Skip to content

Microcredit’s Newest Victims

2011 January 4
by rahul

This story infuriated me:

Tanda Srinivas was lounging in the yard of his two-room house in the southern Indian village of Mondrai shortly after noon on Oct. 28 when his wife, Shobha, burst out of the door covered in flames and screaming for help.

The 30-year-old mother of two boys had poured 2 liters of kerosene on herself and lit a match. The couple had argued bitterly the day before over how they would repay multiple loans, including those from microlenders who had lent small sums to dozens of villagers, says Venkateshwarlu Masram, a doctor who called for the ambulance.

Shobha, head of several groups of women borrowers, was being pressured to pay interest on her 12,000 rupee ($265) loan. Lenders also were demanding that she cover for the other women, even though the state had restricted microfinance activities two weeks earlier, Bloomberg Markets magazine reports in its February issue.

When Srinivas, 35, tried to snuff out the flames with a blanket, his polyester clothes caught fire. Within three days, both parents were dead, leaving their sons orphans.

Have you ever gotten a call from a collection agency? Remember how nasty it was? Now imagine that you’re an illiterate or semi-literate woman in a Third World country with little in the way of enforceable rights, and imagine how much worse the collection agency would treat you. Sadly, this is a large part of the activity of the much-heralded microlending sector, whose advent is supposed, according to Nobel laureate Muhammad Yunus, to “create a world without poverty.”

Unlike the well-known enterprises such as Yunus’s Grameen Bank, the lender in this case, Share Microfin (which is also under investigation for another suicide), is a for-profit company. The article, which is highly critical, goes on to blame these unfortunate outcomes on the commercialization of microfinance. People get into the business just to make money, some of the highest-profile companies have had relatively successful IPOs–Banco Compartamos SA in Mexico raised $467 million in its 2007 IPO and this last August, SKS Microfinance Ltd., India’s biggest microlender, raised Rs. 16.3 billion (about $365 million)–and the interests of investors diverge strongly from those of credit recipients.

Lakshmi Shyam-Sunder of the World Bank’s International Finance Corporation compares the situation with sub-prime lending in the United States, although the two seem rather different in that great numbers of sub-prime loans were made with minimal or no diligence on the question of whether the debtor was likely to be able to pay back the loan, whereas here the emphasis is on getting the loan paid back no matter what happens to the debtor. In the subprime case, the key was identifying profits with loan throughput, whereas here it seems simply to be single-minded focus on profit.

Yunus plays the role of the good guy in the article, explaining that “commercialization is the wrong direction” and that one should not seek exorbitant profits, limiting loan interest rates to “the cost of funds plus 10 percent.”

Superficially, it seems quite easy to blame such horrors on the corporate dedication to profit above all and to distinguish sharply non-profit from for-profit microlending–although it must be pointed out that Yunus’s attempt to separate them so sharply flies in the face of earlier pronouncements. His book touts “social business” as the key to the poverty-free world, starting off with the inspiring tale of creating a joint venture company with the Danone Group (parent of Dannon Yogurt).

In any case, this distinction obscures more fundamental problems. First, “nonprofit” is really a notional status. . Whether surpluses go into profits for shareholders or merely high salaries for top officers of the organization is a matter of bookkeeping. Nonprofits, especially when they get to a certain size, have pretty much the same emphasis on revenues as for-profits do.

They also can have very similar notions of labor discipline. I just read a fascinating article (pay wall–JSTOR) by Mokbul Morshed Ahmad that is based on ethnographic work conducted in 1998 and 1999 among employees of Bangladeshi microcredit organizations, which brought up a point that I hadn’t considered:

A leading advantage of microcredit programmes is that their ‘performance’ can easily be measured, which enables the NGO to demonstrate achievements and satisfy its donors. Now that development intervention is so much driven by ‘performance indicators’, this can be a decisive factor in its adoption.

It is not difficult to guess that one of the reasons microcredit is so popular with foundations is that it is so fundamentally built on the free market (and in particular on making the credit market for the poor a better market in the classical sense); what I had not realized is that it is also great because it allows for labor rationalization. Unlike a great deal of NGO work, microcredit seemingly provides an obvious and built-in metric for judging the work of individual field workers and of organizations. Two numbers–loan throughput and loan repayment rate–allow one to easily evaluate people’s work, fire the ones who don’t perform, and pressure others to constantly keep increasing their numbers (Grameen Bank, which was not one of those Ahmad studied, does not, according to Yunus, use total loan throughput for evaluation of workers).

An obvious result of this is that NGO workers (who are generally poor and easily replaceable) are pushed to hound debtors mercilessly. One of them tells Ahmad

When I lend money, I always keep pressure on my clients that they have to repay it by whatever means. I tell them that if you die without repaying my loan I will kick on your grave four times because you have not repaid the money.

This is unfortunately what it often comes to.

Microcredit seems to involve a number of perversities. The first, so common as to seem almost a tenet of neoliberal economics, is what economists call the “fallacy of composition.” Roughly, it states that it’s a big mistake to assume that, because a certain behavior is beneficial for an individual who does it, it will be beneficial if everybody does it. For example, if one person saves, that’s usually good for the person; if everybody saves, you have a recession or stagnant growth (unless you are driven by exports, like China). Or take the idea, incredibly prevalent in all “human capital” arguments that, if one person gets a better job because of more education, then if everybody gets more education all the bad jobs will be eliminated and only the good ones will remain. In truth, if everybody had a Ph.D., some people would be janitors with Ph.D.’s, some would be Starbucks baristas with Ph.D.’s, and so on. This should not be difficult to figure out, but nobody in the policy biz seems to figure it out.

