What makes an effective politician? Politicians come from all walks of life but the vast majority of them do not have any formal training in political science or in government or in the tasks and tools of being a politician. Renova, an innovative non-partisan non-profit organization in Brazil, seeks to change that and to also improve governance, by training aspiring political candidates. In this podcast, Sami J. Karam speaks to founder and chairman Eduardo Mufarej about Renova’s mission, its training curriculum and its prospects.
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“Historically, Lebanon prospered as a result of inflows of people and funds – people who came to take refuge in Lebanon and also funds. If we look at the post World War 2 period when modern Lebanon became independent and also at previous periods that Lebanon went through – and I mean over the past 100 or 200 years – one thing that was common to all these eras is its liberal economic system that was adopted by all who lived on this land. The constant was the liberal economic system.”____ Joe Issa El Khoury
Sami J. Karam speaks with Joe Issa El Khoury, a Beirut-based financier, about the tragic events that have unfolded in Lebanon since 2019. A sharp fall in the currency, a banking freeze, a political crisis, hyperinflation, and widespread street protests made 2019 a difficult year. But these events were then compounded by the Covid-19 pandemic and the explosion in the port of Beirut in 2020.
Issa El Khoury explains the sequence of events that led to the present, and offers a possible way forward.
0:00 Introduction of Joe Issa El Khoury
2:25 What is it like right now on the ground in Beirut?
8:33 Why did Lebanon have a golden period in 1945-75; why was it later so prone to crisis?
17:40 The Rafik Hariri era and the return of growth 1990-2005
20:00 What explains the weakness of the Lebanese state: geography and demographics
26:30 Lebanon’s diversity as a source of wealth; Example of Lebanese cuisine
30:40 Crossing the line from a laissez-faire economy to a crony economy
35:05 The real estate boom of 2007-11
36:55 The impact of the Syrian civil war
39:10 Crowding out the private sector
44:10 The proximate factors that led to the meltdown
46:15 The current condition of the banking sector; Role of the Central Bank
51:00 Will depositors suffer a haircut? The Lazard and other plans
54:45 Talk of privatization of state assets
59:45 Political patronage in the public sector
1:01:50 “All roads lead to Washington DC and the acronym IMF”
1:05:20 Political reform and the role of the diaspora
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Sinclair Lewis called it “the sedate pomposity of the commercialist”. Now it has spread to many parts of society, not always in its sedate form.
Back in our final days as architecture students in Austin, our class had a farewell gathering with a professor who had been a valued mentor to several of us. As was habitual on such occasions, the professor was discussing with us the work of various architects when the subject of a newly-constructed building came up.
“I hate that building”, one classmate said flatly.
After an awkward silence, the professor mocked: “you mean, strongly dislike?” Off guard, the offending party protested that his use of the word was innocuous then and there. The professor conceded as much but explained that it was a visceral word, the kind of word that forestalls further discussion and that hardens the speaker’s and listener’s opinions. It is difficult to walk back or to change your mind from “hate”, and easier to do so from “dislike” or even from “strongly dislike”, he argued. His advice was to leave in one’s words an open path for retreat, in essence to never burn one’s rhetorical bridges.
This led to another discussion about certainty and about people who speak with certainty. The professor said that he had a reflexive dislike for certainty and that he felt a profound distrust towards people who speak with certainty. There is very little that is certain in life, he said, even among things of which we are convinced at a given point in time. Opinions change, science changes, research advances. New discoveries change our beliefs. Knowledge doesn’t just flow or evolve gradually like a river; it shifts laterally and sometimes suddenly like an earthquake.
“You go to some of these places [Midwestern cities], the question they ask when they meet you is ‘where did you go to high school’?… The fact that where you went to high school is a social marker places you in a community. You go to Washington DC and nobody cares where you went to high school… In New York, they ask ‘where are you from?’ because it is assumed that you are not from here. Some of these places in the Midwest… need more outsiders to come in because outsiders are the natural constituency of the new.” _____Aaron Renn
Aaron Renn, a Senior Fellow at the Manhattan Institute, speaks to Sami J. Karam about US cities. What makes the large coastal cities so successful? What are the prospects for mid-sized and smaller cities in the Rust Belt? What is the current state of play for mass transit? What role does immigration play in the development of cities?
Among the cities discussed, New York, Los Angeles, Chicago, Boston, Washington DC, Seattle, Houston, Dallas, Austin, San Francisco, Charlotte, Minneapolis-St Paul, Nashville, Columbus, Cincinnati, Pittsburgh, St Louis, Cleveland, Detroit, Madison, Iowa City, Rochester (MN), Singapore, Paris.
0:00 Introduction of Aaron Renn
1:15 What makes the large coastal cities so successful at creating wealth?
8:30 Can a large city become dominant in a new sector? (e.g., New York in tech)
13:00 How would you categorize non-coastal cities in terms of their prospects?
16:30 Why some cities are struggling while others are restructuring successfully
20:55 Will some smaller cities turn into ghost towns within twenty years?
26:35 What is going on with Detroit’s recovery?
