Letter to the Spy Publisher: A Response from David Montgomery

Share

Dear David,

I had no idea that you would have such an emotional reaction to my POV on the Colorado shootings, and had I known I would without hesitation have chosen a different topic. But having written it without such knowledge, I stand behind what I wrote, and I have added links to studies supporting my views. Perhaps your feelings have prevented you from reading what I actually wrote, and led you to paraphrase my article in a misleading way. You claim I stated “that one of the murderers, who had been questioning his gender identity at the time of the crime, was the result of our society ‘brainwashing teens into gender dysphoria.’” Only the last 5 words are mine.

If you are implying that I think all teens confused about their gender are potential mass murderers, I am offended more by your lack of respect for my intelligence than anything else. Having expressed my outrage more than once at suggestions that all “white nationalists” are mass murderers, I am not likely to make the same mistake in causality myself.

Do I think that the massive propaganda machine legitimizing the desire to change sex is harmful, and that it added to the impulses that made this boy and girl into killers? Indeed, I do. Capable researchers have published studies that reveal a link between peer and social media pressure and gender dysphoria. That is a matter of fact to be discussed not suppressed.

You clearly disagree with me that great harm is done by teaching that changing one’s physical sex is healthy and therapeutic. That is no reason to prevent me from offering my opinion, which has its own scientific support, any more than you would prevent me from stating my opinion that the scientific basis for claims of imminent climate catastrophe is weak.

Moreover, I never said or thought that the shooters were themselves evil, for their gender confusion or for their murderous intentions. That is not for me to judge.

What I actually wrote is: “The clear evil is in the politicians, “educators,” fashionable psychologists and institutions that are brainwashing teens into gender dysphoria. Teenagers, confused by hormones, immaturity and no doubt family and social pain, are being told that their all too common emotional distress comes from being the wrong sex and that they can solve their problems by changing their dress, bathroom access or biology. It doesn’t work, and creates the even worse problems seen in this event.” By deleting my column, you made it impossible for readers to judge my meaning for themselves.

What I identified as evil are the institutions telling teens that their wishes to have been born with a different biology are healthy and need to be fulfilled. I am convinced that adding the suggestion that “you are the wrong sex” to the sometimes overwhelming stress of puberty and the mismatched timing of hormonal and intellectual development can make life more than a teen can handle. Some choose suicide, many suffer impaired mental health, and in this case two chose mass murder. Perhaps if I had written that rather than the shorter “creates the even worse problems seen in this event” you would have understood me better.

What I find most strange is where you draw the line on what is permissible speech. I’m sorry, this is not even close to “shouting fire in a crowded theater.” In Canada or the Netherlands, I realize, I could be put in jail for “hate speech” for writing this column. That is one reason why I am so thankful to live in the USA.

You say that my words were doing harm. In my opinion, being silent on the tragic consequences of driving our youth into confusion about gender also does immense harm. The question is not what is comfortable but what is true. Though truth may be one, agreement on what is true only comes from listening to statements that cause discomfort. Your and some readers’ attacks on me certainly hurt my feelings, but the reassurance of others that my column was reasonable comforted me.

Your standard seems to be the same “safe space” guarantee that has become notorious on campuses. Perhaps you should add a “trigger warning” to my Points of View. I have become accustomed to prejudice based on my race, gender and age, to insults directed at my religion, and to lies about what I have said and done. I did not and do not expect protection from any of this. Why do we accept the idea that some are so privileged that they should hear nothing but praise?

I am also distressed and puzzled, not for myself but for the readers of the Spy, by your statements about what the Spy supports. Do you mean to say that after suggesting I write about candidate Buttigieg’s appeal to Christianity to support his homosexual lifestyle, you would censor me if I stated my belief that marriage is an institution (or sacrament) ordained by God to unite a man and a woman for life? That is what is said in the Catechism of the Catholic Church and was the universal teaching of Christian churches for almost two thousand years, but it is also termed hate speech in many venues. You should clarify where censorship starts in the Spy.

Unless you do intend to silence all views but your own on these issues and to leave standing the regrettable charge that I am a purveyor of hate speech, I hope you will publish this response to your attacks on me in full.

Respectfully,

David Montgomery

$2 Trillion Infrastructure Plan Opens the Door for Boondoggles by David Montgomery

Share

If reports that President Trump will recommend $2 trillion in infrastructure spending are true, he is once again putting himself in very bad company. The nation does not need and cannot afford that $2 trillion.

The robust growth and high employment the economy is now experiencing is largely due, in my opinion and that of many economists, the aggressive regulatory reform agenda pursued by the Administration and tax reductions designed and pushed through by the Republican leadership of the House and Senate. Neither of these would have happened if Donald Trump had not been elected President. But that is where I part company with him on economic policy.

Though it has caused pockets of hurt, it is hard to see that the President’s hard line on trade with China, redo of NAFTA, and trade pressure on Europe have done anything to slow the U.S. economy.  According to most accounts, it is growing about as fast as possible. The last report on wage growth showed substantial increases, supporting growing consumer spending, and business investment remains high. Labor productivity is growing, but the supply of labor with the needed skills and willingness to work is likely the binding current constraint on growth.

In this environment, the last thing the economy needs is an additional $2 Trillion of deficit spending.  The President, as I discussed last week, would like to see this paid for by the Federal Reserve System, and many Democrats also subscribe to the newly fashionable theory on the left that monetary expansion is harmless and a free source of cash for government to spend.  That, as Chairman Powell is well aware, is a recipe for inflation, crowding out of private investment, pressure on the dollar, and another serious economic downturn.

There is no credible evidence that deferred maintenance on highways, railroads, and bridges requires anything near that sum to correct. Many of the inflated claims about the disastrous state of U.S. infrastructure are based on comparison to current federal standards for new construction, not assessments of its physical condition or analysis of the costs and benefits of bringing existing, usable structures up to standards for new bridges and highways.

Even if there were a substantial need for corrective investment and additions that pass a cost-benefit test, the enthusiasm with which the proposed $2 Trillion is greeted by both Republicans and Democrats should be a warning about what it is likely to produce. Current highway spending is allocated to states based on their gasoline and road tax collections, not their need. Regional scale projects, such as improved rail systems, go unfunded while lucky jurisdictions repave and replace structures far more frequently than needed.  Unlucky jurisdictions jump at the idea of a massive infrastructure program funded from general revenues, because no one wants to suffer the pain of trying again to fix the current irrational funding rules.

