Will Putin"s Gamble Backfire?

WASHINGTON — It’s a stunning comparison that, in some ways, explains everything about the crisis in Ukraine. Back in 1990, average per-person incomes in Poland and Ukraine were roughly equal, about $ 8,000 in each country. By 2012, they no longer were, reports economist Anders Aslund of the Peterson Institute.

Poland’s per-capita income had jumped to about $ 18,000; Ukraine’s had dropped to $ 6,000.

These figures make it easy to understand why so many Ukrainians want closer ties with Europe — and why Vladimir Putin feels threatened. It’s not just geography and history. The hope is that adopting Europe’s more open economic and political system will promote faster economic growth and more freedom. If this happens, Russia might suffer by comparison. Poland is again instructive. In 1990, its per-capita income was a third less than Russia’s; by 2012, it was one-fifth greater.

Putin’s successful campaign to persuade deposed President Viktor Yanukovych to reject a sweeping trade agreement with the European Union — which seemed a done deal — involves far more than trade. For Putin, it’s an act of political self-preservation. The point is to keep Ukraine weak and thereby prevent it from embarrassing Russia. But, ironically, Putin’s aggressive response may ultimately backfire.

Although Russia may acquire Crimea, Putin may not be able to keep Ukraine in Moscow’s economic orbit. Just the opposite: The crisis may have accelerated efforts to reorient Ukraine westward. For starters, the European Union decided to go ahead and give Ukraine the trade concessions in the agreement trashed by Yanukovych.

The EU estimates the annual benefits for Ukraine at 500 million euros ($ 700 million). Meanwhile, the severity of the crisis is forcing Ukraine to address comprehensive reforms sooner rather than later.

The economy is dismal. It’s been in recession since mid-2012. Last year’s budget deficit was about 9 percent of the economy (gross domestic product), and “we believe they may be hiding some losses in off-budget accounts and state enterprises,” says economist Ondrej Schneider of the Institute of International Finance, a think tank funded by banks and financial service firms. The current account deficit — a broad measure of trade — also reached roughly 9 percent of GDP last year. To pay for imports, Ukraine is draining its foreign exchange reserves of dollars and euros. They may be as low as $ 13 billion, says Schneider. That’s down from $ 38 billion in 2011 and equals only a few months of imports.

Ukraine desperately needs a loan to cover imports, including for Russian natural gas, and to make international debt payments. Putin initially pledged $ 15 billion, but now Russia probably won’t lend any more than it already has ($ 3 billion). Although the United States has pledged $ 1 billion and the European Union at least $ 15 billion, most of that money would require Ukraine to reach an agreement with the International Monetary Fund. The IMF would insist on policy changes before giving approval and contributing its funds to the pot.

One target would be lavish energy subsidies. In 2012, they reached 7.5 percent of GDP, reports the IMF.

These huge government subsidies bloat both the budget deficit and the current account deficit, because low prices “encourage one of the highest energy consumption levels in Europe,” as the IMF notes.

What really needs transforming is Ukraine’s economic culture. Corruption is said to be endemic, from getting a driver’s license to signing major business contracts. The Peterson Institute’s Aslund says that the “Yanukovych family” may have diverted as much as $ 10 billion for themselves. Ukraine also needs to modernize its economic base. It remains excessively dependent on communist-era heavy industry, particularly steel.

It’s a tall order that may not succeed. Many vested interests have a stake in the status quo. But the crisis that stalks Ukraine also creates pressures for fundamental change. There’s a short and long game here. Putin may win the first. It’s less clear that he’ll prevail in the second. 

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Will Putin"s Gamble Backfire?

Obama"s big voting rights gamble

The attorney general hinted last week that more lawsuits are on the way. | AP Photo

Whatever President Barack Obama says at the March on Washington ceremony on Wednesday, his administration has already sent a loud message of its own: ramping up its push on voting rights by way of a risky strategy — and pledging more tough moves to come.

