9/11, 14 years on—and where are our civil liberties?

JDN 2457278 (09/11/2015) EDT 20:53

Today is the 14th anniversary of the 9/11 attacks. A lot has changed since then—yet it’s quite remarkable what hasn’t. In particular, we still don’t have our civil liberties back.

In our immediate panicked response to the attacks, the United States passed almost unanimously the USA PATRIOT ACT, giving unprecedented power to our government in surveillance, searches, and even arrests and detentions. Most of those powers have been renewed repeatedly and remain in effect; the only major change has been a slight weakening of the NSA’s authority to use mass dragnet surveillance on Internet traffic and phone metadata. And this change in turn was almost certainly only made because of Edward Snowden, who is still forced to live in Russia for fear of being executed if he returns to the US. That is, the man most responsible for the only significant improvement in civil liberties in the United States in the last decade is living in Russia because he has been branded a traitor. No, the traitors here are the over one hundred standing US Congress members who voted for an act that is in explicit and direct violation of the Constitution. At the very least every one of them should be removed from office, and we as voters have the power to do that—so why haven’t we? In particular, why are Dan Lipinski and Steny Hoyer, both Democrats from non-southern states who voted every single time to extend provisions of the PATRIOT ACT, still in office? At least Carl Levin had the courtesy to resign after sponsoring the act allowing indefinite detention—I hope we would have voted him out anyway, since I’d much rather have a Republican (and all the absurd economic policy that entails) than someone who apparently doesn’t believe the Fourth and Sixth Amendments have any meaning at all.

We have become inured to this loss of liberty; it feels natural or inevitable to us. But these are not minor inconveniences; they are not small compromises. Giving our government the power to surveil, search, arrest, imprison, torture, and execute anyone they want at any time without the system of due process—and make no mistake, that is what the PATRIOT ACT and the indefinite detention law do—means giving away everything that separates us from tyranny. Bypassing the justice system and the rule of law means bypassing everything that America stands for.

So far, these laws have actually mostly been used against people reasonably suspected of terrorism, that much is true; but it’s also irrelevant. Democracy doesn’t mean you give the government extreme power and they uphold your trust and use it benevolently. Democracy means you don’t give them that power in the first place.

If there’s really sufficient evidence to support an arrest for terrorism, get a warrant. If you don’t have enough evidence for a warrant, you don’t have enough evidence for an arrest. If there’s really sufficient evidence to justify imprisoning someone for terrorism, get a jury to convict. If you don’t have enough evidence to convince a jury, guess what? You don’t have enough evidence to imprison them. These are not negotiable. They are not “political opinions” in any ordinary sense. The protection of due process is so fundamental to democracy that without it political opinions lose all meaning.

People talk about “Big Government” when we suggest increasing taxes on capital gains or expanding Medicare. No, that isn’t Big Government. Searching without warrants is Big Government. Imprisoning people without trial is Big Government. From all the decades of crying wolf in which any policy someone doesn’t like is accused of being “tyranny”, we seem to have lost the ability to recognize actual tyranny. I hope you understand the full force of my meaning when I say that the PATRIOT ACT is literally fascist. Fascism has come to America, and as predicted it was wrapped in the flag and carrying a cross.

In this sort of situation, a lot of people like to quote (or misquote) Benjamin Franklin:

“Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.”

With the qualifiers “essential” and “temporary”, this quote seems right; but a lot of people forget them and quote him as saying:
“Those would give up liberty to purchase safety, deserve neither liberty nor safety.”

That’s clearly wrong. We do in fact give up liberty to purchase safety, and as well we should. We give up our liberty to purchase weapons-grade plutonium; we give up our liberty to drive at 220 mph. The question we need to be asking is: How much liberty are we giving up to gain how much safety?

Spoken like an economist, the question is not whether you will give up liberty to purchase safety—the question is at what price you’re willing to make the purchase. The price we’ve been paying in response to terrorism is far too high. Indeed, the price we are paying is tantamount to America itself.

As horrific as 9/11 was, it’s important to remember: It only killed 3,000 people.

