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Sen. Johnny Isakson — Republican

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Sgt. James P. Hunter / U.S. Army

U.S. Senator Johnny Isakson from Georgia talks with U.S. soldiers in a Ghazaliyah market.

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On talking with veterans and their families
I have established relationships with the parents of sons who were lost in Iraq, and have tried to provide the comfort that I can to them and the thanks that I can to them for the sacrifice of their sons. I have done everything I could to see to it that wherever benefits to our National Guard were inappropriate given the fact that they are on the front line now, was rectified, and in large cases, we've done that. We need to make sure that whenever we have differences over what we should be doing, we never should ever have a difference over the full support of our troops deployed in harm's way, and I've always fought for that.

On the Walter Reed VA hospital
The building that brought about the controversy over Walter Reed — Building 19 — was disappointing in terms of its condition, but it was inappropriately depicted as characteristic of the treatment our soldiers were getting. I go to Walter Reed anytime there's a wounded Georgia soldier there — and I have been there many times. Rather than me giving you an opinion, I'll just quote one of my constituents whose son was injured severely. I went to visit [that soldier] at Walter Reed, and gave him my card and said to him: "Give me your parent's number, I want to call them to let them know that if there's anything you need while you're at Walter Reed that I can help you with, I'll be glad to do." And I called his parents that night — and this was back when that news was breaking — and the father said, "Well, one thing, for sure, you can do: I know there's been a lot of controversy going on, but I've been here for 10 days with my son, and he's getting the best care that anyone could possibly get."

On upcoming votes regarding the war's funding
I think the success our troops have had was born out of the debates we had [recently] on Iraq, which were decisive and exemplary of the mood we now have in Congress, which is basically very positive about the success we've had.

On his first visit to Baghdad
My first visit I flew in on a C-130, was put in a Blackhawk helicopter and flown in at low altitudes — evasive procedure — into the Green Zone. By 5 o'clock, they had us on helicopters, flying us out; we couldn't stay overnight. We never left the protection of the Green Zone. It was a substantially dangerous and hostile environment. The last time I went, which was in January, I landed in a C-130, drove in a Chevy suburban to the Green Zone, spent the night. The next day, I walked a neighborhood — now I had a bullet-proof vest and a helmet on — but walked through that village, met with 18 shop owners who had re-opened their shops based on grants from the United States provincial reconstruction teams and met with refugees who had come back from Jordan after being gone for two years. So the difference between the first visit, which was intimidating and hostile, and the last visit, which was hopeful, are remarkable. And the evidence of what Gen. Petraeus and the troops have done is evident to everybody that goes there. There is no dispute — Republican or Democrat — as to progress that has been made.

On the refugee crisis
Of course the number of Iraqis — we don't know how much — but a significant number of Iraqis fled. The estimates are as many as 2 million* (some say its nearly double that) into Jordan. I think there's about 700,000 in Jordan. In fact, I met yesterday with King Abdullah on the refugee issue. He was in the capital visiting with the Foreign Relations Committee, and he acknowledged that they still had 700,000 but there was some movement back, and they were trying to do everything they could to encourage that movement back. The fact that there is movement back is a ratification of the success of the surge, and the relative peace and stability that's come — still relative, still dangerous, but not nearly the hostility that was there.

On public support of the war
I talk to Georgia voters all the time and, quite frankly, Georgia has a significant military investment. We have 13 bases in the state. Most of the ground forces in Iraq go either through Ft. Benning, Georgia, or Ft. Stewart, Georgia. Georgians are very supportive of our men and women in harm's way. There are differences of opinion on the war, but in general, the public is supportive and, in general, I find [them] hopeful now because of the relative progress that has been made in the surge. But war is a tiring process on the soul, and anytime America has been deployed it causes concern on our people. I think everybody wants us to be successful, and they want it to be over. They want both.

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Friday, March 9, 2012

International Poverty: Progress and a Puzzle

Shaohua Chen and Martin Ravallion at the World Bank have prepared a "briefing note" with good news: global poverty rates are dropping.  They write: "That means that 1.29 billion people in 2008 lived below $1.25 a day, as compared to 1.94 billion in 1981. 2.47 billion people in 2008 consumed less than $2 a day, as compared to 2.59 billion in 1981."

The idea of measuring poverty as $1.25 per day or $2 per day may shock some Americans. After all, In contrast, in the United States the poverty threshold in 2011 for a three-person family, single parent with two children, was $18,123, which works out to about $16.50 per person per day. But as the report explains: "$1.25 is the average of the national poverty lines found in the poorest 10-20 countries.
Using this line, poverty in the world as a whole is being judged by what “poverty” mean
in the world’s poorest countries. Naturally, better off countries tend to have higher poverty lines than this frugal standard. $2 a day is the median poverty line for all developing countries."