The irony of the historical forces colliding at that moment won’t be lost on anyone. The nation’s first African American president, standing on the steps of the Lincoln Memorial where Martin Luther King Jr. stood 50 years earlier, will speak at a time when many African Americans and other minorities feel that the Voting Rights Act — one of the proudest accomplishments of the civil rights movement — is being dismantled.

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The backdrop for the big event is a surge in voter ID laws and other restrictive election measures, and the legal fight the Obama administration has picked with Texas to stop the wave. It’s suing to block the state’s voter ID law from taking effect, a clear signal to other states to think twice before they pass any more restrictions on voting rights.

The wave of voter laws comes as a centerpiece of the Voting Rights Act — the power to require advance federal approval for voting changes in nine states and jurisdictions in six other states — has been stripped out by the Supreme Court. The fear among civil rights groups and voting experts is that more could be on the way if voter ID laws in Texas and North Carolina are allowed to stand.

So the Obama administration is sending a clear message to other states in its lawsuit to block Texas from implementing its voter ID law: Don’t even think about it.

The problem is, even those who agree with the administration say there’s no guarantee that it can actually win a lawsuit with the Voting Rights Act tools it has left.

The president himself is clearly well aware of the historical moment. “Obviously we have made enormous strides … I’m a testament to it,” he said at a New York town hall on Friday.

Attorney General Eric Holder’s statements have been heavy with historical awareness, too. In filing the Texas lawsuit, Holder declared that the Department of Justice “will not allow the Supreme Court’s recent decision to be interpreted as open season for states to pursue measures that suppress voting rights.”

And at a March on Washington rally on Saturday, Holder vowed that “the struggle must and will go on in the cause of our nation’s quest for justice, until every eligible American has the chance to exercise his or her right to vote, unencumbered by discriminatory or unneeded procedures, rules or practices.”

The attorney general hinted last week that more lawsuits are on the way — and the smart money is that the next target will be the North Carolina voter ID law, which was enacted shortly after the Supreme Court decision and has been called the most restrictive state election law since the passage of the Voting Rights Act in 1965.

The catch, though, is that the Obama administration’s Texas lawsuit relies on a section of the Voting Rights Act that has never been used to challenge a voter ID law. Election law experts say that means the odds of success are uncertain at best — and most likely, stacked against the Obama administration.

“I think it will be a tough claim to win,” said Rick Hasen, a law professor at the University of California-Irvine and author of the Election Law Blog.

But civil rights groups say they’re glad the Obama administration is trying to challenge the Texas law and send a signal to other states. “It’s very important that they use that authority at this point in time” to show that the Voting Rights Act has other tools left, said Katherine Culliton-González, director of the voter protection program at the Advancement Project.

Either way, the fate of the Texas and North Carolina laws will determine whether other states move ahead with voter ID laws. “Texas and North Carolina are kind of test cases to see how things go,” said Hasen.

The Obama administration’s legal strategy in its Texas lawsuit in based on Section 2 of the Voting Rights Act, which bans voting laws or practices that results in discrimination against minority voters. It’s a substitute for Section 5, which required preclearance of voting changes in Texas and other states — and is now basically useless after the Supreme Court knocked out the formula that determined which states and municipalities need prior approval.

The Justice Department lawsuit argues that Hispanic and African American voters are less likely than white voters to have the kinds of IDs the law requires — which include everything from drivers’ licenses and passports to concealed handgun permits — and that the bill’s sponsors “made little to no effort to analyze the potential effect of photo ID requirements on minority voters.”

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Obama"s big voting rights gamble

Holder"s "mandatory minimums" gamble

If the Obama administration succeeds in its new drive to rein in mandatory minimum prison sentences, it will be a sign Democrats have carried out a kind of political exorcism — finally putting to rest any lingering anxiety over the “soft on crime” label that terrorized the party back in the 1980s and 90s.

There are signs the country may be ready to bury the trope that savaged Democratic presidential nominee Michael Dukakis in 1988, and which Bill Clinton managed to ride to power in the 1990s via an unflinchingly tough approach to criminal justice and the death penalty.

