What would privatizing Social Security look like?
”No one’s gonna take away your grandma’s pension.” - José Piñera, Minister of Labor and Social Security in Chile, right before he took away your grandma’s pension.
Privatizing Social Security has been a conservative pet issue for as long as I can remember, despite being politically unlikely and unpopular. Even Paul Ryan, who paid for his college tuition with SS survivor funds, still reminisced on halcyon days of planning with his Delta Tau Delta bros to privatize SS at keg parties. If it were possible, what would it even look like?
The Background
Social Security is a defined benefit, "pay-as you-go-system," funded by the $1 trillion Old-Age and Survivors Insurance and $142 billion Disability Insurance trust funds, paid via payroll taxes, plus a $63.78 billion Supplemental Security Income from the General fund.
Before FDR passed SS, senior citizens were the poorest demographic in America. Nowadays it’s one of the most popular programs and everyone wants to preserve it in some way.
Problem is, we’re going broke.
Since 2010, the fund that SSA uses to pay benefits to retirees has been paying out more money than it has been receiving in taxes. At the current rate, the fund's trustees estimate that it will exhaust its reserves in 2033 and be unable to pay full scheduled benefits.
What if Ayn Rand was Acting Commissioner of the Social Security Administration?
It should be said that the freest of free market solutions here still imagines coercion of mandatory contributions. Still, the position advocates switching to a privately managed, defined-contribution system, which would get a higher returns by investing in the private market instead of government securities.
Because these are personal accounts, hopefully you fix the problem where an increasingly smaller working population pays for swelling retirees. In reality, those old obligations don't disapear:
Social Security has accumulated trillions of dollars in liabilities to workers who are already retired or who will retire soon. To make room for a new private system, policymakers must find funds to pay for these liabilities while still leaving young workers enough money to deposit in new private accounts. This requires scaling back past liabilities – by cutting benefits – or increasing contributions from current workers. Most large-scale privatization plans also involve major new federal borrowing.
Given that this transition would be pretty expensive and the main benefit is getting to invest in the private market, the counter is: why not just let the government invest in the private market? Such a case is made here.
More Consumer Choice?
A privatized system should give individuals more control over their investment decisions. It’s hard to weigh that benefit against the risk of dumb people ending up with less retirement savings than they get under the current system.
Would Management Costs be Lower?
Surprisingly hard to figure out! SS obviously has no marketing costs and boasts astoundingly low administrative costs of >1%. However, some admin work is outsourced, ie employers and the IRS collect the funding.
But hey, the government’s gonna keep doing all that stuff anyway; a privatized system would just have to duplicate them elsewhere, plus means testing, plus marketing costs.
Costs in proposed plans vary a lot:
In some privatization plans, contributions would be collected by a single public or semi-public agency and then invested in one or more of a limited number of investment funds…By pooling the investments of all covered workers in a small number of funds and centralizing the collection of contributions and funds management, this approach would minimize administrative costs, but it would limit workers’ investment choices.
Another strategy is to allow mutual fund companies, private banks, insurance companies, and other investment companies to compete with one another to attract workers’ contributions in hundreds or even thousands of qualified investment funds. This strategy would permit workers unparalleled freedom to invest as they chose, but administrative costs might be high.
But forget all these technical hypotheticals. The question we’re all wondering is, what does this look like in practice what would a South American military dictatorship do?
El Ladrillo
The largest scale example of a country privatizing its retirement system is under the Pinochet dictatorship in Chile. Initially their rollout was a big success with high returns. However, even Niall Ferguson, a prominent advocate for their system, notes many of the downsides I wondered about above:
There is a shadow side to the system, to be sure. The administrative and fiscal costs of the system are sometimes said to be too high. Since not everyone in the economy has a full time job, not everyone ends up participating in the system. The self employed were not obliged to contribute to Personal Retirement Accounts and the casually employed do not contribute either. That leaves a substantial portion of the population with no pension coverage at all…
On the other hand the government stands ready to make up the difference for those whose savings do not suffice to pay a minimum pension, provided they have done at least 20 years of work. And there is also a Basic Solidarity pension for those who do not qualify for this.
That public pension was in fact created by a socialist government specifically to make up for extremely low coverage under the neoliberal system. I find it pretty damning that the most extreme example of a privatized retirement system ran into all the problems its critics said it would, and handled it in the same way every public system does - through backup government funding. If we’re going to end up doing a mixed market system anyway, it might behoove us to keep our publicly managed system but give them leeway to invest privately, rather than pay a ton to transition to a privatized system then pay more later to fix the holes that left:
Chile’s system hasn’t worked as promised or expected. The creators anticipated that the average worker would save enough to earn 70% of their salary in retirement; the reality has been closer to one-third. They thought the new system would expand the number of workers with retirement funds; instead nearly 40% of Chileans have nothing to fall back on. Rather than improve the lives of Chile’s elderly, most pensioners live on less than the minimum wage...
The private system hasn’t let the government off the financial hook either. The transition period was always going to be expensive as the government footed the bill for those retiring on the public dime without receiving payroll taxes (as these contributions all headed to private accounts). But the government has also had to backstop far more of the new system’s retirees than expected. Officials thought less than 10% of wage earners would rely on public largesse for a minimum pension. Today, more than 40% need the government to step in.
