The expansion of Russia’s radical Islamism outside the North Caucasus

On the morning of July 19, 2012, Kazan the capital of Tatarstan, Russia’s largest autonomous republic and home of its largest Muslim ethnicity, the Tatars, was awakened by six gun shots and, fifteen minutes later, the explosion of a car bomb. The shots were aimed at Valiulla Yakupov, Deputy Mufti of Tatarstan and leading theologian who supervised Islamic education in Tatarstan, as he walked out of his apartment building. The bomb went off under the car of Yakupov’s boss, Mufti Ildus Fayzov. Yakupov was killed instantly. Fayzov was badly injured.[1]

Since their appointment a year before, Fayzov and Yakupov had been crusading “anti-Wahhabists,” out to strengthen the traditional, moderate Hanafi madhab (one of the five major branches of Sunni Islam) by firing imams and madrasa teachers who they felt were too tolerant of the more radical Salafism, including the Imam of the of Kazan’s main mechet (mosque) Kul Sharif.[2]  Lest anyone miss the terrorists’ point, a cavalcade of cars driving under the black-and-white banners of global jihadists raced through downtown Kazan.[3]

Yet there was more to what happened that morning in Kazan than an internecine struggle within Europe’s oldest and, until a decade or so ago, most assimilated Muslim minority. The July 19th attacks may well have been a watershed: two decades after the first Chechen war, the Russian Jihad may be reaching a tipping point at which the center of gravity of militant Islamic fundamentalism has begun to shift from the North Caucasus to the more urban and densely populated European Russian heartland, the home of 13 million Muslims, especially Tatars and Bashkirs. If this trend continues, the consequences for the largest Muslim country in Europe (with an estimated Muslim population of 20 million) and the world at large could be ominous.

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Although the most dramatic, the 2012 attack was only an instance of a trend. Here are a few more examples:

• Of European countries, Russia and Britain had the largest number of their nationals at Guantanamo Bay prison: nine each. The Russian nationals included some of the longest held prisoners. Six out of nine were ethnic Tatars.[4]
• Awaiting sentencing after a trial last month in the federal district court in Richmond is a former commander of the Taliban-affiliated Haqqani Network in Afghanistan — the first Taliban officer tried in a civilian court in the United States.[5] The defendant, Irek Hamidullin, is an ethnic Tatar from the most radicalized of Tatarstan’ s largest cities, Naberezhnye Chelny, which a leading Russian expert called “a focal point for Salafism in Tatarstan.”[6]
• In November 2013 a rocket attack was mounted against a major Russian oil-refining facility in Nizhnekamsk, Tatarstan. The assailants used self-made Qassam missiles associated with the Palestinian Hamas.
• In May 2013, National Anti-Terrorist Committee (NAK) troops engaged in a firefight with a terrorist cell in the town of Orekhovo-Zuevo, 85 kilometers from Moscow, where the terrorists had travelled allegedly to engage in bombing attacks in the Russian capital. Two of them were killed and one wounded and captured. All three were ethnic Bashkirs, Russia’s second largest Muslim ethnic group after the Tatars and very close to them ethnically and geographically.
• In the early 2000s, the so-called Uigur-Bulgar Jamaat (UBJ) was set up by Al Qaeda in the border areas between Afghanistan and Pakistan. Among its members were Tatars, Bashkirs and Uighurs from China and Kazakhstan.[7] Reportedly organized with the “direct participation” of Osama bin Laden[8], the UBJ was ordered by Al Qaeda to “create a network of cells” throughout Russia.[9] Until the Russian authorities blocked the Jamaat’s site in 2011, it posted Russian-language video and radio materials, including interviews with Russian “resistance fighters” inside the Jamaat.[10]
• Between 2006 and 2008 a UBJ cell was set up in Bashkortostan. Its leader, the 36-year old ethnic Russian convert Abdul Mudzhib (Pavel Dorokhov) was reported to have trained in Taliban and Al Qaeda camps in the mid-1990s and again in 2006-7.[11] Dorokhov was killed while resisting arrest by Russian special forces in August 2008. His deputy was sentenced to 15 years at a “strict regime” colony. According to the trial documents, they recruited members to “prepare terrorist acts against vital objects of Bashkortostan and against law enforcement personnel.”[12] Two years later, eight members of the UBJ were arrested in Bashkortostan.[13]
• One of the UBJ leaders, an ethnic Tatar by the name of Rais Mingaleev who had proclaimed himself “Amir of the Tatar Mujahidin” and travelled repeatedly to the training camps on the Afghani-Pakistani border[14], was the mastermind of the attack on Fayzov and Yakupov. After Mingaleev’s death, the actual killer of Yakupov, Robert Valeev, became  the new leader of the “Tatar Jamaat.”  A year later, members of the Jamaat [were reported to be among the “militants from Russia” fighting in Syria.[15]
• According to the leader of Tatar Muslim “Public Center” in Naberezhnye Chelny, 200 Tatar “radical Muslims” were fighting in Syria in summer 2013[16] — as were, according to the Federal Security Service (FSB) 50 Bashkirs.[17] In addition, “several dozen” Bashkirs were said to have been trained in terrorist camps in the area around the Pakistan-Afghanistan border.[18]

***

This possible shift of the center of gravity of the Russian jihad from the North Caucasus to European Russia has been long in the making. Let me mention just a few causes. Most of them continue to operate today as risk factors that increase the likelihood of terrorist attacks in Russia and heighten Russia’s vulnerability to such attacks:

• To begin, after the fall of the Soviet Union, the pent-up demand for religion and religious education, which affected Russian Muslims (as it did members of all other religious denominations of Russia) was met with a dearth of native clergy. As a result, an estimated “tens of thousands”[19] of Russian Muslims (many of them, future Russian imams) received education in the Middle East, mostly in Egypt, Saudi Arabia, Syria and Tunisia.[20] In the process, many of the students have been exposed to Salafism and Wahhabism – not just in such notoriously Salafi-leaning centers as the University of Medina,[21] the Jeddah University,[22] or the King Abdul-Aziz University in Saudi Arabia.[23] On their return to Tatarstan and Bashkortostan, some of these imams have increasingly turned away from the traditional, moderate Hanafi madhab (or school of Islamic theology) and toward the more fundamentalist Salafism or even Wahhabism. According to Russian experts Imams who share Wahhabi views preach and serve in dozens of the over Tatar 1,000 mosques, especially in Naberezhnye Chelny.[24]
• Russia is now home to millions of guest workers, most of them from Muslim Central Asia. There are an estimated two and a half million of only registered migrants in Moscow alone,[25] making it the largest Muslim city in Europe.[26] Often without work permits; marginalized, culturally and ethnically; and often subject to abuse, extortion, and, not infrequently, to racist violence many of these men understandably turn to the faith of their grandparents as a means to sustain dignity. As a result, Tajiks, or Kyrgyz, or Uzbeks who would not have known the way to the nearest mosque in Dushanbe, Bishkek or Tashkent have become zealous Muslims in Moscow, with at least some falling under the influence of radical clerics. As a result, Moscow has become the base for so-called spotters and recruiters for ISIS from all over Russia and the Soviet Union and a key way station on the road to Syria. No one knows precisely how many spotters and recruiters are working in the city, but the estimates run all the way to several hundred. Most troubling is the recent statement by the Secretary of the Security Council, Nikolai Patrushev that at the moment, Russian authorities do not have the means to stem the flow of volunteers to ISIS.[27] The Russian Foreign Ministry estimates that there are around 2,400  Russian- speakers among the jihadists in Syria,[28] while the total of Russian nationals and those from the former Soviet Union in the ranks of ISIS could be as high as  5,000.[29] Today, Russian is the third most popular ISIS language after Arabic and English.[30]
• ISIS’s recruitment effort from the post-Soviet states is likely to grow. According to Egypt’s Administration for Religious Regulations, as Arab states clamped down on ISIS efforts the group’s leadership decided that it would be “quite easy to recruit supporters” in Central Asia, along with a few other vulnerable spots around the world,  because Muslims there are “numerous, not acquainted with the extremist ideology of the group, and have been inclined to trust Arab proselytizers.”[31] Given the permeability of borders and relatively unimpeded flows of people, such efforts are likely to result in the increasing radicalization of the elements of the Central Asia diaspora in Russia. This danger factor will increase multi-fold should the Taliban continue to undermine the central authority in Kabul and almost certainly attempts to destabilize Central Asia, starting with Tajikistan.
• How long will it be before the “surplus” of ISIS recruits is directed toward terrorism inside Russia? How many of Islamic State’s former Russian soldiers, upon their return home, will take up the causes of the “Caliphate” inside Russia? As early as 2012, the Rector of the Russian Islamic University in Kazan, Rafik Mukhametshin warned that “long before the [2012] assassination in Kazan, experts talked about how the [Tatar] fighters will return home and some of them will continue to be in touch with radical Islamic forces. And I don’t exclude the possibility that, trained elsewhere, they may emerge in Tatarstan – or have emerged already.”[32]
• Finally, adding to other multiple risks of Putin’s decision to intervene militarily in Syria, is a significantly increased probability of retaliatory terrorist attacks inside Russia.

Clearly, as the risk factors and trends I have outlined, continue to exist, expand and converge, the forecast for Russia and the world is far from optimistic.

In conclusion, let me make one point very clear. Like overwhelming majorities of Muslims everywhere, most Russian Muslims practice their religion peacefully, abhor violence, and are good citizens and patriots of their country. Yet as we have learned only too well in the 14 years since 9/11, the radicalization of a small minority, usually not registered by opinion polls and denied by the authorities and traditional clergy, can inflict incalculable damage and cost thousands of lives.

If the evidence outlined in this article does not result in a significant increase in national and international terrorism, I will be the first to acknowledge and celebrate my error. But having largely missed the rise of Chechen terrorism, Al Qaeda, and ISIS, we would be far better off wrong than sorry.

1.  http://ift.tt/1QLi1dM
2. ibid.
3. http://ift.tt/13e9mOJ
4. http://ift.tt/1QLi1dO http://ift.tt/1jzcBbC
5. http://ift.tt/1U9tJBC
6. Sergey Markedonov, CSIS, January 2013, “The Rise of Radical and Nonofficial Islamic Groups in Russia’s Volga Region,” pg. 18., http://goo.gl/LIrNij.
7. http://ift.tt/1QLhZCR
8.  http://ift.tt/1jzcBbF
9.  http://ift.tt/1QLhZCT
10.  http://ift.tt/1QLhZCR
11.  http://ift.tt/1jzczR3 and http://ift.tt/1QLi1dR
12.  http://ift.tt/1QLi1dR
13.  http://ift.tt/1QLhZCR
14. http://ift.tt/1jzcBbF
15. http://ift.tt/1QLi1dT
16. http://ift.tt/13e9mOJ
17. http://ift.tt/1jzczR6;
18. http://ift.tt/1jzczR6;
19. Alikberov, op.cit.
20. http://ift.tt/1QLi1dW
21. http://ift.tt/1tyrGdv
22. http://ift.tt/QDFh3n
23. http://ift.tt/1QLhZCV
24. Malashenko, Aleksey, Carnegie Endowment, August 31, 2012, “No Repeat of Chechnya,” http://goo.gl/Xt3j9X. See also  Rais Suleimanov, “Salafism in Tatarstan: On the verge of war,” Agenstvo Politicheskikh Novostey, December 15, 2010, http://ift.tt/1jzcBs4
25. http://ift.tt/1jzcBs7
26. http://ift.tt/1HKEULJ
27. http://ift.tt/1Gummvp
28. “Putin Said to Plan Islamic State Strike With or Without U.S.” Bloomberg, September 23, 2015
29. http://ift.tt/1cZQmrl
30. http://ift.tt/1jzcBsf
31. http://ift.tt/1QLi1e0, in Paul Goble, “Window on Eurasia. August 14, 2015.
32. http://ift.tt/1QLhZCR

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The mend of history: A study of the revisions to the AP US History framework

Key Points

• The College Board’s 2014 curriculum framework for teaching Advanced Placement US History provoked a well-deserved firestorm, which led to a significant revision in 2015.
• The controversy over the AP US History framework was not truly between liberals and conservatives. Rather, it was between some in academia, who see the darker elements of America’s past as what is truly worthy of emphasis, and most Americans, both liberals and conservatives, who also want our students to be taught about America’s distinct virtues and what unites us.
• The 2014 framework evinced a preoccupation with race, gender, class, and exploitation. Division and oppression are part of the American story—but so is the progress we have made. The 2015 framework retains the darkness and the divisions while also emphasizing America’s progress toward fulfilling its ideals.

