Archive for the ‘Economics’ Category
In case you are a Japanese soldier who have been hiding somewhere in the Pacific for sixty years and have missed every single piece of news in the meantime, only to resurface and start reading right here right now, you might be aware that in 2008 there was a massive banking failure as a result of subprime mortgages that allowed the United States government through the Troubled Asset Relief Program (TARP) to transfer up to $700 billion to banks. About $550 billion has actually been spent. The rules on what the transfer actually bought are somewhat complicated, and not worth repeating here. The important point is that this entire program was necessary because banks were under-capitalized, especially so considering how risky their assets were (that’s a different story altogether). See more on capitalization here, here, and here.
You may be asking why am I making a return to blogging over something so obvious, when there is very little controversial about this? Good question, fake reader!
The reason is that there are forces who don’t think banks should actually be required to hold a higher percentage of money: not surprisingly, these forces are bankers themselves.
Citibank’s CEO Vikram Pandit wants to punish banks for riskiness and ignore capital requirements:
Pandit said that capital rules, such as the international Basel agreements, are not transparent and do not give investors a good idea of how much risk a bank is facing.
Pandit said that under the current capital rules it is difficult to tell whether two banks who claim to be meeting the same standard are “equally risky.”
“You don’t know how to calibrate risk because you don’t know enough about what those underlying assets actually are nor how that risk is measured,” Pandit said Friday to a Bretton Woods Committee meeting in Washington.
Pandit said a better way for making sure the financial system is sound would be to create a benchmark portfolio that banks and other financial institutions would measure their own portfolios against.
He said those results should be disclosed publicly.
The response to this is simple: the conventional wisdom on riskiness can very easily be wrong. People who saw the mortgage meltdown coming were mocked. Ratings agencies famously gave AAA ratings to bundled crap (and breaking today: the SEC may go after them). Even if we put the incompetence to the side, we can’t guarantee that a safe profile is, in fact, safe. Companies that were insulated from the subprime crisis were almost brought down by it – companies are too interlocked nowadays.
Secondly, I don’t think there’s an easy way to just get all banks together and get them to disclose their assets to some third party. Banking is too competitive, and if a bank thinks it has a competitive advantage, it’s going to want to hide that.
A couple weeks further bank, JPMorgan Chase CEO Jamie Dimon tried an even dumber line of reasoning to avoid capital requirements:
“I’m very close to thinking the U.S. shouldn’t be in Basel anymore. I would not have agreed to rules that are blatantly anti-American,” he said in the interview.
“Our regulators should go there and say: ‘If it’s not in the interests of the U.S., we’re not doing it’.”
The Basel III capital rules are designed to increase the safety of the financial system by making banks build up risk-absorbent “core tier one” capital to at least 7 percent of risk-weighted assets. The biggest, including JPMorgan, have to reach 9.5 percent.
This was promptly rejected by European and American regulators. At the time, Matt Yglesias pointed out that 1) Jamie Dimon is not paid to advocate for America, but for the banks, and 2) there is nothing inherently un-American about rules on a bank that happens to be American – the rules are normatively good or bad on their own accord, not because of whom they effect. (Incidentally, the only person I could find agreeing with Dimon also urged the US to default on the debt. Not the most credible voice in the world in my humble opinion.)
But Dimon is not going to give up easily: if there’s a regulator to scream at, he’s game, even if that regulator is Canadian:
The new Basel III agreement—the rules regulators from around the globe agreed to late last year—calls for all banks to hold 7 percent capital, up from 3 percent. The biggest banks would be required to hold an additional 2.5 percent capital.
Dimon’s tirade was directed at Mark Carney, Bank of Canada governor, in a closed-door meeting in front of more than dozens of leading bankers and regulators, the Financial Times reports. According to the FT, things got so heated that Goldman Sachs CEO Lloyd Blankfein sent an apologetic email to Carney afterwards.
That’s right, Dimon is so upset that his bank will have to maintain 7% capital that his anger even puts Goldman Sachs to shame.
There are a number of small issues with the Basel Convention that require general debate. The capitalization requirement is not one of them and it’s embarrassing that American banks are putting up this fight.
