More on torture prosecutions

Let me reprise some of the main points from my column on torture prosecutions:

(a) Possibly, torture can succeed in extracting vital information.  
(b) On balance, however, torture does not make the US safer.
(c) In any event, it is shameful and wrong.
(d) Waterboarding is torture in the ordinary meaning of the word.
(e) Notwithstanding (d), the law is not as clear as it should be on whether waterboarding as practised during the Bush administration is torture under the law.
(f) Congress could and should have outlawed waterboarding explicitly already. It  should do so now.
(g) Because of (e), and because the issue is so acutely divisive in the US, prosecutions under the existing law may serve neither the cause of justice nor the public interest.

Most of the non-abusive emails I have received about this rightly concentrate on (e). They say that domestic and international law on this is perfectly clear. They point out that the US has prosecuted foreigners and its own citizens for waterboarding in the past. A few have referred me to this much-cited paper by Evan Wallach, which I was familiar with before writing the column and which is well worth reading. The author also had a column in the Washington Post summarising his argument.

I acknowledge that I am not well qualified to judge this issue. I am not a lawyer, but I have wrestled with the law on it enough to know that it is far from simple and a matter of dispute among lawyers. As now seems to be mandatory on this and other issues, positions are stated with false certainty and with unyielding moral absolutism. It is necessary to read everything sceptically.

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Torture prosecutions

My new column for the FT discusses this issue. I already have an inbox full of emails calling me reprehensible and a torturer. Read the column for an insight into the mind of a monster, and I'll address some of the arguments (many fewer in number than the insults, but there are some) offered against what I say tomorrow.

When Barack Obama directed the release of George W. Bush administration documents describing the brutal interrogation of terrorist suspects and defending the legality of those methods, his aim was to draw a line under the issue. He was right to want to, and the compromise he first proposed was a good one.

In releasing the memos the president in effect repudiated methods such as waterboarding, the slamming of prisoners against walls, confinement in boxes, and other practices. These techniques would not be used on Mr Obama's watch.

At the same time he promised that there would be no prosecutions of interrogators, so long as they had acted in good faith and under guidance that the methods were lawful. And he implied, at least, that the same would go for the lawyers and other officials who had designed the earlier policy.

This would not do, however, for many in Mr Obama's party. They accused him of being too timid. Immediately, the president began to vacillate. He allowed for the possibility of some prosecutions, and mused on the proper form of further investigations - not, his spokesman explained, that he was necessarily in favour of such investigations.

Mr Obama's position is still in flux. The only certainties are that the approach he seems to have had in mind is dead, the issue is violently inflamed, and the US is now preoccupied - when it can ill afford to be - with a bitterly divisive and self-destructive quarrel.

Mr Obama got it right first time. Bringing prosecutions would be a mistake. To see why, it is necessary to separate two questions that are routinely muddled together: whether methods such as waterboarding are ever justified, and whether they are legal. The answer to neither question is self-evident, but the key thing is that they are different questions.

To many critics of the Bush administration, it is all so simple: waterboarding is torture, and thus both impossible to justify and illegal. Some prop up their certainty by denying that waterboarding can ever succeed in extracting vital information. If that were true, of course, the dilemma at the centre of this controversy would evaporate. The dilemma is real, in my view, precisely because torture might sometimes work. CIA officers and senior intelligence officials have said that "harsh interrogation" did yield important information.

The Bush administration's more honest critics accept that possibility, but argue that it does not justify these brutal methods. They are right. The damage that practices such as waterboarding do to US standing in the world, their power as a recruiting aid for terrorists, and - to my mind, most important of all - the harm they do to the country's idea of itself as a force for good outweigh any plausible benefits. Methods that shame the nation are both wrong and counter-productive even if they can claim a measure of success in the narrower sense.

But this already far from simple issue gets even more complicated when you turn from the question of justification to the law. Many just take it for granted that waterboarding is torture, and hence illegal. The convoluted legal defences in the memos are so false, in their view, that they compound the crime. The bizarre care the memos prescribe to guard against lasting physical harm to suspects, for instance, is dismissed as a sham that only makes the enterprise more disgusting.