Read the PDF.

Executive Summary 

The College Board’s 2014 curriculum framework for teaching Advanced Placement US History, the gold standard for high school history, provoked a well-deserved firestorm, as the original, neutral five-page course outline had been replaced by an ideological 90-page script. Criticism of the framework was raised on blogs, and as political opposition swelled, state legislatures across the country considered legislative action. The College Board, though initially defensive, promised to review the 2014 framework extensively and release a more balanced one for 2015.

That newly revised 2015 framework was released this summer. Many of the strongest critics and defenders of the controversial 2014 framework agreed that the new one was not only scrupulously balanced but also presented a fuller and richer account of American history. While some criticism persists from the left and the right, the lack of controversy since its release has been striking.

Whereas the 2014 version reflected the view, prominent in today’s universities, that the sins of America’s past are what is most worthy of emphasis, the 2015 version strikes a balance between the darker elements of our history and the progress we have made toward fulfilling our nation’s ideals. This paper compares similar passages from both standards to show how through careful revision the College Board has brought their AP US History framework further away from the preoccupations and prejudices of academia and closer to a mainstream American consensus, generally improving the overall quality of its content. Several thematic changes stand out.

Colonization and Settlement: The old framework strained to depict British colonists as uniquely racist (and dogmatic about gender roles) compared to their French and Spanish contemporaries. The new framework does not assert historically dubious moral judgments, but rather highlights that English colonists came in larger numbers seeking religious freedom and economic opportunity.

The American Founding: The old framework barely mentioned the Founding Fathers and treated the Declaration of Independence and the Constitution in passing. The new framework mentions the founders, treats their political debates at further length, and encourages teachers to spend a month on the founding documents and their influence on American history.

Slavery: Some critics accused the 2015 standards of “whitewashing” American history but provided little specific evidence to support that assertion. The 2015 version does nothing of the kind when it comes to slavery. By eschewing the anachronistic and substantively weak term “racist stereotyping” for the more morally charged and historically accurate term “racial doctrines,” by emphasizing the cold economic forces shaping slavery, and by pointing out that much of Northern opposition to slavery was based more on economic self-interest than moral indignation, the 2015 framework puts the institution of slavery into more vivid moral relief.

Civil Society: The old framework made it appear that every instance of moral progress in American history was precipitated by government action. The new framework acknowledges that Americans formed voluntary associations outside of government to promote social welfare and champion moral reforms.

The Free Market: In the old framework, capitalism seemed to increase inequality and serve little to no good. In the new framework, the fruits of free market economic progress—that is, rising living standards and increased access to education and leisure—are given their due.

Pluribus and Unum: The old framework never let slip an opportunity to stratify Americans by race, class, ethnicity, or gender. The new framework is less eager to do so. The old framework’s theme of “Identity” and its focus on group identities has been replaced by “American Identity.” The old framework’s theme of “Peopling” has been replaced by “Migration and Settlement,” and the hopes of immigrants and the process of assimilation are now treated with respect.

20th Century Politics: The old framework portrayed the political history of the 20th century as a string of liberal triumphs followed by the unintended consequence of a conservative backlash. The new framework tempers its treatment of liberal policy victories and treats conservative arguments in a way that conservatives would recognize.

America’s Role in the World: The old framework gave no indication that America has been a geopolitical force against tyranny and for democracy. It did not even mention the Nazis, and it treated communism in neutral terms. The new framework makes more clear what we have fought for—and what we have fought against.

No document of American history will ever command unanimous consent. Fair and valid critiques can be made of the 2015 framework from both the left and the right. But the revisions made to the AP US History framework reflected a conscientious and diligent attempt to create a document that should command an American consensus.

Introduction

The College Board’s 2014 curriculum framework for teaching Advanced Placement US History provoked a well-deserved firestorm. AP US History is the gold standard for teaching high school American history. The first-ever attempt to provide a comprehensive guide for teaching the course, which is taken by a half-million students each year, yielded an unqualified mess. It replaced an anodyne five-page outline with an ideological, politicized 90-page script. Larry Krieger, a retired high school history teacher, was the first to flag the single-minded focus on American wrongdoing and racial division.[1] Stanley Kurtz penned an illuminating series of posts for National Review on the framework’s politicization of history.[2]

Some problems were glaring. For example, whereas the new framework depicted Democratic icons Franklin Delano Roosevelt and Lyndon Baines Johnson in glowing terms, it reserved its only negative adjective for Republican Ronald Reagan, reducing his Cold War strategy to a tendency toward “bellicose rhetoric.” When it came to World War II, the framework declared that the atomic bomb and Japanese internment camps caused Americans to question their values, but omitted any mention of the fascist and totalitarian regimes we were fighting.

Yet the ideological impression given by the whole was greater than the sum of its parts. When AEI’s Frederick M. Hess and the Fordham Institute’s Chester E. Finn Jr. reviewed the standards, they noted, “While identity is declared a major ‘theme,’ and the framework brims with references to ethnic and gender identity, there’s no specific attention to the emergence of a distinct American ‘identity.’” They observed that discussion of civic organizations was largely absent. There was “little about economic that doesn’t feel caricatured or framed in terms of government efforts to combat injustice. Students are introduced to decade after decade of American racism and depravity, with little positive context for the nation’s foreign engagements or its success creating shared prosperity for tens of millions.”[3]

The College Board initially issued a prickly statement dismissing such criticism. It accused critics of “a blatant disregard for the facts” and of putting personal agendas “above the best interest of teachers, students, and their families.”[4] The New York Times ran an op-ed by James Grossman, the executive director of the American Historical Association (AHA), accusing critics of being motivated by partisanship and asserting that their “accusations arise from belief born of assumption rather than careful reading.”[5]

A groundswell of political opposition to the framework emerged. The Republican National Committee, in turn, passed a resolution deeming the standards “radically revisionist” and calling on Congress to insist on their further review.[6] States, including Georgia, Oklahoma, North Carolina, Nebraska, Tennessee, Colorado, and Texas, considered legislative action. The battle lines seemed drawn. Then, the College Board reversed its defensive course. It took a closer look at the framework, reached out to critics, solicited feedback from the public, promised that the framework would be reworked for 2015, and asked to be judged on the result.

