Crisis, what crisis? The US needs Nato as much as ever

Quitting Europe would see Washington deliver to Beijing its most important strategic ambition

Philip Stephens

web_NATO meeting
© Ingram Pinn/Financial Times


No pictures, please. It is not often that a British prime minister plays hide-and-seek with a US president. Custom demands they doff their caps in deference to the prized “special relationship”. Boris Johnson, though, faces an election. He knows his American soulmate Donald Trump, in Britain for the Nato summit, is unloved by voters. Mr Trump was uncharacteristically forgiving as his host darted to and fro to avoid the cameras.

This tableau was, in its way, a metaphor for this week’s grand Nato gathering. Marking its 70th anniversary, the 29-nation alliance might have worked on a vision for the future. The founding plan — to keep the Americans in, the Soviets out and the Germans down — could do with updating.

Instead, the event was scripted as an exercise in diplomatic damage limitation. Atlanticism is said to be in crisis, caught between a capricious US and miserly Europeans. And a public spat between Mr Trump and French President Emmanuel Macron dispelled the notion of an alliance advancing as one.

It is hard keeping up with Mr Trump. He used to excoriate Nato as an expensive irrelevance and an unfair burden foisted on American taxpayers. Now he has decided it “serves a great purpose”. Europeans have upped their defence spending and Mr Trump wants the credit. By contrast, Mr Macron now describes the alliance as “brain-dead”, and wants fellow Europeans to find another way to defend themselves.

It does not help that what bills itself as a club of liberal democracies includes Turkey’s autocratic president Recep Tayyip Erdogan. Mr Erdogan, who has been cuddling up to Russia’s Vladimir Putin, refuses to recognise that membership carries responsibilities. He is testing a new Russian-supplied anti-aircraft system.

By waging war on the Kurds of northern Syria — the west’s allies against Islamist terrorists — he has also handed a victory to the Syrian regime and blunted the fight against the remnants of Isis. Mr Macron is right in claiming Mr Erdogan has forfeited his place at the table. That said, Turkey sits on Nato’s eastern flank. It is prudent to keep Mr Erdogan within the tent.

After listening this week to the rambling fantasies and non-sequiturs that comprise Mr Trump’s worldview, it seems reasonable to say things may well look even worse if he wins a second term in 2020. I am still struggling with the logic that says US interests would be well served by a policy of sanctions on its European allies alongside a tripartite trade deal with Russia and China. To be fair, the president did apply a caveat: it may not happen.

And yet. Amid the cacophony, and some real differences, no one should think that the game is up for Nato. Sure, it is an alliance designed for the cold war. If it did not exist, it is doubtful anyone would now invent it. But why, at a moment of geopolitical upheaval that has left western democracies challenged by a risen China and a revisionist Russia, would anyone — even Mr Trump — seek to dismantle their collective defence?

Europe does need to build up its own capabilities. It has made a small start in Africa but will need to take on a lot more responsibility for the security, and prosperity, of its near neighbours. But realism is also required. The continent has a long way to go before it can properly defend itself against, say, an expansionist regime in Moscow.

The French president is correct to say that it makes sense for the west to engage with Russia, as it did during the cold war. The many nuclear arms agreements concluded during the communist era should serve as model for a relationship that identifies areas of mutual interest. We must presume that Mr Macron, however, is not talking about redividing Europe into western and Russian spheres of influence. Those days have passed. Dialogue with Mr Putin will be useful only if the west starts from a position of strength.

The future of Nato, of course, ultimately depends on America’s commitment. And here, often overlooked, lies the assurance that the organisation has a secure future. The argument about Washington’s disproportionately large military commitment has been going on for so long that many have come to see it as an act of altruism. In truth, America has paid for Nato because it has served US national interests. It still does.

A lazy view of those national interests says the focus has changed with the rise of China. The challenge to US primacy from Beijing means the Pacific now counts for more than the Atlantic. Russian revisionism is no longer a direct threat to the US.

This analysis rests on the fundamental misjudgment that competition between America and China will be confined to the Pacific. Beijing’s most important push is westwards. The Belt and Road Initiative is calculated to sideline Russia, pull Europe closer to Asia and establish China as the pre-eminent power in the world’s richest, most populous region — Eurasia. Quitting Europe would see the US deliver to Beijing its most important strategic ambition.