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Now street crime — and fear of it — is waning, bulging prison populations are a ripe target for budget hawks, and Republicans have largely substituted the soft-on-terrorism mantra for the garden-variety violent-crime version they used to bash Democrats a couple of decades ago.

However, there are reasons to doubt how committed President Barack Obama is to the issue. He did little on the subject during his first four years in office, and has sometimes seemed wary of the potential racial overtones of the first African-American president of being identified as an advocate for leniency toward the disproportionately black population in U.S. prisons.

As Attorney General Eric Holder outlined the sentencing reform plan in San Francisco Monday, he peppered this speech with references to Obama. He insisted that the president is fully on board with his plan to avoid charging some low-level drug dealers with offenses that lead to “draconian” prison sentences, and vowed to work with Congress on measures to give judges more discretion in sentencing.

(QUIZ: How well do you know Eric Holder?)

“These are issues the president and I have been talking about for as long as I’ve known him – issues he’s felt strongly about ever since his days as a community organizer on the South Side of Chicago,” the attorney general said. “The president and I agree that it’s time to take a pragmatic approach.”

Stalwart critics of mandatory minimums welcomed Holder’s speech, but said they’re not counting on the White House to do heavy lifting to make sentencing reform legislation a reality.

“In general, I think the message is very positive,” said Julie Stewart of Families Against Mandatory Minimums. “Do I think the president will support it? Yes, but I don’t think he’ll go out on a limb…I don’t think he’s probably going to work very hard on it.”

One supporter of mandatory minimums said Holder’s announcement that he’s instructing prosecutors not to file charges that carry minimum sentences against some low-level offenders largely encompasses a change in sentencing law made back in 1994 known as the “safety valve.”

(WATCH: Eric Holder’s remarks at American Bar Association)

“It’s less than meets the eye,” said William Otis, who spent 18 years as a federal prosecutor. “It’s not now and has never been the case that all low-level drug offenders are being swept up and charged with minimum mandatory sentences….It’s actually not going to change the on-the-ground reality very much at all.”

A Justice Department official insisted Holder’s move does go further than existing law, by allowing some of those with more than minimal criminal backgrounds to escape mandatory sentences and by not requiring defendants to come forward with full details on their actions.

Stewart said she thinks the action will have an impact, but more is needed. “I, of course….don’t think it goes far enough to address the underlying mandatory minimums writ large. Holder’s comments only address drug crimes and don’t take account of other people subjected to mandatory minimums,” such as those charged with having a gun or even ammunition in their possession.

Holder’s move amounts to a bet that criminal justice reform can divide budget hawks and tough-on-crime types in the Republican caucus, much as the GOP has split in recent months over cuts to the defense budget.

The attorney general noted Monday that many states have cut back on mandatory sentences in recent years, in part due to budget woes.

“Although incarceration has a significant role to play in our justice system, widespread incarceration at the federal, state, and local levels is both ineffective and unsustainable,” Holder said. “It imposes a significant economic burden — totaling $ 80 billion in 2010 alone — and it comes with human and moral costs that are impossible to calculate.”

New strategies, he said, have “attracted overwhelming, bipartisan support in ‘red states’ as well as ‘blue states.’ And it’s past time for others to take notice.”

Some in Congress certainly have — but there’s little sign that the issue has yet achieved the kind of consensus that it’s found at the state level. Powerful Democrats like Senate Judiciary Committee Chairman Patrick Leahy and Sen. Dick Durbin are in favor of major reforms, but so far the main support on the Republican side has come from Tea Party favorites like Sens. Rand Paul of Kentucky and Mike Lee of Utah.

Paul himself made clear Monday that his legislation faces an uphill battle in Congress.

POLITICO – TOP Stories

Holder"s "mandatory minimums" gamble

Holder"s "mandatory minimums" gamble

If the Obama administration succeeds in its new drive to rein in mandatory minimum prison sentences, it will be a sign Democrats have carried out a kind of political exorcism — finally putting to rest any lingering anxiety over the “soft on crime” label that terrorized the party back in the 1980s and 90s.