Similarly, if a handful of people can have their lives changed by small loans that can help them start a business (and there is much anecdotal evidence to this effect), people like Bill Clinton and Muhammad Yunus like to suggest that, if all the poor get loans to start businesses maybe they’ll all be better off. In truth, if no structural changes are made in the economy, what you’ll have is far too many vegetable vendors, bicycle repairers, etc. competing with each other until they drive profits down to zero and nobody can keep up with their 20% interest payments (Grameen’s rule of thumb maximum interest rate for a business loan–other microlenders charge much higher rates). Just as with creating an “ownership society” in the United States, flooding Third World markets with excess credit, and pushing people to take loans that they don’t need or will have no good use for, will simply create a large number of people who are underwater. The same kinds of structural incentives that led mortgage lenders here to offer excess credit seem very likely to push microfinance in the same direction. This time, though, the catastrophes will come to people who have nothing to fall back on, not even the tenuous welfare state of the United States.

Even worse, perhaps, microcredit frequently relies on techniques that, if not coercive, are extremely close to it. It involves the provision of credit to people who simply wouldn’t get it otherwise. Many such projects collapsed quickly because of poor repayment. Grameen Bank succeeded because of a focus on lending to women and through invocation of collective responsibility and mutual surveillance. Loans were made to women in a “circle,” all of whom were made responsible for repayment of the entire amount, and they were encouraged to pressure each other to make their payments. To this was added, as Ahmad mentions, considerable pressure from field workers. The result is that, perversely, very often microcredit recipients have fewer rights than ordinary recipients. In the United States, any of us has the right to default on a loan. We can walk away, declare bankruptcy, or whatever. The sanction against doing so is that one loses one’s credit rating and getting future credit becomes very hard, but if the choice is between eating or repaying the loan, you default. Microcredit recipients, at least sometimes, don’t really have credit ratings and have little or no guaranteed access that they are going to lose. Microfinance organizations react to this fact by creating this choking atmosphere of social pressure, which often seems to make default more difficult than it is for the rest of us. People go hungry to pay back the loans, their kids drop out of school to work to repay the loans and sometimes, horribly, they kill themselves.

Despite these two fundamental problems, there are obviously things to be said for microcredit. It’s very difficult to find any systematic data on the effects of microcredit, one of the problems being the difficulty of defining and then finding a control group. As of the end of 2007, the World Bank said 157 million people had been served by microcredit–what is mentioned much less frequently is that likely the vast majority of those people are still poor. A recent study by Abhijit Banerjee, Esther Duflo (recent recipient of the John Bates Clark medal and of a Macarthur Foundation Fellowship for studying the economic lives of the Third World poor), Rachel Glennerster, and Cynthia Kinnan of MIT based on randomized trials in Hyderabad (randomization was by neighborhood, not by individual) found mixed results. There was no statistically significant impact of access to microcredit on measures of health, education, or women’s empowerment (although the trial period was only 15-18 months), but there was a significant increase in household expenditure on durable capital goods (for household businesses) and decrease on spending related to alcohol, tobacco, and gambling. Although significant, the effects were pretty small: per capita spending on durable capital goods went from Rs. 5 per month to Rs. 12 (this is out of roughly Rs. 1000 per month income). It’s possible to imagine that this tiny amount of capital accumulation will make a huge difference for families in the long run, but it’s also entirely possible that it will just mean more money sunk in an untenable business.

A study from the World Bank’s Consultative Group to Assist the Poor seems, on the other hand, to suggest that the main benefit the poor get from microfinance is what economists call “consumption smoothing.” Incomes of the poor are highly variable, as are expenses. Repairs, illness, school fees, etc. are frequently dealt with by short-term borrowing. Family, friends, and moneylenders are the traditional resort; microfinance corporations are more reliable sources of funds than family and friends, and less extortionate than moneylenders. This makes sense and is valuable. The poor need this sort of credit, not usually to get out of poverty, but to avoid catastrophe. The lower the interest rates charged by loan sharks, the better. Carrying a credit-card balance is better than taking out a payday loan. Indeed, this is just creating a more rational market; if you can make money charging the poor 30% interest, then it doesn’t make good free market sense that the only lenders are loan sharks who charge 100%. But to pretend that this is potentially transformative of the situation of the poor is absurd.

I’ve been aware of critiques of microfinance as a stalking horse for neoliberalism at least since I read this article in 1996. Market solutions like microfinance, many said, would just increase the pressure to dismantle state services of the kind that would really be needed to address the issues of poverty. This critique never bothered me all that much, for the simple reason that a great deal of it was happening in places like India or Bangladesh, with virtually nonexistent state social safety nets, or that it was beginning in places like the United States, where social services were going to be dramatically cut anyway. Had I known how gigantic the field would be, and how many bien pensant types would promote it as the killer app for world poverty, I might have thought differently. Even now, though, I think it is foolish to have a blanket position in opposition to free-market-type solutions. We will be dealing with markets for a long time to come, if not forever, and these things will be necessary. There’s nothing wrong with a carbon tax in a world where you can’t wave a magic wand and eliminate or drastically reduce carbon emissions. The problem is the incredibly sloppy thinking (also a defining characteristic of neoliberalism) that resists outlining the often restrictive scope conditions for such solutions and also resists serious thinking about the viability of non-market solutions, alone or in combination with market solutions.

