It has always been difficult to determine how much money is lost to taxation because it is hidden in tax havens that specialize in disguising the identity of the owners of the money. The world economic system has created this tax loophole for no good economic reason: hidden money, almost by definition, cannot be used productively. The loopholes exist for only one reason: to help individuals avoid paying taxes. Finally, economists have begun to tackle the size of the problem, and the figures are substantial. According to one study, about $7.6 trillion is stashed away in loopholes that are not remotely available to the vast bulk of taxpayers. As such, the tax havens have been deliberately constructed to help a very small number of people, and these tax havens are a deliberate feature of the world order.
The Pew Foundation consistently produces very insightful polling data on a whole range of issues. In its most recent report, it examines the political polarization in America. Not surprisingly, the evidence suggests that the country is significantly more polarized than it was 2o years ago. From the report:
A decade ago, the public was less ideologically consistent than it is today. In 2004, only about one-in-ten Americans were uniformly liberal or conservative across most values. Today, the share who are ideologically consistent has doubled: 21% express either consistently liberal or conservative opinions across a range of issues – the size and scope of government, the environment, foreign policy and many others.
The new survey finds that as ideological consistency has become more common, it has become increasingly aligned with partisanship. Looking at 10 political values questions tracked since 1994, more Democrats now give uniformly liberal responses, and more Republicans give uniformly conservative responses than at any point in the last 20 years
No wonder the Congress cannot get anything done.
The news is too grim. We all should relax. Listen to this video.
The stunning advances by ISIS into Iraq came as a surprise to some and as a foregone conclusion to others. ISIS only came into existence three years ago, and it amassed a great deal of power largely because of its control of oilfields in western Syria. Just before ISIS took control of the city of Mosul, Iraqi authorities actually had managed to interrogate some high officials in ISIS that exposed how much wealth the group had been able to appropriate through its activities. The information should give the governments opposed to ISIS a greater ability to limit the group’s activities.
One of the most interesting dynamics in the current world order is the relationship of China and India. We tend to overlook this relationship as both are rising powers, with similar objectives in recasting the world order in ways that are more sympathetic to the interests of emerging powers. To a certain extend, this perspective has validity. But India and China have been familiar powers for far longer than the contemporary world order has been around, and there are some dramatic conflicts of interests between the two. We should keep our eyes on how both powers interact with each other–over the long term, this relationship is perhaps the most important in the world.
Ukrainian separatists shot down a Ukrainian transport plane, killing 49 people. The rebels apparently used anti-aircraft weaponry, marking an escalation in their capabilities. In addition, there are reports that Russia is sending in tanks and other heavy weapons to aid the separatists. If true, Ukrainian forces will be at a severe disadvantage is restoring order to all parts of their country. Western powers will likely examine the evidence, and, if the reports are accurate, will likely increase the sanctions on Russia. There is still no possibility of a Western military response to Russian moves.
Professor Stephen Walt of Harvard University is one of the US’s pre-eminent realists. His critique of American policy in Iraq is pointed and damning. Walt firmly believes that the US has made serious mistakes by intervening in the internal affairs of other states when national interests are not at stake. We should keep Walt’s analysis in mind as President Obama orders US naval vessels into the Persian Gulf, perhaps preparing for air strikes to help out the Iraqi government to defeat the ISIS forces.
The underlying context of the economic crisis the world has been going through since 2008 is the massive increase in the debt taken on by governments. The debt is often viewed as evidence of profligate spending and the growth of a sense of entitlement among citizens that do not contribute to overall economic growth. That analysis is the bedrock of the austerity programs that have led to so much misery in the world. Economists in France have done a thorough analysis of the French public debt, and have come to the conclusion that that analysis is not accurate. Their conclusion is that the vast growth of debt in France was not due to an increase in public spending (in fact, public spending in France went down substantially), but rather the reduction in taxes. If true, then austerity programs are exactly the wrong medicine to apply. In Greece, laid-off state workers have protested their dismissals, leading to dramatic confrontations with the police.
On the other dramatic front in the world, Iraq, we are witnessing one of the last gasps of European colonialism in the Middle East. Iraq is a state with three nations–Sunni Muslims, Shia Muslims, and Kurds–with only one state–the central government in Baghdad. That structure was established by the British along the terms of the Sykes-Picot Treaty concluded in 1916. It was a secret agreement between France, Britain, and Russia dealing with the disposition of the territory controlled by the Ottoman Empire after its expected dissolution at the end of World War I. The treaty gave the territory of what is now Iraq to Great Britain (and what is now Syria and Lebanon to France–see the map below).