There are signs the country may be ready to bury the trope that savaged Democratic presidential nominee Michael Dukakis in 1988, and which Bill Clinton managed to ride to power in the 1990s via an unflinchingly tough approach to criminal justice and the death penalty.

Continue Reading

Now street crime — and fear of it — is waning, bulging prison populations are a ripe target for budget hawks, and Republicans have largely substituted the soft-on-terrorism mantra for the garden-variety violent-crime version they used to bash Democrats a couple of decades ago.

However, there are reasons to doubt how committed President Barack Obama is to the issue. He did little on the subject during his first four years in office, and has sometimes seemed wary of the potential racial overtones of the first African-American president of being identified as an advocate for leniency toward the disproportionately black population in U.S. prisons.

As Attorney General Eric Holder outlined the sentencing reform plan in San Francisco Monday, he peppered this speech with references to Obama. He insisted that the president is fully on board with his plan to avoid charging some low-level drug dealers with offenses that lead to “draconian” prison sentences, and vowed to work with Congress on measures to give judges more discretion in sentencing.

(QUIZ: How well do you know Eric Holder?)

“These are issues the president and I have been talking about for as long as I’ve known him – issues he’s felt strongly about ever since his days as a community organizer on the South Side of Chicago,” the attorney general said. “The president and I agree that it’s time to take a pragmatic approach.”

Stalwart critics of mandatory minimums welcomed Holder’s speech, but said they’re not counting on the White House to do heavy lifting to make sentencing reform legislation a reality.

“In general, I think the message is very positive,” said Julie Stewart of Families Against Mandatory Minimums. “Do I think the president will support it? Yes, but I don’t think he’ll go out on a limb…I don’t think he’s probably going to work very hard on it.”

One supporter of mandatory minimums said Holder’s announcement that he’s instructing prosecutors not to file charges that carry minimum sentences against some low-level offenders largely encompasses a change in sentencing law made back in 1994 known as the “safety valve.”

(WATCH: Eric Holder’s remarks at American Bar Association)

“It’s less than meets the eye,” said William Otis, who spent 18 years as a federal prosecutor. “It’s not now and has never been the case that all low-level drug offenders are being swept up and charged with minimum mandatory sentences….It’s actually not going to change the on-the-ground reality very much at all.”

A Justice Department official insisted Holder’s move does go further than existing law, by allowing some of those with more than minimal criminal backgrounds to escape mandatory sentences and by not requiring defendants to come forward with full details on their actions.

Stewart said she thinks the action will have an impact, but more is needed. “I, of course….don’t think it goes far enough to address the underlying mandatory minimums writ large. Holder’s comments only address drug crimes and don’t take account of other people subjected to mandatory minimums,” such as those charged with having a gun or even ammunition in their possession.

Holder’s move amounts to a bet that criminal justice reform can divide budget hawks and tough-on-crime types in the Republican caucus, much as the GOP has split in recent months over cuts to the defense budget.

The attorney general noted Monday that many states have cut back on mandatory sentences in recent years, in part due to budget woes.

“Although incarceration has a significant role to play in our justice system, widespread incarceration at the federal, state, and local levels is both ineffective and unsustainable,” Holder said. “It imposes a significant economic burden — totaling $ 80 billion in 2010 alone — and it comes with human and moral costs that are impossible to calculate.”

New strategies, he said, have “attracted overwhelming, bipartisan support in ‘red states’ as well as ‘blue states.’ And it’s past time for others to take notice.”

Some in Congress certainly have — but there’s little sign that the issue has yet achieved the kind of consensus that it’s found at the state level. Powerful Democrats like Senate Judiciary Committee Chairman Patrick Leahy and Sen. Dick Durbin are in favor of major reforms, but so far the main support on the Republican side has come from Tea Party favorites like Sens. Rand Paul of Kentucky and Mike Lee of Utah.

Paul himself made clear Monday that his legislation faces an uphill battle in Congress.

POLITICO – TOP Stories

Holder"s "mandatory minimums" gamble