January 14, 2014

Stanley Fischer's nomination a Victory for Women

If you've been following the news lately, you'll know that one of the most important issues in the world, perhaps second only to transgender awareness, is The War on The War on Women. As you hopefully have been informed, men and women are two separate species locked in an endless zero sum war of attrition, so it's very, very important for society to focus on promoting women, and not get distracted by irrelevant details about precisely which women get promoted. The women getting the really good jobs aren't doing it for themselves, they're doing it to make the world better for all of us.

Stay focused, people.

For example, it was extremely important that Janet Yellen rather than Larry Summers get to be the Chairperson of the Federal Reserve Board because they come from such wildly different backgrounds: she was a girl and he was a boy. We're talking diversity. Similarly, if you've been paying attention to the news, you know that it's crucial that Sheryl Sandberg's Silicon Valley career thrive.

You go, girl!

From Fortune:
What Facebook's Sandberg shares with the Fed's next vice-chair 
By Patricia Sellers January 13, 2014: 11:38 AM ET 
Facebook exec David Fischer and his dad, Fed choice Stanley Fischer, are both well-suited to work for powerful women bosses. 
FORTUNE -- Sheryl Sandberg must be the most politically connected executive in Silicon Valley. 
There she was in Washington, D.C., last month when President Obama hosted a powwow with tech honchos at the White House. 
Fifteen years earlier, the Facebook (FB) COO served as chief of staff to Larry Summers when he was Treasury secretary in the Clinton administration. 
And last year, when Summers was being considered to chair the Federal Reserve, Sandberg leaned in to support him. 
Sandberg's mentor didn't get the Fed job—it went to Janet Yellen. But now it appears that Sandberg will have one degree of separation from the next No. 2 at the Fed. Obama's choice to be the Fed's next vice-chairman is Stanley Fischer, whose son David is Sandberg's longtime deputy. 
David Fischer is VP of Advertising and Global Operations at Facebook. Before Sandberg lured him to Facebook in 2010, he spent more than seven years working for her at Google (GOOG), helping her build a 4,000-employee ad operations group—and taking her job as VP of online sales and operations when she left. Famously thoughtful, calm and unflappable, Fischer first earned Sandberg's praise when he worked for her at Treasury. 
Like son, like father? Apparently. The elder Fischer, whom Sandberg indeed knows, is renowned as a low-key, low-ego, and evenhanded economist—the same rep that Yellen has. Once Ben Bernanke's thesis adviser at MIT, Stanley Fischer, 70, has been the World Bank's chief economist, the IMF's No. 2, a Citigroup (C) vice-chairman, and the head of the Bank of Israel, where he steered the central bank through the 2008 global economic crisis with remarkable finesse. 
That's such an impressive resume that some people doubted that Fischer would agree to be No. 2 at the Fed--but Yellen reportedly pushed the White House to ask him. If he's confirmed, Fischers father and son will be working for two of the most powerful women in the world.

And that's what really matters.

January 13, 2014

Haaretz: "Fischer won't discount post as Israel's next foreign minister"

From the Israeli newspaper Haaretz:
Fischer won't discount post as Israel's next foreign minister 
By Moti Bassok     Jan. 30, 2013

Stanley Fischer on Wednesday dismissed the idea that he would become finance minister, but did not discount a role in the Foreign Ministry.  
Outgoing Governor of the Bank of Israel Stanley Fischer has no intentions of leaving Israel - or its public life - and at a news conference on Wednesday, he said just that. 
“I will continue to be involved in the country’s public life. Israel is my second home and I’m not sure that it’s less than first,” Fischer, who announced Tuesday that he would resign from his post this coming June, said at the conference. 
Fischer rejected any suggestion that he would accept the post of finance minister in the next government but did not say he would turn down a chance to lead the Foreign Ministry. 
 
And there is also speculation in Israel that Fischer might take the mostly ceremonial position of President of Israel if 89-year-old Shimon Peres ever drops dead.

A man's got to keep his options open in life. This assumption that a 70-year-old high government official has to pick just one country and stick to it is so 20th Century.

Vice chairman of the U.S. Fed, foreign minister of Israel, head of the IMF, CEO of Citigroup, president of MIT, Dalai Lama, Pope, Ayatollah of Rocknrolla, head groundskeeper at Fenway Park, coach of the Boston Celtics, starting tight end for the Patriots (just until Gronk's healthy again, of course), astronaut, fireman, secret agent, who says one person can't do it all? And why not all at the same time?

What kind of monster are you to crush the dreams of a little boy?
       

"Incentives matter," except to economists

Economics teaches us, famously, that "incentives matter," that human behavior tends to respond to monetary signals from the marketplace. The most notable exceptions to this foundational discovery of the science of economics are, oddly enough, economists themselves, who wholly transcend such grubby earthly concerns. 

For example, economist Stanley Fischer, who is President Obama's nominee for vice chairman of the Fed, was the number two man at the International Monetary Fund from 1994-2001, a period in which he implemented policies that were very well received by the big banks of Wall Street. On December 20, 2001, Fischer signed a contract with Sandy Weill and Robert Rubin to become a vice chairman of Citigroup, with a minimum guaranteed compensation in 2002 of $2 million, plus other pleasant upside opportunities.

Obviously, there was no connection whatsoever between the two events: the insights of economics simply don't apply to economists. If you can't trust economists to not be swayed by economic incentives, who can you trust?

Yet, one deluded individual tried to call into question Fischer's disinterestedness. This hallucinatory person's name is Joseph Stiglitz. Granted, he has a few random professional credentials as an economist: former chairman of the president's Council of Economic Advisers, chief economist of the World Bank, winner of both the John Bates Clark Medal in 1979 and the quasi-Nobel Prize in economics in 2001. But, obviously, he was wrong to write on pp. 207-208 of his 2002 book Globalization and Its Discontents:
Moreover, the IMF's behavior should come as no surprise: it approached the problems from the perspectives and ideology of the financial community, and these naturally were closely (though not perfectly) aligned with its interests. As we have noted before, many of its key personnel came from the financial community, and many of its key personnel, having served these interests well, left to well-paying jobs in the financial community. Stan Fischer, the deputy managing director who played such a role in the episodes described in this book, went directly from the IMF to become a vice chairman at Citigroup, the vast financial firm that includes Citibank. A chairman of Citigroup (chairman of the Executive Committee) was Robert Rubin, who, as secretary of Treasury, had had a central role in IMF policies. One could only ask, Was Fischer being richly rewarded for having faithfully executed what he was told to do?

Fortunately, Stiglitz immediately went on to say:
But one does not need to look for venality. The IMF (or at least many of its senior officials and staff members) believed that capital market liberalization would lead to faster growth for the developing countries, believed it so strongly that it did not need to look at any evidence and gave little credence to any evidence that suggested otherwise.

Still, The Economist immediately jumped in to right this wrong in its review of Stiglitz's book:
In an extraordinary paragraph, the book all but accuses Stanley Fischer, the Fund's deputy managing director during the years in question, of corruption: he inflicted needless punishment on borrowing countries, Mr Stiglitz implies, in return for a nice fat job with Citibank, whose interests that policy served. The author himself knows this is rubbish. Mr Fischer—no less eminent an economist than Mr Stiglitz, by the way—is a man of (hitherto) unquestioned integrity, admired right across the profession. With assaults such as these, Mr Stiglitz only shreds his own credibility.

So there. Fischer is a man of unquestioned integrity so any questions about his integrity must be rendered unquestions.

