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Tax free


I read Peter Beinart’s TRB on Billy Tauzin with great interest because I too have been following his political career (“Accounting,” February 11). I remember a piece on ABC about overseas tax havens and a particular seminar that was offered to anyone interested in evading U.S. tax laws. To my surprise, Tauzin was one of those speaking at the seminar on how to evade taxes. Beinart’s call for Tauzin’s resignation was right on track. Here is a U.S. representative teaching the wealthy how to evade taxes. If everyone took advantage of this overseas haven, who would pay his salary? This issue deserves much more attention.

Troutville, Virginia

Romantic side


By eliding over critical issues, Yossi Klein Halevi’s Jerusalem Dispatch “September’s Children” serves the function of legitimizing an unacceptable aspect of the Indian political landscape (February 11). Halevi alludes in passing to a thread of anti-Muslim bias that runs through segments of Indian polity. What is surprising is a glaring omission by Halevi of the nature and character of the Bharatiya Janata Party (BJP), the ruling Hindu nationalist party. The prime minister of India, his home minister, and almost every BJP member of his cabinet—as well as large numbers of the BJP membership nationwide—are also members of the RSS (National Association of Volunteers), whose ideology is grounded in the writings of the late M.S. Golwalkar (aka “Guruji” Golwalkar). Here is a sample of his “We, or Our Nationhood Defined,” a core text of the RSS: “From this standpoint, sanctioned by the experience of shrewd old nations, the non-Hindu peoples in Hindusthan must either adopt the Hindu culture and language, must learn to respect and hold in reverence the Hindu religion, must entertain no idea but the glorification of the Hindu race and culture.... [I]n one word, they must cease to be foreigners or may stay in the country wholly subordinated to the Hindu nation claiming nothing, deserving no privileges, far less any preferential treatment, not even citizen’s rights.”
And what of Bal Thackeray of the Shiv Sena party in Bombay, a prominent and influential ally of the BJP? From a Time magazine article of September 11, 1995: “Thackeray has stated that he admires Hitler, hinting in interviews that if Muslims didn’t ‘behave,’ they would meet the same fate as Europe’s Jews. When asked in a recent TV program called ‘Ru-Ba-Ru’ (‘Face to Face’) whether he wanted to be the Hitler of Bombay, Thackeray retorted, ‘Do not underestimate me. I am [the Hitler] of whole of Maharashtra and want to be of whole of India’.”

New York, New York


I appreciate the optimism in Yossi Klein Halevi’s Jerusalem Dispatch on Indian-Israeli relations, but I’m wary of some of his assumptions. I’m one of those Americans who traveled in India in the early 1970s, writing a book about Mahatma Gandhi, and I just returned from there after three weeks of traveling with my daughter, who has lived in India for the last six months. It’s true: Israelis are everywhere in India, but I’m not sure the romance is quite what Halevi projects. They have a bit of an “ugly American” reputation among some Indians, given their drug use and high-handedness. Part of the attraction may simply be due to India’s being inexpensive, and Israelis don’t have a lot of places they can go and feel welcome.

Also—I say this with sadness and realize it stirs a hornet’s nest—both peoples have very powerful communal allegiances that in many ways supercede their democratic forms of government. The business opportunities brought about by improved relations, however, are very real and much more likely to grow as time goes by. The current “antiterrorist alliance” opens the door.

New York, New York

Top dollar


I detect a basic misunderstanding about the international role of the U.S. dollar in John B. Judis’s article “Purchasing Power” (February 11). Judis believes that the “United States can run huge current-account deficits (about $400 billion in 2000) without being subject to the fiscal discipline that other nations must endure” because of the position of the U.S. dollar as the international reserve currency. Alas, that is nonsense. The United States can run large current-account deficits because foreigners are willing to pour money into the United States in order to buy stocks, bonds, real estate, bank deposits, factories, Hollywood studios, golf courses in Hawaii, etc. The reserve currency status of the U.S. dollar has nothing directly to do with these capital inflows. Central banks do engage in what are called “official reserve transactions” in order to make sure that the U.S. current-account deficit is offset by a commensurate net capital inflow. But the proportion of the current-account deficit financed by official reserve transactions is quite small.