This statement probably makes you uncomfortable; it may even offend you. How dare I say “only”?

I don’t mean to minimize the harm of those deaths. I don’t mean to minimize the suffering of people who lost friends, colleagues, parents, siblings, children. The death of any human being is the permanent destruction of something irreplaceable, a spark of life that can never be restored; it is always a tragedy and there is never any way to repay it.

But I think people are actually doing the opposite—they are ignoring or minimizing millions of other deaths because those deaths didn’t happen to be dramatic enough. A parent killed by a heart attack is just as lost as a parent who died in 9/11. A friend who died of brain cancer is just as gone as a friend who was killed in a terrorist attack. A child killed in a car accident is just as much a loss as a child killed by suicide bombers. If you really care about human suffering, I contend that you should care about all human suffering, not just the kind that makes the TV news.

Here is a list, from the CDC, of things that kill more Americans per month than terrorists have killed in the last three decades:

Heart disease: 50,900 per month

Cancer: 48,700 per month

Lung disease: 12,400 per month

Accidents: 10,800 per month

Stroke: 10,700 per month

Alzheimer’s: 7,000 per month

Diabetes: 6,300 per month

Influenza: 4,700 per month

Kidney failure: 3,900 per month

Terrorism deaths since 1985: 3,455
Yes, that’s right; influenza kills more Americans per month (on average; flu is seasonal, after all) than terrorism has killed in the last thirty years.
And for comparison, other violent deaths, not quite but almost as many per month as terrorism has killed in my entire life so far:
Suicide: 3,400 per month

Homicide: 1,300 per month

Now, with those figures in mind, I want you to ask yourself the following question: Would you be willing to give up basic, fundamental civil liberties in order to avoid any of these things?

Would you want the government to be able to arrest you and imprison you without trial for eating too many cheeseburgers, so as to reduce the risk of heart disease and stroke?

Would you want the government to monitor your phone calls and Internet traffic to make sure you don’t smoke, so as to avoid lung disease? Or to watch for signs of depression, to reduce the rate of suicide?

Would you want the government to be able to use targeted drone strikes, ordered directly by the President, pre-emptively against probable murderers (with a certain rate of collateral damage, of course), to reduce the rate of homicide?

I presume that the answer to all the above questions is “no”. Then now I have to ask you: Why are you willing to give up those same civil liberties to prevent a risk that is three hundred times smaller?

And then of course there’s the Iraq War, which killed 4,400 Americans and at least 100,000 civilians, and the Afghanistan War, which killed 3,400 allied soldiers and over 90,000 civilians.

In response to the horrific murder of 3,000 people, we sacrificed another 7,800 soldiers and killed another 190,000 innocent civilians. What exactly did that accomplish? What benefit did we get for such an enormous cost?

The people who sold us these deadly wars and draconian policies did so based on the threat that terrorism could somehow become vastly worse, involving the release of some unstoppable bioweapon or the detonation of a full-scale nuclear weapon, killing millions of people—but that has never happened, has never gotten close to happening, and would be thousands of times worse than the worst terrorist attacks that have ever actually happened.

If we’re worried about millions of people dying, it is far more likely that there would be a repeat of the 1918 influenza pandemic, or an accidental detonation of a nuclear weapon, or a flashpoint event with Russia or China triggering World War III; it’s probably more likely that there would be an asteroid impact large enough to kill a million people than there would be a terrorist attack large enough to do the same.

As it is, heart disease is already killing millions of people—about a million every two years—and we aren’t so panicked about that as to give up civil liberties. Elsewhere in the world, malnutrition kills over 3 million children per year, essentially all of it due to extreme poverty, which we could eliminate by spending between a quarter ($150 billion) and a half ($300 billion) of our current military budget ($600 billion); but we haven’t even done that even though it would require no loss of civil liberties at all.

Why is terrorism different? In short, the tribal paradigm.