Banks are creatures of social utility: a bunch of private citizens give their money to an entity that by definition will spend it on other things but promise that if you need it you can get your money. It’s therefore up to the public (through the government) to set rules regarding such capitalization. Because failures in this market are not entirely rational: bank failures cause runs on all banks. It’s not an overstatement that the entire fabric of society is at risk when banks are at risk – that is why something like TARP was entirely necessary in the first place.
As I sat down for the night, I put C-SPAN on to find a panel from the Center for American Progress earlier today celebrating the 40th anniversary of OSHA. A quick Google news search showed that the only people covering this anniversary were, in fact, CAP itself and the AFL-CIO who had a representative on the panel. It did not even merit a press release from the Department of Labor! There is a OSHA at 40 page… located at the OSHA website. Most of what I’ve found here I found through twitter, not surprisingly.
So what is OSHA? It’s the Occupational Safety and Health Administration, signed into existence by the safest President of them all, Richard Nixon.
Basically, what OSHA does is ensure a safe workplace for everyone. I found these rebuttals of common complaints about OHSA salient. Here’s an excerpt:
3. Speaking of PPE, we never had that junk when I was in the field, and we did just fine.Did I just hear, “We’ve always done it that way?” Or maybe it was, “Real men don’t need that crap.” Think about this: Prior to 1970, there were about half as many workers in the United States as there are today, and there were 14,300 job-related deaths. Today, with a workforce more than twice as large, fewer than 5,000 workers are killed on the job in a year. Comparing relative rates (1970 vs 2008) there are about 82 percent fewer fatalities now than in 1970. That sounds pretty good, unless you consider that 5,214 workers were given capital punishment for the crime of going to work. Doesn’t sound so good, does it? Maybe the good old days weren’t so good.
4. OSHA writes citations that cost me money. How am I supposed to stay in business?Short answer: Maybe you shouldn’t be in business if you can’t protect your workers.
I’d really recommend the entire (short) article.
One last point: amidst all the talk about collective bargaining regarding wages (which is really important) collective bargaining also serves an important function in regards to safety standards. Unions are a major institution advocating for the safety of workers. Without their power and ability to mobilize, literally 6 or 7 thousand people a year would probably be dead because of their line of work.
Moreover, cutting OSHA is a dumb idea. It’s already underfunded. This is something the left should (and is) fighting for. There’s no business where it makes sense over any period of time to take serious safety risks in return for higher profit margins. None. OSHA is something that literally pays for itself, and is fundamental to what America is as a country: not letting people die on the job when simple inspections could prevent it.
We’ve seen attacks on OSHA before. The result? They’re nonsense:
OSHA has been particularly effective when regulating some of our most dangerous industries, which hasn’t stopped the affected employers from vigorously challenging the agency at every turn. Following a series of explosions in grain elevators in December 1977, which caused the deaths of 59 workers, OSHA began the process of developing a grain handling facilities standard that took a decade to put into effect. At the time industry was bitterly opposed. Yet, the National Grain and Feed Association (NGFA), a persistent critic of OSHA, acknowledged in 1998 that the industry had seen “an unprecedented decline in explosions, injuries and fatalities at grain handling facilities.” In 2006, a review by the U.S. Chemical Safety and Hazard Investigation Board reported a 42 percent decline in grain explosions, 60 percent decline in injuries, and a 70 percent decline in fatal accidents. (There are still recalcitrant employers who do not follow OSHA’s guidelines, leading to tragedies like the deaths of Pacas and Whitebread.) Similarly, the passage of the Cotton Dust standard in 1978 lowered rates of “brown lung” among textile workers throughout the country from approximately 12 percent to about 1 percent of all employees.
Despite these successes, business lobby groups and their allies in Congress have hamstrung OSHA’s effectiveness by thwarting tougher standards, restricting its budget, and limiting the number of inspectors. Today, state and federal OSHA agencies combined only have 2, 218 inspectors, and in every state the number of OSHA inspectors fails to meet the benchmark set by the International Labour Organization for the appropriate ratio of safety inspectors to employees.