Not so fast. Common sense may tell you waterboarding is torture, but the law is less clear-cut. Congress should make waterboarding a crime, for the reasons I have stated, and it has had many chances before and since 9/11 to do so. The fact is, it has chosen not to. Some of those in Congress now calling for prosecutions, including Nancy Pelosi, speaker of the House, were briefed about these methods in the panic-stricken aftermath of 9/11 and offered no objection.

It is worth noting that the methods in question were adopted from the training US soldiers undergo to resist interrogation. This underlines the fact that using these methods lowers the US to the level of its enemies. But it also suggests that distinctions may be made between waterboarding and, say, breaking on the rack. Unsurprisingly, US soldiers are not subjected to that technique as part of their training. Journalists and YouTube video-makers have undergone waterboarding, the better to pronounce it torture. None that I know of has volunteered to be flayed, or have his fingers crushed.

So far as moral and tactical justification goes, this can be set aside. Waterboarding is shameful, and one may leave it at that. To repeat, Mr Obama was right to forswear its use and that of other brutal measures. But the law does not set these points aside. If the lawyers who worked on the memos can show a court that they worked in good faith, under extreme pressure, to design methods that fell short of torture - in its legal, not commonsense, meaning - they would be innocent of knowingly shielding illegality. They have a strong case.

What would acquittals mean for US standing in the world? Those calling for prosecutions do not appear to have considered this possibility. They ought to.

And that is by no means the only risk. The drive for prosecutions is a furiously partisan project. The Democratic left is plainly out for revenge more than for justice - and Mr Obama is wavering in the face of their rage. Already, little hope remains of a bipartisan approach to the myriad problems that confront his administration. If the president fails to get a grip on this new controversy, the prospect of any such co-operation will be nil.

Treat terrorism as an ordinary crime

On the other hand...

The government today faced a barrage of criticism after police released without charge the remaining 11 suspects arrested a fortnight ago in the north-west of England over an alleged terror plot.

The last two men to be released joined nine others given their freedom last night and one freed on 11 April.

Opposition parties, human rights lawyers and Muslim groups accused the government of mistreating the suspects and botching the anti-terror operation.

The shadow security minister Baroness Neville-Jones said: "It is very worrying that, following an investigation based on strong intelligence into what the prime minister described as a serious terrorist plot, the police have not been able to present sufficient evidence to the Crown Prosecution Service on which it could lay charges against any of the 12 arrested."

Torture memos, revisited

Obama's efforts to draw a line under the torture scandal--if that is what they were--have had the opposite effect. After promising that CIA interrogators would not be prosecuted, and after seeming to deflect calls for a commission to investigate what went on, the president now says that the attorney general must decide whether the officials who designed the policy should face trial. Also, though not actually calling for an investigative commission, he said that if one were somehow to appear, something along the lines of the 9/11 commission would be the right way to go.

It is not an outright U-turn--not by Obama, anyway. Commentators were possibly jumping to conclusions, helped by Rahm Emanuel, when they took the earlier statements to mean no prosecutions of anyone. Obama never actually said that, though what he said did seem to imply it.

Today I felt sorry for poor Robert Gibbs, whose job it was to explain that nothing had really changed. It was an impossible job and he made a hash of it.

During the grilling, NBC's Chuck Todd raised the question I would have asked. If the attorney general needs to review whether policymakers broke the law, on the principle that everybody must be accountable, why promise no prosecutions of interrogators? Are CIA officers above the law? There is a distinction in what you might call ordinary justice, or plain common sense, between the architects and the subordinates, but I don't know that the distinction in law is anything like so clear. "I was just obeying orders" is not regarded as a watertight defense.

Gibbs tied himself in knots, starting to say (I think) that if you break the speed limit inadvertently, because you have been told that you are within it by somebody who ought to know, you have not broken the law--which is untrue, of course. Sensing where that was going, he veered away, leaving the analogy like a cartoon character running frantically in mid-air.

Somebody else then asked, will the attorney general be looking at whether Bush and Cheney broke the law as well? Another good question. Gibbs had no answer.

I thought Obama's original position--or what most people took to be his original position--was a reasonable outcome, all things considered. Ratify, as it were, the abandonment of brutal interrogations, and make it clear they will not be used again. Announce, in effect, that the country has learned its lesson. But do not seek to criminalize the designers or the interrogators for doing their best under extremely difficult circumstances. It appears this compromise cannot hold. And the reason it cannot hold is that Obama, having proposed it, either cannot or will not defend it.