When the new 2015 curriculum framework was released, Frederick Hess and I wrote that it was not only scrupulously nonpartisan but also “flat out good.”[7] Wall Street Journal columnist Daniel Henniger, who had previously written a column criticizing the 2014 standards as “Orwellian,” penned another titled “Hey, Conservatives, You Won.” He declared, “The College Board’s rewritten 2015 teaching guidelines are almost a model of political fair-mindedness. This isn’t just an about-face. It is an important political event.”[8] Though he had initially blasted critics, the AHA’s Grossman opined that the new framework was clearer than the last and that “one of the great strengths of this framework is that it enables teachers and students to explore issues and ideas that have united and divided Americans.”[9]

Read the full report.

Notes

1. Pema Levy, “What’s Driving Conservatives Mad about the New AP History Course,” Newsweek, August 14, 2014, http://ift.tt/1sGiR3j.
2. Stanley Kurtz, “How the College Board Politicized U.S. History,” National Review, August 25, 2014, http://ift.tt/1ztdF1A.
3. Frederick M. Hess and Chester E. Finn, Jr, “Getting our History Right,” National Review Online, September 23, 2014, http://ift.tt/1GhDupg.
4. College Board, “Statement on AP U.S. History,” Advances in AP, September 19, 2014, https://advancesinap. http://ift.tt/1FIr6Un.
5. James R. Grossman, “The New History Wars,” New York Times, September 1, 2014, www.nytimes.com/ 2014/09/02/opinion/the-new-history-wars.html?_r=1.
6. Republican National Committee, “Resolution Concerning Advanced Placement U.S. History (APUSH),” August 8, 2014, http://ift.tt/1GhDupk HISTORY_APUSH.pdf.
7. Frederick M. Hess and Max Eden, “Surprise — The New AP U.S. History Framework Is Scrupulously Fair-Minded,” National Review, July 30, 2015, http://ift.tt/1JzUa0c.
8. Daniel Henniger, “Hey, Conservatives, You Won,” Wall Street Journal, August 26, 2015, http://ift.tt/12Q62IT hey-conservatives-you-won-1440628311.
9. Colleen Flaherty, “Revisiting History,” Inside Higher Ed, July 31, 2015, http://ift.tt/1ePdKIu 2015/07/31/revised-ap-us-history-framework-seeks-calm-critics.

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No, public pensions don’t boost economic output

The California Public Employee Retirement System (CalPERS) issued a report in July claiming that its benefit payments to retired government employees in 2013-2014 “supported 104,974 jobs throughout California and generated more than $15.6 billion in additional economic output.”

Through an economic “multiplier effect,” in which pension benefit checks are spent and re-spent throughout the economy, CalPERS claims to have generated over $387 billion in sales tax revenues and $328 billion in property tax receipts.

To reduce pension benefits for public employees, the study implies, would harm the overall California economy.

One would expect a study like this to gild the lily a bit. But the CalPERS economic stimulus study goes far beyond that: It is a cost-benefit analysis that doesn’t include any costs. This study is nothing short of propaganda that wouldn’t get a passing grade in a freshman economics course.

The study, titled “CalPERS Economic Impacts in California,” is nothing new. For several years, public employee retirement systems around the country have published “pensionomics” studies claiming that the benefits that they pay stimulate the economy and create jobs.

The logic of these studies is simple: Retirees spend their CalPERS benefits on, say, food, housing and medicine. The grocers, homebuilders or health care providers who receive retirees’ money re-spend it, and so on down the line.

CalPERS claims that thanks to this “multiplier effect,” a single dollar of pension benefits creates $2.02 in total economic activity. CalPERS uses an economic model to track these purported economic gains by industry and county so everyone can see how much they benefit.

But for all the seeming economic sophistication, the CalPERS study lacks one important component, called “counting both sides of the equation.” It needs to count economic costs as well as economic benefits.

Yes, retirees spend their CalPERS benefits, and that spending creates economic activity. Economists may debate how big the “multiplier effect” is, but that’s not the problem with the CalPERS study.

The problem with the report is that CalPERS doesn’t create money out of thin air. Every single dollar of CalPERS benefits comes from a dollar that taxpayers or government employees contributed to the program or from the interest earned on those contributions.

Had those CalPERS contributions not been necessary, then both public employees and taxpayers would have had more money in their pockets. When they spent or invested those dollars, precisely the same economic multiplier effects would apply.

Once you count both sides of the equation, the economic costs of supporting CalPERS are just about equal to the economic benefits of the checks CalPERS writes to retirees. It’s a wash.

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Reforming Higher Education Finance

In his testimony today before the Joint Economic Committee, Director of the Center on Higher Education Reform Andrew Kelly identifies the major design flaws in the federal student aid system and explains the four most promising reforms that would encourage colleges to compete on price and value:

1. Cap Loan Programs that Allow Unlimited Borrowing and Reform Loan Forgiveness: Thanks to generous loan forgiveness, some graduate student borrowers face no marginal cost on dollars borrowed above a particular threshold, sending a green light to institutions to raise tuition. Reforming forgiveness is critical.
2. Improve Transparency: Providing prospective students (or their parents) with additional information about costs and student outcomes can empower them as consumers.
3. Implement a Performance Floor and Risk-Sharing for Federal Loans: Policymakers should replace the primary federal higher education regulation—the CDR—with two simple accountability mechanisms: a performance floor that would kick the worst-performing institutions out of federal aid programs and a risk-sharing policy that would give institutions skin in the game.
4. Create Space for Private Financing: Unlike the federal government, private lenders and investors would, in theory, have incentive to underwrite loans on the basis of the expected value of particular postsecondary options. Under such a system, students would be unable to secure financing for programs with no return on investment, and loan terms would reflect the value of different options, thereby sending a signal to students about where to invest.

Read the full testimony, “Reforming Higher Education Finance to Align the Incentives of Colleges, Students, and Taxpayers.”