A $2 Trillion infrastructure program would open the door for boondoggles on a massive scale. Every member of Congress gets a vote, and members of the leadership and appropriations committees get several.  In the current every politician for him/herself environment, that means that at least half the states and half the Congressional districts must receive their share of $2 Trillion no matter how wastefully it has to be spent.

When I was Assistant Director of the Congressional Budget Office, one of my areas of responsibility was transportation programs.  We concluded that in the late 1980s all economically justifiable transportation projects could be funded by the existing transportation budget if the boondoggles could be eliminated – but that to fund them with the current mix of useful and wasteful projects would require doubling the budget.  That experience shaped my attitude toward infrastructure spending.

On a national scale, the Trump Administration and the California governor have wisely cracked down on the immensely costly and technologically challenged high speed rail system for California, but the proponents of high-speed rail have convinced many politicians on both sides that it is just around the corner if we would only spend enough money.  That will be money down the drain, because there is no way that the value of time saved by pushing rail speeds toward 200 mph can be sufficiently large to justify the orders of magnitude higher cost compared to well-run conventional systems or simpler new systems that can provide speeds in the low 100s. The more we spend on HSR, the more we lose, and a $2 Trillion push for infrastructure spending almost guarantees that some with go down that hole.

It is frustrating to see a Republican President promote an arbitrary spending target of $2 Trillion, rather than ask where additional infrastructure investment would have the highest payoff and how much we can afford.  In the last analysis, every dollar spent on an infrastructure project that does not pass an economic test comes out of our pockets, in the form of displaced private investment that would have provided a higher return or higher taxes to support unnecessary projects.  Republicans should remember that, rather than jumping on the bandwagon to get government spending for their favored vote and contribution-generating projects.

David Montgomery is retired from a career of teaching, government service and consulting, during which he became internationally recognized as an expert on energy, environmental and climate policy.  He has a PhD in economics from Harvard University and also studied economics at Cambridge University and theology at the Catholic University of America,   David and his wife Esther live in St Michaels, and he now spends his time in front of the computer writing about economic, political and religious topics and the rest of the day outdoors engaged in politically incorrect activities.

President Trump is Once Again Worrying his Supporters and Feeding his Critics by David Montgomery

Share

President Trump is once again worrying his supporters and feeding his critics. This time it is about the Federal Reserve Board. The President reportedly wants the Fed to push interest rates back down, which he seems to believe will stimulate even faster economic growth. To accomplish this, he has been criticizing the Fed Chairman with his usual grace and tact and threatening to appoint new members to the Board of Governors who support this policy.

There are two aspects to this latest flap.  One is economic, and on this I think the President is on shaky ground. The other is political, and though his critics are appalled by the President’s attempts to manipulate the Fed, he is not the first President to make the attempt.

On the economic side, the Fed under Chairman Powell’s leadership has pursued a thoughtful and moderate course.   The actions taken by the Fed in the past to shore up the financial system and help recovery from the recession created a huge imbalance in the Fed’s balance sheet.  What few realize – including some Presidents – is that the Fed influences the money supply not by printing money but by buying bonds issued by the Federal government. These bonds then become assets for its member banks, allowing them to extend more credit to borrowers. When the financial crisis hit, the Fed bought up not only Treasury bonds but the mortgage backed securities whose value was plummeting.  This was a critical step in maintaining liquidity and making credit available to businesses and consumers, because otherwise the drop in the value of bank assets – in particular mortgage backed securities – would have forced them to stop making new loans.

This action also meant that the debt held by the Fed increased from $950 billion in 2008 crisis to $4.5 Trillion in 2017. This increase in debt has several undesirable consequences, as described by my friend Mickey Levy in testimony before the Senate Finance Committee: by continuing to hold mortgage backed securities, the Fed is in practice allocation credit to the housing sector over manufacturing and other sectors that contribute more to economic growth; it potentially slowed recovery by distorting lending; and the abnormal balance sheet poses risks to the Fed’s credibility and independence.  

Thus since last year under Chairman Powell the Fed has been “normalizing its balance sheet” by selling more Treasury bonds than it buys. This increased supply of bonds drives down their price, and since interest equals the specified payment on a bond divided by its price, it drives up interest rates.  At the same time, the Fed has made carefully timed statements about its outlook for growth and inflation and its resulting decisions about whether and how much to raise its target range for interest rates.

President Trump does not like this.  Despite the careful and measured way in which the Fed is acting, and its flexibility in accommodating short term shocks like fears of trade wars, the President is blaming the Fed for slowing growth during the second half of his term. The robust growth and historically low levels of unemployment we now see are clear indicators that the economy is growing about as fast as possible. If anything, it is the availability of qualified workers that is preventing faster growth, not the Fed, and getting immigration reform of a kind that will allow greater numbers of qualified workers would be most likely to stimulate more growth.

If the Fed does not take this opportunity to shed the debt it acquired as an emergency measure, the risks to economic growth in the longer term will be much greater, as Levy and other experts emphasize. In this light, I think that Trump’s promised nominees, Herman Cain (whose name was withdrawn last week) and Stephen Moore, are potential wreckers if appointed to the Board of Governors. In addition to their advocacy of unwise policies, neither has any appreciation of the subtlety required for the Fed to maintain stable expectations about monetary policy.  The President should get back to work on the kind of immigration reform he has advocated in the past, which will aid faster growth, and leave the Fed alone.

But he is not the first President to attempt to bully the Fed into providing easier money. Lyndon Johnson went much further than Trump has gone in butting heads with the legendary William McChesney Martin, appointed by President Truman to be Chairman of the Fed. Johnson had dug himself into a deep hole in his attempts to hide the cost of the Vietnam War and the Great Society through deficit spending, and he wanted Martin to help him out by printing more money for him to spend on those signature initiatives.

In late 1965, the Fed raised short-term rates because of its fear that the rising deficits would accelerate and lead to inflation.  Johnson flew into a typical rage, summoned Martin to his ranch and bullied him in an attempt to change the Fed’s policies. He is quoted as saying “Martin, my boys are dying in Vietnam, and you won’t print the money I need.”  Johnson was advised by his Attorney General, Nicholas Katzenbach, that he could not legally remove Martin from office because disagreeing with administration policies did not constitute “termination for cause.” Martin went ahead with raising rates, but as later events proved his actions were too little and too late to prevent the rampant inflation and stagnation that appeared during the Nixon administration and continued through President Carter’s term.