This year’s headline catching accidents at Upper Big Branch and Deepwater Horizon, and many of the less known tragedies like the deaths of two teenagers in Mount Carroll, were avoidable with stronger laws and more vigorous enforcement. Industry groups have used their significant resources to escape their responsibilities. Now, the US Chamber of Commerce and congressional Republicans are stepping up their attacks on OSHA, recycling many of the same arguments they used 40 years ago. While they claim stronger workplace protections are “job killers,” the unfortunate reality is that it is American workers who are dying every day.
This is what the administrative state does: it slowly but inevitably makes society work better through a responsive, though slow, process. OHSA is just one example of that.
Sadly, that seems the road the right wants to take us on: where John Galt gives some crumbs, and if people die chasing them off a cliff, so be it. The moral repugnance of that cannot be overstated.
I don’t post a lot about US domestic politics, mostly because I find the politics so inane (Republicans generally screw something up wildly and the Democrats have to pretend they understand and go halfway).
I thought this was an appropriate song to describe the ongoing budget negotiations:
I’ve been reading about the ongoing budget negotiations, and it seems like the range of expected outcomes is somewhere between the KFC doubledown version of a shit sandwich and just outright dousing the capital building with monkey feces.
Research shows that both parties in Congress are held responsible – just not executives. (It helps that unlike health care, Obama is keeping more distance from these negotiations publicly). That’s one reason we see Democrats moving to compromise at the end – if nothing else, there’s no massive belief among them that a shutdown will help their electoral chances. And the Republicans … well who knows, they’re all over the place. Some of the true believers want shutdown at all costs. Some of the more pragmatic want to use the true believers to get massive cuts. It’s just generally speaking a disaster.
I have no answers here – the voters gave us this Congress and we now have to live with it. Remember that next time an election comes around: no matter how similar two candidates are, they’re not the same. And that the difference between a Republican landslide and a Democratic one are the people who are pressed for time and resources getting to the polls to vote.
Let’s make 2012 better than 2010. We need it.
Basically DHE is saying here that thanks to Obama’s decision to go to war, the previous tensions that had been building up inside the conservative coalition on this point are now easing and the whole right-of-center establishment will get behind the idea that the Pentagon shouldn’t be cut.
This is one reason why I think left-of-center hawks have been way to blithe about dismissing the fiscal concerns surrounding this mission. It’s true that nothing about claiming that you’re going to establish a no-fly zone in Libya and then instead offering tactical air support to rebel groups forces you to slash spending on global public health. But the mission in Libya is a shot in the arm for the politics of wasteful defense spending, and unduly high equilibrium levels of defense spending encourage further cost-ineffective “humanitarian” military adventures.
There’s a reason the budget is so high, though, and it’s not missions like Libya – it’s missions like Afghanistan and Iraq. Whether Libya was the right humanitarian intervention is a question for another post. It seems reasonable to believe the United States will be doing some sort of low-risk medium-interest humanitarian interventions under Democratic Presidents going forward (see: Haiti, the Balkans, etc.). Some will be good ideas, some won’t be, some will have good planning, some won’t. But none of them are going to be particularly expensive.
What is expensive is maintaining expensive and mostly fruitless nation-building programs in Iraq and Afganistan. Juan Cole makes this point here, that Libya is the type of intervention the US should be doing, not Afghanistan. If we really want to lower defense spending in the long run, we need to start convincing legislators of lesser footprints of American military actions, even if that may come with lesser certainty as well.
The path to a small military is not through avoiding Libyas, for positive or negative; it’s through avoiding Afghanistans.
(So yes, the worst possible solution in Libya would be escalating. A stalemate is preferable in many meaningful ways to American interests – and some humanitarian ones.)
As the crisis escalates seemingly daily in Cote D’Ivoire, I’ve been wondering why Russia and China abstained on a Security Council measure regarding Libya but have been slow to allow anything in Cote D’Ivoire. The answer, upon doing some research, appears to be oil. Conventionally, one thinks that Libya has oil and countries like Cote D’Ivoire do not. See, for instance, the comments here.