A broader review of the other countries that followed suit seems similarly disapointing:
Starting in Chile in the 1980s, and then in Mexico, Peru, El Salvador, Colombia, Argentina, and Bolivia in the 1990s, countries turned to systems where contributions would be deposited directly in workers’ individual accounts...
the system has done little to stimulate voluntary savings; few workers have channeled additional resources to their accounts. Further, the market for workers’ individual accounts has been far from competitive. On the demand side, workers as consumers of financial products for retirement had difficulty comparing the various combinations of fees and investment options offered by pension fund administrators, particularly when the “product” that workers were buying (or rather, were being forced to buy) would be delivered many years from today. On the supply side, there were few private firms competing, partly because the presence of economies of scale in the administration of funds naturally led to a monopolistic market structure.
Less Radical Funding Solutions
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Raise Payroll Taxes - “even a modest change, such as a gradual increase of 0.3 percentage points each for employees and employers (or less than $3 per week for an average earner), could close about one-fifth of the gap.”
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Raise the payroll cap - The payroll tax is actually regressive, exempting incomes over $160,200. “The Congressional Budget Office estimates that subjecting earnings above $250,000 to the payroll tax in addition to those below the current taxable maximum would raise more than $1 trillion in revenues over a 10-year period”.
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Widen the tax base - “In 1982, 90 percent of earnings were subject to the Social Security tax, but by 2017 the share had decreased to 84 percent.” “Including employer-sponsored health insurance premiums could close over one-third of Social Security’s solvency gap; including other fringe benefits could close one-tenth.”
Soriek
3mo ago
Venezuela
I’ve covered in previous months the negotiations between the United States and Venezuela to lift American sanctions in exchange for the Maduro Administration allowing free and fair elections. Key to this agreement was lifting the ban on opposition leader Maria Machado from running for President (she would be Maduro’s opponent in a general election). Well, Venezuela’s Supreme Court has officially ruled that not only can she not run in this election, she can’t run anytime in the next fifteen years either.
The Maduro Admin may or may not have been serious about the deal initially, but they likely believe they can’t permit her to run or she could actually unseat the Socialist Party. Maduro’s popularity ratings are bad enough that even he’s talking about stepping aside (for a hand picked successor candidate). Either way, this was definitely an end you can see coming. Venezuela was supposed to lift their ban two months ago and hadn’t budged, and they’ve been extra frisky with anti-opposition stuff lately:
The pressure has increased in recent days. Ms. Machado said that her campaign headquarters had been vandalized and that three of her campaign officials had been arrested.
The United States on Tuesday said it was “deeply concerned” by arrest orders and detentions against at least 33 Venezuelans, including opposition members, journalists and former members of the military, according to a statement from the U.S. Embassy in Bogotá, Colombia.
The Biden Administration has threatened that oil and gas sanctions will be fully restored if course is not reversed, and has already restored sanctions on the state owned mining company.
Soriek
3mo ago
India
The controversial issue of the day is the erection of a gigantic $200 million Hindu temple (in the context of a $3 billion glowup for the surrounding town) on what was previously a mosque built by Babur, founder of the Mughal Empire. The temple was razed by a Hindu nationalists mob in part of a larger riot that killed some 2000 people. Rebuilding a Hindu temple in its place has been a longtime Modi commitment and has been touted as a symbolic counter to European and Muslim colonization alike.
More than three decades after a mob of militant Hindu radicals razed a mosque to the ground in the Indian town of Ayodhya, the country’s prime minister, Narendra Modi, has inaugurated the new Hindu temple that will stand in its place.
For some, the inauguration marks a hugely significant religious moment. Many Hindus believe Ayodhya to be the birthplace of the popular deity Lord Ram and the building of the temple, after over a century of disputes, has been heralded as Ram returning to his rightful place, and India freeing itself from the chains of past religious occupation.
Various people have said this is either a huge deal since it breaks with India’s secular founding and is openly anti-muslim, or not really a big deal at all since it’s been a BJP promise for a long time and secularism is always relative. So I figured I’d post it here and phone @self_made_human to make me sound more knowledgeable on the issue.
Soriek
6mo ago
Staffing Shortages in Nursing Homes
Recently the House Energy and Commerce Health Subcommittee held a hearing about two new Biden Administration rules impacting staffing in nursing homes.
The lay of the land is that everyone in both parties agrees that we have a critical lack of workers in nursing homes. There have been more than 500 long term facility closures in 2020, and we would need to fill 150,000 jobs just to reach pre-pandemic levels. One of the witnesses mentioned that most nursing homes do not have anywhere near the minimum number of staff that the Center for Medicare and Medicaid Services considers a requirement to be safe. Higher numbers of staffing are also associated with higher quality patient care and lower deaths. Some witnesses related horror stories of nurses not being able to wash patients who had soiled themselves because they were dealing with more urgent medical situations for other patients.
This is especially urgent because by 2030 all 75 million of the boomers will be over 65 and the demand for care will only continue to rise. So the Biden Administration has proposed two rules to address the situation.
1 - The Proposed Minimum Staffing Rule would require there to be a registered nurse on-site 24 hours a day (up from 8 hours currently), and a ratio of one nurse for every 44 residents and one nurse aid for every ten residents.
• Republicans objected that the Kaiser Family Foundation found as many as 80% of nursing homes would not be able to meet the minimum staffing requirements, and compliance costs alone would be tens of millions per state. This would be especially difficult for rural nursing homes where trained staff are rare.
• Democrats responded by pointing out that the rule phases in over three years, gives rural facilities five years, and makes full exceptions for nursing homes that are trying to find staff but can’t.