To request an interview with Andrew Kelly, or another AEI scholar, please contact AEI Media Services at mediaservices@aei.org or 202.862.5829.

Quick Links: 

5 questions that every presidential candidate should answer on higher education

It’s time to demand more of American colleges. Here’s how

REPORT: Inputs, outcomes, quality assurance: A closer look at state oversight of higher education

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De nadelen van de euro worden elk jaar duidelijker

Het is zowaar inmiddels een tijdje rustig in Griekenland! Een mooi moment om een onderbelicht aspect van die gezellige monetaire unie van ons te bestuderen, namelijk haar effect op handel binnen de Europese Unie.

De eurocraten hebben altijd verkondigd dat de euro, bovenop eeuwige vrede en immer escalerende economische groei, ook een forse toename van de grensoverschrijdende handel binnen de Europese Unie zou opleveren. Mocht je wat van die propaganda uit de eerste hand will vernemen, dan is hier een handige link naar de Europese Commissie. Geniet ervan.

En het leek er vroeger ook wel op dat de invoering van de euro inderdaad tot meer handel tussen EU-lidstaten zou leiden. Niet alleen omdat die tot minder wisselkoersfluctuaties zou leiden, want van dat soort fluctuaties was in Europa toch al niet zoveel sprake, maar daadwerkelijk door de toegevoegde waarde van een gedeelde munt. Zo schatte econoom Andrew Rose van Berkeley in 2000 op basis van meer dan honderd combinaties van landen die tussen 1970 en 1990 dezelfde munteenheid gebruikten in dat de monetaire unie die toen net van de grond was gekomen tot drie keer zo hoge handelsstromen zou gaan leiden. Een voorzichtigere schatting gebaseerd op wat er gebeurt wanneer landen een muntenunie verlaten (uitgevoerd in samenwerking met Reuven Glick) deed hem nog steeds vermoeden dat ze in ieder geval zouden verdubbelen. Dat zou dus bovenop de groei die puur door stabiele wisselkoersen wordt veroorzaakt komen, en uiteindelijk zou dit ook tot forse groei-effecten leiden, zo voorspelde diezelfde Rose in 2002, samen met Jeffrey Frankel van Harvard.

Maar daar is niets van terecht gekomen, zo hebben inmiddels ook de economische onderzoekers ontdekt, zelfs Professor Rose zelf! Het gebeurt niet zo vaak in de academie (of in de politiek!), maar eerder deze maand publiceerden hij en de voornoemde Dr. Glick wat ze “A Post-EMU Mea Culpa” noemen: een paper waarin ze hun eerdere conclusies en voorspellingen volledig terugnemen en ontmantelen. De nieuwe bevindingen zijn dat het eigenlijk onmogelijk is om met ook met maar enige zekerheid de impact van een munteenheid op handelsrelaties vast te stellen, maar dat als je ze een pistool tegen de slaap drukt dan zouden ze wellicht zeggen dat de EU wellicht een klein positief effect heeft gehad – plus 15% of zo, zoals Professor Frankel een aantal jaar terug ook al erkende, maar zeker geen ver(drie)dubbeling.

Hoe komt dat? Wellicht omdat de voorspellingen grotendeels gebaseerd waren op de bijzondere relaties tussen voormalige kolonien en andere derde-wereldlanden en de metropolissen waarmee ze tot voor kort een hechte band hadden. In Europa liggen de relaties uiteraard anders: alle landen liggen relatief bij elkander in de buurt (want in Europa!), en een fors aantal deelt een grens of zelfs een taal.

In ieder geval is het frustrerend dat pas nu dit soort resultaten naar buiten wordt gebracht of wordt ontdekt: de ellende die de monetaire unie in Europe heeft teweegbracht heeft dus nog minder voordelen met zich meegebracht dan de optimisten claimden, zo vertellen zelfs de toenmalige optimisten ons nu. Het is tekenend voor de eurocraten dat zij hier nog steeds geen openheid over betrachten. Hier is hoe de Europese Commissie de boel beschrijft in geval je eerder mijn link besloot te negeren:

“Makkelijk prijzen kunnen vergelijken, [sic] stimuleert de grensoverschrijdende handel en allerlei soorten investeringen, van de individuele consument die het goedkoopste product zoekt tot bedrijven op zoek naar de voordeligste dienstverlening en grote institutionele beleggers die in de eurozone zonder wisselrisico’s efficiënter kunnen investeren. Binnen de eurozone is een grote geïntegreerde markt ontstaan, die eenzelfde munteenheid gebruikt.”

Misleidende lariekoek, zo weten we nu. Wellicht was dit 15 jaar geleden een redelijke voorspelling; nu niet meer. Als de Europese Commissie op die pagina graag een voorspelling van 15 jaar geleden wil, dan wellicht dit: “Indeed, the adverse economic effects of a single currency on unemployment and inflation would outweigh any gains from facilitating trade and capital flows among the EMU members.” Want dat dat wel klopt wordt ieder jaar duidelijker.

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US Food Aid

In advance of the Committee on Agriculture’s hearing entitled “US International Food Aid Programs” later this morning, AEI Visiting Scholar Vincent Smith has released a new report on Cargo Preference for Food Aid (CPFA). Smith explains that reforming US emergency food aid programs by eliminating wasteful practices and maximizing resources would help feed millions more people in dire need.

Key points from the report include:

• Cargo Preference for Food Aid (CPFA), which requires at least 50 percent of all food aid to be sourced and shipped on US-flagged vessels, resulted in an additional $140 million to $200 million in wasted spending on shipping costs from January 2012 to May 2015.

• Although the main political rationale for preserving CPFA has been the need to maintain a viable oceangoing fleet of trained mariners for military preparedness, the most militarily useful ships in the US-flagged commercial mercantile fleet carried only 18 percent of all food aid shipments between 2011 and 2013. Food aid shipments accounted for less than 5 percent of those vessels’ total shipping capacity over that same period.

• By terminating the CPFA, the practice of monetization, and requirements that almost all food aid be sourced in the United States and maintaining current levels of federal funding, US emergency food aid programs could serve an additional 4–10 million people in dire need every year.

For a more detailed analysis, read the full report here: “Military Readiness and Food Aid Cargo Preference: Many Costs and Few Benefits.”