Question. What happens if the people who framed the policy are prosecuted and acquitted?

In search of an Obama doctrine

Whether you like them or not, Obama's domestic policy proposals form a coherent program. Can the same be said of his foreign policy? My new column for the FT considers this question.

Who can fail to be impressed by Barack Obama's energy, or a little stunned by his self-confidence? Show this man a financial crisis, sufficient to occupy or overwhelm an ordinary president, and he sees the chance to "remake" - as he puts it - the entire US economy. You might dismiss that as rhetorical exuberance, but it becomes ever more apparent that his ambition is real. For good or ill, he means to do it.

In foreign policy, one sees the same disposition - the same appetite, the same willingness to bring new thinking to old problems. In recent days, the administration has conceived a spate of new approaches and initiatives.

Just as the financial breakdown is too small a domestic canvas, so Iraq and Afghanistan - where the US currently has most at stake and which constitute by themselves a crushing workload - are too mild a test. The White House has recently made approaches to Cuba and Iran, alongside diplomatic "resets" on Mexico and Latin America, Russia, China, the Middle East, Nato, global summitry, global warming, the international financial institutions and almost anything you care to name.

In every case, Mr Obama seems to say, this administration starts afresh - and if it can break with the diplomatic and strategic failures of George W. Bush, remaking the world as well as the US economy is so much the better.

In domestic policy, an organising principle directs the innovation. Mr Obama wants to shove the US in the direction of a more social democratic - Americans say "progressive" - social contract, with universal healthcare and a tax and benefits system much more attuned to reducing inequality. Whether this is wise, feasible or what the country even wants is questionable, but the connecting theme is clear.

Is any such theme emerging in foreign policy? Can one begin to talk of an "Obama doctrine"?

If style and temperament can constitute a doctrine, the answer is yes. The intellectual traits that Mr Obama says he most prizes in himself and those around him are pragmatism and perseverance. Many would say that Mr Bush also had perseverance, carried to the point of dull-witted obstinacy, but nobody ever accused him of pragmatism. Mr Obama's willingness to start anew, ask what works, offer respect to governments that crave it (even if they may not deserve it) and patiently seek progress where he may is refreshing.

One aspect of this pragmatism is the president's desire to build alliances and cool old enmities, and work towards US aims through co-operation rather than confrontation. The trouble is, most US presidents - including Mr Obama's predecessor - felt the same way until the world beat it out of them. Foreign policy doctrine is put to the test only when co-operation in pursuit of mutual interests fails to achieve results, and the hard choices that Mr Obama insists he is willing to make actually present themselves.

Though it is much too soon to write off Mr Obama's friendly overtures, you could hardly describe them so far as a notable success. He travelled to Europe this month and received ovations at every step; presidents and prime ministers jostled like giddy teenagers to be photographed with him. Yet he went away with nothing: no co-ordinated fiscal stimulus; no meaningful commitments of new military support in Afghanistan. Judged by the outcome, could his predecessor have done much worse?

The world agreed that North Korea's missile test should be opposed; the US even hinted it might shoot the rocket down. The launch went ahead without repercussions. The US and its allies could not agree on a response.

The world believes that Iran should be stopped from developing nuclear weapons, but the allies drag their feet over sanctions. Privately, the US tells Russia it would not build missile defence sites in Poland or the Czech Republic if it received help on Iran in exchange; publicly, Russia says no. Next, the new administration tries outreach, signalling a willingness to talk to Iran without preconditions - and an American-Iranian journalist is sentenced to eight years in jail for spying. At this, Mr Obama and Hillary Clinton, his secretary of state, say they are "deeply disappointed".

The persevering president will no doubt keep plugging away and for a while will be right to do so. The new opportunities afforded by his global popularity are worth exploring - where this can be done at low cost.

In Iran, despite the great stakes, there is not much to lose because the Bush administration's unyielding line had failed in any case. The debacle in Iraq rendered the threat of US military intervention not credible: Israel permitting, Iran was on track to get its nukes regardless. On many other issues as well - Cuba is an obvious instance - the preference for confrontation over co-operation has failed to advance US goals. In both Cuba and Iran, moreover, the US and its foes have real interests in common, so a warming of relations is at least possible. More generally, as Mr Obama would doubtless point out, most nations have a shared interest in peace and security.

