the markets tanked. That’s roughly ten times the GDP of Greece. A serious disruption of China’s economy would send ripples across Asia, Africa, Latin America, and the West. The loss of export markets in China would mean much more to the German economy than, say, a total collapse of purchasing power in Greece.The month of July will be an interesting one in world markets. Technocrats can manage economies and control market fluctuations until, often quite suddenly, they can’t. China’s managers most probably have a few more tricks up their sleeves, but their juggling act (to mix metaphors) no longer looks effortless. China’s economic mandarins seem to be breaking a sweat and the rest of us should take note.

The Watchers on the Wall

The U.S. is rather uncertain about its place in the world nowadays, and despairing about its political system. It’s easy to fall into self-doubt. But on a holiday like this one, it’s comforting to recall how well we are represented by the ordinary people who carry out the nation’s bidding abroad. We’d like to share with you a piece from a few years ago written by a French soldier who served alongside Easy Company (the same unit as the famous “Band of Brothers”) of the 101st Airborne in Afghanistan:

On the one square meter wooden tower above the perimeter wall they stand the five consecutive hours in full battle rattle and night vision goggles on top, their sight unmoving in the directions of likely danger. No distractions, no pauses, they are like statues nights and days. At night, all movements are performed in the dark – only a handful of subdued red lights indicate the occasional presence of a soldier on the move. Same with the vehicles whose lights are covered – everything happens in pitch dark even filling the fuel tanks with the Japy pump. Here we discover America as it is often depicted: their values are taken to their paroxysm, often amplified by promiscuity and the loneliness of this outpost in the middle of that Afghan valley.

And combat? If you have seen Rambo you have seen it all – always coming to the rescue when one of our teams gets in trouble, and always in the shortest delay. That is one of their tricks: they switch from T-shirt and sandals to combat ready in three minutes. Arriving in contact with the enemy, the way they fight is simple and disconcerting: they just charge! They disembark and assault in stride, they bomb first and ask questions later – which cuts any pussyfooting short.Honor, motherland – everything here reminds of that: the American flag floating in the wind above the outpost, just like the one on the post parcels. Even if recruits often originate from the hearth of American cities and gang territory, no one here has any goal other than to hold high and proud the star spangled banner.

We highly recommend you read the whole thing.

God bless America, and God bless and protect those that have kept her free. Happy Independence Day.

Battle of the Asian Giants

Great Game East: India, China, and the Struggle for Asia’s Most Volatile Frontier

By Bertil LintnerYale University Press, 376 pp., $35.00, 

The enemy of the enemy is my friend…at least until a better option comes along. This appears to be the guiding principle of geopolitics in the fault-line region where China and India rub together. It has tended to escape scrutiny from the West, due to the inaccessibility of the area and the labyrinth of language differences.

And, also, the sheer complexity and length of the conflicts involved, according to Bertil Lintner, a journalist who has not only spent decades watching the area but a lot of time traveling around it. His new book, Great Game East: India, China, and the Struggle for Asia’s Most Volatile Frontier, is no armchair study but the result of hands-on experience.Lintner notes that on a number of occasions border disputes between China and India have led to armed conflict. But the Game is usually more about maneuvering for influence with the states, would-be states, and insurgency movements that form a chain from the Himalayas to the Bay of Bengal. Lintner supplies some helpful maps of the area, which illustrate the patchwork nature of the region.The difficult geography and complicated colonial history gave rise to a plethora of small groups, tribes and clans, with distinct languages and customs. In some cases, states within the eastern section of the Indian federation were created to stitch the pieces together. There were some successes, but in others the outcome was a weak government plagued by insurgents—and the insurgent groups are themselves prone to factionalization and splits. Lintner counts more than a hundred ethnic militias operating within the newly created states. Manipur alone has 35, Assam has 34 and Tripura has 30. It quickly becomes a maze of acronyms and competing agendas.At various times, China has covertly (sometimes not so covertly) supported insurgents with arms and money. The strategic goal is not always clear. It might be merely to keep the Indian government distracted, or it might be a form of payback for India’s support of the groups agitating over China’s occupation of Tibet, and its support of the Dalai Lama.Cutting across this are the tensions between India, Pakistan, and Bangladesh, stemming from religious issues as much as from geopolitical goals. At the same time, China worries about the growing Islamic fundamentalism in its western provinces.None of this shows much sign of changing, and the past decade has seen a new player on the scene. Burma (Lintner refuses to call it Myanmar, insisting that Burma is the historically correct name) is seen as both a buffer and a strategic counter, and China has spent years cultivating the relationship. But Burma is itself splintered along ethnic lines. In particular, a large chunk of territory on the Sino-Burmese border is controlled by the United Wa State Army. The UWSA evolved from a communist movement into an ethnic insurgency and then a viable government, and has been supported by China at every stage. When Lintner visited the Wa capital Panghsang, he found a booming region operating without regard to the central Burmese government. As it happens, most of the UWSA’s money comes from drug production, originally heroin but now methamphetamines as well. China is now reaping the whirlwind, facing a flood of drugs across the border.China has hedged its bets by supporting the Burmese national government, and has invested heavily in infrastructure that would provide access to the Indian Ocean. But in the past few years the Burmese government has begun to lean away from China towards the U.S., as it moves haltingly towards democratic reform. Nevertheless, Burma has still been willing to cooperate with China on naval bases and listening posts on its western coast—that is, facing towards India.In fact, Lintner believes that the focus of Indo-Sino conflict is moving towards the Indian Ocean. He speculates that China sees a greater presence in the Indian Ocean as a way to protect its oil imports and as a buttress for its territorial claims in the South China Sea. India is likewise flexing its maritime muscles, and the potential for clashes is growing.Lintner is not optimistic about the future. He sees the “tournament of shadows” between two rising powers as likely to intensify, with the potential to draw in the U.S. and other countries. It is not a happy scenario but, says Lintner, that is how it is.He lays all this out with careful authority, although there are times when the book is not easy to read. This is due more to the complexity of the subject than Lintner’s presentation. But make no mistake: this is an area that policymakers need to watch, and Great Game East is a good place to start.

