Category: Current Affairs

After Bannockburn—After the Referendum: Robert the Bruce and the difficulties of Settlement

Michael Penman—

Scotland’s medieval icons William Wallace and Robert the Bruce and their military encounters with England only occasionally reared their heads during the party leaders’ recent campaigning for and against Scottish independence. In January 2012, former Scottish Secretary and Stirling MP, Michael Forsyth, charged that SNP leader and Scottish First Minister, Alex Salmond, probably preferred June 24, 2014, the seven hundredth anniversary of the battle of Bannockburn, as the date for the referendum vote—so as best to exploit “centuries old grievances and romantic mythology.” September 11 was in fact at first proposed with the Unionists and the press rounding on the SNP’s choice of the anniversary of Wallace’s victory at Stirling Bridge in 1297 in an attempt to allegedly launch a “second war” for Independence (even though the 1997 Yes-Yes Devolution referendum, which embraced many Unionist parties, had also been held on that date).

Thus September 18, 2014 was a compromise choice for the “Yes-No?” vote. But this was not enough to stop former Conservative Prime Minister, John Major, from criticizing what he saw as Alex Salmond’s stoking of “anti-English sentiment” through proximity to the Bannockburn anniversary, allegedly detracting from commemoration of historic “British” military events like the anniversaries of the D-Day landings and the outbreak of World War One. Yet Unionist Ministers also played this game. The scheduling of rival events thus led to a very uncomfortable handshake between Mr. Salmond and Prime Minister David Cameron at British Armed Services Day, held in Stirling on Saturday, June 28, 2014, clashing with the same weekend’s plans for the festival of Bannockburn Live! And just a couple of days later the Queen and PM hosted the launch of the British Navy’s newest aircraft carrier, Elizabeth, at Rosyth docks (in the constituency of former Labour PM and reinvigorated Union-campaigner, Gordon Brown). Then, almost at the death, on September 8, Mr. Salmond invoked the famous Bruce-era “Declaration of Arbroath” of 1320—a pithy statement of Scottish sovereignty sent to the Papacy in the name of Scotland’s nobility— and offered the Scottish people a “Declaration of Opportunity” with promises on the NHS, welfare, social justice, and the right “[to] choose a government to protect their interests.” In response, Unionist commentators only nibbled a bit at this bait, gently poo-pooing such “harking back to a very different world” as the fourteenth century, and then returned to contemporary policy rhetoric. This then was but a mere faint echo of the use which all parties had made of the Declaration of Arbroath as a touchstone of patriotism and political idealism during the 1997 Yes-Yes Devolution campaigns (with Sean Connery’s broadcast for the SNP deploying history from “Sheven Shenturies Ago…”).


Bannockburn: Bruce Reviewing His Troops Before the Battle via Wikimedia Commons

Admittedly, it is surely a positive that in 2014 all parties made a conscious effort of restraint not to mangle centuries-past historical events and figures in their efforts to persuade (with the SNP in particular having moved away after 1997 from such ploys as annual Bannockburn rallies calling for an Independence vote). But with the votes now cast and counted and 55% of the Scottish electorate in favor of retaining Scotland’s place in the Union in some form, the history of Robert Bruce’s reign might again be (cautiously) instructive. For after his triumph at Bannockburn, King Robert had to oversee a resettlement of lands and offices and to win back the territory and hearts-and-minds of several Scottish lordships, towns and regions still in English control or sympathy. The first parliament he called to do this after the battle, in November 1314 at Cambuskenneth Abbey outside Stirling (just a few miles from the battlefield), was by no means an easy affair. As much as the king and his ministers with their battle-mandate may have sought to control that assembly and its agenda, there is evidence of difficult debate on a number of issues: forfeiture of past opponents, lobbying for new lands and offices for supporters, a need to tidy and modernize Scotland’s laws, to rebuild her economy, and settle the royal succession.

This may have been a gathering which Robert sought to use for reconciliation and to avoid any mood of triumphalism and vindictiveness against both his Scottish and English opponents. Indeed, the assembly may have opened by marking All Souls day (November 2) with a procession and mass for the dead, remembering some of those who had fallen on both sides at Bannockburn. It is clear, too, that the key decision of this parliament—an act of November 6 to now forfeit those holders of Scottish lands who remained outside Robert’s peace—was a highly contentious issue for all concerned: the parliamentary record states that “it was finally agreed, adjudged and decreed by the counsel and assent” of the king and his subjects that these individuals should now be disinherited “although they had been often summoned and lawfully expected.”

Nevertheless, it is very telling that such was Robert’s continued need to win support and stabilize his regime that some key individuals still in English allegiance had their forfeiture further delayed, allowing them more time to submit to Bruce. Moreover, although the Bruce government clearly tried to tread carefully in this regard, upheaval and disfavor to past opponents was unavoidable. By 1318 this had provoked a crisis. With his last surviving brother killed in battle in Ireland and only an infant grandson as his heir, Robert was vulnerable and there was growing disquiet about his landed favor to key supporters. An emergency parliament called to Scone in December that year may have been an even more fractious, tense affair with uncomfortable questions and contingencies over patronage, the succession and law reform. Despite the royal regime’s attempts in this parliament to use statute to gag those spreading rumors about a rift between king and subjects there was clearly a substantial plot underway against Bruce, led by former Scottish opponents and in favor of Edward Balliol, a vassal-claimant of the Scottish throne then in Edward II’s court and pay. In 1320 this erupted as the so-called “Soules Conspiracy” with Bruce’s “Black Parliament” condemning those implicated in this sedition and his supporters moving to hunt them down throughout the realm.

So the great medieval turning point of Bannockburn heralded a rocky, often bitter period of settlement with quite partisan outcomes. The political and popular response in the wake of the majority “No” vote in 2014 will also surely be challenging and compelling.

Michael Penman is Senior Lecturer in History at the University of Stirling and co-author of England and Scotland in the Fourteenth Century: New Perspectives. His most recent book is Robert the Bruce: King of the Scots.

Further Reading:

What Does Independence Mean for Scotland and Britain?

