Topic: Foreign Policy and National Security

The Biggest Economic Nonsense Since the Great Depression

An otherwise interesting Washington Post front-pager on “What Went Wrong” claims the current situation “has erupted into the biggest economic crisis since the Great Depression.”  On the contrary, that honor surely goes to 1980-82, with 1973-75 as a close runner-up.

This may indeed be the biggest postwar financial crisis, but that is a very different thing.

The biggest postwar financial crisis so far was the S&L collapse of the late 1980s, when nearly 3000 financial institutions were closed.  But the impact  of the S&L debacle on the real economy was minor at best (the economy grew by 2.9% a year during that “crisis”).  The stock market crash of 1987 inspired many hysterical predictions but no recession at all.

An economic crisis implies a deep and prolonged drop in real output and employment, not just another routine recession.  To describe current conditions as a worse economic crisis than 1980-82 is fanciful nonsense.

Missile Defense and the Banks

Many argue that the demand for public goods justifies government spending and taxing.  Defense spending is a classic public good. The New Times offers an interesting case study of how the federal government actually spends money on defense.

The story recounts the activities of Michael Cantrell, a Defense Department employee who turned into a lobbyist for various projects connected to the missile defense program. According to the story, Cantrell “extracted nearly $350 million for projects the Pentagon did not want, wasting taxpayer money on what would become dead-end ventures.”

Cantrell is awaiting sentencing on corruption charges related to taking kickbacks for defense contractors. But his violations of the law did not start until 2000. Much of the $350 million wasted on defense projects happened before he started taking a cut of the action.

Read the whole story. Here is my summary: Pentagon officials did not want the projects Cantrell pushed, but powerful members of Congress did support such outlays. DOD had missile ranges around the world, but Ted Stevens thought another one was needed in Alaska. Acoustics research might have been conducted many places, but Trent Lott preferred the work done by the University of Mississippi in Oxford and a Huntsville defense contractor that had a branch office in Oxford. And so on.

In other words, members were directing the DOD budget to benefit their constituents in exchange for votes on election day. “Vote for me and I will give you $1,000” is not limited to presidential elections.

Gordon Tullock once wrote of campaign finance:

It should of course be kept in mind that [campaign contributions] are not actually for the purpose of buying votes. The votes are bought by the bills passed by Congress, or the Legislature, which benefit voters. But the campaign money is used to inform the voters about what their congressman has done. Since the voters pay little attention, concentrating the message on a narrow scope and repeating it again and again is necessary even though it annoys intellectuals. On the whole it is the actual things done for the voters by the votes of their and other congressmen, which attract voters to elect those congressmen.

The Cantrell story confirms Tullock’s insight. The reporter mentions campaign finance contributions by defense contractors, but by and large, the story is one of constituent service (that is, the creation and maintenance of vote purchase schemes).

There are several interesting questions here. Can Congress actually provide public goods efficiently? Isn’t Cantrell’s story one of earmarking without the earmarks? If so, won’t the practice of earmarking continue even if Congress gets rid of earmarks? The story shows Congress in a poor light, but don’t we want the legislature to control its agents (like the Pentagon) instead of simply delegating authority to spend to them?

One final lesson. The Cantrell story shows what happens when Congress has money to spend on national defense. In coming days, the federal government may come into ownership of many banks. How do you think Congress will spend the capital of those banks?

The National Republican Trust PAC Is Wrong

I support the right of the National Republican Trust PAC to advocate any issue it wants in any way it wants. It shouldn’t even have to file reports with the government. It’s the job of the public to distinguish messages it should believe and messages it shouldn’t.

So let me help you with that now: An email being circulated by the National Republican Trust PAC is despicable and wrong.

“Obama’s Plan: Mohamed Atta Gets His Driver’s License,” it blares. [I’ve been able to find no online version to link to.] The email reads:

Did you know that Mohamed Atta, the 9/11 ring leader, had a valid Florida driver’s license?

Did you know 13 of the 19 hijackers had obtained valid driver’s licenses? Armed with these licenses, eight of the hijackers even registered to vote!

Here is the shocking fact: Obama strongly supports giving illegal aliens in America driver’s licenses.

