Return to draft isn't needed, won't solve the military's recruitment shortfall
Retention problems a result of "frequent and frivolous deployments," study says

Worry about recruitment and retention problems in the military has led to recent calls for a return to a draft. But a Policy Analysis released today by the Cato Institute concludes that conscription would not only fail to improve retention of skilled personnel, it would be "unfair and unjust-sacrificing the very constitutional liberties that the military is charged to defend."

In "Fixing What Ain't Broke: The Renewed Call for Conscription," Cato Institute senior fellow Doug Bandow writes that although advocates of conscription have usually based their arguments on national survival, "it certainly isn't needed now. The United States is at peace. No major war threatens. Washington stands astride the globe as a colossus-its enemies are pathetic and its allies are secure."

The military is having trouble retaining skilled soldiers, such as pilots and computer technicians, but a major reason for retention problems is that frequent and frivolous deployments are driving skilled personnel away. Bandow cites typical comments from departing soldiers: "We're not really fighting the country's wars; we're just acting like the world's policeman." "I didn't join the Army to be a peacekeeper." "With all these pockets of instability in the world, is it our responsibility to be big brother every time there's a problem?"

If the United States returned to a foreign policy "appropriate for a republic rather than an empire," the All-Volunteer Force (AVF) would have little difficulty attracting qualified soldiers and would save taxpayers some money as well, Bandow argues. Instead, the Pentagon is struggling to keep up with new commitments. "The Army has deployed overseas 29 times during the past decade compared with just 10 times during the previous 40 years," Bandow notes.

The AVF "is providing the best military personnel that America has ever had [and] for that reason, few leaders in the armed services would like to return to conscription," Bandow explains. And "a volunteer military draws in people who want to be there instead of dragooning people who do not, thereby creating a dramatically more positive dynamic."

But the most important reason to reject a draft, Bandow writes, is that "conscription would be incompatible with the government's duty to protect the individual liberty of the American people. A renewed draft would destroy the very values that it purports to save."

Policy Analysis no. 351

Pentagon help has brought "a culture of paramilitarism" to U.S. law enforcement
Local police now look to military as model for behavior and outlook, study finds

"Over the past 20 years, Congress has encouraged the U.S. military to supply intelligence, equipment, and training to civilian police," and the result has been the development of "a culture of militarism in American law enforcement," according to a briefing paper issued by the Cato Institute today.

In "Warrior Cops: The Ominous Growth of Paramilitarism in American Police Departments," Diane Cecilia Weber notes that Congress opened the door to "a dramatic expansion of the role of the military in law enforcement activity" when it passed the Military Cooperation with Law Enforcement Officials Act in 1981, which amended a post-Civil War law designed to keep military forces out of domestic law enforcement work and for the first time authorized the Pentagon to "assist" civilian police in enforcement of drug laws.

Thus began "a dramatic expansion of the role of the military in law enforcement activity," Weber reports. The Pentagon has been equipping police departments with M-16s, armored personnel carriers and grenade launchers. In all, the Department of Defense issued 1.2 million pieces of military hardware to police departments between 1995 and 1997. Police paramilitary units train with active duty Army Rangers and Navy SEALs.

"The sharing of training and technology is producing a shared mindset," Weber observes. "The problem is that the mindset of the soldier is simply not appropriate for the civilian police officer." In fact, those mindsets must be radically different: "The job of a police officer is to keep the peace, but not just by any means. Police officers are expected to apprehend suspected lawbreakers while adhering to constitutional procedures. They are expected to use minimum force and to deliver suspects to a court of law. The soldier, on the other hand, is an instrument of war. In boot camp, recruits are trained to inflict maximum damage on enemy personnel. Confusing the police function with the military function can have dangerous consequences."

Unfortunately, "most Americans are unaware of the militarization phenomenon simply because it has been creeping along imperceptibly for many years." But "the use of paramilitary tactics in everyday police work should alarm people of goodwill from across the political spectrum," Weber concludes.