Pulling back across the Atlantic would do more than deprive the US of the allies and the bases needed to defend its global interests. Rather, it would redefine the US as a hemispheric power, a regional rather than global player. Many Americans, I know, have tired of the global policeman role. I have not heard many suggest a retreat into isolationism.

Until then, Nato is safe.

Persecution of the Uighurs

The West Must Respond to Chinese Oppression

A Commentary By Bernhard Zand

Chinese troops in Kashgar


There are many disturbing aspects to modern-day China, but its treatment of the Uighurs is the most despicable.

The West must come up with a response to the inhuman persecution.

Working as a reporter in the Xinjiang region of China is an experience both exhilarating and depressing. From the vast expanse of the Taklamakan Desert to the majestic peaks of the Pamir range, the panoramas are overwhelming, the landscapes straight out of a painting. Fully two hours are needed to fly across China's largest province from east to west. On the ground, it can take days.

But few are interested in talking -- neither the man sitting next to you on the airplane nor the family sharing your compartment on the high-speed train. After a while, you grow hesitant about addressing anyone at all. Every encounter could have consequences: unpleasant ones for the reporter, but potentially dreadful ones for his counterpart.

Living in Xinjiang, after all, is dangerous. Those who talk to the wrong people or take the risk of speaking with foreigners, those who read the wrong books, visit the wrong websites or express the wrong thoughts: They all risk being interrogated or locked up that same night. Hundreds of thousands of people, and likely more than a million, have suffered that fate. Beijing has set up a surveillance state in the homeland of the Muslim Uighurs of a kind that the world has never seen before.

People across the globe have been broadly aware of the situation for years. But in the last few weeks, the New York Times and an international collective of investigative journalists have published details that had remained secret until now. They provide an in-depth look at how the camp system was conceived and how the state put it into practice.

The documents include procedures for answering the questions of children whose parents are locked away in a camp. They include an instruction manual for running hundreds of penal and re-education camps, which Beijing euphemistically refers to as "vocational training centers."

It makes it clear that it is of utmost importance to "prevent escapes," and states that inmates must be strictly monitored "while they are at class, dining, using the toilet, washing, receiving medical care or meeting with family."

Of all the disturbing aspects of the Chinese regime, it is what it is doing in Xinjiang that is the most disturbing. It reveals the true nature of the Chinese Communist Party (CCP) and may shape modern China's global image more lastingly than any event since the brutal crushing of the Tiananmen Square protests in 1989. It remains doubtful whether Beijing understands the intensity of the shock that the recent reports have triggered around the world.

The problem now facing the West is that of coming up with an adequate response to these hundreds of thousands of violations of basic human rights. Of breaking the silence about the fate of the Uighurs, a silence that is still there despite the recent revelations. Of determining what can actually be done for Muslims in China beyond empty statements of solidarity, given the tight political and economic relations the United States and Europe have with Beijing.

A Conflict over Values

The West finds itself involved in a number of conflicts with the burgeoning global power, from the U.S. trade war to the pro-democracy movement in Hong Kong, from Beijing's industrial policies to its influence along the New Silk Road, from the bickering over telecommunications company Huawei to the territorial disputes in the South China Sea.

Some of these clashes are the inevitable consequence of an emerging China stepping on the toes of an insecure West that is worried that its days of supremacy may be fading. On most issues, there are interests and arguments on both side, but compromise is fundamentally possible.

Xinjiang is different. There are, to be sure, interests at stake here as well: the Chinese population's legitimate need for security along with the equally legitimate concerns of the many countries to which thousands of oppressed Uighurs have fled. But at its core, the Xinjiang conflict is one over values.

The degree of discrimination combined with the severity with which Beijing is persecuting its Muslim minority, represents a violation of fundamental values that are not up for negotiation.

Rather, they are anchored in the Universal Declaration of Human Rights, which China also signed when it joined the United Nations -- and which Beijing isn't shy about invoking when it feels the rights of Chinese citizens have been violated abroad.