Economist Bill Nordhaus at Yale University noticed that less public manipulation of the Fed by sitting Presidents has been frequent. In his article “The Political Business Cycle,” Nordhaus noted how often an easy money policy had been chosen in advance of elections in which an incumbent President was running for re-election.  With the open dust-ups between Presidents and Fed chairmen being relatively rare, the explanation for how this works has to be more informal communication and pressure. This was documented clearly in the case of the Nixon Administration.

As others have noted, the Trump Administration does not go in for back channel communications, and his disagreements with the Fed started out and remained public.  Fortunately, after an initial hiccup markets appear to be discounting anything real coming out of this fracas, as the lessons of history imply. More disturbing is that President Trump has put himself in the company of deficit spenders like Johnson, putting short-term stimulus for political gain ahead of policies conducive to sustained growth. That is a sin far too many Republicans, anxious to keep on doling out favors like the ethanol subsidy and spending on unnecessary infrastructure to their constituents, are willing to ignore.

David Montgomery is retired from a career of teaching, government service and consulting, during which he became internationally recognized as an expert on energy, environmental and climate policy.  He has a PhD in economics from Harvard University and also studied economics at Cambridge University and theology at the Catholic University of America,   David and his wife Esther live in St Michaels, and he now spends his time in front of the computer writing about economic, political and religious topics and the rest of the day outdoors engaged in politically incorrect activities.

 

Howard Schultz’s Special American Latte by David Montgomery

Share

Never did I imagine having a good feeling toward the founder of Starbucks, that symbol of the corruption of the American palette and character.  Yet I am encouraged and impressed by his comments on politics and economics, and intrigued by the idea of Howard Schultz as President.

He strikes me, first off, as having the gravitas and character to pull off a Presidential campaign.  His speech is literate, composed and clear. He looks the part and was an extremely successful businessman.  

The economic philosophy that Schultz has described combines conservatism on the deficit with concern about inequality.   He has, thus far, unambiguously rejected “socialism”, stating clearly his opinion that capitalism alone has achieved sustained income growth for all, and that someone must pay for socialism’s trillion dollar promises.  This is a salutary point, considering that the youth who endorse socialism seem to have no idea how it would control work, income and business: to them socialism just means getting more free goodies from government.

Schultz is the only potentially important candidate willing to state clearly that entitlement reform is necessary to slow the growth of the deficit.  He is telling Democrats that means less spending and Republicans that it means more progressive taxes. What is attractive about his presentation of these points is that so far he has done so without rancor, slogans or class warfare.

Yet there is the fact that he was CEO of that icon of political correctness Starbucks.   Will he remain a centrist of the old-fashioned sort on issues of abortion and euthanasia, freedom to practice religious beliefs, judicial restraint, and rights of the majority to resist being tyrannized by social justice warriors?  Or will he go along with the progressives in their campaign to make intolerance for any views but their own the new center?

At this point I know nothing of his views on or ability to deal with national security and foreign policy issues.   This is not much of a deficiency relative to the rest of the challengers to President Trump, most of whom are ignorant, extreme or both.   If he can articulate a reasoned and realistic middle ground that avoids isolationism, kowtowing to Europeans and the UN, military adventurism, and pacifism, he would indeed have a chance.

A serious centrist third party presidential candidate would provide a critically important insight into the causes of political polarization.  The competing theories are that the parties have found ways to polarize a basically centrist America and that American electorate no longer has a middle.  If a third party candidate were to win, it would be clear evidence that the first theory is correct. And if a serious, well-financed centrist, third party contender came in far behind in third place, it would not really matter which candidate was helped by his presence.   That outcome would validate the second theory and signal a future of wide swings back and forth between Presidents and Congresses at opposite ends of the political spectrum, until one party or the other assumes dictatorial powers.

David Montgomery is retired from a career of teaching, government service and consulting, during which he became internationally recognized as an expert on energy, environmental and climate policy.  He has a PhD in economics from Harvard University and also studied economics at Cambridge University and theology at the Catholic University of America,  David and his wife Esther live in St Michaels, and he now spends his time in front of the computer writing about economic, political and religious topics and the rest of the day outdoors engaged in politically incorrect activities.

Never Interrupt When They are Making a Mistake by David Montgomery

Share

President Trump needs to start following the rule: “Never interrupt your enemies when they are making a mistake.” So many lost opportunities to be the winner by just being silent.

That is one of the reasons I have not been writing about the antics of Democrats trying to elbow their way into the crowd at the far left of their party. It is why this column will be short, depending on how many amusing examples I encounter. I sympathize with the President, because I cannot resist listing some of the larger holes into which I hope the Democrats will continue digging themselves.

Beto forgetting to tell Nancy Pelosi’s 16-year-old voters, who I think he believes have never had a civics lesson with content beyond “white privilege,” that the electoral college is mandated in the Constitution. They might just think he was wasting their time if they ever realize that the chances of an amendment abolishing the electoral college being approved by the same states that benefit from it are, well, nil.

Somehow the publicity that Beto gets for this and other ridiculous promises is biting him where it hurts. The more publicity Beto gets, the more we are also learning about his children’s books advocating mass murder and his history of drunk driving and hacking. Keep it up.

Joe Biden announcing that he is the most progressive candidate, when everyone else knows that the only appeal he ever had was as a bumbling, sometimes amusing, good old Irish boy.

AOC for every word that has come out of her mouth, not to mention chicanery about her actual residence and campaign finance. And a shout-out for the media who are promoting her as the leader of the new Democratic party and making sure everyone gets the idea that voting Democrat is voting AOC.

Her media admirers seem unconcerned that their constant coverage is allowing just about everyone to observe how young, pretty and utterly uninformed about any matter of substance she is.

The others are much less amusing. Ms. Omar’s outspoken and gratuitous anti-Semitism is even putting off her own Somali constituency in Minnesota, with the high point being her “all about the Benjamins” tweet concerning AIPAC and donations. Ms. Tlaib accused Senate supporters of Israel of having “dual loyalties.” The two are working hard to reveal the underlying anti-Semitism of the entire “Boycott, Divest, Sanctions” movement.

It is almost as if some Islamophobes got together to invent the first two Muslim women to be elected to Congress, so as to imprint a caricature on the minds of voters the next time a Moslem runs for office.