Obama Steps Up Immigration Unilateralism

The Federal government  is relaxing enforcement of immigration laws against illegal immigrants who have been in the United States for a substantial period of time. The Washington Post reports:

In recent months, the Department of Homeland Security has taken steps to ensure that the majority of the United States’ 11.3 million undocumented immigrants can stay in this country, with agents narrowing enforcement efforts to three groups of illegal migrants: convicted criminals, terrorism threats or those who recently crossed the border.

The new policy represents an escalation of the unilateral approach to immigration the Obama Administration has taken since comprehensive reform stalled in Congress last year. In November, Obama took the unprecedented step of issuing an executive order granting temporary legal status to about five million unauthorized workers. The new DHS policy is a less dramatic, but still significant, effort to move U.S. immigration policy leftward in the face of Congressional resistance. Obama has said that legislative gridlock forced him to act unilaterally on immigration; many Republicans are sure to pounce on this move as yet another dangerous power-grab by the executive. These Republicans can take comfort in the fact that, unlike Obama’s executive amnesty from last year, this change in enforcement policy will be relatively easy for a future administration to reverse.

Aging Hipsters Priced Out of Obamacare

When insurance companies across the country requested hefty hikes for their Obamacare plan premiums, we noted that regulators might deny or scale back the requests. But the first official numbers are in from Oregon, and the results aren’t pretty for the ACA. Not only did the state’s Insurance Commissioner approve big premium hikes, she has even required insurers that didn’t request any increases to raise their prices. WSJ:

Laura Cali approved an average 25.6% increase for Moda Health Plan Inc., the biggest plan on the state’s health exchange. She also gave a green light to average increases of 30% or more for four smaller companies, in a decision released this week. And she required plans that hadn’t attempted to raise rates to do so anyway, including Kaiser Foundation Health Plan of the Northwest, by an average of 8.3% […]

“We share the concerns expressed through public comment about the affordability of health insurance in Oregon, and these final rates were approved in order to protect consumers from extreme rate increases in the future. Inadequate rates could also result in companies going out of business in the middle of the plan year, or being unable to pay claims,” she said in a statement.

Oregon news outlet The Oregon has more:

The more than 100,000 people who purchased Moda policies on the individual market will see increases of 25.6 percent more in 2016 compared to this year, or $307 per month for a 40-year-old Portland resident buying a silver plan (the example scenario the division uses to compare policies).

These rate hikes will be far more important for Obamacare’s future than the SOCTUS decision. The ACA’s failure to address the root causes of health care inflation means that the troubles with health care haven’t ended. In the near future, plans will be too expensive for too many families, with high deductibles and restrictions on doctor choice. Subsidies will help, of course, but they won’t fix the problem. The costs to government of subsidies will continue to increase, threatening the sustainability of the system and further burdening taxpayers.

The Obama Administration is apparently issuing more talking points for family conversations on Obamacare. Supporters in Oregon are going to need all the talking points they can get, if they want to avoid getting roasted at the family barbecue.

Japan Woos the Mekong Five

Japanese Prime Minister Shinzo Abe is playing host to leaders of five of the Mekong’s states this weekend in a strong bid to promote trade ties in the region. The Financial Times:

Mr Abe is expected to use the summit to push for a three-year development strategy for the Mekong region, in which Japanese manufacturers have long invested heftily and profitably. Fresh aid is likely from a $110bn Asian infrastructure programme the premier floated in May.

Tokyo has already agreed to help revive Myanmar’s much delayed Dawei special economic zone, a joint project with Thailand that would offer users a route to the Indian Ocean and the markets of South Asia, the Middle East, Africa and beyond.Moe Thuzar, a fellow at the Institute of Southeast Asian Studies in Singapore, said the Japan deals would help the Mekong countries meet infrastructure needs and also widen their alliances in Asia. “At the strategic level — certainly in countries like Myanmar — there is an interest to diversify the external partnerships,” she said.

Interesting, and smart. The Japanese are going out of their way to officially frame this in terms of strengthening Asean ties in general, there’s no doubt that this is a move to counter and match China’s growing clout in the region.

Boko Haram to Buhari: Come And Get Us

Boko Haram’s brutal, barbaric rampage in northeastern Nigeria continued unabated this week. The BBC:

Eyewitnesses say the gunmen stormed the village of Kukawa near Lake Chad on Wednesday evening, killing 97 people, including women and children.

On Tuesday, the militants shot dead 48 men after they had finished prayers in two villages near the town of Monguno, a resident told the BBC. […]“The terrorists first descended on Muslim worshippers in various mosques who were observing the Maghrib prayer shortly after breaking their fast,” [an eyewitness] said.“They… opened fire on the worshippers who were mostly men and young children.“They spared nobody. In fact, while some of the terrorists waited and set most of the corpses on fire, others proceeded to houses and shot indiscriminately at women who were preparing food,” he said.

President Muhammadu Buhari, the first opposition leader to peacefully replace an incumbent in Nigeria’s history, vowed to take the fight to Boko Haram. Boko Haram appears to be saying, “Well, here we are. What are you going to do about it?”

The consequences for Nigeria, Africa and the world will be immense if Buhari fails. But the odds for his success are poor. The Nigerian army and government are not exactly widely noted for incorruptibility, professionalism, efficiency, and skill. Yet without effective and coordinated efforts involving police, military and civil administration, the insurrection will be hard to contain.