Thursday, August 28, 2014

Pope Francis and Violence

I’ve been thinking for a while about a post on “Evangelium Gaudium”, the controversial first encyclical written by Pope Francis last year shortly after his elevation to the Papacy. Evangelium Gaudium means “The Joy of the Gospel” but events today in the Middle East and elsewhere might make one consider that the Papal message of joyful evangelization seems almost irrelevant in a world full of butchery and violence directed against Christians.

A friend of mine sends me a daily listing of incidents of persecution against Christians ranging from the brutally violent ones that have finally broken into the media in Iraq to the ongoing outrages that go largely unnoticed in China, India, and Africa. In his encyclical Pope Francis noted that evangelization should involve more than words or preaching. He agreed that actions speak louder than words but I don’t think he imagined the martyrdom that so many Christians have had to endure since he became Pope.

Although Pope Francis commands worldwide attention, Evangelium Gaudium was directed primarily at Catholics and their leaders. It called on all Catholics to evangelize or to spread the gospel message of service and humility. The Pope set out this goal in the very first paragraph:

With Christ joy is constantly born anew. In this Exhortation I wish to encourage the Christian faithful to embark on a new chapter of evangelization marked by this joy, while pointing our new paths for the Church’s journey in years to come.
Yet, what can this message mean to the thousands and thousands of Christians murdered, tortured, robbed, abducted, and raped all over the world? The Pope’s message seemed largely directed towards the developed world that was once largely Christian but now has become more and more secularized.  Perhaps this is why the Pope singled our materialism as the number one problem.
The great danger in today’s world, pervaded as it is by consumerism, is the desolation and anguish born of a complacent yet covetous heart, the feverish pursuit of frivolous pleasures, and a blunted conscience.
It is true that the Pope argued that inequality of wealth breeds violence, a violence almost justified since it has been caused by oppression and exclusion. I believe that few people have taken the trouble to read the encyclical and have rather been content with a few media snippets. It is clear though that Pope Francis is no Communist or Socialist. He does not call for the State to take over the means of production.

He does direct criticism though at uncontrolled Capitalism, a system that he believes is based on “survival of the fittest” or “trickle down” economics.

I just heard of an example of trickle down economics. A wealthy hedge fund manager recently gave his daughter an extremely costly and elaborate wedding. The rehearsal dinner itself cost $100000. True, I suppose someone could argue that vendors, waiters, dishwashers, hairdressers, clothiers and other lowly folk all benefitted from the wedding. Still you can see why the Pope might be upset at this excess. In the encyclical he asked how could anyone throw away food when so many are starving?

Nevertheless, I’m not sure that the inequality of people in this wedding causes violence. On the contrary, it wouldn’t surprise me if most poor people didn’t admire the rich and famous. Certainly, the current violence in the Middle East does not seem to be the result of economic inequality. ISIS is heavily armed. Where did they get the money to buy machine guns, rocket launchers, mines, and humvees? I suspect that the Sunni militants are more well to do than the majority Shiites they are terrorizing. They would also seem to be better off than the Christians they are robbing and murdering.

The Pope does not claim to provide a sociological analysis of the world’s problems but rather in Evangelium Gaudium he speaks more as a missionary prophet. His warning to the developed world about materialism and its dangers is not new. It pervades the gospels, and can be found throughout the Hebrew Scriptures. He writes,
the majority of our contemporaries are barely living from day to day, with dire consequences….inequality is increasingly evident….This epochal change has been set in motion by the enormous qualitative, quantitative, rapid and cumulative advances occurring in the sciences and in technology…
I would like to discuss the whole question of the changes the Pope alludes to here in another post. For now, I think that there is a much more pressing need. It is time for the Pope to call a summit of religious leaders from all faiths to demand an end to sectarian violence. In particular, he should ask Moslem religious leaders to call for an end to the satanical violence and persecution of Christians who have lived in peace in Moslem controlled lands for centuries. Can this brutality be the will of Allah?

The Pope is the only figure in the world who could convene such a summit. Assisi would be a good venue.