The governor of Virginia, whose endorsement of the idea that parents and doctors can decide whether to kill a living baby after its birth turned into the best boost the pro-Life cause has had since the Planned Parenthood videos.

But he is second to Governor Cuomo in the sheer outrageousness of his glee at making it legal to kill babies born alive, and in provoking some Catholic bishops to point out that he has excommunicated himself under canon law.

We must not forget packing the Supreme Court. Beto and his imitators want to appoint 6 more Justices when one of them is elected President. Short of a ruling by that Court that the Constitution confers a previously unrecognized right on the sitting Democrat to occupy the White House forever, the next Republican will realize that appointing 12 new justices will restore the textualist majority. After a few years there will be more Supreme Court justices than basketball playoff games and we will have “Washington Madness” all year.

The Democrat party is living in Dreamland. If they spend the next two years trying to prove that Mueller missed something in his investigation, promoting the ridiculous Green New Deal and promising the wishful Medicare for All, voters are going to start recognizing that all they are hearing is a beep-beep-beep from outer space.

I know you don’t read my column, so keep it up Democrats. I would hate to interrupt your self-destruction.

David Montgomery is retired from a career of teaching, government service and consulting, during which he became internationally recognized as an expert on energy, environmental and climate policy.  He has a PhD in economics from Harvard University and also studied economics at Cambridge University and theology at the Catholic University of America,   David and his wife Esther live in St Michaels, and he now spends his time in front of the computer writing about economic, political and religious topics and the rest of the day outdoors engaged in politically incorrect activities.

White Nationalism by David Montgomery

Share

“White nationalism” is now the catchphrase of the day for the Left to use in maligning President Trump. In response to a question about the New Zealand killings, the President gave the perfectly reasonable reply that he did not see white nationalism as a rising threat. For this, he was immediately attacked by the self-appointed censors of political discourse. As the former president of Harvard University, Larry Summers, learned a number of years ago, questioning the dogmas of the left will bring down wrath but not constructive debate.

There are four reasons why skepticism about the threat of white nationalism is justified: numbers, vagueness, motivation and organization.

By the numbers, white nationalism clearly does not compare to Islamic terrorism. In 2017 alone, Islamic terrorists murdered 18,753 innocent men, women and children who would not submit to one form of radical Islam or another, and 236,000 in the past decade. The names of the organizations are a litany of terror: Al Quaeda, ISIS, Al Shabab, Boko Haram, the Moslem Brotherhood, the Taliban. In comparison, there were just 158 deaths from attacks by far right extremists in Europe and North America between 2002 and 2017. The left tries hard to conceal this simple fact by talking about increasing trends and percentages while obscuring the huge disproportion in actual attacks.

The label “white nationalist” has been applied to so many different people that it has become virtually meaningless except as a signifier of dislike. The label used to be “alt-right,” a term whose lack of specificity was obvious, but “white nationalist” sounds so much scarier. Most of those who are now labelled white nationalists by the social justice warriors abhor physical violence. Publicly opposing illegal entry by Hispanics crossing the southern border frequently earns the label. Opposing admission of economic refugees from Middle Eastern countries does the same. Even comparing the accomplishments of Western Civilization with failed states in Africa will earn the label, and wearing a MAGA hat will certainly do so. None of these actions have any connection to murderous attacks. With this vague and expansive use of the term “white nationalist,” any question about the topic is an invitation to be misinterpreted.

The murderers who have been labeled white nationalists were all loners and nuts. None were found to have any direct encouragement to act from a white nationalist organization. Their actions stemmed from a deep psychopathology, and while racist leanings may have affected their choice of targets, the violence came from within.

This should be obvious to those who apply the label “white nationalists” to such a large percentage of the American population. If most Trump supporters are white nationalists, then the likelihood of a white nationalist becoming a deranged killer cannot be significantly greater than the likelihood of a member of any other group, or the general population, becoming one. Normal people have not been made into killers by the political propaganda of extreme white nationalists, any more than they have become mass murderers of other types.

There does seem to be some evidence that the number of incidents in which sociopaths have murdered Jews or people of color has increased. Incidents in which disturbed students attacked a school or angry individuals shot up a workplace have also increased. But these incidents of deranged behavior are very different from the motivation of Islamic terrorists and Jihadis. There is an entire belief system behind Islamic jihad, dating back to Mohammed’s decision to convert Jews to Islam by force when they rejected his incoherent preaching in Mecca. This makes the pool of potential murderers much larger than the pool of racist sociopaths.

Granted that many perpetrators of suicide attacks have been forced to wear their suicide vests. Yet the core and leadership of jihad appear to be following the very clear precepts and instructions of the Koran. Even the lone wolf terrorists of recent years were converts to this belief, and not the deranged loners who carried out “white nationalist” attacks. Pope Benedict ignited a firestorm of criticism when he repeated the question that a Christian king asked a Moslem cleric about how Islam could justify use of violence to further religious ends. But Pope Benedict received no reasoned answer, just threats of bodily harm for insulting Islam. Point made.

The threat to Christians in Africa, to Moslems of different sects in Southeast Asia, and increasingly to Europeans from Islamic jihad is not only derived from the teaching of a religion that aspires to be universal. It reveals itself in well-organized terror attacks, establishment of territorial domination under Islamic rule, and continuing disruption of civil society. In Egypt, for example, the Moslem brotherhood has wiped out a large part of the Coptic Church, and ISIS has virtually driven Christianity out of Iraq. Boko Haram maintains control over large areas of Africa where it terrorizes the Christian population.

When I try to see the world through the eyes of a leader whose first responsibility is to safeguard the wellbeing of his country’s citizens, I see that in comparison to the threat of Islamic jihad on a global scale, the threat of attacks by deranged killers who espouse racist beliefs is “not that large.” Based on the numbers, specificity, motivation and organization, the threat of white nationalism pales in significance compared to Islamic jihad.

Every taking of an innocent human life is gravely immoral, whether it be in the form of abortion, euthanasia, gang violence, drug wars, Islamic terrorism or racist ideology. Traditional moral teaching does not measure evil by comparing how many are killed – each intentional killing of an innocent is as evil as the total of such murders. President Trump never questioned this moral principle, and no matter what CNN says, he condemned the killings in New Zealand explicitly and forcefully.