James E. Cronin—

Great Britain, the nation that teamed up with the United States to defeat Germany in two world wars and, after each, to do what it could to bring order into a disordered world and that did so much to shape the contours of the post-Cold War world, might soon cease to exist. The Scots vote on whether to leave the United Kingdom on Thursday, September 18th. It would be a hugely important choice for Scotland, for the rest of Britain and for the world.

The referendum campaign has been long, and mostly unexciting, and until recently the “no” camp was way ahead. The effect was complacency, with few outside Scotland giving much thought to what might happen if the “yes” vote prevailed. The polls have recently narrowed, however, and there is now a reasonable possibility that the Scots will choose independence. People are beginning to pay attention and political leaders in Britain are close to panic. What might actually happen?

Perhaps the least helpful guide to the likely consequences is the set of arguments that have been made during the campaign. This was deliberate. The pro-independence camp adopted the strategy of reassurance and claimed that a yes vote would not produce any radical change: Scotland would keep the Queen; it would continue to use the British pound as its currency; it would stay in the European Union and perhaps forge even closer ties with the continent; university students would still not pay tuition fees as they do elsewhere in Britain; benefits and social services would be maintained if not improved. An independent Scotland would not have to pay for another generation of nuclear weapons and it would stay out of foreign ventures like Iraq. In short, there would be no negative consequences and the Scots would keep what they had, and liked, and now also get control of their politics. The pro-union camp—“Better Together” they called themselves—did not confront the argument directly, for fear of appearing to bully or threaten and of provoking a backlash. The “no” camp poked at their opponents’ optimistic claims and sought to raise doubts. The Scots, they suggested, could not necessarily keep the pound; their membership in the EU and NATO would not be guaranteed or quickly settled; the nationalists’ estimates of revenue from North Sea oil—the appropriate division of which had yet to be determined—were overly optimistic; and Scotland’s finances might therefore not suffice to maintain the welfare state so prized by nationalists. But the opponents of independence refrained from an all-out attack in favor of messages about how much everyone loved Scotland and Scots and things Scottish.

Vandalized No Thanks Sign in Scotland

Vandalized no thanks sign courtesy of K . R / flickr

Both sides chose, in effect, to downplay the likely consequences of independence. And both were wrong. It is impossible to say with precision what will happen, but certain consequences are at least likely. It is likely, for example, that the Scottish economy will suffer, for investment in a newly independent nation with an uncertain and unsecured currency involves more risk. Already, several major employers, including the Royal Bank of Scotland, have said they would move their headquarters south. Forcing Britain to removes its stock of nuclear weapons from the Clyde naval base, which the Scottish National Party (SNP) has promised, will cost many jobs and seriously weaken its defense industry.

There is also no doubt that secession, should it happen, would have a very big impact on British politics. In the short run, David Cameron will be seen as the Prime Minister who lost the union. If he managed to hang on as party leader until the general election next May, something that is not guaranteed, he would most likely lose that context. Labour would probably win, but its majority would rest on Scottish Labour MPs who would soon leave Parliament altogether, at which point Labour would find itself in a near permanent minority.

Equally, and possibly more, important effects would come in matters of foreign and defense policy. Traditionally, the SNP opposed membership in NATO, but changed its position in 2012 in anticipation of the referendum. The new commitment is unlikely to hold if the Scots insist on ridding the country of nuclear weapons, for that would not only irritate Britain and the United States, but also throw into question NATO’s broader strategic orientation. In such a situation it seems unlikely that Scotland would be allowed to sign up to the alliance once again. Whatever one thinks of specific NATO policies, it is central to the network of alliances that the US and its allies have put in place to provide global security.

The EU is another institution that, while troubled, spans most of the European continent and organizes its relationships internally and with the rest of the world. The nationalists profess their attachment to Europe, but an independent Scotland would have to reapply for membership, a process that would take time and whose outcome would be uncertain. The unresolved issue of Scotland’s currency would be a particular stumbling bloc.

The biggest impact is the simplest to grasp: Britain without Scotland would instantly be transformed from a serious player in international relations into something much less. How much this would matter to the Scots is hard to say, but it would matter to the rest of Britain and it would matter to the world. Great Britain is no longer the dominant world power, as it was at the height of empire, but it retains a permanent seat on the UN Security Council, it played a huge role in the creation and maintenance of NATO, and it is the closest and most reliable ally of the United States. It can be argued, in fact, that the present global order is fundamentally an Anglo-American product, a set of institutions and relationships that were cobbled together mainly by the United States and Great Britain. It is easy enough to locate flaws in the post-Cold War order and to query its guiding principles and it is impossible not to notice the many ways it is currently threatened. Still, the case against fails utterly for lack of anything better. An independent Scotland would not signal its imminent demise, but it has to weaken one of its strongest supports. Can that be a good thing?

None of this means that independence is not or will not someday be the right thing for Scotland. There will be consequences, however, and costs that will be borne not just by the Scots but by the rest of Britain and, indirectly, by many others. It is important that these be recognized before rather than after the vote.

James E. Cronin is professor of history at Boston College and an affiliate of the Minda De Gunzburg Center for European Studies, Harvard University. His latest book, Global Rules: America, Britain and a Disordered World, is available in October 2014.

Further Reading:

Global Rules by James E. Cronin

Did DNA Really Prove the Identity of Jack the Ripper?

Paul Begg—

If it seems too good to be true—it probably is.

Over the last few days the newspapers and television have become very excited over a claim that DNA tests on a silk shawl of scarf had identified Jack the Ripper, the uncaught Victorian serial killer who murdered several women in London’s East End in 1888. The shawl/scarf had been passed down through several generations of descendants of an 1888 policeman, Acting Sergeant Amos Simpson. According to family tradition, Simpson had been near Mitre Square, where the Ripper murdered Catherine Eddowes and where the shawl was allegedly found, and Simpson was allowed to keep it.

The shawl/scarf has been known about for decades, it has even undergone inconclusive DNA tests for a TV program and for a while was on loan to the Crime Museum (formerly known as the Black Museum) at Scotland Yard. The then owners retrieved the shawl when they decided to sell it. It was put up for auction, being bought by Russell Edwards, the author of the book Naming Jack the Ripper which has caused the recent brouhaha.