• Republicans also claimed there simply aren’t enough trained staff out there to be hired, which makes the requirement impossible. It’s unclear if this is true; the witnesses were pretty evenly divided.
• (Related tidbit from outside this particular hearing: Senator Bill Cassidy, Bernie Sanders’ Republican counterpart on the Senate HELP Committee, has complained that we have a shortage of trained nurses partially because many states require nursing colleges to be taught by nurses with masters degrees, who are few in number and already mostly working as practitioners. I can buy this because in my experience looking into other healthcare issues, state level regulations often do make federal laws go much less far. For example pricing transparency rules don’t really matter when states allow hospitals to be monopolies.)
• Democrats responded that the rule provides $75 million in grants to train nurse aids, and also pointed out that Democrats repeatedly have tried to boost federal spending to help with this kind of training and hiring but Republicans were opposed soooo.
2 - The proposed Medicaid Access Rule would require home health agencies to pass through a minimum of 80% of funds to direct health care work force.
• Republicans objected that this only leaves 20% of funds to handle everything else: administrative costs, facilities, training, supervision.
• Democrats countered by demonstrating that non-profit nursing homes were spending on average 43 more minutes per patient each day than for-profit nursing homes, and this held consistent across urban vs rural areas as well as rich vs poor areas. Meanwhile, for-profit orgs are also, obviously, walking away with more profit. Thus, the 80% rule is just a way of ensuring that the federal funds goes to our most critical problem: staffing and patient care, since clearly you can’t rely on businesses choosing to do this on their own.
It's a crappy situation. Basically everyone agrees that the current status quo is unacceptable, but also nursing homes genuinely don't seem to be the funds to hire the desperately needed more nurses, even though they were able to (at least moreso) only a few years ago? The only solution seems to be raising federal funding for nursing homes to hire more people, but this is unlikely to happen any time soon. It would probably be easier to get everyone to agree on stuff like lifting the supply restrictions on nursing colleges, but of course that happens on the state level and is much more complicated to address from the federal side.
Red Sea
Speaking of the Red Sea, things still look chaotic there. The US issued a “final warning” to the Houthis to stop attacking or face reprisal, which the Houthis immediately defied by attacking the next day. It’s been a week since then and it’s unclear to me if the west has escalated in any specific way.
Otherwise, tanker traffic still looks remarkably stable though the shipping behemoth Maesrk has recently put a pause on the route for their vessels though, despite the US sinking three Houthi vessels that attacked Maersk ships.
Don’t worry though, Sri Lanka has now announced they will join Operation Prosperity Guardian.
Soriek
3mo ago
Having other countries side with you, use your symbols and laws, and aspire to your culture by choice is certainly a more impressive measure of your global stature than only being able to make them do that by force.
Go to a political rally in Seoul and I assure you that you will indeed see countless American flags; go to Mexico City, or any City in Mexico, and you can see their numerous statues of Abraham Lincoln. American flags fly in Taiwan, in Argentina, in Brazil, in countries no one would even think of, and there are statues of Reagan, Clinton, Lincoln, George Washington, Woodrow Wilson, even irrelevant Presidents like Rutherford Hayes, in countries across the world, in France, Germany, the United Kingdom, Poland, the Czech Republic, Hungary, Kosovo, even in the lands of our mortal enemies like China and Russia.
Countries we've fought brutal wars with like Vietnam and the Philippines still have incredibly favorable impressions of us and line up for American trade and security guarantees out of choice rather than at the point of a gun; there are West Africans who will frown when they think you're British and break out into a grin when they see you're American, Liberians who will proudly tell you they are in fact American as well, 750 military bases across nearly half the countries in the world where American soldiers walk armed and freely by request of the host nation, countless constitutions and legal systems inspired by the American foundational blueprint, police forces the world over taught by Americans, a world learning English and watching American media and crossing oceans and deserts to come be part of the United States.
Don't pine for empire, we already have it - the footprint of America covers every corner of the world.
Soriek
5mo ago
Argentina
Javier Milei surprised the world not just by winning the Argentinian election, but by beating Economy Minister Sergio Massa by a commanding 12 points. I assume this now means he is assuredly the first elected anarchist-capitalist head of state in history. While the world has been paying more and more attention to his antics in the past month, the last few days have seen a wave of “who the heck is this guy?” Pictures of his cosplay past have come up alongside his juicier quotes, and photos of his fans wearing Chainsaw Man face masks at his rally.
So what happens now? I don’t think anyone knows but in my opinion, probably not much? Milei has a minority in Congress, which means he doesn’t have a mandate to push any of his incredibly ambitious reforms through. Libertad Avanza will work together with some members of Juntos por el Cambio, the center right party that endorsed him after the runoff, but many of their members have said they have no interest dealing with Melei at all. Even with all of their seats together (LA 35 + JxC 31) they would only have a two seat majority in the Chamber of Deputies. And it seems very unlikely they’ll be able to get anywhere near that much support from JxC.
He has promised to privatize as much of the Federal Branch as he can, which supposedly excludes the sizable Health and Education Ministries because they apparently operate at the provincial level. What remains at the federal level will be shrunk from 18 down to 8. Does he have the power to do all this without input from the legislative branch? It’s not really clear to me. Interested to hear if anyone else understands the situation better.
Soriek
6mo ago
With the reports of Egypt notifying Israel in advance of an impending attack, people here and elsewhere have wondered if Bibi maybe let the attack slip through on purpose to consolidate power. Overnight he went from dealing with protests against his judicial reforms and the draft to having those problems disappear and securing the full backing of a broad unity government with his former opposition.