Unfortunately, not all are as willing as the US to pay for them. Soon, the leaders who say they so admire Mr Obama will have to return more than warm feelings. Europe should bear more of the burden in Afghanistan. Iran would be better induced to co-operate if US overtures were combined with solidarity among the allies should those overtures be rejected. If US allies keep demanding the benefits of co-operation without the costs, Mr Obama's respect for them will evaporate and so will his country's - and that will be that for the Obama doctrine on foreign policy.

Green shoots, oncoming trains

My new column for National Journal discusses signs of improvement in the economy, and worries about two longer term issues: the need for substantial tax increases, as yet entirely unacknowledged by the tough-choice specialists in the White House, and the difficulty of unwinding the Fed's extraordinary recent interventions. Referring to speeches this week by Obama and Bernanke, in which both pointed to signs of improvement, I say:

It is interesting that when Obama and Bernanke began to look beyond the immediate difficulties, they stopped reading from the same script.

The president talked about the need for fiscal discipline once the economic recovery is secure. Alluding to the Sermon on the Mount, he said this was to be one of the pillars of the "house upon a rock" that he hopes to build. Bernanke, in contrast, addressed the need in due course to reverse the Fed's aggressive interventions in financial markets...

"For too long," Obama complained yet again, "too many in Washington put off hard decisions for some other time, some other day."

Tough choices will have to be made, he said. Yes, they will. When does he intend to start discussing them?

His 10-year budget leaves a permanent fiscal gap of 4 percent of national income a year -- even after years of strong economic expansion, which the administration optimistically assumes, and despite the fact that the budget provides for half or less of the full cost of health care reform, as the White House admits. Entitlement reform as traditionally envisaged cannot close that gap. Nor can tweaking taxes by restoring "a sense of fairness and balance to our tax code by shutting down corporate loopholes and ensuring that everyone pays what they owe," as Obama put it.

To crank out that exhausted cliche even as he invokes the need for new honesty, the president must be either severely deluded or far more cynical than most people suppose. Make no mistake: His budget arithmetic calls for higher taxes -- much higher. That 4 percent of national income, which deliberately understates the fiscal hole, is equivalent to approximately half of what the current federal income tax collects. The president knows it is going to take a lot more than doing a few extra audits and closing a few loopholes to solve that problem. One hopes he does, anyway. So far, while constantly invoking the need to face difficult choices, he refuses to frame the one that matters most: How much are people willing to pay for the new things he wants the government to do?

Restoring fiscal balance is a huge challenge for the future, one the Obama administration is not yet willing to face. The Fed will have to confront a different and less obvious test, but one of equally daunting dimensions.

Bernanke has undertaken an extraordinary range of interventions to support the economy. They extend far beyond the Fed's traditional monetary policy tools, and they blur, if not erase, the line separating monetary policy and fiscal policy. Partly to evade congressional scrutiny of Treasury's actions, partly to get the cost of supporting the banks and shadow banks off the government's balance sheet, the Fed has committed trillions of dollars to reviving the market for securitized loans and supporting particular institutions or lines of business...

The great danger -- one that the financial markets have not begun to grapple with -- is that the two issues will merge. Persistent and irreparable budget imbalance, plus a central bank as fiscal partner, is a formula for surging inflation. There is no sign of it yet: With demand so depressed, deflation is still the greater danger.

But it is not too soon to start thinking about the problem, and preparing people for the increases in taxes that will eventually be needed to avert it.

You can read the rest of it here.

Creative capitalism

Despite my reservations about the term, at least as used by Bill Gates, "creative capitalism" pretty well encompasses two new and notable books I would draw to your attention.

The first is The Beautiful Tree by James Tooley, an unsung hero of development policy. Tooley is a teacher and a professor of education, who these days spends most of his time in Hyderabad, India. His speciality as both scholar and practitioner is ultra-low-cost private education in the world's poorest countries. Given the pitiful standards of most state-run schools for the poor in the third world, this is a crucial sector, and in many cases a thriving one. Yet its existence was denied in official aid circles until Tooley began publishing his findings. In fact, such was the reluctance to accept the implications of his work, the role played by such schools was denied even after he began describing it in detail.

