More Energy Security Gibberish (Wall Street Journal Edition)

Yesterday, the Journal ran a long, page one story featuring claims by retired Air Force General Charles Wald that oil production facilities around the world are dangerously vulnerable to terrorist attack and that the U.S. hasn’t done enough about it. General Wald is primarily worried about unguarded pipelines and chokepoints for tanker traffic and believes that the U.S. military needs to make “oil security” one of its chief concerns.

I was invited this morning by producers at CNBC’s Kudlow & Co. to debate General Wald, but alas, the General turned out to be unavailable, so the spot was scrapped. That’s too bad, because I was looking forward to engagement.

In short, General Wald is arguing that:

  • Market actors - who have spent billions of dollars on these facilities - are underinvetsting in security;
  • Producer states - who rely on oil revenues for most of their state revenue - are underinvesting in security as well; and finally:
  • If the U.S. military doesn’t do something about this, nobody will.

This is all pretty hard to swallow. Why would investor-owned oil companies be so carefree about their multi-billion-dollar facilities and capital assets? Are those companies run by stupid or myopic individuals? Likewise, poor governments have even more reason to be worried about securing oil production facilities and transit lanes than does the United States, because the economic harms caused by disruption would be far greater on the former than the latter.

While it’s certainly possible that oil companies and producer states are investing suboptimally when it comes to security expenditures, they have every incentive to make reasonable security investments. What makes General Wald think his assessment of the costs and benefits of those investments are better than those of investor-owned oil companies or the incumbent governments in question?

Now, let’s assume for the sake of argument that General Wald is indeed the master of this informational universe. If the U.S. taxpayer steps in via the U.S. military to undertake needed investments, what incentive do companies or governments have to make future security investments? Why wouldn’t both parties subsequently free-ride off the U.S. taxpayer for the rest of time?

And, not to put too fine a point on it, but is it really the military’s job to protect private corporate property? Shouldn’t the oil companies be paying those costs themselves? They, after all, are making a somewhat risky bet when they put their money into these regions. If that bet pays off, they make billions. If it doesn’t, then they should bear the loss alone if they’re going to reap the gain alone. Likewise, why should the U.S. military protect the economic assets of state-owned oil companies controlled by dubious regimes?

General Wald’s justification for all of this is that an oil supply disruption threatens the foundation of the American economy. That’s bunk. Recent research suggest that GDP is simply not affected that much by oil price spikes.

The contention that “we” aren’t doing enough to hedge against the possiblity of terror attacks on the oil supply infrastructure invites the question of just exactly who is this “we”? Market actors are building up oil inventories at a breakneck pace and an unprecidented amount of money is flowing into oil futures contracts. In other words, people in the market aren’t dumb. They know that a supply disruption is possible. And they’re acting on that possiblility by putting oil in the storage facilities for a rainy day.

But this is just more of the same-old same-old. Superficial bilge about energy security is the currency of the intellectual realm these days, and General Wald’s naval-gazing represents nothing new. What really got my attention was this:

In late 2002, he [Wald] was named deputy chief of the U.S. European Command in Stuttgart, which also oversees parts of Central Asia and most of Africa. The command wasn’t on the front lines of the fight then about to begin in Iraq, and officers were searching for a mission.

Well, if the U.S. European Command has no mission and nothing to do, then why not shut it down? If it’s got to cast about looking for something to worry about, it can at least pick something that it can handle. Given how thinly stretched our troops are at the moment, is it really the best use of our resources to perform this nearly unimaginable task of defending thousands of miles of foreign pipelines from rifle-fired pot-shots?

Gerson’s “Vision Thing”

How can the G.O.P. get its groove back?  Michael Gerson, former speechwriter and top policy advisor to President Bush, has an idea: purge the small-government conservatives.  As he puts it in the current issue of Newsweek, “any political movement that elevates abstract antigovernment ideology above human needs is hardly conservative, and unlikely to win.” 

As Justin Logan has pointed out in this space before, Gerson finds the “small government” aspect of conservatism “morally empty.”  Gerson expands on that theme here:

As antigovernment conservatives seek to purify the Republican Party, it is reasonable to ask if the purest among them are conservatives at all. The combination of disdain for government, a reflexive preference for markets and an unbalanced emphasis on individual choice is usually called libertarianism. The old conservatives had some concerns about that creed, which Russell Kirk called “an ideology of universal selfishness.” Conservatives have generally taught that the health of society is determined by the health of institutions: families, neighborhoods, schools, congregations. Unfettered individualism can loosen those bonds, while government can act to strengthen them. By this standard, good public policies—from incentives to charitable giving, to imposing minimal standards on inner-city schools—are not apostasy; they are a thoroughly orthodox, conservative commitment to the common good.

Campaigning on the size of government in 2008, while opponents talk about health care, education and poverty, will seem, and be, procedural, small-minded, cold and uninspired. The moral stakes are even higher. What does antigovernment conservatism offer to inner-city neighborhoods where violence is common and families are rare? Nothing. What achievement would it contribute to racial healing and the unity of our country? No achievement at all. Anti-government conservatism turns out to be a strange kind of idealism—an idealism that strangles mercy.