When Iraq became independent in 1932, there was no move to reconceptualize the territory along the lines of the allegiances of the people who lived in the territory. A monarchy had been established in 1921 that perpetuated the idea of Iraq, but the monarchy was overthrown in 1958 and a republic was created. Ultimately, Saddam Hussein seized power in 1979 until his overthrow by American forces in 2003. Throughout this entire history, the Sunni Muslims had been in control of the central government because the British had placed them in power from the very beginning, and the Sunnis did not allow the Shia or the Kurds any meaningful participation in their governance.
Thus, when the US set up elections in 2006, the majority population–the Shia–took control of the central government, and, under Prime Minister of Nouri al-Maliki, there has been a systematic exclusion of the Sunni Muslims. The Sunnis resent the loss of control; the Shia view their behavior as payback. The Kurds thought that greater autonomy was all they could ask for, but, given the oil reserves in Kurdish territory, an independent Kurdish state was always possible.
But now everything is up for grabs. The Sunni Muslims look poised to take control of territories populated by Sunnis. ISIS has made the claim to take control of Baghdad, and perhaps they might, but the central government of Iraq has lost all legitimacy (that’s what happens when the security forces abandon their posts without a fight). So there is no longer any “Iraq”. We will most likely see the country split into three separate states, two of them Islamic Republics who will actually hate each other. The Kurds will establish their own state which will roil the Kurds in Syria, Iran, and especially Turkey.
Such a division should have occurred with the dissolution of the Ottoman Empire. The mistake of European colonialism was to believe that nation-states could be created without regard for the historical and cultural dynamics of the people who lived within the territory. We are now witnessing the turmoil of justice long delayed.
Temperatures in New Delhi, India, hit 118 degrees Fahrenheit yesterday as the country suffers through an oppressive heat wave. Fortunately, the monsoon season is about a week away, which should bring relief from the heat, but Indian forecasters are predicting a relatively weak monsoon season. The country is ill-prepared for such heat, as electricity for air-conditioning is not especially reliable in parts of the country. The heat wave is likely to increase demand for electricity leading to increased use of coal, aggravating greenhouse gas emissions in the country.
The US is in a very difficult situation in Iraq. The Islamic Army of Syria and Iraq (ISIS) poses a real challenge to the US and to liberal forces in the Middle East. But the government of Iraq is also no close friend of the US as it has close ties to Iran. The US has to decide how much support it wishes to give the Iraqi government–ISIS is a more serious threat to US interests in the region. The Obama Administration has the difficult job of trying to restabilize Iraq after the US invasion upset the balance of power in the country in 2003.
The disintegration of Iraq continues. The success of ISIS in taking over several cities in Iraq has emboldened the Kurds to think about their independence from Iraq. The Kurds have dreamed of their own homeland, Kurdistan for over a century, but their nation is divided among Turkey, Iran, Iraq, and Syria. In Iraq, the Kurds have carved out a high degree of autonomy from the central government, and they also have access to their own oil fields which are some of the richest in the Middle East. At this point there does not seem to be a high degree of animosity between the Kurds and ISIS, but that situation may change rather quickly if ISIS continues to exert greater control.
Members of the Sunni Islamist group, the Islamic Army of Iraq and Syria (ISIS) have now taken control of 4 Iraqi cities. In a further blow to the Iraqi government, it appears as if the Iraqi military surrendered the cities without much of a fight. Reports indicate that ISIS now has control of huge caches of military equipment, including state-of-the-art US Blackhawk and Apache helicopters (although it is not clear that ISIS knows how to fly them). Additionally, ISIS forces took control of large amounts of money from government offices and banks. ISIS now ranks as a formidable military and political force in the region. It is a perverse turn of events, all precipitated by the US invasion of Iraq in 2003 for the explicit purpose of denying militants access to Iraqi resources.
In response to the armed attack on the Karachi airport, the US used drones to kill presumed militants in the Iraqi area of North Waziristan. Apparently, the Pakistani military is planning an offensive in the region which is a stronghold for the Pakistani Taliban. It is not clear how the drone stikes are an effective response since the attack on the Karachi airport was hailed by the Pakistan militants as a response to an earlier drone strike that killed its leader, Hakimullah Mehsud, last November.
One of the most indefensible assumptions of world politics is the distinction between domestic and foreign politics. That distinction is virtually meaningless in economic terms, as it is now impossible to identify the national identity of most large multinational corporations (or where they store their money). But the distinction is also becoming blurred in the area of security as local police forces take on a lot of the equipment usually associated with national armies. The New York Times has a very troubling story on how police forces across the US are arming themselves in ways that give local forces overwhelming firepower, leading to a strong separation of security capabilities with the security threats mostly associated with local populations.
After the economic crisis of 2008-09, many believed that the debts that had grown so large in the 2000s had to be drastically reduced. To this end, many countries were forced to undergo painful spending and budget cuts in a policy that was called “austerity.” The assumption was that by forcing drastic reductions in spending, the debts would be slowly reduced and economic growth would return because the costs of investment would also be reduced. The plan was great in theory, but, in practice, economic growth actually declined in many countries with austerity programs. The graph below dramatically shows the failure of most of the austerity programs (Ireland is a major exception).