He said as much during two Democratic debates earlier this year.

This is terror-pandering of the highest order. While it’s true that several 9/11 hijackers got driver’s licenses and other documents, this has the same relationship to the success of their attacks as the brand of shoes they wore. They could have used their Saudi passports to board flights that day, and the same people in the same circumstances could get on planes today. Even if the REAL ID Act were implemented and we all carried a national ID, terrorists would not be prevented from boarding U.S. flights.

Yet there is no reason to fear. Our protection against a subsequent 9/11-style attack is the direct security of hardened cockpit doors and the awareness and vigilance of airline crews and passengers.

If it’s true that Obama would allow illegal aliens to get driver’s licenses — by the way, it wouldn’t be his decision because driver’s licenses are issued by states — it wouldn’t affect our security against terrorism.

By all appearances, this message looks like it is designed as much to raise money for the National Republican Trust PAC as to discredit Obama. Certainly, it doesn’t bring credit to Senator John McCain. In fact, it hurts him. To folks who don’t know campaign finance law, it looks like a desperate and venal grasp by McCain for an issue against Obama.

Hyping terror threats damages our country by provoking overreeactions that can be more damaging than direct attacks themselves. This message from the National Republican Trust PAC is offensive.

More Eavesdropping

Brian Ross of ABC News is reporting allegations from two whistleblowers who say the federal government eavesdropped on hundreds of international phone calls between Americans. The surveillance continued even when there was no indication of espionage or terrorism.

Question for the White House: Is this another disgraceful news report? After all, it reminds the terrorists that the NSA listens in on calls.

Questions for CIA director Michael Hayden and NSA director Lt. General Keith Alexander: When you say the ‘law’ is always followed, would you remind us as to what, exactly, constitutes illegal eavesdropping? And how many government officials and employees have been disciplined, discharged, or prosecuted for illegal surveillance over the past 10 years?

Question for Congress: What does Sen. Jay Rockefeller (D-WV) mean when he says an oversight hearing may be necessary? How many whistleblowers have to come forward to warrant a hearing?

For more, read Glenn Greenwald. For related Cato scholarship, go here.  

McCain and the Military Budget

John McCain likes to hold himself out as a fiscal conservative, and compared to Barack Obama there is no comparison. McCain expresses concern over the mountains of debt that George Bush and his willing accomplices in Congress have left for future generations, and has put forward modest plans for reversing these ominous trends. For example, the Republican pledges to freeze some government spending – with the notable exclusion of the military budget, veterans benefits, and entitlements – and perhaps to eliminate certain federal agencies, although in last night’s debate he didn’t stipulate which ones. Obama will not commit to similar steps to halt the runaway train of federal spending, and his tax increases are unlikely to generate nearly enough revenue to offset his proposed spending increases, and may well make the fiscal imbalance worse by stifling entrepreneurship and job creation.

But McCain’s specific proposals don’t add up to considerable savings. For example, last night he cited his opposition to the Boeing tanker deal, which he claimed saved taxpayers $6.8 billion (back in June, McCain put the figure at $6.2 billion). He has mentioned his opposition to earmarks, which total $18 billion. In the previous debate, he suggested that eliminating cost-plus contracts would save money in the Pentagon, but he didn’t venture a guess as to how much. Such modest proposals invited Obama counterattacks: the Democrat noted that the costs from the Iraq War, which McCain has pledged to continue until we achieve “victory,” would erase McCain’s vaunted earmark savings in less than two months.

Beyond sparring over Iraq War costs, however, the two candidates have not been pressed to justify their plans for military spending.

Personnel costs constitute roughly one third of the total defense budget, and are likely to grow in 2009 regardless of who wins next month’s election. Both McCain and Obama support President Bush’s decision to increase the size of our ground forces by 92,000 men and women over a five-year period. It is curious that Obama, a man who wears his opposition to the war in Iraq like a badge of honor, would support such increases. If Obama gets his wish, and removes most U.S. military personnel from Iraq over a 16-month period, he will presumably have more than enough troops to surge some into Afghanistan, while still reducing the burdens on our men and women in uniform, and their families. So, why the need for still more troops? Where else would a President Obama send them? Darfur? Congo? Burma? Georgia? He hasn’t said.