The IMF's PR guy also objected to Stiglitz's slander of the purity of Fischer's motivations:
Stiglitz, the IMF and Globalization 
A Speech to the MIT Club of Washington
By Thomas C. Dawson
Director, External Relations Department
International Monetary Fund
17. As part of this score-settling, Stiglitz has made some very mean-spirited observations about Fund staff and officials, past and present. One charge in particular should not go unanswered, particularly before this audience. Stiglitz notes that Stanley Fischer, the former deputy head of the IMF and former MIT professor of economics, went straight from the IMF to Citigroup. Stiglitz adds: "A chairman of Citigroup was Robert Rubin who, as secretary of Treasury, had a central role in IMF policies. One could only ask, Was Fischer being richly rewarded for having faithfully executed what he was told to do?" To anyone who knows Fischer's utter devotion to institutions he works for, whether it was the IMF or MIT, the suggestion that he used twisted IMF policies to ensure a job at Citicorp is repugnant. Stiglitz surely knows that Fischer is regarded as a man of unimpeachable integrity and yet he cannot resist the jibe at him.

Fischer is a man of unimpeachable integrity so his integrity can't be impeached. 

QED.

Seriously, I don't doubt that Dr. Fischer is, relatively speaking, a fine fellow, well above average both in intelligence and morals for a Big Time economist / politician. After all, Fischer couldn't have gotten to be the intellectual godfather of the economists running the global economy for the last two decades if he didn't possess supple intelligence and interpersonal skills.

Hence it's only natural that these incredibly powerful people want to reward their friend and mentor, and crush the slightest skepticism about Fischer's right to work as a top policymaker for two separate countries in succession. Because if outsiders, or even other top economists like Stiglitz, are allowed to ask any questions about a great guy like Fischer, who knows what they could ask about the rest of our gang?  

WaPo: Everybody who is anybody loves Stanley Fischer

So if you don't love President Obama's nominee for vice chairman of the Fed, you're a nobody.

From the Washington Post:
Stanley Fischer saved Israel from the Great Recession. Now Janet Yellen wants him to help save the U.S. 
By Dylan Matthews, Updated: January 13 at 9:58 am 
Every August, central bankers from across the globe, who collectively pull the levers of the world economy, descend on Grand Teton National Park in Wyoming. They enjoy a symposium of big economic ideas and strenuous afternoon hikes. At one of their dinners a few years ago, Federal Reserve Chairman Ben S. Bernanke looked around at some fellow titans of finance. 
“Do you know what everyone at this table has in common?” he mused. “They all had Stan Fischer as their thesis adviser.” 

So, since the guys running the world economically have done such a great job of it in this century, promoting their aged mentor makes perfect sense.
Stanley Fischer, who Barack Obama nominated on Friday to be Janet Yellen's vice chairman of the Federal Reserve, is one of the most accomplished economists alive. Any one of his past jobs would be a crowning achievement in an economist’s career. 
As a professor at MIT — arguably the best economics department in the world — he helped found a school of economic thought that has come to dominate departments across the country. He also advised an all-star crew of grad students who went on top jobs in the policy world, including Bernanke, European Central Bank President Mario Draghi and former chief White House economist Greg Mankiw. 

Mankiw was George W. Bush's chairman of the Council of Economic Advisers. Heck of a job, Manky!
As the No. 2 official at the International Monetary Fund, he helped contain the Asian economic crisis of 1998.

Let's not talk about Fischer's sizable role in the Russian economic crisis of 1998.
As a vice chairman at Citigroup, he ran all work for public-sector clients at what was at the time the world’s largest bank.

Let's not talk about Citigroup's role in the Great Financial Crash of 2008.
And in 2005, Israeli Prime Minister Ariel Sharon and Finance Minister Benjamin Netanyahu picked him to lead the central bank of a country he had previously only visited.

Ariel Sharon and Bibi Netanyahu: two pure meritocrats without a biased, nationalistic, ethnocentric bone in their bodies. They would have picked Fischer for the job even if he were a Palestinian.
No matter — Fischer’s results were more than enough to assuage any doubts. No Western country weathered the 2008-09 financial crisis better. ... 
It’s fair to say he’s been embraced by the Israelis. Upon his resignation as governor of the Bank of Israel, Meirav Arlosoroff of the liberal daily Haaretz newspaper wrote that he is a “leader in whom the Israeli public had absolute trust” who “stood amid all the financial and leadership chaos like a fortress of stability, logic, level-headed judgment and international reputation.” Both Netanyahu and opposition leader Shelly Yachimovich lavished him with praise. 
Netanyahu reportedly attempted to keep Fischer in Israel by offering him the finance ministry. 

That Netanyahu, he's the ultimate believer in Open Borders cosmopolitanism.
But rather than enter politics, Fischer returned to America, joining the Council on Foreign Relations as a senior fellow in September.

A "decent interval" between his two jobs ... Nobody can say Obama is appointing Israel's central banker; they have to say he is appointing a former central banker for Israel. That could have been decades ago, right? You might almost think that Fischer's decision to resign early from his Israeli job was because he was tipped off about getting the American job, but that would be a conspiracy theory, so it's wrong. To posit a conspiracy theory, you'd have to believe that Stanley Fischer, Ben Bernanke, Janet Yellen, and Larry Summers are all friends.
He retained his American citizenship while in Israel, and spent his entire adult life here up until his move to Israel. He was a candidate to lead the Federal Reserve Bank of New York in 2003 (Timothy F. Geithner got the job instead), and the failure of his 2011 bid to run the IMF was attributed in many circles to his being “too American” for a job traditionally reserved for a European.
Fischer was widely considered a dark horse contender to succeed Bernanke, though his chances were always lower than those of Janet Yellen or Larry Summers (who Fischer hired as a professor at M.I.T.). Yellen's decision to pick him as her deputy surprised observers not because of Fischer's time abroad but because he is, if anything, overqualified for the no. 2 position. 
The market for top central bankers is increasingly global, most vividly illustrated by former Bank of Canada governor Mark Carney's appointment to lead the Bank of England.

The Carney Precedent justifies the Fischer Precedent. What will the Fischer Precedent be used to justify? I mean, shouldn't the CIA look to the global pool of talent? Who has more talent than Mossad? Or what about the NSA? Why should its leadership be restricted to Americans when the leaders of Israel's Section 8200 may well know more about certain software code embedded in NSA processes than NSA's current leadership?

You know, with that world-historical lane closure crisis deflating Chris Christie's chances in 2016, the GOP should think a little more imaginatively about its next presidential nominee. I know an MIT grad with plenty of high level experience who seems to be getting bored with just pushing the Pals around. Bibi 2016!
In this post-crisis era, the job of a central banker requires someone who is simultaneously a brilliant economist, regulator, diplomat and politician. There are few figures today who fill those roles as successfully as Fischer.