The trouble is that while there really was a policeman named Amos Simpson he belonged to N Division, a police division some distance away from H Division where the murders were committed. Policemen had been drafted into the H Division from other divisions, but these were all recorded in Police Orders, issued to police stations every day, and there is no mention of Amos Simpson. So Amos Simpson shouldn’t have been anywhere near Mitre Square. Small wonder that the shawl hadn’t been given very much attention by Ripperologists, as writers and researchers into the mystery are collectively called.

But the problems with the provenance—the history of the shawl/scarf—move to the back burner if the DNA evidence proves solid.

The big question, of course, is who the DNA revealed as Jack the Ripper. The shawl was once loaned to Scotland Yard’s Crime Museum and during his research Russell Edwards contacted the curator, Alan McCormack, to see if he had further information about the shawl. In the course of their conversation the curator said the police had always known the identity of Jack the Ripper, he was a man named Aaron Kosminski.

A document written by a senior policeman a few years after the murders in which he sought to exonerate a man identified in a newspaper as the Ripper named three men who were more likely than the suspect to have been Jack. One of them was a Polish Jew named “Kosminski”. Then, in 1910, Sir Robert Anderson, the head of the CID at the time of the murders, published his autobiography in which he stated that the Ripper was a Polish Jew who had been positively identified by an eyewitness and was subsequently committed to an asylum. Frustratingly Anderson did not name the man and amazingly it wasn’t until 1987 that writer Martin Fido speculated that Anderson’s unnamed Polish Jew was the same man as the Polish Jew called “Kosminski”. Prompted by a newspaper article referring to Fido’s theory a descendant of Chief Inspector Donald Swanson, who headed the Ripper investigation, produced the Chief Inspector’s own copy of Anderson’s autobiography. Swanson had made some marginal notes in which he said the Anderson’s suspect was—“Kosminski”. Martin Fido had undertaken an exhaustive search through the asylum records and had found only one “Kosminski”, a young man named Aaron Kosminski.

Jack the Ripper Puck Magazine

The cover of the September 21, 1889, issue of Puck magazine, featuring a depiction of the unidentified Whitechapel murderer Jack the Ripper via

The identification of “Kosminski”/Aaron Kosminski as the Ripper is fraught with problems and it was probably wrong for the curator of the Crime Museum to say with such certainty that the police had always known the identity of Jack the Ripper. Nevertheless, that two policemen very close to the investigation claimed that Kosminski was the Ripper obviously carried a lot of weight.

Dr. Jari Louheleinen, from Finland, is a Senior Lecturer in Molecular Biology at Liverpool’s John Moores University and an Associate Professor in Biochemistry and he has a list of publications only slightly shorter than your arm. He had met Russell Edwards, knew the story of the shawl, and was curious to see if he could extract any information from stains known to be on it. He offered to undertake a series of serious tests in his own time on condition that he could publish the results. Edwards jumped at the offer. Unless you know about DNA the information given in Mr. Edwards’ book is scientific gobbledygook, but initial tests revealed three things, a stain that appeared to be semen, a stain that appeared to be blood, and bloodstains which Jari, from his experience working with various law enforcement agencies, recognised as “’consistent with arterial blood spatter caused by slashing.’”

Unfortunately nuclear DNA deteriorates quickly and therefore when analyzing old material scientists have to rely on mitochondrial DNA (mtDNA). Discovered in the 1960s, it is inherited through the female line and is popularly known as the “Eve Gene”, but there can be hundreds of thousands of people with the same mtDNA. In this instance, however, the recovered mtDNA proved to be a rare strain which meant that it would be shared by 1 in every 290,000 people in the world. That sounds like a lot, but according to Edwards it means that in 1888 Eddowes would have been one of about twenty-five people in London to have the mutation. The test on the DNA in the semen produced a near perfect match with DNA provided by a direct descendant of Aaron Kosminski’s sister.

That DNA on the shawl matches a victim of Jack the Ripper and the man who senior officers at the time believed was Jack the Ripper is remarkable, after all the mtDNA needn’t have matched anyone connected with the Ripper case at all.

But there are serious problems with all this and we must await the expert responses to Jari Louheleinen’s paper when it appears.

And then there is the problem of explaining how the shawl passed into the hands of Amos Simpson.

Paul Begg is a world authority on Jack the Ripper and the author of several books about him, including Jack the Ripper: The Definitive History. He is co-author with John Bennett of Jack the Ripper: CSI Whitechapel. His latest book is Jack the Ripper: The Forgotten Victims.

Further Reading:

Jack the Ripper: The Forgotten Victims by Paul Begg

Brazil: An Introduction to a Rising Global Power

Brazil CoverBrazil may have lost badly to Germany in the 2014 FIFA World Cup Semifinals on Tuesday, but they are still competing on the world stage and may soon contend with Germany and other more established countries in the global economy. Indeed, a new book by Michael Reid argues that Brazil deserves consistent international recognition and attention, as it may well be one of the world’s most influential nations by 2030. In Brazil: The Troubled Rise of a Global PowerThe Economist‘s Latin American columnist describes the country’s tumultuous history, notes its achievements, and assesses the challenges that face Brazil if it is to live up to its potential.

Tom Jobim, the composer of “The Girl from Ipanema,” once said that “Brazil is not for beginners,” and Reid‘s book is both a guide for the perplexed and an insightful meditation for the already informed. To initiate the wholly uninitiated—and to whet your appetite—here are a few key pieces of information about Brazil’s economy and culture.

  • The nation is the world’s fifth largest country by area. It is in equal in size to the United States, and all twenty-eight countries of the European Union would fit comfortably inside Brazil’s territory.
  • Brazil is a deeply religious country, with a mix of Christian and African religions. Many Brazilians pray to both a Catholic saint and an African orixá (deity).
  • The country’s population of 200 million makes it the world’s fourth most populous democracy.
  • Brazilians love football so much that on days when the national team is playing in the World Cup, the country completely shuts down, and the streets of major cities effectively fall silent.
  • Brazil has the seventh-largest economy, but it is the third-largest exporter of food and the six-biggest manufacturing power.
  • In Brazil, loyalty to the family is key, and the family is in some ways the central institution of Brazilian society.
  • Brazilians devote more of their disposable income to beauty and personal care products than anyone else in the world.
  • The nation is both self-sufficient in oil and the world leader in plant-based fuels.