But there are many oil wells off the coast of west Africa, much like the Gulf of Mexico. The oil production in the country has dramatically risen (PDF link) the past decade by a factor of three and more wells are scheduled to be drilled. And even though MMS regulations in the Gulf of Mexico have been notoriously lax, regulations in west Africa are even weaker, if not nonexistent:
LUKoil produces almost 2 million barrels of oil per day, but faces a declining level of output from its Russian oilfields. For this reason it has been more active than other Russian oil producers in pursuing oil prospects outside Russia — in Iraq, Saudi Arabia, Egypt, and west Africa. The Gulf of Guinea. In the mid-Atlantic, is as rich in potential oil reserves as the Gulf of Mexico, the Russian oil company says — but with a significantly looser regulatory supervision and lower drilling and environmental safety costs.
Russia and China both have oil interest in the country, and the Russian firm (see directly above) LUKoil has an especially close relationship with the illegitimate President Laurent Gbagbo, which has made Russia unwilling to endorse any real action in the country. LUKoil has made big investments in the country and is scheduled to drill wells in Cote D’Ivoire waters with the state oil company Petroci in 2012, as part of a comprehensive LUKoil expansion. LUKoil highlights the Cote D’Ivoire projects on its website. Gbagbo still controls oil interests in the country through Petroci.
The Gbagbo administration is being increasingly isolated. One after the other all its ambassadors in the EU and in the US were declared personae non gratae and replaced by pro-Ouattara diplomats. Since January 14, the EU sanctions apply to [. . .] the directors of the National Petroleum Operations Company of Cote d’Ivoire Petroci, Kassoum Fadika and Laurent Ottro Zirignon, [. . .] who are accused to have contributed to the “funding of Mr Gbagbo’s illegitimate administration”.
Last December, Fadika provided a significant help to Gbagbo by transferring CFA francs 20 billion (some € 30m) from Petroci’s accounts to Cote d’Ivoire’s National Treasury, which helped Gbagbo to pay the salaries of civil servants. EU sanctions also target 11 parastatals including the oil company Petroci. . . .
In other words, all transactions by European companies are banned, including loans or the payment of services either directly or through proxies. It means for instance that shipowners who come and load cocoa or other commodities in the Ivorian harbours are no longer allowed to pay the port authorities for these services. As far as Petroci is concerned, one of the immediate consequences may be the postponement of a project to build a 60,000 tons refinery with an American partner.
The Gbagbo administration is being increasingly isolated. One after the other all its ambassadors in the EU and in the US were declared personae non gratae and replaced by pro-Ouattara diplomats. Since January 14, the EU sanctions apply to high-ranking figures of the financial sector including Marcel Gossio, the director general of the Port Autonome d’Abidjan, the directors of the National Petroleum Operations Company of Cote d’Ivoire Petroci, Kassoum Fadika and Laurent Ottro Zirignon, the chairman of the Société ivoirienne de raffinage (SIR) who are accused to have contributed to the “funding of Mr Gbagbo’s illegitimate administration”.
There are American companies doing business in Cote D’Ivoire (Yam’s Petroleum is based in Wyoming and Total E&P appears to be based in France and the U.S., Vanco is out of Texas, and there are likely more.) But both France and the United States are willing to take action in the country. though that could be a result of that the legitimate President Ouattara is closer to France, as some have accused. Some say the French want control of the country to protect Total:
One of the most significant events in West Africa last year was the purchase of the Swiss oil trading company Addax by the Chinese firm Sinopec. Addax was a frequent deliverer of oil to the Ivory Coast and was a major player in the West African oil mafia. The loss of a key player to the Chinese was seen as a real threat. Since then the French oil companies have been buying up oil assets in the region using obscure shell companies. The Western oil companies seem to be using the Ivory Coast as the first battle against the Chinese moving into the oil and gas business in the region.