The President has different responsibilities as the Commander-in Chief, at least in the eyes of those with a realist view of international affairs. He is responsible for the security and domestic tranquility of the United States, and must rank threats not morally but in order of the damage they are likely to do if left unchecked. Constructive thinking and disagreement with his priorities is legitimate and useful but knee-jerk condemnation of his every statement is not. When the President states priorities that have a legitimate factual basis, he deserves a logical and reasoned response from those who disagree, not the shrieks of offended children who had their safe spaces violated.

David Montgomery is retired from a career of teaching, government service and consulting, during which he became internationally recognized as an expert on energy, environmental and climate policy.  He has a PhD in economics from Harvard University and also studied economics at Cambridge University and theology at the Catholic University of America,   David and his wife Esther live in St Michaels, and he now spends his time in front of the computer writing about economic, political and religious topics and the rest of the day outdoors engaged in politically incorrect activities.

Green New Deal: An Economist’s Perspective by David Montgomery

Share

One of the newest and one of the oldest radicals in the U.S. Congress, Alexandra Octavio-Cortez and Ed Markey, unveiled a so-called “Green New Deal (GND)” in resolutions they filed in the House of Representatives and the Senate. The rhetoric and expansiveness of the revolution they propose makes their proposal more of a manifesto that a resolution. The areas of public policy that they address include climate change, workplace regulation, universal healthcare, and guaranteed income. More troubling, the manifesto also envisions radical changes in governance, elevating the politics of identity and victimization to the guiding principle of American government.

Since I am an economist and have tried to quantify the impacts of most major energy and environmental policies over the past 40 years, friends have asked how I would go about trying to assess the potential costs and economic impacts of the GND, in particular its determination to eliminate greenhouse gas emissions within 10 years.

Despite the ability of creative analysts to put a number on almost anything, I think that it is impossible to make a reasonable estimate of the cost of the Green New Deal in its envisioned time frame of 10 years using any kind of existing economic model. There are three reasons why this is so:

Having excluded nuclear power, it is impossible to achieve zero greenhouse gas emissions in 10 years without drastic reductions in the availability and reliability of energy

The commitment of the GND to government planning and regulation guarantees that existing economic models will grossly underestimate the cost of achieving its goals

The vision of using climate and other policies to achieve radical redistribution of income and political power will cause changes far outside the data and experience on which models are based.

Economic models are systems of equations and constraints. If one of them is used to estimate the cost of an internally contradictory program, it will simply report that the equations cannot be solved.

What GND calls renewable energy (which excludes nuclear and large scale hydro) now comprises under 10% of U.S. energy supply. Replacing 90% of electric generating capacity, gasoline and diesel fuel, and all natural gas with wind and solar, which are all that is left, is literally impossible. There is no way to store enough energy to maintain supply when the wind is not blowing and the sun is not shining, and diverting enough land to produce biofuels would drastically reduce food supply.

Even if it were possible, diverting enough resources to replacing the existing energy capital stock with renewable assets would reduce our ability to produce consumption goods. This is exactly what happened in the investment-driven 5-year plans of Chairman Mao and Stalin, starving their people along the way. Thus achieving, rather than just imagining, zero emissions would require a combination of starvation, blackouts, and rationing.

The costs of starvation, blackouts and rationing are literally impossible for economic models to capture. Some models, which impose realistic constraints on how rapidly new technologies can be introduced, would simply report that there is no solution to their equations. Others, that allow for extreme changes in consumption of energy and other goods, would give misleadingly optimistic answers about how consumers will substitute purchases of clothing and bicycles for energy. Rationing would be indistinguishable from an extremely high carbon tax, and mortality from lack of energy or food would be ignored except for the effect of a smaller labor force on GDP.

The commitment to central planning and government regulation that pervades the GND would make matters even worse. Case studies that compare specific regulatory approaches to market incentives like carbon taxes, studies have found that assuming that optimal market-based policies are used leads to gross underestimates of costs. For example, studies published in leading journals find that fuel economy standards cost 6 to 10 times more than a carbon tax designed to achieve the same reductions in CO2 emissions.

Since economic models are basically computer programs, they require a very precise description of the policies being modeled. Just like typing an email address, a small error in that specification can be fatal. The GND is vague about specific policies, and achieving its climate goals alone would require a regulatory net covering every decision about energy use and supply. We have collected mountains of data on energy since the 1970s, but still fall far short of the ability to calculate the total cost of retrofits to improve energy efficiency in every building in the country or modifications of all manufacturing processes to reduce emissions.

In the absence of specific details of the policies to be implemented and extensive data on affected economic sectors, models default to assuming that government is omniscient and adopts policies that achieve the same result as a perfect market. That leads inevitably to gross underestimation of the cost of universal government planning envisioned by the GND.

And energy policy is the subject on which we probably have the most information. Other areas of life that the GND would affect include intrusive workplace regulations, free health care, guaranteed income regardless of effort or ability and other proposals that radically change incentives for consumption, investment and labor supply. Modeling the cost of these changes is orders of magnitude harder than energy.

The vision of governance found in the GND compounds the problem. The GND resolutions introduced in Congress establish that the primary goal of GND is income redistribution and transfer of power to what it labels “frontline and vulnerable communities.’’ The beneficiaries of this enshrinement of the politics of identity and victimization as a new form of governance are to include “indigenous communities, communities of color, migrant communities, deindustrialized communities, depopulated rural communities, the poor, low-income workers, women, the elderly, the unhoused, people with disabilities, and youth.” In other words, if you are a healthy white male between 18 and 65 earning a decent living, do not apply.

Not only are policies to be designed to redistribute income toward these groups: they are to be designed by “democratic and participatory processes that are inclusive of and led by frontline and vulnerable communities and workers to plan, implement, and administer the Green New Deal mobilization.” Sounds like the Great Cultural Revolution to me.

What this implies is not just that the GND would implement regulatory approaches with costs far higher than economic models can capture. It implies that climate, health care, labor and other regulations will be designed not just to correct specific concerns, but to achieve income redistribution and empowerment of favored constituencies.

The empirical evidence that the result cannot be modeled adequately is overwhelming. Environmental justice movements have multiplied the cost of achieving California’s climate goals, by demanding inefficient choices and compensation payments in every new initiative. Developing countries demands for compensation and environmentalists objections to cost-effective ways of reducing greenhouse gas emissions have hamstrung global climate negotiations.