If you are interested in learning more about Brazil’s past, present, and possible future, don’t miss your chance to win a copy of Brazil: The Troubled Rise of a Global Power through our Goodreads giveaway. Make sure to enter by the end of the month!

Goodreads Book Giveaway

Brazil by Michael Reid


by Michael Reid

Giveaway ends July 31, 2014.

See the giveaway details
at Goodreads.

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Recommended Reading for the U.S.-China Strategic and Economic Dialogue

Unbalanced: The Codependency of America and China by Stephen RoachThe U.S.-China Strategic and Economic Dialogue (S&ED) is taking place in Beijing, China on July 9–10. In his new book, Unbalanced: The Codependency of America and China, Stephen Roach addresses the current and prospective state-of-play in the economic relationship between China and the United States. As the S&ED approaches, we’ve asked him to weigh in on several key aspects of this important exchange between the world’s two largest and leading economies.

Yale University Press: What is the S&ED and why is it so important?

Stephen Roach: In an effort to formalize and coordinate high level exchanges on economic and financial issues between the U.S. and Chinese governments, a Strategic Economic Dialogue (SED) was launched in December 2006 by Former Treasury Secretary Henry Paulson. In 2009, the Obama Administration broadened the focus of the dialogue to include foreign policy and security discussions—hence, inserting an ampersand into the acronym (S&ED)—and reduced the frequency of engagement from twice a year to an annual meeting. The summit continues to rotate back and forth between Washington and Beijing. It brings together on a regular basis the largest delegation of senior government officials of both nations. Its core mission is to generate a “dialogue that will focus on addressing the challenges and opportunities that both countries face on a wide range of bilateral, regional, and global areas of immediate and long-term economic and strategic interest.” Bottom line: The S&ED is now the main event in the U.S.-China debate.

YUP: What is the mood heading into the upcoming S&ED?

SR: Not good. Tensions have intensified recently on three key fronts—trade and currency (again), cyberhacking, and maritime and territorial disputes in the East and South China Seas. Unsurprisingly, both nations are blaming the other for causing these problems. These are classic symptoms of the blame-game of codependency that I stress in Unbalanced—a penchant for partners to hold the other accountable for problems of ones own making. For its part, U.S. complaints are undoubtedly exaggerated by the domestic political cycle—a fairly typical outbreak of China bashing that has broad bipartisan appeal heading into national elections. China is also shaped by its own political agenda—ironic for a one-party system but in keeping with President Xi Jinping’s grass roots appeal for restoration of the so-called China Dream.

YUP: What do you see as the key issues in the U.S.-China economic relationship that you would like to see addressed at this year’s S&ED?

SR: The main problem with the economic relationship is that it has moved into the danger zone of a destructive codependency, where, as I wrote in a recent op-ed on Project Syndicate, both the U.S. and China are focused more on frictions than on synergies. The challenge is to embrace the opportunities of a more constructive interdependency. In that vein, I would like to see progress on two fronts—moving ahead on a U.S.-China bilateral investment treaty (BIT) and reestablishing military-to-military exchanges on the increasingly contentious cybersecurity issue.

YUP: How can the U.S. benefit from a bilateral investment treaty with China?

SR: China is at the early stage of a powerful transformation—moving from a manufacturing-led investment and export growth strategy to a services-led consumer society. In Unbalanced, I estimate that the growth in Chinese services will amount to some $12 trillion between now and 2025. In an environment of ever increasing IT-enabled global connectivity, many services have been transformed from nontradables to tradables. In the book, I calculate that the tradable portion of China’s coming bonanza in services growth could amount to between $4 and $6 trillion by 2025. No one is better positioned than the United States—the world’s largest and most competitive services economy—to garner a significant share of China’s coming wave of services development. The key will be having access to the growth in China’s domestic services market—a critical objective of a bilateral investment treaty.

YUP: Will China enjoy equal benefits from a bilateral investment treaty with the United States?

SR: Yes, that’s precisely the point. What we get on access to Chinese markets they will rightfully want and demand from us. That’s not to say that each nation replicates precisely the same industry and product-specific access of the other. There will be differences in what each would consider “out-of bounds”—the so-called negative list characteristic of all trade negotiations. But there can be no mistaking that China is now moving aggressively to invest in foreign markets, including those in the United States. According to a tabulation by the consultancy Rhodium Group, China’s outward-bound foreign direct investment into U.S. markets has just surpassed American fixed investment into China for the first time ever. Just as U.S. companies have sought to capture share in Chinese markets, it is only logical that China’s increasingly globalized multinationals seek to do the same in the United States. Both nations benefit from this aspect of economic integration—consistent with the familiar “win-win” mantra of globalization. Furthermore, if China and the United States reach accord on a rules-based framework of market access, that could well set the stage for broader trade liberalization, including China’s participation in the Trans Pacific Partnership (TPP) that the U.S. is currently negotiating with eleven other countries in the Asia-Pacific region. Excluding China from TPP would be a mistake. Progress on a BIT could well avoid such a blunder. That would be icing on the cake.

YUP: But any treaty between nations would need to be approved by the U.S. Senate. What are the chances that a dysfunctional Congress would agree to such an action?

SR: Given the political polarization in Washington, there is little possibility of Senate approval of a BIT with China in the foreseeable future. Realistically, however, U.S. and Chinese negotiators still have considerable ground to cover before presenting any such accord to their respective governments for ratification. The soonest I could envision that occurring would be late 2015 or early 2016—hopefully squeezing through a narrow window in the U.S. political cycle between the upcoming off-year elections and the next Presidential campaign. While this may seem unrealistically optimistic—especially in light of the long and arduous negotiations that preceded China’s accession to the WTO in 2001—there is growing support for such action by trade experts in both countries. An especially strong appeal for a BIT was recently made on the op-ed pages of The Wall Street Journal by none other than Ambassadors Charlene Barshefsky and Long Yongtu, the two principal negotiators of the China-U.S. WTO accord. Notwithstanding the compelling arguments and growing support outside the Washington Beltway for a U.S.-China BIT, it would be naïve to presume that Congress will suddenly put aside its long-standing anti-China biases. That remains a major fly in the ointment.