I’m anything but an expert on the subject of microfinance, so if anyone can point me to any really good data on its actual effects on the poor, I will be grateful. I have no doubt that it’s done a lot of good; what seems very likely, however, is that any further expansion will do more harm than good.

Return from Hiatus

2010 December 26
by rahul

I put this blog on hiatus back in February, for a variety of reasons. Among them were a need to redesign the blog, a feeling that I was limiting myself too much by the format I chose (a weekly 700-800 word commentary), a need to deal with other matters, and profound political burnout. Of course, as other bloggers know, the burnout intensifies when you can’t even vent about it, so I’m back now.

The blog is now powered by wordpress. Comments are enabled (finally), and I strongly hope that people will comment. I am still experimenting with formats for my posts. I don’t have the time to be a johnny-on-the-spot blogger, and I also think the value-added from that is minimal, but I will do a few of the normal posts involving response to something I just read. I will do longer commentaries at least once a week, although I may try some much longer posts than in the past. It’s up in the air for now. Feedback on any of this would be much appreciated.

Weekly Commentary — “Kinder, Gentler” COIN and Marja

2010 February 15
by rahul

Stanley McChrystal is very serious about his vision of “kinder, gentler” counterinsurgency.

When a recent rocket attack killed 12 villagers, at least nine of them noncombatants, he immediately apologized to President Karzai and ordered troops to suspend use of the weapon system involved.

I think it’s fair to say that actions like this are unprecedented in the history of U.S. counterinsurgency.

Not that that is likely to be of much consolation to those who knew those twelve people, several of whom were children.

The incident occurred as part of Operation Mushtarak, billed as the largest military operation in Afghanistan since the fall of the Taliban in 2001. Involving apparently 15,000 coalition and Afghan troops, including 4000 U.S. Marines, it is an attempt to “clear” the small town and district of Marja in southern Helmand of insurgents.

Supposedly, Marja has now become the biggest Taliban stronghold in southern Afghanistan; a year ago, it was on no one’s radar.

The “preparation of the battlefield” before the operation began was marked by confusion; a warning of the assault, much like the second attack on Fallujah in November 2004, so that civilians could flee ahead of the fighting, combined with admonitions to civilians to stay in their homes.

What supposedly makes this plan different from so many useless efforts previously in Afghanistan is the planning for the aftermath. Apparently, 2000 Afghan police will be stationed here after the battle is concluded, along with civilian officials; McChrystal has been quoted as saying, “We’ve got a government in a box, ready to roll in.”

Whether this “government in a box” will be superior to Taliban governance is an open question; it is likely to be more corrupt and provide less security but may allow more political freedom. And if there is an improvement, will it be enough of one to justify the violence and disruption the people of Marja have to go through in this assault, and in the Taliban attacks that are sure to follow?

That is likely not a question Stanley McChrystal is asking himself; even “kinder, gentler” counterinsurgency relies on the automatic, unquestioning assumption that your side must prevail. And the reasons for that assumption, even in this “population-centric” paradigm, always lie beyond the good of the population in question. Here, they have something to do with al-Qaeda, but mostly to do with the idea that the United States shouldn’t lose.

It’s easy enough for members of the U.S. military and reporters embedded with them to convince themselves that these considerations are perfectly compatible with, or even logically linked to, the good of the Afghan population. The brutality of the typical insurgency faced with a technologically superior foe that has far more resources for coercion enables this feeling, and the reactionary ideology of the Taliban intensifies it. Any further qualms are put to rest by McChrystal’s new rules of engagement.

Afghanistan has always been a difficult one. If you observed the early commentary from the left very closely, it would have been difficult to avoid noting that it was the very people who knew the most about Afghanistan and approached analyzing the war from the vantage-point of the Afghan people who most fudged the question of what is to be done, and in particular the question of U.S. withdrawal. Withdrawal has become an easy question for those “progressives” who believe that “Afghanistan is not worth the bones of a single American soldier” (to paraphrase Bismarck on the Balkans) or that Afghanistan is a primitive, stone-age civilization that, despite the best of our intentions, we cannot hope to democratize.

For those of us with a slightly more expansive view of the worth and capabilities of Afghans, it has never been that easy. Even now, it is not. The neo-Taliban has avoided both traps of the takfiri insurgency of Iraq; an increasing spiral of ideological extremism and one of baroque and macabre violence against one’s own side. But how much of that is because of the existence of political competition; if they took over completely, who knows what order they would impose?

It is conventional for social scientists and others who apply a cost-benefit calculus to human misery to judge actions not relative to some unattainable baseline but rather relative to likely or feasible alternatives. Doesn’t the Korean War, with all its saturation bombing atrocity, seem a little more reasonable when one looks at the horror that is North Korea today?

But the truth is that strong actions, like that one or the occupation of Afghanistan, play a constitutive role, creating and destroying various other alternatives. The trauma of the Korean War conditioned what kind of country North Korea would be afterward; the perpetuation of the Afghan counterinsurgency may well make the neo-Taliban more brutal and more desperate. If it does, just as in Iraq, everybody will wash their hands of it, saying that this proves all the more how right we were all along.