The reduction in poverty rates reaches across all regions of the developing world. Not surprisingly, much of the most rapid reduction of poverty has come from China. As the figure shows, it used to be that if you included China with the rest of the developed world, it raised the overall poverty rate. But now, if you include China with the rest of the developed world, it reduces the overall poverty rate. Nonetheless, 173 million people in China remain below the $1.25 poverty line. As the World Bank describes it:

"Looking back to the early 1980s, East Asia was the region with the highest incidence of poverty in the world, with 77% living below $1.25 a day in 1981. By 2008 this had fallen to 14%. In China alone, 662 million fewer people living in poverty by the $1.25 standard, though progress in China has been uneven over time. In 2008, 13% (173 million people) of China’s population still lived below $1.25 a day. In the developing world outside China, the $1.25 poverty rate has fallen from 41% to 25% over 1981-2008, though not enough to bring down the total number of poor, which was around 1.1 billion in both 1981 and 2008, although rising in the 1980s and ‘90s, then falling since 1999 ..."

The reduction in poverty rates is clearly good news, but the pattern of reduction in poverty rates across countries poses a puzzle that Martin Ravallion raises in "Why Don’t We See Poverty Convergence?" in the February 2012 issue of the American Economic Review. The article isn't freely available on-line, although many academics will have access through their libraries. He sets up the discussion of the puzzle this way"

"Two prominent stylized facts about economic development are that there is an advantage of backwardness, such that in a comparison of two otherwise similar countries the one with the lower initial mean income will tend to see the higher rate of economic growth, and that there is an advantage of growth, whereby a higher mean income tends to come with a lower incidence of absolute poverty. Past empirical support for both stylized facts has almost invariably assumed that the dynamic processes for growth and poverty reduction do not depend directly on the initial level of poverty. Under that assumption, the two stylized facts imply that we should see poverty convergence: countries starting out with a high incidence of absolute poverty should enjoy a higher subsequent growth rate in mean consumption and (hence) a higher proportionate rate of poverty reduction. That poses a puzzle. The data on poverty measures over time for 90 developing countries assembled for this article reveal little or no sign of poverty convergence."

Here is Ravallion's figure to illustrate the point. The horizontal axis has poverty rates for 90 countries, mostly from the 1980s and 1990s as data became available. The vertical axis shows the decline in poverty rates from the start of the data up to 2005. Notice that the best-fit line doesn't show that countries which started from higher levels of poverty have larger reductions in poverty: if anything, the relationship goes a bit the other way.

Ravallion puts it this way (citation omitted): "The overall poverty rate of the developing world has been falling since at least 1980, but the proportionate rate of decline has been no higher in its poorest countries." This finding suggests that while poverty rates are diminishing over time, there is no particular reason based on past patterns to expect that the poverty rates will fall more quickly where poverty is greatest. Ravallion offers the clear implication: There do often seem to be "advantages of backwardness," which relatively poorer countries can take advantage of global knowledge and market to reach a faster growth rate, but there is apparently also a drag of high poverty rates, in which the existence of a high poverty rate makes it harder for a country to reduce its poverty rate further. These factors tend to offset each other, and as a result, the poorer countries don't in fact reduce their poverty rates faster.

Why might the existence of high poverty rates make it harder to grow? Perhaps high poverty rates reflect the lack of a middle class, which in turn makes it harder for an economy to grow. Perhaps high poverty rates reflect a poorly-educated workforce, which means that investment in the country is unprofitable, which slows growth. Perhaps high poverty rates lead to poor health, which reduces the prospects for growth. Ravallion investigates whether factors schooling, life expectancy, and the price
of investment goods might provide a link from high initial poverty to the lack of reductions in poverty, but doesn't find statistical connections.  Understanding why the poorest countries have no greater success in reducing their poverty rates remains a good research topic.

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Wednesday, March 6, 2013

Next Stage for China's Economy

When you look at China's annual rates of economic growth, no major problem is apparent. Here's a figure showing annual growth rates for China since 1980, generated using the World Development Indicators from the World Bank. Sure, there's a little dip back in the 1989-1990, and the growth rate has slowed a bit since the go-go days of 2006 and 2007 just before the Great Recession hit. But take a look just under the surface, and it becomes clear that the main engine of China's economic growth needs to change.