Wednesday, August 20, 2014

NATO Dangerous War Games

NATO expansion (original members in blue)
All year the Wall St. Journal editorial page has been unrelenting in its call for an escalation of an arms build up in Eastern Europe. Editorials, op-eds, and columnists have all called for confronting Russia. This week the Journal pulled out the big guns with an op-ed jointly written by Anders Fogh Rasmussen and General Philip M. Breedlove, the civilian and military heads of NATO.

The article was entitled “A NATO for a Dangerous World” but a close reading would indicate that NATO bears some of the responsibility for making the world more dangerous. The authors refer to an imminent NATO summit where steps will be urged to make NATO forces “fitter, faster, and more flexible to address future challenges from wherever they come.” Can anyone doubt that Rasmussen and Breedlove believe that the major challenge comes from Russia?

In particular the authors call for “the presence of NATO forces in Eastern Europe for as long as necessary,” and that intelligence capability, defense plans, training and exercises all be expanded and upgraded. In addition, they see the need to upgrade “rapid reaction” capability, and even “pre-position equipment and supplies” along NATO’s borders for future rapid deployment. I wonder what borders they are thinking of.

If this is not an arms race and escalation of tension in Eastern Europe, I don’t know what is. Ironically, if you read between the lines, you will see that Rasmussen and Breedlove believe that after all these years NATO is not ready to deal with new circumstances in a changing world. NATO performed a valuable service during the Cold War but with the break-up of the Soviet Union, it is time to consider whether it is still needed.

The Journal likes to compare the situation in the Ukraine with the appeasement of Hitler before the Second World War. It seems that a more apt comparison would be with the arms build up and entangling alliances that led to the start of the First World War 100 years ago. Today, the threat of an increased military build up in central Europe with the potential of a nuclear exchange makes the world a much more dangerous place than it ever was.

In his famous farewell address George Washington warned that the new American nation should avoid any foreign entanglements. Washington was not only the first President of the newly formed United States of America but he was also the general who had guided the American colonies through their seven-year struggle for independence from the British Empire. When Washington uttered his warning, Great Britain and France were in the midst of a life and death struggle for supremacy in Europe.

About a hundred and sixty years after Washington’s warning, another American President cautioned about the growing influence of a military/industrial complex in America after the great victory in World War II. Like Washington, Dwight Eisenhower was also a general before becoming President. He had experienced the horrors of the greatest and most devastating war in history. During his term in office he brought an end to the Korean War and subsequently warned that the United States should never become involved in a land war on the continent of Asia.

Perhaps it is time for us to re-consider the entangling alliances and commitments that have involved us militarily all over the world. Rather than a summit in Wales to escalate the arms race, the United States, the European Union and Russia should convene a summit meeting to limit NATO expansion, calm Russian fears, and de-militarize Eastern Europe.


Tuesday, August 12, 2014

Hiroshima and Nagasaki August 1945

This summer media sources are remembering the start of the First World War 100 years ago in August 1914. Somewhat overshadowed has been the events of August, 1945 that brought the Second World War to an end. On August 5, 1945 a U.S. Air Force bomber dropped the first Atomic bomb on the Japanese city of Hiroshima. Four days later a second Atomic bomb was dropped on the port city of Nagasaki. Five days later on August 15 Japanese Emperor Hirohito and the Japanese government agreed to accede to Allied demands and surrender unconditionally.

Earlier that year, on May 8, 1945, the European Allies had accepted the surrender of Germany after Hitler’s suicide. VE Day marked the end of the war in Europe and the Allies could now turn their full attention to the defeat of Japan. Joseph Stalin, the brutal Communist dictator in Russia, had refused to open an Asian front against Japan until the defeat of Germany.

After VE Day Stalin agreed to launch an attack on the Japanese puppet state in Mongolia within three months. On July 26, 1945 the Allied leaders met at Potsdam and issued a demand to Japan to surrender unconditionally or face utter destruction. While the Russians built up their forces in the East, the United States launched a series of devastating firebomb attacks on Japanese cities from their recently taken islands in the Pacific.