Just ask various Russian billionaires currently residing in London and New York.
Astride the divide 
America is Fischer’s adopted homeland: He was born in Mazabuka, a medium-size town in Northern Rhodesia, now Zambia. At 13 he moved to Southern Rhodesia (now Zimbabwe), where he stayed until heading to the London School of Economics.
He went to MIT for his doctorate, banging out a PhD in three years and then landing an assistant professorship at the University of Chicago. When Fischer arrived in Hyde Park in 1969, a chasm was about to open between Chicago, along with its peers near the Great Lakes — schools like Carnegie Mellon University and the University of Minnesota — and coastal powerhouses such as the University of California at Berkeley, Harvard, and, perhaps most notably, MIT. ...
Fischer was one of the few figures at the time with bona fides on each side of the argument. He was at Chicago when Lucas formulated his critique, but had MIT’s Samuelson on his dissertation committee, and in 1972 returned to that department as a professor. Perhaps as a consequence, his students remember him as an unusually diplomatic presence during the decade’s theory wars. ...
The fruit of Fischer’s effort to integrate the two approaches is known today as “New Keynesian” economics. It is the dominant approach in most leading economics departments, with Mankiw, Bernanke, IMF chief economist Olivier Blanchard and many others contributing to the movement. 
... Fischer also retained respect for his old Chicago colleague Milton Friedman, who shared some of Lucas’s ideas. ... 
The man [Bernanke] who would spend his Fed chairmanship flooding the economy with dollars to try to prevent a second Great Depression first learned how to do it from Friedman and Schwartz. And he learned about Friedman and Schwartz from Fischer. 
People don’t give up tenured spots in the MIT economics department. It’s one thing to take a few years’ sabbatical to take a policy job, as Fischer did from 1988 to 1990 when he served as the World Bank’s chief economist. But it’s quite another to resign such a post permanently, as Fischer did in 1994 when he joined the IMF as its second-in-command. 
He was recruited by Summers, who had gotten his first academic job at MIT on Fischer’s recommendation, and who was at that point undersecretary of Treasury for international affairs....
Fischer’s seven-year tenure, ending in 2001, came at a particularly rocky time for the IMF. The “structural adjustment” programs of tax increases and budget cuts it had recommended to developing countries had led to a political backlash, and anti-globalization activists began to regularly protest its meetings. Colleagues remember Fischer as a believer in IMF policies, but one who took critics’ voices into account. 
“When he interacts with you, he starts with the assumption that he can learn a lot from you,” said Mohammed El-Erian, who leads the bond fund PIMCO and served at the IMF with Fischer. “He doesn’t intimidate you with his brilliance, he engages you with his brilliance.”... 
Fischer left the IMF in late 2001, and some months later joined Citigroup in New York as a vice president. Three years into that role, in 2005, he was offered the post of governor of the Bank of Israel. At the time, Israel’s central bank was highly centralized, with the governor having near-absolute power to pursue whatever policy course he wished. Fischer accepted. Though he did not relinquish the U.S. citizenship he had held since 1976, he became an Israeli citizen upon arrival, in accordance with the law of return for non-Israeli Jews. 
It was not, however, Fischer’s first time living in Israel. He had taken frequent vacations and sabbaticals to the country with his wife, Rhoda, throughout his academic career. Nor was it his first time providing it with academic expertise. In the mid-1980s, when he was at MIT, he advised the Israeli government on how to extricate itself from its inflation crisis. Later that decade, he — along with Anna Karasik, Leonard Hausman and the Nobel laureate Thomas Schelling — was part of a project attempting to put together economic solutions to the Israel-Palestine conflict. 
That culminated in a book, “Securing Peace in the Middle East,” in which Israeli and Palestinian economists, representing their governments, agreed on a plan to eliminate restrictions on Palestinian employment in Israel, to transfer of control over Gaza and the West Bank to the Palestinians, and to implement a system of free trade in the region. 
The recommendations closely resembled the eventual form of the Oslo peace agreement between Israel and Palestine. ...

You can just tell how even-handed Fischer was by how much he was hated by Sharon and Netanyahu. Oh, wait ...
Hausman remembers Fischer mostly as a fiercely competent and easy-to-work-with project leader, but identifies a passion for the subject as well. “Israel, I think, always was a big part of his heart and mind,” Hausman said. “But also, Stanley was and is a big believer in Israeli-Palestinian and Israeli-Arab peace on reasonable terms.” 
Fischer remembers the process fondly. “I had never worked with Palestinians before,” he said. “I learned that if you want to work well with people with whom you disagree, it’s important to frame problems as merely technical ones.”

So, listen up, dummies: Fischer's jobs in Israel and now in America are merely technical ones. You shouldn't be asking lowbrow political questions like: "Whose side is this guy on?"
The Israeli economy that Fischer took over in 2005 was a world apart from the one he advocated in the early ’90s. The security wall meant that West Bank residents could no longer work in Israel with any ease. Since 2008, Gaza has been cut off from not just the Israeli economy but also from the world. Nevertheless, Fischer has retained his popularity among Arab colleagues. Hausman points out that Arab countries were a major base of support for Fischer’s unsuccessful 2011 bid to lead the IMF — rather remarkable for an Israeli candidate. 
Being governor of a small country’s central bank during a worldwide financial crisis isn’t anyone’s idea of a fun job. Israel, like many other nations, was hit with the consequences of screw-ups made on Wall Street and in Washington. U.S. policymakers could have, in theory, prevented the crisis; at his post in Israel, Fischer had no such ability. But Fischer had a weapon of his own: the shekel. 
Central banks generally have a lot of control over how much their countries’ currencies are worth relative to others. And reducing a currency’s value increases a country’s exports, which can often lead to economic growth. 
Big central banks tend to be cautious about using that lever. If Bernanke halved the value of the dollar relative to, say, the Chinese yuan, that would dramatically increase U.S. exports and probably economic growth, too, but it would also wreak havoc with the global financial system. Every dollar-denominated asset in the world, including all manner of bonds, would plummet in value. 
It’s less risky for small countries. There aren’t massive piles of shekels lying around in other countries the way there are with dollars and euros, and Fischer took advantage of that fact. On May 30, 2008, a dollar was worth about 3.2 shekels. On March 6, 2009, it was worth 4.2 shekels. In less than a year, Fischer had reduced the value of the shekel by about 25 percent — a massive devaluation. 
It worked. Exports soared, and 2008’s trade deficit of $2 billion became 2009’s trade surplus of $5 billion. While other countries fell deeper into recession, Israel brushed its shoulders off. 
When the White House first considered appointing Fischer as Yellen's deputy, the idea was dismissed as implausible. Not because Fischer was too controversial, that is, but because officials didn't think he'd be willing to take it. 
But after discarding the idea, Obama's aides were surprised to get a call from Yellen, who, reports Bloomberg's Julianna Goldman, told them, "not only did she want Fischer at the Fed, she had already reached out to him and sold him on the idea." ...
Fischer's views on financial regulation are harder to gauge. ... 
The role will likely be the last for Fischer, who at age 69 [actually, 70] is three year's Yellen's senior, and its significance is well summed up by Yellen's runner-up, Summers. Speaking at an IMF forum in Fischer's honor, Summers declared, "The number that is in my mind is a number that I would guess is entirely unfamiliar to most of the people in this room, but is familiar to all of the people on this stage, and that is 14.462. That is the course number that Stan Fischer's course in monetary economics at MIT for graduate students was. It was an important part of why I chose to spend my life as I have -- as a macroeconomist -- and I strongly suspect that the same is true for Olivier [Blanchard], and for Ben [Bernanke, and for Ken [Rogoff]. 

So, if you've loved the economic performance of America and the world in the 2000s, you've just got to love Stanley, according to the people who have been running things so brilliantly.

Study: Arizona's law against illegal immigration worked

The rage of the New York Times, which is about 8% owned by its 2008 financial savior / telecom monopolist Carlos Slim (who profits exorbitantly from phone calls by illegal immigrants home to Mexico), against the state of Arizona turns out to be empirically based: Arizona citizens had been effectively organizing to resist illegal immigration through rule of law:
Review of Economics and Statistics

Did the 2007 Legal Arizona Workers Act Reduce the State's Unauthorized Immigrant Population? 
Sarah Bohn
Public Policy Institute of California 
Magnus Lofstrom
Public Policy Institute of California and IZA 
Steven Raphael
Goldman School of Public Policy University of California, Berkeley and IZA

Abstract 
We test for an effect of Arizona's 2007 Legal Arizona Workers Act (LAWA) on the proportion of the state population characterized as non-citizen Hispanic. We use the synthetic control method to select a group of states against which the population trends of Arizona can be compared. We document a notable and statistically significant reduction in the proportion of the Hispanic noncitizen population in Arizona. The decline observed matches the timing of LAWA's implementation, deviates from the time series for the synthetic control group, and stands out relative to the distribution of placebo estimates for other states in the nation.