For two recent papers discussing the "rebalancing" that China's economy needs, I recommend "A Blueprint for Rebalancing the Chinese Economy," by Nicholas Lardy and Nicholas Borst, written as Policy Brief PB 13-02 for the Peterson Institute for International Economics, and "What's Next for China?" by Jonathan Woetzel, Xiujun Lillian Li, and William Cheng from McKinsey. For example, Lardy and Borst start this way:

"For the past several years China’s top leadership has repeatedly described the country’s current economic model as “uncoordinated, unsteady, imbalanced, and unsustainable.” This language is in sharp contrast to what has been a decade of apparent success: high-speed economic growth and emergence into the ranks of middle-income countries. What accounts for this discontinuity between rhetoric and record? Chinese policymakers have correctly assessed that the country’s economic growth over the past decade has been based on superelevated levels of investment and systematic suppression of private consumption. Th e resulting capital-intensive growth model has not generated adequate gains in consumption and employment and instead has built up significant distortions
in the economy."
The way I sometimes think about these issues, in looking at data on China's economy, is that something clearly happened around 2001. For example, here's a figure from Lardy and Borst showing patterns of household consumption and investment over time. Starting around 2001, consumption starts a fall of about 10 percentage points of GDP, and the investment rate--which had already been sky-high at about 35% of GDP, rises about 10 percentage points of GDP.

Remember, the years after 2001 are a time when economic growth rates were high and rising in China--but consumption as a share of GDP was falling. Similarly, wages as a share of GDP take a downturn after about 2001.

The trade statistics also show changes happening around 2001. Through the 1980s and 1990s, China ran trade surpluses some years and trade deficits other years, and overall was fairly close to an equal balance between exports and imports. But around 2001, China's trade surplus starts climbing to about 10% of GDP in 2006, 2007, and 2008.. The main driver is a surge in China's exports, which were around 10-15% of GDP in the 1980s and 15-20% of GDP in the 1990s, but have been more like 30% of GDP and higher from 2003-2011. Here are a couple of figures using the World Bank data to illustrate these points.

So what happened around 2001 that caused exports to take off? One factor was that China entered the World Trade Organization that year. In theory, this reduced barriers for both imports and exports, but China's exporters found it far easier to charge into the rest of the world than the rest of the world found it to charge into China. Another factor, emphasized by Lardy and Borst, is that back in 2001 China's central bank was keeping the exchange rate of its currency pegged to the U.S. dollar. Thus, when the U.S. dollar began to depreciate in value in 2001, China's currency also depreciated against all trading partners other than the United States--thus providing an additional spur to exports.

In most economies, when businesses start selling a lot more, then households end up making more money, too. Either the higher sales get passed along in the form of wages to workers, bonuses to managers, interest payments to bondholders, or dividend payments to shareholders. But China's financial sector remains underdeveloped, and when firms found themselves sitting on much higher profits and revenues, their easiest course of action (and one encouraged by the government) was to plow those funds back into investment, rather than in one way or another having them end up as household income for consumption purposes.

Everyone from outside economists to the Chinese government seems to agree that "rebalancing" China's economy toward greater consumption is needed, and a variety of policies are available to help make this happen. For example, Lardy and Borst emphasize several steps: 1) letting China's exchange rate continue to fall, which will exert pressure to reduce China's exports and increase imports; 2) allowing interest rates to rise, which will reduce the incentive of firms to borrow and invest and put more income in the pockets of savers; 3) removing the controls that keep energy prices artificially low, which effectively provide a subsidy to heavy manufacturing, rather than domestically-oriented service industries; 4) a rise in government spending on health and education services, especially those targeted at the poor.

Woetzel, Li, and Cheng from McKinsey take a slightly different emphasis, and focus on what kinds of policies might help to raise household incomes, thus rebalancing consumption in that way. Thus, they emphasize another set of policies: 1) government policy-makers should scale back on their efforts to hold down wages; 2) deregulation of the financial sector could help household savers get more money and small and medium firms have greater access to capital; and 3) China should encourage entry of new firms in many industries. In some ways, these suggestions can be seen as a way of trying to build the connections from the business sector back to the household sector, so that when companies make money, the gains turn into higher household income rather than an even-higher surge of investment.

The hardest time to reform can sometimes be when things seem to be going reasonably well. (For example, consider the list of economic reforms that the U.S. economy did not implement in the years leading up to the Great Recession.) China's economic growth rate remains high. Its trade imbalance has come down a bit in the last few years. But China's leadership has shown an intriguing streak of pragmatism and flexibility in its economic policies over the last few decades, and the time has come for one more change of pace for the world's second-largest economy.


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Help! My Child is Afraid to Go to Sleep at Night

My Child is afraid to go to sleep at night. What can I do to help him?

MOLLY: We received this question from a parent whose 3-year-old son became frightened during a recent thunderstorm. He asked the parent if he would stay with him in his room, but the parent, not wanting to start that habit instead told the child to be a big boy and try to sleep. Now the child is afraid to go to sleep at night, and the parent doesn’t know what to do. What do you think she can do?