To arrange an interview with Vincent Smith, or another AEI scholar, please contact AEI Media Services at 202.862.5829 or mediaservices@aei.org.

Quick Links: 

ONE PAGER: US food aid pouring money down the drain

INFOGRAPHIC: Food aid folly

Why the US food aid system needs reform

A better direction for food aid reform: Allowing markets to help people

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Fixing America’s ‘crumbling infrastructure’

The 405 freeway is viewed from above in Carson, California August 5, 2015. REUTERS/Mike Blake.

In a new AEI Economic Perspectives paper, Richard Geddes presents a set of principles to guide policy making intended to facilitate the operation, maintenance and expansion of what politicians and civil engineers alike often to refer to as “our nation’s crumbling infrastructure.” His focus is in particular on the highways, roads, streets, bridges and tunnels that cars and trucks use.

The principles Professor Geddes believes policymakers should adhere to are the following three:

• Infrastructure should be paid for by those who use it, ideally through user fees;

• Public-private partnerships should be used to streamline financing, operations, and maintenance;

• Public policy should complement emerging transportation technologies, especially those related to vehicle autonomy.

Each of these has direct policy implications, and the paper discusses a variety of concrete steps toward implementation.

But let us elaborate a little on the first principle. Taxes on motor vehicles and the fuels they use have historically paid for much of US infrastructure spending, sometimes complemented by general tax revenue (especially at the local level). For example, taxes on gasoline and diesel account for more than 90% of the revenue going into the federal Highway Trust Fund.

For a variety of reasons — such as political opposition to raising these taxes merely to keep up with inflation, increased fuel efficiency, and the rise of electric cars —  revenue from these taxes has declined significantly in recent years. Fortunately, technological progress has made it much more straightforward to charge drivers for actual use without costly tollbooth systems.

In a sense, the surface transportation system has become more “excludable,” as economists say: it is easier to keep track of who uses it, to keep users, and to make them pay, without excessive transaction and monitoring costs. Infrastructure can thus be financed more easily in ways typically associated with private, not public goods, making a shift to a system with more user cost financing a sensible step.

And that’s just the beginning! For much more, read the entire paper here.

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America’s transportation challenges: Proposals for reform

ABSTRACT: Politicians and civil engineers alike often refer to America’s immense surface transportation system as “our nation’s crumbling infrastructure.” Major segments of the system are in need of renovation, and its problems are exacerbated by deferred maintenance and unstable, inadequate revenue sources. New approaches to funding, financing, operating, and maintaining the US transportation system are necessary. Policymakers should adhere to three main principles: infrastructure should be paid for by those who use it, ideally through user fees; public-private partnerships should be used to streamline financing, operations, and maintenance; and public policy should complement emerging transportation technologies, especially those related to vehicle autonomy.

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America’s transportation challenges

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The Hillarycare sequel to Obamacare

As Obamacare heads into its third full year of implementation and the 2016 presidential election campaign kicks into high gear, expect the law’s leading intellectual authors and defenders to shift their tactics from defense to offense. They want to solidify Obamacare’s reach and fulfill their original vision. Their continued aim is to cement the federal government’s control over American health care and the practice of medicine.

Hillary Clinton, the front-runner for the Democratic nomination for president in 2016 and the former secretary of state in the Obama administration, is the logical champion of the sequel to the Affordable Care Act because she paved the way for Obamacare with the plan she pushed as first lady in 1993 and 1994. She provided its intellectual origin.

The similarities between the original Hillarycare and Obamacare are striking.

Both plans were built around the concept of “exchanges” — originally called “Health Insurance Purchasing Cooperatives” in Hillarycare.

Both plans relied on an employer mandate.

Both had minimum federal benefit requirements, and federal preemption of the traditional state role in the regulation of health insurance.

Both saw an extensive role for federal agencies in establishing the health benefits that a consumer must have access to, and those services that wouldn’t be available.

The only real daylight that has ever been visible between Clinton and Obama on health care occurred in 2008, over the individual mandate. Clinton, campaigning for president, supported a mandate as part of her health-care plan. Then–senator Obama, also campaigning for president, opposed it and vigorously attacked Clinton over the issue, only to drop his opposition after getting elected. With that flip-flop, Obamacare became indistinguishable in all of its key features from the plan pushed by Hillary Clinton 15 years earlier.

So it is not surprising that Clinton is now campaigning to “build upon” Obamacare, mostly by trying to blunt the high cost of Obamacare’s regulatory excess with yet more costly regulation. Nor is it surprising that what she is promising sounds an awful lot like what Obama promised nearly seven years ago — free health care, with no consequences. In recent days, she proposed a $250 annual limitation on what people must pay for pharmaceutical products (with insurers presumably covering all costs above that amount and charging higher premiums as a result). She also wants to give everyone in the United States three free trips to the doctor each year, along with a $2,500 tax credit ($5,000 for couples) for people with high out-of-pocket expenditures. Who would pay for all of this?

She claims it would be paid by cost savings from painless government-imposed cost controls, especially on drug companies. But, of course, price controls are never “costless.” Access to new drugs will suffer. By definition, with price controls there will be less innovation and fewer new products to address the many ailments that afflict millions of patients every year.

And Clinton’s agenda will not stop there. She has signaled that she will continue the Obama administration’s plans to impose more government control on the provision of services, as well as adopt the cost-control agenda of the Democratic party’s top thinkers.

In a New England Journal of Medicine op-ed from January 2015, Health and Human Services Secretary Sylvia Burwell provided the roadmap for what lies ahead. Burwell announced that, as insurance enrollment was expanding due to Obamacare, it was time for her department to take the lead and “shape the way care is delivered” across the United States to cut costs and improve efficiency. In other words, HHS is launching more intrusive micromanagement of how providers organize themselves to care for patients.

HHS’s plan to  “shape” how health care is delivered centers on using Medicare’s purchasing power to coerce doctors and hospitals to conform to the government’s plans. The names of the various pieces of the initiative can sound benign – such as Accountable Care Organizations (ACOs), “bundled payments,” and “paying for performance” — but their effect is to force practitioners into government-sanctioned care arrangements. In the case of ACOs, which are government-regulated managed-care plans, doctors are now being coerced into joining them to get higher Medicare-reimbursement rates.