Conversely, countries like Thailand must pay attention to the size of their current-account deficits because, unlike the United States, they cannot count on a steady supply of foreign capital willing to invest in their economies enough to offset their current-account deficits. It is not, contrary to Judis’s argument, because the Thai baht doesn’t have international reserve status. Therefore, it is simply false that the United States “would suddenly feel pressure to rein in its foreign debts for fear of suffering a loss in the dollar’s value” if the U.S. dollar lost its international reserve currency status. The United States would only feel such pressure if foreigners were no longer willing to invest in the United States and buy U.S. assets like real estate, stocks, or bonds. The reality is that the United States gains very little benefit from the position of the dollar as the main international reserve currency. There have been estimates of this by economists, and the size of the benefits in several cases has been quite small.

Riverside, Connecticut


Did I overstate the point? Having the dollar as a reserve currency and as the main currency for international transactions encourages the purchase of dollars and dollar assets (Treasury bills) that cushions the United States from some downward pressure on its currency and upward pressure on its interest rates that other countries experience. But it doesn’t exempt the United States, as became clear in the late 1960s and late 1970s—and will become clear again if foreign purchasers lose interest in buying both our products and our real assets.

All talk


In “The Old Way,” Noam Scheiber advises Democrats to demagogue the Medicare issue in order to roll back the Bush tax cut (February 11). He admits that this is dishonest and that the real debate is about the size of government but that Republicans have made it impossible to have the debate honestly because they have a strategy to “force deficits through huge tax cuts.” Even if this were a Republican strategy (it isn’t), why does it call for dishonesty?

As a conservative, I am in general in favor of more limited government and lower taxes. I have good and sufficient reasons for this position, and I feel no need to be dishonest in arguing in support of it. Scheiber favors larger government and higher taxes. One assumes he has good and sufficient reasons. Why does he feel he must be dishonest, cut “intellectual corners,” and resort to demagoguery to promote his position? I guess his ideas won’t sell any other way.

Saratoga, Wyoming

Applied path


In response to Siddhartha Mukherjee’s article “Fighting Chance,” I would like to address the following point (January 21). AIDS could have become treatable any time after 1984-1985, since all of the biologic knowledge required for “triple therapy” was available at that time: HIV had been shown by French scientists, in 1984, to cause AIDS, and the presence in HIV of an aspartyl protease enzyme had been discovered by Japanese scientists in 1985. (That three anti-AIDS drugs would have to be given concurrently—because of the virus’s ability to mutate rapidly—was generally assumed, based on the prior experience of physicians in attacking leukemic cells or the bacteria that produce tuberculosis. But until the mid-1990s, there weren’t three drugs to give.) Neither the discovery of HIV nor the characterization of its enzymes reflected “curiosity-driven research,” as Mukherjee described. An international war was on to identify the agent that caused AIDS and to find a biochemical target for drugs that would inactivate that agent. Many laboratories competed to win that war.

So why didn’t AIDS become treatable in the mid-1980s? Because application of this biologic knowledge was retarded by politico-economic factors—i.e., the number of years it would probably take to have an effective drug approved by the Food and Drug Administration (FDA)—and the consequent costs of developing such a drug. These made it unlikely that such drugs would generate profits for the companies that produced them. But in the 1990s the FDA changed its regulatory policies regarding approving drugs for AIDS; very soon thereafter the first protease inhibitors appeared, and “triple therapy” became the therapeutic norm.

Now our nation faces grave dangers from other untreatable infections—like Ebola Fever—which might be used as weapons of mass destruction. Finding ways to treat such infections will doubtless be accelerated if scientists motivated solely by their own curiosity make discoveries about the causative agents, much as Professor John Collier did for the anthrax toxin. But we can’t assume that such individual decisions about what’s interesting to study will alone yield drugs for preventing or treating these infections. We must also mount “Manhattan Projects” with the specific goals of discovering such drugs and of removing political and economic hurdles to their development.

Cecil H. Green Distinguished Professor of Neurosciences, Massachusetts Institute of Technology; Director, General Clinical Research Center, Harvard-MIT Division of Health Sciences and Technology

These letters originally ran in the March 25, 2002 issue of the magazine.