There are in fact downsides to not being infinite identical psychopaths, and this is one of them. An infinite identical psychopath would simply maximize their own probability of survival; but finite diverse tribalists such as we underreact to some threats (such as heart disease) and overreact to others (such as terrorism). We’ll do almost anything to stop the latter—and almost nothing to stop the former.

Terrorists are perceived as a threat not just to our individual survival like heart disease or stroke, but a threat to our tribe from another tribe. This triggers a deep, instinctual sense of panic and hatred that makes us willing to ignore principles we would otherwise uphold and commit acts of violence we would otherwise find unimaginable.

Indeed, it’s precisely that instinct which motivates the terrorists in the first place. From their perspective, we are the other tribe that threatens their tribe, and they are therefore willing to stop at nothing until we are destroyed.

In a fundamental way, when we respond to terrorism in this way we do not defeat them—we become them.
If you ask people who support the PATRIOT ACT, it’s very clear that they don’t see themselves as imposing upon the civil liberties of Americans. Instead, they see themselves as protecting Americans (our tribe), and they think the impositions upon civil liberties will only harm those who don’t count as Americans (other tribes). This is a pretty bizarre notion if you think about it carefully—if you don’t need a warrant or probable cause to imprison people, then what stops you from imprisoning people who aren’t terrorists?—but people don’t think about it carefully. They act on emotion, on instinct.

The odds of terrorists actually destroying America by killing people are basically negligible. Even the most deadly terrorist attack in recorded history—9/11—killed fewer Americans than die every month from diabetes, or every week from heart disease. Even the most extreme attacks feared (which are extremely unlikely) wouldn’t be any worse than World War II, which of course we won.

But the odds of terrorists destroying America by making us give up the rights and freedoms that define us as a nation? That’s well underway.

The terrible, horrible, no-good very-bad budget bill

JDN 2457005 PST 11:52.

I would have preferred to write about something a bit cheerier (like the fact that by the time I write my next post I expect to be finished with my master’s degree!), but this is obviously the big news in economic policy today. The new House budget bill was unveiled Tuesday, and then passed in the House on Thursday by a narrow vote. It has stalled in the Senate thanks in part to fierce—and entirely justified—opposition by Elizabeth Warren, and so today it has been delayed in the Senate. Obama has actually urged his fellow Democrats to pass it, in order to avoid another government shutdown. Here’s why Warren is right and Obama is wrong.

You know the saying “You can’t negotiate with terrorists!”? Well, in practice that’s not actually true—we negotiate with terrorists all the time; the FBI has special hostage negotiators for this purpose, because sometimes it really is the best option. But the saying has an underlying kernel of truth, which is that once someone is willing to hold hostages and commit murder, they have crossed a line, a Rubicon from which it is impossible to return; negotiations with them can never again be good-faith honest argumentation, but must always be a strategic action to minimize collateral damage. Everyone knows that if you had the chance you’d just as soon put bullets through all their heads—because everyone knows they’d do the same to you.

Well, right now, the Republicans are acting like terrorists. Emotionally a fair comparison would be with two-year-olds throwing tantrums, but two-year-olds do not control policy on which thousands of lives hang in the balance. This budget bill is designed—quite intentionally, I’m sure—in order to ensure that Democrats are left with only two options: Give up on every major policy issue and abandon all the principles they stand for, or fail to pass a budget and allow the government to shut down, canceling vital services and costing billions of dollars. They are holding the American people hostage.

But here is why you must not give in: They’re going to shoot the hostages anyway. This so-called “compromise” would not only add $479 million in spending on fighter jets that don’t work and the Pentagon hasn’t even asked for, not only cut $93 million from WIC, a 3.5% budget cut adjusted for inflation—literally denying food to starving mothers and children—and dramatically increase the amount of money that can be given by individuals in campaign donations (because apparently the unlimited corporate money of Citizens United wasn’t enough!), but would also remove two of the central provisions of Dodd-Frank financial regulation that are the only thing that stands between us and a full reprise of the Great Recession. And even if the Democrats in the Senate cave to the demands just as the spineless cowards in the House already did, there is nothing to stop Republicans from using the same scorched-earth tactics next year.