At the same time, Medicare’s beneficiaries are also being “automatically enrolled” into ACOs — forced to become patients of these networks, without their explicit consent. If their physician is in an ACO, so are they — by default. Thus, the Medicare bureaucracy has created a new vehicle built entirely on coercion rather than choice. Over time, it is quite predictable that ACOs will become the mechanism for more micromanagement of physician practices.

It will be far easier for HHS to regulate how providers deliver medical care when physicians mainly practice in large groups. Right now, it’s hard to control the nation’s doctors from a remote bureaucracy in Washington, because physicians still mainly practice medicine in small groups. There are too many of these small-group practices for HHS to control easily. But by coercing doctors to join large, and usually hospital-based, health systems — or by forcing them to become employees of ACOs — it will be much easier to control how care is delivered, because HHS will be able to impose rules on a much smaller number of health systems. It will then be up to the ACO or hospital to enforce HHS’s rules on their affiliated providers.

#share#Some of the key architects of Obamacare, who are also advisers to Hillary Clinton, have come forward with explicit plans for giving the government even greater cost-control authority. Former Obama official Ezekiel Emanuel, along with a lengthy list of co-authors, has recommended more explicit, governmentally imposed cost controls on both public and private-sector health care, all in the name of cost control. The overall concept is called a “global budget,” and the implicit enforcement mechanism is the extension of the government’s regulated payment rates in Medicare to the rest of the health system.

The effect of this approach to cost control would be to export out of Medicare to employer plans and other insurance arrangements the many perverse incentives now embedded in Medicare’s regulated rates. The government has no real way to determine the right price for medical services, so it invents technocratic schemes to create the illusion of competence. The reality is a system that both overpays and underpays frequently — and thus misallocates resources.

These same themes were prevalent in Clinton’s last campaign for president, in 2008. Speaking at a campaign stop at the Broadlawns Medical Center in Des Moines, Iowa, she said:

It is time that we put patients, not drug companies and insurance companies, first. That means changing the way they do business. . . . Because ultimately, the American taxpayer pays for the development of a lot of these drugs through NIH grants and other kinds of research grants; we pay for the clinical trials, and then we pay the highest prices in the world. And we’re going to begin to rein that in.

She would go back to this line or argument often during the 2008 campaign and has brought it back again in her current quest for the White House.

Her populist message will have some political appeal, of course. There is a pervasive anti-business mood taking shape in the electorate. But the pandering should fall flat with many Americans. They were already promised reduced costs with Obamacare, and now most Americans are paying much more for their health care. They should be skeptical of more promises of cost-free health care courtesy of the federal government.

Moreover, Americans remain rightly uneasy about the massive expansion of the government’s overall role in the health system. Polls continue to show that more voters oppose Obamacare than support it for this very reason. They are right to have these concerns.

The central, driving theme of Obamacare is a massive shift of power and authority from states, employers, physicians, and individuals to the federal government. Only a small portion of that authority has been exercised to date by the federal bureaucracy. If Hillary Clinton is elected president, she will push her campaign proposals, but she will also build upon the Obama administration’s current plans to have the federal government run every aspect of medical care. That was the unfinished piece from her original vision, which formed the intellectual inspiration for Obamacare. Whatever remaining autonomy there is for private initiative in the health system would be wiped away.

An effective counter to this agenda must begin with a relentless critique of the disastrous consequences of government-run health care. The public agrees that the quality of health care would suffer greatly with the government fully in charge.

But opponents cannot just offer up critiques of Obamacare. The public wants effective health-care reform, just not the kind that passed in 2010 or what Hillary Clinton will promise. However, if there is no politically viable alternative in sight, it will not be possible to block the sequel to Obamacare, much less roll back what is already in place from Obamacare 1.0.

It is crucial, therefore, that the 2016 GOP presidential nominee offers a plan to the country that provides access to secure insurance to everyone in the United States without handing to the federal government all power and authority over the health system.

Fortunately, most of the work to develop such a plan has already been done. Senators Richard Burr and Orrin Hatch and Representative Fred Upton have introduced a credible health-care proposal, as has House Budget Committee Chairman Tom Price. These plans would broaden insurance enrollment, give those with preexisting conditions affordable options for coverage, and slow rising costs by introducing intense price competition and consumer choice. They would meet these key objectives without the massive expense and governmental overreach of Obamacare. The GOP candidate should build upon the themes and ideas developed in these plans.

There’s reason for optimism, despite the many challenges with rolling back a law that was enacted more than five years ago. Hillarycare perished in 1994 when Americans realized it would introduce too much governmental control into the health system. The public remains wary of Obamacare for the same reason.

There is still an opening to offer a better way forward. But that window of opportunity will close after 2016. So now is the time for the GOP candidates to begin countering Obamacare and Hillarycare with plans of their own.

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Debate: What ails Republicans?

Francis Wilkinson is a former Democratic consultant who’s now a member of the Bloomberg View editorial board. Ramesh Ponnuru is a veteran conservative writer and policy expert and a Bloomberg View columnist. They exchanged e-mails about the Republican Party’s internal conflicts after the surprise resignation of Speaker of the House John Boehner.

Francis: Given my jaundiced view of the Republican majority, I’ve interpreted the demise of Boehner as further confirmation that the Republican Party is in crisis.  A Republican speaker operating with a large majority who nonetheless feels compelled to resign — midterm — because he cannot manage the contentious Republican conference. And of course it follows previous voluntary dramas on the debt ceiling and Obamacare.

In his Sunday interview with John Dickerson on CBS, Boehner agreed that the few dozen Ultras (I hate calling them “conservatives”) in the House are absolutely “unrealistic” about what they can achieve in Washington with power divided between the parties. Yet the House — Boehner’s House — is repeatedly held hostage to the Ultras’ demands, and  more than a few mainstream conservatives live in fear of a primary challenge from the right.

This dynamic has been playing out since at least 2011, and it didn’t really budge after Obama was re-elected in 2012. You can see something similar working on the party’s presidential candidates, especially with regard to immigration — with everyone shifting right to avoid trouble (for now).

Is this a healthy party?