Economic models are neither designed for nor capable of being modified to capture the effects of changes in underlying political institutions and property rights. Historical examples can give some idea of the magnitude of harm that might be brought about: Venezuela under Chavez, Argentina under Peron, or Zimbabwe under Mugabe come to mind. Only in retrospect has it been possible to calculate the cost of socialism to the people of those countries.

One particular form of redistribution that would be likely under any policies designed to drive greenhouse gas emissions to zero over a single decade is the bankruptcy of most businesses that now own the capital equipment used to generate and distribute electricity, produce and refine petroleum, or deliver natural gas.

Getting to zero emissions in just 10 years would require shutting down all fossil-fueled power plants, oil refineries, and oil and gas production, and emptying natural gas pipelines and distribution systems. These assets would become valueless, bankruptcies would spread the loss to lenders as well as shareholders, and the financial system would suffer a major shock.

Those bankruptcies would certainly achieve some of the leveling goals of the GND, by destroying the savings and assets of every lender and equity investor in non-renewable energy. Based on the ratio of energy to total domestic investment, that would be destruction of at least 6% of the wealth of the country. The shock would likely be comparable to the recent financial crisis, as financial institutions revised their balance sheets and restricted credit, individual investors retrenched due to their reduced assets, and courts were swamped with bankruptcy filings.

Someone once said that some arguments are best refuted by a good laugh. That was my first reaction on reading descriptions of the GND. Any effort to quantify its costs would have to invent concrete programs to achieve the largely ideological goals of the GND. The harm likely to be done by the GND would greatly exceed any estimates that might be made of the cost of sensible programs. Making those estimates would only give credibility to a program that is at best a flight of fancy and more likely subversive of every institution that has supported the unprecedented prosperity of the United States.

David Montgomery is retired from a career of teaching, government service and consulting, during which he became internationally recognized as an expert on energy, environmental and climate policy.  He has a PhD in economics from Harvard University and also studied economics at Cambridge University and theology at the Catholic University of America,   David and his wife Esther live in St Michaels, and he now spends his time in front of the computer writing about economic, political and religious topics and the rest of the day outdoors engaged in politically incorrect activities.

The Last Acceptable Prejudice by David Montgomery

Share

Arthur Schlesinger, the liberal historian and admirer of John F. Kennedy, wrote that “The deepest bias in the history of the American people” is against Catholics.  Last week’s fake news about students from Covington Catholic High School in Kentucky is a reminder that the bias still exists, and that it has become even more virulent in the age of social media and irresponsible reporting.  Catholics are the one minority in America that it is possible to hate publicly and with impunity. Bigoted and unconstitutional attacks on Catholic judges during their confirmation hearings reveal that the bias is just as strong in the “tolerant” elites as in the virtual mob that attacked the Covington students.  

Suppression of the Catholic Church began in the first English-speaking settlements in America. Catholics were at first banned from the colonies, then placed under severe restrictions on worship and land ownership, not permitted to vote and excluded from public office.  Discrimination and lies about Catholics grew rapidly in the nineteenth century, as waves of Catholic immigrants from Germany, Ireland, and Italy arrived in the United States. Nativists campaigned to keep Catholics out of the country and when that failed, to make it impossible for them to hold public office.  Mobs burned churches and pursued individual Catholics, and the Ku Klux Klan made Catholics and Jews its major targets after the First World War.

Intellectuals like Mark Twain showed no restraint in expressing their disdain for Catholics, and even as Catholic immigrants began to bind themselves to the Democratic Party they were largely excluded from national offices on the spacious grounds that Catholics are all controlled by the Vatican.  

Kennedy broke the glass ceiling on Catholic politicians, but he did so by assuring voters that his Catholic beliefs would not affect his actions as President: “I am not the Catholic candidate for president. I am the Democratic party’s candidate for president who also happens to be a Catholic.  I do not speak for my Church on public matters – and the Church does not speak for me.” Catholics are now routinely expected to abandon their religious and moral beliefs as a condition of participating in public life. Some do so reluctantly, some enthusiastically, some persecute fellow-Catholics who uphold the Church’s teaching, and a few take up the challenge of being Catholic statesmen.

I write all this down because far too few Americans have any idea of the history of bigotry and discrimination against Catholics.  Catholics did not demand reparations for discrimination against their ancestors.  We do not teach about “Protestant Privilege.” Catholics certainly did not get affirmative action.  The wave of Catholic immigrants simply buckled down to become indistinguishable from other Americans, despite Pope Leo XIII’s warnings about where this would lead.  When Catholics march, it is not for ourselves but for others – the March for Life being a case in point.

The recent examples of bias against Catholics include both the historically familiar features of falsehoods that incite mob reactions and campaigns to exclude Catholics from public office.

White boys from a Catholic school in a red state wearing MAGA hats were the perfect target for the bigots of the modern age.  They fit the profile.

The young men were standing where they had been instructed by school officials to wait for their bus after participating in the March for Life.  It happened to be near a Native American gathering at the Lincoln Memorial, and they were verbally assaulted by a group of radical black supremacists known as the Black Israelites.  Without provocation, the black racists called the young men ‘racists,’ ‘bigots,’ ‘white crackers,’ ‘faggots,’ and ‘incest kids.’ The young Catholic men stood their ground, as was their right and necessary to avoid missing their bus, and eventually started some school spirit chants to drown out the obscenities.  Seizing an opportunity for attention, a “professional Indian” agitator grabbed a drum and started beating it in the face of one of the young men.

As the student in the viral picture described it, “To be honest, I was startled and confused as to why he had approached me. We had worried that a situation was getting out of control where adults were attempting to provoke teenagers. I believed that by remaining motionless and calm, I was helping to diffuse [sic] the situation. I realized everyone had cameras and that perhaps a group of adults was trying to provoke a group of teenagers into a larger conflict. I said a silent prayer that the situation would not get out of hand.”

As he feared, a video of a young white man smiling at a furious Native American beating a drum went viral.  Whoever posted the photo didn’t even need to make up an accusation against the young men – the media and the sharks of the internet immediately took up the attack and manufactured their own lurid stories about how the Catholic youths were disrupting a sacred event and showing disrespect for protected minorities.  Their story became headlines on all the television networks and in those bastions of tolerance, the Washington Post and New York times. Even the Bishop of Covington and their own school administrators turned on them, condemning them without even asking their own student what happened.