But leaving that aside, the scheduled increases are not nearly enough for John McCain. Writing in Foreign Affairs late last year, McCain pledged, “As president, I will increase the size of the U.S. Army and the Marine Corps from the currently planned level of roughly 750,000 troops to 900,000 troops.” If McCain gets his wish, these two branches will be nearly 40 percent larger than they were prior to 9/11.

And how much will these additional troops cost? By my estimates, nearly 10 times what McCain would save if he eliminated every single earmark.

In April 2007, the Congressional Budget Office estimated that Bush’s plan to grow the force would cost an additional $108 billion through 2013. Backing out those figures – $108 billion / 92,000 – equates to $1,173,913 per additional man or woman in uniform. Applying that same number to McCain’s additional 150,000 troops comes to $176 billion.

Don’t take my admittedly crude, back-of-the-envelope estimate as gospel. According to earlier Army estimates, every additional 10,000 soldiers cost about $1.2 billion a year, so the costs of McCain’s proposal to grow the force by another 20 percent might ultimately total less than $176 billion. But if CBO pegged the earlier Bush increases at $108 billion over six years, then it seems logical to conclude that McCain’s additional 150,000 will cost still more than that.

And McCain is proposing to increase that portion of the military budget that has already witnessed considerable cost growth in recent years. The military has boosted bonuses to entice new recruits to join, and to keep those already in the service from leaving. Health care costs have also risen for the military, just as they have in the private sector. If anything, the CBO’s projections likely understate the true costs of the additional troops, because they consider only the incremental expenses associated with adding 92,000 new personnel to the system, but do not fully account for the long-term costs of keeping these troops paid, fed and equipped over the course of their military careers. Then there are the additional expenses associated with caring for more military retirees.

In two successive debates, moderators Jim Lehrer and Tom Brokaw have tried to pin the candidates down on what they would do to control spending, and both times the candidates have evaded the question. CBS’s Bob Schieffer gets his shot next week in the third and final debate. Rather than an open ended “What would you cut?” question, he might ask them how much their different plans for increasing the size of the military will cost the taxpayers.

The Slow, Attritional Death of My Molar Enamel

Every public policy scholar has particular arguments in his or her field that seem so empty, or so obviously wrong, that seeing them causes the scholar to grind his or her molars down to the nub.  Seeing my friend Spencer Ackerman’s article on the Army’s new Stability Operations Field Manual gets at one of my policy pet peeves.  (My boss Chris Preble has more on the topic below.)

First, as an aside, Lt. Gen. William Caldwell claims that we need a stability ops manual because the United States exists in an “era of uncertainty and persistent conflict.”  What uncertainty, exactly?  What period in the past century would Caldwell argue has been characterized by “certainty”?  And how is “persistent conflict” measured?  More sharply, from the Army’s vantage point, hasn’t United States national security policy itself over the past 25 years amplified uncertainty and created conflict?

John Nagl, a retired Army lieutenant colonel and now a scholar at the centrist Center for a New American Security also supports the shift toward emphasizing stability operations, arguing, as have dozens before him, that

The greatest threats we face, arguably, will no longer be from states that are too strong, but from states that are too weak.

In one sense, it is (I mean this sincerely) gracious of Nagl to allow that there is a chance that the greatest threats we face might not emerge from weak states.  It is such an article of faith among Beltway security analysts that weak states are the biggest threat that it demonstrates a broad-mindedness on Nagl’s part to consider that they may not be.

But Nagl’s statement on its face, it’s just occurred to me, doesn’t hold any particular analytic value, let alone policy implications.  We would need to know something about the nature of the second-greatest threat(s) we face in order to make any relative claims about the importance of the greatest threats.  If, on the one hand, the second-greatest threat we face is a combined nuclear first-strike from China and Russia, then it’s crystal clear that we ought to really emphasize stability ops.  If, on the other hand, the second-greatest threat we face comes from the Animal Liberation Front, saying that something is the “greatest threat we face” doesn’t tell us too terribly much.