But Jerusalem Post just released a pretty damning poll:
An overwhelming majority of 86% of respondents, including 79% of coalition supporters, said the surprise attack from Gaza is a failure of the country's leadership...
Furthermore, almost all of the respondents (94%) believe the government has responsibility for the lack of security preparedness that led to the assault on the South, with over 75% saying the government holds most of the responsibility...
A slim majority of 56% said Netanyahu must resign at the end of the war, with 28% of coalition voters agreeing with this view.
In addition, 52% of respondents also expect Defense Minister Yoav Gallant to resign.
In addition, most respondents also noted that they do not trust the government to lead the war on Gaza, though the poll was held prior to former defense minister Benny Gantz joining an emergency unity government on Wednesday evening.
Is there any way for Bibi to hold onto power? If not, what might the future look like?
OSHA Effectiveness: MMTYWTK
In the thread about unions @vorpal_potato linked an excellent Roots of Progress piece on the history of worker’s compensation law. That got me thinking about the history of workplace safety since then, chiefly the top down reform since no-fault compensation: OSHA.
Did OSHA make workers safer?
Since OSHA was founded in 1970 fatal workplace incidents have decreased by 60% according to the Environmental Law Institute (admittedly somewhat confounded by manufacturing employment decreasing by 65%...).
On the other hand, the Mercatus Center has assembled a graph on workplace fatalities from 1933 to 2010 using data from the National Safety Council and the Bureau of Labor Statistics. The results show that while fatalities certainly dropped after 1970, they had been falling long before and the trendline did not change following the creation of OSHA.
But prior to 1970 fatalities weren’t falling in some kind of regulatory no man’s land. In the entire period on the graph we had continuously evolving workplace safety rules emerging from the Bureau of Labor Standards founded in 1934. The BLS regularly met with organized labor to help establish new safety rules under State Labor Departments and played an important role in the passage of labor legislation like the Walsh–Healey Public Contracts Act or the Fair Labor Standards Act. And all of this doesn’t even capture all the state level workplace safety legislation that happened in the following decades (look up New York).
Without this context, Mercatus leaves you to imagine workplace safety incidents prior to 1970 were dropping entirely due to capitalist technological progress, as opposed to OSHA being another in a series of many steps of gradually increasing safety regulations.
And when you drill down into the details of specific OSHA policies, they often do show results. A few examples:
A 2012 study in Science found that OSHA's random workplace safety inspections caused a "9.4% decline in injury rates" and a "26% reduction in injury cost" for the inspected firms. The study found "no evidence that these improvements came at the expense of employment, sales, credit ratings, or firm survival."
A 2020 study in the American Economic Review found that the decision by the Obama administration to issue press releases that named and shamed facilities that violated OSHA safety and health regulations led other facilities to increase their compliance and to experience fewer workplace injuries. The study estimated that each press release had the same effect on compliance as 210 inspections.
There has especially made progress for those concerns that won’t be reflected in raw safety incidents, such as long term exposure to lead, asbestos, and other toxic chemicals “OSHA standards have virtually eliminated some occupational diseases such as “brown lung” disease in the textile industry, and accidental transmission of HIV and hepatitis in healthcare workers”.
OSHA standards have dramatically changed norms and practices. Just think about how asbestos removal is handled today — with enclosures, full-body personal protective equipment, and more — compared with decades ago. In health care, including dental offices, use of gloves and facemasks or respirators is standard practice, in large measure due to OSHA’s bloodborne pathogens standard. These practices are now viewed as necessary and appropriate to protect both workers and the public. But when these standards were issued, there was huge employer opposition, with claims that the rules were unnecessary, infeasible, and would put employers out of business and cost jobs.
- Peg Seminario, Safety and Health Director, AFL-CIO
What are the economic benefits vs costs of OSHA?
I have no idea why, but I can’t seem to find any present day studies on the compliance costs of OSHA. A number of very out-of-date studies from the 1990s find costs between $10 and $40 billion. Studies on their benefits seem totally clouded by your base assumptions - CATO assumes extremely small benefits because they attribute almost none of the post-1970 drop to OSHA; OSHA itself assumes high benefits because it takes credit for the whole drop. For long term exposure we would also want some way to calculate healthcare costs from ex: respiratory problems. In general I wasn’t able to find a ton useful here but maybe it doesn't matter that much either way; it’s okay if OSHA costs more than it brings in, in terms of dollars and cents, if it plays a large role in reducing human suffering.
Why has OSHA declined in stature?
This piece has a decent quick write up on what works well and not so well about OSHA. Broadly summarized, OSHA has some really well-tailored standards it’s created since the 90s, mixed with a bunch of woefully out-of-date standards from the 60s. The actual inspection trainings are insufficient, and obsolete standards means that sometimes unimportant things are flagged while serious safety hazards are ignored. Why does OSHA use so many out of date standards? It sounds like the same bipartisan dysfunction that’s slowed every agency down since the 70s:
The process for setting standards that protect workers has slowed to a crawl, because Congress, the executive branch, and the courts have weighed it down with added analytic and procedural requirements. The time-consuming hurdles that OSHA must overcome to revise its out-of-date standards means that it has less time to address new hazards that have been recognized since 1970, including the risk of workplace violence to health care and social service workers and musculoskeletal disorders arising from patient handling. It now takes OSHA, on average, more than seven years to complete a new standard. Since 1970, OSHA has issued only 37 major health and 55 major safety standards.