Weekly Commentary — Orphaned Haiti

2010 February 8
by rahul

Ten good salt-of-the-earth American Christians from the New Life Church in Idaho who apparently went to Haiti to help children are now in prison, charged with child kidnapping.

They were stopped by Haitian authorities with a busload of 33 children they were trying to take to an orphanage run by New Life in the Dominican Republic. They had no papers with them. Their defense has been that they didn’t know any documentation was needed. Many of the children have living parents, and some have claimed that they were taken without their parents’ permission.

The emerging news story is that the leader of the group, Laura Silsby, is something of a shady character, while the other nine were just innocent dupes who were trying to do good.

That’s not how I see it. When Americans are forced to admit they have done anything wrong, they always fall back on stories of blundering attempts to do good, which founder because they didn’t understand the cultural peculiarities of Vietnamese or Iraqis or Haitians.

I do believe the other nine were stupid and ignorant; I also believe they were culpably stupid and ignorant. Who imagines that you can take 33 children that don’t belong to you across a national border without a scrap of paper attesting to your right to custody? Would any native Idahoan, no matter how blissfully protected from knowledge by the New Life Church, have imagined they could do that with American orphans?

Haitian children are not puppies (and no, I don’t approve of the way humans separate puppies from their families either).

You may concede the underlying racism that made this ignorance possible, but still believe they were trying to help the children and give them a better life. The truth, though, is that they were engaged in the despicable task of taking advantage of the poverty, desperation, and bereavement of Haitians to acquire tiny captives as subjects for the forced acquisition of their bizarre belief system (yes, New Life admits openly that the orphanages exist for the purpose of conversion).

Many parents claim that they gave up the children willingly; it’s unlikely they knew what kind of life they were condemning them to. But the actions of desperate people are understandable and forgivable.

This little episode is Haiti and its relations with the United States in microcosm. The media has been full of opinion pieces about how this is now Year Zero in Haiti and the United States should remake Haiti ab initio so that such things never happen again. The Washington Post even ran a story quoting numerous Haitians who basically expected the U.S. to take over, build things that work, and use some tiny fraction of its enormous wealth to make life better for them.

It is a forlorn hope. The United States government is not the New Life Church. It doesn’t want to organize life in Haiti; it didn’t even want to in Iraq and Afghanistan until it began to seem necessary to defeat a tenacious armed insurgency. Haitians have no weapons and no military capability to mount an insurgency that will bother American soldiers, so this just won’t happen.

But what will likely happen is an extended U.S. troop presence and an intensification of the effective U.S./UN trusteeship of the country.

You might say this makes sense. After all, Haiti is a miserable failure and national sovereignty notwithstanding, it makes little sense to repeat and perpetuate this failure.

This is true, but there is a real question about what exactly the failure is. Here’s a thought. Since Dessalines’ declaration of Haiti’s independence in 1804, Haiti has never really been allowed to govern its own affairs. Francois Duvalier was the first ruler to create a genuinely independent Haitian politics; unfortunately, it involved intense political terror.

It was not until Aristide and Lavalas that anyone presented the possibility of Haitian independence without mass killing. Between Aristide and Preval, the evolution and then collapse of Lavalas, there is a complicated story that others can tell better than I, but the most salient point is this; since 1990, the evolving popular movements and the leaders they have elected have never had a chance to govern untrammeled by the white powers.

Haiti has a highly politicized populace. In the past 20 years, it has undergone two periods of mass terror and attempts to destroy popular movements. After the second, which happened under the aegis of the United Nations, the population still overwhelmingly voted for Preval instead of the candidates of the oligarchy that was terrorizing them. Maybe if they had governments that represented them and their interests without being hobbled by the so-called “international community,” they would work out some form of good governance for themselves. It’s just a thought.

Weekly Commentary — Haiti’s Curse

2010 January 25
by rahul

There are already 150,000 Haitians in the ground. The total death toll may, one hopes, be as low as 200,000, but it could easily be significantly greater.

The world reacted immediately, with countries as far away as China and Israel dispatching rescue teams. President Obama avoided the initial mistakes of the Bush administration with the tsunami, declaring immediate solidarity with Haiti, pledging $100 million, and sending in the Marines. And individual Americans, reacted with a generosity and concern unprecedented in the speed of its mobilization. U.S. relief organizations have collected over $380 million in donations.

Almost no sooner had the earthquake happened than numerous left commentators who had connections with Haiti began criticizing, warning of the dangers, and reminding readers of the sordid history of U.S. and U.N. policy toward Haitians. At the time, I was ambivalent about it. On the one hand, politics and disasters always go together, and it’s reasonable to make the case that people should focus on the potential political problems as early as possible. On the other hand, such behavior is indubitably part of why everybody hates the left.

My ambivalence was happily resolved by David Brooks’ noxious op-ed in the New York Times, blaming Haitians for the disaster and calling for their subjugation under an “enlightened paternalism.” I give him credit for being openly noxious — the same theme, thinly veiled, cropped up in innumerable other places in the mainstream media.

They started it.

Of all of the arrogant, ignorant, paternalistic white commentators, the one who hit closest to the truth was Pat Robertson. Haiti is cursed. There is and has been for 500 years no more benighted place on the planet.

The indigenous population was wiped out by Columbus and his successors in perhaps the most complete genocide in history.