This conflict of values has been exacerbated by the technological aspect. In Xinjiang, China is relying on digital tools for mass surveillance to an unprecedented degree. DNA-profiling, compulsory installation of spying apps, algorithm-driven facial recognition, identifying citizens based on ethnic characteristics: Beijing is essentially using all of the technical tools at its disposal to keep the Uighurs under tight control.

Even many Chinese harbor fears that these technological tools could soon be used elsewhere in China and even beyond the country's borders. These concerns are justified. The scale of digital surveillance being used in Xinjiang is nothing short of a civilizational rupture. For the first time, it has become conceivable that an authoritarian regime will succeed in robbing an entire population of its culture and religion using digital means.

An Aside

How should the West react to something like that?

The first step must be that of ascribing the diplomatic and political weight to the Xinjiang issue that it demands. Thus far, only the U.S. government has done so sufficiently. European heads of government, by contrast, have "addressed" the persecution of the Uighurs during their recent visits to China, but only as a side note and among other issues.

Second, European countries must insist more forcefully than they have thus far that Western diplomats be guaranteed unimpeded access to Xinjiang. It is important that they get a firsthand look at a situation that only very few journalists have thus far laid eyes on.

Furthermore, such visits to the region by European diplomats are necessary to shine the spotlight on oppression. In contrast to the protest movement in Hong Kong, whose representatives have traveled the world to drum up attention for their demands, and in contrast to Tibet, whose plight is never completely ignored because of the presence of the Dalai Lama, the Uighurs have few prominent supporters abroad.

Third, the West must significantly increase both the political and economic cost for Beijing should it continue its human rights violations in Xinjiang. That could include import restrictions for companies that benefit from the tech-powered surveillance regime in Xinjiang, including firms like Dahua, Hikvision and Iflytek. Should the conflict escalate, the West could also consider targeted export bans.

Some of this may sound dated and somewhat futile given China's current economic strength. And one shouldn't have any illusions about how much influence the West has on Chinese domestic policy. It's not much. But for Beijing, the use of severe -- or even extreme -- measures in foreign policy is a matter of course.

Norway learned as much in 2011 after regime critic Liu Xiaobo received that year's Nobel Peace Prize. South Korea likewise bore the brunt in 2017 after the deployment of a U.S. missile defense system in the country, and Canada was penalized by Beijing in 2018 after arresting the chief financial officer of Huawei, including the arrest of two Canadian citizens who are still behind bars to this day.

To be sure, China wouldn't be alone in bearing the costs for a more robust Xinjiang policy. Western companies would suffer as well. And Germany, because of its reliance on exports, is particularly exposed. But together with its European and American allies, Berlin does have significant influence. And because of its own history, Germany has a greater responsibility than any other country to flex its muscles.

Unacceptable

Earlier this year, the European Commission released a report in which it referred to China as a "systemic rival." That is particularly true when it comes to Xinjiang. Still, the West must resist the temptation to conflate the human-rights violations in Xinjiang with other ongoing China conflicts and turn it into an all-encompassing confrontation between two worldviews. That would neither be a fruitful approach to the Xinjiang question, nor would it contribute to finding solutions to the other disputes.

On the contrary, it would constitute a relapse into a world divided along an ideological fault line. With humanity currently facing an array of problems that cannot be solved without China -- nuclear proliferation, climate change, the fight against poverty and the consequences of globalization, to name a few -- that is something we can ill afford.

What is taking place in Xinjiang is unacceptable. Even as a million Uighurs have been separated from their children for indoctrination in camps, hundreds of millions of people further to the east in this vast country are living the "Chinese dream," working hard, ensuring a good education for their children, amassing consumer goods and traveling the world.

But sometimes, even in faraway Beijing, the reality of the surveillance state in western China makes an appearance. A few weeks after I had returned to the capital after my last trip to Xinjiang and written about the oppressive realities in the region for DER SPIEGEL, I was called in by the Foreign Ministry.

An official there lectured me about the "irresponsibility" of my coverage and about my ignorance of the true conditions in Xinjiang. "You sit in your air-conditioned office," he said, "and don't have a clue what is going on there."