- Randy Rabinowitz, Director, Occupational Safety & Health Law Project
OSHA can regulate only after a complex process of finding “significant risk” and economic “feasibility,” and then is constrained to set standards at “the lowest feasible level.” As a result, some health standards have been costly compared to their effects. The longer process tended to make it less likely that any rulemaking could be begun and completed within the term of any OSHA director.
- John Mendeloff, Health and Safety in the Workplace Director, Rand Center
In its 46-year history the agency has issued standards for 30 toxic substances. The standard-setting process has gotten harder and longer, as layers of procedural and analytical requirements have been added and industry and political opposition has intensified. Early on, it took OSHA one to three years to issue new standards for major hazards. The most recent standards — silica and confined space entry in construction — took about 20 years. As a result for most hazards, standards are out of date or non-existent. OSHA can’t address even long-recognized problems, let alone the emerging hazards that put workers in danger.
- Peg Seminario, Safety and Health Director, AFL-CIO
Also, everyone from Mercatus to the AFL-CIO agrees that OSHA’s present day fines are actually too small to encourage much behavior change from companies, at least relative to things like worker’s comp and lawsuits.
Would More Funding Help?
Mercatus Center and CATO claim (without a source) that Quebec funds its equivalent workplace safety agency four times more per staff and gets similar results. I glanced at a few other countries: in France and Britain they both spend less than us; the UK gets much better results and France gets much worse, so make of that what you will! I just divided budgets by staff whereas the Quebec comparison is supposedly measuring “dollars spent on workplace prevention”, which I don’t know how to check for other agencies, but I could easily believe their numbers are better than ours because we waste a ton on administration or paperwork.
Still, whether we do it by spending our funds more effectively or by raising funds, there does seem to be a strong argument that OSHA needs more staff - the UK has about double our inspectors for a country about a fifth of the size, for instance.
OSHA’s biggest problem and deficiency is that it simply does not have the resources that are needed to meet its responsibilities. OSHA’s current budget is $552 million. As a comparison, the EPA budget is $8.1 billion. Federal OSHA and the state OSHA plans are responsible for overseeing the safety and health of 140 million workers at more than 8 million workplaces. But currently there are fewer than 2,000 OSHA inspectors (about 900 with federal OSHA). Federal OSHA is able to inspect workplaces under its jurisdiction on average only once every 147 years.
- Peg Seminario, Safety and Health Director, AFL-CIO
tl;dr
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Workplace fatalities have fallen by 60% since the passage of OSHA. The rate of workplace fatalities did not fall any faster after OSHA, but it’s hard to disentangle the pre-1970 trendline from the safety regulation and legislation in decades prior, and there’s no reason to assume the trendline would have continued if our standards didn’t continue evolving as well.
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OSHA definitely coincided with significant changes in worker pathogen exposure.
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OSHA could be improved by:
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Simplifying the procedural rules around creating new standards so they take <10 years.
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Hiring more inspectors so they’re stretched less thin, and training those inspectors better
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Probably increasing OSHA’s ability to levy greater financial fines.
Soriek
3mo ago
There are obviously some state functions that are genuinely essential, or at least things that pretty much everyone wants, so I could see those having a meaningful impact.
One of the reforms Milei is trying to press through would actually make it harder for essential workers to strike at all, afaik currently there are no restrictions.
On the other hand, the idea of public health officials and other officious bureaucrats refusing to show up for work and expecting that this will move public opinion to their side is fairly hilarious from my generally economically libertarian perspective.
The standard move for these strikes used to be using all those non-working folks to block traffic and otherwise cause a ruckus, but Milei promised to arrest anyone who did that. Surprisingly, this seemingly hasn't led to any bad confrontations between the police and protestors.
Soriek
3mo ago
Pakistan
Pakistan will supposedly have elections next Thursday, though there have been some murmurs of delaying it again. The Pakistani Taliban (TPP) has promised not to attack any election rallies, which is polite of them.
Former PM Imran Khan of course still banned from running, but his presence looms large over the election - only Monday the police arrested dozens of people at a rally in his favor. His party Pakistan Tehreek-e-Insaf (PTI) has had all its proposed candidates banned, which leaves the election dominated by Pakistan’s historical establishment parties, he Pakistan People’s Party (PPP) and the Pakistan Muslim League (PML-N). The PPP will be led by former Foreign Minister Bilawal Bhutto Zardari, son of former PM Benazir Bhutto and grandson of former PM Zulfikar Ali Bhutto, both of whom were killed in office (so you see why a terrorist group promising not to commit political violence is actually a bit of a big deal). The PML-N is slated to perform well and will be led by Nawaz Sharif, who has been Prime Minister on three separate occasions, which cumulatively put together make him the longest serving PM. So basically two extremely establishment, dynastic candidates from parties that voters overwhelmingly rejected in favor of PTI.
Separately, the Diplomat has a good writeup on Pakistan and America’s evolving security cooperation. Collaboration has somewhat reduced since the American withdrawal from Afghanistan nearly nearly three years ago, but Pakistani intelligence has aided in American operations against Al Qaeda (including the assassination of their leader al-Zawahiri) and the US continues to be Pakistan’s main ally against the TPP, long considered their own most serious security threat. Still, things have shifted - the US used to dronestrike the TPP, now we mostly sanction them.
Pakistan has been trying its best to restore the previous relationship and coax out more military aid. They’ve been somewhat successful - Trump cut them off from aid for not doing enough to combat anti-American militants; they’ve stepped up activities there and Biden has restored aid. The relationship is still not what it once was, but the countries continue to share some common goals and common enemies - potentially moreso if relations between Pakistan and Iran deteriorate.