Briefing Paper no. 50

Trade deficit is result of "good things," Cato expert tells congressional commission
Griswold debunks myth that trade deficit reflects poor health of domestic economy

"The biggest threat to our economy is not the deficit itself but what politicians might do in a misguided mission to shrink it," a Cato Institute expert told the U.S. Trade Deficit Review Commission today -- the same day the Commerce Department released the latest deficit statistics. Dan Griswold, associate director of Cato’s Center for Trade Policy Studies, told the commission that the trade deficit is "not the cause of bad things in our economy; it is the result of good things, chief among them rising investment."

Griswold explained that "the fundamental cause of the trade deficit in the United States today is the gap between what we save as a nation and the level of domestic investment. To cover a shortfall of savings, we offer investment opportunities to foreigners, using the surplus of incoming capital to pay for the import of goods and services over and above what we export. The result is a trade deficit." He provided a detailed analysis of economic activity over the past quarter century showing clearly that trade deficits are invariably associated with positive economic trends in the United States:

• "During years of rising deficits, the growth of real gross domestic product averaged 3.2 percent per year, compared to 2.3 percent during years of shrinking deficits."
   
• "During years of ‘worsening’ trade deficits, the unemployment rate, on average fell by 0.4 percent. During years of ‘improving’ deficits, the unemployment rate rose by 0.4 percent."
   
• "During years of rising deficits, manufacturing output grew an average of 4.5 percent a year. During years of shrinking deficits the average growth rate of manufacturing output was 1.4 percent."
   
• "Years of growing trade deficits saw manufacturing jobs increase by an average of 13,100 workers per year. Years of shrinking deficits were accompanied by an average annual loss of 116,700 jobs."
   
• "In years when the deficit grew, the poverty rate in America fell an average of 0.1 percentage points a year. In years when it shrank, the poverty rate rose by an average of 0.3 points."

The U.S. Trade Deficit Review Commission was created in the Omnibus Appropriations Bill signed into law on October 21, 1998 (19 U.S.C 2213). Its purpose is to "study the nature, causes, and consequences of the United States merchandise trade and current account deficits." It will hold several hearings throughout the nation and will examine many issues relating to the trade deficit and report to the president and appropriate committees of Congress. Griswold was one of several expert panelists asked to comment on the "Causes of the U.S. Trade Deficit."

The U.S. Trade Deficit: A Sign of Good Times

U.S. antidumping law punishes normal behavior, not ‘unfair trade,’ study says
Methods are odd: government doesn’t even try to measure whether prices are below cost

The U.S. antidumping law "all too frequently punishes normal marketplace behavior that has nothing to do with ‘unfair trade’ under any plausible definition of that term," according to a new study issued today by the Cato Institute. In "The U.S. Antidumping Law: Rhetoric versus Reality," author Brink Lindsey argues that the current law, hailed by its advocates as a bulwark against unfair trade practices abroad, "does not reliably identify either price discrimination or below-cost sales."

Lindsey, director of the Cato Institute’s Center for Trade Policy Studies, reviewed all U.S. Department of Commerce final determinations through the end of 1998 in original antidumping investigations initiated since January 1, 1995-a total of 141 company-specific dumping findings in 49 different cases. In addition, for particular companies it was possible to examine highly detailed price and cost data from the confidential case record. Lindsey says that the evidence shows clearly that "there is a disconnect between the rhetoric of antidumping supporters and the reality of antidumping practice." Among his findings:

• "Of the five different calculation methodologies used by the Commerce Department to measure dumping, only one has any relevance to detecting market-distorting price discrimination; only 2 of the 107 affirmative findings reviewed in this study relied exclusively on this methodology."
   
• "None of the calculation methodologies measures whether sales are below cost; the one that comes closest merely determines whether profits are below an often arbitrary and inflated benchmark."
   
• "The law lacks any mechanism for determining whether the pricing practices it condemns as unfair have any connection to market-distorting policies abroad."
   
• "In actual practice, the methods of determining dumping under the law fail, repeatedly and at multiple levels, to distinguish between normal commercial pricing practices and those that reflect government-caused market distortions."

Lindsey proposes specific reforms that would eliminate the worst abuses under the current law. In its present form, however, the antidumping law cannot be justified as ensuring a "level playing field" for American companies and their foreign competitors. "On the contrary," Lindsey concludes, "the law actively discriminates against foreign goods by subjecting them to requirements not applicable to American products."