The Gulf of Guinea is rapidly becoming a major international oil play. Abidjan has a good refinery and will soon have another. Looking through the list of vessels delivering crude to the SIR refinery in Abidjan more than half were Addax vessels. Now they are Addax/Sinopec vessels. This has frightened the oil companies, especially Total. They do not have the money to compete with the Chinese and now Russian companies like Lukoil are entering the Gulf of Guinea market in a big way as well. The only way the French can compete is to try and maintain control of the strings of power in the Ivory Coast to find ways to delay or deter the Chinese and Russian invasion in what they thought of a their patch. The US and European countries share this ambition. Perhaps that is their reason for their blind and self-destructive policy in the country.
But on the other hand LUKoil is a key part of Gbagbo’s agenda. The relationship is such that Gbagbo scrubbed his website of evidence of meetings with the firm, but the evidence is still there on Google’s cache. Indeed, one of the main differences between Ouattara and Gbagbo is that Gbagbo rejected French (Cote D’Ivoire was a French colony) investment for nationalism and Russian investment:
Although Gbagbo’s supporters make much of his nationalist and anti-French stance, the regime signed a multimillion-dollar deepwater oil contract with Total two months before the elections. France still contributes 60% of foreign investment – including contracts for ports, oil production and telecommunications. Gbagbo’s failure to bring in alternative investors from the Middle East and Asia has weakened his negotiating position. However Russia’s Lukoil has been a lifeline to Camp Gbagbo. Along with Angola and Israel, the country has been its bedrock in terms of financial support.
That still leaves one question: Why is Russia catering to LUKoil so much? Aside from being the biggest Russian non-state oil and gas producer, LUKoil threatened to leave Russia and drill more overseas, particularly in west Africa over a dispute related to Russian tax rates:
An announcement last week by LUKoil’s number-2 executive and shareholder, Leonid Fedun . . . that the Russian oil producer expects to find more crude oil in Africa than in Russia was intended to set off alarms bells at the Ministry of Finance in Moscow. That is where Fedun is negotiating for tax concessions for his company’s newly developed oilfields in the Russian sector of the Caspian Sea and in western Siberia. Company sources admit there was nothing new about the African projects in what Fedun had to say. Whether the Finance Ministry intends to offer tax benefits to temper LUKoil’s African enthusiasm remains to be seen. And for the time being, West African spending represents a small fraction – maybe less than a tenth – of LUKoil’s global exploration budget.
. . .
LUKoil spokesman did not respond to a request for a breakdown of LUKoil’s recent and planned expenditures at prospects off the coasts of Ghana and Cote d’Ivoire. . . .
In the Cote d’Ivoire project three “promising geological targets” have been mapped, according to the annual report, and prepared for drilling.
. . .
So what was Fedun’s reason for the promoting the notion that LUKoil has found more oil in Ghana and Cote d’Ivoire than in western Siberia? In mid-July, the Moscow industry press reported that LUKoil had applied to the Finance Ministry for a tax holiday to cover its brand-new Korchagin oilfield in the Caspian, and for other fields being developed to production nearby. The company application was for zero export duty on the oil it plans to lift and ship from Korchagin. This would be worth at least $400 million, if granted.
And that’s the rub. LUKoil is competing against Rosneft and other Russian crude oil exporters for relief of the export duty on new fields. The others who have already benefited from zero export duty since January are producing at new fields in eastern Siberia; they are shipping eastwards to the Asian market, through a pipe and rail link to China; and through the new Pacific Ocean tanker terminal at Kozmino Bay.
LUKoil wants the benefit to apply with equality over the entire oil geography of Russia. The Finance Ministry wants to eliminate or reduce the tax benefit to the oil companies so as to cover rising budget outlays demanded by the approaching national election campaigns. LUKoil’s response is Fedun’s – make our new Russian wells more profitable, or else we’ll drill elsewhere.
This was serious enough that Putin himself was involved in the negotiations, promising partial relief. It dragged on into this year as Russia needed some of the revenue to close a budget gap. And it still has not been resolved, with the founder of LUKoil himself now talking up African locations instead of Russia.
So essentially, Russia probably wants to protect the company it gets tax revenue from (imagine that, tax revenue from an oil company), in order to prevent it from leaving altogether – very much a quid pro quo: You stay here with slightly lower profits, and we’ll protect you overseas.