Though for now it looks like escalation between Pakistan and Iran has been successfully avoided and smoothed over. Iran’s Foreign Minister Hossein Amirabdollahian (say that five times fast) has now visited Pakistan in hopes of smoothing things over after the previous week of lobbing missiles at each other. They both said they got a little too excited there for a minute and reiterated their unity over their common hatred of terrorists and secessionists. Peace in our time.
Separately, Pakistan has accused India of extrajudicially killing two Pakistani citizens and claims to have proof.
Soriek
3mo ago
Rwanda
Rwanda is a well managed oasis in an unstable neighborhood, but has been rather poorly managing its relations with its neighbors. Tensions with the DRC are abysmal from the Rwandan support for the M23 rebels. Now Burundi, the country with which Rwanda shares its strongest cultural and political ties and once fought alongside in the Congo Wars, has accused Rwanda of supporting RED-Tabara, a violent terrorist group which may or may not have also been involved in a coup attempt. Burundi has closed its border with Rwanda and started expelling Rwandan citizens. I have no idea really how to evaluate whether these claims are true as Burundi has grown closer to DRC and may be pressured to oppose Rwanda, but RED-Tabara normally operates out of the same region in the DRC where M-23 does, and Rwanda definitely supports the latter, so it’s not that crazy to imagine.
Separately, the British-Rwandan plan to deport their extra immigrants has been delayed in the House of Lords until it can be demonstrated that Rwanda is safe. Their ruling isn’t binding but would place a court case against the law on stronger grounds.
Soriek
3mo ago
The mantle has now passed to you to lead Transnational Thursdays.
On the other hand, fellow Islamist nations seem to be far more laissez-faire about just taking each other on, on a whim, and I can't say I really feel like Pakistan is the aggrieved party.
This latest episode of Iran just kind of attacking all its neighbors is pretty uncharacteristic at least, and is hopefully just their way of showing they won't take terrorism lightly, not a continuous thing they're going to commit to. Iraq and Syria at least aren't going to retaliate militarily. I can think of one or two downsides to a war with Pakistan! Though hopefully this won't turn into that.
China and the Philippines
I’ve covered the flare ups between the Philippines and China recently, including China using water cannons to repeatedly attack Philipino ships transporting supplies to fisherman in the contested Scarborough Shoal, and placing up borders at the shoal's entrance. The latest update is China doubling down and fully reiterating their commitment to an aggressive posture in the South China Sea vis-a-vis the Philippines. Regrettable news considering the US is treaty bound to defending the Philippines in a conflict, and has recently reiterated their own commitment to this obligation.
In a phone conversation Wednesday with his Philippine counterpart, Enrique A. Manalo, [Chinese Foreign Minister] Wang “warned that if the Philippine side misjudges the situation, goes its own way, or even colludes with ill-intentioned external forces to continue to stir up troubles, China will defend its rights in accordance with law and respond resolutely,” the official Xinhua News Agency reported.
Wang’s comments follow China’s mobilization of its coast guard and maritime militia to block Philippine supply missions to support its soldiers and fishermen. China claims sovereignty over virtually the entire South China Sea, one of the world’s most crucial waterways for shipping, putting it at odds with the Philippines, Vietnam, Malaysia, Taiwan and Brunei, who all maintain claims over islands, reefs and undersea resources in the region.
In particularly sharp comments, Wang was quoted as accusing the Philippines of having “changed its policy stance so far, reneged on the promises it has made, provoked troubles at sea, and undermined China’s legitimate and lawful rights.”
The Philipines has been requesting a multinational naval force that could protect its ships and escort safe passage through the shoal, hopefully including the US, Australia, Japan, and whoever else in on board.
On the plus side for peace, the top US and Chinese military officials are finally speaking again for the first time in over a year (they weren’t able to at the California summit despite Secretary Austin’s willingness because Chinese Defence Minister Li Shangfu had recently been fired).
Soriek
4mo ago
Japan
The funding scandal contains to rage on. Prime Minister Kishida has fired four top ministers, all from the Shinzo Abe faction of the Liberal Democratic Party, including:
Chief Cabinet Secretary Hirokazu Matsuno; Economy and Industry Minister Yasutoshi Nishimura; Agriculture Minister Ichiro Miyashita; and Internal Affairs Minister Junji Suzuki. All have emerged as the alleged recipients of suspected kickbacks of unreported fundraising proceeds. But of course it’s not over. Prosecutors have now raided LDP party offices:
Investigators from the Tokyo District Public Prosecutors’ Office searched the offices of two LPD factions associated with former Prime Minister Shinzo Abe and former secretary-general Toshihiro Nikai, local media reported on Tuesday.
Prosecutors are investigating allegations that party officials failed to declare a combined 600 million yen ($4.18m) in fundraising proceeds, directing money to faction-run slush funds…
Kishida’s cabinet reshuffle, however, has done little to boost his flagging approval.
In an opinion poll published by the Mainichi newspaper on Sunday, 79 of respondents said they disapproved of the government – the highest figure since the poll began in 1947.
In other major Japan news, you’ve probably heard that US Steel, once the largest corporation in the world, is now being purchased by Nippon Steel for $55 a share. This may be less of a major deal than it sounds due to US Steel’s diminished status these days, though it certainly feels like it matters for symbolic reasons.