MOM: Well, I would handle it somewhat differently. While I understand that she was trying to appeal to the more “grown up” side of the child, actually I think in this instance it wasn’t helpful. I think it would have been more helpful to lie down with the child for a few minutes and reassure him.  That way he gets to feel comforted. At three, he’s scared of the violence of the storm. As an adult, just to hold his hand and lie down with him for a few moments will help him recalibrate internally and settle his anxiety down. Then he knows that somebody is there for him; there’s somebody between him and the storm, so to speak. This is a big part of giving reassurance to a child.

MOLLY: That he knows that you’re there for him?

MOM: Right, and that he’s protected. That he doesn’t have to face this violent storm alone –I’ll use that as a metaphor, too.

MOLLY: From not doing that, not giving him reassurance in the storm, what do you think happened? Why is the child now having trouble sleeping even when there is not a thunderstorm?

MOM: I think it caused him some anxiety which is translating into scared to sleep at night. This is obviously a change of behavior for the child and the fearful incident has become generalized to other situations.

MOLLY: What can the Mom do now? How can she fix it?

MOM: Once she recognizes that that might not have been the best way to handle it, she can address it directly with the child. If she doesn’t address it with him, the anxiety can take on a life of its own and can become a very long term problem that, after a while, no one remembers where it came from. In therapy, we talk about this type of anxiety as developing a life of its own, and then it becomes much more difficult to address.

For this mom, she might say something during the daytime and not necessarily at night. She want’s to engage him when he’s fully functioning emotionally and not tired or hungry or about to go to bed.

She might say, “You know, I’ve been thinking about what happened the other night. Do you remember what happened during that terrible storm that we had? It was raining really loudly and there was a lot of thunder and lightening. You asked me to lie down with you and I said, oh be a big boy, you can manage this. Do you remember that? You know, I’ve thought about it and that wasn’t very nice of me not to stay with you for a bit while you were scared.”

Then she can say, “I’m really sorry that I didn’t stay with you during the thunderstorm, but the next time something scary happens, you let me know and I promise I’ll be there for you.”

It’s not that hard to do, and the child then feels understood.

MOLLY: And that will solve the problem?

MOM: Usually, but the kid will most likely test her out. Something will come up soon, it’s almost guaranteed. He’ll want to know that Mom’s response is for real.

MOLLY: She’ll have to make sure she follows through.

MOM: Yes, as a parent you have to make sure you do something if you say you will. If you don’t do it after saying that you will do it, there will be problems.

MOLLY: Then he might have trouble trusting you? It’s hard to go back to a place of trust at that point.

MOM: The development of trust is so important, but you can go back. You can go back and “clean it up” so to speak.

MOLLY: So as a parent, you might make these mistakes, but you can go back and change things in your relationship with your child?

MOM: Right. The closer to the time of the actual event, the better. The rule of thumb is: if you can respond to the child’s need, then that allows him to move on from there. An unresolved need can result in a child getting stuck in that stage of development.

Comment below if you’ve had success using other strategies to help your child deal with their fears at bedtime. Or Contact Us if you have a parenting question you’d like to see addressed.

ding 3 comments on “Help! My Child is Afraid to Go to Sleep at Night

  1. We’ve had similar issues with storms, shadows, etc, and have always let the kids crawl into bed with us. At first I was worried about developing bad habits but as it turned out, they just wanted comfort in those moments and didn’t turn it into a nightly event. As a parent, you learn to weed out the times when they are actually in need vs. times when they just don’t want to go to bed. We always try to err on the side of caution but a child’s tummy can only hurt so many nights in a row before you realize they just want to watch hockey with Daddy ;D

  2. I giggled out loud when I read about your comment about “wanting to watch hockey with Daddy”. We’ve had that same dilemma…what’s real and what’s “I’m hungry” so I can avoid going to bed. I guess once it starts becoming a habit than you have your answer and have to do figure out what to do about it!

  3. It was nice to read such a sharing and contributing conversation between a mother and child, and not merely good advice for parents but great example of how parents and children can relate as they grow older. Thanks!
    I have one comment to add, and that is our young children are “reading” our parental concerns and non-concerns all the time. Just being with a child who is afraid, and letting them experience you as you are experiencing a thunder storm (or a stranger, a new environment, etc.) gives them a way to tell whether something is safe or not and how to relate to it. Talking about a thunderstorm as “scary” probably is not as valuable as being physically close and talking together about having been scared or being scared during a thunderstorm. I think it’s good for our children to “see” how to deal with things when they are afraid, and they can learn empowering ways to do that from us at many levels. No teaching required, just honest sharing and comforting.

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