I wouldn’t literally say we should put bullets through their heads, but we definitely need to get these Republicans out of office immediately at the next election—and that means that all the left-wing people who insist they don’t vote “on principle” need to grow some spines of their own and vote. Vote Green if you want—the benefits of having a substantial Green coalition in Congress would be enormous, because the Greens favor three really good things in particular: Stricter regulation of carbon emissions, nationalization of the financial system, and a basic income. Or vote for some other obscure party that you like even better. But for the love of all that is good in the world, vote.

The two most obscure—and yet most important—measures in the bill are the elimination of the swaps pushout rule and the margin requirements on derivatives. Compared to these, the cuts in WIC are small potatoes (literally, they include a stupid provision about potatoes). They also really aren’t that complicated, once you boil them down to their core principles. This is however something Wall Street desperately wants you to never, ever do, for otherwise their global crime syndicate will be exposed.

The swaps pushout rule says quite simply that if you’re going to place bets on the failure of other companies—these are called credit default swaps, but they are really quite literally a bet that a given company will go bankrupt—you can’t do so with deposits that are insured by the FDIC. This is the absolute bare minimum regulatory standard that any reasonable economist (or for that matter sane human being!) would demand. Honestly I think credit default swaps should be banned outright. If you want insurance, you should have to buy insurance—and yes, deal with the regulations involved in buying insurance, because those regulations are there for a reason. There’s a reason you can’t buy fire insurance on other people’s houses, and that exact same reason applies a thousandfold for why you shouldn’t be able to buy credit default swaps on other people’s companies. Most people are not psychopaths who would burn down their neighbor’s house for the insurance money—but even when their executives aren’t psychopaths (as many are), most companies are specifically structured so as to behave as if they were psychopaths, as if no interests in the world mattered but their own profit.

But the swaps pushout rule does not by any means ban credit default swaps. Honestly, it doesn’t even really regulate them in any real sense. All it does is require that these bets have to be made with the banks’ own money and not with everyone else’s. You see, bank deposits—the regular kind, “commercial banking”, where you have your checking and savings accounts—are secured by government funds in the event a bank should fail. This makes sense, at least insofar as it makes sense to have private banks in the first place (if we’re going to insure with government funds, why not just use government funds?). But if you allow banks to place whatever bets they feel like using that money, they have basically no downside; heads they win, tails we lose. That’s why the swaps pushout rule is absolutely indispensable; without it, you are allowing banks to gamble with other people’s money.

What about margin requirements? This one is even worse. Margin requirements are literally the only thing that keeps banks from printing unlimited money. If there was one single cause of the Great Recession, it was the fact that there were no margin requirements on over-the-counter derivatives. Because there were no margin requirements, there was no limit to how much money banks could print, and so print they did; the result was a still mind-blowing quadrillion dollars in nominal value of outstanding derivatives. Not million, not billion, not even trillion; quadrillion. $1e15. $1,000,000,000,000,000. That’s how much money they printed. The total world money supply is about $70 trillion, which is 1/14 of that. (If you read that blog post, he makes a rather telling statement: “They demonstrate quite clearly that those who have been lending the money that we owe can’t possibly have had the money they lent.” No, of course they didn’t! They created it by lending it. That is what our system allows them to do.)

And yes, at its core, it was printing money. A lot of economists will tell you otherwise, about how that’s not really what’s happening, because it’s only “nominal” value, and nobody ever expects to cash them in—yeah, but what if they do? (These are largely the same people who will tell you that quantitative easing isn’t printing money, because, uh… er… squirrel!) A tiny fraction of these derivatives were cashed in in 2007, and I think you know what happened next. They printed this money and now they are holding onto it; but woe betide us all if they ever decide to spend it. Honestly we should invalidate all of these derivatives and force them to start over with strict margin requirements, but short of that we must at least, again at the bare minimum, have margin requirements.

