The Costs of War

With 103 American fatalities, October was the fourth-bloodiest month since the beginning of the Iraq War. But the focus on the number of battle deaths may understate the true costs of the war for the American soldier. Due to innovations in battlefield medicine, we’re getting much better at saving soldiers’ lives. In WWII, 30 percent of those injured in combat died. In Vietnam–and even in the Gulf War–it was 24 percent. Now it’s around 10 percent. That is unquestionably a positive development. But it also means that many of those we save are horribly maimed. As this article from the New England Journal of Medicine describes:

One airman with devastating injuries from a mortar attack outside Balad on September 11, 2004, was on an operating table at Walter Reed just 36 hours later. In extremis from bilateral thigh injuries, abdominal wounds, shrapnel in the right hand, and facial injuries, he was taken from the field to the nearby 31st CSH in Balad. Bleeding was controlled, volume resuscitation begun, a guillotine amputation at the thigh performed. He underwent a laparotomy with diverting colostomy. His abdomen was left open, with a clear plastic bag as covering. He was then taken to Landstuhl by an Air Force Critical Care Transport team. When he arrived in Germany, Army surgeons determined that he would require more than 30 days’ recovery, if he made it at all. Therefore, although resuscitation was continued and a further washout performed, he was sent on to Walter Reed. There, after weeks in intensive care and multiple operations, he did survive. This is itself remarkable. Injuries like his were unsurvivable in previous wars. The cost, however, can be high. The airman lost one leg above the knee, the other in a hip disarticulation, his right hand, and part of his face. How he and others like him will be able to live and function remains an open question….

[F]or many new problems, the answers remain unclear. Early in the war, for example, Kevlar vests proved dramatically effective in preventing torso injuries. Surgeons, however, now find that IEDs are causing blast injuries that extend upward under the armor and inward through axillary vents. Blast injuries are also producing an unprecedented burden of what orthopedists term “mangled extremities” — limbs with severe soft-tissue, bone, and often vascular injuries. These can be devastating, potentially mortal injuries, and whether to amputate is one of the most difficult decisions in orthopedic surgery. Military surgeons have relied on civilian trauma criteria to guide their choices, but those criteria have not proved reliable in this war. Possibly because the limb injuries are more extreme or more often combined with injuries to other organs, attempts to salvage limbs following the criteria have frequently failed, with life-threatening blood loss, ischemia, and sepsis.

Even with all the efforts made to save limbs, “the amputation rate in Iraq is double that of previous wars,” as the LA Times reported earlier this year, in its three-part series on wounded American soldiers. 

That war is a bloody business is hardly a novel point.  And, of course, it is not by itself an argument against any particular war. If these men incurred similar injuries charging Al Qaeda positions at Tora Bora, that would have been terrible, but far easier to justify.  However, it is becoming increasingly hard to justify the costs of our open-ended commitment in Iraq, where our mission becomes ever murkier, and victory, however defined, continues to recede over the horizon.

America’s Subsidized (and Amazingly Wealthy) Farmers

In a speech in Indiana last week, U.S. Secretary of Agriculture Michael Johanns reminded his farm-sector audience that U.S. farmers have perhaps never had it so good:

“For the last three years in a row, farm net worth has grown by an amazing, if not eye-popping, $90 billion per year, and we expect the same to be true in 2006. Farm equity, ladies and gentlemen, well, it’s at a record high today: just an unbelievable $1.6 trillion. And we expect the debt-to-asset ratio, by the end of the year, to be the lowest in 45 years.”

So can somebody explain to me again why the federal government subsidizes and protects American farmers at a cost to American taxpayers and consumers of $40 billion a year?

Schumer’s Epiphany?

I had to do a double take of the by-line of an unabashedly pro-capitalism op-ed (subscription required) in today’s Wall Street Journal. Yes, indeed, that was Sen. Chuck Schumer (D-NY) who co-authored a piece with New York City mayor Michael Bloomberg on the need to rethink stifling regulation of America’s financial services industries, and to consider tort reform.

Lamenting the relative decline of NYC as the world’s financial capital, Schumer and Bloomberg identify stifling regulation and frivolous law suits in the United States as major factors contributing to London’s and Hong Kong’s relative ascent as premiere locations for initial public offerings in recent years. Among the facts they cite is that in 2005, only one out of the top 24 IPO’s was registered in the United States, while four were registered in London. Moreover, “next year more money will be raised through IPOs in Hong Kong than in either London or New York.”