When I reminded him that I had just spent a week in the region, he pulled out a slip of paper and said: "Yes, and you pressured a taxi driver into talking about his family, among other things." He knew the exact place, date and time: the morning of July 7 in the oasis city of Kashgar.

It was true. On that day, a driver in Kashgar had taken me to the airport. And we chatted along the way, about our children.

 Government Debt Is Not a Free Lunch

With borrowing costs at multi-decade lows, governments seemingly can take on much more debt without any great concern about long-term consequences. But the real risks and costs of higher public borrowing may be hidden.

Kenneth Rogoff

rogoff188_aslan alphan_getty Images_debt


CAMBRIDGE – With interest rates on government debt at multi-decade lows, a number of leading economists have argued that almost every advanced economy can allow debt to drift up toward Japanese levels (over 150% of GDP even by the most conservative measure) without any great concern about long-term consequences. Advocates of much higher debt might be right, but they tend to downplay or ignore everything that can go wrong.

First and foremost, the new view of debt understates the risks to other claimants on public tax revenues – such as pensioners, who might be thought of as junior debt holders in the twenty-first-century welfare state. After all, most social-security systems are debt-like in the sense that the government takes money from you now, and promises to pay it back with interest when you are old. And for governments, this “junior” debt is massive relative to the “senior” market debt that sits atop it.

Indeed, governments in OECD countries are currently paying out an average of 8% of GDP in old-age pensions, and a staggering 16% in the case of Italy and Greece. Actuarially, future taxes earmarked for paying pensions swamp future taxes earmarked for paying debt by a significant multiple, although many governments have been trying to adjust pensions downward gradually, as Europe did during the financial crisis, and Mexico and Brazil have done under duress more recently. Unfortunately, slow growth and aging populations mean much remains to be done.

Thus, even if it seems that governments can take on much more debt without having to pay significantly higher market interest, the real risks and costs may be hidden. Economists Alan Auerbach and Laurence Kotlikoff made a similar point in an influential series of papers back in the 1990s.

Second, and perhaps even more critically, the current complacency regarding much higher debt implicitly assumes that the next crisis will look just like the last one in 2008, when interest rates on government debt collapsed. But history suggests that this is a dangerous assumption.

For example, the next wave of crises could easily stem from a sudden realization that climate change is accelerating much faster than previously thought, requiring governments simultaneously to stall the capitalist engine and spend vast sums on preventive measures and remediation, not to mention dealing with climate refugees. And the next global conflagration could be a cyber war, with unknown ramifications for growth and interest rates.

Moreover, aggressive experimentation with much higher debt might cause a corresponding shift in market sentiment – an example of the Nobel laureate economist Robert Lucas’s critique that big shifts in policy can backfire owing to big shifts in expectations. And, frankly, any realistic assessment of current global economic risks must acknowledge that the world’s most important economy is in state of political paralysis, with impulsive decision-making leaving it ill-equipped to deal with an outside-the-box crisis should one arise.

The bottom line is that there is no guarantee that interest rates will fall in the next global crisis.

None of the preceding arguments undermine the strong case for investing now in high-return infrastructure projects (including in education) that more than pay for themselves in the long run. As long as governments adhere to sound debt-management criteria, balancing risk and cost when choosing maturities, today’s ultra-low interest rates offer great opportunities.

But the broader claim that issuing government debt has become a veritable free lunch, similar to government profits from currency issuance, has been dangerously overblown. If the aim of government policy is to reduce inequality, the only sustainable long-term solution involves raising taxes on high earners; debt is not a magic shortcut for giving to the poor without taking from the rich.

True, in many advanced economies, current real (inflation-adjusted) interest rates on government debt are below the real rate of economic growth. Presumably, therefore, governments can take on much more debt without ever having to raise taxes. After all, as long as income is growing faster than the stock of public debt, simple arithmetic shows that the ratio of debt to GDP (income) will fall over time.

Yet, things are not quite so simple. Interest rates are ultra-low in part because global investors are starved of “safe” assets that will still pay out in the event of a sharp downturn or economic catastrophe. But can governments in fact provide that insurance for free if there is a risk that interest rates will rise in the next major systemic crisis?