As Kentucky Governor Matt Bevin, one of their few forthright defenders, put it, “It was amazing how quick those who preach tolerance and non-judgment of others were to judge and label some high school students based on partial information…There are none more intolerant than liberals who don’t like your options, values, faith beliefs, political stance, …”

Fortunately, one of the young men decided to speak out and found an audience, and other videos showing the entire sequence of events were posted.  A number of respected columnists who rushed to judgment made full apologies, but the major media outlets have only made small gestures to correct the falsehoods they invented and circulated.   The typical response was “the behavior of the students might be interpreted differently in light of the context.” Profiling of white Catholic young men in MAGA hats is invulnerable to facts.

Equally troubling is the way that Amy Coney Barrett and others have been attacked for their faith in confirmation hearings as federal judges.  One was the famous event when California Senator Diane Feinstein told Judge Barrett that “the dogma lives loudly within you, and that’s of concern…”  Senator Feinstein made her point clear when she added that “You would be a no vote on Roe [v Wade].  Clearly Senator Feinstein would have no problem with a prospective judge in whom the dogma of “reproductive rights” lived loudly.  It was the specific content of Judge Wade’s Catholic faith that made her and by implication all other faithful Catholics unacceptable to the Senator.

In a more recent example of prejudice in reviewing candidates for Federal judgeships, Senators Mazie Hirono (D-HI) and Kamala Harris (D-CA) attacked Brian C. Buescher on the basis of his membership in the Knights of Columbus.  Sen. Hirono asked if Buescher would quit the Knights of Columbus because the organization “has taken a number of extreme positions. For example, it was reportedly one of the top contributors to California’s Proposition 8 campaign to ban same-sex marriage.”  

The Knights of Columbus, like Judge Barrett and the Covington students, stood up to these attacks, stating “We were extremely disappointed to see that one’s commitment to Catholic principles through membership in the Knights of Columbus…would be viewed as a disqualifier from public service in this day and age.”

Even the ultra-liberal Justice Sotomayor was accused of being influenced by her Catholic upbringing when she granted an injunction protecting the Little Sisters of the Poor from the contraceptive mandate..  

All this is flatly inconsistent with the constitutional guarantee that there be no religious test for public office.  These attacks not only resurrect memories of the time when Catholics were literally excluded from voting and holding office.  They also closely resemble first stages of what turned into murderous persecution of Catholics in Spain and Mexico in the early twentieth-century when leftist and atheist governments took power.

But the battlefield is now abortion.  Attacks based on the bigoted belief that American Catholics will serve the global ambitions of the Vatican have been replaced by attacks on the respect for human life from the moment of conception that is obligatory for all faithful Catholics.    That was the cause of each one of the recent attacks on Catholics, from Judge Barrett to the Covington students. Again, the message is that it is okay to be Catholic in America, but only if you abandon the fundamental teachings of the Catholic Church.

Unfortunately, the Catholic Church in America seems in danger of falling into the Stockholm Syndrome.  A large part of the hierarchy and many Catholics have become so cowed by the intolerance of the “tolerant” power structure that they are now imitating our oppressors.  Their school administrators and their bishop threw the Covington students to the lions – and neither has yet recanted. Very few bishops or priests are willing to tell Catholic politicians who openly campaign to make abortion more prevalent that they are in a state of mortal sin and may not receive communion. Heretical Catholic politicians and a fearful Catholic hierarchy are cooperating in the continued persecution of faithful Catholics.

From this dark picture, a few rays of light do shine.  One public figure, the governor of Kentucky, stood up for the Covington students and pointed a finger in the right direction when he said “The level of bigotry that was evident throughout this came from one side entirely.”

We should all give thanks and pray for the young men from Covington Catholic High School who stood their ground, loved their enemy and kept their faith.  May this strengthen them for much greater accomplishments in their adult lives.

David Montgomery is retired from a career of teaching, government service and consulting, during which he became internationally recognized as an expert on energy, environmental and climate policy.  He has a PhD in economics from Harvard University and also studied economics at Cambridge University and theology at the Catholic University of America,  David and his wife Esther live in St Michaels, and he now spends his time in front of the computer writing about economic, political and religious topics and the rest of the day outdoors engaged in politically incorrect activities.

Trump, Mattis and Syria by David Montgomery

Share

President Trump’s apparently spur-of-the-moment decision to withdraw U.S. troops from Syria and its aftermath have stirred up a storm of criticism from all political directions. Whether U.S. troops belong in Syria is debatable, but the manner in which President Trump made and announced his decision to withdraw is very troubling. His subsequent order to withdraw U.S. troops from Afghanistan is even more worrisome, because there U.S. forces are clearly accomplishing important objectives.

Our friends in the Middle East, including the Kurds and Israel, were directly affected and taken by surprise. Our commitment to contain Iranian and Russian influence in the region – and other foes in other regions — was made questionable. The Secretary of Defense resigned in protest. And, for good or ill, in recent days the President’s intentions have become even less clear.

Secretary Mattis’s resignation in protest of President Trump’s surprise announcement followed the departures of General Kelly as chief of staff and Nikki Haley as UN ambassador. Respect for those three (plus Ambassador Bolton who remains) was the main reason that Republicans like me had confidence in the national security policy of the Trump Administration.

My first reaction was that President Trump’s gullibility in dealing with the Turkish dictator left our national security policy in shambles. Not, to repeat, because withdrawing U.S. troops from Syria is necessarily a bad decision, but because of the way President Trump appeared to ignore our allies’ interests, strategic consequences and his own advisors’ recommendations.

For a number of reasons, some relevant and some irrelevant, I took time to reflect before expressing that opinion. I am now somewhat hopeful about how our allies will be affected, as announcements of an extended schedule and conditions for withdrawal have appeared. The strategic implications of what many characterized as repeating President Obama’s pusillanimous retreat from confrontation will likely depend on how the ongoing discussions turn out.

To me, the greatest tragedy is the continuing attrition of the President’s once outstanding national security team. I am not only troubled by Trump’s apparent ability to alienate his best people. I am even more disappointed by those resigned.

I see four key questions in assessing where things stand today:

What could a continued U.S. military involvement in Syria accomplish?
In what other ways will we support Israel and the Kurds?
How can Iranian influence in Syria be countered?
How competent a national security team will the President assemble?