A number of years ago I had the opportunity to meet the strong man of the political resistance in Arizona, state senate president Russell Pearce, before he was brought down by establishment GOP maneuvering in a 2011 recall election. At the time, the former sheriff who had been wounded a couple of times in the line of duty, reminded me of another white-haired Arizona politician. He was like John McCain, except on the side of Americans.

Today, though, I'm reminded of another white-haired security warrior turned politician: Ariel Sharon.

Tyler Cowen's American Future: Regression to the Bean

To sum up, Mr. Cowen believes that America is dividing itself in two. At the top will be 10% to 15% of high achievers, the “Tiger Mother” kids if you like, whose self-motivation and mastery of technology will allow them to roar away into the future. Then there will be everyone else, slouching into an underfunded future of lower economic expectations, shantytowns and an endless diet of beans. I’m not kidding about the beans.  
Poor Americans, writes Mr. Cowen, will have to “reshape their tastes” and live more like Mexicans. “Don’t scoff at the beans,” he says. 

In other words, sure, America had its centuries in the sun as a high wage / low cost of land country as Benjamin Franklin pointed out in the first immigration restrictionist essay. But now America will suffer the inevitable fate first described by the Mexican polymath Francisco Galtonez in his landmark 1869 book Hereditary Peonage: Regression to the Bean.

Or America could do something about cutting back on immigration, but that's unthinkable, so: Beans ahoy!

January 12, 2014

Stanley Fischer's role in piratizing Russia's wealth

In the 1990s, a small coterie of economists at Harvard and MIT, such as Jeffrey Sachs, Larry Summers, Andrei Shleifer, Jonathan Hay, and Stanley Fischer, played a crucial role in recent history by advising the government of Russia to rapidly privatize its economy. Much of the wealth of Russia wound up being stolen by a tiny number of oligarchs.

The President has nominated Dr. Fischer, who recently resigned after eight years as head of the Israeli government's central bank, to be vice chairman of America's central bank, the Federal Reserve. This might be a good time to reflect upon the successes and failures of Dr. Fischer's recommendations in contributing to the Rape of Russia.

Fischer was not the public face of the experts from Cambridge, but he appears to have been a respected insider, as he remains today. His nomination to the Fed has been greeted with outpourings of praise from global financial insiders and very little skepticism from the less privileged.

As far as I know, nobody has ever accused Fischer of attempting to unethically profit off of the disaster he helped create in Russia, as the Federal government fined Shleifer and Harvard for doing.

Still, Fischer was there at the creation. He had numerous chances to speak out publicly about what was going horribly wrong in a Russia that looked to him and his friends for advice.

Fischer's role in Russia in the 1990s can be seen from contemporary documents:

From the Christian Science Monitor, June 19, 1991:
Yeltsin Arrives In US to Discuss Trade, Politics
US-SOVIET RELATIONS

EVEN before Boris Yeltsin touched down on United States soil June 18, the newly elected president of the Russian Republic had scored public relations victories on two fronts. ... 
Yeltsin arrives in the US at the height of debate over what the West should do, if anything, to prevent a possible collapse of the Soviet economy and promote genuine, lasting market reforms. 
The enthusiastic reception of Yeltsin's visit could bolster Gorbachev's bid for Western economic aid, because as a noncommunist and as the first democratically elected leader of Russia, Yeltsin could be instrumental in helping Gorbachev implement radical market reforms. 
Over the weekend the much-discussed "grand bargain" proposal linking Western aid to Soviet reform, drawn up by US and Soviet academics at Harvard University, was delivered to the White House and the Kremlin. 
... At the unveiling June 14 the plan's architects did not project an exact cost of the proposal, which would provide credits and cash to ease the hardships that would result from the shift to a market system and a convertible currency. But Stanley Fischer, an economist at the Massachusetts Institute of Technology (MIT) who took part in the project, says for the first few years the figures would be "large between $20 billion and $25 billion a year, a cost to be borne by the Western industrialized nations. 
The first step, says Dr. Fischer, is for the Soviet Union to gain associate status at the International Monetary Fund and the World Bank, which will then oversee the country's economic restructuring. The big change, he continues, would start in 1992, when price controls would be lifted, trade restrictions would be eased, and the money supply and budget deficit put under control. 
When asked if Yeltsin will support the plan, Mr. Yugin said, "I think we will." ...

Gorbachev aide Yevgeny Primakov and First Deputy Prime Minister Vladimir Shcherbakov, have distanced the Kremlin from Grigory Yavlinsky, the lead Soviet economist on the Harvard plan. 
Mr. Yavlinsky's murky status is "convenient for everybody involved," says Fischer of MIT. If the plan is deemed workable, everyone can embrace Yavlinsky's work, Fischer says. If not, the Kremlin will not be seen as having failed yet again to follow through on an economic reform plan.

This seems to be a recurrent theme: Dr. Fischer was publicly proud of not just his economic theory bona fides but also of his practical political expertise in the murky terrain of post-Soviet Russia.

From the Christian Science Monitor, June 5, 1992:
Improving the World With Academic Advice

RUSSIA'S First Deputy Prime Minister Yegor Gaidar knows quite a bit about the problems Latin American nations have had with populism and hyperinflation. That's because Rudiger Dornbusch, a Massachusetts Institute of Technology (MIT) economist [and co-author with Stanley Fischer of the textbook Macroeconomics], "Fed-Exed" the Russian economic reformer a bundle of 15 or so books on that topic, figuring it would help him deal with Russia's similar difficulties.

"He actually studied them," says Dr. Dornbusch, one of several United States professors giving economic advice to the Russians. 
Another MIT economist, Stanley Fischer, got back last Saturday from Moscow after spending several days working with the Russian Central Bank. 
These two aren't alone. A sizable group of well-known academics from MIT and Harvard University are acting as consultants, paid or unpaid, to foreign governments. Their advice is actually having some impact on world affairs. 
... "We do it because it is extremely interesting," Professor Fischer says. While in Moscow, for instance, he learned enough about the political situation to anticipate the resignation of the Central Bank's chairman, Georgi Matyukhin. He can even speculate on successors. Fischer also gives advice to Israel on visits to that country. 

Was Fischer simply embarrassingly naive about what these post-Soviet apparatchiks were up to? Or did he have some clue about the crimes being committed by those claiming to follow his advice?

Those seem like they would be interesting questions to ask him, so I'm betting no Congressman will ask them.

From the Christian Science Monitor, December 11, 1992:
MIT's Mr. Fischer hopes Gaidar [the acting prime minister] will push ahead even faster with privatization of industry, getting the budget in shape, and other reforms. But the Russian government, he says, doesn't have "a coherent policy" for dealing with the large enterprises within the "military-industrial complex." 

From the 2003 book The Piratization of Russia by economist Marshall I. Goldman:
Gaidar [acting Prime Minister of Russia in 1992] was a strong proponent of a market system. He was an even stronger advocate of privatization and, for that matter, a whole package of near-simultaneous reforms that came to be known as “shock therapy,” and today is called the “Washington Consensus.” Gaidar had come to this concept as a result of his studies as well as from a series of discussions with economists from both Eastern Europe and the United States. Among those interacting with Gaidar at one stage or another were Jeffrey Sachs, Andrei Shleifer, Jonathan Hay, all of Harvard University, Anders Aslund of Sweden, and, later, the Carnegie Endowment and Richard Layard of the London School of Economics. IMF officials and Stanley Fischer in particular had long advocated something similar, that is, simultaneous and far-reaching economic liberalization (that is, micro policy reforms combined with determined macro restrictions to curb inflation).