YUP: How do the charges and counter-charges over cyberhacking affect the relationship and can the upcoming S&ED do anything to calm the waters on this key issue?

Stephen Roach

Stephen Roach: Photo by Tony Rinaldo

SR: Painfully, cyber-espionage has become a way of life in the Internet Era. In terms of the U.S.-China relationship it has become an increasingly contentious issue in the past eighteen months following the January 2013 release of a report by a leading cyber security firm Mandiant that documents alleged hacking of U.S. companies by a cyber intelligence unit embedded in the Chinese army. That report served as the basis of a recent U.S. Department of Justice indictment of five officers in the People’s Liberation Army on charges of espionage, theft of trade secrets, identity theft, and fraud. Following that indictment, China has withdrawn from the military-to-military exchanges that were established at last year’s S&ED in July 2013, denying the validity of U.S. allegations and arguing that the evidence of U.S. cyber hacking provided by former NSA contractor, Edward Snowden, portrays equally egregious violations by the United States. This is a classic example of how the finger pointing of codependency can get partners into serious trouble. A resumption of military-to-military exchanges on cyber issues offers the only viable avenue of resolution. The S&ED is the best platform to accomplish that objective.

YUP: How do China’s economic leaders currently view the U.S. economy?

SR: They still view the U.S. economy with great admiration—as the largest and strongest economy in the world and as an economy that sets the bar very high in terms of innovation, technological change, and entrepreneurial start-ups. In the same sense, they recognize that the U.S. was seriously wounded by the Great Financial Crisis of 2008-09 and will take a long time to return to its former pre-crisis health and vigor. China continues to worry about macroeconomic imbalances—its own as well as those of the United States. It is attempting to address its imbalances by shifting to more of a consumer-led growth strategy. It is disappointed that America does not seem to be addressing its imbalances after the turmoil of such a wrenching crisis—preferring, instead, to sustain an historic shortfall of domestic saving and thereby still rely on others, such as China, to fill that void. China views this as an inherent source of macro-instability in the U.S. that leads to trade and currency tensions that always seem to be debated at S&EDs. The current Dialogue is hardly an exception in this regard—epically in light of the U.S. Treasury’s recent expression of concern (PDF) over a supposed shift in Chinese currency policy.

YUP: What do you advise as the steps needed to correct the “imbalance” in our two economies?

SR: The solution is conceptually quite simple—China needs to save less and consume more. America needs to do the opposite—consume less and save more and deploy that saving toward rebuilding competitiveness by investing in human capital, infrastructure, and manufacturing capacity. But talk is cheap—the heavy lifting of implementation is where the rubber meets the road. China. I believe, is on that road to rebalancing. The United States, I fear, is not. Instead, we remain fixated on the excesses of debt- and asset-driven consumer-led growth as the crux of the American Dream. In a codependent relationship, this asymmetrical response is troubling. America is likely to feel pressure as China shifts from surplus saving to saving absorption and thereby provides support for the safety net of its own citizens rather than offering such support for American citizens. In response, the United States will find itself lacking the external source of saving it has long relied on as the sustenance of its unbalanced growth. This is the subtext of what is likely to be an equally asymmetrical engagement at the upcoming S&ED in July 2014. It’s the “S” that remains the big problem for Washington—a failure to comprehend the strategic imperatives of America’s rebalancing agenda.

Stephen Roach is senior fellow, Jackson Institute for Global Affairs and School of Management, Yale University. Prior to that he was Chairman of Morgan Stanley Asia, and for the bulk of his career on Wall Street was Chief Economist of Morgan Stanley. Prior to joining Morgan Stanley in 1982, Mr. Roach served on the research staff of the Federal Reserve Board and was also a research fellow at the Brookings Institution. He holds a Ph.D. in economics from New York University. Roach has written extensively for the international media and appears regularly on television around the world.

Jennifer Taub Explains Everything You Need To Know About the Housing Market Crisis

TaubThe United States is still struggling to understand and recover from the financial crisis that flared up in 2007-8. The story of the housing market, subprime mortgage lending practices, and the mistakes responsible for the crisis is both complex and essential to understand in order to avoid repeating. In this exceptionally informative Q&A, Jennifer Taub, author of Other People’s Houses: How Decades of Bailouts, Captive Regulators, and Toxic Bankers Made Home Mortgages a Thrilling Business, explains what you need to know about the housing market failure.

Yale University Press: There are numerous news stories of late, which talk about the comeback of the housing market, in particular in urban centers like New York City. Is the housing crisis—and the associated economic downturn—safely behind us?

Jennifer Taub: Stories of all-cash bids for New York City apartments and soaring sales of luxury homes in San Francisco belie the hard reality that the housing market has not recovered. After a few years of gains, we now see signs of stagnation. According to new data from Standard & Poor’s, home prices appear to be flattening. Volume is also down with sales of new and existing homes falling.

Applications for home purchase mortgage loans slid by nearly 18% this April compared to last year, according to the Mortgage Bankers Association. Completed home mortgage loans (including refinancings) dropped more; this quarter they were down 58% compared to the same time last year. This is the lowest level since 2000, according to Inside Mortgage Finance.

This is a tale of two recoveries. Wealthy purchasers seeking investment properties or vacation homes can draw upon stock market gains to bid up prices. In contrast, most Americans rely upon wages for income and their main assets are their homes. This means a shortage of willing and able buyers and sellers.  As recently described by Neil Irwin in the New York Times, there are more than 2 million “missing” households, those who under normal circumstances are of the right age to purchase homes but are not taking that step.  Many are renting or living with parents and other extended family members. This is likely because unemployment is still high, wages are low, and those with jobs feel less secure and are burdened by debt.

Meanwhile, the shortage of sellers stems from the fact that about 9 million households are still deeply underwater on their mortgages (owing more on their home loan than their property is worth). Thus many people cannot sell without facing a loss.