That $14.1 billion sale price, while a 40% premium from where US Steel’s stock closed Friday before the deal was announced, makes it a minor leaguer in today’s economy. The nation’s tech powerhouses - Apple, Google’s parent Alphabet, Amazon, Microsoft and Nvidia - trade at a valuation of more than $1 trillion each. US Steel, even at the sale price, is valued less than 0.5% of the value of Apple, and less than 2% of the value of Tesla.
Its revenue last year of $21 billion is roughly what Walmart brings in every two weeks. Or to put it another way, it’s just over half of the annual sales that Apple receives just from its wearable products, primarily its headphones.
Japan
Japan’s longtime dominant Liberal Democratic Party has been caught in a scandal where politicians were receiving kickbacks from fundraisers. Some of this was already known and the party responded by updating their previously unreported funds, but recently it was revealed that Shinzo Abe’s faction1 has been doing this for years. The size of this scandal is apparently enormous; the LDP’s popularity is at a staggering 17%, remarkable considering they have basically run the country with few interruptions since World War 2.
Prime Minister Kishida is apparently considering replacing “all” of the Abe faction who currently enjoy ministerial posts. This would include “Matsuno, the top government spokesman [Chief Cabinet Secretary], and Nishimura [he Minister of Economy, Trade and Industry,]...two other ministers, five senior vice ministers and six parliamentary vice ministers from Abe's faction…Tsuyoshi Takagi, who is currently the LDP's chief of Diet affairs…LDP policy chief Koichi Hagiuda and Hiroshige Seko, secretary general of the party in the House of Councillors”
It sounds like a lot, but it might not be enough - quite a few people have called for Kishida himself to step down (for his responsibility as the Executive; Kishida is not in the Abe faction). Formally he doesn’t have to call an election till 2025 but he could be voted out by his own party if the public mood is bad enough. Japan is notorious for sacking PMs at the drop of the hat (I think only Italy has them beat for most leaders since WW2) but Kishida has proven prickly and survived several scandals that would have ousted other PMs.
1The LDP is made up of five (arguably six) different “factions,” or cliques, that are somewhat tied together on policy and somewhat by the personality and influence of the leaders of those cliques. During the Abe era his own faction was a mix of nationalists and people who thought (often correctly) they could ride his coattails to influence. Kishida’s is the same for the more liberal/pacifist wing of the party.
Soriek
4mo ago
Hong Kong
Hong Kong held elections on Sunday, the first since the 2019 elections that elevated pro-democracy candidates and set off the whole conflict between HK and the mainland. Needless to say, the results this time were quite different:
Voter turnout plunged below 30% in Hong Kong’s first district council elections since new rules introduced under Beijing’s guidance effectively shut out all pro-democracy candidates, setting a record low since the former British colony returned to Chinese rule in 1997…
Beijing loyalists are expected to take control of the district councils after Sunday’s elections, with results showing big pro-government parties winning most directly elected seats…
The district councils, which primarily handle municipal matters such as organizing construction projects and public facilities, were Hong Kong’s last major political bodies mostly chosen by the public.
But under new electoral rules introduced under a Beijing order that only “patriots” should administer the city, candidates must secure endorsements from at least nine members of government-appointed committees that are mostly packed with Beijing loyalists, making it virtually impossible for any pro-democracy candidates to run.
An amendment passed in July also slashed the proportion of directly elected seats from about 90% to about 20%.
Many prominent pro-democracy activists have also been arrested or have fled the territory after Beijing imposed a harsh national security law in response to the 2019 protests.
Iran
A major terrorist attack occurred at General Qasem Soleimanis tomb on the fourth anniversary of his assassination by the US. Over a hundred people have been killed so far. Iranian investigators have claimed the top suspects are suicide bombers, but it remains completely unclear who exactly is responsible. It would be extraordinarily unlikely for the US to be directly implicated, but coming at a time when direct fighting between American soldiers and Iranian militias in Iraq has been ratcheting up (the US just airstruck the PMF headquarters today and killed a top official), it’s not fantastic to also re-open this wound that brought our countries the closest they’ve come to direct conflict.
Update:
ISIS has claimed responsibility for the attack
Red Sea
The United States has set up a multinational naval force to protect shipping in the Red Sea, involving thus far “Britain, Bahrain, Canada, France, Italy, the Netherlands, Norway, Seychelles and Spain” (some of these countries are sending ships, others just operational support). Maersk has already said they will resume shipping through the corridor.
The Houthis have responded by saying they will fire on US ships, which seems inadvisable, but I guess we’ve been at proxy war for a while now anyway. The Us and Britain have reported already shooting down over a dozen attack drones. Ironically, Saudi Arabia, the country the Houthis have actually been at war with and who has the most to lose from a Red Sea conflict (36% of their imports), will not be joining the effort (the UAE won’t either), apparently because they are concerned with holding together their fragile peace with Iran. Probably for the best honestly. Of course, even among their rapidly anti-Houthi populace, Saudi Arabia does not want to be seen doing anything like supporting the pro-Israel forces of the war.
Soriek
4mo ago
Argentina
Milei has withdrawn (really just not finalized Argentina’s entry into) the growing BRICS collective. If you think BRICS is a relevant counterweight to western alliances / institutions (I don’t particularly) then this is a win for the latter. Either way, it solidifies Milei in the western camp.
Supposedly the IMF and Argentina are very close to finalizing their review of their $44 billion loan from 2022. If everything is squared away it’ll “unlock” another $3+ billion sent to Argentina. Tightening things up here with the IMF is basically a necessity if Milei wants to qualify for sufficient financing to undergo dollarization.