The population was entirely replaced by white settlers and Africans abducted, enslaved, subjected to a brutally deadly passage to the New World, and then subjected to perhaps the most onerous slavery in the history of the world. They were worked to death so fast that more slaves had constantly to be imported.

The first ray of light was the advent of Toussaint and the slave revolt. It was a bloody series of battles spreading over 13 years and costing the lives of hundreds of thousands of the newly freed. Any battle like that creates leaderships composed of hard men, who ruthlessly take the measures they deem necessary for survival. Those who do not, do not survive.

Given that process, Toussaint was a surprisingly enlightened and humane man, remarkably ready to forgive his enemies, stubbornly committed to racial reconciliation, even to the point of welcoming the return of the émigré plantationocracy that was responsible for the crimes committed against his people.

His vision, gradually developing, of an independent Haiti closely connected to, helped and advised by Republican France, which he saw as the foremost source of culture and modern thinking in the world, was an admirable one that, if realized, might have changed Haiti’s history forever after.

He was taken from Haiti by French perfidy and the counterrevolution in France. His successor, Jean Jacques Dessalines, autocratic but efficient, was assassinated, and Haiti broke up, split between different warlords created during the slave insurgency. Do not blame the ignorance and backwardness of Haitians for the fact that, after this mighty effort for freedom, they created emperors and kings to rule them; it was, after all, the ultra-civilized French who voted overwhelmingly to make Napoleon emperor and who later accepted the Bourbon restoration.

Fast-forward over 185 years of constant colonial depredations by France, the United States, and other European powers, including the 19-year occupation started by Woodrow Wilson, during which time Haitians were rounded up into work gangs not so dissimilar from their role in the days of slavery, the French theft of 150 million francs under the guise of compensation for the property lost in the slave revolt — property in the form of the bodies of the slaves — and Cold-War-inspired U.S. support for the murderous Duvaliers.

The second ray of light was the formation of Lavalas and the rise of Jean-Bertrand Aristide. He has now been removed from power by two coups, the first in 1991 by military and feudal elements friendly to the United States and in some case on the CIA’s payroll, and the second openly backed and organized by the International Republican Institute of the National Endowment for Democracy with the connivance of the Bush administration and with the support of the U.N. Security Council. So dangerous is this meddlesome priest that for six years he has not been allowed to return to his country.

Who or what cursed Haiti? Consider this. By all accounts, when Columbus landed on Hispaniola, the island was filled with a prosperous, peaceful, happy people; it seemed to early European observers to be a paradise.

Weekly Commentary — A Legislative Travesty

2009 December 18
by rahul

Whether it was Otto von Bismarck or some unheard-of American lawyer who actually originated the famous aphorism about the making of laws and sausages, he was very unfair to sausage-makers. After all, they don’t really try to hide the fact that their final product, the sausage, is a revolting mixture of ground-up bits of waste gristle and fat encased in cleaned-out intestines, or even the fact that they will send you to an early grave. And they’re very clear that they make them in order to make money.

Laws, on the other hand, like the so-called “health care reform” that may eventually pass through Congress, are frequently dressed up to hide the innumerable rat parts that somehow got included in them or at least to distract the average citizen from thinking of them.

The “public option,” in whatever emaciated form might conceivably have emerged, is dead. The passage of an individual mandate requiring that everyone buy health insurance will mean a gigantic boondoggle for private insurance companies, who will at one stroke get 40-odd million new subscribers. In return for making this gigantic sacrifice, insurance companies may be allowed to lower the already low rate of premium repayment; i.e., not only will the numbers of subscribers increase, the profit per subscriber may well increase as well.

On the other hand, the poor and young, who are often just scraping by, will be required by law to give money to insurance companies while in general receiving considerably less health care than they are paying for. If not, they will have to pay a penalty.

Yet another bright idea: an excise tax on so-called “Cadillac plans.” What this may well mean in practice is that those of us with half-decent health insurance through unions or because we are public sector employees will be hit with extra costs to help finance the extra profits of insurance companies. These groups, of course, vote Democratic, so the geniuses on the Hill will be hurting themselves.

Perhaps the most obvious reform was eliminating “rescissions,” the charming practice of many insurance companies by which they retroactively drop coverage when somebody gets sick — without repaying their premiums — if they can find the slightest misrepresentation, accidental or otherwise, on a form. Instead, there will probably be a loophole allowing rescissions in cases of “fraud,” i.e. business as usual.

About the only real reform will likely be the requirement that insurance companies cease discriminating against people with pre-existing conditions. This is a small price to pay when you are delivered a gigantic new captive market.

There is no doubt a tremendous rogues’ gallery here. One can certainly include every Republican. And then there are various wonderful blue-dog Democrats like Max Baucus, Ben Nelson, Blanche Lincoln, and a sea of political mediocrities. And, as always, the ever-noxious Joe Lieberman, who never met a super-exploitative oligopolistic cartel he didn’t love (except those run by Arabs, of course), and who somehow manages to maintain his air of preening sanctimony whether he is arguing against accountability for torture and sexual abuse or in favor of increasing corporate profits by denying decent health coverage to millions of people.

But, honestly, it takes remarkable contortions to avoid criticizing President Obama for this, as well as every other debacle he is so calmly plunging into. He was exactly right during the primaries when he emphasized that major legislative changes could not be made by worrying about Washington, inside-the-Beltway culture, and picayune partisan politics; in order to get real change, he said, what was needed was broad principled appeals meant to mobilize the masses and force legislators to consider their concerns rather than those of entrenched interests. If you weren’t convinced of that before, watching all those Congressmen in the pockets of insurance companies should have done the job.