Ramesh: Republicans are healthy enough that they could in 16 months have control of the White House, both houses of Congress, and a majority of governorships and state legislatures. But you are right, of course, that there is a lot of dysfunction within the party. I would not put all the blame for it on the most conservative Republicans in Congress. The party’s congressional leaders promised great things if they took charge of the Senate. Once in control they acted as though they had no higher priority than passing a highway bill — which they then failed to do. Of course a lot of Republicans grew restive.

A lot of Republicans are unhappy that their party has done nothing about President Obama’s executive lawmaking. Republicans’ discontent often takes the form of feuds with one another or threats of pointless showdowns with Obama. But the cause of that discontent is a dysfunction in our current system of government, not just in the GOP.

Congress has been growing weaker and weaker institutionally for a long time now. This is not just a matter of gridlock: Even in Obama’s first two years in power, when his party had large majorities in both chambers, a lot of the legislation he signed consisted mostly of grants of power to the executive branch. The trend toward executive government has accelerated as Obama has tested the limits of his powers. Congress has done very little to fight back, and Republican leaders have made it pretty clear that they are resigned.

The malcontents are right to want Congress to recover its authority. They’re right, as well, to rebel against an agenda of “regular order” that won’t change anything.

Francis: You know conservative politics much better than I do, but I’m not seeing a lot of grassroots outrage that Congress is insufficiently congressional. I see people upset that Republicans aren’t riding roughshod over the executive because the executive is a liberal Democrat. In any case, Congress was certainly intensely engaged in a lot of the 2009-2010 legislation — no more so than on Obamacare, which, of course, quickly proceeded to become the chief source of outrage on the right. So if the GOP base is worried about the erosion of congressional prerogatives and the expansion of executive power, I have a sneaking suspicion they will lose that passion under a Republican president.

I agree that Republican leaders oversold and under-delivered to their base. I don’t see Boehner and McConnell as victims — more as accessories. And the trouble began before 2010. Both GOP leaders played footsie with birthers and other cranks — using “I take the president at his word” and other rhetoric that pandered to notions that the Obama presidency was illegitimate. Who benefited? It fed a — dare I say it? — a paranoid style that’s only grown in evidence.

On a larger stage, though, the party seems backward facing — the efforts of people like yourself notwithstanding. It’s OK to say, “Look, inequality is not our thing, policy-wise. It’s just the way free markets work.” But then more high-end tax cuts? Because they worked in the 1980s? And given the market-based approaches to climate change that a conservative party could champion, I don’t see how it’s acceptable to have one of the party’s brightest up-and-comers (and maybe soon!), Marco Rubio, saying, in essence, “Hey, we’re not doing anything about it.”

Republicans may indeed control Congress and the White House very soon. Yet I don’t have a clear understanding of what that would mean. Would they really adopt the Ryan budget? Or was that just tough talk when everyone knew it wouldn’t happen? (And before Paul Ryan discovered the poor?) I don’t know which policies are coming to market at full value and which are trading at a discount. Maybe I’m not skilled enough at reading the news. But I also think it results from a party that isn’t sure if it’s conservative or radical.

Ramesh: It’s true, Frank, that most conservatives have no deep attachment to congressional prerogatives. My point is rather that conservative anger at Republicans is connected to the long decline of Congress: When Republicans control Congress and Congress gets sand kicked in its face, it’s Republicans who look weak to their allies. You’re right as well that congressional Republicans could revert to follow-the-leader mode if a Republican wins the White House. But I think that the feistiness of congressional conservatives in recent years suggests that there could be a real check.

What else would that Republican president do with a generally but not automatically supportive Congress? I think we can safely predict that taxes would be cut and Obamacare significantly modified, maybe even replaced. Defense spending would be raised. International efforts to curb carbon emissions would be set back. (A good thing, in my view, since curbing emissions is not likely to generate benefits worth the costs.) Conservative justices would be appointed to the Supreme Court. Whether Republicans would try to rein in entitlements is harder to say, but several of their potential nominees seem committed to the idea.

None of that seems especially radical to me, but I think there is something to your criticism of Republican policies as “backward-looking.” Again, though, I think that both parties have stale agendas. The rhetoric of nearly every Democrat on labor issues is suffused with nostalgia for Walter Reuther’s America. Democrats’ proposals on guns seem like exercises in symbolism more than attempts to make an actual difference to the problems they identify. Their opposition to the Keystone Pipeline has that same totemic quality.

I suspect that one reason politics puts Americans in such a dyspeptic mood these days is that they sense that both parties are less interested in addressing current concerns than in priorities that they set a very long time ago.

Francis: I didn’t have that view of Democrats in 2009 — though I guess a global meltdown changes the stakes as well as perceptions of them. But I partly agree with you about the general drift of the Democratic campaign/debate thus far. I think Elizabeth Warren, and then Bernie Sanders, established a vocabulary that Hillary Clinton is less adept at speaking. And if you allow inequality to be your target, you’re going to have a very difficult time hitting that mark, especially with policies you want to carry you through a general election. (Although I will also say that when Walter Reuther was around, the money was good.)

What you say on a Republican agenda makes sense, of course. As our View colleague Jon Bernstein likes to point out, politicians actually tend to do what they promise. But radicalism is in the eye of the beholder. I don’t think nationalizing Mitt Romney’s health care plan was radical, especially given a far less than optimal status quo. But a lot of people concluded it was. And I have no doubt that a different group of Americans will conclude the same about any Republican president’s agenda.

Maybe, as you say, the congressional forces would assert themselves even to confront a Republican executive, which I suspect would have some perhaps unintended but still positive effects on relations in Congress. But with high levels of conflict between the parties, and a pretty robust conflict under way within at least one party, it’s an unsettling moment. And it doesn’t look to end soon does it?

Ramesh: I’d say there is conflict underway in both parties. It has been more muted among the Democrats because they have the White House and because Hillary Clinton for a long time seemed like she might not be effectively challenged.

During that period, it often seemed odd to me that she was being more responsive to her party’s left than some of the Republican presidential contenders, in a highly competitive field, were being to their party’s right. Jeb Bush and Marco Rubio refused to join Donald Trump in calling for an end to birthright citizenship; Clinton, on the other hand, has walked away from previous positions on crime and trade.

Recent polls, though, have begun to suggest that she had good reasons for her caution. Democratic politics could be about to get interesting too.

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