From Wikipedia' article on Yegor Gaidar:
Gaidar was often criticized for imposing ruthless reforms in 1992 with little care for their social impact. Many of Gaidar's economic reforms led to serious deterioration in living standards. Millions of Russians were thrown into poverty due to their savings being devalued by massive hyperinflation. Moreover, the privatization and break-up of state assets left over from the Soviet Union, which he played a big part in, led to much of the country's wealth being handed to a small group of powerful business executives, later known as the Russian oligarchs, for much less than what they were worth. As society grew to despise these figures and resent the economic and social turmoil caused by the reforms, Gaidar was often held by Russians as one of the men most responsible.[9][10]

So, was Fischer simply suffering from faulty Gai-dar? Or was his Gaidar working accurately, and the catastrophes suffered by the Russian people struck him as just a case of being unable to make an omelet without cracking some eggs? Or was the looting of Russia more a feature than a bug?

In 2011, after all these years, Fischer delivered the Gaidar Memorial Lecture, suggesting he doesn't feel betrayed by his Gaidar.

From the appendix of a 1993 Brookings Institution book Privatizing Russia by Shleifer, Maxim Boycko, and Robert W. Vishny, here are Fischer's comments on the success of the recommendations made by himself and his colleagues:
Comments and Discussion  
Stanley Fischer: Privatization stands out as the most successful element in the Russian reform program. Indeed, Russian privatization is even outpacing privatization in other countries in the former Soviet Union and in eastern Europe.

Conversely, the slower pace of privatization in countries like Poland shows that the Rape of Russia didn't have to happen, or least not as disastrously.
This interesting paper, written by some of the important thinkers behind the program, helps explain why.  
... Apparently, the authors, like other observers, do not yet see much in the way of restructuring taking place.  
Does that mean that the authors should have urged delaying privatization until they had invented a scheme that would guarantee rapid restructuring? The answer is no, because it was crucial to move these firms out of direct state control. Should the lack of restructuring cause a slowdown of the privatization process? Again, the answer is no, for the same reason.
... Was there an alternative that would have produced more rapid restructuring? The answer is yes, but that decision belonged not to the privatizers but to Boris Yeltsin. He could have pushed for a more aggressive reform program, but chose instead to confront his congressional rivals more slowly.  
... The paper gives the impression that all politicians are bad. But at some point it becomes clear that Anatoly Chubais, Boris Yeltsin, and the reformers are good politicians. So this is really a paper about the good guys versus the bad guys, and we do not know what drives the good guys, and what differentiates them, except that we are on their side and they on ours.
... Beyond the privatization of industrial firms lies the challenge of privatizing agriculture and housing. Given the speed at which the current privatization is proceeding, the authors will soon be able to turn their talents to those problems. 

In 1994, Fischer became America's man at the International Monetary Fund, its number two official. (By custom, Europe gets the top IMF guy, while America gets the top World Bank official.) On January 9, 1998, Fischer delivered this less than prescient speech:
The Russian Economy at the Start of 1998 
Stanley Fischer 
January 9, 1998 
Six years after the start of the Russian economic reform process, much has been achieved and the continued progress of the economy towards economic normalization is not in doubt. ... 
Nineteen ninety seven was a year of achievement for the Russian economy. 
For the first time since 1992, the economy grew, albeit barely. The current account of the balance of payments was in surplus. The Central Bank of Russia once again proved its professionalism, as inflation continued to decline, and as late in the year it successfully fought off contagion effects from East Asia and maintained the currency band. At the start of 1998, with a broadened currency band, and a non-confiscatory currency reform under way, confidence in the maintenance of monetary stability should continue to strengthen. 
In 1997, as in 1996, central government revenue shortfalls constituted the major failure of macroeconomic policy. At the start of 1998, fiscal reform and performance remain both the crucial element and the crucial question at the center of Russia’s economic program with the IMF. The reform of the tax code and increased revenue collection are on one side of the equation; on the other side, increasing the efficiency of government spending and strengthening expenditure management deserve no less attention. Equally important for future growth is continued progress with structural reforms, whose implementation had for some years lagged until recently -- but it must be noted and emphasized that the structural components of the Russian reform program moved ahead as agreed with the IMF (indeed even a little faster) during 1997. 
I am also happy to report that the IMF Executive Board yesterday completed the delayed sixth quarterly review of the Extended Fund Facility with Russia, and -- laying particular stress on the fiscal action plan agreed between the Russian authorities and the Fund staff in December -- agreed to disburse a $700 million tranche, thus bringing the program back on track. 
I. Achievements of the past six years. 
Six years ago, Russia set out on the road to a market economy by liberalizing prices and beginning to dismantle the instruments of central planning. In these six years, Russia has made remarkable progress in important areas. ... 
Market development: A large and increasing share of Russian economic activity is channeled through market mechanisms. In its latest Transition Report, the EBRD estimates that 70 percent of GDP is accounted for by the private sector.4 This vibrant private sector, for all its imperfections, has become the major agent of economic growth and change. 
... The experience of other transition economies, as analyzed in a number of studies, suggests that Russia will move onto a sustained growth path as inflation falls and fiscal adjustment and structural reforms proceed. In many respects, Russia has an exceptionally favorable basis to achieve that end: important natural resources, including minerals and energy; a highly educated labor force, which is still employed to a large extent in the less productive state sector; and a potentially large domestic market with pent-up demand for consumer goods and social infrastructure. However, a major constraint to Russia attaining satisfactory rates of growth is that the process of structural reform has not gone far enough. 
Indeed, empirical analysis has shown that the main reason why growth in Russia and other CIS countries lags behind the record of the Eastern European and Baltic countries is the slower pace of market-oriented structural reform.6 While Russia has made substantial strides in some areas of structural reform (notably small scale privatization, the liberalization of the trade and foreign exchange system and, to a lesser extent, natural monopoly regulation), there are important areas where much more progress is needed. 
... With macroeconomic stability close to being attained, the focus now must shift to structural reform, particularly private sector development. A fast pace of economic recovery will demand substantial increases in efficiency and capital accumulation, and these in turn demand a competitive business environment. Certain elements of such a business environment (such as a market culture) cannot be developed rapidly or established by government action, but other major elements (including the legal and institutional framework) can be. Such efforts are under way in several areas: 
1. Faster, more transparent privatization and improved management of state-owned enterprises. The privatization program was stepped up in 1997 after a disappointing record in 1996, and the Government’s privatization plan for 1998 envisages a further acceleration. The new privatization norms call for an open, transparent, and competitive process -- elements of which were missing in earlier waves of privatization.

You know, there's an inherent trade-off between velocity and transparency of privatization schemes. The faster you push privatization, the more likely it is to turn out to be piratization. Is it really too much to ask that seven years or more after he began poking his nose in Russian affairs that Dr. Fischer might have figured that out by 1998?
... In summary, Russian economic reform is entering a less dramatic phase than that of the last few years: the most important battles in securing macroeconomic stabilization and creating a market economy have been won; but much remains to be done to secure the future growth of the economy. 
Up to this point, the optimists on Russia have been more right than the pessimists. There is good reason to believe the optimists will continue to be right.

Eight months and eight days after Fischer's speech, Russia defaulted.

Dr. Fischer is a thoughtful man who is not always afraid to say he was wrong in the past; but nobody today seems to be interested in giving him a chance to publicly reflect upon anything he has learned from the world-historical mistakes that he and other elite economists made regarding Russia in the 1990s.

Who knows? Maybe he'd like to take this opportunity to apologize to the Russian people ...

But, even if Fischer's conscience is bothering him about the Rape of Russia, it's not that likely that he'll be given much of a chance to apologize for screwing up so badly. There really isn't much of a market for skepticism about the documented track records of Federal Reserve leaders.