The problem was that he resolutely disavowed, then and afterward, every kind of broad principled argument on every conceivable issue. He tried to create a national crusade on health-care “costs,” as if costs were a problem in themselves. Why shouldn’t we spend more money on health care, instead of on plasma-screen TVs and SUVs? The problem is not how much we spend on health care but how little we get for it. And talking about that requires the unmentionable word “profits.” That is divisive and not Niebuhrian and Obama would not do it.

The truth is that we are not more alike than our politics would suggest. We are in large part what our politics make us. The Republicans, crazy as they are, understand this.

Weekly Commentary — Climate Change Theatre

2009 December 7
by rahul

It’s always disturbing when one finds oneself agreeing with George Will, but his disparagement in a recent op-ed of the “climate change theater” going on at Copenhagen are right on target.

Barack Obama is talking about a 17% reduction in carbon emissions in the United States (from 2005 levels) by 2020, with an 83% reduction by 2050. So far, the United States has proved itself incapable of even saying in any meaningful way that it will cut carbon emissions — forget any question of actually doing so. Although liberals whined a lot when Bush pulled us out of the Kyoto protocol, the truth is that the Senate never ratified it. Even the pathetic 17% reduction Obama is talking about will only result in a massive barrage of verbiage from the Republicans until it is drowned in nonsense.

And yet we actually talk about how much reduction will be achieved by 2050. That is absurd, in a country where six months ahead is a long-term forecast, but to say that the reduction will be 83% is just insulting to whatever passes for our intelligences. Assuming Will’s numbers are right (and you should never assume this), this will commit us to carbon emissions per capita at the level we had in 1875. Does anyone believe this? Does anyone outside of the radical ecologistic far left even have the courage to talk about what kind of life this would mean?

In truth, as is always the case with claims like this in America, “by 2050″ just means “we’re not going to do anything about it now.” And yet on the strength of a couple of cheap numbers, the United States is being hailed for its newly constructive role in climate change politics and Obama will surely be much feted at Copenhagen. It’s just a shame there’s no Nobel Prize for the Environment.

And then there are India and China. They have a valid case for not being treated the same as the countries of the First World. After all, it is the Europeans and their descendants who created the problem, while simultaneously despoiling the Third World (and perhaps even creating it, if you go along with Mike Davis’s thesis in Late Victorian Holocausts). But instead of putting forward an argument in terms of equity, or in terms of the equal right of every individual to the bounties of the earth (per capita emissions even in China are far below those in the United States and still well below those of Europe as well), they have actually attempted to compete with Obama in cynicism.

India says it will reduce its “carbon emissions intensity” by 20% by 2020, and China will reduce it by 40-45%. “Carbon emissions intensity” is a physically and atmospherically meaningless quantity — carbon emissions per dollar of GDP. The environment really doesn’t care how much you say various pieces of paper you produce are worth. Will rightly derides the use of this farcical phrase, although, since he is himself an apotheosis of dishonesty, he doesn’t mention that this is a severe case of “monkey see, monkey do” — the concept of emissions intensity was a creation of the Bush administration intended to prove that the United States was such a good environmental citizen that it didn’t need to do anything.

Although one must admire these countries’ cleverness in using America’s folly against it, institutionalization of this pernicious concept is a serious price to pay.

The Europeans are no better; with few exceptions, the only countries that have met their Kyoto emissions targets are those of the former Soviet bloc, which did it through imposed deindustrialization and social dislocation.

Let us not forget the other half of “climate change theater,” as underscored by Mike Tidwell of the Chesapeak Climate Action Network — Buying your friends carbon offsets for Christmas, talking about voluntary adoption of compact fluorescent light bulbs, and generally trying to make people think that all they have to do to save the environment is to consume different products.

In the last two years, the level of concern with and belief in global warming among the American public has turned around and started heading down. This has to do in part with the resurgence of the far right wing, which has now taken over right-of-center politics, but it also has to do, I think, with the feeling that it’s being taken care of. You don’t even actually have to buy a compact fluorescent light bulb; just knowing you’re supposed to has almost the same effect on individual psychology.

Nonsensical posturing about targets that no one intends to meet and that are likely not even socially or politically possible to meet is actually part of the problem.

Weekly Commentary — To Surge or Not to Surge

2009 December 2
by rahul

Well, Hamlet has finally made up his mind. After a major strategic review of Afghanistan, an equally major review of the review, and then several months of reviewing both reviews, he has finally committed himself to a course of action. Whether it involves his pretending to be insane or just treating the rest of us as if we are, next week he will be awarded the Nobel Peace Prize just after announcing a major military escalation.

Obama’s speeches have been variously criticized over the past few years for soaring rhetoric untethered to actual facts and circumstances and for dry wonkish attention to policy detail, so he cleverly arranged this time to satisfy all critics by having neither.

Indeed, if you set aside the increase of 30,000 troops, repeatedly telegraphed by the White House, there were only two things noteworthy in the speech — first, his completely unforced reiteration of the commitment to withdraw completely from Iraq by the end of 2011 and second, his bizarre new commitment to start withdrawing the troops he is now throwing into Afghanistan within 18 months.