Washington Needs Its Own Tribal Awakening

Over the past month, U.S. forces have struck possible terrorist targets in the vast unpoliced region of western Pakistan known as the Federally Administered Tribal Areas, or FATA. Many of the attacks have been conducted with missiles fired from unmanned planes, and at least one with Special Forces ground troops. These strikes followed a string of operations the Pakistani military launched in August under increased U.S. pressure – attacks in FATA’s Bajaur Agency killed almost 70 militants, wounded 60 others, and displaced 200,000 refugees.

While its true that unilateral missile strikes and commando raids can successfully extinguish high-value targets, the collateral damage unleashed by such attacks may only be adding more fuel to violent religious extremism in this nuclear-armed Muslim-majority country.

FATA has long remained a mystery to the outside world. The region’s deep ravines and isolated valleys – much of which can support only foot traffic or pack animals – is inhabited by fiercely independent Pashtun tribes who adhere to the pre-Islamic tribal code of Pashtunwali. Social values include hospitality (melmastiya), loyalty (wafa), and honor (nang). But one other closely held tribal precept is badal, the Pashto word for taking revenge.

During a visit last month to the frontier region, I spoke with local tribesmen from the South Waziristan Agency. They noted that the collateral damage unleashed by U.S. and Pakistani missile strikes has ripple effects throughout tribal society, provoking a backlash that has inflamed local tribes and triggered collective armed action throughout the region.

U.S. policymakers point to the successful killing of top Al Qaeda militants, such as Abu Laith al-Libi last January and chemical weapons expert Abu Khabab al-Masri in July, as effectively vindicating the military approach. But the fallout from U.S. missile strikes proves strategically problematic for three reasons.

First, missile strikes undermine the authority of sitting Pakistani leaders and further strain already shaky U.S.-Pakistan relations. The August 19th resignation of Pervez Musharraf shows how Washington’s embrace can prove a political liability for “war on terror” allies. It’s also one reason why Pakistan’s new president, Asif Ali Zardari, is reviled by many Pakistanis—among other things—for his pro-American stance, while opposition leader Nawaz Sharif, has seen his popularity soar.

Second, military strikes encourage insurgents to lash out against the government of Pakistan, further eroding U.S. standing in the region. Militants routinely attack law enforcement officials, military outposts and political leaders. Suicide bombers were virtually unheard-of in Pakistan before 9/11, but now strike with increasing frequency and in large urban centers, such as Peshawar, Karachi and Islamabad. I spoke with over a dozen Pakistani government officials in Karachi, Lahore and Islamabad, and it is clear they take the insurgent threat seriously. And despite Washington’s repeated accusations of Islamabad’s duplicity in aiding terrorists, the Pakistani army has lost over a thousand soldiers in direct confrontation with insurgents. Further inflaming internal tensions, the South Waziri tribesmen I spoke to perceive that Pakistani action in the tribal areas are being conducted at the behest of Washington. Any plan to contain the spreading insurgency must originate with the civilian leadership in Islamabad.

The final, and most important, reason to be circumspect about escalating military force in the tribal areas is that it will almost certainly fail. The clans of Pashtun tribes straddling the Afghan-Pakistan border have endured thousands of years of foreign invasion. Time and again, Persian, Greek, Turk, Mughal, British and Soviet invaders have learned these peoples to be virtually unconquerable.

It’s clear that the insurgency cannot be eliminated militarily. But Islamabad’s recent course of cutting peace deals with militants has proved equally ineffective. The deals reduced the Pakistani army’s presence in some of the tribal areas, but such moves merely allowed radicals to make further territorial gains.

A better strategy would be to employ low-level “clear and hold” operations, in which small numbers of U.S. Special Forces and Pakistan’s Special Services Group (SSG) perform limited ground and air operations in and around FATA. Although such a limited presence is less than ideal for a region as expansive FATA, an area equivalent in size to Vermont, a heavier combat presence risks provoking a more hostile response. A limited presence with highly trained forces would be better positioned to root out militant safe havens and deny insurgents a base from which to attack U.S.-led NATO operations in neighboring Afghanistan.

Predator-drone attacks and major military campaigns ignore the history, character and ethos of the tribal regions. The struggle for Pakistan’s border is best waged through as light a military footprint as possible. Blunt force is an antidote that will prove worse than the disease.