Trade Policy Analysis no. 7

Foreign weapons sales get big boost from hidden Pentagon subsidies
Corporate welfare often disguised with innocuous terms like 'excess defense articles'

U.S. weapons suppliers get $7.9 billion a year in federal government subsidies that are tucked away in the defense and foreign aid budgets, according to a new study released today by the Cato Institute. This corporate welfare takes many forms, including "taxpayer-backed loans, grants, and government protocol activities that help U.S. weapons makers sell their products to foreign customers."

In "Corporate Welfare for Weapons Makers: The Hidden Costs of Spending on Defense and Foreign Aid," author William D. Hartung, president's fellow at the World Policy Institute, notes that both parties now appear ready to increase military spending in fiscal year 2000. But who will benefit? "Will it be the men and women of our armed forces, as President Clinton and Republican congressional leaders have claimed? Or will it be such weapons-making conglomerates as Raytheon, Boeing, and Lockheed Martin?"

Corporate welfare for arms makers gets little public scrutiny because of the way it's put in the budget, Hartung notes. "The U.S. government supplies arms export subsidies through various programs administered by separate agencies. Those subsidies are frequently listed under innocuous budget titles that don't seem to have anything to do with weapons exports: excess defense articles, emergency drawdowns, and economic support funds, for example. That budgetary sleight of hand has made it difficult to keep track of U.S. arms export subsidies, much less reduce them." In fact, he adds, of the $7.9 billion in U.S. arms export subsidies, just $1.2 billion comes from the Pentagon.

The hidden spending includes a lot of money that was supposed to have been in the form of loans to be repaid. "Since 1991 U.S. taxpayers have been forced to pick up the tab for roughly $10 billion in loans for arms sales and military technology that have either been forgiven for political reasons or written off for financial reasons," Hartung writes. "That sum represents a significant hidden cost of the government's loan programs for arms sales."

Other forms of Pentagon corporate welfare include "direct Pentagon participation" in airshows where weapons dealers market their goods abroad, and "so-called restructuring costs to weapons companies to help them defray the costs of mergers and acquisitions," including bonuses for executives and the closing of factories, all paid for by taxpayers.

Policy Analysis no. 350

Reform of 1872 Mining Law would probably "be a cure worse than the disease"
Cato Institute scholar tells Congress any reforms should apply only to future claims

"The 1872 Mining Law [is] one of the better federal resource statutes on the books," Cato Institute adjunct scholar Richard L. Gordon told the House Subcommittee on Energy and Mineral Resources today. The panel is considering various proposals for reforming the law. Gordon, Emeritus Professor of Mineral Economics at Penn State University, pointed out that the statute "reflects the disposal orientation of the late 19th century, the belief that the government should not own land," a view he shares. But the law "is not, however, ideal."

Critics have complained that the fees charged for federal mining land are too low and therefore encourage speculation rather than development of resources. "A related criticism," Gordon noted, "is that land is being claimed under the 1872 Mining Law and diverted to other uses, primarily real estate development. While both observations are accurate, nothing necessarily is wrong with current practices, and little economic reason exists to control how mineral lands are used."

The demand for government control of mineral-rich land, Gordon argued, "is based on the incredible notion that entities as transitory and fickle as politicians in office are more foresighted than private investors. The global financial community is more imaginative and flexible than any government. Nothing about natural resources justifies a different conclusion about who is more farsighted."

Gordon advised members that "the most important advice to those who would reform the mining law is not to enact any reforms that affect current claim holders or those who have already privatized their claims under the 1872 law." If reforms are adopted, they "should affect only future and not current mining claims." To do otherwise "would cause arbitrary wealth transfers that would activate political opposition and doom any possibility of reform and the efficiency gains that might go with it."

"It is probably best to leave he 1872 Mining Law alone and press for public land privatization outside the context of this debate," he concluded. "If a consensus is ever reached that the federal government should divest itself of its vast Western land holdings, there will be more than enough time to then repeal the 1872 Mining Law as an inferior and obsolete tool of land disposal. Any reform aimed specifically at the law, no matter how well intentioned or theoretically sound, would probably be corrupted in its execution and prove to be a cure worse than the disease."

Reforming the 1872 Mining Law

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