What the latter means is very unclear. If it were Clinton or Bush, I would ignore it as verbiage, a mere hole in the air, but Obama does not throw away words and has an uncanny consistency between what he says and what he ends up doing — look at how he promised to escalate in Afghanistan while campaigning and has already doubled the U.S. troop presence since taking office.

I would guess the genesis of the promise is the growing pressure on him from Democrats in Congress. On Afghanistan, he is in the unenviable position of being dependent on the Republicans and at odds with his own party. Obama has tried to split the difference, thus pleasing nobody.

Still, being Obama, he no doubt had to convince himself that this commitment motivated by domestic political considerations is actually an important part of the optimal strategy in Afghanistan — presumably, his reasoning is that he is signaling to the U.S.-propped Afghan government and to Hamid Karzai that the U.S. commitment is far from open-ended. He is also, I imagine, trying to signal to himself that he is not Lyndon Johnson.

The truth, though, is that if you’re going to fight a counterinsurgency — and that is the course he has clearly put us on — this is a ridiculous way to do it. Why not just withdraw now? The chances that something climactic will happen in the next 18 months are minimal — and if it does, it will likely be something horrible. In Iraq, things came to a head within a very short time frame from 2005-2007 because of the descent into a nightmare of internecine carnage, followed by desperate attempts by various groups to step back from the edge of the precipice. Of course, if such a thing were to happen in Afghanistan, it would provide the foundation for another great counterinsurgency “success” like Iraq, but it’s very unlikely — 8 years of occupation has seen no major sectarian violence.

Short of that, 18 months will not suffice to eradicate the neo-Taliban — especially since all indications are that they’re still growing and that things are still in the phase where more counterinsurgency means more insurgency.

I do have some hopes that the increase in troop numbers will not lead to significant additional violence against Afghans because of partial implementation of Gen. McChrystal’s “kinder, gentler” rules of engagement — it’s worth noting that Germany’s August airstrike on a tanker near Kunduz that killed up to 145 people has already caused the resignation of their chief of staff and their defense minister at the time.

Although the lesson that killing civilians may be militarily counterproductive has been absorbed, it is still amazing how many lessons have not. In his introductory boilerplate, Obama attributed the rise of the Taliban to the Soviet occupation, the ensuing civil war, and the fact that American attention had “turned elsewhere;” by some prodigious effort, he has avoided learning that the rise might have had something to do with what America was doing before its attention “turned.” Similarly, he presents Pakistan’s turn to a more militaristic approach as a realization at long last that Pakistan is endangered by “extremism.” In fact, of course, Pakistan faced virtually no internal terrorist attacks before the 2001 war and subsequent ones are entirely a product of American and Pakistani military operations in the area.

Barack Obama was the only American president in living memory capable of absorbing the decidedly non-Western idea that in some cases doing nothing might be more productive than “doing something” — witness his immediate reaction to the election tumult in Iran — but by this point it seems all possibility of insight has drained out of his foreign policy. This lesson is apparently not one that Americans will ever learn.

Weekly Commentary — Sarah Palin and the Crazy Right

2009 November 23
by rahul

Sarah Palin’s “auto”-biography is really boring. Having a mere twenty minutes to spare, I only got a chance to read about a quarter of it, but that was enough for me.

The exigencies of expending 400 pages on the non-events of what was until mid-2008 a non-life are not pleasant to imagine; it’s quite obvious that the book was published early because, unlike most political memoirs, there was no need to sift through a mass of facts, anecdotes and musings to refine out a coherent story — all that was need was to add in lots of junior-high prose describing the Alaskan landscape and to recapitulate well-known events from the presidential campaign.

The book is full of distortions and outright lies — the AP put 11 fact-checkers on the story (as Markos Moulitsas pointed out, it might have been nice if they did this for the Iraq WMD story). There is also a lot of cheap score-settling, showcasing Palin’s by-now legendary vindictive, backbiting personality. But the dominant thread is simply the fact that she is a non-entity, with nothing discernible behind the moose-shooting leg-showing façade.

There seem to be sharp disagreements over whether she can be safely dismissed. Frank Rich says she is here to stay as a phenomenon because she taps into something deep in the American soul, a sentiment shared by Maureen Dowd. Matthew Continetti of the Weekly Standard, one of her greatest fans, locates her in a hallowed lineage of hard-nosed American “populism,” following in the footsteps of Andrew Jackson, William Jennings Bryan, and Ronald Reagan, ending his bizarre piece with an injunction to Palin to oppose the crucifixion of America on the “cross of Goldman Sachs.”

My sense, though, among the more explicitly partisan liberals, is that they are salivating at the thought of a Palin presidential campaign, expecting an easy win for the Democrats. It is true that key bloggers like Moulitsas and Matthew Yglesias do frequently express concern for the descent of the Republican Party into insanity and extremism. Some of that is schadenfreude expressed as concern, and some of it is based on the idea that the country needs a two-party system, that implosion of the Republicans because they have stopped representing Americans will in the long run be bad for the polity.

I come down on the side of concern myself, but not for the same reasons. I don’t think the extremization of the Republican Party has any chance of leading to its disintegration. The institutional strength of the two-party system and the emotional resonance of the liberal-conservative divide are too great. The last real challenge to the two-party system was in the late 19th century with, in fact, William Jennings Bryan. The end of the Vietnam War and the impeachment of Richard Nixon wrecked the Republican Party; in 1975 and 1976, its demise was already being celebrated in some quarters. Yet, four years later, a Republican was elected president and an era of Republican political dominance was ushered in; it still has not ended.