There is no certainty about what will happen in Syria whether the U.S. leaves or stays. In the short run, an unconditional and immediate pullout would leave the Kurds vulnerable to a Turkish attack. The Kurds have, like Poland, retained a national identity despite having their territory taken over by larger countries. They stood up against Saddam Hussein in Iraq and have been our only unambiguous allies in the Syrian conflict. Unfortunately for the Kurds, Turkey has always wanted their oil-rich territory. U.S. troops in Syria have interposed themselves between the Kurds and Turkish forces and protected the Kurds from Turkey.

I consulted friends with national security backgrounds to understand the risks of a continued presence in Syria, such as Turkish attacks on U.S. forces embedded with Kurdish forces or trip-wire confrontations with Russia that would escalate U.S. involvement, There are serious uncertainties about whether the aid that U.S. troops give to non-Islamic democratic forces opposing Assad can make any difference in the long run to how Syria is governed, and whether that U.S. aid is simply lengthening the humanitarian crisis by delaying the inevitable victory of Assad’s regime.

Our only unambiguous national interest seems to be to prevent Iran from expanding its influence or taking over territory in Syria. That, it appears, might be accomplished at least as well by supporting Israel’s less constrained operations against Iranian assets in Syria and preparing U.S. forces remaining in the region to counter Iran.

Israel’s reaction to President Trump’s announcement has been interesting. Initial headlines in Israel lamented “Israel left with false Russian promises, volatile U.S. president.” Then within a week, Israel mounted an extensive aerial attack on Iranian weapons depots in Syria. According to Haaretz, “The alleged Israeli strike may have been in pursuit of some specific military goal … but it has a broader political context. Israel is signaling that Israel sees itself as free to continue attacking targets in Syria, when necessary.”

There does appear to be more to the story. Ambassador Bolton, the National Security Advisor, has been visiting Israel. It was reported over the weekend that he said “U.S. troops will not leave northeastern Syria until IS militants are defeated and American-allied Kurdish fighters are protected.” Israeli sources reported that Netanyahu had spoken to Trump and asked that any withdrawal be gradual, and Bolton confirmed “that there is no timetable for the pull-out of American forces, but insisted it’s not an unlimited commitment.” Sources also reported that the U.S. has promised continued intelligence and operational support to Israel in confronting Iran in Syria.

In all this, Bolton appears to be walking back the immediate and unconditional withdrawal implied by the first reports on the call between Trump and Erdogan. That did not please Turkey, which claims that the Erdogan never promised to protect the Kurds in Syria and that Bolton was not speaking for the Administration. On Tuesday January 8th Bolton met with his Turkish counterpart and they “identified further issues for dialogue.”

Other reports suggest that Erdogan may also have committed to more than he wants to do. According to Reuters, President Trump asked “If we withdraw our soldiers, can you clean up ISIS?'” When Erdogan stated that he could, Trump took him up on the offer saying “Then you do it.”

To do more than push back our allies the Kurds, Turkey will have to expand its operations over a far larger territory than it expected to attack, and runs the risk of engaging with the Damascus government’s troops and even Russians in order to get to the pocket that ISIS still controls. It is not clear that Erdogan’s staff are any happier than Trump’s. Diplomats often cringe when heads of state talk to each other about anything but the weather, and this seems to be a case in point.

More is at stake here than just the fate of the Kurds and Iran’s prospects in Syria. Trump’s initial announcement of immediate withdrawal seems to have led some adversaries to believe that he is returning to the isolationist populism that appeared at times during his presidential campaign. It is unlikely to be a coincidence that statements from the Chinese military have become more provocative in the weeks since he announced withdrawal from Syria.

All of this points to how important it is that the President rely on his national security team. Until now, the Trump Administration demonstrated a welcome reversal of President Obama’s policy of vacillation, weakness and unwillingness to lead. As I discussed in previous columns, the Trump Administration continually and consistently ratcheted up sanctions against Russia and took direct military action against Russian troops and contractors in Syria. It also restarted joint military exercises with the Eastern European countries facing Putin’s expansionist ambitions, confronted North Korea with threats of force, and revised the ludicrously restrictive rules of engagement that had frustrated and endangered U.S. forces in Afghanistan and Iraq. It gave regional commanders freedom to design and execute their own battle plans and put the Pentagon under the management of tested military leaders.

It would tragic if the President’s snap decision about U.S. troops in Syria undid this progress and tempted adversaries to believe he would back off from confrontation as his predecessor did.

National Security Advisor Bolton appears to be getting somewhere in mitigating the damage from Trump’s off-the-cuff decision, but it remains unclear what authority he has been given to set new terms for withdrawal. This is the point at which the President needs to listen to and stand behind his national security team.

For the future, it is critically important that Pompeo, Bolton and the new Secretary of Defense find ways both to give advice and to be informed of decisions. The White House Chief of Staff should have the job of making sure that such two-way communication takes place. This should not be an impossible task. And the new Secretary of Defense has to partner with Pompeo and Bolton, not be someone who will pursue an independent agenda.

In this context, Secretary Mattis’s resignation puzzles me. There is no suggestion that the President requested his resignation. He still had an important job to do in shaping national security policy, no matter how great the immediate frustrations of dealing with this President. The changing signals being sent from the Administration about timing and conditions for withdrawal suggest that even now policy is moving in the direction he preferred.

One other aspect of the President’s sudden announcement might have been intolerable to a Marine general. Many of the U.S. fighters in Syria are special operations forces working closely the Kurds and other democratic forces against ISIS. Military men and women compete to get into special operations units, train intensively, and are motivated by a desire to do exactly what they doing in Syria. They are winning at this time, and snatching defeat from the jaws of victory infuriates every professional.

Though I am sure that Secretary Mattis did not want to be seen as sending that message to people he had sent downrange, Marines don’t just quit. He had to feel an obligation to his men and women in uniform and to his country to keep on trying to point the President in the right direction. What could override that duty remains a troubling mystery.

David Montgomery is retired from a career of teaching, government service and consulting, during which he became internationally recognized as an expert on energy, environmental and climate policy.  He has a PhD in economics from Harvard University and also studied economics at Cambridge University and theology at the Catholic University of America,   David and his wife Esther live in St Michaels, and he now spends his time in front of the computer writing about economic, political and religious topics and the rest of the day outdoors engaged in politically incorrect activities.

 

×
×
We're glad you're enjoying The Chestertown Spy.

Sign up for the the free email blast to see what's new in the Spy. It's delivered right to your inbox at 3PM sharp.

Sign up here.