When these attacks failed to bring the Japanese to their knees, the Allies made preparations for a full-scale attack on the Japanese mainland. Massive casualties were projected on both sides.  Finally, by the beginning of August scientists had successfully tested the Atom bomb. President Truman then made the decision to use the bomb.

I was six years old at the time and have only the slightest recollection of that world-shattering event. I don’t think anyone at the time could have imagined the awful destruction caused by those two bombs. A few years later, after the Soviet Union had managed to steal the technology and build their own bomb, I remember participating in air raid drills in school. Teachers told us to crouch under our desks or just put our heads on the desks with our hands over them. I guess that this exercise was to protect against shattered windows but even we children realized its futility.

As  I got older I became somewhat aware of the debate that had gone on within the Truman administration about the decision to drop the bomb, as well as the debate that still goes on among scholars and other commentators about the necessity and morality of the action. I’m sure that this question is one in which there are strong arguments on both sides. For myself, I still wonder why it was necessary to drop the second bomb on Nagasaki only four days after Hiroshima.

Coincidentally, at the time Nagasaki was the most Christian city in Japan. The day the Japanese government agreed to surrender was August 15, the feast day of the Assumption of the Blessed Virgin Mary into Heaven. Although Catholics had celebrated the feast of the Assumption on August 15 for centuries, the doctrine had never been officially defined by the Church.

Maybe it was the awful destruction of the Second World War, maybe it was the horror of Hiroshima and Nagasaki, and maybe it was the prospect of an atomic arms race, but only five years after the surrender of Japan on August 15, Pope Pius XII, in a rare exercise of Papal infallibility, declared that belief in the Assumption of Mary was a binding doctrine of the Catholic church.

So far, despite the Cold War and the continued development of nuclear weapons, the bombing of Hiroshima and Nagasaki remain unique.  Although warfare has continued, there has thankfully been no worldwide conflagration to match either WWI  or WWII. It might not seem so, but since August 15, 1945 we have witnessed an unprecedented era of peace.


Wednesday, August 6, 2014

Pension Liabilities

The enormous unfunded pension liabilities of the State of Connecticut have hardly been discussed so far in the run up to the November gubernatorial election. Nevertheless, the question needs to be raised for whoever is Governor after the November election will inevitably have to reform the State’s employee pension plan or face the possibility of bankruptcy.

A relatively small but significant first step in reforming the system would be to freeze pension benefits for all existing State employees not covered by union contractual obligations. These employees would include non-union members and employees of the State’s executive, legislative, and judicial branches. It would also include all administrators in the University of Connecticut system. In the future these employees could participate in a defined contribution or 401k-type plan. This reform would still provide them with a retirement income, based on the vested value of the current plan as well as the accumulated value of the new defined contribution plan, a combination that would still be superior to what is available to citizens in the private sector.

This reform would reduce the State’s enormous pension liability while at the same time eliminate some major abuses. Here are some examples. Governor Malloy recently appointed a 66-year-old leading Democratic politician and lawyer to the State’s highest court. In four years the new judge will be eligible for a pension of $100000 per year for life. It takes 2.5 million dollars earning 4% interest to provide an annual income of $100000. The judge will contribute about 7% of his pay or about $10000 each year to fund his pension. Who will contribute the balance?

The Governor has appointed about a dozen lawyers over age 60 to the bench. Each of them will be eligible for an equally generous and impossible to fund pension. The outcry over the latest appointment was so great that in the waning days of the last session, the Legislature voted to slightly alter the judicial benefit formula, but only for subsequent appointments. The Governor’s picks were left on the gravy train.

During his tenure the Governor has also elevated about a dozen members of the State legislature to work in his administration. Legislators are considered part-time employees and make about $35000 per year. These appointments to high administrative positions, often with salaries in excess of $100000, have a dramatic effect on their State pension benefits. As legislators they contributed 7% of their pay to the State pension plan. At retirement their pensions would have been based on a percentage of their $35000 salary. Now they only need serve three years in their new positions to double or even triple their pension income.