A recent International Monetary Fund study of 55 countries over the last 200 years showed that although economic growth exceeded interest rates on government debt almost half the time, this was not a good predictor of whether the surveyed countries were safe from interest-rate spikes in a crisis.

Last but not least, how sure can investors be that they will come first in line in the next crisis, as they did in 2008? Will the United States government again put Wall Street before Main Street and honor debts to China ahead of obligations to pensioners?

Modern economies have many important uses for debt. But it is never a risk-free option for governments, which is why it should be taken on and managed wisely, even when rock-bottom borrowing costs prevail.


Kenneth Rogoff, Professor of Economics and Public Policy at Harvard University and recipient of the 2011 Deutsche Bank Prize in Financial Economics, was the chief economist of the International Monetary Fund from 2001 to 2003. He is co-author of This Time is Different: Eight Centuries of Financial Folly and author of The Curse of Cash.

Here’s What’s Happening in the American Teenage Bedroom

Rowan Winch is 15. He’s a businessman.

By Taylor Lorenz


Credit...Eva O'Leary for The New York Times


For years, Rowan Winch was nothing if not online. Each day his alarm went off at 6 a.m. and he would roll over in his twin bed, grab his iPhone and start looking for memes — viral images and videos — to share on Instagram. He’d repost a handful to his suite of popular accounts before getting into the shower. Afterward, he would keep searching, and posting, until it was time to board the bus for school.

On the way to his high school in suburban Pennsylvania, Rowan would curl up in a seat, mining the internet for content. The point was not always quality but quantity. Between classes, at lunch, during study hall, he would keep his social media empire running with new images and videos. (His school has a relatively relaxed cellphone policy.) Rowan’s target, at the time, was 100 posts a day. (By comparison, The New York Times publishes around 250 pieces of original journalism each day, though some of those posts take longer to make.)

When he got home, Rowan would turn on his laptop and sit in front of the glowing screen for hours, or flop onto his bed, his phone hovering above his face. His Instagram feed flashed before him like a slot machine. His most popular account, @Zuccccccccccc, taking its name from Facebook’s chief executive, had 1.2 million followers.

If his posts were good, his account would keep growing. If he took some time off, growth would stall. Rowan, like most teenagers on the internet, wasn’t after fame or money, though he made a decent amount — at one point $10,000 a month and more, he said. What Rowan wanted was clout.

On the internet, clout is a social currency that can be used to obtain just about anything. Rack up enough while you’re young, and doors everywhere begin to open.

College recruiters notice you. Job opportunities and internships come your way. Your social status among peers rises, money flows in. Even fame becomes a possibility, if that’s what you’re after.

“I want to have enough clout to be recognized for who I am, but I don’t ever want to see myself like a famous person,” Rowan said one day in his bedroom. “I just want to be able to have connections everywhere and be financially secure and monetize what I like doing.”



Credit...Eva O'Leary for The New York Times


Rowan’s economy was a primarily teenage one. Mostly he sold ads on his Instagram to other teenagers looking to promote their own pages, apps or online storefronts. He negotiated deals through direct messages on Instagram and posted about 10 ads per day — some in the form of comments, links and images — on his various accounts.

The profits supported his lifestyle; he bought Saint Laurent sneakers, an iPhone XR, a Gucci wallet. He planned to purchase a Tesla next year, when he’s eligible to get his driver’s license.

Rowan’s meme account was not his first business. Like many teenagers, Rowan had begun leveraging the internet early for financial and social gain. In middle school he’d order stickers in bulk on Amazon, then sell them at a markup to his classmates by promoting them on Snapchat.

By the time he reached high school, Rowan had entered the apparel resale market. He would purchase designer clothes and accessories from brands like Supreme on websites like Letgo, OfferUp and Craigslist, then resell them on Grailed, an app for consigning luxury items.

Rowan also experimented with dropshipping. This entails setting up an online storefront that ships products from third-party retailers to customers, profiting on the difference. Before he monetized his meme account, Rowan also sold shout-out videos on Fiverr. His followers could pay a small fee to receive a video of Rowan delivering a personalized message.

All of these are popular ways for teenagers to make money on the internet. Rowan, however, was unusually successful.