The Islamic State in Iraq and the Levant (ISIS), an offshoot of al-Qaeda, has seized control of Mosul, the second largest city in Iraq. ISIS is an organization populated primarily by Sunni Muslims, the city of Mosul is generally regarded as a Kurdish stronghold, and the government of Iraq is run by Prime Minister Nouri al-Maliki, a Shia Muslim. In short, the political control of Iraq is highly fragmented, and the success of ISIS makes the situation in Iraq highly volatile.
Malaria kills almost a million people a year. The disease is spread by mosquitoes and control of the disease is incredibly difficult. Scientists have developed a genetically modified mosquito that breeds mostly male mosquitoes leading to the possibility of collapsing mosquito populations within six generations. The breakthrough is dramatic, but we should think about whether eradicating mosquito populations is something we wish to do, despite the benefits of wiping out malaria. Scientific advances often lead to ethical questions we are perhaps ill-equipped to answer–humans may not miss mosquitoes, but humans may rely on species that need them.
The Tehreek-i-Taliban Pakistan (TTP) has claimed responsibility for the attack on the Karachi airport yesterday. The sophistication of the attack, as well as the sensitivity of the target, revealed a strength of the TTP that many analysts had failed to realize. It is difficult to imagine how the fragile Pakistani government can withstand such direct challenges to its power and authority without losing more of its legitimacy to the Pakistani polity. Pakistan is likely to go through a very difficult period in the immediate future, and it is not at all obvious how the government can regain the trust of its people.
There is a very controversial advertisement campaign being waged in the Boston subways. Supported by an organization called Ads Against Apartheid, the ads sharply criticize Israeli policies toward Palestinians. Such ads would have been inconceivable several years ago, and they suggest that there may be a shift in attitudes in the US toward Israeli policies in the Occupied Territories. As is usually the case with ad campaigns, it is hard to measure the actual effect on attitudes. Nonetheless, there are likely discussions going on in Boston that are different from those in the past.
The World Cup begins in four days in Brazil, and a metro strike and general unrest have roiled the country in anticipation. Many Brazilians are upset by the $11 billion spent on the tournament, believing that the money could have been better spent on some of the social and economic problems in the country. About 500,000 people from abroad are expected to attend the games, and security in the country has made likfe for many much more difficult.
Heavily armed gunmen have attacked the Jinnah International Airport in Karachi, Pakistan. This event is an ongoing one, and at this time there is no report of who is responsible for the attack. The violence is a clear escalation of the ongoing unrest in Pakistan, and the attack on the airport is a manifestation of the strength of the rebel movements in the country.
Photographic images often tell a great story. The photo below is from the commemoration of the 70th anniversary of the D-Day invasion of Europe. Russian President Putin has been shunned by Western leaders since the turmoil in Ukraine, and the photo conveys his isolation well. Unfortunately, the success of the event, D-Day, owed a great deal to the Soviet pushback of German forces from Russian territory to the German border.
One of the issues we always face in the classroom is the question of whether to allow students to use their laptops during class. Most students take notes on the computer, but some believe that they can “multi-task” and look at something else while keeping full attention on the lecture. The myth of mluti-tasking is incredibly insidious and completely false.
There are about 7,000 distinct languages spoken in the world right now, but about 25% of those languages are in danger of going extinct. Not surprisingly, the rate of extinction is roughly the same as that of biodiversity in the world. The cause for both extinction is the loss of forests, an environment that favors niche existence. About half of the 7,000 languages are currently spoken by fewer than 10,000 people so the perpetuation of those languages is highly problematic. The broader context of globalization makes efforts to preserve those languages both more possible and less likely.
Syrian President Assad was re-elected President of Syria in what can only be regarded as a completely sham election. Voting was only possible in areas controlled by the government. But the outcome was hailed by supporters of Assad as evidence that there is no solution to the civil war in Syria that does not somehow include President Assad. It is highly unlikely that any of the factions within the Syrian opposition will agree to any possible settlement that includes Assad. In short, the stalemate in Syria seems only to have deepened, even as roughly 160,000 people have died in the over three-year war.
The US and Iran are holding face-to-face talks on the Iranian nuclear program. The negotiations thus far have been held under the rubric of the Permanent members of the UN Security Council (France, Great Britain, China, Russia, and the US) plus Germany. The joint negotiations were necessary because Iran and the US do not have diplomatic relations, as well as political pressures on both sides to not show any signs of cooperation. But apparently, the two states have decided to meet in Geneva to hold bilateral discussions. Neither side wishes to make a big deal about the decision since their domestic politics would likely have negative reactions. Nonetheless, the decision is a very big deal, and suggestive of warmer relations and a sense of progress in the talks.
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