Thus, for years Alan Greenspan was treated as a genius by the media, because ... what if he weren't really a genius? What if he were just some Ayn Rand cultist? Well, that possibility was too horrible to contemplate, so everybody agreed to keep him in office over and over until almost his 80th birthday in 2006. What could possibly go wrong?

Instead, it's best not to undermine confidence by asking our economic superiors to account for their track records.

Upworthy: "What America Cares about Now"

From Upworthy
     

The ideal victims of political incorrectness are the non-victims

I wanted to come back to the growing list at Handle's Haus of the "bullied-and-badgered-pressured-and-purged" victims of political correctness. 

By nature I'm a nice, pleasant, optimistic, think-the-best-of-everyone person, so I've had to train myself intellectuallyto notice the less admirable traits of human beings. One of those is that we are more outraged by indignities suffered by winners than by injustices suffered by losers. Therefore, I suspect that the most valuable members of Handle's list are not those most victimized, but those widely seen as having triumphed over insults. 

For example, consider the campaign that drove Joe Sobran into poverty versus the pouring of a pitcher of ice water on the head of Harvard sociobiology professor Edward O. Wilson at an AAAS meeting in 1978. Now, in objective terms, the crushing of Sobran was a larger detriment to intellectual life in America than the momentary insult to Wilson. 

But the point is that Sobran lost. So, therefore, he is assumed to be a loser. And thus to have deserved whatever he had coming.

In contrast, Wilson, a resilient and resourceful individual, came back repeatedly and has achieved Grand Old Man status in American intellectual life, clearly demonstrating that he is a winner. (Here are some of the many episodes of the Charlie Rose Show upon which Wilson has appeared in recent years.) And winners don't deserve any setbacks.

Human beings like winners (perhaps out of a hope that winners will like them) and tend to dislike losers (perhaps out of fear that their loser cooties will rub off on them).

Thus, the story of Wilson being attacked is a touchstone for anybody objecting to the reign of political correctness, while the fate of Sobran is largely veiled in silence, other than for a few brave souls like Ann Coulter.

Similarly, I have read hundred of times about how Daniel Patrick Moynihan was unfairly criticized for his 1965 report to LBJ on how the black illegitimacy rate had reached 22 percent. And, indeed, Moynihan's career might have suffered a temporary setback because of political correctness. Yet, by 1969 Moynihan was the President's chief domestic advisor and later the U.N. Ambassador. He then served 24 years or 8766 days (some of them, no doubt, sober) as a U.S. Senator (D-NY). Therefore, this horrible, horrible thing that happened to Moynihan in the mid-1960s, which might have slowed his career enough to keep him from someday becoming President, remains a vivid mainstream memory of the excesses of political correctness. 

So, my advice would be to make up a sublist of people who have triumphed almost completely over accusations of political incorrectness. For example, Larry Summers quickly rebounded from outraging feminists to become Obama's chief economics guru. If he'd become Fed Chairman, his comeback would have been complete.

You may think this is, logically speaking, backwards, but this is how the human brain works.

Stanley Fischer undermined role of dollar as reserve currency

From Reuters:
Policymakers see dollar losing reserve currency allure 
DAVOS, Switzerland Mon Jan 31, 2011 (Reuters) - The U.S. dollar's role as a reserve currency will diminish in the coming years as Asian economies like China grow and countries seek to diversify their monetary holdings, policymakers said on Friday. 
The U.S. Federal Reserve's policy of quantitative easing -- essentially printing money -- and a call by France to look at ways to wean the world off the dollar as the sole reserve money have put the U.S. currency in the spotlight. 
"I'm more optimistic about the euro gaining strength as a potential reserve currency," Bank of Israel Governor Stanley Fischer said during a panel discussion at the annual World Economic Forum in Davos, Switzerland. 
"We ourselves are diversifying into currencies which we would never have put in the reserves before, including the Australian dollar and so forth," he added. "I think people will diversify their reserves."

In the above quote from Stanley Fischer, the new nominee for Vice Chairman of the U.S. Federal Reserve Bank, "We" does not mean America.

January 11, 2014

Is there any precedent for Stanley Fischer?

To get some sense of how revolutionary is President Obama's nomination of Stanley Fischer, the head central banker for the Israeli government from 2005 to 2013, to the number two role at America's central bank, I've been trying to look up American government officials who were previously high government officials for other governments. I haven't yet been able to find a Wikipedia category for such a thing.

In particular, I'm looking for American citizens who at a fully mature age took up citizenship in a foreign country, served in a very high position in the foreign government, then attempted to take up a high role in the U.S. government.

Wikipedia does offer a list of 20 U.S. cabinet officers and 4 other cabinet-equivalent level officials who were foreign-born. Most arrived in the United States as children. A few arrived as students in their early twenties. Not one of them appears to have been a foreign government official of the slightest importance before arriving in America, much less the top official in their fields for any foreign government.

Indeed, none of them appear to have started the post-educational phase of their adult political careers abroad, with the exception of Carl Schurz, a German student radical who rebelled against Prussian repression in 1848-49 when he was in his late teens. Fleeing for his life, Schurz arrived in the U.S. at about age 23. As the most dynamic figure in the German-American community, Lincoln made the orator a general in Union Army, in which he served bravely but ineptly at three major battles.

The high-ranking officials to have arrived at the oldest age include Zbigniew Brzezinski, who arrived in the U.S. to get a doctorate at Harvard after obtaining a bachelor's and master's at McGill in Canada. Zalmay Khalilzad's career is similar. Some others arrived around age 21, such as refugee Michael Blumenthal who then went to Berkeley as an undergraduate.

But none of these appointed officials had been important government officials in other countries. (You could claim that Douglas MacArthur's title of Field Marshall of the Philippines in the later 1930s was similar to Fischer's excursion to Israel, but, obviously, the Philippines were still an American colony only being prepped for independence.)

As an analog to the Fischer case, I guess you could name Werner von Braun:
Don't say that he's hypocritical,
Say rather that he's apolitical.
"Once the rockets are up, who cares where they come down?
That's not my department," says Wernher von Braun.

Of course, von Braun was brought to the U.S. essentially as a prisoner of war and kept under guard at a military base in El Paso for five years as a sort of "prisoner of peace."

Another example would be Friedrich Wilhelm von Steuben, a gay pederast courtier who had to flee Germany due to scandal and wound up being the inspector-general of the rebel army during the Revolutionary War due to his being just about the only man in America with Prussian staff training. (The early U.S. tended to attract raffish adventurers fleeing their own reputations in Europe -- my favorite is Mozart's librettist Lorenzo da Ponte.) Of course, America in the 1700s was a small, not terribly well-educated country.

But those aren't good examples because von Braun didn't leave America in his sixties and, say, run France's rocket program for eight years, then try to come back to the U.S. at 70 and be #2 man in the American space program. 

The more you think about the specifics of the Fischer case, the more bizarre it becomes, and more far-ranging the precedent it sets.

The point is not that Fischer arrived in the U.S. at age 23, but that he left the U.S. at age 61 to head up a key department of a foreign power but now he wants to come back at age 70 to take a crucial position in the U.S. government.

Fischer's defenders (to the minor extent that they feel the need to defend him) tend to treat his eight years running Israel's central bank as if he were engaged in rocket science rather than statecraft. They emphasize that, well, sure, it's kind of hard to tell whose side Fischer is on, but, you see, he has a very high IQ and that ordinary Americans can't begin to understand what all he has in his bag of economic tricks. So, why aren't you reassured?

In reality, the key to Fischer's success at keeping up the Israeli economy was his decision to boost Israeli exports at the expense of Israel's trading partners (of which the U.S. is the largest) by massively devaluing the shekel. It wasn't really complicated: Fischer's big decision was good for Israeli exporters and it was bad for American exporters.