Western diplomats have also connected numerous times LUKoil to Russia’s objections and also stated that Russian objections to previous resolutions were not substantive objections. One diplomat even said Russian’s objections were “90 percent about oil, ten percent about sovereignty.” When Ban Ki Moon raised concerns that Belarus may have delivered attack helicopters, Russia lept to its defense, calling it an errant report; a Brazilian diplomat in charge of the matter said later there was likely no such delivery.
For it’s part, China has previously stated that it will allow the African Union to lead:
China has said that it will respect the sovereignty of the Ivoirian government but will back efforts of the African Union to mediate. The African Union, for its part, quickly dispatched former South African president Thabo Mbeki to Abidjan to try to break the standoff. Mbeki left two days later, unsuccessful, urging that “every effort should be made to ensure that the transition to democracy succeeds.” Subsequently, the African Union went further, issuing a statement that calls for “respect for the outcome of the presidential election as proclaimed by the Independent Electoral Commission.” West African leaders, joined by Mbeki, have convened an emergency meeting of the regional grouping ECOWAS to determine a way forward. ECOWAS too has endorsed the findings of the electoral commission and called for Gbagbo to resign.
Chinese oil interests in the country seem to be more dependent on stability (PDF link) rather than a connection with Gbagbo; they are partnered with an American company (Vanco, which also partners with LUKoil) and an Indian company).
Just yesterday, France introduced a new draft resolution to the Security Council that the United States has announced its support for (State Department briefing yesterday). But it’s hard to see Russia agreeing to a resolution that allows for “all necessary means” to disarm Gbagbo’s forces, even if they are protecting civilians.
Is there a local solution? Probably not:
The Economic Community of West African States (ECOWAS), the African Union and the UN have taken a strong stand, unambiguously telling Gbagbo to go. Unheeded, ECOWAS and the AU then threatened using “legitimate force” – a revolutionary proposition for usually cautious organisations. So far, their actions have not matched their bold declarations.
Nigeria is not enthusiastic about intervention. It would have to pay for most of the operation and provide the logistics too. The country will hold its own elections in April. President Goodluck Jonathan is preoccupied at home with militias from the Niger Delta to the far north. Those realities might explain the mission of former president Olusegun Obasanjo to talk to Gbagbo in mid-January: few ex-leaders in the region are as blunt and forceful.
Côte d’Ivoire’s neighbours watch on closely. Ghana’s President John Atta Mills has ruled out sending troops, saying the matter should be settled through negotiations. Other states are wobbling. An intervention against an incumbent president would set an uncomfortable precedent in a year when some 18 African countries are holding elections.
Gbagbo’s camp says it is ready. One supporter showed Anansi a stash of arms in a darkened room, saying: “Eighty per cent of young Ivorians are unemployed. For us, a gun is a passport to making money.” Yet the truckloads of newly armed Gbagbo supporters patrolling Abidjan point to distrust: the cheerleaders cost money, and show a lack of confidence in the national army. “If you have to arm youths and recruit foreign mercenaries, you doubt either the capacity or loyalty of your own army of 18,000 men,” a general pointed out.
ECOWAS could still revise its position if sanctions against Gbagbo start to work. Civil servants and then, more dangerously, the army and assorted mercenaries could be left without salaries. Gbagbo’s grip on the army relies on the generals, not the ranks, many of whom voted for Ouattara. As the pressure mounts, junior officers could cut a deal with Ouattara and mount a putsch.
It’s hard to see how this doesn’t get worse before it gets better.
UPDATE: Upon recollection, I wondered if I pursued the Vanco story enough. Vanco is a partner with LUKoil and Petroci, in Cote D’Ivoire, in Africa and, recently, in the Black Sea. And Vanco is based out of Texas.
Vanco, Petroci, and LUKoil have extensive plans in 2011 and 2012 to drill off the Ivory Coast – and there are indications as mentioned above that the Russians feel this project may be at stake with the Gbagbo and Ouattara dispute.