As his meme accounts grew in popularity, so did his status. Rowan became a popular figure in online communities. He founded his own Discord server with more than 33,600 members, nearly all of them between the ages of 14 and 18. (Discord is a social network and chat interface that is popular with gamers, YouTube stars and internet celebrities who use it to connect with their audiences.) Some high-profile artists and influencers followed Rowan on Instagram, and they struck up friendships. Ski Mask the Slump God, a SoundCloud rapper, invited Rowan backstage at a show.

Rowan met his girlfriend on Instagram, too.

“My meme account has definitely made me more independent,” Rowan said. “It’s made me more mature in a sense, because I get a lot of crap from people daily. I developed a thick skin from that. I’ve learned what’s appropriate for something, what’s a little too far. I’ve learned what people like and don’t like.

I’ve learned to put other people’s interests kind of ahead of mine. It’s more responsibility as well. If I don’t post for a day, people will start asking questions and I’ll start feeling bad. I could have gained a lot of followers that day. I could have gotten money that day.”

On July 26, 2019, Rowan’s world turned upside down. He was lying in bed around 11 p.m., refreshing Instagram, when he got a notification: @Zuccccccccccc had been disabled.

He figured it had happened by mistake. His page had been wrongly penalized before; he’d regained access through appeals to the company.

That wasn’t the case this time, and he wasn’t alone: Instagram had shut down dozens of popular meme pages without warning or reasoning. (According to an Instagram spokesperson, Rowan’s account was removed for violating policies.)

Three months later, the aftershocks were still palpable.

“A lot of my friends think I’ve become depressed, and I think that’s right,” Rowan said. “I’ve been feeling insecure about a lot of things, like how I look and act and talk. I talk a lot less than I used to. I’m a lot less confident. Losing my account is the main reason I feel like this. With @Zuccccccccccc, it felt like I had a purpose and was doing something that benefited a lot of people, and now I kind of just feel — I feel lost.”

“He’s not in a healthy state, in my opinion,” said his mother, Naomi Winch, who once became so frustrated with his phone use she threw his phone out a car window. His parents have tried to get him to engage with life offline.

They’ve urged him to get an hourly job at the hot dog shop by their house, just for social connection. “Any extracurricular activity, sports or a physical job, not selling something on the internet,” Ms. Winch said.

But he loves the internet. He created a Discord server called The Fallen with over 200 other teenagers whose meme accounts were also deactivated, mostly in two major waves over the last 12 months. He started a podcast.

He still posts to his personal Instagram account, with 60,000 followers, and two other meme pages with 120,000 followers and 197,000 followers. But losing @Zuccccccccccc was like suddenly getting fired from a big job. Rowan’s identity was so intertwined with the page, he’s still trying to figure out who he is without it.

Lately, he’s been thinking he might become a YouTuber. He is inspired by creators like CallMeCarson and PewDiePie, whose specialty is commentary. He has posted four 20-minute videos to his own channel so far. But programming for YouTube is a lot different than Instagram. “My main issue is coming up with ideas of what to talk about,” he said. So far, he’s tackled Instagram and mental health; both videos received positive responses.

What he most misses about @Zuccccccccccc is the feeling of helping others on a daily basis. His mother said that when she would try to restrict Rowan’s phone use, his followers would send DMs protesting her parenting decisions.

“I got all these messages from kids saying, ‘You can’t let him not be online, he’s the reason I didn’t kill myself last week, he gives me the ability to laugh every day,’” Ms. Winch said. “I thought, ‘Oh my God, this is a lot of responsibility, it’s a little scary.’ But I was glad he was able to connect to kids.”

His followers haven’t abandoned him. He wants to be there for them, too. Because at the end of the day, his work isn’t about jokes, or money, or fame, or even clout. It’s about connecting.

“It’s made me understand people much more,” Rowan said of his meme account. “It’s made me a lot more exposed to what’s going on in the world.”

In the meantime, he’s focused on rebuilding his online influence. “With YouTube I want to get big enough so the people that inspired me are my friends. It was like that with my meme pages,” he said.

“The more followers you have, the more voice you have,” he said. “The more clout you have, the more power you have.”