Undoubtedly, it didn't come as a surprise to Fischer that as head of the Bank of Israel he would  he would have the opportunity to do things that would be bad for America, such as competitively devaluing the shekel during an American economic crisis. He's a smart, experienced guy, and he no doubt realized that he was choosing to put himself in a position where he might decide to hurt America. 

Fischer was free to make his choice to spend most of his 60s as an Israeli citizen and high Israeli government official. He made his choice. And he should live with the consequences, not get some giant do-over in his 70s that establishes a precedent, especially when nobody is talking about the implications of that precedent.

The single most fundamental question of political life is: Whose side are you on? There is a lot of talent available to the United States government, so why it should be necessary to appoint to high position a man who carefully chose to make that question unanswerable?

Of course, the real question is bigger than Fischer. The true issue is: What's wrong with Americans these days that almost all of us are too buffaloed to notice?

Will nomination of Israeli official to Fed be "controversial?"

As I've often remarked, the word "controversial" has undergone a striking metamorphosis over my lifetime. From reading the Los Angeles Times in, say, 1967-1974, I recall that the word "controversial" was then a mark of approval: it was headline shorthand for new, exciting, forward-thinking, and, most of all, sexy.

Today, "controversial" usually means disreputable, derisible, and demonizable. (This may have something to do with the winners of 1967-1974 being more or less still in charge of our culture in 2014.)

So, it will be interesting to see how Obama's nomination of Stanley Fischer, until recently head central banker for the Israeli government, to be Vice Chairman of the U.S. government's Federal Reserve Board will be treated in the American mainstream press.

Will Obama's nomination of an Israeli dual-citizen be described as "controversial?"

Or, will any skepticism of the nomination be shunted aside as "controversial?"

Or, will the whole thing simply be treated as not being controversial at all, that everybody knows that high-ranking foreign government officials routinely become high-ranking U.S. government officials (even if it's hard to think of too many examples), so this is just a dog-bites-man business-as-usual story and no reason at all to distract the public's attention from the Really Big National News, the important issues you must think about, such as lane-closures in New Jersey?

From Google News about 30 hours after word that the President would nominate Fischer went on the news:
"Chris Christie" controversial: "About 70,900 results (0.24 seconds)"
"Stanley Fischer" controversial: "19 results (0.22 seconds)"

Ariel Sharon was the Nathan Bedford Forrest of his generation

Ariel Sharon has died after a long coma. As Greg Cochran observed, Sharon's place in military history is secure: like the brilliant Confederate cavalry general Nathan Bedford Forrest, Sharon was the most accomplished light mobile commander of his generation. Sharon's performance during the 1973 war, when the more senior Dayan broke down under the strain and started thinking about nuking the Aswan Dam, was heroic. Out of favor politically, Sharon arrived at the chaotic front in a civilian car, took command through force of personality, and organized the recrossing of the Suez Canal, trapping an Egyptian army and winning the war.

But, also as with Forrest, you really wouldn't want to be a footsoldier taken prisoner by Sharon's troops. (The general rule in warfare is you are more likely to survive if you surrender like-to-like: if you are a footsoldier, it's best to surrender to enemy footsoldiers. Infantry POWs who surrender to fast-moving mounted forces are often seen as slow-moving impediments to their further dashes, and sometimes are disposed of accordingly.)
 

January 10, 2014

Dual loyalty? If we're lucky ...

From the NYT:
President Obama plans to nominate three people to the Federal Reserve’s Board of Governors, including Stanley Fischer, former head of the Bank of Israel, as the Fed’s next vice chairman, the White House said on Friday. ... 
Mr. Fischer, 70, would succeed Ms. Yellen in her current role. The Senate confirmed Ms. Yellen as the Fed’s new chairwoman this week. She will take over from the current chairman, Ben S. Bernanke, in February. ... 
He also worked as a senior Citigroup executive from 2002 to 2005. ... 
Mr. Fischer, born in present-day Zambia [Northern Rhodesia, then], holds American and Israeli citizenship. 
He said in a statement that he was “deeply honored” by the nomination.

Although Fischer's many well-heeled supporters portray his jobs in Israel and now America as utterly technical, they are inherently political. An anti-Israel lobby called IMREP has a long analysis of Fischer's career in regard to his service to Israel. For example:
More importantly for Israel, Stanley Fischer won an appointment to the Reagan administration's U.S.-Israel Joint Economic Discussion Group that dealt with Israel's 1984-1985 economic crisis. ... The U.S.-Israel Joint Economic Discussion Group fundamentally transformed U.S. aid to Israel forever.  Before the Reagan administration, most U.S. aid to Israel took the form of loans that had to be repaid with interest.  After the input of Fischer's team, subsequent U.S. aid was delivered in the form of outright grants paid directly from the U.S. Treasury—never to be repaid or conditioned when Israel took actions the U.S. opposed.

That solution sure required some economic brilliance: "Instead of us loaning us money, we'll give us money. Great idea! Hey, who is this 'us' I'm referring to anyway? It's confusing."

As IMREP's Grant F. Smith points out, the importance of Fischer's nomination is triple:

The Fed is a major regulator, abroad and at home.

First, for example, last month the Fed and two other federal agencies fined the mostly British government-owned Royal Bank of Scotland $100 million for violations of the sanctions against doing business with Iran. Conversely, the Fed can also fight the growing movement in Europe to put sanctions on doing business with Israel.

Second, the Fed is supposed to be (but often isn't) a major regulator of domestic financial wheeler-dealers. For example, Fischer himself was Vice-Chairman of Citigroup from 2002-2005 as the subprime bubble inflated, before he decamped for Israel.

Third, the nomination of Fischer is to establish that it's A-OK for a dual-citizen high Israel-government official to move over to a similar job in the U.S. government. Sure, a few years from now it may still seem a little unusual for, say, the head of Israeli military intelligence to move on to running the National Security Administration in Fort Meade, but don't you remember the Fischer Precedent?

I apologize for the following comment by an America-hating fringe extremist:
"So, likewise, a passionate attachment of one nation for another produces a variety of evils. Sympathy for the favorite nation, facilitating the illusion of an imaginary common interest in cases where no real common interest exists, and infusing into one the enmities of the other, betrays the former into a participation in the quarrels and wars of the latter without adequate inducement or justification. It leads also to concessions to the favorite nation of privileges denied to others, which is apt doubly to injure the nation making the concessions by unnecessarily parting with what ought to have been retained, and by exciting jealousy, ill will, and a disposition to retaliate in the parties from whom equal privileges are withheld; and it gives to ambitious, corrupted, or deluded citizens (who devote themselves to the favorite nation) facility to betray or sacrifice the interests of their own country without odium, sometimes even with popularity, gilding with the appearances of a virtuous sense of obligation, a commendable deference for public opinion, or a laudable zeal for public good the base or foolish compliances of ambition, corruption, or infatuation…. 
"Against the insidious wiles of foreign influence (I conjure you to believe me, fellow-citizens) the jealousy of a free people ought to be constantly awake, since history and experience prove that foreign influence is one of the most baneful foes of republican government. But that jealousy, to be useful, must be impartial, else it becomes the instrument of the very influence to be avoided, instead of a defense against it. Excessive partiality for one foreign nation and excessive dislike of another cause those whom they actuate to see danger only on one side, and serve to veil and even second the arts of influence on the other. Real patriots who may resist the intrigues of the favorite are liable to become suspected and odious, while its tools and dupes usurp the applause and confidence of the people to surrender their interests." 
– George Washington’s Farewell Address
 

NYT: "Ethnic Segregation at a U.N. Camp in South Sudan"

@alunmacdonald: "Most depressing photo of the day – a sign at UN camp in
South Sudan separates Dinka and Nuer as they arrive"
From the New York Times:
Ethnic Segregation at a U.N. Camp in South Sudan 
By SOMINI SENGUPTA and ROBERT MACKEY

Reporting from South Sudan on Friday, the BBC correspondent Alastair Leithead discovered that civilians taking refuge from fighting at a United Nations base outside the town of Bentiu were being segregated along ethnic lines by the peacekeepers. 
One image from the video report filed by the BBC News crew, showing a hand-painted sign directing members of the Dinka and the Nuer tribes to opposite sides of the camp, caught the attention of Alun McDonald, an Oxfam media officer who has worked with refugees in South Sudan.