30:40 The role of new immigrants in the development of a city
36:50 Immigration policy in Canada and Australia compared to the US and UK
43:50 What is the future for mass transit?
48:00 The lack of city to city benchmarking in infrastructure costing and execution
53:40 Is there anything going on in high-speed rail, other than in California?
59:40 The decline of trust in institutions and the problem of cronyism.
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Cronyism destroys trust and assigns the blame to scapegoats of its own creation.
Only a fiercely committed left or right-winger would fail to recognize that there is today a social and political divide that does not easily fit within the traditional mold of left vs. right. If, loosely speaking, the left leans socialist and the right leans capitalist, there is a third branch, cronyism, that is characterized by the rising power and wealth of rent-seeking industries and individuals. In the past, this branch was dominant mainly in poorer countries with weaker institutions. But today it has also gained significant strength in a number of developed countries, including the United States.
In fact, if the Republican Party has been hijacked by Trumpism, as some allege, then we could say that capitalism has been similarly hijacked by cronyism. In our view, this parallel is nearly seamless, given that the GOP is traditionally pro-capitalism – in words if not always in deeds – and that the incumbent administration is largely populated with captains of rent-seeking industries. Read more →
Venezuela is bankrupt, having just defaulted on three interest payments. And much of the world is pointing fingers at the socialist policies of Hugo Chavez and those of his successor, the incumbent Nicolás Maduro. This laying of the blame is not wrong but it is incomplete.
The kindest thing you could say about Mr. Chavez is that he was a talented demagogue who brilliantly identified his opportunity and judiciously seized his moment. But, as previously argued by Fred McMahon of the Fraser Institute, Chavez did not start Venezuela’s downward spiral. He was instead one of the final acts in the country’s decades-long devolution from laissez-faire capitalism to cronyism and finally to socialism. Cronies undermined Venezuela’s economy for decades and opened the door to Chavez’s socialism. Read more →
The Wharton Africa Business Forum took place in Philadelphia on November 3-5, 2017. Present were the Finance Minister of Nigeria, the CEO of Ethiopian Airlines and other business leaders (notably from lead sponsors McKinsey & Company and the Boston Consulting Group) and educators. The event was attended by hundreds of participants including Wharton faculty, students and alumni, African investors and entrepreneurs, members of the African diaspora and many others who have an interest in Africa.
These are our notes from the event. They are not intended to be comprehensive.
“Let us share without fear the journey of migrants and refugees.” Pope Francis (@Pontifex) tweet on 27 September 2017.
While some people in the United States are sweating the presence, against the backdrop of a demographically stagnant white population, of the 11 million undocumented immigrants or of the 30+ million other foreign-born residents, there are far bigger numbers brewing in other parts of the world, numbers that are so large that they could affect, decades from now, the life of an American citizen far more than would the rare determined Mexican or Guatemalan who manages henceforth to scale President Trump’s purportedly impenetrable border wall.
In the next decades as was so often the case in history, the future shape of the world could once again be decided in Europe and by Europe’s and the West’s handling of Africa’s incipient demographic boom.
In fact, if you are a generous-minded European who shares the Pope’s noble sentiment and who views the ongoing wave of migrants coming into your country as a benign and positive development; or, if you believe that borders are outdated constructs and that all refugees and other immigrants should be welcomed into the rich world; indeed, if it is your view that anyone who stands in the way of this openness is misguided by racist and nefarious motives, then it behooves you to test the strength of your belief by examining the larger demographic data coming out of Africa and Asia. Read more →
To slow mass migration, stop the illicit capital flight from poor to rich countries.
An asset manager called ____ Capital recently sent out this email seeking referrals:
The US Investor visa program allows one to invest $500,000 U.S. in a government licensed fund for a period of about five years and in around 18 months, a conditional green card is attained for the investor and their immediate family. The investor and their family can live, work and study anywhere in the United States and there are no educational, age or English language requirements.
Most experts report that on September 30th the investment amount will increase from $500k to $1.3m, a significant jump that will price out many potential investors.
There is still time to file before September 30th if you start your process with ____ Capital now.
Others can comment on the practice of selling green cards (and ultimately US citizenships) to wealthy foreigners while millions of other applicants, some of whom would be greater contributors to the United States, continue to wait in line for years. Our concern is one step removed and has to do with the legality of this money. Read more →
When the Soviet Union collapsed 26 years ago, it was generally agreed that the West had won the Cold War. This was affirmed by the prosperity and possibilities awaiting citizens of Western countries, as opposed to the political and economic stagnation experienced by those in Communist states. A natural conclusion, much repeated at the time, was that capitalism had finally defeated communism.
This sweeping statement was only partially true. If one took capitalism and communism as the only two protagonists in the post–World War II struggle, it was easy to see that the latter had suffered a mortal blow. But there was a third, stealthier protagonist situated between them. This was a system best identified today as cronyism. For if capitalism did win over the other two contenders in 1991, its victory was short-lived. And in the years that have followed, it is cronyism that has captured an ever-increasing share of economic activity. A survey of the distribution of power and money around the world makes it clear: cronyism, not capitalism, has ultimately prevailed. Continue reading at Foreign Affairs >>>