Orthodox opinion on developing-country education for the poor holds that  parents are too ignorant to know a good school when they see one, and that a decent education is impossible to provide on the minimal budgets available to private schools serving poor students. In country after country, Tooley found that both claims are false. Official attitudes are now changing, he says, but slowly. The book is a memoir of his travels and researches, and a thorough examination of the issues. Everyone interested in development should read it. (Try the first half-dozen pages on Amazon and see if you aren't hooked.) In the US it is published by the Cato Institute.

Tooley's book is about entrepreneurial education in unpromising conditions, not philanthropy.  In contrast, Philanthrocapitalism by Matthew Bishop (a former colleague of mine at The Economist) and Michael Green is about marrying entrepreneurial methods to charity. That of course is what Gates has done with his foundation (though he appears to mean something different again by "creative capitalism"). The book describes how an emphasis on results, cost-effectiveness and accountability, backed by billions of philanthropic dollars, is changing the way charity works--and the way much official aid works, as well.    

Shame that the book launch gatherings in DC clashed last night; I turned up for the one that invited me first. Sorry, Matthew.

John Taylor on monetary policy

Here is a review of John Taylor's new book on the financial crisis: "Getting Off Track: How Government Actions and Interventions Caused, Prolonged, and Worsened the Financial Crisis". I complain that it is too short and too tightly focused on the issue that Taylor sees as most important, namely the Fed's too-easy monetary policy in the years leading up to the breakdown. On the other hand, since many commentators ignore that issue almost entirely, you might say he is just redressing the balance. In any event, it's good, and I recommend it highly.

The literature on the causes of the economic breakdown will soon be vast. Amid the stacks, this new book by John Taylor, Stanford professor and author of the celebrated Taylor rule of monetary policy, is worth noticing. It combines seriousness, brevity and accessibility - and it advances a distinctive argument. Its theme is that monetary policy errors, rather than "any inherent instability of the private economy", first caused the crisis and then made it worse.

Unsurprisingly, the Taylor rule has a central role in the analysis. The author has long expounded the view that predictable, rules-based economic policy gets better results than an approach that surprises economic agents or leaves them guessing about what the government intends. The Taylor rule was originally intended as a recommendation to central banks about the conduct of monetary policy and later recognised as a way to predict how central banks actually behave.

The rule says central banks should set the short-term interest rate equal to one-and-a-half times the inflation rate; plus half of the gap between actual and trend gross domestic product; plus one. For example, if the inflation rate is 5 per cent and the output gap 3 per cent, the Taylor rule says make the interest rate 10 per cent: one-and-a-half times 5, plus a half of 3, plus 1. The rule is derived from monetary-policy models that describe how the economy reacts to changes in interest rates. By the late 1980s and early 1990s, the US Federal Reserve was observed to be following the rule, with notable success.

The crisis that began in 2007 and worsened in 2008 was caused, Taylor says, because the Fed abandoned the rule earlier in the decade. Between 2002 and 2004 interest rates were cut even though the rule required them to be raised. In 2004 and 2005 the gap between the actual and the recommended interest rate was between two and three percentage points. Taylor describes a model simulation in which interest rates followed the Taylor-rule path during this period instead of diverging from it so markedly. The housing boom would have ended in 2003 instead of 2006, he says; house prices and levels of mortgage debt would not have risen so high. In short, monetary policy was the primary cause of the boom and subsequent bust.

The rest of the review is here.

A criminally stupid war on drugs

With apologies for the radio silence of the past week--I know how you hang on my every word--here is a link to my latest column for the Financial Times.

How much misery can a policy cause before it is acknowledged as a failure and reversed? The US "war on drugs" suggests there is no upper limit. The country's implacable blend of prohibition and punitive criminal justice is wrong-headed in every way: immoral in principle, since it prosecutes victimless crimes, and in practice a disaster of remarkable proportions. Yet for a US politician to suggest wholesale reform of this brainless regime is still seen as an act of reckless self-harm.