Not surprisingly, leadership of Vanco energy have donated extensively to prominent Republicans. Founder Gene Van Dyke has donated to Republican Senators John Cornyn, Rand Paul, Roy Blunt, Kelly Ayotte, and James Inhofe. He’s donated to House members Ted Poe, Bill Flores, Michael McCaul, Pete Olson, and John Culberson. He also donated a substantial amount to the Republican National Committee.
Poe and McCaul are on the House Foreign Relations Committee. Neither are on the Subcommittee dealing with Africa and Human Rights.
James Inhofe is on the Senate Foreign Relations Committee, and is also on the Subcommittee on African Affairs.
I can find no evidence of any of these supporting Gbagbo over Ouattara in the current dispute. But the question should be posed to them.
While there is worry about the revolutions in the Middle East turning too Islamist, at the end of the day, governments are only successful if they govern. And there’s still no evidence that Hamas can do that:
Whatever the reason for Hamas’s obvious lack of restraint in recent weeks, it is not helping the party’s reputation in the Gaza Strip and the West Bank. Its popularity among Palestinians continues to decline: A mid-March opinion poll by the Palestinian Center for Policy and Survey Research had Hamas support at a mere 33 percent of people in Gaza and 21 percent in the West Bank. Fatah, on the other hand, enjoys 42 percent support in Gaza and 39 percent in the West Bank. Hamas’s brutal crackdown on national unity rallies in Gaza on March 15, including the killing of at least one female protester, further discredited the organization. Perhaps Hamas hopes that another confrontation with Israel would bolster its foundering domestic credentials.
This probably has something to do with the increasing attacks on Israeli citizens. Of course, there’s no evidence Fatah is particularly skilled at governing either. At some point, there has to be some sort of economic development plan for Palestinians in the Wst Bank and Gaza. But it’s not clear there’s anywhere near the willpower necessary to do that in Israel or the United States, sadly.
US Attorneys are people too. Meaning, of course, they are as flawed and human as the rest of us. Of course, given that luminaries such as Chris Christie and Rudy Giuliani were former US Attorneys, this should not be surprising.
“Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism,” U.S. Attorney Tompkins said in announcing the verdict. “While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country,” she added. “We are determined to meet these threats through infiltration, disruption, and dismantling of organizations which seek to challenge the legitimacy of our democratic form of government.”
While printing money is certainly illegal, it is not terrorism. Things can be damaging to the United States writ large and not be terrorism. Using this definition of terrorism actively waters down what terrorism actually is and only makes it easy to scare people by saying things like “terrorism is on our doorstep!”
[T]he term “terrorism” means premeditated, politically motivated violence perpetrated against noncombatant targets by subnational groups or clandestine agents
Does any of that apply to this guy (from the same press release):
Von NotHaus designed the Liberty Dollar currency in 1998 and the Liberty coins were marked with the dollar sign ($); the words dollar, USA, Liberty, Trust in God (instead of In God We Trust); and other features associated with legitimate U.S. coinage. Since 1998, NORFED has been issuing, disseminating, and placing into circulation the Liberty Dollar in all its forms throughout the United States and Puerto Rico. NORFED’s purpose was to mix Liberty Dollars into the current money of the United States. NORFED intended for the Liberty Dollar to be used as current money in order to limit reliance on, and to compete with, United States currency.
Taking into consideration that Von NotHaus (there’s a name for you) remains free on bond (again via that same press release). I’ll repeat that: this guy who the United States Attorney called a domestic terrorist is free on bond, which the attorney feels free to mention off hand.
Now, as for Tompkins, she has a notable resume and biography: she worked in part on the prosecution of Saddam Hussein, she’s worked for the attorney’s office off and on for years, and she is one of three openly LGBT US Attorneys. She also has a long record of donations to Democrats and likely wants to move into politics at some point (why else say something like this?) And every indication is she prosecuted and is prosecuting this case as wonderfully as any US Attorney in the land should.
But calling this terrorism in public is a mistake that we should not reward. There are meaningful and needed ways to engage on monetary policy from the left, as Matt Yglesias has ably noted; calling them terrorists is not one of those ways.