YUP: Are there still problems with bank lending practices and if so what are they? Do we need more regulation or less, in your opinion?

Jennifer Taub

Jennifer Taub

JT: Banks and bankers behave badly when there are incentives—including competitive pressures—to do so. Ideally, consumer protection regulation acts as a counterweight. Sensible regulation creates a level-playing field so that responsible lenders are not at a disadvantage when they avoid abusive and deceptive practices that are profitable to them in the short run, yet harm consumers and society in the long run.

There are incentives for banks to return to high-risk mortgage lending. Most of the pick-up in home loans we saw in recent years was due to an extraordinary level of mortgage refinancings. With interest rates now rising, refinancings have dropped off. With the decline in volume, we should be concerned that originators will once again push predatory mortgages and unreasonably relax underwriting standards.

There are also significant problems with payday loans—money lent in advance of the borrower’s paycheck. More than 12 million Americans use payday loans. At a March hearing conducted by the Consumer Financial Protection Bureau, experts revealed that payday loans are not really short-term in nature and can turn into a debt trap. Many large banks are now backing away from offering these or providing financing to payday lenders. However these fringe lenders are still flourishing.

Proponents of payday loans suggest restricting them will hurt those Americans who have little other sources for credit. A good alternative might be postal banking as suggested by Professor Mehrsa Baradaran. This would involve the U.S. Postal Service taking deposits, making small loans, and providing bill payment services.

YUP: Do the conditions that caused the prior market meltdown still linger and are we still vulnerable to a similar financial crisis?

JT: Unfortunately, yes. In 2009 Federal Reserve chairman Ben Bernanke defended the multi-trillion-dollar bailouts, explaining that “it wasn’t to help the big firms that we intervened. . . . When the elephant falls down, all the grass gets crushed as well.” Today, the elephants are larger than ever, and the grass is still crushed.

The top banks are bigger than they were before the crisis, and they still borrow excessively in the short-term and overnight markets to purchase risky securities, leaving them vulnerable to runs. The Dodd-Frank Act provided the regulators plenty of tools to prevent another meltdown. So far, the modest improvements to the safety of the system are encouraging, but woefully inadequate.

Read an excerpt of Other People’s Houses on Salon

YUP: What should be done?

JT: It’s time now for more bold action, such as the 21st Century Glass-Steagall Act sponsored by Senators Elizabeth Warren, John McCain, Maria Cantwell, and Angus King. We should also reduce banks’ dependence on short-term wholesale funding. In addition, we should create a pre-paid risk fund to finance the “orderly resolution” process created under Dodd-Frank, so that the banks themselves have to front the resolution process instead of the taxpayers. Such an upfront assessment was included when Dodd-Frank was in progress, but, under pressure from the banks, it was removed before the law was enacted.

YUP: How did we get to this point? Was this just a one-off market failure for 2008 or an indication of a larger pattern with banks and financial institutions? 

JT: The 2008 meltdown was not a one-off market failure; it was a repeat performance, a more severe relapse of the same underlying disease that caused the S&L debacle in the 1980s.  In both cases the same reckless banks, operating under different names, failed, while the same lax regulators overlooked fraud and abuse. Furthermore, today as the legal problems plaguing JPMorgan Chase demonstrate, the situation is essentially unchanged.

Though deregulation and desupervision enabled the S&L crisis the subsequent legal reforms failed to eliminate risk to borrowers, lenders, taxpayers, or to the entire system. Instead, risk grew, but through sophisticated financial innovation, it was strategically directed away from Wall Street to homeowners and taxpayers.

We are repeating the cycle. Today, our biggest banks are larger than before the crisis, are still excessively leveraged, are bumbling and behaving badly, sometimes criminally, but with little to no personal accountability. This poor conduct goes well beyond abusive consumer lending practices.  With scandal after scandal, we see that these financial firms are too big and too complex for their own executives to manage and for the government to regulate or prosecute.

The problem is amplified when after a crisis, the strongest survivors swallow up the failing competition along with the target’s troubled corporate cultures and toxic assets. We saw this with JPMorgan Chase and now fresh evidence includes Bank of America’s announcement in late April of this year that it submitted incorrect data to the Fed as part of the annual stress tests. In an accounting error related to sales of bonds inherited from Merrill Lynch, Bank of America overstated its equity capital by $4 billion. The Fed required the bank to suspend a dividend increase and stock buyback plan.

Listen to Jennifer Taub on The Takeaway (starts 28:01)

YUP: While there are headlines about this spike in luxury apartment buildings, there are also statistics that the amount of “underwater houses” is on the rise (an underwater house is a home mortgage with a higher balance outstanding than the market value of the home.) What are the latest statistics on underwater homes: are there improvements?

JT: Despite some improvement in home prices, many millions of homeowners in America remain deeply underwater on their mortgages. These include families who purchased homes at inflated values or who were encouraged to take on more debt as property values rose during the bubble. Collectively, the negative home equity holds back our nation’s economic recovery.

According to RealtyTrac, more than 9 million homes have mortgages that are “seriously underwater” meaning the borrower owes at least 25% more on the loan than the home’s estimated market value. This is about 17% of all properties with mortgages. While this is an improvement from early 2012 when 12.8 million homes were deeply underwater, the housing market and the economy are stagnating in part due to this problem. By comparison, CoreLogic calculates that 6.5 million of mortgaged homes are underwater, down from an estimated 11.2 million in 2010.

YUP: At your book’s core is the story of Nobelman v. American Savings Bank.  In that case, the U.S. Supreme Court decided that even filing for bankruptcy would not provide any help for underwater homeowners: that the mortgage loan principal could not be reduced.  Is this still the status quo? Are there any indications that policy might change here to help distressed homeowners and stave off foreclosures?

JT: Our nation’s bankruptcy system is designed to offer a fresh start to borrowers who owe more than they own or who cannot make ends meet. Before the Nobelman decision in 1993, struggling homeowners in more than twenty states could turn to bankruptcy courts to save their homes. An underwater borrower could reduce the outstanding mortgage loan balance to the sunken value of their home. And, knowing this relief was available, lenders were more willing to voluntarily restructure mortgage loans.