According to Mr. Leithead, civilians from both tribes have been forced to seek safety as the fighting raged between forces loyal to President Salva Kiir — a member of the country’s largest ethnic group, the Dinka — and followers of his former vice president, Riek Machar, a Nuer. ...
Still, many close observers of the conflict were taken aback by the partition of the camp. In a conversation on Twitter, both Rebecca Hamilton, a human rights lawyer who has written about the impact of citizen advocacy on U.S. policy in the region, and Amir Ahmad Nasr, a Sudanese blogger, criticized the United Nations Mission in South Sudan for dividing the civilians. 
Malvina Hoffman's
"Nuer Warrior"

I don't know. Sounds pretty prudent to me.

First, Dinkas and Nuers speak somewhat different languages. The Wikipedia article on "Dinka Language" says, "The closest non-Dinka language is Nuer, the language of the Dinka's traditional rivals."

Second, they are fighting right now.

Third, the Nuers and the Dinkas fought throughout the 19th Century until the British arrived and saved the Dinka from complete conquest. This is less obscure than it sounds because rivalries between and among the Nuers and Dinkas are the subject of the classic works on "segmentary lineage" among the Nuer by anthropologist E.E. Evans-Pritchard (the father of colorful Daily Telegraph reporter Ambrose Evans-Pritchard, by the way). See for example, Marshall D. Sahlins' 1961 article "The Segmentary Lineage: An Organization of Predatory Expansion." The Nuer are a canonical example in the anthropological literature of me against my brother, my brother and I against my cousin, my cousins, brother, and I against the world.

The Nuer are pretty good though at coming together with distant cousins for the purposes of kicking around the poor Dinkas. Nuer tribes were traditionally organized on a larger scale that allowed Nuers to put larger armies in the field and defeat the Dinkas. Both sides take the cattle of each other, but the dominant Nuer do it by battle and the poor Dinka fight back by theft.

The ruling mindset of white people writing about Africa is that Africans have no agency: Africans are merely robotic vehicles for the malign influence of white people. Thus, if white people pay for a refugee camp for Dinkas and Nuers, this pair of signs can then be held responsible for all future conflicts between the tribes. The alternative is to assume that Africans have some responsibility for the state of Africa, but, considering the state of Africa, that would be racist.

In truth, the Nuer were always been proud of their ability to push around the Dinka and take his cattle. They would consider the conventional wisdom of themselves as pitiful victims being manipulated by white stereotypes into fighting the Dinka as an insult.

Pour encourager les autres

At Handle's Haus, there is a list (with links) to 91 incidents of  persecution for political incorrectness:
Bullied and Badgered, Pressured and Purged

January 9, 2014

Is Melissa Harris-Perry "America's most foremost public intellectual" or is Ta-Nehisi Coates the black Glenn Beck?

Ta-Nehisi Coates writes at The Atlantic:
On Saturday, [MSNBC talking head] Melissa Harris-Perry apologized on air for segment that made light of the Romney clan's adoption of a young black boy. ... 

[Large amounts of verbiage snipped]
When not attempting to shame their enemies on trumped-up charges of racism, the conservative movement busies itself appealing to actual racists. ... 

[Large amounts of verbiage snipped]
Mitt Romney is not immune to this trend—he embodies it. On July of 2012, then-candidate Romney spoke to the NAACP (allegedly planting his own supporters). Later that day, he went before a crowd of conservatives and pitched his speech as follows: 
I had the privilege of speaking today at the NAACP convention in Houston and I gave them the same speech I am giving you. I don't give different speeches to different audiences alright. I gave them the same speech. When I mentioned I am going to get rid of Obamacare they weren't happy, I didn't get the same response. That's OK, I want people to know what I stand for and if I don't stand for what they want, go vote for someone else, that's just fine. But I hope people understand this, your friends who like Obamacare, you remind them of this, if they want more stuff from government tell them to go vote for the other guy-more free stuff. But don't forget nothing is really free. 

[Large amounts of verbiage snipped]
... But there is no one more worthy, and more capable, of holding that conversation than America's most foremost public intellectual—Melissa Harris-Perry.

[Large amounts of verbiage snipped]

Have you ever noticed how Ta-Nehisi Coates is the black Glenn Beck, in the sense that both are autodidacts (which is a good thing) who are constantly recounting for their rapt audiences mind-blowing excerpts from old books they are halfway finished reading?

Mitt Romney's black grandson and Glenn Beck's war on "Hetero-Fascism"

I pointed out years ago that Democrats are driven crazy by Mitt and Ann Romney's annual Christmas card featuring all their grandchildren: those Republicans are trying to breed their way to victory. Don't those Aryan crypto-Nazis know that the only legitimate way to win elections is to import foreigners illegally to vote for you?

Now, one of the five Romney sons has adopted a black child. So, when a half-black talking head on MSNBC named Melissa Harris-Perry invited a claque of minor comedians to fill some dead air by making fun of the latest Romney Christmas card, conservatives went nuts in response since there's now a black individual in the Romney family picture for them to defend, allowing them to accuse Harris-Perry of "racism."

Glenn Beck, in contrast, defended Harris-Perry sensibly, saying, "She apologizes, for what? It was a break with comedians."

More generally, interracial and international adoption is a fraught topic since it exposes obvious flaws in the group giving up their children. 

The classic example is South Korea, which was a poor country with little altruism for non-family members. The typical pattern is that nice white people in America find out about a country or culture that doesn't do a good job of taking care of its orphans and they start adopting that culture's unwanted children and giving them good homes. Eventually, the donor country starts to become ashamed by the fact that the American adopters are better people than they are, and decides to get its house in order and do a better job of taking care of its own orphans. 

Being human, the ashamed donor culture lashes out at the evil Americans who are taking their unwanted rejects into their own homes and raising them in an atmosphere of love. But, hopefully, the chastened donor culture gets its act together and does better by its own orphans.

That seems to be going on right now with Russia, for example. After an era of dissolution, the Russians are now ashamed and incensed that they let two perverts in the West adopt a Russian child in 2005 for use in their sick games, and so they are turning against foreign adoptions and have banned gay adoptions altogether

(This Russian ban on homosexuals adopting of course is one of the talking points for the Washington-Wall Street axis that wants to stir up a World War G with Russia. For example, Glenn Beck is jumping on the bandwagon of having a new Cold War, this time over gays:
Glenn Beck Claims He Will 'Stand With GLAAD' Against Russia's 'Hetero-Fascism'

A lot of money was made off the last Cold War. A new one waged against "Hetero-Fascism" sounds like a real geyser of cash for the well-positioned.)

Anyway, part of the Black Pride movement of the 1960s-early 1970s was opposition to whites adopting African-American babies. But this healthy emotional reaction ran into the reality that blacks weren't really ready to go to all the trouble of taking care of all black babies, so this attempt at a ban on interracial adoption fell apart. But that won't stop black people from feeling embarrassed and thus angry at nice white people like the Romney son who adopt a black child.