My guess now is that, no matter how far the Republican Party goes, they will lose very little more of their support. You can already see Obama losing popularity, even though most of what he has done is at least partly in the interest of the lower and middle classes and even though the only prescriptions Republicans have are utter nonsense (or stalking horses for insurance companies, like the call to let them sell insurance policies across state lines, thus freeing them to pick the state with the least onerous regulatory requirements).

This analysis is, I think, especially true with a foreign black Muslim Kenyan in the White House. Although Obama’s victory was indeed a victory for a certain post-racial America (which is very different from an America that has dealt with the injustice of race and racism), there is a large chunk of the country that is not ready to be dragged into the 21st century — or the 20th.

The latest trope in this unsavory group is a bumper sticker saying “Pray for Obama — Psalm 109:8.” In the King James Bible (if it was good enough for Jesus, it’s good enough for me), this reads, “Let his days be few; and let another take his office.” The psalm continues with imprecations against his fatherless children and his widow. The expression of these charming sentiments coincides with a huge rise in death threats against the president, which, along with an increase in related incidents, apparently threatens to overwhelm the Secret Service.

Obviously, a presidential campaign espousing this sort of hatred will get nowhere fast; just as obviously, a non-entity like Palin would be nowhere without it.

Weekly Commentary — Nidal Malik Hasan as a Rorschach Test

2009 November 16
by rahul

Like all good current events, Major Nidal Malik Hasan’s recent shooting spree at Fort Hood, wherein he killed 13 people and wounded over 40, has functioned as a political Rorschach test.

For the right, the blob resolves very easily; indeed, this particular incident was unnecessary. Muslims are scary and can’t be trusted. Hasan was part of a massive “terrorist” ring planning assaults on the U.S. military from within. Joe Lieberman, always one of the stalwarts of anti-Arab paranoia and fundamentalist anti-Islamism, plans to hold hearings designed to ferret out said plots.

A further obvious lesson is that the pinkos and peaceniks running the U.S. military are caught up in “political correctness;” no longer just about keeping white boys on elite college campuses from having good clean fun, now it has a body count.

Interestingly, of all the mainstream commentators, only Frank Rich had the wit to point out the bizarre contradiction at the heart of the “war on terror” for the past six years at least; the very people who jump to support our various expeditions into the Muslim world and excoriate opponents for not wanting to help Muslims and not believing that Muslims are capable of democracy themselves rabidly hate Muslims. It’s apparently not polite to say, but it’s quite obviously true.

For the status-quo defenders of ponderous military bureaucracy, which apparently includes all militant liberals now, the lesson is that there is no lesson. The military’s expansive tolerance and respect for diversity are good things, and Major Hasan’s unfortunate emotional problems have nothing to do with his religion.

For some fervent opponents of the war, I suppose, the incident is a lesson that some incipient groundswell of Muslims is out there, ready to kill our soldiers and drown our empire in blood, and that we should cease to occupy Muslim countries or we will be destroyed.

There are other lessons one might just as easily choose to learn. Instead of the danger of Muslims in the military, one might consider the danger of the casual abuse and prejudice within the military; perhaps the all-too-common practice of soldiers cheerfully referring to people like Hasan as “ragheads” and “hajis” is actually not such a good idea.

Or one might consider how this incident manifests the severe problems with the provision of psychiatric care within the military; how was it that a man who was clearly in serious need of it himself ended up being charged with providing it to others?

One might even choose to learn the lesson that Hasan himself suggested, at the end of a rambling and semi-coherent PowerPoint presentation with 50 slides that he delivered in 2007 to a mystified group of Army doctors expecting a medical presentation — a presentation that, by the way, was a cry for help that only a complete blockhead could have failed to notice. The last slide contained a single recommendation: allow Muslim soldiers to become conscientious objectors and/or leave the military if they felt too much conflict with the idea of fighting against fellow Muslims. In retrospect, at least, it is hard to argue with this one.

Personally, the main lesson I see, which is, I suppose, partly in line with that of the military brass, is that it’s actually quite amazing how little of a problem Muslim soldiers have been. There have been two incidents of fratricide, that of Hasan Akbar near the beginning of the Iraq war, and this one, and only a handful of cases of conscientious objection or noncooperation.

While the military bureaucracy obviously failed miserably in dealing with Major Hasan, the complacency of the brass is well justified. Muslim soldiers and intelligence agents are a major asset in the prosecution of the “war on terror;” incidents like these are acceptable losses for a militarily sound program. It is quite obvious that these incidents are no more disconnected from the religion and/or ethnicity of the two men in question than membership in AIPAC or the NAACP is, but still they only add up to a minor cost; 13 American soldiers is the number being killed in a week in Afghanistan.

American Muslims, furthermore, have essentially posed no threat, either of terrorist attacks, or even of significant political resistance to the war on terror. They are not only less cohesive than Muslim communities in many European countries, they are apparently much more apolitical. Although there is a great deal of simmering  resentment at the reflexive anti-Arab and anti-Muslim prejudice of much of the country, it doesn’t seem to translate into any kind of action.

Naturally, of course, the right wing wants to take one of the few things that America does right and fix it.