Even a casual observer can see that much of the damage done in the US by illegal drugs is a result of the fact that they are illegal, not the fact that they are drugs. Vastly more lives are blighted by the brutality of prohibition, and by the enormous criminal networks it has created, than by the substances themselves. This is true of cocaine and heroin as well as of soft drugs such as marijuana. But the assault on consumption of marijuana sets the standard for the policy's stupidity.

Read on here.

America's widening fiscal gap

My latest column for the FT looks at the ever-widening long-term budget gap and what will be needed to close it.

In short, whether it intends to or not, Congress is leaning towards making the long-term deficit even bigger. It is preparing to underwrite a large and permanent expansion of the government's spending obligations while failing to provide for a corresponding expansion of the tax base. A crucial question is therefore whether, and for how long, Mr Obama will continue to be bound by his pledge to raise income taxes "by not one cent" for almost all Americans.

Mr Obama intends to squeeze the rich, but the scope for this may be more limited than US liberals would wish. Few Americans seem aware that the US income tax code, as a recent Organisation for Economic Co-operation and Development study showed, is already one of the most progressive.* Even before the rise in top marginal rates promised by Mr Obama, the US income tax collects 45 per cent of its revenues from the highest-income decile. Compare that with Britain at 39 per cent, Canada at 36 per cent, France at 28 per cent, Sweden at 27 per cent and an OECD average of 32 per cent.

This difference is only partly explained by the less-equal US income distribution. The fact that the US has no broadly based national sales tax - value added taxes make Europe's overall tax codes less progressive still - only underlines the point. The US tax system raises comparatively little revenue; what little it raises already comes disproportionately, by international standards, from the rich.

I have previously argued that the US will need a VAT. Even before Mr Obama unveiled his ambitions for healthcare reform, wage subsidies to help the working poor, better education and the rest, the US middle class was seriously undertaxed. The government's promises, on present plans, will be unaffordable. If they are honoured regardless, the only question is which comes first: broadly based tax increases or fiscal collapse. Welcome home, Mr President.

You can read the whole thing here.

G20: The bottom line

I like Steven Pearlstein's commentary in the Washington Post very much and I agree with him more often than I disagree, but not this time. He gives the G20 higher marks than it deserves.

International economic summits deserve to be regarded with skepticism: The most important decision to come out of them is usually the call for yet another meeting.

But yesterday's G-20 meeting in London was an exception. While President Obama may have overstated things a bit when he declared it a "turning point" for the now-shrinking global economy, the meeting did manage to boost the confidence of financial markets, inject another trillion dollars into the financial system and provide needed political cover for world leaders to take unpopular actions back home.

Here's my own take on the summit [link expires in a fortnight]:

The usual declarations in support of cooperation, open markets, and judicious regulation nestled alongside affirmations of previous commitments and paragraphs of self-congratulation for what has already been done. On coordinated fiscal stimulus, no agreement has been found, and none is likely this week, this month, or this year.

It would be wrong to call the event and the activity surrounding it a waste of time...  A big increase in the IMF's ability to lend unconditionally to prequalified governments is in the works, and long overdue. In general, in fact, the IMF's hour has come. An institution that you would think was ideally placed to play the lead role in supervising international finance and managing the global crisis was recently drifting without direction and pushing staff into early retirement. If it can be refreshed with extra resources and a new sense of purpose, this will be money well spent.

In the longer term, it matters even more that the governments of some huge and (until recently) fast-growing economies, such as Brazil, China, and India, are being given a bigger voice...

Valuable as entrenching the G-20 and reviving the IMF may be, though, the most urgent need at this summit was to deal with the immediate danger of a worsening global slump. Designing a coordinated fiscal stimulus to expand global demand, keep people at work, and relieve the pressure for competitive devaluation and new trade restrictions -- the means by which governments traditionally try to export their unemployment -- was the prize that mattered most.

Concerning "affirmations of previous commitments and paragraphs of self-congratulation for what has already been done", see this crisp summary of the numbers by the FT's Chris Giles. He is even harsher than I was. The bottom line:

When all the sums are added together, rather than $1,100bn, the new commitments appear to be below $100bn and most of those were in train without the G20 summit. While the inflation of relatively small and old commitments into an enormous number does not render the summit a failure, the desire to produce large headline numbers as the main result of the gathering suggests the divisions and spats on other issues were considerable.