The Nobelman decision is still the law of the land. This means that middle class homeowners are singled-out. Whereas the amount owed on a boat or vacation home can be reduced in bankruptcy, a purchase mortgage on a principal residence cannot. There is a solution— a simple amendment to the Bankruptcy Code. Such a proposal passed in the House in 2009, but over industry opposition and without support from the Obama Treasury department this important amendment failed in the Senate.

This simple amendment should have been included in the Bush bailout legislation in 2008. On the campaign trail, then-candidate Barack Obama had vocally supported changing “our bankruptcy laws to make it easier for families to stay in their homes” and to remove what he called a “Washington loophole” that “if you’re a family that owns one house, bankruptcy judges are actually barred from helping you keep a roof over your head by writing down the value of your mortgage.” However, in late September of 2008, while the bailout legislation stalled, he suddenly reversed his position encouraging the exclusion of bankruptcy reform from the legislation.

YUP: In your book, you point to the increasingly popular view that the 2008 meltdown in the housing market was the fault of borrowers. That these “subprime” borrowers had no business taking out loans for homes they could not afford, and that was the reason for the bursting of the housing bubble. Is that a fair assessment, in your view?

Read Joe Nocera’s op-ed “Bankrupt Housing Policy” in the New York Times.

JT: Subprime mortgage borrowers have been unfairly scapegoated. If every single subprime mortgage had defaulted, as author and former investment banker Nomi Prins has noted, the total unpaid principal would have been a fraction of what was committed by the Fed, Treasury, and FDIC in the financial crisis.

It is not credible to blame homeowners alone for the crisis. True, some homeowners participated in fraud, and others were simply unrealistic or were speculating that housing prices would continue to rise.  However, a much larger number were victims either of abusive lending practices or of the housing bubble and burst that diminished their home values and retirement savings.

It was the desire of banks to make profitable trades, and hedge funds and other large institutions to speculate in mortgage-linked securities that drove the production of unsafe mortgage loans and brought down the system. It was the side bets, made knowingly by some and unknowingly by others, that put far more at risk than the total value of all the subprime mortgages.

The most influential bankers testified under oath that they alone should take the blame. Bank of America CEO Brian Moynihan told the Financial Crisis Inquiry Commission: “Over the course of the crisis, we, as an industry, caused a lot of damage. Never has it been clearer how poor business judgments we have made have affected Main Street.” In addition, JPMorgan Chase CEO Jamie Dimon told the Commission, “I blame the management teams 100% . . .and no one else.”

YUP: Is there anything the average citizen can do to help bring about change to protect themselves from predatory lending and under-regulated banks?

JT: Consumers concerned about a predatory or misleading banking practices can contact the Consumer Financial Protection Bureau, which was created under Dodd-Frank. They can seek assistance from an attorney with consumer law expertise.  Those frustrated with too big to fail banks can also move their savings to a smaller institution. For example there are nearly 7,000 community banks in about 50,000 locations in this country as well as thousands of credit unions.

Consumers should share their stories with and express their concerns to their state and federal representatives. Phone calls, emails and letters matter greatly. To stay informed on legislation and policy matters, they can also follow the work of advocacy organizations including Americans for Financial Reform, Better Markets, and The Center for Responsible Lending.

Jennifer Taub is an associate professor at Vermont Law School, where she teaches courses on contracts, corporations, securities regulation, and white-collar crime. Formerly she was an associate general counsel at Fidelity Investments. She frequently speaks and writes about the financial crisis of 2008. She lives in Northampton, MA.

Yale Press Podcast: Author Jennifer Michael Hecht on Suicide

Stay: A History of Suicide and the Philosophies Against ItThere is a certain myth to the idea that most suicides occur around the holidays; in fact, it’s usually in spring and summer that see the highest rates of this irretrievable act. In our latest episode of the Yale Press Podcast, Jennifer Michael Hecht, author of Stay: A History of Suicide and the Philosophies Against Itspeaks poignantly to the value of  recovering the most powerful historical and contemporary arguments against the act.  The book, based on research as well as personal experience — has been well received by critics: it’s what David Brooks has called “eloquent and affecting” in his New York Times column, what Maria Popova claimed as “more than a must-read — it’s a cultural necessity” on Brain Pickings, and what Andrew Sullivan has treated readers to with a series of videos with an Ask Anything series with Hecht on The Dish.


Listen to Jennifer Michael Hecht on the Yale Press Podcast on iTunesU!

As we close our #YUPapr conversations this month about “Ancient Texts, Modern Beliefs”, Hecht‘s argument importantly shapes how we have perceived our own humanity as an object of faith and community, and for our modern society and its set of beliefs, the message is clear: don’t go, stay.

Every Pope a Saint? The Politics of Canonization

For our #YUPapr conversations this month about “Ancient Texts, Modern Beliefs”, a closer inspection of contemporary religious practices—and their comparative differences— is important for our consideration of changing beliefs in the greater context of world history. Here, Yale University Press author Michael Coogan discusses the upcoming April 27 canonization of two popes and the rapidly increasing rate of sainthood for modern Bishops of Rome, offering some perspective on the changing political nature of the Church in today’s society.

Michael Coogan—

On April 27, ornately robed clerics will celebrate the canonization of two recent popes, John XXIII and John Paul II. In the modern Roman Catholic Church until the last few decades, canonization­—declaring someone a saint—was rare and occurred only after a protracted process. Successive steps lead to canonization: first, one is declared “Servant of God,” then “Venerable,” then “Blessed,” and finally “Saint.” From the beginning of the fourteenth century to the mid-twentieth, only two popes were canonized and another three were declared “Blessed.” Not so any more: since the papacy of John Paul II a flurry of canonizations has been underway, not just for ordinary individuals deemed holy, but also for modern popes.

GWB LB DIGITAL 12:35 Statements with Pope John Paul II.

Pope John Paul II

Remarkably, all of the popes since the mid-twentieth century, except of course for those still alive, are on the path to canonization: Pius XII (1939–1958, declared Servant of God in 1990 and Venerable in 2009), John XXIII (1958–1963, declared Servant of God in 1965, Venerable in 1999, and Blessed in 2000), Paul VI (1963–1978, declared Servant of God in 1993 and Venerable in 2012), John Paul I (1978, declared Servant of God in 2003), and John Paul II (1978–2005, declared Servant of God in 2005, Venerable in 2009, and Blessed in 2011). Why this sudden, almost automatic rush to sainthood for recent popes?