A speechwriter’s job is to make the president talk pretty; it’s generally a bad idea to give him a policymaking role.  Yet Gerson had one in the Bush White House.  “He might have had more influence than any White House staffer who wasn’t chief of staff or national security adviser,” according to Bill Kristol.  As the Washington Post reported upon Gerson’s departure last summer: 

He was a formulator of the Bush doctrine making the spread of democracy the fundamental goal of U.S. foreign policy, a policy hailed as revolutionary by some and criticized as unrealistic by others. He led a personal crusade to make unprecedented multibillion-dollar investments in fighting AIDS, malaria and poverty around the globe. He became one of the few voices pressing for a more aggressive policy to stop genocide in Darfur, even as critics complained of U.S. inaction.

This is the Gerson vision: armed uplift abroad, compassionate statism at home, and boundless generosity with other people’s blood and treasure.  If you think the problem with American foreign policy is that it hasn’t been ambitious enough in the last five years, if you think the problem with the Great Society was that there wasn’t enough hymn-singing, then it may be for you.  But for those of us who favor limited, constitutional government, Gerson’s views are instructive.  That a man with such contempt for small-government conservatives had the ear of the president explains a lot about the wreckage that surrounds us.

Kings, Dukes and Earls

Here’s a gem about officialdom from The Adventures of Huckleberry Finn.

Excerpt:

I read to Jim about kings and dukes and earls, and how they called each other “your majesty” and “your grace” and “your lordship,” instead of mister.  Jim’s eyes bugged out, he was so interested.

“I didn’t know dey was so many of ‘em, he said.  “I ain’t heard about none, but old King Solomon, and dem kings in a pack of cards.  How much pay do a king get?”

“Why they can have just as much as they want.  Everything belongs to them.”

“Ain’t dat gay?  And what have dey got to do, Huck?”

“Why nothing! How you do talk. They just lazy around.”

“Is dat so?”

“Of course it is.  They just lazy around—except maybe when they go to war.”

Topics:

The Pentagon Is Not Reporting the Good News from Iraq

The Pentagon said yesterday that violence in Iraq soared this fall to its highest level on record and acknowledged that anti-U.S. fighters have achieved a “strategic success” by unleashing a spiral of sectarian killings by Sunni and Shiite death squads that threatens Iraq’s political institutions.

In its most pessimistic report yet on progress in Iraq, the Pentagon described a nation listing toward civil war, with violence at record highs of 959 attacks per week, declining public confidence in government and “little progress” toward political reconciliation.

The Washington Post

Milton Friedman Days

The Loudoun County, Virginia Board of Supervisors is meeting today to pass a resolution recognizing Milton Friedman’s contributions to the nation and to the principle of human liberty – and they are naming July 31st, his birthday, Milton Friedman day.  Interestingly, the University of Chicago and others have designated January 29, 2007 as Milton Friedman Day.

As someone who was very fond of Milton, and committed to the same ideals, all I can say is: two down, 363 to go.

Topics:

Republicans and the Libertarian Voters

Writers in both National Review and the New Republic have dismissed David Kirby’s and my warning that Republicans are losing libertarian voters by noting that President Bush’s percentage of the vote went up in 2004 even though he lost libertarian votes. Thus, Ramesh Ponnuru and Jonathan Chait say, losing libertarian votes is no problem for the Republicans.

In National Review, Ponnuru writes:

The electorate as a whole swung toward Bush during those years: He increased his percentage of the overall vote from 48 to 51. Libertarians swung one way; the remaining 85 percent of the electorate swung the other way, and swung far enough to overwhelm the libertarians.

In the New Republic Chait agrees:

Boaz and Kirby …stress that President Bush’s share of the libertarian vote dropped precipitously between 2000 and 2004. But, during that time, Bush’s total share of the vote rose by almost 3 percent.

It’s true enough that Bush increased his percentage of the total vote even as libertarians were swinging away from him. But Chait and Ponnuru would have us believe that Bush succeeded because his policies alienated libertarians and appealed to a larger group of non-libertarian voters. But what policies would those be? Did he achieve re-election on the strength of the war in Iraq? His massive over-spending and prescription drug entitlement? His support for the gay marriage amendment? Not likely. (For a discussion of state marriage amendments and the 2004 vote, see here.)

Indeed, the large question about 2004 is why a president with a strong economy won only 51 percent of the vote, 6 points behind what economic models of presidential elections predicted. The biggest answer is the war in Iraq, which was increasingly unpopular by November 2004 and which likely turned off both libertarians and other independent and centrist voters.

Meanwhile, along with the economy, what accounted for Bush’s gains from 2000 to 2004?

It’s terrorism, stupid. The most important number in the 2004 exit polls was this: 58 percent of respondents said they trusted Bush to handle terrorism, while only 40 percent trusted Kerry. You can’t win a post-9/11 election if only 40 percent of voters trust you to protect them against terrorists; people may not have been happy with the war in Iraq, but many of them thought terrorism was the bigger issue. Indeed, our study found that libertarian-leaning voters who cited “terrorism” as the most important issue in 2004 voted heavily for Bush, while those who cited some other issue gave a majority of their votes to Kerry.

And of course, our post-election 2006 data found that libertarians again gave Democrats a larger share of their votes than they had historically done. And this time it did cost the Republicans. Independents–many of them libertarian-minded–turned sharply away from Republican candidates. Disgruntled libertarians probably cost the Republicans congressional seats in New Hampshire, Montana, Arizona, and Colorado, Nevada, and Iowa, and possibly also in Florida, Ohio, and Pennsylvania.

If Republicans can’t win New Hampshire and the Mountain West, they can’t win a national majority. And they can’t win those states without libertarian votes. This may be good news for Democrat Chait. But Ponnuru should worry about it.