Speaking of his agenda, the recent turbo-deregulation decree has now been suspended by the National Chamber of Labor Appeals following a challenge by the General Trade Confederation. Separately, Milei is trying to pass a huge omnibus bill through Congress that would achieve much the same goals, apparently in case the decree is held up indefinitely.
Soriek
3mo ago
France
French leftist Prime Minister Elizabeth Borne has resigned on Macron’s request from her position. Her replacement is the young (youngest PM ever actually) Gabriel Attal, also originally from the Socialist Party. Polls say Attal, who rose to prominence during the Covid pandemic and went on to be the Education Minister, is one of the most popular politicians in France. Macron is likely hoping through his appointment to absorb some of that popularity himself in the wake of a series of hard ball policy pushes, from the pension reform to the immigration bill, combined with the backdrop of rising living costs. It still remains to be seen if Macron will reshuffle other members of his cabinet.
Also:
Macron, 46, and Attal have a combined age just below that of Joe Biden, who is running for a second term in this year's U.S. presidential election.
Rude.
Soriek
3mo ago
NATO Updates
Turkish parliament has finally signed off on Swedish ascension to NATO. I had worried if the recent flareup of attacks by the Kurdish Workers Party would derail things but the measure seems to have sailed through.
The legislators ratified Sweden’s accession protocol by 287 votes to 55, with four abstentions. It will come into effect after its publication in the Official Gazette, which is expected to be swift.
Which leaves only one holdout:
Hungary then becomes the only NATO ally not to have ratified Sweden’s accession…
Hungary has also stalled Sweden’s bid, alleging that Swedish politicians have told “blatant lies” about the condition of Hungary’s democracy. Hungary has said it would not be the last to approve accession, although it was not clear when the Hungarian parliament intends to hold a vote.
Hungarian Prime Minister Viktor Orbán announced Tuesday that he sent a letter to his Swedish counterpart, Ulf Kristersson, inviting him to Budapest to discuss Sweden’s entry into NATO.
Meanwhile, NATO has finally finalized a contract to continue supplying Ukraine with ammunition:
NATO signed on Tuesday a $1.2-billion contract to make tens of thousands of artillery rounds to replenish the dwindling stocks of its member countries as they supply ammunition to Ukraine to help it defeat Russia’s invasion.
The contract will allow for the purchase of 220,000 rounds of 155-millimeter ammunition, the most widely sought after artillery shell, according to NATO’s support and procurement agency. It will allow allies to backfill their arsenals and to provide Ukraine with more ammunition….
Ukraine was firing around 4,000 to 7,000 artillery shells each day last summer, while Russia was launching more than 20,000 shells daily in its neighbor’s territory, according to European Union estimates…
But the shells will not arrive quickly — delivery on orders takes anywhere from 24 to 36 months, the NATO agency said.
The European Union plans to produce 1 million artillery rounds for Ukraine have fallen short, with only about a third of the target met. Senior EU officials have said that they now expect the European defense industry to be producing around one million shells annually by the end of this year.
Soriek
3mo ago
ECOWAS
In the past few years the West African countries of Niger, Burkina Faso, and Mali have all experienced military coups and are now ruled by juntas. There has been significant tension between them and the remaining democracies of West Africa, who really, really don’t want to incentivize military coups in their own countries, leading them to sanction the upstarts. As of this week all three of the juntas have now withdrawn from ECOWAS, the Economic Community of West African States, or a regional trading zone that also allows for free movement of West Africans between countries and occasionally deploys peace keeping force.
The withdrawal is effective immediately; technically you’re supposed to give a one year notice before you exit the organization, but it’s not like anyone can really hold them to that. The also formed the Alliance of Sahel States, which so far just has these three juntas, all three of which, it should be remembered, are very poor and despite being ruled by the military, have very small militaries. All three countries have increasingly close relations with Russia; Mali has been hosting the Wagner group for a while, Russian soldiers arrived in Burkina Faso and will probably be in Niger soon. This is interesting in the sense of the ongoing dynamic of West Africa (and its many resources) shifting away from France and the United States and towards Russia, but the fact that you probably haven’t heard of the Alliance of Sahel States is a good indicator of its relative importance.
But to claim that Germans and Italians just wanted to be American is historically ignorant, because they maintained ethnic enclaves up until they were forced to stop, and didn’t use English as a first language until they were forced to.
At least from the surveys I've looked at it sounds like hispanic immigrants want to learn English, and they make their kids learn even when they themselves don't. This is from 2015 but:
Fully 89% of U.S.-born Latinos spoke English proficiently in 2013, up from 72% in 1980. This gain is due in part to the growing share of U.S.-born Latinos who live in households where only English is spoken. In 2013, 40% of U.S.-born Latinos, or 12 million people, lived in these households, up from 32% who did so in 1980...
for Hispanics overall, 95% say it is important that future generations of Hispanics living in the U.S. be able to speak Spanish (Taylor et al., 2012). Nearly as many, 87%, say that Hispanic immigrants need to learn English to succeed in the U.S.
I'm not sure how many other Europeans were really all that forced to integrate either. Even for Germans, while prejudice and discrimination against them was definitely very real in the WW1 era, iirc the laws against German language schools were struck down pretty quickly, and I'm not aware of similar rules on Italians, Poles, etc.
I think the stat is that 80% of divorces are filed by women, which is different than "initiated by". If your husband cheats on you, or hits you, and you file a divorce, who really initiated it?
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