Part of the answer lies in nineteenth-century realpolitik. For more than a thousand years, the pope was not just the spiritual head of the Roman Catholic Church, but also a monarch, the ruler of the Papal States in the central Italian peninsula. As sovereigns of this territory, popes engaged in diplomacy and war to maintain and expand their control. In the nineteenth century, however, the papal domain was virtually eliminated by the unification of Italy under Garibaldi and his successors, culminating with the capture of Rome by Italian forces in September 1870. All that was left of papal territory was tiny Vatican City. Only a few months before, when the fall of Rome was already inevitable, the First Vatican Council, at Pope Pius IX’s prompting, declared the doctrine of papal infallibility. If the popes could not be political sovereigns, it seems, they could at least have absolute spiritual authority, especially, as the official wording has it, when they say they are speaking infallibly on an issue of faith or morals.

Although there has been only one technically infallible pronouncement since 1870—Pius XII’s proclamation in 1950 of the doctrine of the Assumption, that Mary, the mother of Jesus, had been bodily taken up to heaven at her death—papal authoritarianism has expressed itself in other ways, as when John Paul II asserted in an apostolic letter that women could never be priests, and then Cardinal Ratzinger (later Benedict XVI) subsequently called this teaching infallible, unchangeable, and binding on all Catholics forever.

By the second half of the twentieth century, even the popes’ spiritual authority was being eroded, because of flawed leadership. Pius XII’s silence about the Holocaust was moral cowardice, if not latent anti-Semitism. Paul VI’s insistence on banning artificial contraception in his encyclical Humanae Vitae, against the opinion of a majority of his advisors, effectively ended papal authority for many Catholics. John Paul II’s clericalism led to years of denial and coddling of predatory priest pedophiles and their episcopal superiors, which further diminished the Church’s authority as well as its coffers. Significantly, these last two issues concern what the current pope has called an obsessive preoccupation with sex and reproduction; it is of more than tangential interest that of the thousands of men and women put on the path to sainthood by John Paul II and Benedict XVI, only a tiny percentage were married. Most openly sexually active persons, it seems, can’t really be saintly.

The haste to canonize the last five deceased popes is an effort to shore up the diminished spiritual authority of the papacy. If every pope is a saint, who could dare disagree with them? Surely they are being elevated to sainthood not mainly because of their personal holiness but because they were popes, even though as popes most of them were deeply flawed. Is flawed leadership no bar to sainthood?

Among the popes whose canonization process John Paul II sped up was none other than Pius IX, declared Servant of God in 1907, but Venerable only in 1985 and Blessed in 2000: the most authoritarian pope of the nineteenth century was propelled toward sainthood by one of the most authoritarian popes of the twentieth. The Vatican is locked in a time warp of absolute monarchical authority, and popes canonizing their predecessors is an attempt to preserve and enhance it. The joint canonization of John XXIII and John Paul II—the first a darling of liberal Catholics, the second a favorite of traditional Catholics—is calculated to appeal to different constituencies. Even sainthood is political, and it is disingenuous to pretend that it is not.

Michael Coogan is the author of The Ten Commandments: A Short History of an Ancient Text, out this month from Yale University Press.


Michael Coogan



The Catholic Church’s Role in World Development

Last week, President Obama and Pope Francis met for almost an hour in a much-anticipated private visit in which they discussed, among other issues, income inequality and global peace. Indeed, in his first year as Pope, Pope Francis has emphasized the necessity to care for the poor, both from the standpoint of the Church and in political terms. This special emphasis on the plight of the poor has touched many, and drawn particular attention to the Church’s role in addressing these needs. In his book Earthly Mission: The Catholic Church and World Development, Robert Calderisi places the role of the Church in global and historical context. This book takes on the Catholic Church’s practical role in developing nations, particularly in the last 60 years. In so doing, Calderisi touches on the relationship between religion and politics, the economy, and social progress.

Earthly MissionIndeed, in looking at both individual people and official institutional practice and dogma, this book obliquely raises the question, “What is the Church?” The tension between the institution and the individual occurs throughout Earthly Mission, in ways one wouldn’t always expect. The institution has often, but not exclusively, played a “conservative” role; in fact, the term “conservative” takes on wider meaning than a distinct place on the political spectrum. There are institutional, national, and economic issues at stake in the meeting between the Catholic Church and international development, not to mention the actions of persons outside the institution.

In addition to keen historical and economic investigation, Calderisi draws from the stories of people he met in fourteen developing nations from Rwanda, to Argentina, to Bangladesh. He speaks to cab drivers in Italy, economists in the Philippines and pastors in Tanzania. This approach gives Earthly Mission the insight that comes from individual experience alongside broader analysis with hard data.

The scope of the Catholic Church’s role in world development is vast and complex, and Earthly Mission includes the range from hopeful moments where poverty has been alleviated and to the most difficult ones. Calderisi examines heartbreaking moments in world history, such as the horrors of the Rwandan genocide in the 1990s. Calderisi speaks to those who were there and grapples with the incomprehensible violence.  “Church leaders did nothing to prevent the butchery,” he explains, “and some even seemed to encourage it.” The heroism of some individuals is set up against failures of courage on the other. Priests, nuns and lay Catholics all participated, some as victims, others as perpetrators.

In the end Earthly Mission provides a dynamic picture of the intersection between religion and politics and the diverse ways that appears in different places on the globe. It is in part a story of the Church’s institution meeting governmental institutions, and the individuals in between. “Diverse and all too human in its internal organization,” Calderisi writes, “the Church has varied greatly in its responses to social challenges. Vagaries of character, pressures of circumstance, and instincts of self-preservation have sometimes won out over the eternal truths to which it is dedicated.” Laying his cards on the table, Calderisi himself does not give up hope for the Catholic Church, yet leaves the story open for readers to draw their own conclusions as to whether the Catholic Church, as a whole, has been a force for good.