A good example is the case of Andrew McDonald, a lawyer and long time friend of the Governor’s from Stamford. After many years in the State legislature, McDonald was appointed legal counsel to the Governor almost immediately after his inauguration. McDonald’s salary went from $35000 per year to well over six figures. Two years later McDonald was appointed to the State’s highest court with a salary of about $150000. When he chooses to retire, McDonald’s pension will be based on his highest three years pay and not on the $35000 annual salary he made as a legislator. How is it possible for pension actuaries to even calculate State pension liabilities when employees can have such dramatic increases in pay shortly before retirement? I estimate that despite his calls to deal with unfunded pension liabilities, Governor Malloy has added over $50 million to the State’s liabilities with just these few appointments.

Removing legislators and other political appointees from participation in the State pension plan does not involve breaking any sacrosanct union contracts. The plan for future judicial pensions was changed almost in an instant in response to public outcry. Not only will such a reform help to reduce the State’s unfunded pension liability but it should also provide legislators and other officials with an incentive to reform. Under the present system members of the State government were always on the same side of the table with the public service unions when it came to pension negotiations. Everything they gave to the unions also benefitted them since they were participants in the same plan.

Once political fat cats not longer have an interest in preserving the existing plan benefit formula, they might at last be willing to take on the larger issue of reforming the whole system. The lion’s share of the huge unfunded pension liability is the extremely generous contractually binding retirement benefits enjoyed by members of the various public service unions.

The benefits are extremely generous because the retirement income is based on the average of an employee’s highest three years pay. Most state employees start at relatively modest salaries and their pension contribution is a percentage of that amount. Someone who starts at $30000 is required to contribute about $2000 per year to the pension plan. That contribution will never be enough to adequately provide a pension thirty or thirty- five years later of 70% of one’s highest pay. For example, teachers starting today at $40000 will certainly be earning over $160000 by the end of their careers, and be eligible for pensions in excess of $100000.

Even though many public service employees gripe about their pensions, a simple comparison with Social Security will point out the disparity between the benefits that this minority enjoys and those enjoyed by the rest of us who are covered under Social Security. The pension benefit in Social Security is based on an average of earnings over a thirty-year period, and not on the highest three years. Teacher union leaders like to point out that Connecticut teachers are not covered by Social Security, but they react with horror at the suggestion that their Pension plan be replaced by Social Security.

So, how is it possible to reform the pension system without starting a Greek style revolution among our public service employees? Their pension benefits are guaranteed by law and contract. The Governor gave away the store two years ago when he promised no layoffs in exchange for some union concessions. On their part the unions did throw future State employees under the bus when they agreed that new hires would have a different type of pension plan.

Unless a moderate solution is found the State faces either dramatic layoffs, economy-busting tax increases, or even bankruptcy. However, it might be possible to get the unions to agree to a modification of the benefit formula that could be phased in gradually. For those retiring in the next three years Final Average Pay would still be the average of their highest 3 years pay. But for those retiring after, Final Average Pay would be the average of the number of years of service from the present to their actual date of retirement. For example, the pension of an employees retiring in five years would be based on the average of the five last years of service: for those retiring in ten years the pension would be based on the average of the last ten years of pay, and so on. Ultimately, final average pay would be based on the average of an employee’s entire working career.

The adoption of this new formula would not hurt anyone close to retirement. Those further away from retirement would still enjoy retirement benefits superior to anything available to citizens in the private sector. In addition, they would be able to supplement their retirement income by contributing to tax sheltered retirement plans available to public employees.

The new pension formula would allow the State’s pension actuaries to get a much better handle on the actual size of the unfunded liability. After all, how is it possible to really estimate the figure when no one can tell how much an employee will be making in the last years of service? The little reform would also put an end to the nefarious but little known practice called “spiking”, whereby employees find ways to dramatically increase their salaries in the last three years of service.

If this year’s candidates for state office refuse to support some kind of pension reform, whoever wins will have to be prepared to lead the state into bankruptcy.