Why are margin requirements so important? There’s actually a very simple equation that explains it. If the margin requirement is m, meaning that you must retain a portion m between 0 and 1 of the loans you make as reserves, the total amount of money supply that can be created from the current amount of money M is just M/m. So if margin requirements were 100%—full-reserve banking—then the total money supply is M, and therefore in full control of the central bank. This is how it should be, in my opinion. But usually m is set around 10%, so the total money supply is 10M, meaning that 90% of the money in the system was created by banks. But if you ever let that margin requirement go to zero, you end up dividing by zero—and the total amount of money that can be created is infinite.

To see how this works, suppose we start with $1000 and put it in bank A. Bank A then creates a loan; how big they can make the loan depends on the margin requirement. Let’s say it’s 10%. They can make a loan of $900, because they must keep $100 (10% of $1000) in reserve. So they do that, and then it gets placed in bank B. Then bank B can make a loan of $810, keeping $90. The $810 gets deposited in bank C, which can make a loan of $729, and so on. The total amount of money in the system is the sum of all these: $1000 in bank A (remember, that deposit doesn’t disappear when it’s loaned out!), plus the $900 in bank B, plus $810 in bank C, plus $729 in bank D. After 4 steps we are at $3,439. As we go through more and more steps, the money supply gets larger at an exponentially decaying rate and we converge toward the maximum at $10,000.

The original amount is M, and then we add M(1-m), M(1-m)^2, M(1-m)^3, and so on. That produces the following sum up to n terms (below is LaTeX, which I can’t render for you without a plugin, which requires me to pay for a WordPress subscription I cannot presently afford; you can copy-paste and render it yourself here):

\sum_{k=0}^{n} M (1-m)^k = M \frac{1 – (1-m)^{n+1}}{m}

And then as you let the number of terms grow arbitrarily large, it converges toward a limit at infinity:

\sum_{k=0}^{\infty} M (1-m)^k = \frac{M}{m}

To be fair, we never actually go through infinitely many steps, so even with a margin requirement of zero we don’t literally end up with infinite money. Instead, we just end up with n M, the number of steps times the initial money supply. Start with $1000 and go through 4 steps: $4000. Go through 10 steps: $10,000. Go through 100 steps: $100,000. It just keeps getting bigger and bigger, until that money has nowhere to go and the whole house of cards falls down.

Honestly, I’m not even sure why Wall Street banks would want to get rid of margin requirements. It’s basically putting your entire economy on the counterfeiting standard. Fiat money is often accused of this, but the government has both (a) the legitimate authority empowered by the electorate and (b) incentives to maintain macroeconomic stability, neither of which private banks have. There is no reason other than altruism (and we all know how much altruism Citibank and HSBC have—it is approximately equal to the margin requirement they are trying to get passed—and yes, they wrote the bill) that would prevent them from simply printing as much money as they possibly can, thus maximizing their profits; and they can even excuse the behavior by saying that everyone else is doing it, so it’s not like they could prevent the collapse all by themselves. But by lobbying for a regulation to specifically allow this, they no longer have that excuse; no, everyone won’t be doing it, not unless you pass this law to let them. Despite the global economic collapse that was just caused by this sort of behavior only seven years ago, they now want to return to doing it. At this point I’m beginning to wonder if calling them an international crime syndicate is actually unfair to international crime syndicates. These guys are so totally evil it actually goes beyond the bounds of rational behavior; they’re turning into cartoon supervillains. I would honestly not be that surprised if there were a video of one of these CEOs caught on camera cackling maniacally, “Muahahahaha! The world shall burn!” (Then again, I was pleasantly surprised to see the CEO of Goldman Sachs talking about the harms of income inequality, though it’s not clear he appreciated his own contribution to that inequality.)

And that is why Democrats must not give in. The Senate should vote it down. Failing that, Obama should veto. I wish he still had the line-item veto so he could just remove the egregious riders without allowing a government shutdown, but no, the Senate blocked it. And honestly their reasoning makes sense; there is supposed to be a balance of power between Congress and the President. I just wish we had a Congress that would use its power responsibly, instead of holding the American people hostage to the villainous whims of Wall Street banks.