Schumer and Bloomberg cite regulatory costs that are 15 times higher in the United States than in Britain, an adversarial relationship between “tough cop” regulators and business in the United States, and the surging costs of securities-related class action suits as key factors driving business away from New York’s financial houses. The auditing expenses associated with the requirements of Sarbanes-Oxley are deemed to have grown “beyond anything Congress had anticipated.”

These are indeed serious problems, but it’s hard not to laugh about the irony. Schumer’s never met a regulation he didn’t like. He’s never been a friend of business. Of course he voted for Sarbanes-Oxley, along with all of his colleagues in the Senate, but he also led the charge against Kelloggs, General Mills, and the other cereal companies in the 1990s, when the price of Lucky Charms became unacceptably high to him. Just last summer, Schumer urged federal regulators to examine the behavior of oil companies to make sure they weren’t holding back production. And Schumer has been quick to ascend the podium to decry America’s growing trade deficit, urging, at times, government intervention to “correct” that growing problem.

That Schumer is suddenly opposed to stifling regulation and is saying things that are sure to upset the trial lawyers is welcome news. But it is likely just a fleeting flirtation with enlightenment. Let’s see what happens when someone points out to the Senator that New York’s capacity to attract IPOs, and the foreign investment that follows, is more a cause of the U.S. trade deficit than any “unfair trade” practices he assails. Which cause will he champion then?

Can Bloomberg Manage America?

Richard Cohen speculates that New York City mayor Michael Bloomberg might spend as much as half a billion dollars of his personal wealth on a race for president. He could certainly afford to. His company may be worth as much as $25 billion, and it has recently been reported that he could realize $7 billion from a “leveraged recap” while retaining 70 percent of the company. And a top Republican fundraiser pointed out to me that if you don’t have any fundraising expenses, then half a billion is the functional equivalent of a billion-dollar campaign fund. If a lunatic billionaire could get 19 percent of the national vote by spending $70 million in 1992, how much better could a sane and stable billionaire with ten times that much money do?

Cohen writes that “there is no doubt that Bloomberg has done a terrific job managing New York, and there is no doubt that the federal government is a mismanaged mess.” True enough.

But if anyone thinks that a good manager can make the federal government run like a well-oiled machine, he’s going to be disappointed. In the first place, the federal government is far larger than Bloomberg LP or even the New York City government. It’s not amenable to hands-on management. And more importantly, government failure is systemic. It’s not a product of stupid or lackadaisical presidents or Cabinet secretaries. It results partly from inherent disagreements about what would be good policy; a corporation may have one goal or mission, but a society does not. And if government is supposed to reflect society, then it can only have a clear mission as long as that mission is to protect citizens from rights violations and leave them otherwise free to pursue happiness in their own ways. Once government begins taking on broader duties, citizens will disagree about what it should do.

And then there are the institutional obstacles to lean and effective government. As Milton Friedman told President Bush (pdf) in 2002, “if you spend someone else’s money on someone else, you are not very concerned about how much is spent, or how it is spent.” The problems of incentives, concentrated benefits and diffuse costs, the concentration of power, and bureaucratic self-interest cannot be solved by a hard-nosed manager who’s good at hiring, firing, and delegating.

Federalism Gone Awry

Many self-proclaimed fiscal conservatives in Congress defend pork-barrel spending by arguing that the practice circumvents the wasteful Washington bureaucracy and allows folks who best know the local community (i.e. congressmen) to steer money where it is most needed.

For instance, in a misguided appeal to federalism Representative Mike Simpson and Senator Larry Craig, both conservative Republicans from Idaho, assert, “We have always believed that better decisions are made by local officials. Who would you rather have making decisions about funding for Idaho? Lawmakers who are accountable to you, or some nameless, faceless bureaucrat in Washington, D.C., who has never stepped foot in Idaho?”

It’s a clever attempt by Simpson and Craig to redefine the term “local officials” and frame the earmarking issue in their favor. But an article in the Raleigh News & Observer tells a different story:

North Carolina’s members of Congress quietly took control of more than $135 million from the state Department of Transportation last year to help pay for dozens of highway projects they favored.

That means other projects deemed more important by state and local officials must be delayed.

The new projects dictated by Congress didn’t have enough support in North Carolina to be included among the 2,337 funded in the state’s 2006-2012 Transportation Improvement Program.

And the problem is worsening:

Within broad guidelines set by Congress, the states have traditionally decided how to spend their share of federal gasoline tax receipts. But that is changing.

The growth of earmarks in the transportation reauthorization bill, which Congress considers about every six years, has been remarkable. It raises questions about who knows best how to spend federal highway money: members of Congress, or state and local officials and the highway planners who assist them.

If Simpson, Craig and their colleagues in Congress truly believe in federalism, they sure have a funny way of showing it.